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Document of
The World Bank
Report No: ICR1947
IMPLEMENTATION COMPLETION AND RESULTS REPORT
(Credit No.s 4426-GH & 4627-GH & 4746-GH)
ON
CREDITS
IN THE AMOUNT OF SDR 25.9 MILLION
(US$ 40 MILLION EQUIVALENT)
TO
THE REPUBLIC OF GHANA
FOR
NATURAL RESOURCES AND ENVIRONMENTAL GOVERNANCE FIRST, SECOND AND
THIRD DEVELOPMENT POLICY OPERATIONS
December 28, 2011
Environmental and Natural Resources
Sustainable Development Department
Africa Region
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CURRENCY EQUIVALENTS
(Exchange Rate Effective December 28, 2011)
Currency Unit = Ghana Cedis (GHS)
1.00GHS = US$0.60
US$ 1.00 = GHS 1.65
FISCAL YEAR
January 1 – December 31
ABBREVIATIONS AND ACRONYMS
AFD Agence Française de Développement
ASM Artisanal & Small-scale Mining
CAS Country Assistance Strategy
CBO Community Based Organization
CEA Country Environmental Analysis
CEPS Customs, Excise & Preventive Service
CHRAJ Commission on Human Rights and Administrative Justice
CIDA Canadian International Development Agency
CSO Civil Society Organization
CRM Community Resource Management
CSIF Country Strategic Investment Framework (for sustainable land management)
DA District Assembly
DFID Department for International Development of the United Kingdom
DPO Development Policy Operation
DP Development Partner
DSA Debt Sustainability Analysis
EA Environmental Assessment
EC European Community
EGPRC Economic Governance and Poverty Reduction Credit
EIA Environmental Impact Assessment
EITI Extractive Industries Transparency Initiative
EKN Embassy of the Kingdom of the Netherlands (Ghana)
ENRAC Environment and Natural Resources Advisory Committee
EPA Environmental Protection Agency
EU European Union
FC Forestry Commission
FLEGT Forest Law Enforcement, Governance & Trade
GoG Government of Ghana
GEF Global Environment Facility
GDP Gross Domestic Product
GESS Ghana Environment Sector Study
GNPC Ghana National Petroleum Corporation
GEITI Ghana Extractive Industries Transparency Initiative
IBRD International Bank for Reconstruction and Development
ICR Implementation Completion Report
IDA International Development Association
IMF International Monetary Fund
IMP Information Management System
IMS Information Management System
ISR Implementation Status and Results Report
IRS Internal Revenue Service
IMAT Independent Monitoring & Advisory Team
MEST Ministry of Environment, Science & Technology
M&E Monitoring & Evaluation
MC Minerals Commission
MDBS Multi-Donor Budget Support
MDAs Ministries, Departments & Agencies
MEST Ministry of Environment Science & Technology
MLFM Ministry of Lands, Forests & Mines (former)
MLGRD Ministry of Local Government & Rural Development
MLGRDE Ministry of Local Government & Rural Development Environment (former)
MLNR Ministry of Lands & Natural Resources
MoFEP Ministry of Finance & Economic Planning
MoV Means of Verification (of achievement of PAF targets & triggers)
MTEF Medium-Term Economic Framework (GoG budget planning tool)
MTR Mid-Term Review
MSSP Mining Sector Support Program
NCOM National Coalition on Mining
NDPC National Development Planning Commission
NGO Non-Governmental Organization
NRE Natural Resources & Environment
NREG Natural Resources & Environmental Governance
NRMP Natural Resources Management Project
OASL Office of the Administrator of Stool Lands
PAD Project Appraisal Document
PAF Performance Assessment Framework
PAMAB Protected Area Management Advisory Board
PDO Program Development Objective
PES Payment for Environmental Services
PFM Public Financial Management
PHRD Policy & Human Resources Development (Japanese Trust Fund)
PRSC Poverty Reduction Support Credit (World Bank DPL in support of national
development strategy; latterly renamed „EGPRC‟ in Ghana)
PSIA Poverty & Social Impact Assessment
REDD Reduced Emissions from Deforestation & Degradation
SBS Sector Budget Support
SDAP Sustainable Development Action Plan
SEA Strategic Environmental Assessment
SLM Sustainable Land Management
SMART Specific, Measurable, Attainable, Relevant & Time-bound (indicators)
SSM Small Scale Mining/Miners
SRMC Savannah Resource Management Center
TA Technical Assistance
TCC Technical Coordination Committee
TIDD Timber Industry Development Division (of Forestry Commission)
ToR Terms of Reference
WD Wildlife Department
UNFCC United Nations Framework Convention on Climate Change
VAT Value Added Tax
VLTP Validation of Legal Timber Programme
VPA Voluntary Partnership Agreement (Forestry)
Vice President: Obiageli K. Ezekwesili
Country Director: Sergiy V. Kulyk (Acting)
Sector Manager: Idah Pswarayi-Riddihough
Project Team Leader: John W. Fraser Stewart
ICR Team Leader: Stephen Ling
THE REPUBLIC OF GHANA
Natural Resources and Environmental Governance First, Second and Third
Development Policy Operations
CONTENTS
Data Sheet
A. Basic Information
B. Key Dates
C. Ratings Summary
D. Sector and Theme Codes
E. Bank Staff
F. Results Framework Analysis
G. Ratings of Project Performance in ISRs
H. Restructuring
1. Program Context, Development Objectives and Design: ................................................................... 1
2. Key Factors Affecting Implementation and Outcomes ....................................................................... 6
3. Assessment of Outcomes ................................................................................................................... 18
4. Assessment of Risk to Development Outcome ................................................................................. 24
5. Assessment of Bank and Borrower Performance .............................................................................. 24
6. Lessons Learned ................................................................................................................................ 27
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ................................... 29
Annex 1. Bank Lending and Implementation Support/Supervision Processes ...................................... 30 Annex 2. Stakeholder Workshop Report and Results ............................................................................ 32 Annex 3. Summary of Borrower‟s Comments on Draft ICR ................................................................ 34
Annex 4. Comments of Cofinanciers and Other Partners/Stakeholders ................................................ 36 Annex 5. List of Key Supporting Documents ........................................................................................ 37 Annex 6. Full text of PDO indicators and triggers. ............................................................................... 39 Annex 7. NREG Program Matrices ....................................................................................................... 42 Annex 8. DPO1 Program Matrix targets for 2007 & 2008 that were not carried through (as opposed to
re-worked) into the revised DPO2/3 Program Matrix .............................................................................. 52
Annex 9. Participation and Demand For Good Governance mechanisms in the NRE sectors ............. 55
Annex 10. Six main risks identified at the appraisal of DPO-1 ............................................................... 56 Annex 11. Key findings of the NREG Mid-Term Review (August 2010) on sector management systems
................................................................................................................................................................... 57 Annex 12. MAP ....................................................................................................................................... 58
i
A. Basic Information
Country: Ghana Program Name: Natural Resources and Environmental
Governance (NREG) Program
Program ID: DPO-1: P102971
DPO-2: P113172
DPO-3: P118188
L/C/TF Number(s): DPO-1: IDA-4460
DPO-2: IDA-4470
DPO-3: IDA-47460
ICR Date: 12/28/2011 ICR Type: Core ICR
Lending Instrument: DPL Borrower: Government of Ghana
Original Total Commitment:
DPO-1: XDR 12.5 M
DPO-2: XDR 6.8 M
DPO-3: XDR 6.6 M
Disbursed Amount:
DPO-1: XDR 12.5 M
DPO-2: XDR 6.8 M
DPO-3: XDR 6.6 M
Implementing Agencies: Ministry of Finance & Economic Planning
Cofinanciers and Other External Partners: Embassy of the Kingdom of the Netherlands (EKN),
European Union (EU), Department for International Development (DFID, UK), Agence Française de
Développement (AFD)
B. Key Dates (all fields are entered by the system)
First Natural Resources and Environmental Governance Development Policy Operation – P102971
Process Date Process Original Date Revised/Actual
Date(s)
Concept Review: 09/13/2007 Effectiveness: 08/05/2008 08/05/2008
Appraisal: 02/19/2008 Restructuring(s): N/A
Approval: 06/03/2008 Mid-term Review: N/A1 N/A
Closing: 06/30/2009 06/30/2009
Second Natural Resources and Environmental Governance Development Policy Operation –
P113172
Process Date Process Original Date Revised/Actual
Date(s)
Concept Review: 10/09/2008 Effectiveness: 10/14/2009 10/14/2009
Appraisal: 05/20/2009 Restructuring(s): N/A
Approval: 06/30/2009 Mid-term Review: N/A N/A
Closing: 06/30/2010 06/30/2010
Third Natural Resources and Environmental Governance Development Policy Operation – P118188
Process Date Process Original Date Revised/Actual
Date(s)
1 The Bank did not conduct Mid-Term Reviews for each operation. A Mid-Term Review exercise for the whole NREG
Program was conducted under the leadership of EKN and GoG early in FY11, and is discussed below.
ii
Concept Review: 12/16/2009 Effectiveness: 12/08/2010 11/02/2010
Appraisal: 04/12/2010 Restructuring(s): N/A
Approval: 06/03/2010 Mid-term Review: N/A N/A
Closing: 06/30/2011 06/30/2011
C. Ratings Summary
C.1 Performance Rating by ICR Outcome: Moderately satisfactory
Risk to Development Outcome: Moderate
Bank Performance: Moderately unsatisfactory
Borrower Performance: Moderately satisfactory
C.2 Detailed ratings of Bank and Borrower Performance (by ICR)
Bank Ratings Borrower Ratings
Quality at Entry: Moderately
unsatisfactory
Government: NA
Quality of
Supervision:
Moderately
unsatisfactory
Implementation
Agency/Agencies:
NA
Overall Bank
Performance:
Moderately
unsatisfactory
Overall Borrower
Performance:
Moderately
satisfactory
C.3 Quality at Entry and Implementation Performance Indicators
Implementation Performance Indicators QAG Assessments (if any) Rating
Potential Prob. Program at any time (Yes/No): No Quality at Entry (QEA): None
Problem Program at any time(Yes/No): No Quality of Supervision (QSA): None
DO rating before Closing/Inactive status: Satisfactory
D. Sector and Theme Codes
First Natural Resources and Environmental Governance Development Policy Operation – P102971
Original Actual
Sector Code (as % of total Bank financing)
Forestry 29
General Energy Sector 14
General Transportation Sector 14
Mining and other extractive 29
Other Social Services 14
Theme Code (as % of total Bank financing)
Environmental policies and institutions 67
Other environment and natural resources management 33
iii
Second Natural Resources and Environmental Governance Development Policy Operation –
P113172
Original Actual
Sector Code (as % of total Bank financing)
Forestry 33
General agriculture, fishing and forestry sector 17
Mining and other extractive 33
Other Industry 17
Theme Code (as % of total Bank financing)
Biodiversity 18
Climate change 18
Environmental policies and institutions 36
Other rural development 10
Rural policies and institutions 18
Third Natural Resources and Environmental Governance Development Policy Operation –
P118188
Original Actual
Sector Code (as % of total Bank financing)
Forestry 40
Mining and other extractive 40
Oil and gas 20
Theme Code (as % of total Bank financing)
Biodiversity 18
Environmental policies and institutions 54
Lead administrations and management 10
Rural policies and institutions 18
E. Bank Staff
Positions At ICR At Approval
Vice President: Obiageli K. Ezekwesili Obiageli K. Ezekwesili
Country Director: Sergiy V. Kulyk (Acting) Ishac Diwan
Sector Manager: Idah Pswarayi-Riddihough Marjorie-Anne Bromhead
TTL: John W. Fraser Stewart Jean-Christophe Carret
ICR Team Leader: Stephen Ling
ICR Primary Author: Sylke von Thadden / Stephen Ling
iv
F. Results Framework Analysis
Program Development Objective:
The objectives of the three operations in this DPO series were to: (a) ensure predictable and
sustainable financing for the forest and wildlife sectors and effective forest law enforcement; (b)
improve mining sector revenue collection, management, and transparency; (c) address social issues
in forest and mining communities; and (d) mainstream environment into economic growth through
Strategic Environmental Assessment (SEA), Environmental Impact Assessment (EIA), and
development of a climate change strategy.
Revised Program Development Objective:
No substantive changes (see section 1.3).
The PDO indicators below are taken from 3-year outcomes identified under the 1st operation
(DPO-1), and substantially revised as the Key Outcome Indicators during the preparation of DPO-
2. However, the outcome indicators were not given appropriate attention during the remainder of
the DPO series and therefore do not fully reflect the agreed triggers. Section 2.1 presents the PDO
indicators alongside the triggers for a clearer understanding of the disconnect between the two and
the achievements in focal areas of the Program.
(a) PDO Indicator(s)
Baseline Value
(from approval
documents)
Original Target
Values
(from approval
documents)
Formally Revised
Target Values
Actual Values
Achieved
at Completion or
Target Years
PDO Indicator 1: Strengthen institutions and governance [in forestry sector]
Value
(quantitative or
qualitative)
Baseline study on
percentage of legal
timber in the
domestic market
completed in
September 2009.
Reduced level of
illegality by X%
100% timber
exports verified
legal
(a) 10% increase in
legal wood supply to
domestic markets;
(b) first Forest Law
Enforcement
Governance and
Trade (FLEGT)
license issued.
(a) Baseline share
of domestic timber
market from legal
sources (sawmills
and bush mills)
estimated at 16%.
(b) First license
awaiting
completion of
tracking system
pilot –expected
shortly.
Date achieved
Comments
(incl. %
achievement)
Partially achieved. Draft policies for increasing legal domestic supply require further
development. Baseline estimated through market surveys, but not yet repeated. Strong
implementation of FLEGT systems, but 1st license delayed by pilot stage.
PDO Indicator 2: Sustainably finance and promote investment in forestry sector
Value
(quantitative or
Qualitative)
Baseline revenue
study in June 2009 Budget allocation
FC: 95%
Approved district
(a) Timber Revenues
increased by 15%;
(b) plantation forest
area increased by
(a) Revenues
increased by 30%
between 2006 and
v
budgets released:
80%
Revenues
collection rate:
80%
15%, through
increased private
investment.
2008, but then
declined by almost
50% to 2009.
(b) Plantation forest
area increased by
19% from 2007 to
2009, with private
investment
contributing a third
of the total.
Date achieved
Comments
(incl. %
achievement)
Partially achieved. Revenue collection performance increased, but overall revenue has
fallen recently due to shortage of commercial timber. Plantation expansion exceeded
target, but mostly through government action.
PDO Indicator 3: Reduce social conflict issues in mining communities and improve support to small scale
miners (SSM)
Value
(quantitative or
Qualitative)
No tool or tracking
of perception of
social conflicts in
mining communities
2 cooperatives in
existence (2006
baseline)
Reduced social
conflicts and other
negative impacts as a
result of
consultations among
government, mining
communities/civil
society, and mining
companies including
implementation of
guideline
(a) design of a survey
tool and carrying out
of at least one
survey,
(b) SSM established
through three co-
operatives in mining
areas with improved
performance
(a) Tool developed
and piloted in three
areas as part of
baseline study.
(b) SSM
cooperatives have
not yet been
established as
survey processes to
identify suitable
areas have taken
longer than
anticipated.
Date achieved
Comments
(incl. %
achievement)
Mostly achieved. 3a fully achieved. Over 60 candidate SSM sites. Survey activities have
been conducted at 7, but 2 of the first sites explored proved unsuitable and no site has
yet been formally designated or formal cooperatives established.
PDO Indicator 4: Improve mining sector revenue collection, management, and transparency
Value
(quantitative or
Qualitative)
Zero mine fiscal
models in use (2006
baseline)
No mining macro-
model
Data on local mining
incomes, royalties,
and local revenues
and their distribution
not published
No tracking of
perception of use of
local mineral
revenues
Increased mining
revenues to
government
(a) fiscal model
applied to three
mines;
(b) up to date data on
mining incomes,
royalties and local
revenues published at
district level;
(c) survey tool to
track perception of
use of mining
revenues at local
level designed, and
one survey
undertaken.
(a) Application of
fiscal models
completed. Macro
model created.
(b) Sub-national
transfers have been
included in
Extractive Industry
Transparency
Initiative (EITI)
reports.
(c) Social specialist
hired, but tool not
developed by close
of DPO-3.
Date achieved
Comments Mostly achieved. 4a & 4b were achieved, although traditional authorities are blocking
vi
(incl. %
achievement)
publication of details of royalty payments they receive. Revenue perception survey tool
was not a PAF target, and has not been prioritized.
PDO Indicator 5: Promote investment in climate change adaptation and mitigation
Value
(quantitative or
Qualitative)
No investments for
adaptation to climate
change in the 2008
budget
Climate change
adaptation and
mitigation measures
are adopted by all
relevant Ministries,
Departments and
Agencies (MDAs) at
different levels and
the National
Development and
Planning
Commission
(NDPC).
preparation of one
long-term investment
plan
Investment plan
was not prepared by
the end of DPO3,
due to the decision
to drop preparation
of a national
adaptation strategy
in favor of a
comprehensive
National Climate
Change
Framework.
Date achieved
Comments
(incl. %
achievement)
Partially achieved. A general National Climate Change Framework has been
developed, and investment planning is underway in specific sectors, but a
comprehensive investment plan had not yet been formulated.
PDO Indicator 6: Strengthen national environmental impact assessment system
Value
(quantitative or
Qualitative)
Strategic
Environmental
Assessment in need
of update vis-a vis
legislation and
development of
sector guidelines
needed
30% of EIA
applications
processed within the
prescribed time
frame and with the
requested
consultation and
disclosure
procedures
Enhanced EIA
service delivery,
including application
of 8 sectoral
guidelines and
enhanced
consultation and
disclosure
procedures, Polluter
Pays Principle
implemented
(a) updated
legislative instrument
on Strategic
Environmental
Assessment (SEA),
sector guidelines for
oil, mining, forestry,
energy, transport
sectors for
environmental
assessment;
(b) 60% of EIA
applications
processed within the
prescribed time
frame.
(a) Preparation of a
law on SEA has
begun. Sectoral
EIA guidelines
have been
produced.
Environmental
guidelines for the
oil sector have been
issued.
(b) Performance
target met in
assessed sectors.
Date achieved
Comments
(incl. %
achievement)
Mostly achieved. Sector guidelines prepared and SEA institutionalized, although SEA
law is still being drafted. 6b was achieved based on an assessment of the last year of the
NREG Program using the new on-line EIA processing system.
(b) Intermediate Outcome Indicator(s)
Intermediate Outcome Indicators were not identified in the program documents.
G. Ratings of Program Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements
(US$mil.)
vii
1 - P102971 05/27/2009 Satisfactory Satisfactory 19.75
2 - P113172 11/11/2009 Satisfactory Satisfactory 10.77
3 - P118188
H. Restructuring
N/A.
1
1. Program Context, Development Objectives and Design:
1.1.Context at Appraisal
Macro-economic Context
1. The first development policy operation (DPO-1) was prepared in the context of a strong
macroeconomic performance with GDP growth at 6.3 percent in 2007, down slightly from 6.4 percent in
2006. Performance was driven by several sectors (mining, finance and insurance and real estate,
construction and in services), which greatly outweighed the output declines in other sectors (such as
manufacturing, electricity and water production). Stimulus was also provided by fiscal policy, with
government services rising by 6 percent, and yielding an additional 1 percent of real GDP growth.
2. Additionally, export revenues increased due to a continuous rise in prices for cocoa and gold by 60 and
125 percent respectively over the previous seven years. However, despite a good performance of the export
sector as well as positive net capital inflows, the surge in imports (attributed in particular to a 17 percent
increase in oil and non-oil imports) led to a weakening in the country‟s external position. The current
account deficit widened to 12 percent of GDP (including official transfers) in 2007, from 10 percent in
2006.
3. Since the second half of 2006, government expenditures have risen faster than revenue collections,
leading the overall fiscal deficit to reach 7.5 percent of GDP in 2006. The main driver of growth in
government spending has been the public sector wage bill and energy sector subsidies. Nevertheless,
government spending maintained its pro-poor orientation in 2007 at 9.4 percent, though slightly lower than
in 2006 (10.5 percent) but up from 8.5 percent in 2005.
4. Fiscal and balance of payments factors have influenced the interest and exchange rates. Between
September 2007 and mid March 2008, the exchange rate (Cedis to the US$) declined by 5.2 percent (against
an already declining US Dollar), prompting the Bank of Ghana to increase its prime rate twice over the
same period to 14.2 percent by mid March 2008. Meanwhile, the consumer price index rose from 10.9
percent in 2006 to 12.7 percent by end of 2007, driven by external supply-side shocks (e.g. higher crude oil
prices, higher imported food prices) and internal pressures (e.g. higher food prices following the drought
and flood in northern Ghana and adjustments in utility tariffs).
5. At the start of implementation of the DPO series, the Ghanaian economy continued its strong GDP
growth performance (7.3 percent in 2008), driven by a surge in export revenues and sustained public and
private domestic demand for goods and services. Estimates for 2009 and 2010 suggested a significant
slowing of GDP growth (down to an average of 4 percent), due to the global slowdown and decelerated
domestic demand, and through the combined impact of fiscal stabilization, tighter credit conditions, and
lower remittances and foreign direct investment. Continued fiscal expansion in 2008, combined with
exogenous shocks led to a fiscal deficit of 15.5 percent. In response, the Government adopted a multi-year
fiscal stabilization plan, supported by the IMF, with complementary support is provided by the Bank‟s
Economic Governance and Poverty Reduction Credit (EGPRC). Government has faced some fiscal and
balance of payments challenges during the course of the NREG Program, especially with the advent of the
crisis, but has responded through sound planning in coordination with key development partners.
Sector background
6. Ghana‟s growth has historically been fueled by natural resources. At preparation, the forestry, wildlife
and mining sectors accounted for 15 percent of Ghana‟s GDP, 25 percent of Government revenues, 60
2
percent of foreign exchange, and significant employment. Over 70 percent of the population was dependent
on natural resources for their basic food, water, and energy requirements. However, absence of effective
regulatory institutions, lack of effective inter-sectoral collaboration among the natural resources sectors and
weak mechanisms for citizen participation led to institutional inefficiencies and put both sustainability and
long-term economic growth at risk. Ghana‟s resources were being depleted at an alarming rate: (i) 50
percent of the original forest has been converted to agriculture, while timber and non-timber forest products,
and biodiversity were in serious decline; (ii) mining and forestry revenues were suspected not to be well
captured; and declining environmental quality has affected the quality of life and productivity of Ghana‟s
population, notably through air pollution and inadequate clean water supply and sanitation. According to
the findings of the Country Environmental Analysis (CEA)2, the high rate of natural resource degradation
represented an annual cost of about 10 percent of GDP, representing almost half of Ghana‟s US$ 1.5 billion
annual Official Development Assistance.3
7. In this context, the Government of Ghana (GoG) decided to launch a five-year Natural Resources and
Environmental Governance (NREG) 2008-2012 program to address governance issues related to the mining
and forestry sector and to improve environmental management with the overall objective of ensuring
economic growth, poverty alleviation, increasing revenues and improving environmental protection.
Rationale for Bank assistance & contribution to higher level objectives
8. The Bank‟s involvement in NREG built upon on support already provided for natural resources
management and the environment over the previous decade, centered around the Natural Resources
Management Project (NRMP) and two related GEF grants – the High Forest Biodiversity Conservation
Project and the Northern Savanna Biodiversity Conservation Project. NRMP was envisaged as a 10-year, 3-
phase APL, but was discontinued after the initial 2-year phase because the structure of the project was
considered to be too complex, and policy and governance gaps limited the effectiveness of project
investments4. A renewed policy dialogue, anchored in a series of analytical studies shared among key
development partners, was considered necessary to identify and lay the groundwork to overcome the
systemic weaknesses (see summary of background analysis in section 2.2). Involvement of the Bank was
seen as critical in order to convene support of the other DPs, not only through its financial contribution, but
also due to the Bank‟s experience in policy lending for the natural resources and environment (NRE),
including DPOs in Cameroon and Gabon, as well as a multi-sector NRE DPOs in Brazil, Colombia,
Mexico, and Peru.
9. The program was consistent with Government‟s national priorities as described in the 2006-2009 2nd
Growth and Poverty Reduction Strategy (GPRS II), and was intended to complement the EGPRC DPO
series, allowing greater focus on natural resource and environmental policy issues. The GPRS II laid the
foundation for the NREG program with the Government‟s commitment to reducing environmental
degradation and identified priorities for environmental management through an SEA for each of the GPRS
II key pillars (private sector competitiveness, human resource development, and good governance and civil
2 World Bank, AFD, EKN & DFID (2007)
3 Out of the total US$730 million costs of lost productivity due to damage to five classes of natural assets (agriculture
land, forest and savanna woodlands, coastal fisheries and wetlands, wildlife, and Lake Volta) and of damages to
human health (incurred from urban air pollution, indoor air pollution and inadequate potable water supply, sanitation
and hygiene), the two highest costs are from timber depletion (US$270 million) and inadequate potable water supply,
sanitation and hygiene (US$180 million). 4 NRMP ICR (2003): “There were several serious flaws in project design, however that were largely responsible for
the problems encountered during Project implementation. . . Project design failed to identify as a risk, that it would be
very difficult to complete the myriad of policy reforms in a complex sector such as Forestry in 2 years. Thus, the
project was overly ambitious given the number of activities in each sub-component, the number of co-financiers and
the weak human capacity”
3
responsibility). NREG was also aligned with the 2008-2011 CAS which has a substantial section on
sustainable management of natural resources as well as a number of specific priorities aligned with the
NREG Program, including: (a) transparent fiscal and revenue frameworks in natural resources management;
(b) the analysis and governance of extractive industries through a value chain approach; (c) engagement and
dialogue with civil society organizations and local communities; (d) increased coordination between natural
resource/environment ministries and agencies; (e) increased attention to climate change mitigation and
adaptation; and (f) sound environmental management of the oil and gas sectors.
1.2 Original Program Development Objectives (PDO) and Key Indicators (as approved)
10. The objectives of the three operations in the DPO series were to: (a) ensure predictable and sustainable
financing for the forest and wildlife sectors and effective forest law enforcement; (b) improve mining sector
revenue collection, management, and transparency; (c) address social issues in forest and mining
communities; and (d) mainstream environment into economic growth through Strategic Environmental
Assessment (SEA), Environmental Impact Assessment (EIA), and development of a climate change
strategy.
11. The PDO indicators are based on the six key outcome indicators identified in the DPO-2 & -3 program
documents, which are linked to the PDO (see annex 6). They are drawn from the 16 3-year (2008-2010)
expected outcomes in the revised NREG Performance Assessment Framework (PAF). The DPO-1 program
document did not identify key outcome indicators, but did identify 3-year outcomes for the 8 (of an original
24) program / policy objectives corresponding to the DPO triggers. The outcome indicators and baselines in
the DPO-1 document were generally qualitative, and substantially revised during the preparation of DPO-2.
1.3. Revised PDO (as approved by original approving authority) and Key Indicators, and
reasons/justification
12. The same statement of objectives was included in all three program documents, although it was first
explicitly labeled as the Program Development Objective and linked to a set of Key Outcome Indicators in
the DPO-2 program document.
1.4 Original Policy Areas Supported by the Program (as approved):
13. The NREG DPOs supported reforms in three natural resource sectors – forestry and wildlife,
mining, and environmental protection – under the institutional mandate of three semi-autonomous
agencies, the Forestry Commission (FC), the Minerals Commission (MC), and the Environmental
Protection Agency (EPA), respectively. The selection of policy areas was based on the findings of a number
of analytical studies carried out prior to the NREG preparation5 as well as policy interventions and reforms
implemented by the Government under the GPRS I.
14. The forestry and wildlife sector was identified as an important pillar of economic growth. The formal
sector employed about 120,000 Ghanaians, and is dominated by sawmills that focus on international
markets. Processed wood products accounted for only 11 percent of exports, and Government did not
capture high levels of timber values. The residual forest rent not collected by government was estimated to
be typically US$10 to US$45 million per year. Of the total industry turnover of US$500 million in 2004,
GoG captured only US$22 million. The potential of the timber industry had not been realized as market
practices were inefficient in their utilization of wood extracted, employed outdated technology and
considerably exceeded the annual allowable cut required to sustain the productive base of the industry.
5 See section 2.2 for further details.
4
Domestic demand for timber was estimated to be roughly equal to that of the export market yet there was
insufficient supply from legal sources to meet this demand. The illegal chainsaw industry provided US$ 1.3
million in income for an estimated 50,000 people in 2003, yet was un-regulated, unsustainably managed,
and wasteful due to processing of logs by chainsaw as opposed to sawmills.
15. Data across 46 forest reserves, comparing inventories in the 1950‟s, 1970‟s and 1990s showed that
forest stocks were being degraded, with a loss of 0.13m2/ha/yr in average basal area of stems. Degradation
of forest reserves accelerated dramatically in the last decade from over-logging, encroachment, illegal
logging, and bushfires. Off-reserve, losses arose from the combined expansion of farming (especially
cocoa) and demand for timber for domestic (informal) markets. The CEA estimated that timber depletion
results in an annual cost of about 3.5 percent of Ghana‟s GDP. A key challenge for the FC was insufficient
budget that hindered performance of its management, regulatory and enforcement mandates. Furthermore,
opportunities existed for attracting investment in ecotourism and plantation development, and for the
promotion of value-added processing, but had not received sufficient attention.
16. In order to ensure good governance in the forestry sector, the Government prioritized its actions under
four strategic policy areas: (i) strengthening institutional capacity of the sector to ensure effective policy
implementation and law enforcement and securing predictable and sustainable financing of the forestry
sector, (ii) promoting collaborative resource management, promoting forest and wildlife investments, (iii)
increasing supply of legal timber on the domestic market and (iv) securing the natural ecosystem and
strengthening monitoring and evaluation and information communication technology.
17. At preparation, revenues from Ghana‟s mining sector represented about 5 percent of GDP and 12
percent of Government‟s revenues and the mining industry accounted for 37 percent of Ghana‟s total
exports. Ghana has one of the worlds‟ largest gold ore reserves, ranking around tenth worldwide in gold
production and second in Africa. Ghana is also a significant producer of manganese ore, and diamonds.
Metal prices have risen greatly in recent years, and gold prices more than doubled. Nonetheless, with the
use of older calculation procedures along a sliding scale and lack of capacity for collection, it was widely
suspected that GoG was not benefitting from mining revenues as fully as it should have been, given the
increase in resource prices. Ghana‟s EITI (Extractive Industries Transparency Initiative) reports also
illustrated inadequate scrutiny of mining sector revenues, estimating that this could cost Ghana a significant
amount in terms of foregone revenue.
18. At the time of the program, seven large and one medium-scale gold mining company formally
employed about 15,000 people, with an additional 5,000 working on other minerals. A further 500,000
people are estimated to work in artisanal and small-scale mining (ASM), although the actual figure is not
reliably known. Mining in Ghana has been characterized by divergent interests, cultures and institutions,
lack of clarity over legal compensation and the distribution of benefits, conflict and a lack of trust between
communities, industry and Government, as well as tensions between local communities and migrants. With
increasing gold price and government strategy to attract more foreign investment, disputes have been on the
rise. Moreover, large-scale mining operations often cause involuntary resettlement, resulting in loss of land,
livelihoods and resources for local communities. Another area of concern has been the environmental
damage resulting from mining activities, especially unregulated ASM. Conscious of these challenges, GoG
and its development partners (DPs) identified establishment of a modern policy and regulatory framework,
the improvement of mining sector revenue collection, management, and transparency and the tackling of
social issues in mining communities as critical areas for reform under NREG.
19. With respect to environmental protection, health costs related to water supply, sanitation and indoor
air pollution were identified as one of the key sources of the high cost of environmental degradation in
Ghana. EIA systems are relatively well-established in Ghana, and the country has been a regional pioneer in
the application of Strategic Environmental Assessment (SEA). However, several challenges remained for
5
effective regulatory mechanisms, especially enforcement of compliance. There was a need to improve
coverage and effectiveness of the current EIA systems, including decentralizing the EIA review process to
avoid bottlenecks in Accra, and developing sectoral guidelines. Ghana also needed to consolidate its
leadership in SEA through mainstreaming application to sectoral policies and district plans. Monitoring and
enforcement of the recommendations of various environmental assessment tools has also been weak partly
due to resource constraints for the EPA. To enhance environmental governance, there was also a need to
establish mechanism and a platform for more comprehensive dialogue and partnership between government
agencies and sector stakeholders. In the context of an assessment of Ghana‟s vulnerability to the impacts of
climate change under the Initial National Communication to the UNFCCC, there was also increasing
appreciation of the potential vulnerability of Ghana‟s coastal zone, agriculture (including fisheries, cocoa,
cereals, and root crops production), and water resource sectors, as well as human health, poverty, and
women‟s livelihoods, to climate change and variability.
20. To improve the effectiveness of environmental management, NREG identified as key areas of reform:
(i) carrying out SEAs to inform decision-making and mainstream environment in sector planning; (ii)
improving cross-sectoral environmental management, including development and implementation of an
inter-sectoral climate change strategy; (iii) strengthening of the EIA process and compliance
bydecentralizing environment management, reinforcing monitoring and effective dissemination; and (iv)
regularizing funding for EPA and ensuring better civil society participation.
21. Two other natural resource sectors were considered for inclusion in NREG, but not carried
forward as core pillars of the program. Discussions were held with the Fisheries Department, but given
its institutional home within the Ministry of Food and Agriculture, it was considered more appropriate to
support fisheries policy reform through the Bank‟s Agricultural Development DPO series. Anticipation of
rapid development of the oil and gas sector in Ghana was growing at around the time that the NREG
Program was being developed, and consideration was given to how this sector might be supported in
parallel to mining and forestry. NREG partners were concerned, however, that the expected rapid growth
of the oil and gas sector might overwhelm the already broad NREG agenda, and, therefore, it was decided
not to address it directly under the present program.
1.5 Revised Policy Areas (if applicable):
22. No changes were made to the general policy areas during the course of the three DPOs, although
the Performance Assessment Framework (PAF) was streamlined during the preparation of DPO-2 with a reduction in the policy objectives (from 24 to 16) and targets (from more than 60 to around 40),
together with considerable efforts to tighten the indicators to make them more precise and measurable.
Support for sustainable management of the oil sector through a SEA was also included. In the context of
the third DPO, the prior action on submission of a climate change adaptation strategy to cabinet was
dropped as it was superseded by the Government‟s new policy to develop a comprehensive (i.e. adaptation
and mitigation) National Climate Change Framework. In general terms, however, attention to climate
change issues has intensified during and with support of NREG, through publication of the Economics of
Adaptation to Climate Change, and emergence of new opportunities for forest carbon financing.
1.6 Other significant changes:
23. Changes since preparation of DPO-1:
IDA financing. During the identification and preparation of the NREG program the indicative IDA
allocation for the Bank‟s support to the program, rose from US$3 million for the first year, to
US$10 million, and eventually to US$20 million, when the potential for inclusion of considerable
activities in the oil and gas sector appeared high. Following resistance from other development
6
partners (DPs) to inclusion of major oil and gas activities, however, it was decided that the IDA
allocation for the subsequent two years would remain at $10m per year. Despite these amounts
being discussed and agreed with the Ministry of Finance & Economic Planning (MoFEP), it created
an impression amongst the NREG ministries, departments and agencies (MDAs) that funding had
been reduced relative to expectations. Whilst this was unlikely to have had much material effect on
the implementation of the NREG program, given that absorption by the three core agencies has
lagged behind the available funding, the perceived cut did create some tension, adding to existing
sensitivities in the forestry sector over the Bank‟s earlier decision to discontinue support to NRMP.
Institutional setting. When NREG was first under preparation, EPA was under the Ministry of
Local Government, Rural Development and Environment (MLGRDE). Prior to Appraisal of DPO-
1, however, it became effectively independent, although formally still under the oversight of the
Ministry of Local Government and Rural Development. Then in 2009, it was included within the
reformed Ministry of Environment Science and Technology (MEST). As a result, the routing of
funds to the EPA for NREG activities has changed a number of times, as has the autonomy with
which it could act. This has at times led to some delays in the transfer of funds to the EPA as well
as in the implementation of its activities.
Change of government. National elections were held in autumn 2008, shortly after DPO-1 became
effective, and a new government was installed in early 2009. As with the institutional changes
above, this did not lead to any appreciable change in the policy content of the program, but it did
delay certain activities, particularly policy dialogue and coordination with senior levels of
government.
2. Key Factors Affecting Implementation and Outcomes
2.1 Program Performance:
24. The Performance Assessment Framework (PAF) for the NREG Program details annual targets
grouped under policy objectives. Six triggers were drawn from the targets for each operation6. Outcome
indicators were also specified for each policy objective at 5 years (end of the GoG NREG Program) and,
during development of DPO-2, also at 3 years (end of the Bank‟s DPO series). Annex 7 summarizes the
PAF for the 3 years of the Bank DPO series, based on the streamlined version created for DPO-2, but
including relevant parts of the DPO-1 matrix.
25. All triggers for all three DPOs were met, with the exception of the dropped DPO-3 trigger on
submission of a climate change adaptation strategy which was waived (see section 1.5 above).
However, there is a performance gap between the achievement of the triggers and achievement
against the PDO indicators, largely due to a disconnect between the triggers (which received
particular attention during the Program) and the PDO indicators (which did not). The PDO indicators
were not referenced in the legal documents, and after their initial formulation were not given much
emphasis, nor were they revised during preparation of DPO-3, despite changes to related PAF targets. The
following tables summarize achievements within each sector in relation to both the triggers and
corresponding PDO indicators, to give a clearer picture of achievement within the focal areas of the
Program than is evident from review of the PDO indicators alone. The disconnect with the triggers is
evident in the occurrence of PDO indicator targets which:
6 Annex 6 lists all the triggers according to the exact language in the legal agreements. Triggers were used as a basis
for World Bank approval of each operation. Other DPs disbursed against a more holistic assessment of progress
against PAF targets.
7
are not directly related to any PAF targets – e.g. survey to track perception of use of mining
revenues at local levels, and updated legislative instrument on SEA.
are directly related to PAF targets, but not to the triggers – e.g. increase in the legal wood supply to
domestic markets, increase in plantation forest area, and establishment of SSM cooperatives.
were not updated after DPO-2, and are therefore out of sync with revised DPO-3 action targets,
e.g.:
- increase in legal timber supply, although the end-of-DPO-3 target was only for a baseline to be
evaluated.
- FLEGT license to be issued, although the DPO-3 target was only for completion of the wood
tracking pilot.
- design and implementation of a conflict tracking tool, although the DPO-3 target was only to
initiate development of an annual tracking mechanism.
- establishment of 3 SSM cooperatives, although the DPO-3 target was only to conduct
exploration in new areas after the initial areas identified appeared unsuitable.
- long-term climate investment plan, although the DPO-3 target was only for a consolidated
National Framework for Climate Change, which did not include the identification of specific
investments.
Forestry: Key Outcome
Indicator
Triggers Outcome indicator targets7
DPO-1 (2008) DPO-2 (2009) DPO-3 (2010)
Strengthen
institutions and
governance
Define elements
of VPA
[Achieved]
VPA signed
[Achieved]
Pilot wood
tracking
commenced
with at least 3
companies
[Achieved]
(a) 10% increase in legal wood supply to
domestic markets;
(b) first FLEGT license issued.
[Partially achieved]
Implementation of FLEGT systems in the formal forestry sector has progressed well through a
consultative process. The Voluntary Partnership Agreement (VPA) was signed with the EU,
outlining the safeguards that Ghana would follow to retain access to EU timber markets, a tracking
system to verify the legality of timber has been piloted with 4 companies, and a Timber Verification
Department established in FC to issue FLEGT licenses. Implementation of the tracking system has
been complex and slower than anticipated, and therefore issuance of the first license is somewhat
delayed. In the meantime, faced with a largely uncontrolled informal industry, the stocks of quality
timber available for the formal, export sector appear to be rapidly dwindling.
Ghanaian sawmills are required to provide 20% of output to the domestic market. In reality the
figure is probably closer to around 5%, as domestic buyers are unwilling to pay export prices. A
proposal to increase domestic supply by allowing chainsaw operators to retrieve stumps and residues
from licensed timber coupes is delayed by questions over legal rights. Other proposals, to (i) better
enforce the requirement on sawmills to supply the domestic market or (ii) regularize informal
chainsaw operators more generally, have yet to be developed into detailed policies.
Sustainably
finance and
promote
investment in
forestry sector
Financial
Framework
submitted to
cabinet
[Achieved]
Implement
approved
Financial
Framework
[Achieved]
Procedures to
improve
transparency of
forestry revenue
disbursement
[Achieved]
(a) Timber Revenues increased by 15%;
(b) plantation forest area increased by
15%, through increased private investment.
[Partially achieved]
Under the Financial Framework, measures were implemented to improve the collection rates of
stumpage fees and debts, and revenue collection performance has risen to 95%. A number of
legislative options for increasing revenues were proposed by FC, but have met with obstacles:
Park visitor fees have been revised upwards, but this is a very small component of overall forest
7 Details of assessment of achievement of PDO indicators are in Section F above.
8
revenues.
Timber export levy was decreased from 3% to 1.5% following complaints by the timber
companies that this is no longer ear-marked for re-investment in the industry.
Conversion of timber concessions to Timber Utilization Contracts is subject to legal review.
Linking stumpage fees to exchange rates is under consideration, but resisted by the industry.
Proposals to establish a payment for environmental services (PES) system to fund forest areas are
at an exploratory stage.
Timber revenues did initially increase, but then declined in 2009 and 2010. Changes are likely due
mainly to cutting cycles and the general decline in the availability of valuable timber – the available
data do not reveal the impact of improved collection performance.
On revenue transparency, district revenues have been published, although dissemination at the local
level remains rudimentary. Ghana plans to make forestry EITI-compliant, and combining with
mining and oil sectors offers potentials for strengthening dissemination of sub-national revenue that
Ghana is attempting to pioneer through its EITI program.
NREG targets on the signing of leases and benefit-sharing agreements contributed to expansion of
plantations beyond the 15% target, but FC struggled to attract as much private sector investment as
desired, and most of the increase was through direct government action.
Mining: Key Outcome
Indicator
Triggers
Outcome indicator targets DPO-1 (2008) DPO-2 (2009) DPO-3 (2010)
Reduce social
conflict issues
in mining
communities
and improve
support to
small scale
miners (SSM)
Proposal on
social
responsibility
guidelines
[Achieved]
Consultations
on social
responsibility
guidelines
[Achieved]
Social
responsibility
guidelines
issued
[Achieved]
(a) design of a conflict survey tool and
carrying out of at least one survey,
(b) SSM established through three co-
operatives in mining areas with improved
performance
[Mostly achieved]
Social responsibility guidelines (non-binding) for mining companies in mining communities have
been developed. These consist of principles and a set of operating guidelines designed to serve
companies, regulators, communities and civil society as benchmarks for development and
implementation of social responsibility activities. These have been assessed to be of high quality and
focus on corporate governance and ethics, human rights, employment and labor standards, health
and safety, environmental stewardship, supply-chain stewardship, community development,
stakeholder engagement, and compliance and reporting. M&E systems will need to be strengthened
going forward to assess the implementation and impact of the guidelines and other conflict-
mitigating measures. A conflict monitoring instrument has been developed, and used for a baseline
study, but needs to be developed into a regular conflict monitoring process, however.
Over 60 candidate SSM sites have been identified, and survey activities conducted at 7 of them, with
a further 8 planned for 2012. However, the process has taken longer than anticipated as two of the
first sites proved unsuitable (gold deposits too deep), and no site has yet been formally designated.
In the meantime, the MC have carried out capacity-building and monitoring activities with small-
scale miners, but formal cooperatives have yet to be established.
Improve
mining sector
revenue
collection,
management,
and
transparency
Draft mining
policy and
regulations
[Achieved]
Revenue Task
Force, action
plan, and fiscal
model piloted
[Achieved]
Pilot audit of
one mine and
fiscal model
applied to three
mines
[Achieved]
(a) fiscal model applied to three mines;
(b) up to date data on mining incomes,
royalties and local revenues and their
distribution published at the district level;
(c) at least one survey to track perception
of use of mining revenues at district and
municipal level.
[Mostly achieved]
The development of the Mining Policy has helped re-orient the minerals sector towards improving
durable economic outcomes for Ghana (including revenue generation, diversification, generating
employment, support industries and infrastructure) with due regard to social and environmental
issues.
The Multi-Agency Minerals Revenue Task Force is considered to have worked effectively. The
9
macroeconomic models, financial models and audits used by the Task Force (i) demonstrated that
the fiscal regime in Ghana was internationally competitive, rather than excessively favorable to
investors as had been suggested; and (ii) revealed some specific gaps in revenue collection and led
to government proposals for a streamlined and more progressive regime. A flat 5% royalty has
replaced the former sliding rate based on mine profits, for easier administration. Other proposals for
the 2012 would increase income and windfall taxes, and significantly increase revenues.
District transfers and revenue use guidelines have been published, but local dissemination is weak.
Environmental protection: Key Outcome
Indicator
Triggers
Outcome indicator targets DPO-1 (2008) DPO-2 (2009) DPO-3 (2010)
Promote
investment in
climate change
adaptation and
mitigation
-
Draft National
Climate Change
Adaptation
Strategy
[Achieved]
Adaptation
Strategy
submitted to
Cabinet
[Dropped]
Preparation of long-term investment plan
[Partially achieved]
The Adaptation Strategy developed in 2008-09 reviews areas of climate vulnerability in Ghana and
identifies priority adaptation programs. This was subsequently complemented by work on the social
dimensions and Economics of Adaptation to Climate Change in Ghana, which particularly
highlighted the vulnerabilities and costs in the agricultural sector and for the rural poor. Submission
of the Adaptation Strategy to cabinet was dropped in favor of development of a comprehensive
National Climate Change Framework, combining the work on adaptation needs with the draft
NAMAs. An overview document entitled Ghana Goes for Green Growth was prepared. It remains
to be converted into a coherent program including identification of specific investments, but efforts
are ongoing, and climate planning and action is relatively advanced within key sectors – forestry,
agriculture, coastal management, health, transport and energy. EPA is trying to mainstream climate
change in national planning through NDPC (alongside new SEA requirements).
Strengthen
national
environmental
impact
assessment
system
Energy and
transport SEAs
[Achieved]
Appraisal of
EIA service
delivery
processes and
sectoral
guidelines
[Achieved]
Tourism SEA
and review of
national SEA
experience
[Achieved]
Environmental
management
guidelines and
draft SEA for
oil sector
[Achieved]
(a) updated legislative instrument on
Strategic Environmental Assessment;
(b) 60% of EIA applications processed
within the prescribed time frame.
[Mostly achieved]
Under the NREG program, a number of additional sector SEAs have been conducted, and Ghana‟s
national experience in promoting the use of SEAs reviewed. Ghana‟s SEA model emphasizes use of
simple (i.e. largely no-quantitative) tools through participatory processes for engagement around
environmental issues, building understanding and capacity. A weakness is that SEAs have typically
been applied ex-post, and their policy impact has therefore been limited. Following the review, EPA
and NDPC have worked to introduce the use of basic SEA tools into routine local government
planning. New legislation to mandate the use of SEA in targeted planning processes is at an early
stage of development. The draft SEA of the oil sector reviewed environmental assets and the legal
framework, established 3 development scenarios, and identified accident prevention and response as
a key priority. The SEA process will be completed with support of the Oil and Gas TA project, and a
team including GNPC, NDPC and EPA has been established to lead this process.
EPA has established an on-line EIA system that has improved performance and monitoring.
26. Performance against the wider range of annual PAF targets (beyond the World Bank
disbursement triggers) has been considerable, given the large number of actions involved. Around half
have been fully achieved and most of the rest were partially achieved (see table below). As reported in the
DPO-2 Program Document, the results of the 2009 PAF assessment were markedly better, but the
10
Independent Advisory and Monitoring Team‟s (IMAT) assessment8 for the same year pointed out a number
of weaknesses and deviations from the original means of verification (MoVs)9, suggesting that the later
joint assessment benefited from more flexibility in the interpretation of MoVs as well as the additional time
to complete delivery. Implementation against NREG work plans prepared by the MDAs also encountered
delays, partly due to delays in the transfer of funds10
, but mainly to limits on absorptive capacity imposed
by staffing constraints and procurement processes. Budget performance of NREG MDAs has been steadily
improving during the course of the program, but up to September 2010, MoFEP had only transferred a total
amount of GhC 68.7 million, out of an available GhC 97 million11
. These constraints on implementation
suggest that expectations on completion of all annual PAF targets to schedule were overly ambitious.
Year
Achievement of PAF targets
Source Fully
achieved
Partially
achieved
Not
achieved
Unclear /
no longer
valid12
2008 36 14 2 19 MTR interpretation of descriptive statements in DPO-2 PD
2009
28 5 2 Ratings stated in DPO-3 document
4 12 4 1 ICR interpretation of descriptive statements in IMAT report
(NB: Forestry not included)
2010 21 14 5 Ratings stated in DPs‟ letter (dated 27 June 2010)
summarizing Joint Assessment of 2010 PAF
2.2 Major Factors Affecting Implementation:
Government's commitment
27. Ownership of the NREG Program and associated matrix by the three natural resource agencies,
and engagement by Ministry of Finance & Economic Planning (MoFEP) have been strong, and is
cited as a step-change from the earlier experience in the NRM sectors under a traditional project
modality. MDAs uniformly feel empowered by and enthusiastic about the NREG process than previous
investment projects (see annex 3). The Technical Coordination Committee (TCC), led by MoFEP and
including representatives from participating MDAs and the National Development Planning Commission
(NDPC), has generally provided an effective platform for inter-agency dialogue and coordination, including
annual performance reviews and updates to the PAF. Leadership by MoFEP has been key13
, and the recent
appointment of a Natural Resources Director (a former Technical Director for forestry in the Ministry of
Land & Natural Resources) is evidence of the strong engagement by the Ministry.
8 For mining and environment only; forestry was not included due to an road accident that befell the IMAT‟s forestry
specialist. 9 E.g. the establishment of an inter-ministerial environment and natural resources forum was supposed to be evidenced
by the minutes of the first meeting, but a draft TOR for establishment of the Environment and Natural Resources
Advisory Committee (ENRAC) was instead provided as ENRAC didn‟t meet until later 2010. 10
E.g. out of the GhC 8.4 million transferred to the EPA by Feb 2010, the agency received the bulk (60 percent) only
within preceding three months. (IMAT 2010) 11
Ecorys (2010) NREG-PFM support mission Ghana, September 2010 12
I.e. the description of the achievement against the target was unclear, or the target had been dropped by the time of
the assessment. 13
“Coordination by MoFEP [through the TCC] has been very successful in bringing together the sector ministries and
agencies in a constructive manner, leading to efficiency gains within the sector through cross-agency learning.” (MTR,
2010)
11
28. Nevertheless, the Program would have benefited from supplementary capacity to meet
coordination, M&E and reporting requirements, and from more engagement from senior decision-
makers around contentious issues, such as revisions to the forestry fiscal regime. NREG coordinators
in all the key MDAs, including the MoFEP NREG Program Coordinator14
, have numerous other duties,
which significantly constrained program management capacity (for e.g., close oversight of PHRD and other
consultancies, development of sector strategies, monitoring and reporting). Engagement by senior policy-
makers also lagged behind engagement at the technical level, in part due to disruptions from the change of
government during the first year of the Program and the protracted institutional transition of the EPA to the
newly re-formed Ministry of Environment, Science & Technology (MEST). The Policy Committee
envisaged in the original NREG design was replaced by an Environment and Natural Resources Advisory
Council (ENRAC) with a long-term mandate, but it was not convened until late 2010, with the first
substantive meeting on policy issues occurring in February 2011. Select members of parliament have
attended some NREG meetings, but more could have been done to educate legislators on the Program and
issues.
Stakeholder involvement
29. NREG involved strong commitment to stakeholder inclusion, notably through the organization of
annual Sector Summits, but the approach to civil society inclusion could be further elaborated and
institutionalized. Many government activities related to civil society engagement and transparency have
been implemented, including a pioneering EITI program, a public environmental rating and disclosure
process, and consultation platforms at national and local level (see annex 9 for more details), but the overall
approach could have been more systematic. Although the span of activities has been wider, much of the
discussion on civil society within NREG has focused on how to coordinate input from civil society
organizations (CSOs) to workshops and dialogue. A comprehensive strategy would have given more
recognition to other aspects, such as community co-management, adoption of transparency standards,
participatory monitoring, etc. Engagement could also be strengthened at the local level. For instance, data
on district-level revenues from mining and forestry have been published but effective dissemination to
impacted communities is limited, and District and Regional Forest Forums need more support. Civil society
is increasingly vibrant and recognized as a potentially important development resource in Ghana, but
attitudes within Government still vary between individuals and agencies who appreciate the value-added of
civil society engagement15
, and others which view it primarily as an issue of compliance with minimum
consultation requirements.
30. Direct support to CSOs on environment and natural resource issues was successfully piloted. In
addition to government activities, the Embassy of the Kingdom of the Netherlands (EKN) established direct
capacity-building support to CSOs, including parallel civil society reviews of the NREG Program, through
the Kasa (“speak out” in Twi) mechanism16
. The multi-donor civil society facility originally envisaged in
the DPO-1 Program Document did not materialize, but Kasa commenced in the 2nd
year of NREG and was
assessed to have „done remarkably well for a pilot with effectively 18 months of implementation‟, although
with some more attention needed to strategic direction and gender focus17
. It promoted increased civil
society engagement in NRE issues, including through establishment of CSO platforms and working
14
Notably, he is also head of the EITI Secretariat. 15
E.g., the EPA perceives the strength of its mandate to be linked to its ability to mobilize public understanding and
concern around environmental issues, and is therefore enthusiastic on civil society engagement. 16
Kasa‟s activities focused on (i) supporting capacity enhancement activities of civil society groups, (ii) providing
grants to civil society, research and media organizations to conduct advocacy, (iii) facilitating platforms for
information sharing with Government and DPs and (iv) documenting lessons learned to inform a longer-term civil
society advocacy mechanism for equitable natural resource and environmental governance in Ghana. 17
Nordic Consulting Group (2011) Final evaluation of Kasa.
12
relationships with the media. CARE and DANIDA have stepped in to continue support to Kasa beyond the
initial pilot phase, but due to a change in EKN funding priorities, longer term support remains in doubt.
31. Many Ghanaian NGOs have a healthy skepticism towards government. Building the robust
relationships and understanding that will facilitate constructive dialogue is a gradual process. Overall,
NREG has seen markedly increased dialogue between government NRM agencies and civil society, but not
all CSOs are familiar with NREG, still fewer have been actively involved in government-led meetings, and
trust remains weak in some quarters. Consultations have led to increased expectations and to some
frustrations from CSOs that their feedback was not subsequently incorporated into policy18
. According to
the World Bank Civil Society Monitoring program that reviewed NREG in 201019
, CSOs suggested a
number of platforms for further engagement with civil society, including Publish What You Pay, a CSOs-
led transparency and accountability network, the new Ghana Oil Platform bringing together CSOs to
interface with government on petroleum matters, and the National Coalition on Mining (NCOM). NREG
has also illuminated complexities of engaging with traditional authorities. They are important stakeholders
and community representatives in their own right, and are routinely included in consultation structures, but
they have also resisted attempts to increase transparency of the use of natural resource revenues that flow to
them. The MTR also pointed out that structured involvement of the private sector in policy discussions has
been limited.
Soundness of the background analysis
32. NREG design was founded on a considerable analytical base, which identified areas of concern,
but left room for more precise policy analysis as part of the program. In particular, the Country
Environmental Analysis (CEA; World Bank, DFID, RNE, AFD 2007) evaluated the economic costs of
environmental degradation in Ghana, building on the Ghana Natural Resources Management and Growth
Sustainability Economic and Sector Work (World Bank, DFID, 2006), and the Ghana Environment Sector
Study (GESS, EKN 2006), which reviewed institutional capacity for environmental management20
. The
CEA identified environmental governance as key for sustainable management of the country‟s natural
resources and this became a catalyst for the creation of the NREG budget support program. It also laid out a
broad agenda of reform, that was highly influential in the development of the PAF, e.g. making
recommendations to review fiscal regimes in forestry and mining, pay more attention to local consultation
and social safeguards in forestry and mining, introduce more transparency and competition in bidding for
timber concessions, introduce legal timber verification systems, encourage private sector involvement in
forest plantation, promote CSR by mining companies, establish programs for management of ASM, and
increase capacity for environmental management within the mining sector.
33. During NREG preparation, institutional and contextual analyses were undertaken through a
recipient-executed PHRD grant, including a Stakeholder and Risk Analysis, a Public Revenue Analysis, a
review of budget, expenditure & financial management in the NRE sectors, and a study of options to
empower civil society. The PHRD studies were useful, but could have gone into more depth and detail.
Delivery was delayed, with the result that outputs were not timely for program preparation and over 40
percent of the funds21
were returned, as the grant had to be closed once NREG became Effective.
18
Partly this is a result of naivety amongst young CSOs, who sometimes assume that having a voice should
automatically equate to policy influence, rather than appreciating that their influence ultimately relies on the quality of
what they bring to the debate in terms of novel analysis or effective representation of broader constituencies. 19
Ghana Anti-Corruption Coalition (2010) Pilot Review of Six World Bank Assisted Projects in Ghana. 20
The choice of instrument and financial aspects were also informed by the “Budget Support, Aid instrument and
Environment Ghana Case Study” (ODI, 2007), the annual national External Reviews of Public Financial Management
and the draft (2009) Public Expenditure Financial Accountability report.
21 Roughly US$245,000 of US$600,000.
13
34. The Program design also drew on lessons from previous Bank interventions in the NRE sectors in
Ghana, the ongoing Multi-Donor Budget Support program, a Bank environment DPO in Mexico and
an environment sector budget support program in Senegal supported by EKN. Similar Bank
environmental DPOs in Gabon and Cameroon were not cited amongst the lessons learnt, presumably
because they were considered too young during NREG preparation. Lessons focused on the need for
ownership, establishing an effective monitoring and evaluation system with sound baseline data and the
importance of public participation.
Choice of instrument
35. At the time of preparation, there was general consensus amongst DPs and GoG to make increased
use of budget support. Following earlier donor-supported interventions for the environment and in the
natural resources (particularly forestry) sectors, there was a desire to move away from isolated investments
to a sector-based approach that could tackle systemic governance issues and elevate the level of the
dialogue. A conventional, sector-wide approach was discussed, but around the time of preparation, sector
budget support (SBS) was becoming increasingly popular with a number of donors, and was seen by both
GoG and DPs as a more mature approach that would provide for enhanced ownership against a relatively
strong record of governance and development performance in Ghana. Development policy lending provided
an instrument by which the Bank could contribute to the NREG Program. In line with the donor
harmonization agenda22
and Ghana‟s good track record of implementing the EGPRC as part of a Multi-
Donor Budget Support program, close to 59 percent of lending under the current CAS is currently via
DPOs. Flexible sector-based financing is considered to have been instrumental in strengthening sector
ownership and engaging MoFEP and NDPC in the substance of the Program, ultimately leading to much
stronger support for reform.
36. Nevertheless, the transition from traditional investment lending, and the combination of SBS
(emphasizing predictable support to implementation of broad programs of activities through
strengthened sector systems) and development policy lending (focused specifically on policy reform)
within a single instrument, engendered a steep learning process and a degree of compromise. The
NREG PAF included a range of activities, which did not always have a very strong policy focus, and many
staff working on NREG have a tendency to focus on technical activities23
. At a practical level, many
activities could have been achieved through a technical assistance (TA) investment operation, such as the
development of social responsibility guidelines and monitoring in the mining sector, the preparation of
climate change strategies, or the strengthening of environmental assessment systems. Some activities, such
as expansion of forest plantations, were GoG sector priorities, but were not fully reflected in NREG as they
were more investment than policy focused. The PAF contained targets for facilitation of private sector
investments in forest plantations, but two thirds of the recent growth in plantations has still come from
direct government investment. The transition to programmatic support also requires effective sector
systems, which were not well developed at the start of NREG. Progress has been made on sector systems
through the Program, but the work is ongoing. This is discussed in more detail in section 3.4b.
37. The Bank was constrained in its choices during preparation by the availability of instruments and
an initially modest financial contribution. The Bank does not have an instrument specifically designed to
work in an SBS modality (although the Program-for-Results instrument is currently in development). A
DPO could have been designed to combine with or to complement the sector support instrument being
supported by other DPs, but the initial commitment from the Bank was to provide only US$3 million
22
The 2007 Ghana Joint Assistance Strategy, signed by 16 partners, included a specific commitment by DPs to
increase the amount of aid being channeled through budget support. 23
Evidenced by the assertion during PAF formulation that targets on policy adoption are inappropriate as they can
only be delivered by senior decision-makers.
14
towards an expected first phase financing pool of US$15 million. The Bank‟s relatively minor financial
contribution was therefore intended to leverage the contributions of the other DPs, and an explicit decision
was taken during preparation not to formulate a separate policy matrix for the Bank‟s operation. The
eventual US$20 million IDA credit for the first operation was not made available until late in preparation.
38. The choice of instrument has allowed GoG to feel that it is being treated as a mature partner with
full ownership of the program, but issues of capacity and the policy content of the matrix suggest a
weakness to using a DPO alone to provide predictable funding to a multi-faceted sector program. In
hindsight, a clearer distinction between the Bank‟s DPO series and other donors‟ SBS would have helped to
sharpen the focus on key policy results.
Complexity
39. NREG is institutionally complex. The Program encompasses forestry, mining and environment,
stretching across two Ministries and three semi-autonomous government agencies, in addition to the
Ministry of Finance. The program is supported by 5 DPs, 4 of whom were active in the technical dialogue.
The scope of the dialogue leading up to NREG was originally focused on governance of natural resource
rents from forestry, mining and fisheries, but environmental management and climate change were added as
cross-cutting issues affecting the natural resource sectors. Fisheries was eventually dropped from the NREG
program as the Department of Fisheries is housed within the Ministry of Food and Agriculture, which
receives policy lending through the World Bank‟s Agricultural Development DPO series. Discussions
around the mooted inclusion the oil and gas sector are summarized in section 1.6 above.
40. This complexity brought benefits, but also came with costs. The inclusion of three NRM sectors is
felt by both GoG and DPs to have been beneficial in terms of sharing lessons on parallel activities such as
revenue management and participation of local communities, and raising the profile of cross-cutting themes,
such as environmental management and climate change. The harmonization of the support of 5 DPs around
a single program was highly appreciated by GoG, although adding to the burden of coordination, reporting
and dialogue for the MDAs. From a DP perspective, transaction costs have been higher due to the need for
greater donor coordination. An informal understanding between the DPs on division of labor in supervision
support did not function as well as intended. Overlaps in the technical dialogue remained because individual
DPs were still accountable for results across all sectors, whilst some specific gaps occurred, such as
adoption of clear responsibility for support to a second-phase PSIA study. Conversely, the need to present a
coordinated DP position limited agility at times, particularly with respect to the oil and gas sector, where the
Bank‟s interest in using NREG to respond to emerging national priorities was greater than that of other
development partners. Even within the Bank team, supervision involved both the African Environment and
Natural Resources and the Gas, Oil and Mining sector units, and staff from the latter at times felt that they
lacked the freedom and resources to engage to the extent for which separate mining operation would have
provided.
41. Multi-sector and multi-donor programs do work, but require a lot of effort, efficient working
relationships take time to crystallize, and some degree of complementarity is usually required. DPOs
routinely work across several sectors. The ICR for PRSCs 1-3 in Ghana, which provided Bank support to
the Multi-Donor Budget Support (MDBS) program, discusses similar themes of transaction costs and
compromise, and indicates the need for both high investment of staff resources and time for effective
working relationships to evolve. Typically however, PRSCs are able to draw on a wealth of other sector-
specific operations to support technical dialogue, and do not go into the same level of detail and breadth on
sector-specific planning and systems as NREG attempted to do under its SBS approach. This again supports
the argument for a greater differentiation of donor support and instruments than occurred under NREG.
15
Technical assistance & related operations
42. The NREG Program involved considerable TA, but the impact has been mixed, and overall, the
approach has not been as systematic as was originally envisaged. Development of a complementary TA
facility based on a comprehensive needs assessment was discussed during preparation and referenced in the
DPO-1 program document24
, but was not hard-wired into the design – i.e. no binding commitments and
funding sources were established. Many TA activities have taken place, but the systematic approach
envisaged at design did not materialize, and the results have been mixed. Some TA has been provided
directly by DPs in addition to the budget support, and in other cases, DPs took a very active role in advising
GoG on the identification of appropriate expertise, for example:
Robust support on public financial management (PFM) has been provided through periodic visits of
a PFM advisor, funded by EKN and much appreciated by MDAs.
Considerable analytical work has been carried out as part of a dialogue on Climate Change
supported by NREG. Individual studies were largely implemented by separate DPs25
, rather than
through NREG or the National Climate Change Committee, leading to some complaints that
pooling funds would have allowed for a more comprehensive approach.
An Independent Monitoring and Advisory Team (IMAT), financed by the EU, was mobilized to
backstop monitoring against the 2009 PAF, but was not fully welcomed by the MDAs and has not
been institutionalized (see section 2.3).
High-quality work on modeling mining revenues was carried out with the assistance of a leading
international expert, identified with assistance of the Bank. This helped to ease concerns over laxity
in the mining fiscal regime.
These instances have sometimes (but not always) been more effective than where TA inputs have been
managed by GoG more independently and typically limited to the use of national consultants, for example:
Useful social analysis around conflict and CSR has been conducted in the mining sector, leading to
the production of sound voluntary guidelines.
A survey was conducted of the domestic timber market, but the analysis of options for increasing
the legal supply of wood for internal consumption was cursory, and led to little implementation
since.
SEAs have been produced for key sectors, although translating them into tangible action has been
more challenging.
A local TA firm contacted by MoFEP to support the development of sector M&E systems has
added only modest value to date.
43. The NREG DPO series has been the Bank’s central instrument for engaging in the forestry,
mining and environmental protection sectors over the last three years, although a number of other
activities have made some contributions. The Bank has supported some TA activities related to NREG
through trust funds, notably the EITI Trust Fund and work on economics of adaptation to climate change
using a number of funds. Linkage to other lending operations has been limited. Sustainable land
management, fisheries and land administration investment projects have all been worked on natural
resource issues outside the scope of those covered by NREG. An oil and gas TA project was prepared in
parallel to NREG implementation. It supported some SEA and capacity-building activities within the EPA,
and there is growing interest in improving the sharing of lessons with the NREG sectors on e.g., revenue
management and civil society engagement issues. Some targets developed under NREG, notably the
establishment of the ENRAC, were linked to Multi-Donor Budget Support program to provide additional
24
DPO-1 claimed that “The DPO series will have a signaling effect in helping Ghana mobilize additional resources,
which are critical to the successful implementation o f the NREG program. This includes . . . capacity building and
technical assistance”, and discussed a technical assistance grant to accompany DPO-2. 25
E.g., the World Bank supported the Economics of Adaptation to Climate Change country case study for Ghana, and
DFID has produced a series of policy briefs.
16
incentives for timely completion. Although the process began too late to inform the existing NREG PAF,
the strongest overlap in subject area has been with the design of support to Ghana from the Forest Carbon
Partnership Facility and the Forest Investment Program. These funds will support planning, capacity and
investments to enhance carbon stocks in Ghana‟s forests, are already driving much of the technical dialogue
on the forestry sector, and should complement future policy support through any continuation of NREG.
Relevance of the risks identified at appraisal and effectiveness of mitigation measures
44. Key risks identified during preparation (see annex 10) were appropriate, but risks associated with
weak implementation capacity were overlooked (other than for PFM). Envisaged political, public
financial management (PFM) and social risks materialized to some extent. The change of government
following the elections in late 2008 and the subsequent reformation of MEST slowed down some aspects of
implementation. Weak PFM systems were in part responsible for delays in release of funds to MDAs and
their effective absorption, and reforms aimed at increasing revenue collection from the commercial forestry
sector have in some cases been resisted by the timber industry in Ghana. None of these issues has been
overwhelming, however, and in the case of the PFM, TA has been effective in identifying remedial actions
and gradually strengthening performance. In hindsight, more attention could have been given to risks to
broader implementation performance, including capacity constraints on program execution, defining and
monitoring against clear policy targets, and addressing emergent sector issues.
2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization:
M&E design
45. The M&E framework for NREG was weak. At the heart of the problem was an overly extensive
Program Assessment Framework (PAF) that substituted for under-developed sector planning
systems and did not provide sufficient focus on key results. The PAF included a set of policy objectives,
targets, outcome indicators and means of verification that were jointly identified and revised with the
Government on an annual basis. Though it was agreed that the PAF should be limited in size and comprise
only the most crucial objectives and targets of the three sectors, the DPO-1 matrix ended up including 24
program / policy objectives, and more than 60 targets for each of the first 3 years. From the outset, the PAF
was used not only to capture key policy reforms and outcomes, but a much wider set of activities and
intermediate steps. MDAs familiar with investment projects used the PAF to plan NREG-related activities
and justify their claim on resources to MoFEP. Many PAF targets were therefore output-oriented, which led
to issues of subjectivity in the subsequent performance assessments – i.e. outputs were produced, but there
were sometimes disagreements between GoG and DPs over the acceptable level of quality (see annex 3).
46. Commitment to GoG ownership hindered rationalization of the PAF. As mentioned above, the
decision was taken during preparation avoid using a separate policy matrix for the DPO, but instead to work
with the PAF resulting from broader SBS goals and a highly GoG-led process. During preparation of DPO-
2, an M&E specialist from the Bank was mobilized to support streamlining the PAF, resulting in a modest
decrease in the number of policy objectives to 16 and annual targets to 35. Three and 5-year outcome
indicators were also included for each of the 16 policy objectives. Despite agreement of the TCC on the
need to streamline, the push to achieve this within a short-term Bank mission jarred with the established
GoG-led approaches and the process left some disgruntlement on the side of the MDAs.
47. World Bank disbursement triggers did attract greater focus, but the PDO indicators linked to
them were flawed. Selection of 6 annual triggers did provide more focus, as evidenced by the higher
performance against triggers in comparison to other annual PAF targets. Three-year outcomes linked to the
6 triggers were established during preparation of DPO-2 as Key Outcome (effectively PDO) Indicators for
the DPO series. Of the 12 indicators identified, however, 5 are actually outputs (such as the design of
17
survey tools, application of fiscal models or preparation of an investment plan), mostly copied directly from
annual targets, rather than representing downstream outcomes. Those that are genuinely outcome-oriented,
typically did not have established baselines even by DPO-2, and some presented attribution issues, such as
the target to increase timber revenues by 15 percent. Each of the 3-year outcomes from which the PDO
indicators were drawn was also linked to a number of PAF targets, which explains some of the disconnects
identified in section 2.1 between the achievement of triggers and PDO indicators.
M&E implementation
48. The need to develop sector M&E systems has been accepted, but implementation progress has
been slow. At least since 2009, and with the support of a new country-based Bank M&E specialist,
development of comprehensive M&E systems for each of the NREG agencies has been on the agenda.
Recognition by the MDAs of the need for comprehensive sector M&E systems is in itself a significant
achievement that is unlikely to have been pursued under earlier project-based lending. Credible efforts have
already been made in this direction, including the establishment of Planning, Monitoring & Evaluation
Units, and the FC commissioned its own study on M&E design. Unfortunately the MDAs were let down by
weak performance of a consultancy intended to support all three. After agreement on the TOR and some
delays, a local team was engaged by MoFEP during the first half of 2011, but their value-added has been
limited as they have focused on the design of a needlessly elaborate information system, rather than
establishing appropriate indicators and monitoring protocols for each of the agencies.
49. An attempt to establish an Independent Monitoring and Advisory Team (IMAT) to reduce the
burden and increase transparency of the PAF assessment was not successfully adopted. To
systematize the PAF assessment, it was originally proposed that the government would establish, at first for
the NREG triggers and ultimately for all targets, a methodological data sheet (clarifying responsibilities,
data collection methods, means of verifications, etc.), but this was not carried through26
. For the 2009 PAF
assessment, a small group of international and national consultants was recruited as the IMAT to carry out
an independent assessment. The intention was to reduce the transaction burden of the annual PAF
assessments on MDAs, MoFEP and DPs, whilst providing a more objective and transparent process, and
M&E TA support to the MDAs more generally. Nevertheless, the MDAs received it unenthusiastically as
more of a policing than a support function, due to an accident to one of the IMAT members the forestry
sector was not covered, and a joint GoG-DP performance assessment was still required. The exercise was
not repeated for the 2010 assessment.
50. The 3-year outcome indicators, including the DPO series PDO indicators, have not received
appropriate attention. With GoG focused on a 5-year NREG lifespan, the 3-year outcome targets were
inserted into the PAF essentially in relation to the Bank‟s financing schedule, but have not received
effective follow-up since 2008. There was no systematic attempt to report against the indicators at the end
of DPO-3, nor were they updated during DPO-3 preparation, despite the fact that many of the
corresponding PAF targets had changed. As a result, several of the indicators were no longer realistic in
comparison to the PAF targets expected by the end of DPO-3. Resulting disconnects between the PDO
indicators and the DPO series triggers were detailed under section 2.1.
M&E utilization
51. Use of M&E data has been limited by its availability. Information on the attainment of triggers and
broader PAF targets has been used as a basis for disbursement by the Bank and other DPs, respectively.
Assessing the contribution that PAF target have made to overall progress within the NREG sectors is harder
due to weaknesses in the outcome indicators and sector M&E systems. Weak sector M&E also made it
26
The NREG mid-term review report, September 2010
18
difficult to monitor implementation in a more detailed or real-time manner. For example, information on
EIA processing performance by the EPA was available in 2011 to verify if the 2010 target and outcome
indicator was met, but was not available in time to adjust performance ahead of the milestone.
2.4 Expected Next Phase/Follow-up Operation (if any):
52. GoG’s 5-year NREG Program was predicated on the need for predictable, and coordinated
medium-term donor support. NREG DPs are mostly continuing support, but with some degree of re-
configuration. EKN, EU and AFD have undertaken to support the Program for the full 5 years (up to
2012), whereas the World Bank (and DFID) committed to provide support for the first three years and then
assess progress, with a view to determining the best course for further support. The indication in the NREG
Program Documents was that the Bank would be likely to continue support at least for the remainder of the
original 5-year program, but that the NREG Mid-Term Review, conducted in July 2010) and the World
Bank ICR process itself would be critical to confirming and shaping that intent.
53. Following the MTR and ICR process, an active dialogue is currently underway on preparation of
a second phase of NREG support from the World Bank. This is expected to involve a further
programmatic DPO series (likely 2 operations). The design will draw on the lessons learnt from the
previous NREG series (see Section 6) through: (i) focusing on a smaller number of key reforms,
complementary to broader investments supported by other DPs, and to FCPF and FIP activities in the
forestry sector; and (ii) including a linked TA operation to strengthen policy analysis and stakeholder
consultation. Focal areas for the DPO and TA operations will be:
i. Forestry: (i) establish enabling environment for increased private sector, farmers and community
involvement in forest management, (ii) enhance forest monitoring capacity.
ii. Mining: (i) strengthen revenue forecasting; (ii) improve environmental management of small scale
mining activities; (iii) encourage and monitor local procurement of goods and services by the
mining industry.
iii. Climate Change: (i) strengthen institutional structures for mainstreaming climate change; and (ii)
strengthen capacity to design bankable projects and assess climate financing.
iv. Environmental Management: (i) establish Strategic Environmental Assessment as a mandatory
environmental management tool for government sectors; and (ii) enhance capacity to manage and
monitor environmental impacts of large infrastructure development.
3. Assessment of Outcomes
3.1 Relevance of Objectives, Design and Implementation (to current country and global
priorities, and Bank assistance strategy):
54. The development of the NREG PAF was strongly government-led, and drew heavily on joint
analysis supported by the DPs. The operation is therefore generally considered to be well-aligned with
national priorities, although some DPs put particular emphasis on specific activities (e.g. the VPA, which
was strongly supported by the EU), and some key policy areas (e.g. increasing government plantations)
were not emphasized as they were more investment- than policy-focused. The 2009-2010 IMAT review
also concluded that NREG activities were aligned with sector policies, whilst recommending the inclusion
of more institutional development targets, as well as attention to environmental management in the mining
sector. Many of the recommendations made in the CEA were incorporated into the NREG PAF, although
some differences exist:
The CEA had a strong emphasis on competitive bidding for timber and wildlife management
concessions, whilst the PAF focused on improving stumpage fee collection, perhaps as a more
achievable target.
19
The CEA focused on community-based natural resource management concepts and the scaling up
of Ghana‟s Community Resource Management Areas. DPO-1 included assessment of existing
groups for collaborative forest management (NGOs, CBOs, Protected Areas Management
Advisory Boards), but subsequent targets focussed on local Forest Forums and dissemination,
rather than active community management.
Increasing the supply of legal timber on the domestic market was not recommended in the CEA.
In the case of the mining sector, most of the CEA‟s recommendations are found in the NREG
program, but additional activities are included in the PAF, such as the development of corporate
social responsibility guidelines and the creation of the Multi-agency Revenue Task Force.
Environmental protection activities, including establishment of an inter-ministerial coordination
body and the need for a sustainable funding, were taken from the CEA‟s cross-cutting
recommendations, but climate change strategy and institutionalizing SEA reflect recent priorities.
The CEA also covered land resources and fisheries, but these were not reflected in PAF due to the
desire to limit the number of sectors involved.
55. The NREG PDO statement is relevant to policy priorities over the last three years, but was very
broad, and could have provided more focus, particularly in regard to tackling informal forestry and
mining activities. Illegal timber harvesting and artisanal and small-scale mining (ASM – particularly
unregulated gold-mining known locally as galamsey) were already well-recognized at preparation.
Unregulated chainsaw operators are estimated to cut up to 70 percent of the trees harvested in Ghana,
supplying almost all timber for domestic consumption, and galamsey is estimated to employ several times
the formal gold-mining industry workforce. Nevertheless, whilst “forest law enforcement” is mentioned in
the PDO, the emphasis of the PDO indicators and triggers was on ensuring legality of timber supplied by
the formal sector, and informal mining is not explicitly mentioned in the PDO at all. The approach was to
build momentum by tackling more tractable issues first27
, and PAF targets related to illegal forestry and
mining emphasized putting in place viable alternatives as part of the approach to “social issues”, rather than
law enforcement. These alternatives, specifically legal sources of domestic wood supply and areas for
establishing regulated ASM cooperatives, have proved hard to identify, however, and the ongoing impact of
the informal sector urges a more explicit and comprehensive strategy.
56. Overall design of the Program was relevant to the objectives, but specific design issues are
apparent. Whilst the use of a DPO was appropriate to the systemic issues that NREG was aiming to
address, tying it into a single instrument with an SBS approach that emphasized predictable inputs to the
annual budget cycle constrained the ability to condition triggers on ambitious reforms, particularly in
contentious and complex sectors such as mining and forestry. In addition, the absence of a separate TA
facility weakened the consistency of ongoing policy analysis that was needed to elaborate incomplete sector
strategies and respond to emerging priorities. Whilst triggers were realistic and generally relevant, there
were specific disconnects with the PDO indicators (as detailed in section 2.1) which compromised the
realism of achieving certain indicators by the end of DPO-3. There was also a disconnect between the
forestry PDOs and the related PDO indicators and triggers. No PDO indicators or triggers clearly addressed
“social issues in forest . . . communities” and the only indicators or triggers related to “forest law
enforcement” were restricted to verification of the formal sector and increasing legal domestic timber
supply. For mining and environment, the PDO indicators and triggers were largely based on outputs, rather
than defining unambiguous outcomes related to the development objectives.
27
In forestry, it was hoped the establishment of robust FLEGT mechanisms in the formal, export industry under the
VPA would eventually pave the way for extension to domestic timber supply chains.
20
3.2 Achievement of Program Development Objectives (including brief discussion of
causal linkages between policy actions supported by the operation and outcomes):
57. Of the 6 PDO indicators (encompassing 12 targets) three are rated as partially achieved and three
as mostly achieved, but weaknesses in the results framework are more to blame than poor
implementation performance. As noted above and discussed under sections 2.1 and 2.3, there are
numerous disconnects between the triggers to which GoG committed under legal agreements, and the PDO
indicators, which were retrofitted in late 2008 and then largely neglected. In particular, the failure to update
unrealistic indicators during preparation of DPO-3 means that it would be unreasonable to judge
implementation performance solely on the basis of targets that were unachievable under the agreed program
of actions.
58. Achievements in relation to the PDOs have been substantial to the extent that these were
translated into clear triggers and targets:
(i) Ensure predictable and sustainable financing for the forestry and wildlife sectors and
effective forest law enforcement. An emphasis on financial autonomy for FC around the time
of NREG preparation has since diminished as Government has increased funding. In practice,
the indicators and targets related to “predictable and sustainable financing” focussed on
increasing gross forest revenue to Government, and in those terms there has been some success
through improving revenue collection performance, updating national park fees, and significant
growth in plantations (which will increase long-term revenues). Fundamental reforms to timber
fees were largely blocked by industry lobbying, however, and the greatest determinant of
revenues remains the volume of legally harvested timber, which has recently been in sharp
decline, especially for high value wild hardwoods. FC has demonstrated its ability to advance
implementation of a complex international FLEGT agreement, forest reserve boundaries have
been demarcated, and a significant reduction in the incidence of wildfires has been achieved in
northern Ghana, following implementation of the FC‟s fire management program to protect
savanna forests. Achievements in these areas of forest law are at risk of being overshadowed by
uncontrolled informal harvesting, however, which remains unaffected by efforts to increase
legal supplies of domestic timber, and will also require attention to issues of tree tenure,
reliance on wood fuel and strengthened law enforcement.
(ii) Improve mining sector revenue collection, management, and transparency. Very
commendable achievements have been made under this objective. Creation and effective
operation of the multi-agency Mining Revenue Task Force has clarified that fiscal performance
is better than the average for international comparators, and has led to a process of both
simplifying and strengthening of the fiscal regime. Current proposals for the 2012 budget
would result in significantly higher revenues and a more progressive regime. Ghana has been
validated as EITI compliant in the minerals sector, and is pioneering application of EITI
methodologies to local revenue-sharing arrangements. MC has also developed guidelines for
use of mining revenues by District Assemblies, although its ability to influence the behaviour
of both Districts and traditional authorities is limited.
(iii) Address social issues in forest and mining communities. Greatly increased attention and
discussion has been focused on conflict and human rights issues in the minerals sector, bringing
together Government, mining companies and CSOs. Social Responsibility Guidelines for
mining companies have been developed and disseminated, and monitoring tools developed.
Although instances of conflict persist, the trend is believed to be positive, and should be subject
to more systematic monitoring in future. Key social issues for forest communities have been
less clearly elaborated under NREG, but establishment of district-level Forest Fora has
provided for more regular consultation between forest managers and local communities.
(iv) Mainstream environment into economic growth through Strategic Environmental
Assessment, Environmental Impact Assessment, and development of a climate change
21
strategy. Ghana‟s SEA model has been extended to a number of sectors, including the nascent
oil and gas sector, and to routine local government planning. SEA activities have resulted in
more transparent and participatory planning, training of more than 100 central Government and
more than 440 district officials, more funding for environmental activities in sector plans, SEA
tools being incorporated into NDPC planning guidelines, and mainstreaming of environment in
government planning as evidenced by (i) strengthening of line agency and district
environmental units and new budget lines for environmental activities, and (ii) environmental
issues incorporated into medium-term development plans of all 170 District Assemblies and
into 10 sector policies / plans. The EPA is now giving training to other African countries on
mainstreaming environment into their planning system. Sectoral EIA guidelines have been
developed and EIA service delivery and monitoring has been improved through new on-line
systems. Awareness of and activity on climate change has greatly increased. An overall climate
change management framework has been developed as a step towards a comprehensive
investment plan, and several key sectors, including agriculture, forestry, transport and energy
are moving ahead with their own climate strategies.
3.3 Justification of Overall Outcome Rating (combining relevance, achievement of
PDOs):
Rating: Moderately Satisfactory
59. NREG was designed to broaden reform within the NRE sectors beyond what could be achieved through
inclusion of one or two targets under the PRSC operations, and it has achieved that goal. Achievements
have been significant, especially viewed in the context of previous NRE sector initiatives. Donors have
been engaged in supporting the NREG sectors for many years in Ghana, often with disappointing outcomes.
Implementation of new sector-based approaches and instruments has been a learning process and design
weaknesses have become apparent, but more has been achieved though NREG than in several previous
projects in terms of specific reforms, and strengthening the institutional platform for continued action (see
section 3.4b). Performance against the stated PDO indicators and broader demonstration of outcomes on the
ground has been compromised by weakness of the M&E framework. Realism is also required in comparing
to what could realistically have been achieved within 3 years, with relatively modest funding, and in the
face of long term negative resource trends driven by complex factors. Nevertheless, it has produced a step
change in the dialogue and government ownership within areas, such as improved revenue management and
transparency, and systematic application of SEA.
3.4 Overarching Themes, Other Outcomes and Impacts (if any, where not previously
covered or to amplify discussion above):
(a) Poverty Impacts, Gender Aspects, and Social Development
60. The Stakeholder & Risk Analysis, conducted during the latter stages of Program preparation as
the first stage of a PSIA, made a number of recommendations for reducing social risks in the NRM
sectors, many of which were pursued by NREG, e.g.: establishing an inter-sectoral coordination
mechanism at Cabinet level; simplifying EIA processes and strengthening related consultation
requirements; developing a policy on corporate social responsibility; encouraging private investment in
forestry; and strengthening the role of communities in forest management. One area in which NREG
activities were identified as potentially increasing social risks was regulation of informal forestry and
mining activities. To date, however, activities undertaken have emphasized carrots rather than sticks,
primarily attempting to identify alternative sources of legal timber for the domestic market and areas where
artisanal mining can be accommodated. The Stakeholder & Risk Analysis concluded that risk of social
22
conflict was at the heart of the NRM sectors, as a result of discretion in decision-making due to weak
regulatory frameworks and of unclear policies on access and compensation. Conflict has been most evident
in the minerals sector, in the recent past. Activities during the NREG program have begun to lay a
foundation for dealing with these issues. CHRAJ conducted an assessment of human rights issues in the
sector, and a social conflict monitoring tool has been developed.
61. There are some indications that exploitation of Ghana’s natural resources has brought social
development benefits, but a solid information base for assessing NREG’s impact on poverty and
gender issues is only starting to be assembled. A recent (and preliminary) re-assessment of the costs of
environmental degradation in Ghana suggested that increased extraction mineral wealth in the 5 years to
2009 was compensated by increased investments in human capacity28
. A focused PSIA of policy reform in
the minerals sector is now underway with support from the Bank PSIA Trust Fund, but the results were not
available in time for inclusion within the ICR. On conflict issues, work remains to be done to strengthen
resolution / redress mechanisms, and to institutionalize regular monitoring of levels, locations and causes in
order to assess the impact of NREG reforms aimed at reducing it, such as development of social
responsibility guidelines, improved transparency around local revenue-sharing, and development of local
content policies.
(b) Institutional Change/Strengthening (particularly with reference to impacts on
longer-term capacity and institutional development):
62. Technical capacity within Government has been enhanced through the NREG program,
particularly in cross-sectoral areas. MC has gained considerably more understanding of social and
revenue management issues through NREG activities, helping to broaden its focus away from simply
promoting mining investments. FC has developed capacity to implement wood-tracking and FLEGT
systems, as well as to strengthen consultation processes with CSOs and local communities. EPA has
improved its capacity to process and track EIA application through its on-line register, and more than 500
government officials have been trained in the use of SEA tools. MoFEP has gained a better understanding
of objectives and activities within the NREG sectors, and is forming a Natural Resources, Environment and
Climate Change unit, which should further strengthen technical engagement in areas such as management
of natural resource revenues and climate finance. A comprehensive capacity needs assessment for the
NREG sectors was never carried out, however, and hiring restrictions continue to place constraints on the
manpower available to MDAs.
63. Institutional strengthening was the focus of the NREG Mid-Term Review (MTR). Considerable
progress has been made through NREG in comparison to earlier donor projects in the NRE sectors
which gave limited attention to broader sector management issues. The MTR employed an EU
conceptual framework for sector budget support based around 5 pillars, namely sector policy, budget and
PFM systems, sector coordination, institutions & capacity, and M&E. Key findings are summarized in
annex 11. Work remains to be done in this area in order to establish a fully effective sector program, but
awareness and willingness to act have been transformed.
Sector policy: Attention has been given to sector policies under NREG, for instance through review
of the Forest & Wildlife Policy, and revision of the Minerals Sector Policy. Key priorities and
strategies would benefit from further clarification, however, in response to evolving issues.
Numerous NRE objectives have been stated in a range of high level policy documents, and the
challenge is to: (i) condense these into a single coherent set of high-level objectives for each sector;
and (ii) fill the missing middle between high-level sector objectives and activity plans with a set of
clear strategic goals. Policy documents are currently being developed which should address this,
28
IDL Group (2011) Capacity Building for the Assessment and Monitoring of the Cost of Environmental Degradation
in Ghana
23
including a number of strategic plans and a revised Forestry Development Master Plan. The EPA‟s
draft (2011) Strategic Plan already provides a good model.
M&E: M&E systems remain weak within the NREG sectors, lacking of a stable set of high-level
and strategic indicators, but development of sound sector M&E systems is firmly on the agenda.
The Department of Forestry has been working on a set of sector objectives and has started reporting
against quantitative annual performance targets, and EPA has set out a sound results framework in
their draft Strategic Plan, although linkage to high-level objectives and indicators should be
approved. Agreement has been reached that each of the three key agencies should: (i) incorporate
clear output indicators in annual Medium-term Expenditure Frameworks (MTEFs29
), and (ii)
develop sector results frameworks which link a coherent set of high-level and strategic objectives to
SMART30
indicators and targets.
Budget planning & financial reporting: The quality and comprehensiveness of financial reporting
within the NREG MDAs has been gradually improving following periodic targeted TA inputs,
resulting in adoption of up-to-date government MTEF and financial statement formats, and
recognition of the gains in the NREG sectors in Government Public Expenditure Assessments.
Work remains to be done to improve inclusivity and credibility of budgeting (particularly reducing
under-spending) and establishing integrated technical and financial reporting.
Coordination: The Technical Coordination Committee has generally functioned well.
Establishment of the ENRAC has been delayed, but it is now operational and expected to provide a
key platform for defining sector policy going forward. Vertical linkages between MoFEP (and also
NDPC) and the three NRE agencies have been significantly strengthened. EPA, in particular,
believes this has been instrumental to mainstreaming environment, particularly in the roll-out of
SEA tools. Although contentious issues remain between the NREG MDAs over issues such as
mining within Forest Reserves, dialogue and understanding has increased.
Civil society engagement: Consultation processes and transparency have increased through a
number of activities (see section 2.2 and annex 9). Local CSOs are now more actively engaged in
the ENR sectors, and are learning to work more effectively with media.
Human capacity: NREG MDAs have established human capacity goals (albeit constrained by
government restrictions on hiring new staff), and capacity has been built in specific areas via
NREG, e.g. on PFM, on revenue modelling in the minerals sector, etc. A systematic assessment of
capacity requirements would be beneficial, however.
Ownership: There is consensus that the NREG Program has been game-changing in increasing
government ownership of donor support. From the DPs‟ perspective, challenges remain in terms of
improving the substance and comprehensiveness of sector dialogue, but expected improvements in
sector strategies, M&E and reporting will help immensely.
(c) Other Unintended Outcomes and Impacts (positive and negative):
N/A
3.5 Summary of Findings of Stakeholder Workshops:
64. Since the start of the NREG Program, annual Environment and Natural Resources Sector Summits have
been convened, which provide a platform for the NREG MDAs to present and discuss achievements in the
presence of CSOs and media. With support from Kasa, CSOs have held their own meetings ahead of these
summits to elaborate a shared position on sector activities. In general, the CSOs raise a lot of issues and
criticisms of specific activities, particularly within the forestry and mining sectors. They also re-affirm the
need to strengthen and further formalize their own role and community engagement in sector management
29
A Government budgeting tool. 30
Specific, Measurable, Attainable, Relevant & Time-bound
24
activities. But they are very supportive of NREG in general, consistently urging extension of the program to
other natural resource sectors. Annex 2 summarizes discussions from the 2011 Summit.
4. Assessment of Risk to Development Outcome
Rating: Moderate
65. Ownership of the NREG program is strong, reforms are largely incremental, and there is little risk that
the main achievements will be reversed – e.g. on the implementation of the VPA, mining revenue scrutiny
through the work of the Task Force and EITI, and promotion of SEA as a key tool for mainstreaming of
environmental concerns. Ongoing financial support to the sectors by EKN and EU until 2013, and planned
additional support from the Bank slightly beyond that should guarantee continuation. There is more risk to
those areas which have been subject to studies and policy dialogue, but where the process of reform is still
at an early stage – e.g. increasing the supply of legal timber to the domestic market, managing ASM and
social conflict in mining sector. Here, ongoing policy engagement and technical support is also needed to
ensure design of workable interventions and maintain momentum.
5. Assessment of Bank and Borrower Performance
66. On the side of both the Bank and Borrower, a huge amount of hard work and dedication was put
into the NREG Program, and has resulted in significant achievements. Where achievements have not
matched initial expectations, it has been largely due to the adjustment to a new modality of support and
related structural issues that were not fully addressed, rather than to a lack of effort or commitment.
5.1 Bank Performance
(a) Bank Performance in Ensuring Quality at Entry:
Rating: Moderately unsatisfactory
67. Overall, the Bank preparation team produced a valiant effort to convene both DPs and
government agencies and construct a complex and coordinated program responding closely to the
findings of the CEA. The Bank is regarded by both Government and DPs as having played a critical role in
the development of the NREG Program and much of the analytical work that under-pinned it, motivating
and coordinating other development partners, and providing much of the drive and international experience
for the development of a sector support program. Mobilization of a PHRD grant during the preparation
phase also started to lay a systematic basis for addressing broad sector management and governance issues,
including on PFM, stakeholder analysis, etc.
68. A number of issues were identified and discussed, but not fully resolved, during preparation,
including provision for systematic TA support, institutional strengthening and a complementary civil
society facility. The PAF was also overly extensive and output-focused, with poorly defined outcome
objectives and indicators. The selection of triggers left some disconnect with the PDOs related to forestry,
and insufficient focus on the informal mining and forestry, or on environmental impacts of mining. To the
extent that these issues were not sufficiently addressed during supervision, some responsibility is also
shared with the design of a combined DPO-SBS instrument which reduced subsequent flexibility.
69. The performance of the Bank preparation team must be viewed in context of the limitations on
independent action, and the novelty of the approach. When the Bank joined NREG preparation, it was a
minor financial contributor looking to influence, rather than direct the approach taken by other DPs, who
25
under an SBS modality had a slightly different set of priorities. Even after the Bank contribution was
increased, freedom of action was constrained, as evidenced by the appeal other DPs made directly to the
World Bank Board to block the inclusion of oil and gas sector issues in NREG. Sector DPOs, especially for
natural resources and environmental management, were a relatively new instrument in Africa, as was the
approach of combining one with a multi-donor SBS program. Programmatic DPO series were considered
very flexible instruments, and therefore assumed to provide for adaptive management during
implementation. Also, at the time of preparation, the template for results frameworks under DPOs was less
clearly developed and standardized than at present.
(b) Quality of Supervision:
Rating: Moderately unsatisfactory
70. The supervision team inherited a complex program structure including multiple sectors and a
broad technical agenda, but managed to deliver DPOs in both of the two years following DPO-1.
Delivery of DPO-2 and -3 to schedule was a considerable achievement, helping to maintain momentum and
belief in the NREG process, and contrasting with the typical experience of slippages in sector programmatic
DPO series, including in the case of both the other environment / natural resource DPOs in the Africa
Region, in Gabon & Cameroon.
71. The processing requirements for these annual operations imposed a burden, however,
particularly given the need to coordinate across multiple sectors and donors. In a reversal of its
perception as a galvanizing force during preparation, the Bank was now seen as difficult to deal with due to
the heavy process requirements of preparing new operations each year. These requirements constrained the
annual Program cycle, whilst also diminishing the quality of technical interactions around the policy
content. GoG technical staff complained that Bank technical engagement was limited, and which led to
divergence in expectations over the form in which triggers should be met. DPs also felt that there was less
Bank engagement in joint decision-making in comparison with the preparation phase.
72. Efforts were made to address outstanding design issues, but with limited results. Given the
complex operating environment and resistance to major changes, it is likely that there would have
been a trade-off between effecting more fundamental changes and adhering to the anticipated
disbursement schedule. The Bank-led process to streamline the PAF required significant effort was spent
during preparation of DPO-2, and led to substantial, if incremental improvements, but was poorly received
by MDAs, as it was felt to be at odds with government-led processes. Efforts to improve broader M&E
systems also received a sluggish response. Support on sector planning and budgeting systems came mostly
from the Netherlands Embassy, as did the direct support to civil society. Although perfectly appropriate in
the context of donor division of labor, this generated an impression in some quarters that the Bank was
insufficiently focused on the civil society aspects of NREG. Potentially, more effort could have been made
by the Bank to improve provision of TA, M&E, and the overall focus on and clarity of objectives, but
considering the time and political capital required, any fundamental changes would probably have meant
delaying the schedule of operations. The amount of staff time spent on NREG during DPO-3 preparation
dropped significantly31
in comparison to previous years, perhaps because pushing for major changes seemed
less appropriate just prior to the end of the agreed period of support and to the scheduled MTR and ICR
reviews.
73. Following approval of DPO-1, the documentation of the management of NREG is fairly sparse.
The Program was supervised from the country office and Aide Memoires and ISRs essentially reflected the
31
35 staff weeks in FY10 as opposed to nearly 60 during FY09 and slightly less than 100 during the original
preparation of the Program in FY07/08.
26
achievement of triggers and processing of new operations, rather than chronicling substantive sector and
technical discussions related to the Program32
.
(c) Justification of Rating for Overall Bank Performance:
Rating: Moderately unsatisfactory
74. NREG was a valuable, ambitious and in some respects experimental undertaking, for which Bank
leadership was both critical and highly appreciated. The new approach brought significant benefits in
terms of specific policy achievements and advancing broader sector management and governance
issues, but it also represented a high risk strategy in the context of a multi-sectoral operation with
weak existing sector systems. Inevitably weaknesses became apparent in the design. These were identified
relatively early, but the complexity of the Program, working across 5 MDAs, plus MoFEP, with 4 DPs in
addition to the Bank, and under a modality that emphasized government leadership, made it difficult to
effect timely changes, particularly in the short window between effectiveness of one operation and
preparation of the next. Ultimately, supervision prioritized adherence to the expected disbursement schedule
and letting the initial years run their course, over pushing hard for profound early changes. It also stressed
maintaining Bank support and engagement in the joint sector program, as opposed to focusing efforts on the
much smaller number of triggers. That approach has achieved significant results, and allowed GoG to learn
from their own experience, but it also permitted certain weaknesses to persist.
5.2 Borrower Performance
(a) Justification of Rating for Overall Borrower Performance33
:
Rating: Moderately satisfactory
75. GoG maintained a high degree of engagement and activity across a very broad multi-sectoral
agenda, with strong involvement from MoFEP and NPDC in sector activities. Progress has been
impressive in a number of important areas, such as the implementation of the VPA, analysis of mining
revenues, the application of SEA tools to government planning, and the establishment of more efficient and
monitorable on-line processing systems for EIAs. In other areas, progress has been slower, including the
management of ASM activities, providing a sustainable supply of timber to the domestic market and
revising revenue structures for the timber industry. Strong engagement at the technical level, was not
always matched at the senior policy level, which limited progress on the most contentious issues. The lack
of well-defined policy priorities contributed to the difficulty of securing high-level attention, but
establishment of ENRAC should provide a strong foundation for future engagement. Strong leadership from
MoFEP was instrumental to achievements, but staffing constraints also limited MoFEP‟s ability to
effectively manage centralized TA activities under the PHRD and later in support of M&E strengthening,
which retarded the development of sector management systems.
76. Issues that arose should be seen in the context of the novelty of the instrument to NREG MDAs
accustomed to an investment projects, and the need to adjust to new modalities. The change to sector
budget support involves much more freedom in the use of funds, but less structured support for design and
32
A December 5 2008 Aide Memoire summarized discussions on PFM and streamlining the PAF in November 2008,
but AMs since initial preparation have reflected little technical (as opposed procedural) detail. 33
Although the NREG implementing agencies are distinct, they include all the key MDAs responsible for
implementation in the targeted areas, obviating the need for separate assessment of the performance of government in
addition to the implementing agencies.
27
management of activities, broader requirements on reporting and sharing of sector information, and higher-
level accountability than is the case for a narrowly focused set of project activities:
The onus is on the implementing agency to determine and put in place the additional staff, TA, etc.
to absorb the additional funding and associated transaction costs. Lagging budget performance of
NREG MDAs exposed the limitations of the human resources made available, but efficiency of the
working arrangements has been improved over time, and the number of activities expected at the
start was probably unrealistic.
During PAF assessments, DPs expressed frustration at the MDAs‟ focus on delivery of outputs,
rather than discussing their content in the context of broader sector goals. This suggests the need for
a attitudinal shift from reporting on a limited set of activities to comprehensive sector dialogue, and
also for understanding the distinction between triggers and MoVs.
Complaints from GoG officers at the technical level that they are unable to guarantee high-level
policy approvals are understandable, but not ultimately acceptable within the context of a DPO.
77. Sector management and work processes have improved. Sectors in Ghana with established sector
budget support operations, such as health and education, have also taken time to adjust to new ways
of doing business. Although ultimately the responsibility lies with government to deliver, DPs need to
support the transition through clarity on requirements. Progress in NREG has likely been constrained
by the lack of precision on strengthening of sector systems, and the overly extensive and output-focused
PAF. The lack of attention given to defining a limited set of priority outcome objectives diluted the focus of
implementers and decision-makers34
. This is particularly the case in Ghana, where rapid development and
enthusiasm for innovation already tax attentions. GoG is keen to vigorously engage on many innovative
programs, such as FLEGT, EITI, climate change, SEA, etc., but staff and leadership attention is limited,
making the need to focus on priority deliverables all the more critical. Stronger existing sector strategies
would have avoided many problems, and this gap should have received more attention from the outset.
6. Lessons Learned
78. The transition from financing individual projects to sector budget support (SBS) rejuvenated
ownership, and revolutionized multi-agency dialogue. Although difficult to quantify, the adoption of an
SBS program based around a government-led target-setting process resulted in a much greater sense of
ownership, empowerment and enthusiasm amongst the implementing MDA than previous, discrete project
investments. It also engendered a far more active dialogue between the sector MDAs, and more substantive
engagement with both MoFEP and NDPC. Particularly in the case of the environment, this engagement was
considered crucial to improving the understanding of environmental and climate change issues, and to
mainstreaming environment through e.g. development of SEA tools for government planning. It has also
allowed effective collaboration on financial performance, particularly in regard to the work of the Revenue
Management Task Force in the mineral sector.
79. A sector support program should be conditioned on solid sector planning, monitoring and
reporting. Fundamental building blocks of a sector budget support program were not in place within the
implementing MDAs at the start of NREG, particularly clear and comprehensive strategies, resource
planning and M&E systems. As a result, there have been weaknesses in budget realism and execution. More
fundamentally, a lack of clarity in overall program goals and appropriate indicators compromised
demonstration of results. Weaknesses were both understandable and clearly identified at the outset, and
have been subject to considerable incremental improvement over the three years of the Program.
Nevertheless, general assurances to improve these systems in the Framework Memorandum should have
been hard-wired through clear milestones and conditionality, to ensure basic pre-requisites of an effective
sector program were in place in more timely fashion.
34
And also made it harder to evaluate the progress that was made.
28
80. The NREG Progress Assessment Framework (PAF) was too broad and output-focused during the
first three years; a policy matrix should focus on a small number of strategic and highly
consequential reforms to avoid losing the wood for the trees. The NREG PAF included a large number
of targets (initially 66, later reduced to around 40), many of which were based on outputs that were more
investment- than policy-focused, or yielded opaque policy outcomes (i.e., draft policy documents of
indeterminate status). This tended to obscure the dialogue on key policy reforms and outcomes. More time
was spent tracking and assessing a myriad of small activities and outputs, than on identifying strategic
priorities and analyzing the political economy or engaging senior decision-makers around critical reforms.
Bank disbursements were based on a more selective set of 6 annual triggers, which attracted greater-than-
average attention and levels of achievement. But the triggers were not qualitatively different from the far
larger number of PAF targets from which they were drawn, and upon which most efforts were concentrated.
The size of the PAF was recognized as a weakness from the outset, but once the precedent was set, major
changes were hard to effect. Ultimately, reforming the PAF was very difficult without first strengthening
sector strategies and planning tools (such as MTEFs and multi-year results frameworks). Ideally, the PAF
would have been drawn from these, but instead partially substituted for them.
81. Development policy lending has limitations when used as the primary vehicle of support to a
sector program, and may be more effective when complementing other instruments. NREG was
worked in two parallel arenas – policy reform (the primary focus of DPOs) and strengthening sector
management systems (the primary focus of SBS). These should be complementary, but delivery through a
single instrument may have complicated both. The SBS modality emphasized broad engagement in sector
activities rather than focusing on select policy issues, whereas use of a World Bank DPO template as the
key program document encouraged the use of the PAF as a primary planning tool and de-emphasized
specific investments in sector systems, such as M&E and TA. A broad sector program, addressing
challenges in institutional capacity as well as policy reform, may be better supported by a DPO in
conjunction with other types of instruments. In practice, sector DPOs, such as the forestry and environment
DPO in Cameroon, are often supported by an additional TA facility. Structured TA support would have
been especially important in NREG as the initial analytical work established a policy agenda, but not the
detailed reforms needed to pursue it.
82. Working across three sectors (forestry, mining and environment including climate change),
involving 5 MDAs and MoFEP, and harmonizing inputs of 5 DPs, multiplied transaction costs.
Structures should have been put in place to manage this complexity. Given the context at preparation,
shortly after the Accra Declaration and with only a modest initial contribution from the Bank, NREG
probably could not have gone ahead except as a multi-donor program. The multi-sector approach provided
sufficient gravitas to the program to attract strong engagement from both MoFEP and DPs, and also
strengthened cross-sector learning and cooperation. But multiple sectors and donors greatly increased
transaction, and the Bank found its freedom of action constrained. A more structured division of labor
between DPs would have increased efficiency, and could have been achieved through:
A formal agreement between the DPs on areas of technical leadership and additional TA inputs
(such as support for a PSIA);
Differentiation of disbursement triggers between DPs in line with areas of technical focus; and/or
Donor coordination based on unity of purpose rather than unity of process, i.e., designing a range of
instruments coordinated around a single sector dialogue, rather than consolidating all inputs into
one instrument.
One possibility would have been for the other NREG DPs to support a core SBS program based around
institutional strengthening and TA, whilst the WB DPOs focused specifically on identifying critical policy
reforms, and on high-level engagement around them. PRSC series regularly combine many sectors and
29
donors in annual operations35
, but tend to be able to draw on policy dialogue supported by a range of
separate sector activities, and do not get into the level of detail of sector implementation as the NREG SBS.
83. The complexity of the policy agenda in the NREG sectors required more time and flexibility in
timing to implement ambitious reforms. The NREG policy environment is complex and demanded
ongoing policy analysis and adaptive management, for instance to address the serious challenges posed by
diffuse, informal sector activities in Ghana. However, NREG was envisaged as an SBS program with
annual disbursements providing a predictable budget supplement to each of the implementing MDAs.
Annual DPOs left less than 6 months between disbursal of one operation to delivery of prior actions for the
next, and practically no window to assess outcomes from the preceding set of actions. The imperative to
adhere to annual budget cycles constricted the space in which to address systemic issues (e.g., to strengthen
strategy, M&E or provision of TA), and created pressure to retreat from ambitious targets, rather than to
pursue contentious policy reforms36
. Flexibility on the timing of targets should not have had a severe impact
on the implementation of work plans given that spending by the NREG MDAs has lagged behind budgets
and available funds. It has also been the case for many other sector DPOs, particularly in the NRE sectors37
.
The CEA noted that “DPs are supporting a reform process that is not linear, and engagement mechanisms
must be flexible, responsive, and capable of being scaled up or down as appropriate.” Locking all
disbursements into the same, rigid schedule hindered a graduated and flexible response to performance.
7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners
(a) Borrower/Implementing Agencies:
84. Borrower comments (see annex 3) reflect appreciation for sector-based support and pride in
achievements, but also reveal some of the frustrations and difficulties in the dialogue around the use of the
new instrument, particularly in terms of results requirements that diverge from those of investment
operations. The flexibility and additional autonomy of budget support are welcomed, but there is still an
expectation that funding should be provided up front, and that activities and outputs are sufficient measures
of progress. Such frustrations would have been reduced by: (i) clearer sector strategies, providing for
mutual understanding of the expected linkage between activities and results from the outset, and distinct
from the PAF so that changes to PAF milestones would not be seen as changes to the sector program itself;
(ii) a smaller set of targets, which could be more reliably delivered, rather than setting numerous annual
targets, at least some of which would inevitably slip; and (iii) more results-oriented phrasing of targets to
avoid confounding the means of verification (e.g., a report) with the target (i.e., an unambiguous measure of
progress towards a specified goal as evidenced in the report). Issues raised on donor coordination and flow
of funds also reflect teething problems of introducing a new approach.
(b) Cofinanciers: N/A
35
And also involve huge transaction costs and time to develop effective working relations – e.g. see the ICR for
PRSCs 1-3 in Ghana. 36
For instance, 2 successive triggers on development and implementation of a Financial Framework for the FC were
assessed as achieved on the basis of financial reports, despite proposals for revising forestry fees being largely
blocked. 37
The multi-sectoral Gabon NRM DPO achieved concrete targets across diverse sectors, after considerable delays to
the release of the 2nd
tranche that reflected the need for time to overcome resistance to reforms. Experience with sector
policy lending across many countries suggests that initial time-lines for ambitious reform programs are typically over-
optimistic.
30
ANNEXES
Annex 1. Bank Lending and Implementation Support/Supervision Processes
(a) Task Team members
38
Supervision of the current and preparation of the next annual operation were essentially conducted together once the
program was underway.
Name Title Unit Responsibility/
Specialty
Lending (preparation of original Program under P102971)
Jean Christophe Carret Senior Environmental Economist AFTEN Task Team Leader
Paola Agostini Senior Economist AFTEN Environment & NRM
Edward Dwumfour Senior Environmental Specialist AFTEN Environment & NRM
Allison Berg Senior Operations Officer COPCO Mining & operations
Boubacar Bocoum Senior Mining Specialist COPCO Mining & EITI
Caroline M. Kende-Robb Lead Social Development Specialist SDV Social development
Jan Bojo Lead Environmental Economist ENV Environmental
economics
Carlos Cavalcanti Senior Economist AFTP4 Macroeconomic
assessment
Manush Hristov Senior Counsel LEGAF Country lawyer
Rajiv Sondhi Senior Finance Officer LOAFC Loan officer
John Nyaga Senior Financial Management Specialist AFTFM PFM
Christine Kimes Senior Operations Officer AFTRL Results
Robert Wallace DeGraft-Hanson Financial Management Specialist AFTFM PFM
Sandra Bulls Program Assistant AFTEN Team support (HQ)
Victoria Ahlonkoba Bruce-Goga Program Assistant AFTEN Team support (CO)
Supervision/ICR (including completion of preparation of P113173 & P118188)38
John W. Fraser Stewart Senior Natural Resources Management
Specialist
AFTEN Task Team Leader
Peter Kristensen Sector Leader AFTEN Climate change, oil &
gas SEA
Alyson Kleine Operations Analyst WBICC Operations
Kristina Svensson Operations Officer SEGOM Mining
Carolyn Winter Senior Social Development Specialist AFTCS Social development
31
(b) Staff Time and Cost
Stage
Staff Time and Cost (Bank Budget Only)
No. of Staff Weeks US$ Thousands
(including travel and consultant costs)
P102971 Lending
FY07 34 160.49
FY08 63 316.77
TOTAL: 97 477.26
P102971 Supervision
FY08 0 13.79
FY09 19 107.79
TOTAL 19 121.68
P113172 Lending
FY09 39 187.58
TOTAL: 39 187.58
P118188 Lending
FY10 35 172.13
TOTAL: 35 172.13
P118188 Supervision
FY11 23 90.90
TOTAL 23 90.90
Franke Hendrik Toornstra Adviser AFTDE Policy matrix revision
David John Santley Sr. Petroleum Specialist SEGOM Oil & gas SEA
Sunil Mathrani Sr. Energy Specialist AFTEG Climate change /
energy
Smile Kwawukume Sr. Public Sector Specialist AFTPR Governance
Anders Jensen Monitoring & Evaluation Specialist AFTDE M&E
Sebastien Dessus Lead Economist AFTP4 Macroeconomic
assessment
Ferdinand Tsri Apronti Procurement Specialist AFTFM PFM
Virginie Vaselopulos Program Assistant AFTEN Team support (HQ)
Jayne Kwengwere Program Assistant AFTEN Team support (HQ)
Ernestina Aboah-Ndow Program Assistant AFCW1 Team support (CO)
Rose Abena Amapadu Program Assistant AFCWI Team support (CO)
Stephen Ling Natural Resources Management
Specialist
AFTEN ICR
32
Annex 2. Stakeholder Workshop Report and Results
The 3rd
Environment and Natural Resources Stakeholder Summit was held in July 2011, involving
112 participants representing GoG (including the Ministers of Lands & Natural Resources and of
Environment, Science & Technology, and the CEOs of FC, MC & EPA), traditional authorities,
more than a dozen NGO representatives, several DPs, and a small number of private sector
organizations. The Summits largely present an opportunity for the NREG MDAs to present annual
progress for discussion, but the 2011 Summit also included presentations from representatives of
chainsaw operators and the National Association of Small-scale Miners, who stressed the
importance and their willingness to work together to find comprehensive approaches to informal
forestry and mining activities that recognized the reality that these activities are well-established,
economically important, and do not focus simply on a law enforcement response. As in previous
years, a communiqué was presented from a parallel civil society review of the sectors, which was
supported by Kasa and involved more than a hundred CSO representatives. The following notes
summarize main points presented in the civil society review and/or discussed during the Summit in
response to the GoG presentations.
A number of GoG activities were particularly commended:
The formation of the Environment and Natural Resources Advisory Committee (ENRAC)
to bring together key ministers for senior policy coordination and guidance.
FC‟s attempts to increase the involvement of CSOs, especially in the VPA process and in
the review and formulation of a new Forest and Wildlife Policy.
The establishment of the AKOBEN system by EPA for environmental rating and public
disclosure of large private sector developments, including mining operations.
The general effectiveness of the NREG Program for highlighting issues and promoting
policy reform, transparency and engagement was recognized in the request that additional
sectors be included under the Program, including fisheries and land degradation /
desertification issues.
However, more efforts were urged in a number of areas. To further promote civil society
participation and transparency, the following were proposed:
An NREG communication and media strategy, including more frequent programs on key
issues, establishment of a media resource center, and an awards program to recognise
quality journalism on NRE issues.
Disclosure of environmental audits of mines.
Strengthened representation of CSOs on the FC Board.
Publication of a list of timber rights holders and status of their financial obligations.
Clearer reporting back on activities and achievement in relation to the agreements of
previous Summits.
Increased participation of the private sector in the Summits and in consultation structures
more generally.
In relation to specific policy issues, the following were proposed:
Minerals – MC‟s mission statement should emphasize promotion of local investment and
linkages to local economies, rather than simply providing a more attractive environment for
33
external investment. Mining should not be allowed in forest reserves. New mining
developments should be subject to free prior informed consent of local communities,
comprehensive cost-benefit analysis, and the principle of polluter pays.
Forestry – More should be done to promote establishment and operation of Community
Resource Management Areas, and SMEs in the forestry sector. More should be done to
increase the legal supply of timber for the domestic market. Gender analysis should be
included in review of the Forest and Wildlife Policy.
Environment – Development of the comprehensive Climate Change Policy Framework
should be accelerated, and emphasis should be given to local adaptation needs. Application
of the AKOBEN scheme should be extended to additional projects and developments,
including in the state sector.
34
Annex 3. Summary of Borrower’s Comments on Draft ICR
The document has been well written and the issues well articulated, including both the programme
design and the implementation. We generally agree with most of the challenges mentioned,
especially those faced by GOG, and certainly that the programme was complex. We would
question why the Borrower performance rating is only moderately satisfactory instead of
satisfactory, given that triggers of all the 3 DPOs were met.
We would like to highlight a number of issues which presented particular challenges from the
Government perspective:
Donor dialogue. Donor coordination and harmonization was not strong enough, which
produced heavy transactions cost, and sometimes parallel discussions on the same topics.
Development partners (DPs) also wanted numerous changes in the focus and objectives of
the programme.
Differing expectations of MoVs. Even where the means of verification (MoV) for a target
was provided, DPs in certain instances rated the performance as “partially achieved”. For
example if an MOV states “Report of Exploration” it means that we have to produce a
report on mineral exploration work being carried out in the area. It does not necessarily
mean that the exploration should have been finished as it is a complex process.
Impatience for results. Reform processes take time, and the activities conducted under
NREG were designed to lead to longer-term outcomes. Hence the suggestion by some DPs
that they are not seeing results is too premature at this stage. For example, to address the
explosion of illegal mining activities in Ghana due to the unprecedented rise in gold prices,
a quick fix could be following by simply using security agencies to flush out illegal miners
to, but this is not a sustainable method of solving the problem as it will simply push them
elsewhere, or they will return after a short time, and in the meantime conflict with formal
mines and authorities is increased. It is not realistic to see instantaneous results in dealing
with the illegal small scale mining problem.
Delays in release of funds. DPs generally released funds late in each fiscal year for which
the activities were supposed to take place, with the result that there were constraints on
funding and some activities and targets were then deferred to the next year. The time taken
to process internal applications for release of funds to the implementing agencies was also
part of the problem.
Having noted some problems, however, we also want to emphasis that on balance, NREG has been
a very positive development. Sector Budget Support has proven for us to be the most efficient
method of DP support, and the programme has been very useful in resourcing the NREG sectors to
address most of their challenges. Financing of the sectors have also increased tremendously from
the 2008 levels through both DP and GoG contributions. Furthermore, intersectoral collaboration
amongst the NREG agencies is stronger than ever before.
We particularly want to highlight the following specific achievements in each of the sectors:
35
1) Environment
Strategic Environmental Assessment (SEA) is emerging as a major tool for developing and
analyzing Government policies, plans and programmes (PPPs) to ensure that they
adequately mainstream sustainability. Decision-makers have increasing confidence that
SEA enhances sustainability of policy and planning frameworks. SEA activities have
resulted in more transparent and participatory planning, training of more than 100 central
Government and more than 440 district officials, more funding for environmental activities
in sector plans, SEA tools being incorporated into NDPC planning guidelines, and
mainstreaming of environment in government planning as evidenced by (i) strengthening of
line agency and district environmental units and new budget lines for environmental
activities, and (ii) environmental issues incorporated into medium-term development plans
of all 170 District Assemblies and into 10 sector policies / plans. The EPA is now giving
training to other African countries on how Ghana achieved so much success in
mainstreaming environment into their planning system.
Online EIA registration has helped shorten the EIA process and strengthen decentralization
of the EIA system in Ghana. It has also helped EPA improve its record keeping of projects
which have followed the EIA process.
2) Forestry
Notwithstanding the challenges encountered during implementation, the NREG programme has
significantly improved the business processes within the forestry sector including the following:
Revision of Forest and Wildlife Policy
Improved systems for securing forest boundaries
Increased revenue collection rates and improved disbursement mechanisms
Enhanced dialogued processes between major stakeholders (private sector, civil society
organizations, resource owners and forest fringe communities)
3) Minerals
There is now better collaboration between sectors, evidenced by the joint work of EPA and MC to
strengthen environmental guidelines for the mining sector. Substantial progress has been made
towards a solution to unregulated mining by identifying areas to be set aside for formalized small-
scale mining under organized cooperatives. Under the NREG programme, about 61 areas which
had been blocked out countrywide for demarcation to small scale miners are now under a process
of being explored. So far 7 of these areas are under exploration and 8 more will be added next year
subject to availability of funds. However, robust processes take time, and progress in both these
areas will not be reflected in immediate major changes on the ground.
Also, in an attempt to reduce social conflict in mining communities, fiscal models have been
developed and are being applied to the mining companies to monitor mineral revenues that mining
companies pay to Government. The model has been applied to various mines in the country. In
addition, Guidelines for use of mineral royalties at the local level have been developed. Similarly,
Guidelines for Corporate Social Responsibility by Mining Companies in Mining Communities
have been developed and sensitization of the various Districts and Municipal Assemblies as well
as all stakeholders is on-going.
36
Annex 4. Comments of Cofinanciers and Other Partners/Stakeholders
Development Partner feedback on the findings of the ICR was not received in time for inclusion.
The DP Sector Leader (representative from EKN; joint head of the GoG-DP Sector Working
Group) provided some factual updates in response to the draft document, but due to pre-occupation
with Durban Climate Change meetings, and then the end-of-year holidays, formal comments on
the conclusions of the ICR was not provided before the end of Decemember 2011.
37
Annex 5. List of Key Supporting Documents
Official Bank documents
Project documents – Program Documents & Legal Agreements for NREG DPOs 1-3
Formal records – Aide Memoires, minutes of Concept & ROC review meetings for NREG DPOs
1-3
ISRs for NREG DPOs 1&2 (not completed for DPO-3)
NREG PHRD GRM
ICRs for Ghana: Natural Resources Management Project and Ghana: Poverty Reduction Support
Credit (1-3)
Background analytical and policy documents (including PHRD studies)
Ambale, D. (2008) Support to Civil Society to Increase Accountability in Natural Resource
Governance
EKN (2006) Ghana Environment Sector Study
ODI (2007) Budget Support, Aid instrument and Environment Ghana Case Study
Sync Consultant Ltd (2008) NREG Stakeholder & Risk Analysis
World Bank, AFD, RNE, DFID (2007) Ghana Country Environmental Analysis
Analytical and policy documents produced during NREG
Development Management Consultants (2010) Monitoring and Evaluation (M&E) Situation of
Ministry of Lands and Natural Resources, Forestry Commission, Minerals Commission and
the Ministry of Environment, Science & Technology and the Environmental Protection
Agency (EPA)
EPA (2011) Draft Strategic Plan
EPA & NDPC (2010) SEA of Oil and Gas Sector
FC (2011) Draft Forest and Wildlife Policy
FC (2011) The Wood Tracking System in Ghana: evaluation of the pilot project
FC & Forestry Research Institute of Ghana (2009) Ghana Domestic Timber Market Study
Ghana Extractive Industries Transparency Initiative (2007) 1st Report on Aggregation /
Reconciliation of Mining Benefits in Ghana
Ghana Extractive Industries Transparency Initiative (2008) 2nd
Report on Aggregation /
Reconciliation of Mining Benefits in Ghana
Ghana Extractive Industries Transparency Initiative (2008) 3rd
Report on Aggregation /
Reconciliation of Mining Benefits in Ghana
GoG (2009) Statement of Policies on NRE (27 May 2009)
GoG-EU (2009) Voluntary Partnership Agreement [on import of timber products into the EU]
Kron (2011) Development of Sectoral Monitoring and Evaluation (M&E) System for NREG
MDAs
MEST (2010) Ghana Goes for Green Growth [National Climate Change Framework]
MC (2010) Development of CSR Guidelines for Mining Companies
MC (2010) Draft National Mining Policy of Ghana
MLNR (2009) Draft Strategic Plan for the Mining Sector (2010 – 2020)
MoFEP (2009) Public Expenditure Financial Accountability report
van der Linde, M. (2009) Report of the Financial Management Support Mission November 2009
van der Linde, M. (2010) Report of the Financial Management Support Mission March 2010
38
van der Linde, M. (2010) Report of the Financial Management Support Mission September 2010
External reviews and commentary
FC (2011) Environment & Natural Resources Summit 2011
Ghana Anti-Corruption Coalition (2010) Pilot Review of Six World Bank Assisted Projects in
Ghana
IDEG, ODI & ECORYS (2010) The NREG mid-term review report
IDL (2010) Validation of the Extractive Industries Transparency Initiative in Ghana
IMAT (2010) Monitoring Report No.1
Kasa (2011) Civil Society Organizations (CSOs) Annual Review of the Natural Resource and
Environment Sector
MC (2010) Environment & Natural Resources Summit 2010
Nordic Consulting Group (2011) Final evaluation of Kasa
Vaa, J. (2010) Lessons Learned from NREG SBS [Note circulated to DPs by EU team member]
39
Annex 6. Full text of PDO indicators and triggers.
NREG’s
Program Development
Objectives
Key Outcome Indicators
(a) Ensure predictable and
sustainable financing for the
forest and wildlife sectors and
effective forest law
enforcement
1) Strengthen institutions and governance as evidenced by: (a)
10 percent increase in legal wood supply to domestic markets;
and (b) first FLEGT license issued.
2) Sustainably finance and promote investment in forestry
sector as evidenced by: (a) Timber Revenues increased by 15
percent; and (b) plantation forest area increased by 15 percent,
through increased private investment.
(b) Improve mining sector
revenue collection,
management, and transparency
3) Improve mining sector revenue collection, management, and
transparency as evidenced by: (a) fiscal model applied to three
mines, resulting in improved overview of revenues due to the
Government of Ghana and a reduction of the “revenue gap”;
(b) up to date data on mining incomes, royalties and local
revenues and their distribution published at the district level;
and (c) survey tool to track perception of use of mining
revenues at district and municipal level designed, and at least
one survey undertaken.
(c) Address social issues in
forest and mining communities
4) Reduce social conflict issues in mining communities and
improve support to small-scale miners (SSM) as evidenced by
(a) design of a survey tool and carrying out of at least one
survey, (b) SSM established through three co-operatives in
mining areas with improved performance.
(d) Mainstream environment
into economic growth through
Strategic Environmental
Assessment (SEA),
Environmental Impact
Assessment (EIA), and
development of a climate
change strategy
5) Promote investment in climate change adaptation and
mitigation as evidenced by the preparation of one long-term
investment plan.
6) Strengthen national environmental impact assessment
system through: (a) updated legislative instrument on Strategic
Environmental Assessment, including sector guidelines for oil,
mining, forestry, energy, transport sectors and consultation and
disclosure procedures for environmental assessment; and (b)
60 percent of EIA applications processed within the prescribed
time frame and with the requested consultation and disclosure
procedures.
40
First Operation in a Programmatic Series
Prior actions from Legal Agreement – The Recipient has: Status
Forestry
made satisfactory progress in the negotiations with the European
Union on a voluntary partnership agreement concerning the
“Forest Law Enforcement, Governance and Trade” initiative, and
has defined the elements of such agreement by December 2007
Achieved.
submitted to the Cabinet a financial framework to ensure
predictable and sustainable funding for the Recipient‟s Forestry
Commission
Achieved.
Mining
prepared, through the Recipient‟s Minerals Commission, a
proposal for new guidelines on social responsibility in mining
activities, which takes into account inter alia experiences with
alternative livelihood programs and community development
schemes in the mining sector, for consultation with relevant
stakeholders
Achieved.
prepared, through the Minerals Commission, and in consultation
with relevant stakeholders: (a) a draft mining policy document to
govern the Recipient‟s strategic directions in the mining sector
over the short, medium and long term; and (b) draft regulations on
royalty, compensation, health and safety and service companies,
following the adoption of the Minerals and Mining Act of 2006
(Act 703)
Achieved.
Environmental protection
completed strategic environmental assessments in the energy and
transport sectors Achieved.
carried out an appraisal of the environmental impact assessment
service delivery processes, and prepared revised environmental
impact assessment guidelines for the general construction, health,
mining, agriculture, energy, tourism, manufacturing and services
and transport sectors
Achieved.
Second Operation
Prior actions from Legal Agreement – The Recipient has: Status
Forestry
signed a voluntary partnership agreement with the European
Community concerning forest law enforcement, governance and
trade, and submitted the said agreement to the Recipient‟s
Parliament for ratification
Achieved.
implemented the Cabinet-approved financial framework for the
Recipient‟s Forestry Commission in a manner satisfactory to the
Association
Achieved. Implementation
judged satisfactory by
DPs, although the
financial report used as the
MoV noted ongoing
performance issues.
Mining
undertaken consultations with mining communities, civil society
and mining companies on the content of guidelines on social
responsibility in mining activities, and published a summary of the
Achieved.
41
consultations
(a) established a multi-agency mining revenue task force including
but not limited to the Recipient‟s Minerals Commission, the
Ministry of Lands and Natural Resources, the Internal Revenue
Service and the Customs, Excise and Preventive Service; (b)
adopted, through the said task force, an action plan to enhance
mining sector revenue collection; and (c) piloted a fiscal model for
one mine
Achieved.
Environmental protection
prepared a draft national climate change adaptation strategy Achieved.
prepared a strategic environmental assessment of the tourism
sector, and conducted a review of the experience with strategic
environmental assessments of different sectors completed to date
Achieved.
Third Operation
Prior actions from Legal Agreement – The Recipient has: Status
Forestry
commenced a pilot program of wood tracking systems to verify
the origin of timber with at least three commercial companies that
are involved in the harvesting, processing and export of timber, as
a means of implementing the Voluntary Partnership Agreement
Achieved.
established procedures to improve transparency of disbursement of
forestry revenue Achieved.
Mining
prepared and issued satisfactory guidelines on social responsibility
for mining activities
Achieved. Guidelines are
non-binding.
commenced the implementation of the Mining Revenue Task
Force action plan to improve mining sector revenue collection,
management and transparency, including: (a) completion of a
collaborative pilot audit by the Recipient‟s Minerals Commission,
the Internal Revenue Service and other relevant departments of at
least one mine; and (b) application of a fiscal model to three mines
Achieved.
Environmental Protection39
submitted a draft Strategic Environmental Assessment of the oil
sector, satisfactory to the Association, and issued guidelines for
environmentally responsible management of oil sector
Achieved.
39
As noted above, the second DPO-3 prior action on the submission of the climate change adaptation strategy to
Cabinet was dropped owing to Government‟s new comprehensive approach to climate change.
42
Annex 7. NREG Program Matrices
SECTOR MATRICES INDICATING TARGETS 2007-2010 & 3-YR OUTCOMES
Forestry Matrix
Program / Policy Objectives Targets 200740 Targets 200841 Target 200942 Targets 2010 EXPECTED OUTCOMES
2010 (End of 3 years)
F1. Institutional
Strengthening and
Governance
Clearly defined
indicators for monitoring
levels of legality based
on GOG definition of
legality
Baseline survey conducted on
percentage of „legal‟ timber in
domestic market
Monitor the percentage change
of „legal‟ timber in domestic
market in reference to baseline
Improved law enforcement in
the Forestry Sector:
-10% increase in Legal Wood
supply to the domestic market.
- 1 FLEGT License issued
Conduct study to
propose policy options
to address the domestic
wood demand
Policy option for
domestic market wood
supply approved by
MLFM
Policy options and
implementation plan for
domestic wood supply approved
by MLFM
Implementation of approved
option piloted
VPA negotiations
between GoG and EU
concerning Forest
Law Enforcement
Governance and
Trade launched and
elements of agreement
clearly defined by
December 2007
VPA agreement
between GOG and EU
signed and submitted
for Parliamentary
ratification process
New wood tracking and
verification system pilot
tested for 3 companies
Piloting of Wood Tracking
initiated with 3 companies
1st FLEGT License issued
F2. Secure Natural Ecosystems
for the benefit of all segments
of society
Strategy for reducing
fire incidence
developed
Baseline for fire
incidence completed
Three key
recommendations of
Strategy Document
implemented
Fire incidence in
transition zone reduced
by 20%
Wildfire strategy fully
implemented
Continue implementation of
Wildfire Strategy
Improved forest health:
- Incidence of wildfires reduced
by 40%
- Presence of keystone species in
Protected Areas increased by
3%
40
DPO1 Prior Actions are in bold. 41
DPO2 Triggers and in bold and performance indicators in italics. 42
DPO2 Triggers and in bold.
43
Program / Policy Objectives Targets 200740 Targets 200841 Target 200942 Targets 2010 EXPECTED OUTCOMES
2010 (End of 3 years)
Boundaries assessed for
10 forest reserves and
30 GSBAs and
gazettment of Kyabobo
National Park initiated
Complete integrated
management plans
(IMPs) for 10 reserves
Survey, demarcate and
re-pillar boundaries of
additional 10 Forest
Reserves, and 1
Protected Area
Implement management
plans for the 30 GSBAs
Develop IMPs for On
Forest reserves,
Protected areas,
savannah and areas rich
in biodiversity
Options for future
financing of SRMC
developed
Develop (10) Review (5) and
implement (5) Management
plans for forest reserves and
Protected Areas (PAs)
Continue the development,
review and implement
Management Plans for forest
reserves
1. F3. Sustainably Finance and
Promote Investment in
Forestry Sector
Financial framework
for secure and
predictable financing
for the FC submitted
to Cabinet
Implement approved
FC framework
Legislation related to financial
framework approved
Approved legislation related to
financial framework
implemented
Predictable and diversified
sources of funding for Forestry
Commission secured:
- Actual Timber Revenues
against potential Timber
Revenues increased by 15 %
due to better collection of
fees and royalties
- Eco-Tourism revenues
increased by 10%
- Process of payment for
environmental services (PES)
initiated
Increased Private Sector
investment framework in Forest
and Wildlife Sector:
-Carbon financing proposal
prepared
-Export of Tertiary Processing
Wood increased by 5%.
- Plantation Forest Area
increased by 15%, through
increased Private investment
Potentials for accessing carbon
credit schemes assessed
Proposals for accessing Carbon
financing developed
Concept note for
encouraging value-
added processing
drafted
Proposal for value-added
processing developed
and endorsed by MLFM
Strategy for tertiary wood
processing developed and
approved
Implementation of two priority
areas in strategy initiated
Land lease and benefit
sharing agreement
submitted and discussed
in Cabinet
Land lease and benefit
sharing agreement signed
with additional 10
investors
Land lease and Benefit Sharing
Agreements with 10 investors
signed and monitored
Land lease and Benefit Sharing
Agreements signed and
monitored with an additional 10
investors
2. F4. Strengthen Monitoring & Assessment of WD Assessment of FSD and M&E System for Forestry M&E System for Forestry Evidence-based management
44
Program / Policy Objectives Targets 200740 Targets 200841 Target 200942 Targets 2010 EXPECTED OUTCOMES
2010 (End of 3 years)
Evaluation / Information
Communication Technology
Systems
M&E system conducted
Assessment of existing
databases for FC HQ
completed
TIDD M&E system
completed
Assessment of MLFM
and FC M&E systems
conducted
Assessment of databases
held by all FC Divisions
completed
Data communication
linkage requirements
between districts, regions
and HQ identified
ICT policy and standards
developed for MLFM
and FC
Commission and MLFM
approved.
Commission and MLFM
developed
decision making system put in
place:
-Data from M&E system being
generated on a monthly basis,
disclosed and submitted to
policy and decision-makers
Comprehensive Database
Management System designed
Data communication linkage for
Forestry Commission districts
and Parks implemented
F5. Promote equitable
resource access rights and
benefits for all segments of
society
Continue reviewing
existing benefit sharing
schemes to allow
equitable benefit flows
Implement benefit
sharing agreement on
modified taungya in 7
forest districts
Conduct a survey ( work to be
contracted to an entity with the
requisite technical expertise and
be undertaken with NGO
engagement) to assess current
level of awareness at community
level on resource access rights
and benefits
Develop framework for
promoting community
involvement in resource access
rights and benefits
Data on revenue collection and
distribution fully and actively
disclosed to local communities
(transparency):
- 40% of local communities
actively informed on revenue
collection and distribution.
Active participation of
communities in decision-making
regarding resource management:
- 25 Forest Fora functional in
forest districts
Dissemination of bi-annual
Revenue Disbursement
Reports within 30 days of
*publication by Forestry
Commission
Continue dissemination of
information based on agreed
timelines
Initiate the
establishment of forest
fora in all 10 regions in
Ghana
Assess existing groups
for collaborative forest
management (NGOs,
CBOs, PAMABs)
10 regional and 1
national forest forum are
operational
Consultation with key
stakeholders on how to
roll out district for a
beyond current 17
districts
10 Regional and 1 National
Forest Forum adequately
resourced and functional
Modalities developed for
integration of Forest Fora into
District Assembly Structures
45
Program / Policy Objectives Targets 200740 Targets 200841 Target 200942 Targets 2010 EXPECTED OUTCOMES
2010 (End of 3 years)
Increase the number of
CRM groups by 5%
46
Mining Matrix Program / Policy Objectives Targets 2007 Targets 2008 Target 2009 Targets 2010 EXPECTED OUTCOMES
2010 (End of 3 years) and level
of achievement
M1. Institutional
strengthening in the mining
sector
Establish HRD plan for
mining sector agencies
(MC, GSD, Inspectorate
Division MLFM) and
start training based on
this plan
Continue training for mining
sector agencies based on short
term HRD plan.
Continue Training and 10%
(increase over 2009) of medium
to long term Human Resource
Development Plan implemented.
Mineral licensing:
- Processing time for 40% of the
mineral licenses in compliance
with the requirements of the
minerals and Mining Act (Act
703).
Study Possibility of
Establishment of the Unit at
Minerals Commission to deal
with Social (and environmental)
issues.
Monitoring of compliance:
- 45% of planned compliance
missions undertaken for
operational mines, 30% of
planned compliance missions
undertaken to exploration sites
M2. Reduced social conflict
issues in mining communities
and improve support to small
scale miners (SSM)
Proposal for social
responsibility
guidelines, including
e.g., ALPs, community
development schemes,
prepared by MC for
consultation with
relevant stakeholders
Consultations with
mining communities/
civil society and mining
companies on content
of social responsibility
guidelines and
summary of
consultations published
Guidelines on social
responsibility for mining
activities prepared
Implementation of guidelines
with annual tracking
mechanisms to include social
conflicts
Monitoring social conflicts and
establishment of small scale
miners cooperatives:
- Survey tool to track perception
of social conflicts in mining
communities designed, and at
least one (first) survey
undertaken
Review areas suitable
for SSM
Carry out exploration
work to prove viability of
areas for SSM
Continue to carry further
exploration activities to find two
(2) new areas for SSM.
Implement Programs to improve
performance of small scale
miners in existing co-operatives
and establish two (2) new co-
operatives in viable areas (on the
basis that suitable areas are
found in 2009 for the co-ops) -
again dependent on outcome of
exploration activity
SSM established through three
(3) co-operatives in mining
areas with improved
performance
M3. Improve mining sector
revenue collection,
management, and
transparency
Relevant agencies of a
multi-agency Mining
Revenue Task Force
(including MC, IRS,
MLFM, CEPS, etc.)
identified, with the aim
of enhancing
collaboration and
revenue collection
Multi-agency Mining
Revenue Task Force
(including MC, MLFM,
IRS, CEPS, etc.)
established and action
plan to enhance mining
sector revenue
collection adopted by
the Task Force; pilot of
fiscal model for one
Mining Revenue Task Force
action plan under
implementation, including
collaborative pilot audit (by
Minerals Commission, IRS,
and others) and application of
“fiscal” model to one mine in
addition to 2008.
Mining Revenue Task Force
action plan under
implementation, including
collaborative audit (by
Minerals Commission, IRS,
and others) of one more mine.
Fiscal model applied to one (1)
additional mine.
Generation and use of mining
revenues:
- Fiscal model applied to three
(3) mines, resulting in improved
overview of revenues due to
GOG and a reduction of the
"revenue gap" (difference
between paid amounts and
amounts actually due)
47
Program / Policy Objectives Targets 2007 Targets 2008 Target 2009 Targets 2010 EXPECTED OUTCOMES
2010 (End of 3 years) and level
of achievement
mine set up
First EITI report
published by EITI
Secretariat, in liaison
with MC
Second EITI report
publicly available on
GEITI web site
Fourth (covering 2006) & Fifth
(covering 2007) EITI reports
published by EITI Secretariat
(MOFEP), in liaison with
Minerals Commission.
Sixth EITI report (covering
2008, and also including
information on royalty payments
at local level) published by EITI
Secretariat (MOFEP) in liaison
with Minerals Commission
- Up to date data on mining
incomes, royalties, and local
revenues and their distribution
published at the district level
Draft guidelines on use
of mineral royalties by
District/ Municipal
Assemblies under
preparation
Guidelines on use of mineral
royalties by District and
Municipal Assemblies finalized
Implementation, monitoring and
evaluation of use of mineral
royalties by District and
Municipal Assemblies (using
annual tracking mechanisms,
linked to annual tracking
mechanism under M2)
- Survey tool to track perception
of use of mineral revenues at
district and municipal level
designed, and at least one (first)
survey undertaken
M4. Enhanced policy and
regulatory framework and
effective coordination among
key government agencies to
improve the performance of
the mining sector
Mining Policy
Document prepared
by MC in consultation
with relevant
stakeholders to govern
GoG’s strategic
directions in the sector
over the short,
medium, and long-
term
In follow-up to 2006
Mining Act, draft
regulations on royalty,
compensation, health
and safety, and service
companies under
preparation by MC
Mining Policy Document
transmitted to Cabinet
and under
implementation
Package of regulations
submitted to Attorney
General for review
Draft Mining Regulations, MDF
Bill, finalized for presentation
to Parliament. Mining Policy
ready for presentation to Cabinet
Mining Policy, Mining
Regulations (ie (a)Draft
Minerals (Royalties)
Regulations, 2009, (b)Draft
Mines (Support Services)
Regulations, 2009, (c)Draft
Mines (Compensation &
Resettlement) Regulations,
2009, (d)Draft Minerals and
Mining Regulations, 2009,(e)
Draft Mining Regulations, 2009
(f) Draft Explosives (Mining &
Civil) Regulations and MDF Bill
submitted to parliament by
Government (NB Passage of
these Bills into Law beyond
scope of Minerals Commission)
Reporting by mining companies,
and financing of Minerals
Commission:
- 60% of the mining companies
submitted their quarterly reports
on time
- MDF Bill submitted to
Parliament by GOG (NB.
Passage of bill beyond scope of
Minerals Commission)
MSSP EIA/SEA
finalized and SEA
incorporated into
international review of
SEA experience in
Ghana, with EPA
Workshop held to
improve coordination
among key institutions
having responsibility for
the mining sector
Review of final MSSP EIA
reports to establish baseline on
compliance
Monitor compliance with new
EIA procedures - Minerals
Commission in conjunction with
EPA
EIA compliance:
- Reduction of 40 % of
documented incidences of non-
compliance with EIA
M5. Enhance international
and regional cooperation Adherence to Kimberly
certification scheme
Continued adherence to
Kimberley certification
Register of small scale diamond
miners. 10% more than in 2008
Register of small scale diamond
miners. 5% more than in 2009
International and regional
cooperation:
48
Program / Policy Objectives Targets 2007 Targets 2008 Target 2009 Targets 2010 EXPECTED OUTCOMES
2010 (End of 3 years) and level
of achievement
scheme
- Compliance with KPCS
49
Environmental Matrix
Program / Policy Objectives Targets 2007 Targets 2008 Target 2009 Targets 2010 EXPECTED OUTCOMES
2010 (End of 3 years) and
level of achievement
E1. Cross-sector natural resource
and environmental management
and partnerships in
environmental management
Draft framework for the
process of developing a
Sustainable Development
Action Plan (SDAP)
Collection of relevant
data and information, and
stakeholder consultations
to prepare the SDAP
Draft SDAP and Action plan
formulated and reflected in
Ghana‟s long-term
development plan
SDAP finalized and
approved by Cabinet,
Review of national polices
from a sustainable
development perspective:
- Formalized SEA review of
all new policies in place
Draft framework for a
formal inter-ministerial
forum on environment and
sustainable development
Cabinet paper on a
preferred option, and
alternatives, for an inter-
ministerial forum and
level of representation,
taking into account
existing bodies and
committees.
Inter-ministerial forum
established
Inter-ministerial forum
meetings held on SDAP,
climate change and
environmental management
of the oil industry.
E2. Strategic Planning for
Environmental Institutions Gain insights in financial
situation and constraints to
secure funding for EPA
Insight in financial flows
and systems, and reflected
in strategic plan and
annual plan to enable
delivery of core EPA
functions.
Review of fee and levies
system.
Ministry‟s and EPA‟s
functions and financing
mechanisms on environment
reviewed;
Institutional functions of
Ministry and EPA approved
by Head of Civil Service
(Management Services
Division
Organization and function of
national environment
institutions:
- New functional
relationships and resource
mechanisms submitted to
Parliament for Ministry of
Environment, Science &
Technology and EPA Initiate consultations for
developing a strategic plan
for MLGRDE, and
evaluation / updating of
strategic plan for EPA.
Statement on ministerial
functions on environment,
action plan with budget
on environment portfolio
in MLGRDE.
Updated strategic plan for
EPA, including functions,
HR and training plan
based on existing strategic
plan and GESS and linked
to SDAP process
Strategic plan improved to
reflect functions of EPA and
the ministry.
Strategic plan endorsed by
the EPA board and Minister.
E3. National environmental
monitoring and reporting
Task force established,
relevant sectors identified,
and inter-sectoral working
paper on assessment
method, indicators and
targets to reduce costs of
environmental
Study on the costs of
environmental degradation
done.
Cost of environmental
degradation calculated for the
forestry sector-
National environment
monitoring and reporting:
- Environmental M&E system
in place and operational.
50
degradation building on
initial study PHRD grant.
ToR to develop an
environmental data-base
and key indicators
(consistent with national
development. priorities)
Agreed set of key national
environmental indicators
and plan for data
collection for sectors and
issues identified in SDAP.
Ghana Environment
Outlook for 2008
prepared
SDAP indicators developed. Agreement on the SDAP /
environmental indicators and
monitoring system.
E4. Decentralized environmental
management
Decentralization of EIA
review process;
Implementation and
training on new sector
guidelines;
Simplified EIA quality
check in region.
30% of districts have
capacity built in SEA tools
and mainstreamed into
District Medium Term
Development Plans (DMTPs)
EIA procedures decentralised
to the ten (10) regional and
three (3)district EPA offices
Additional 20% of districts
(above base year) have
capacity built in SEA tools
and mainstreamed into
DMTPs
EPA regional and district
offices strengthened to
undertake SEA and EIAs
Pilot of Online EIA
registrations in four(4)
Regions
Pilot of Online EA
registrations in four
additional (4)regions and one
(1) district office
E5 Climate change Elements of an inter-
sectoral climate change
adaptation and mitigation
strategy in preparation
Develop a draft national
climate change strategy,
linked to some pilot
adaptation and
mitigation measures.
Adaptation climate change
strategy submitted to Cabinet
Mitigation climate change
strategy approved by Cabinet
Investment in climate
change adaptation and
mitigation integrated into
national budget and planning
processes:
- Long-term investment plan
prepared
E6 National environmental
assessment system SEAs in 2 sectors key for
growth: energy and
transport.
Mechanisms agreed to
ensure that
recommendations are
implemented
8 sector guidelines
finalised
SEAs in one additional
sector (shelter or
tourism).
Review of SEA
experiences to date
(including social issues,
consultation process and
complementarity wih
EIA), in and with
different sectors (incl.
mining
SEA on oil sector is
produced, which
includes guidelines for
environmentally
responsible management
of oil sector
Based on guidelines
produced in 2007-2009,
preparation of an
institutional framework
(including resource
requirements for
environmentally
responsible management
in the oil, transport,
mining, construction,
health, tourism,
agriculture, manufacturing
sectors)
National environmental
impact assessment system:
- Updated legislative
instrument on Strategic
Environmental Assessment,
including sector guidelines
for oil, mining, forestry,
energy, transport sectors and
consultation and disclosure
procedures for
environmental assessment.
- 60% of EIA applications
processed within the
prescribed time frame and
51
Stock-taking of EIA
delivery
Baseline on EIA
applications processed
within prescribed time
frame
50% of EIA applications
processed within
prescribed time frame
50 % of EIA applications
processed within the
prescribed time frame
including required
consultation and disclosure
procedures.
60% of EIA applications
processed within the
prescribed time frame
including required
consultation and disclosure
procedures.
with the requested
consultation and disclosure
procedures.
52
Annex 8. DPO1 Program Matrix targets for 2007 & 2008 that were not carried through (as
opposed to re-worked) into the revised DPO2/3 Program Matrix
Original Program / Policy
Objectives
Targets 2007 Targets 2008 Progress against 2008 Targets by end
of DPO1
FORESTRY
To strengthen institutional
capacity to implement
policy
Draft TORs for policy and
Forestry Development
Master Plan (MP) review
prepared and submitted for
discussion at Ministerial
level
Review of Master Plan for Forest
and Wildlife Sector completed
ToR for the drafting of an updated Forest
and Wildlife Sector Master Plan were
prepared and consultants identified; their
engagement was awaiting the availability
of funds.
Restructuring plan for WD
drafted and submitted for
approval within MLFM
Top 2 priorities of restructuring
plan implemented
The implementation of restructuring
actions in the Wildlife Division was also
delayed due to the late release of NREG
funds.
To ensure effective law
enforcement
Initiate review and draft
New Forest and Wildlife
Laws and Regulations for
stakeholder consultation
Draft Wildlife Bill submitted to
Cabinet Ratification of the VPA, and a Draft
Wildlife Bill, have been placed on "fast
track" by the new Government‟s
administration.
To ensure equitable socio -
economic benefits for all
segments of Society from
forest resource
management
Stumpage collection rate of
current and outstanding
debts increased to 68%
Collection rate increased to 75%
Stumpage collection rate for 2008
increased substantially to 90%.
To attract investment in
the forest and wildlife
sector
Organise international
investment forum to
identify investment
potential in the sector
Submission of the conclusions
and recommendation of
investment forum report for
Ministerial approval and
identification of priority areas for
implementation.
Completion of the targets on sector
investments were somewhat delayed.
The Investment Forum Report will be
reviewed, and priorities identified for
further action.
Investment opportunities
marketed and tenders for
concessions launched
Monitor Implementation of
concession agreements
Tender documents for two
additional investment portfolios
developed
Completion of the targets on sector
investments were somewhat delayed.
To ensure a predictable
and sustainable financing
of the forest sector
Approved Parliamentary
Budget allocation from
MoFEP to FC is timely
released
Approved district forestry budgets
are timely transferred by FC. [not reported]
MINING
To improve information
availability and sector
promotion
Establishment of upgraded
IMS under way, with
support of MSSP,
including:
- intranet network;
- external web site;
- database
Implement recommendations for
improvement of IMS
Initiate digitization of old maps,
reports, and data
Adapt cadastre to 2006 Minerals
and Mining Act
The Ghana Mining Portal
(http://www.ghanamining.org/ ) was
updated. Improvements to the mining
sector information management system
continued, with further digitization of old
maps, reports, and data. Minerals
Commission also pursued modernization
of the mineral cadastre (rights/licensing
system), through a consultant engaged to
53
Framework for review of
IMS established
draft regulations on adapting cadastre to
the 2006 Mining and Mining Act
To address social issues in
mining communities
including equitable
distribution of mining
revenues
Initiate the process to improve
mine closure and post-closure
policies prepared by government
and consultations launched
ToRs for consultancies on mine closure
policies and the use of royalties by
district/municipal assemblies were
drafted, and subjected to validation at
stakeholders‟ workshops
Survey to establish baseline data
regarding social conflicts in
mining communities designed in
consultation with stakeholders
A questionnaire for a baseline survey on
social conflicts has been drafted.
To improve support to
small-scale miners (SSM) Studies for reclamation of 5
areas degraded by small
scale mining completed
Initiate tender process for works
contract(s) for reclamation of 1-2
degraded areas.
ToRs and tender documents have been
prepared for works contracts for the
rehabilitation of two sites degraded by
SSM.
Integration of mining into
economy and
diversification of mineral
production base
Interim studies, supported
by MSSP, on potential for
development of clay and
pegmatites
Conduct market survey of salt
produced in Ghana
Assess potential of one industrial
mineral (e.g., clay, pegmatities)
Mapping for base metals and
other minerals for 1 area
Consultants‟ reports on market
assessments for salt and Kaolin clay have
been prepared.
Improve mining sector
revenue collection,
management, and
transparency
Initiative [sic] consultations with
stakeholders on cost/benefit
analysis of mining
[not reported]
Enhance international and
regional cooperation
Design action plan in line with 1
existing international or regional
[mining] agreement/ or
partnership and begin
implementation
[not reported]
ENVIRONMENTAL
PROTECTION
To improve cross-sectoral
environmental
management
EPA coordinates
development of inter-
sectoral strategic
investment framework
(CSIF) for SLM.
CSIF finalized; Revise and update
land planning and soil
conservation ordinance and its
amended act ;
Initiate pilots on sustainable land-
use plans using SEA guidelines
(District level)
A workshop on sustainable land
management was held, with the
TerrAfrica program and the National
Sustainable Land Management
Committee. A draft Country SLM
Investment Framework (CSIF) and a
road map for developing pilots on SLM
using SEA guidelines has been
developed, with the objective of
mainstreaming and scaling up SLM in
Ghana.
Effective decentralized
environmental
management
Use of SEA / NDPC
guidelines at District level
for medium-term
development plans
Further use of NDPC SEA
guidelines at District level,
Development of land-use pilots
using SEA guidelines (see SLM).
[not reported]
24 District mid-term
development plans
developed using SEA
guidelines with assistance
from EPA
25 more Districts assisted by EPA
in using SEA guidelines [not reported]
54
Agreement on plan for
setting up of Natural
Resources Environmental
(NRE) Departments in
decentralized local
government.
25% of Districts have NRE
departments established by the
Local Government Service, and
capacitated by training on NRE
management and use of SEA
guidelines.
Training on SEAs given to 24 districts.
Natural Resource & Environment (NRE)
departments have yet to be established by
the Local Government service. There has
been some work with District Works
Departments. This now needs to be
revisited in light of the separation of the
EPA from the old MLGRDE.
Strengthening functional
partnerships and
participation in
environmental
management
Consultations on
establishment of national
dialogue forum, including a
broad range of
stakeholders.
Continued consultations on
establishment of national dialogue
forum, including a broad range of
inter-sectoral stakeholders.
Definition of mechanisms for
involvement of CSOs in SDAP
(including private sector,
academia, NGOs, media,
traditional authorities), partly
based on proposed review of
SEAs.
Consultations on a national dialogue
forum were held, and will be built on in
2009.
55
Annex 9. Participation and Demand For Good Governance mechanisms in the NRE sectors
Ghana is seen as a leader in promoting good governance within West Africa, and has relatively strong
formal institutions, such as parliament, local government, the judiciary and the press. Activities under
NREG have reached beond these basic building blocks for engaging with broader society around natural
resources issues.
Across NRE sectors:
Ghana is now EITI compliant. Much revenue information is already available for the mining
sector, and EITI is being extended to the oil & gas and forestry sectors. EITI has also shown that
strong multi-stakeholder collaboration between government, CSOs and private sector is possible
and can lead to strong outcomes.
A lot of dialogue on NREG issues with a range of stakeholders is already happening. Most GoG
agencies in the NREG sector already have some consultation mechanisms for sharing
information and discussing ideas with civil society and the private sector.
KASA civil society funding mechanism. Although only a short-term (18-month) pilot, Kasa has
already yielded lots of valuable lessons on the best way to support CSOs in this sector. It has
helped to solidify some coalitions of CSOs in the sectors such as mining, forestry, water, etc…
Innovations that have worked well in particular sectors:
Forest Fora have engaged forestry officers more pro-actively with local communities, and have
worked closely with the Forest Watch Coalition on processes like the VPA.
EPA has developed the AKOBEN rating and disclosure system “to motivate companies to
improve their performance” in terms of compliance with environmental laws and regulations.
AKOBEN explicitly recognizes the importance of public awareness in incentivizing
environmental performance.
The Commission on Human Rights and Administrative Justice (CHRAJ) has taken an active
interest in conflict issues in the mining sector, carrying out an independent investigation of
allegations of human rights abuse and conflict. The challenge now is to follow up on their
report‟s findings more systematically, including through the legal system in some cases.
The Minerals Commission is building knowledge and capacity to better respond to social
issues in the mining sector. They commissioned a baseline study of conflicts in the mining
communities, and have developed guidelines for Social Responsibility of large mining
companies and for use of mining revenues by District Assemblies. They have also formed two
District Mining Committees as a pilot platform for increased local consultation (drawing in part
on the Forest Forum model). They have also recruited a senior social specialist to lead this work.
56
Annex 10. Six main risks identified at the appraisal of DPO-1
Political risks – the main risks are the that natural resources and environmental governance are
highly political and contested; moreover, the December 2008 Ghanaian presidential and
parliamentary election might impact the policy reforms and lead to an increased level of
spending
Risks of a weak public finance management – the main risk associated with weak PFM are (i)
low capacity of sector ministries, departments, and agencies to prepare comprehensive works
plans that are costed, (ii) low budget ceilings given to line ministries to accommodate the
additional financing requirement for the NREG program, (iii) delays in the release of funds
Economic risks - Changes in the global economy or disruptions in the domestic economic may
lead to a slow down in growth; an increase in non-concessional borrowing could result into debt
distress
Environmental risks – Unintended negative environmental effects may include attracting
investment into the forest and wildlife sector, diversification of the mineral production,
integration of mining into the economy, and technical focus on environment that neglects
capacity to deliver on social and environmental realities at local level. Also increase revenue to
the sector and boosting employment, this could induce greater rates of extraction
Social risks – the three main risks comprise (i) the blockage of reforms by elites and powerful
interest groups, (ii) negatively impact on the vulnerable groups and increase gender differences
due to the NREG intervention and (iii) a limited participation of citizens due to insufficient
benefits accruing to local communities and an increase of social conflict, at last in the initial
stage, as a result of distributional asymmetries becoming publicly visible
Risk of Misperception – the Bank‟s involvement could be misperceived as only aiming to
increase revenues from extractive industries with little concern for social or environmental
impact
57
Annex 11. Key findings of the NREG Mid-Term Review (August 2010) on sector management
systems
A sector policy should be updated and clarified beyond the broad objectives laid out in the
Letters of Development Policy. The 2009 Statement of Policies on Natural Resources and
Environment, provides a good start, but was largely donor-driven, and should be more
focused and specific. Medium-term strategies for each of the NREG sub-sectors are also
needed to link policy objectives to specific targets that will inform annual plans. There is also
need for more stability in the planning process to avoid of multiple incompletely
implemented plans and strategies. Currently, a National Environment Policy is being drafted,
and the FC intends to begin work on a vision for the forestry sector.
The budget management capacity of the NREG agencies was weak at the outset of NREG,
lacking medium term budget frameworks, annual work plans linked to consolidated budgets,
and adequate reporting systems. The Framework Memorandum gave insufficient focus to
PFM within the NREG agencies. Absorption of funds during the initial years has been low,
but with technical assistance from EKN, budget management improved during DPO-2 and
DPO-3: (i) an annual public finance action plan for 2009 and 2010 was drafted for
strengthening financial programming and financial management; (ii) NREG activities were
mainstreamed into the Annual Budget and the MTEF (2010-2012); and (iii) budget
comprehensiveness improved with reporting by the FC and EPA on all funding sources.
The Technical Coordinating Committee has been generally effective for sector coordination
at the senior technical level, but the establishment of the ENRAC has been delayed, and
involvement of civil society, especially the private sector, is not fully institutionalized.
Lack of clarity on the respective roles of the NREG agencies vs their line ministries is one of
the biggest institutional weaknesses. In the case of the EPA, clarification of roles has been a
target within the PAF, but delivery was delayed and the draft National Environment Policy
makes no mention of MEST. General capacity constraints are also an issue, more within MC
and EPA, than FC. During preparation, there was considerable discussion around TA
provision, but it was decided not to develop a parallel TA operation to avoid diluting
government ownership. A planned comprehensive assessment of sectoral TA needs never
took place, and whilst GoG have used NREG funding on TA, including senior international
experts in the case of mining revenues, there is a general perception amongst DPs and some
acceptance within GoG that the quantity and quality of TA has not been ideal, and the quality
of outputs has suffered as a result.
There has been limited progress on the establishment of routine sector M&E systems to date,
but an initial scoping assessment has been conducted, and the need for such systems, linked
to sector strategies, is accepted within each of the three NREG agencies.
REGION
UPPER WESTREGION
R E G I O N
R E G I O N
BRONG-AHAFO
REGION
ASHANTI
WESTERN
CENTRAL
EASTERN
VO
LT
A
EASTUPPER
N O RT H E R N
REG
ION
REGION
REGION
REGION
GREATER ACCRA
G H A N A
THIRD NATURAL RESOURCE ANDENVIRONMENTAL GOVERNANCE PROGRAM
1°0°1°2°3°
5°
6°
7°
8°
9°
10°
11°
3° 2° 1° 0° 1°
B U R K I N A F A S O
C Ô T E D ´ I V O I R E
T O G O
T O G OB E N I N
IBRD37675
MA
RCH
2010
8°
7°
6°
5°
11°
This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.
G u l f o f G u i n e a
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Boabeng-FiemaMonkey Sanctuary
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Shai HillsGPR
Asin AtandasoRRKakum
NationalPark
Nini-SuhienNational
Park
AnkasaGPR
Bia SouthTributaries
BofombiriGame Reserve
KogyaeStrictReserve
OwabiRamsar
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Denu Aflao
Keta
Anyako
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Wute
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NewAdubiase
Bodwesango
AkokoasoAjuafo
Ntronan
Amua
AduamoaObo
Hohoe
BaagloKute
Jasikan
Kadjebi
Ahamasu
Dodo
Asukawkaw
Brewaniase
Kpandae
Makongo
Kimabui
Salaga
Wangasi-Turu
Gbung
Barekese
Awaaso
AdansiAkrofuom
AkimSwedru
Esaaman
Ayiem
AkwidaaPrince´s
Town
Eikwe
Alenda
Apataim
PresteaHuniValley
Nsuta
Bui
Nsawkaw
Dwokwa
Achiasi
Edubia
Obogu
Agogo
Kayoro
Mankarigu
Gambia No.2
PROTECTED AREAS
FOREST RESERVES
RIVERS
SELECTED CITIES/TOWNS
REGION CAPITALS
NATIONAL CAPITAL
REGION BOUNDARIES
INTERNATIONAL BOUNDARIES
20 40 60 80 KILOMETERS0
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