Recommendations

IFAD's Approach. While the main elements of IFAD's strategy in Ghana are still robust, there is a need for some reorientation and refocus to take into account the emerging constraints and lessons from experience. The medium-term orientation of IFAD's approach in Ghana should therefore, include the following strategic thrusts:

(i) Focused Geographical Coverage. Despite the somewhat improved incidence of rural poverty between 1988 and 1992, poverty is still predominantly rural and Northern and Upper Regions are still the poorest. IFAD should strengthen and focus its poverty-alleviation efforts in these regions, and extend its coverage to communities of the western part of the Northern Region where no operations have yet been undertaken. This is needed to maximize IFAD's visibility, and hence leverage, through an effective and focused impact on poverty where it is concentrated. The "concentrated" versus "spreading thinly" approach can be particularly effective in the context of proliferation of poverty alleviation assistance by the major international financial institutions.

(ii) Strengthen support to rural household food security at the national level by supporting technology development of root crops and building on IFAD's successful experience in technology transfer and dissemination of cassava.

(iii) Specific support for drier zones research and technology development focused on food security and environmental rehabilitation in northern Ghana. A longer term three- pronged programme approach should be adopted to: (a) support the identification and testing of better varieties of food crops endogenous to the drier zones; (b) support farm systems research aimed at maintaining soil fertility and minimizing land degradation in the same zones; and (c) support investment activities to disseminate the identified technologies.

(iv) Emphasis on widening markets, and increased access to inputs, through extensive support to rural infrastructure rehabilitation and construction (roads and small-scale irrigation schemes) at village level. IFAD's previous experience in this context should be internalized.

(v) Continuous support to rural women by, inter alia, decreasing drudgery and increasing scope for productive activities by promoting village level simple potable water schemes centred around water management committees run by women.

(vi) Consolidation of IFAD's experience in rural credit in Ghana with the immediate initiation of an intensive dialogue with GOG, PBs and all concerned to determine a new set of rules for IFAD's further support to smallholders credit. The dialogue should be based on issues and constraints identified by the CPE (and others) in this field. Central to these is the sustainability of the financial intermediation processes for smallholders and the rural poor. Further IFAD support to rural credit in Ghana should depend on the results of this dialogue.

(vii) Reorient targeting mechanisms away from strict quantitative criteria and large area targeting to communities and village based targeting; identify additional innovative targeting mechanisms to reach the poor in better off regions and revamp beneficiaries' participation at the design and implementation stages through their genuine involvement in selection and implementation of activities without loosing sight of the realities of the poor's survival strategies.

(viii) Support to ongoing GOG reform on specific fronts directly affecting the rural poor e.g.; (a) support to the extension system reform by identifying and strengthening initiatives to fill the gaps between smallholders, farmers and MOFA Front Line Extension Staff; (b) support to GOG decentralization policies; (c) strengthen support to privatization by enhancing the incorporation of private operators in implementation while maintaining adequate technical supervision by government agencies.

Given the poor infrastructure (e.g. roads, telecommunications) in the rural areas, difficulties in coordination among various regional entities and institutions, IFAD should attempt to limit a specific project to a specific region, and perhaps to a specific number of districts within the region depending on the state of poverty and intra-district socio-economic differentiation. To support decentralization, the district should constitute the administrative unit on which project design and activities are centred.

88. To ensure future sustainability of project activities and benefits, IFAD-supported projects should be implemented within the regional ministry's administrative structure. The project team should remain on the payroll of the regional ministry, but should be paid a project allowance and fringe benefits (such as housing and transport). Those on secondment should be treated similarly. The staff of the IAs should also receive a project allowance commensurate with their incremental duties in the implementation of project activities.

IFAD should have a policy dialogue with the Government to ensure the inclusion of its projects in the core programme. Counterpart funds flowing to the project should be based on a well- prepared and mutually agreed upon annual work plan and budget, while dated covenants for periodic payments of counterpart funds to disbursement from the special account should be agreed upon during negotiations (as is the case of REP).

There is a need to streamline and harmonize coordination mechanisms. High level sectoral coordination for all IFAD projects should be established with bi-annual meetings. The first meeting would be devoted to discussing implementation progress, streamlining activities and conflict resolution, and the second would also include approval of the annual work plan and budget of all projects.

To support its future technology development activities, IFAD should use existing research institutes which are, on the whole, well established but whose field programmes especially in remote areas and the northern regions, would need considerable support, in addition to the normal GOG funding.

National Root and Tuber Crop Improvement Programme (NRTCIP). The current system of multiplication should be reorganized taking the following factors into account: (i) establishment of significant areas of foundation material at selected regional sites carefully supervised by Crop Research Institute researchers; (ii) the use of farmer contractors supervised by DAES or Crop Services Department, to multiply planting material at selected sites within the regions; (iii) the promotion of the new varieties, as many growers appear to be not totally aware of the limitation of the old varieties; and (iv) alternative uses for cassava, including chips for export. There is ample justification for financing another phase of NRTCIP which would further develop the activities undertaken to date.

Extension. It is strongly recommended that the research institutes and MOFA critically assess the very considerable research data they have accumulated, and ultimately produce crop packages/recommendations that the FLS can use, and that are viable for smallholders in the main soil types given current price relationships. In future projects IFAD should assist DAES where feasible through providing training to FLS particularly on livestock matters; promoting the link between the FLS and the poor rural communities under the UEA by strengthening the two pilot concepts, CLW and Women Extension Volunteer, and promoting the use of the media, particularly radio, in helping extension messages reach the farmers.

Infrastructure. The potential for small-scale irrigation should be further exploited particularly in the north of Ghana where such development represents substantial support to community food security. Technical recommendations for design and implementation are given in the report. Potable Water, should be an integral part of design for IFAD's future projects. Since potable water is widely appreciated its provision should be exploited by projects as a means of sensitizing the community to other project activities. The most appropriate way of providing potable water should not be pre- determined but decided on the basis of local experience, preference (within reason) and, obviously hydrogeological considerations. Provision of and improvements to road networks as a key element in enhancing access to markets should remain a central project activity. The implementation methods that have evolved under the IFAD projects should be strengthened and generalized. The technical capabilities of government agencies in this respect should be strengthened and contracting encouraged in areas where contractors' services are inadequate even if the process involves initial implicit subsidies. Contracts should have an element of beneficiary involvement built into them.

Group Formation. To improve group formation the literacy/numeracy programmes of the GOG should be more directly linked with the IFAD-supported project groups. A two tier approach to group formation should be followed where the first tier would be reserved for intensive group sensitization and training and the second tier for screening by banks to receive credit. Successful groups should be encouraged to form inter-group associations with the purpose of linking them directly to participating banks and widening their scope of activities. The pressure to achieve targets in terms of group formation should be reduced in favour of a stronger emphasis on group quality. Targets need to be adjusted to remove the pressure to form new groups until the implementing agencies can effectively service all existing ones. The development of WUAs under LACOSREP should serve as an example for other IFAD projects in Ghana.

96. Credit. To reduce both lender and borrower transaction costs, experiments should be carried out such as: (i) using RB's offices as retailing units for larger banks (eg. ADB); (ii) lending through semi-formal and informal channels along the lines of the Pilot Credit Project in LACOSREP after the corrections introduced by CPE; (iii) promoting mobile banking in villages, using vehicles equipped with banking facilities; and (iv) an IFAD-assisted project risk fund be established in the PBs to facilitate the smoother administration of write off of bad debts.

ADB should continue to be among IFAD's partner institutions in Ghana to validate IFAD's investment so far and build on its field expertise of rural lending to smallholders. IFAD should however, insist on transparency during the policy dialogue with ADB. Despite the current weakness of the RBs they have the potential to develop and grow to become critical agents shaping the rural credit sector and in particular, the poorer communities. Even with the restructuring programme under the Rural Finance Project supported by the World Bank, RBs still need guidance and close supervision for their proper development. Strengthening the Association of Rural Banks (ARB) both at the headquarters and regional chapters might be necessary.

Targeting. In North and Upper Ghana due to the pervasive nature of poverty, specific area targeting appears to be a practical method for low-cost, effective targeting of the rural poor. This means moving from general area targeting used in the selection of the project district/regions, to lower levels such as sub-districts, towns and rural communities, using data produced by the project itself or through other recent projects and/or studies. In the case of the Transitional Zone with relatively better socio-economic conditions, specific area targeting is still valid in some areas, e.g. immigrant villages which are easily identified and have a generally higher level of poverty than the rest of the population. Other innovative targeting mechanisms should be sought to reach the poor within the better-off communities. When targeting in this manner, the attempt to reach the most disadvantaged within the group must be done openly with the assistance and even the leadership of community 'notables' and traditional authorities.

Participation. A significant change of approach to project formulation and design is needed to achieve effective participation of the beneficiaries. IFAD and government agencies must start with an exploratory exercise aimed at understanding the perceptions of local communities regarding their needs and their own evaluation of the proposed activities. The next step is to engage in a participatory planning exercise which implies negotiation between the local communities and the agencies concerned to find how best to match the agendas of both. The new project design cycle proposed under the most recent IFAD's reengineering efforts seems to be responding adequately to this need; and the last project designed for Ghana's Upper West Region and just starting implementation, is a step in the right direction.

The post of Gender Specialist/Coordinator (or Group Formation Specialist with emphasis on Gender as in SCIMP) should be included in the PCUs of future IFAD projects. She will be responsible for coordinating women's activities and group formation, and also supporting participating agencies and M&E Units to develop indicators for collecting and developing a gender disaggregated data base.

NGOs should not be used simply as a matter of course. NGOs are advantageous in certain project contexts but not in others. They can greatly improve implementation in some circumstances while slowing it down in others. They should be used where they present particular advantages to the project in reaching its objectives, including sustainability. But the desire to include NGOs in the project should be tempered by a careful evaluation of the benefits to be derived and a thorough assessment of the NGO's capacities and relevant experience.

 Lessons learned

The spread of a project over a wide geographical area especially with poor infrastructure (roads and communication) and many regional and district administrations creates managerial difficulties, stretches limited project resources thinly, increases competition among administrative units, complicates coordination and slows the pace of project implementation. Complexity of some projects due to many components and IAs requires further coordination and taxes the limited institutional capacity.

Managerial Effectiveness. The implementation performance of early projects in the portfolio demonstrates the need for the selection of a coherent management team. The selection of this team was thought to be best undertaken by a consultancy firm. This approach did not produce good results even when the consultancy firm recruited staff internationally. The members lacked harmony and team spirit. The subsequent experience with a well-remunerated full fledged national management team directly selected by the GOG produced consistently good results. The success is associated with the generous incentives (foreign currency-based remuneration), and stable terms of service.

For effective project coordination and implementation, managers/coordinators should be associated with the project as early as possible even from the design stage; a condition largely fulfilled in Ghana. Other essential characteristics of project management are: experience, continuity, motivation and authority. These requisites of success are also visible in IFAD-funded projects in Ghana.

While the creation of a separate project M&E unit has been effective in some projects in providing timely response to project management needs for planning information, it has achieved this at the expense of sustainability and transfer of experience and knowledge to the regional and national Policy Planning, Monitoring and Evaluation Division (PPMED). The subsequent integration of M&E functions, to various degrees, within regional PPMEDs aimed to ensure sustainability and continuity after project completion. When this was associated with incentives for implementing officers, good results were obtained.

The returns to human skill development are positive in the medium as well as in the long term. The spillover effect has been particularly effective in Ghana. Professionals trained in VORADEP in the fields of research, extension, monitoring and evaluation, participated successfully in the management and implementation of the current IFAD projects almost ten years later. In some cases training has been effective and its impact visible even in the short-term, as in the case of the irrigation agronomist in LACOSREP.

Whereas the core project staff is essential for the effective implementation of projects, the sustainability of project activities and benefits depends on the performance of the IAs and the interest of the beneficiaries. Beneficiaries, in particular, have to be ensured an immediate, tangible and durable benefit from project intervention to effectively mobilize them and contribute to project sustainability.

Conditions for Effective Transfer and Development of Technology. The positive experience of transfer and development of improved technologies to fight cassava diseases and improve yields can be attributed to the synergies of a number of factors which created the right conditions for success:

(i) the subject of the technology transfer is cassava, a crop crucial for household food security hence large demand for yield improvements exists and is increasing with income growth;

(ii) the technology (improved cassava varieties and biological control) existed already in international/regional institutions (IITA) and has been tested in similar (though not identical) environments;

(iii) the existence of committed institutional capabilities and good technical expertise to undertake the adaptive research and trials under local conditions in Ghana (Ghanian Crop Research Institute)

(iv) the ability of IFAD to identify the gaps in such capabilities and make funds available to strengthen them accordingly;

(v) the existence of a well-defined and clear legal framework between IFAD, IITA and the GOG within which funding flows directly and regularly from the IFAD loan to IITA upon delivery of required services;

(vi) excellent technical backstopping support from IITA (financed by IFAD) whereby technical assistance was provided to the counterpart research institute throughout the critical initiating period and until adaptive trials were well underway;

(vii) commitment of researchers involved, of project management and above all, the commitment of the GOG in support of this programme; cassava development has a central role in recent government agricultural policy; and

(viii)adequate support and prompt follow-up from the CI.

Approaches to Research and Extension. Based on IFAD's experience, the lesson is that support to existing inherently strong research institutions - on condition that IFAD's specific interests are given sufficient weight in their research programmes - together with the promotion of Research/Extension/Farmer linkages offer a workable approach. Elaborate packages detailing labour requirements and technologies were found inadequate in many cases because of the high cost of inputs. They, therefore, were useless at field level. Recommended packages should be updated regularly to reflect the changing price relationships and should incorporate variations required for different soil types. The UAE could be a rational choice for the consolidation of extension service and the optimization of limited available resources. For this approach to be successful, intensive training in multiple fields is required, and the creation of a link between the FLS and the farmers themselves.

Rural Infrastructure as a Catalyst for Project Activities. Improvement to infrastructure, including the provision of potable water, road improvement and small-scale irrigation are still much needed in most parts of Ghana. These three activities, which have been greatly valued by communities where they have been undertaken by IFAD-supported projects, can successfully act as a catalyst for the implementation of other activities. In particular the provision of potable water has been a major impact point in all IFAD projects and gathered momentum for the implementation of other project activities. They represent valid interventions for inclusion in future IFAD-supported projects.

The inadequacies inherent in some government services with regard to the physical implementation of infrastructure activities, and the shortage of staff have led to the successful use of contractors as implementers. The role of technical government agencies remains important however, and was particularly effective in design and supervision of infrastructure activities with selective support from IFAD projects. Complementarity between the private and the public sector is an important element for project implementation.

Main elements of sustainability of small-scale irrigation schemes are catchment area protection and adequate management of the dam infrastructures; activities which are dependent on targeting receptive beneficiaries and the formation of strong WUAs. Participatory site selection and the proper animation of beneficiaries, grouped in WUAs, are essential ingredients for success. The direct involvement of communities in the development of irrigation facilities through the provision of labour, will help to develop proprietary interests in the undertaking. In the socio-economic conditions prevailing in northern Ghana during the dry season, beneficiaries providing labour should be compensated for lost dry-season off-farm earning. If this is the case, it becomes feasible to construct dam infrastructure using labour-intensive methods together with a limited amount of machinery for quick execution. In the interests of sustainability irrigation infrastructure activities should aim to attain a balance between labour provided by the beneficiary community and the use of machinery; the exact mix will depend on specific circumstances.

Effectiveness of Credit Groups. Despite several improvements made in the procedures for group identification, animation and training over the years under different IFAD projects, absence of well trained, participative and responsible groups still continues to be a problem. Groups have been formed to facilitate credit and savings activities with the premise that they would become cost- effective units for obtaining services from the formal banking sector. Given the small average loan size, the interest rates and the low recovery rates, the revenue generated to the banks is low and the group units are still far from reaching cost effectiveness. Groups need to be formed into inter-group associations, wherever there is a large number of groups in one location, to cut the costs of bank supervision and administration for credit and savings activities. However, this larger grouping mechanism needs strong organizational capability within the groups to function effectively. The issue of low recovery rates is multidimensional and has to be worked out jointly with all parties concerned.

Credit Sustainability and the Role of Participating Banks. ADB has been a major recipient under IFAD-supported projects and its scope for expansion in this sector depends on effective control of non-performing assets which are building up rapidly. Negative incentives like penalizing groups for subsequent loans if all members have not fully repaid and penalizing new groups from obtaining loans if the village has residents who have not repaid in full, are necessary deterrents. However, with this strategy, the good borrowers may also be deterred; this is not in the interests of sustainability. Mechanisms for effective recovery have to be established and distinctions have to be made between genuine cases of default and wilful default. The RBs are likely to be more accessible to and familiar with the local communities. Their development and growth are critical in shaping the rural credit sector, particularly in the poorer communities. Strengthening RBs on a case-by-case basis should remain a feature of IFAD credit design.

Commercial Banks' (CBs) interest in small rural credit depends on the readiness of small farmers to become creditworthy so that the CBs can consider them financially viable. The participation of CBs in two IFAD-assisted projects has led them to believe that small farmers, when organized into groups, are creditworthy. However, their willingness to extend their scope of participation in IFAD-assisted projects will remain selective, i.e., limited to clients who have performed well (good repayers). They would, in all cases, like to be fully protected against risks. The proposal to establish an IFAD-project risk fund within each PB would facilitate their involvement.

Loan Packages. It is evident from IFAD's experience in Ghana that the design of restrictive loan "packages" for credit to smallholders is counterproductive, both for the borrowers and for the lenders/administrators. Smallholders do not "compartmentalize" farm activities. Farm households are managed as one multi-activity enterprise where costs, revenues and repayments are not clearly delineated by activity. Attempting to confine a poor borrower to use loan proceeds to finance a single activity is difficult because it is inconsistent with the farmer's vision of the household economy. It is also counterproductive because it limits the flexibility with which farmers can maximize benefits from the loan. Even for the lender, it might require more complex methods of control (e.g. the need to give the loan in the form of two or three in-kind components) and closer supervision. In-kind credit, which attempts to oblige the borrower to use the credit as specified in the package, is perceived by borrowers as restrictive and rigid and may result in inadequate recovery rates. Cash credit based on the assessment of the totality of households needs and production potential, implies greater choice, with fewer restrictions and greater flexibility in adapting to individual needs and circumstances.

Group Sustainability. As groups are used mostly as vehicles for credit disbursement, insufficient time and resources are devoted to group formation and training to ensure their continuity for other purposes. Sustainability, therefore, is threatened except in the case where project groups are built on the basis of endogenous existing groups. In the latter case, the ability of groups to form and dissolve at short notice represents one of the strengths of the traditional system of cooperative enterprise, since it implies flexibility to adjust to changing circumstances. The role for project group mobilization activities in this context lies in improving the quality of these traditional community groups by enlarging their area of action, strengthening their organizational and technical skills and offering them opportunities for productive activities. To attach great importance to promoting the permanence of project-sponsored groups is to ignore characteristics inherent in social organizations.

Women's Groups. Awareness is being created at project level and at community level of the need to mobilize and reach women with all project activities, but the majority of the field staff working with women groups are male. Communication between male staff and women farmers is not effective, partly because of socio-cultural factors and partly because the male staff have difficulty in seeing issues from the women's perspective. The need to identify and use qualified female field staff is, therefore, of primary importance. Mixed groups do not appear to afford women the opportunity to get as much experience and exposure to certain activities (e.g. visiting banks, training and participating in discussions). This is not the case in all-women groups. As a first stage, women may need to be part of women-only groups until they have developed the skills enabling them to participate in mixed groups on a more equal footing.

Water User's Associations. The WUAs in IFAD's project in the Upper East Region represents one particularly successful experience in group activity, in sharp contrast with credit groups. They have undertaken responsibilities for construction of tertiary infrastructure, maintenance, collection of dues and catchment protection. The main characteristic which distinguishes these groups from project credit groups is that they are built around very clear and concrete economic assets (plots of irrigated land) whose value for household food security is substantial and closely linked to the effective functioning of the group. If the group breaks down, so will the quality and reliability of the irrigation system. In addition, active support from the project has been a key element in improving the effectiveness of these groups. The project has been responsible for developing guidelines and revising them after the first round of implementation. The government agency responsible appointed FLS as facilitators for this programme and other agencies have been supporting training and assisting the groups in their activities. Significant elements of the successful approach have been:

(i) involvement of local traditional authorities, including chiefs, tindanas (clan land custodians), and local assemblies in the recognition and empowerment of the WUAs;

(ii) development of simple, practical methods for calculating water charges to fund the WUAs;

(iii) priority allocation of irrigated land to displaced farmers from the catchment area;

(iv) involvement of NGOs where they have a comparative advantage;

(v) training of facilitators as "facilitators, enablers, motivators and educators";

(vi) legalization of WUAs and assistance in drafting by-laws; and

(vii) institutional integration through the involvement of line agencies and local political bodies in supporting the initiative.

The Role of NGOs versus Government Agencies. In some instances, the NGOs participating in IFAD projects for group formation were more of a burden to the projects instead of rendering a service through linking with the grassroots. In reality, projects had to extend substantial support to NGOs to enable them to deliver their contractual agreement in fields in which they had no previous experience. The role of government agencies in group formation has also been mixed. Their role has basically been to supplement technical and informational inputs for economic activities. The scope of these agencies to effectively play a developmental role in group formation would need strong assistance like that given to some NGOs. The difference between NGOs and government agencies is one of permanency and sustainability. Long-term survival of most NGOs depends on external grants with a limited time frame, whereas government agencies are generally more permanent. NGOs which have diversified into financial intermediation activities like Women's World Banking may survive longer if their base is broadened and strengthened. This sustainability element should be taken into consideration in the design and selection of institutions to support and be supported by the projects.

Effective Targeting. Targeting during implementation on the basis of cut-off criteria for exclusion of non-target individuals or households, has proved to be problematic and ineffective. What seems to be missing is the realization, at design stage, that indicators for identifying the poor are not the same as mechanisms for reaching those same poor. The technical feasibility and costs of applying these criteria, and the social or political consequences, do not receive due consideration in design. Other mechanisms for reaching the poor need to be developed and tried. In addition, the strong social cohesion and interdependency webs which characterize much of the northern regions, imposes a targeting approach aimed at communities or subcommunities as a whole, rather than attempting to go directly to individuals or households. Traditional leaders should be fully incorporated into the exercise of identifying the poorest. This approach takes full advantage of the customary social objective of providing for everyone.