trade and investment program for a competitive export economy...

TRADE AND INVESTMENT PROGRAM FOR A COMPETITIVE EXPORT ECONOMY (TIPCEE) SECOND YEAR WORK PLAN FOR PARTNERS

OCTOBER 2005 – SEPTEMBER 2006

September 2005

This publication was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc.

TRADE AND INVESTMENT PROGRAM FOR A COMPETITIVE EXPORT ECONOMY (TIPCEE) SECOND YEAR WORK PLAN FOR PARTNERS

OCTOBER 2005 – SEPTEMBER 2006 The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

CONTENTS Acronyms Executive Summary SECTION I Introduction to TIPCEE First Annual Work Plan A. TIPCEE collaboration B. Project Overview C. Organizational Structure D. Results Framework SECTION II 2005 Work Plan by Component A. Export Business Development Component B. Enabling Environment Component ANNEX A Key Result Areas, Indicators and Targets EXHIBIT 1 TIPCEE Organizational Chart EXHIBIT 2 TIPCEE Results Framework

CHEMONICS INTERNATIONAL INC.

ACRONYMS ACPG Association of Cashew Processors, Ghana ADRA Adventist Development and Relief Agency International AgSSIP Agricultural Services Sub-Sector Investment Project ASYCUDA Automated System for Customs Data Acquisition BDS Business Development Services BOG Bank of Ghana BUSAC Business Sector Advocacy Challenge CAF Competitiveness Activities Fund CEDIS Customs Export Data Information System CERSGIS Center for Remote Sensing and Geographical Information Systems CGE Computable General Equilibrium CIDA Canadian International Development Agency CRIG Crop Research Institute of Ghana CSIR Council for Scientific and Industrial Research DANIDA Danish International Development Agency DCA Development Credit Authority DfID Department for International Development EBD Export Business Development EE Enabling Environment EMOD Economic Modeling EU European Union EurepGAP Euro-Retailer Produce Working Group-Good Agriculture Practices FAGE Federation of Associations of Ghanaian Exporters FAS Foreign Agriculture Service FASDEP Food & Agriculture Sector Development Policy FIAS Foreign Investment Advisory Service

ii TIPCEE DRAFT SECOND YEAR WORK PLAN FOR PARTNERS


FINSSP Financial Sector Strategic Plan GAP Good Agricultural Practices GCMS

Ghana Customs Management System

GCNET

Ghana Community Network

GDA

Global Development Alliance

GDP

Gross Domestic Product

GEPC Ghana Export Promotion Council GISPA Ghana ISP Association GPRS Ghana Poverty Reduction Strategy GSB Ghana Standards Board GT Ghana Telcom GTZ Gesellschaft für Technische Zusammenarbeit GSSP Ghana Strategic Support Program HAG Horticulture Association of Ghana HIPC Heavily Indebted Poor Countries ICS Information and Communications System ICT Information Communication Technology IEE Initial Environmental Evaluation IEHA Initiative to End Hunger in Africa IFPRI International Food Policy Research Institute IMF International Monetary Fund IPM Integrated Pest Management IR Intermediate Result ISP Internet Service Provider ISSER Institute of Statistical, Social, and Economic Research ITFC Integrated Tamale Fruits Company KRA Key Result Area

TIPCEE DRAFT SECOND YEAR WORK PLAN FOR PARTNERS iii


LTS Long Term Savings MCA Millennium Challenge Account MCC Millennium Challenge Corporation MDBS

Multi Donor Budget Support

MISTOWA

Market Information Systems and Traders' Organizations in West Africa

MMYE

Ministry of Manpower, Youth and Employment

MOFA

Ministry of Food and Agriculture

MOFEP

Ministry of Finance and Economic Planning

MPC Monetary Policy Committee MTEF

Medium Term Expenditure Framework

NBFI

Non Banking Financial Institutions

NCA National Communications Authority NDPC National Development Planning Commission NED National Economic Dialogue NEPAD New Partnership for African Development NLC National Labor Commission NTC National Tripartite Committee ORA Other Result Area PAMPEAG Papaya and Mango Producers and Exporters Association of Ghana PEF Private Enterprise Foundation PERSUAP Pesticide Evaluation Report and Safer Use Action Plan PIET Programme Intervention and Evaluation Template PIR Project Intermediate Result PIVA Partner Institutional Vulnerability Assessment PMP Performance Monitoring Plan PPRSD Plant Protection and Regulatory Services Department PRSP Poverty Reduction Strategy Paper

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PSIA Poverty and Social Impact Assessment RF Results Framework RIA Regulatory Impact Assessment SAKSS Strategic Analysis and Knowledge Support System SEC Securities and Exchange Commission SME Small and Medium Enterprise SPEG

Sea Freight Pineapple Exporters of Ghana

TIPCEE Trade and Investment Program for a Competitive Export Economy TIRP Trade and Investment Reform Program TQIL Total Quality Investment Limited TSSP Trade Sector Support Program UofG University of Ghana USAID United States Agency for International Development VCTF Venture Capital Trust Fund VEPEAG Vegetable Producers and Exporters Association of Ghana WAFF

West Africa Fair Fruit

WAGP

West African Gas Pipeline

WARP

West Africa Regional Program

TIPCEE DRAFT SECOND YEAR WORK PLAN FOR PARTNERS v

EXECUTIVE SUMMARY The Trade and Investment Program for a Competitive Export Economy (TIPCEE) seeks to achieve exponential growth in sales of non-traditional exports over the five-year life of the project by increasing the competitiveness of Ghana’s private sector in world markets. In the 8 months since project inception, TIPCEE defined major priorities for both the Export Business Development and Enabling Environment components and made significant progress in implementing practical improvements in the horticultural industry supply chains of various commodities and in reforming the Ghanaian policy and regulatory landscape. In Year 2, TIPCEE will build on the strong partnerships established – with government, private sector and other donors – and achieve demonstrable impact in the competitiveness of the Ghanaian private sector.

TIPCEE Implementing Partners

• Chemonics International • CARE International • TechnoServe/Ghana • The Services Group • Geomar Group • Dexis International • Elan International • International Business Initiatives

Priorities established in Year 1 and activities planned for Year 2 feed into USAID’s Strategic Objective 6 (SO 6) “Competitiveness of the Ghanaian Private Sector in World Markets Improved”, which was designed, in consultation with GoG, to link directly to the Ghana Poverty Reduction Strategy (GPRS), particularly the private sector pillar. TIPCEE’s work also responds to GoG priorities as outlined in the Private Sector Development Strategy and the new Trade Sector Support Program. During TIPCEE’s first year, the Export Business Development team engaged with industry to develop programs which will have a lasting impact on selected commodities: pineapple, mango, papaya, vegetables and cashews. In Year 2, these programs will be scaled up and result in cross-cutting impacts which will translate into significant gains in competitiveness. In the pineapple industry, two industry-led initiatives to be supported by TIPCEE will focus on improving and monitoring effective compliance to established product norms as well as developing a capacity to integrate supply chain information systems through the introduction of pallet bar coding. Complementary activities will improve product packaging through strict quality assurance methods and the introduction of new formats. The conversion to MD2, will get a boost from the MOFA (HEII) smallholder program in which TIPCEE will support participating farmer group nurseries to attain maximum productivity from the distributed propagation material. Support to the development of cayenne pineapple concentrate for regional distribution will open a market for the excess cayenne supply base. The mango industry will make a strong entry on the export market in 2006 with support from TIPCEE all along the supply chain. This initial large scale export program will require long-term preparation and training of participating farmers in order to maximize export grade fruit, a central concern following the pilot shipments conducted in the project’s first year. It is expected that mango exports should jump from 200 metric tons in 2005 to over 1,000 metric tons in 2006. The papaya industry will gain from support in the establishment of an industry product standard which will serve as the basis to integrate small farmer production while maintaining quality. Support for the development of profitable irrigated smallholder production systems will extend the supply base and enable nucleus enterprises to spread the investment required to increase their shipments.


The vegetable industry will initiate a product norm setting program, supported by TIPCEE, which will improve general quality and set the stage for the penetration of mainstream distribution channels. Experiments on diversification crops such as okra will translate into quick market growth when a successful technological mix is developed based on virus resistant seeds and the dissemination of IPM techniques. The widespread cashew production base will be clearly identified through mapping technology, and smallholder farmers and others along the supply chain will be trained in grading and sorting techniques in order to facilitate linkage of cashew producers with downstream partners. This will greatly contribute to the emergence of a processing base by lifting constraints linked to the management of a reliable supply line and will ultimately increase the quality and therefore value of Ghana’s cashew crop. Through these commodity focused actions, TIPCEE will address cross cutting issues which will contribute to strengthening the industry’s competitiveness. One of the key objectives of TIPCEE is protecting and promoting the smallholders’ place in the export supply chain. The focus on smallholder networks is present at all levels of TIPCEE’s work. Specific interventions are targeted at current smallholder groups, as in the MD2 pineapple and cashew nut programs, and aim to make them market ready to link with downstream partners. In other cases, TIPCEE will work with nucleus enterprises, developing smallholder management systems and striving towards achieving quality assurance certification standards (EurepGAP, FairTrade, Organic) and demonstrated and equitable profitability for all parties involved. The second program year will also be the time to prepare for subsequent interventions, selecting commodities which will gradually replace the current ones, as Year 2 commodity initiatives will eventually be mainstreamed by industry players. A central objective of the selection process will be to broaden the options of the country’s upper and northern regions whose export crops are currently limited to mango and cashew. This diversification effort will contribute to increasing TIPCEE’s outreach and impact in the north, bringing new growth opportunities to the populations in these areas. TIPCEE’s activities will be carried out against the backdrop of imminent large scale investments which will dramatically improve the capacity of Ghanaian farmers to link with downstream partners. TIPCEE’s promotional support activities will aim to convey this very positive outlook to industry partners all along the supply chain, including international players. The Enabling Environment (EE) component is focused on seven sectors that are considered most important to achieving the TIPCEE goals and objectives: macroeconomic, monetary and fiscal policy; financial markets; labour, trade and other private sector policies; agriculture; energy; and ICT. The focus on these areas is based on the overriding need to achieve and sustain macroeconomic stability through monetary and fiscal policy, improve the efficiency of factor markets particularly labour and financial markets, as well as agricultural product and input markets, and improve the regulatory frameworks for key infrastructure sectors such as energy and ICT. In Year 1, the EE component began implementing policy and regulatory support programs in labour, assisting in operationalizing the National Labour Commission (NLC) through drafting of legislative instruments and supporting capacity building events for commissioners, mediators, and the judiciary; in finance, supporting the implementation of FINSSP by drafting policy documents and issues papers, holding public-private dialogue events, and developing a FINSSP monitoring and evaluation system; in energy, developing a roadmap and beginning work on regulations for the secondary market for natural gas; and in ICT, supporting the review of three ICT bills which will go to parliament by the end of the calendar

2 TIPCEE DRAFT SECOND YEAR WORK PLAN FOR PARTNERS


year. TIPCEE’s expert at the Bank of Ghana provided continuing support to the Monetary Policy Committee and facilitated progress on the Foreign Exchange Bill. TIPCEE initiated work in both the agriculture and trade sectors, however, work in both of these sectors is expected to begin in earnest in Year 2. During Year 2 TIPCEE’s macro focus will include support to the Monetary Policy Committee in the Bank of Ghana as well as other technical assistance by its embedded advisor, Dr. Mahamudu Bawumia. In addition, TIPCEE will conduct a training needs assessment for the Policy Analysis Unit MOFEP and will provide technical support to the Ministry for the annual National Economic Dialogue. In the finance policy area, TIPCEE will embed senior policy advisor Dr. Sam Mensah in the new Financial Sector Division at the Ministry of Finance and Economic Planning (MOFEP), where he will support implementation of FINSSP. Activities for Year 2 include providing technical assistance to the Board of Trustees of the VCTF to establish guidelines for fund operations; supporting implementation of the Long Term Savings Scheme such as amending the Act and preparing detailed regulations and administrative procedures and manuals; supporting a revision of the Financial Institutions (Non-Banking) Law, 1993 (NBFI); providing technical assistance to the SEC to develop rules for mergers and takeovers (currently absent) and establish a regulatory framework for the over-the-counter (OTC) market; and increasing civic awareness of the financial sector by supporting Financial Sector Literacy Week. For labour, TIPCEE will continue supporting the National Labour Commission (NLC) and will begin supporting the Tri-Partite Committee. Support will include drafting of legislative instruments, policy papers and public-private dialogue events. TIPCEE’s work in the trade sector in Year 2 will be guided largely by the Trade Sector Support Program (TSSP, part of the PSD strategy), which was recently released by the Ministry of Trade and Industry (MOTI). In addition to work that may come out of the TSSP, TIPCEE will work with FAGE and PEF to prepare a study assessing the impact of duties, tariffs, levies, and taxes (national and local) on selected commodity chains (e.g., pineapple, papaya, mango, cashew). TIPCEE will provide additional support for implementation of the PSD, including support for implementation of RIA/PIET. In Year 2 for agriculture, TIPCEE, collaborating with DFID, will support MOFA with the revision of FASDEP in an effort to clarify the appropriate roles of government, private sector, academia/research and development partners to improve the competitiveness of the private sector. In addition, TIPCEE will facilitate the Sea-Freight Pineapple Exporters of Ghana’s (SPEG) understanding of the legal framework for the development and management of Tema Shed 9 through a public-private partnership; support MOFA in examining the feasibility of a Trade Desk; and facilitate access to safe and effective pesticides by preparing background documents and legislative instruments, as necessary, recommending that pesticides that are approved by the EU and USA are automatically approved by the Ghana EPA based on equivalence determination provisions of the Agreements on Agriculture. TIPCEE’s Year 2 energy activities will include support for the drafting of a policy and regulatory framework for the secondary market in natural gas, a stakeholders’ forum to review the draft policy and regulatory framework, and the finalization of the policy and regulatory framework. A roadmap, prepared for the Ministry of Energy by TIPCEE in Year 1, will outline other follow-on activities which TIPCEE will undertake subject to budget considerations and in collaboration with other donors. For ICT, TIPCEE will provide support for the review and finalization of three draft bills for submission to Parliament including the Telecoms Bill, the National Communications (Amendment) Bill, and the E-Legislation Bill. In addition, TIPCEE will support the Ghana ISP Association (GISPA) and other industry groups to negotiate and lobby with NCA and GT for cheaper access to Sat 3 cable.

TIPCEE DRAFT SECOND YEAR WORK PLAN FOR PARTNERS 3


SECTION I Introduction to TIPCEE Year 2 Work Plan This work plan covers the period from October 1, 2005 through September 30, 2006. The Chemonics International Consortium presents this draft second year work plan under the United States Agency for International Development (USAID) Trade and Investment Program for a Competitive Export Economy (TIPCEE). Chemonics International, along with its consortium partners, CARE International, TechnoServe/Ghana, The Services Group (TSG), Geomar, Dexis International, Elan International, and International Business Initiatives, was awarded the TIPCEE contract on December 2, 2004. A. Project Overview

The goal of TIPCEE is to increase the competitiveness of Ghana’s private sector in world markets through an improved enabling environment and a strengthened capacity of the private sector to respond to market demands. The objectives for TIPCEE can be grouped into 4 broad categories; expanded market access, improved performance of enterprises and smallholders, increased delivery of demand driven business services, and key policy and regulatory constraints addressed and solutions proposed. TIPCEE will increase the performance, value, and innovation of Ghana’s export industries in world markets by strengthening selected commodity supply chains from farm to market; and work with policy makers and implementers, and private sector stakeholders to improve the legal and regulatory environment for private sector operation and investment. In order to meet the demands of the global market place, TIPCEE’s Export Business Development team will enhance Ghanaian businesses’ ability to identify market opportunities overseas and within the sub-region; meet the stringent quality standards of export markets; form strategic partnerships with agri-business firms in the U.S., Europe and other countries; increase purchases from smallholders; and improve the quality of and demand for business development services. TIPCEE will link its Enabling Environment team of international and Ghanaian professionals with government officials, policy research institutes, business associations and other private sector groups to improve key policies and regulations that currently constrain business development in Ghana. B. TIPCEE Collaboration Government of Ghana (GoG) TIPCEE is working closely with the GoG on the vast majority of TIPCEE initiatives. TIPCEE provided input into the 2005 Composite Work Plan of the GoG Private Sector Development (PSD) Strategy and will continue to feed project information and activities into the GoG PSD annual work plan process and will report applicable M&E data. TIPCEE is working with the Ministry of Finance to implement FINSSP and has recently been requested to embed one of the project’s senior advisors in the ministry. TIPCEE is working with the Ministry of Youth, Manpower and Employment to implement the Labour Act of 2003, specifically the formation of the National Labour Commission and the National Tri-Partite Committee. While TIPCEE has met with the Ministry of Trade numerous times, the relationship will deepen once priorities have been established for the TSSP, which will guide and drive the GoG trade



strategy for years to come, Additional GoG partners for TIPCEE include the Bank of Ghana, the Ministry for Private Sector Development, the Ministry of Communications, the National Communication Authority, the Ministry of Energy, the Energy Commission, and the National Development Planning Commission, among others, all of which TIPCEE has established working relationships with in Year 1. MOFA is a particularly strategic partner for TIPCEE. TIPCEE recently began supporting MOFA in the revision of FASDEP. In addition, TIPCEE joined MOFA’s Horticulture Export Industry Initiative (HEII) Steering Committee as an observer in Year 1. In Year 2, TIPCEE will collaborate with HEII on a number of initiatives including: the MD2 plantlet distribution program which TIPCEE will complement with technical assistance to smallholder nurseries; the crop diversification research program which TIPCEE will support and complement with industry dissemination activities; the issues related to Public Private Partnerships in respect to the privatization of the management of HEII financed infrastructures at Tema Port; EurepGAP training; and the establishment of common GIS practices. In addition to MOFA’s HEII, TIPCEE will seek to establish links with the African Development Bank’s recently approved Export Marketing and Quality Awareness Project which will begin implementation, through the same MOFA team implementing HEII, in the first quarter of 2006. This $18 million 5-year program is planning to invest in post harvest infrastructure, analytical labs, regional applied research stations and feeder roads, as well as significant capacity building support, all targeted at the horticulture sector. In parallel to MOFA’s horticulture export promotion programs, TIPCEE will collaborate with MOFA’s Cashew Development Project and liaise with the implementation teams to provide training to identified groups. Private Sector As TIPCEE’s goal is to increase the competitiveness of Ghana’s private sector, the project works primarily through the private sector to achieve results. TIPCEE’s private sector partners include smallholder producers; large nucleus farms; exporters; industry associations including SPEG, HAG, GAVEX and FAGE, among others; processors; the many BDS providers working along the supply chain (packaging manufacturers, graphic designers, seed and input distributors, equipment manufacturers and maintenance agents, accounting and ICT services, quality control agents, transport and logistics services companies etc); and international buyers including both Royal Ahold, which shares offices with TIPCEE, and Coca Cola, among others. Several activities will take up issues identified during the African Cashew Alliance Organization meeting held in 2005. Specific TIPCEE actions will cover many alliance themes such as developing reliable industry data and statistics, improvement in the dissemination of good post harvest practices, the reinforcement of supply chain linkages, the support to processing units and the connection to international markets. Other Donors TIPCEE has established good relationships with all donors working in technical areas relevant to TIPCEE. TIPCEE works closely with the World Bank on financial Sector, ICT, energy and agricultural (WB funds HEII) initiatives; with DANIDA on financial sector, BDS and labour sector issues; with DFID on agriculture (FASDEP revision) and financial sector and other issues; and with African Development Bank, the European Union (EU), and the Canadian International Development Association (CIDA), among others. TIPCEE will coordinate with MDBS on macro and private sector-specific policy initiatives and on revision of the Ghana Poverty Reduction Strategy (GPRS). TIPCEE has established a particularly valuable relationship with GTZ, which recently launched the Market Oriented Agriculture Program (MOAP). Close ties between MOAP and TIPCEE were established in Year 1 and joint support programs were established for Year 2 including organization of Ghanaian participation at Fruit Logistica and the organization of “Mango Week” in Ghana, planned for



February 2006. In addition, TIPCEE will collaborate with the GTZ team working with EurepGAP to establish a smallholder framework, which needs to be translated into field applications and pilot tested. TIPCEE will also capitalize on work carried out by GTZ in support of FAGE’s plan to establish a Trade Information Services profit center by funding the development of specific modules and services which will become fee generating industry information products. USAID TIPCEE is working with USAID’s Title II partners including consortium partner TechnoServe on cashew and with ADRA on mango, and Title II linkages are expected to expand and broaden in the future. TIPCEE is coordinating with USAID West Africa Regional Program (WARP) activities including MISTOWA and the West Africa Trade Hub (WATH), both of which offer an opportunity for leverage. TIPCEE is discussing a joint initiative with WATH to support a current TIPCEE client to take advantage of AGOA in order to gain entry into the US market with high value fresh produce items, and additional such opportunities for joint programming are expected. TIPCEE is working closely with the IFPRI initiative Ghana Strategic Support Program (GSSP), formerly Strategic Analysis and Knowledge Support System (SAKSS). GSSP will work in four main areas: spatial analysis and mapping of development domains; refinement of economy-wide simulation models; agricultural investment analysis; and development of the M&E framework for IEHA. TIPCEE has already begun mapping of commodity areas and this will provide critical field level data for the GSSP high level domain mapping exercise to the benefit of both activities. In addition, TIPCEE is providing assistance to MOFA to develop a revised FASDEP, which would benefit considerably from GSSP input. A new USAID linkage for Year 2 will be with the Last Mile Initiative (LMI). LMI will offer the opportunity to increase access by rural smallholders and businesses to information products and services. TIPCEE will collaborate in the design of this activity, scheduled to commence in early 2006. MCC Ghana has been selected as one of sixteen countries eligible for assistance under the U.S. Government’s Millennium Challenge Account (MCA). At MCC’s request, USAID encouraged TIPCEE to provide support to the MCA Ghana team, as the central argument of the proposal’s agri-business case is focused on high value horticulture crops. The compact preparation is progressing and it is expected that compact signing should occur in the final quarter of 2005 or the first quarter of 2006. TIPCEE has collaborated with the MCC and the MCA Ghana Team in providing input into the draft of Ghana’s MCA proposal. Specifically, TIPCEE has helped draft the Financial Services Component of Ghana’s proposal. In addition, TIPCEE has and will continue to provide the Ghana MCA team with the strategic information which will enable the proposal’s core team members to meet MCC’s due diligence and economic analysis requirements related to the proposal’s focus on horticulture. In that respect, work carried out by TIPCEE on the competitiveness framework of the industry, commodity opportunity profiles and the horticulture supply chain structure will be made available to the proposal team. C. Organizational Structure

The TIPCEE approach is highly integrated and the two technical components, Export Business Development, and Enabling Environment will work together as cohesive partners to develop the supply chain and work on policy reforms that address constraints identified by the private sector and improve Ghana’s climate for private investment.


Exhibit 1

Sr. Operations ManagerAnnie Kneedler

Enabling Environment Director Dr. Susan Hester

Office ManagerEvelyn Asante

Lead Marketing SpecialistRoland Adade

Lead BDS Specialist Samuel Akyianu

Business Policy SpecialistElsie Addo

Competitive Activities Fund ManagerTBD

Marketing SpecialistJennifer Saint-Acquaye Emily Afaribea BoahenPearl Coleman Ackah

BDS Specialists William HwanompeJoseph Gyapong

Banking Policy Specialist Bank of Ghana

Dr. Mahamudu Bawumia

AccountantBenjamin Onny

Association Development Specialists

Pamela Okyere Rosemary Adico

Finance Policy SpecialistMinistry of Finance and Economic

PlanningDr. Samuel Mensah

Trade Policy Specialist Ministry of Trade and Industry

Dr. Augustine Fritz Gockel

Agricultural Policy Specialist Ministry of Food and Agriculture

Dr. George Kwadzo

M&E Specialists Edwin Afari

Philip Boahen

Export Business Development DirectorJean Michel Voisard

Ghana Trade and Investment Program for a Competitive Export Economy (TIPCEE) Project Staff

Lead Small Holder SpecialistReuben Coffie

Small Holder Specialists Moses Akadimah Gifty Esi Blekpe Andrew Odonkor

Lead Business SpecialistCharles Ofori-Addo

Business Specialists Emmauel Adjei

Takyi Sraha Orleans Nii Chinery

Chief of Party Phil Broughton

Bookkeeper: Felicia AsamoahReceptionist: Dzifa NtiHead Driver: Maxwell AcquayeDrivers: Lawrence BarnorAdjah Sai, Kofi Afful, Sumailia Dramani, Ransford Obeng-AfraneJohn Agyam, Evans AmegashieOffice Assistants/Cleaners: Richard Asare, Eric Okine


The TIPCEE organizational structure is shown in Exhibit 1. The TIPCEE team is organized into two technical components, the Export Business Development Component and the Enabling Environment Component.

• The Export Business Development Component is comprised of a Marketing team, an Enterprise team, a Smallholder team, and a Business Development Services (BDS) team to support interventions along supply chains. In addition to these technical teams, there are also cross cutting activity teams to focus on each activity outlined in this work plan. These activity teams bring experts from Marketing, Enterprise, Smallholder and BDS together to manage each activity. This dynamic structure provides for maximum efficiency and human resource utilization to accomplish the ambitious Year 2 activities.

• The Enabling Environment Component is comprised of five highly specialized policy

experts in the areas of agriculture, financial markets, monetary policy, labor, trade, ICT, and legal and regulatory issues. The Monetary Policy Specialist is embedded in the Bank of Ghana, advising on particular fiscal policy issues from within. Subject to finalizing a few remaining details, early in Year 2 a policy advisor will be embedded in the Ministry of Finance and Economic Planning (MOFEP). The EE team is flexible to respond to policy constraints brought to their attention by the GoG, the private sector and the EBD component and will accommodate an adaptable policy agenda.

D. Results Framework

A results framework (RF) is a planning, communications, and management tool. It conveys the development hypothesis implicit in the project goal and objectives as well as the cause-effect relationships between key result areas (KRA), project intermediate results (PIR), and project objectives. Hence, the RF provides a foundation for work planning and performance monitoring. The TIPCEE project falls under USAID’s Strategic Objective 6 (SO6) Competitiveness of the Ghanaian Private Sector in World Markets Improved. USAID seeks four key outcomes that will be measured through four intermediate results (IRs):

• IR 6.1 Enabling Environment for the Private Sector Increased • IR 6.2 Private Sector Capability to Compete in Selected Industries Increased • IR 6.3 Construction and Maintenance of Economic Infrastructure Improved • IR 6.4 Regional Integration and Policy Harmonization Enhanced.

TIPCEE will contribute significantly to USAID Ghana’s SO 6 — Competitiveness of Ghanaian Private Sector in World Markets Increased - hence SO-6 is by design the TIPCEE goal. To reach this goal, TIPCEE will work through two project objectives: Strengthened Private Sector Capability to Compete, and Improved Enabling Environment for Private Sector Competitiveness. These two objectives correspond to the mission’s Intermediate Result (IR) 6.2 and 6.1, respectively (see above). TIPCEE will also contribute towards the mission’s two other IRs for SO-6, and to SO-5. These are shown in the TIPCEE Results Framework as Other Result Areas (ORA) under the project goal. This design—adopting a basic structure that mirrors SO-6—ensures that TIPCEE activities will be designed within USAID Ghana’s strategic interests and will contribute to mission results. Under the first project objective of strengthening private sector capability to compete, TIPCEE will work to expand access to markets, increase capacity of enterprises and smallholders to respond to market demand, and to increase delivery of effective, demand-driven services. These are the three project intermediate results (PIR) of the first project


Supporting othermission SOs and IRs

PIR 5

TIPCEE Objective 2 (IR 6.1)

Improved Enabling Environment forPrivate Sector

Strengthened Capability ofSelected Policy Units toAdminister Policy andRegulatory Framework

PIR 4

Improved Selected EconomicPolicies and Regulatory

Framework

Management Skills of SelectedPolicy Units Enhanced

KRA 5.1

KRA 3.2

KRA 4.1

KRA 4.2

Analytic Capacity for PolicyDevelopment Increased

Public/Private DialogueEnhanced

Expanded Market Access

PIR 3

Increased Delivery of Effective,Demand-driven Services

PIR 2

Increased Capacity ofEnterprises and Smallholders

to Respond to MarketDemand

PIR 1

KRA 1.1

Use of Market InformationExpanded

KRA 1.2

Market Linkages Expanded

TIPCEE Goal: USAID Ghana SO-6

Increased Competitiveness ofGhanaian Private Sector in Selected

Industries

Smallholders ProductivityIncreased

KRA 2.3

Strengthened Private SectorCapability to Compete

KRA 2.1 KRA 3.1

TIPCEE Objective 1 (IR 6.2)

Effective Demand for BusinessDevelopment Services

Increased

Associations and ApexOrganizations Capabilities

Strengthened

Smallholder SystemsDeveloped and Strengthened

Ghana TIPCEE Project Results Framework

ORA 3

Democratic andDecentralized

Governance throughCivic InvolvementSupported (SO 5)

ORA 2

Regional Integration andPolicy Harmonization

Supported ( R 6.4)

ORA 1

Construction andMaintenance of EconomicInfrastructure Supported

(IR 6.3)

Enterprise PerformanceImproved

KRA 2.2

TIPCEE Results Framework Feb 2, 2005


objective. Each of these three PIRs is in turn elaborated into key result areas (KRAs) as shown in the exhibit. Similarly, under the second project objective of improving the policy/regulatory enabling environment, TIPCEE will focus on two PIRs: Improved Selected Economic Policies and Regulatory Framework and Strengthened Capability of Selected Policy Units to Administer Policy and Regulatory Framework. These PIRs are also elaborated as KRAs. While the main body of the TIPCEE work plan is organized around activities, it is also important to see how these activities feed into the Results Framework. Annex A provides a detailed listing of each of TIPCEE’s KRAs and indicators, including the 2006 and Life of Project targets.



SECTION II – WORK PLAN BY COMPONENT The work plan is structured to represent both how TIPCEE will work operationally as well as how our results will feed into the Results Framework and USAID reporting mechanisms. The EBD team is organized into sub-teams to work on a specific activity and each TIPCEE policy expert is responsible for the activities in his or her respective policy area. Therefore, the body of the document is structured by activity for both EBD and EE. Indicators of success for the project were established by USAID early on in project implementation. The KRAs and indicators are included in Annex A, along with the 2006 and LOP targets by indicator. TIPCEE continues to foster collaboration between the EBD and EE component, and sees this as essential to TIPCEE’s success. A. Export Business Development Component In year two, TIPCEE’s Export Business Development component activities will focus on implementation throughout the selected commodity chains to address the critical competitiveness issues identified in Year 1. The EBD activities are grouped into six thematic areas deemed to be the foundation of a true high value horticulture cluster: smallholder networks, nucleus enterprise models, quality management systems, innovation pilots, market intelligence and cluster governance. Smallholder networks are central to the work of TIPCEE and Year 2 activities aim to empower these groups and link them to downstream channels. The second theme focuses on reinforcing innovative nucleus models across the commodity range to facilitate linkages and the management of a distributed production base without compromising quality, food safety or predictability of volumes. The implementation of quality management systems, such as traceability and geographic information systems will improve the precision of supply chain reporting and translate into immediate competitiveness and value gains for participating exporters. Theme four is about encouraging innovation, mainly through a series of market driven pilots, to maximize private sector and small farmer collaboration and produce sustainable methodologies. Market intelligence and cluster governance, are more strategic thematic areas. TIPCEE’s market intelligence work will structure the Ghanaian market intelligence framework around a set of competitiveness indicators and encourage cross cluster dissemination of strategic statistics and technical knowledge packages, making the most of ICT technologies. The cluster governance work will strengthen the existing industry associations in order that they evolve towards a service oriented approach which will stimulate membership buy-in and sustainability. Certain activities are mid term projects that build on structuring work carried out during year one. For example, the norms and standards program as well as the GhanaGAP initiative, build on extensive industry and institutional design work already completed in order to achieve a satisfactory implementation roadmap. The same applies to the Geographic Information System linked activities which will aim to mainstream approaches and skills which were initiated during the first year. The large scale mango 2006 program has been made possible by the commercial pilot shipments organized in 2005. Pro-environment agricultural practices are good business. A cross cutting theme that runs through all EBD work is that environment-friendly agricultural practices are not just compliance issues – they are good business. All TIPCEE’s activities will be screened prior to implementation and all activities follow the recommendations outlined in TIPCEE’s Initial



Environmental Evaluation (IEE). Screening forms will be completed and mitigation measures implemented to ensure that TIPCEE’s work has no adverse affect on the environment. A.1 SMALLHOLDER NETWORKS

A central objective of TIPCEE is to ensure that smallholders remain a cornerstone of Ghana’s export horticulture sector. This will require a special focus on the structuring of smallholder networks and the supporting systems that will link them to downstream partners, both in-country and internationally. Two of the commodity chains targeted by TIPCEE, pineapple and cashew, have an extensive small farmer base which is largely unstructured. These will benefit from the creation and reinforcement of farmer organizations and their linkage to downstream market partners. In both cases, TIPCEE’s strategy will be to collaborate with current Ministry of Food and Agriculture (MOFA) activities: the MD2 pineapple plantlet distribution program financed by AgSSIP and the Cashew Development Project. TIPCEE will complement these production focused initiatives by providing technical support to grower groups in structuring their membership, defining their production capacity and controlling their supply base, with the end objective of improving quality, reliability and value. At the end of Year 2, TIPCEE aims to provide support to 3,600 smallholders, with the objective of 15,000 at project’s end. The majority of these smallholders will be entered individually in a Geographic Information System, an innovation which will not only enable close monitoring of the project’s impacts, but, more importantly, provide a strong linkage tool to downstream supply chain networks. Once visible, these farmers will be easily approached by potential buyers, fostering competition and improved farm gate prices. These smallholders will be targeted by specific capacity building training programs, focused on improving quality, introducing new technologies and diversifying output. TIPCEE will reinforce existing farmer groups and promote a service oriented approach to group activities, with a LOP objective of supporting 600 smallholder groups. A.1.a. MD2 for smallholders The Horticulture Export Industry Initiative (HEII) of AgSSIP, managed by the Ministry of Food and Agriculture and funded by the World Bank, will provide $2 million to finance the purchase of an estimated 6 million tissue culture pineapple plantlets of the MD2 type, which will be exclusively distributed to existing smallholder pineapple farmers (defined as farms of less than 20 acres). Actual procurement and distribution is due to commence in October 2005 and proceed until July 2006. These plantlets will be used to establish group owned nurseries which should provide enough planting material to establish 1,500 acres of MD2 over the next two years. This will translate into a yearly production of 30,000 metric tons with an annual farm gate value of US$ 6 million. As HEII’s distribution program is time-bound by the World Bank fund’s October 2006 disbursement deadline, TIPCEE will join with MOFA at the program’s outset to provide technical assistance to the pineapple farmer groups, ensuring continuous support beyond the end of HEII. TIPCEE’s support will aim to build up the groups into strong hubs which will be able to connect productively with downstream partners. TIPCEE will focus on ensuring that the groups acquire the skills required to master the varietal change process, and seize the opportunity granted by MD2 to acquire know how in plantlet multiplication, MD2 cultivation, EurepGAP documentation and, once the fruits are available, post harvest management and export marketing. Specifically, TIPCEE’s support to the MD2 farmer groups in 2006 will target the following key activities: • smallholder group mobilization and sensitization: this will include group dynamics, and

establishment of a group management database system;



• mapping of all targeted farms and capturing the supply data into a GIS system to enable effective management of the smallholders involved in the multiplication and distribution;

• establishment of plantlet multiplication management and documentary systems; • commercially viable market linkages that guarantee production and marketing services

for the smallholder MD2 producers. It is expected that the switch to MD2 will increase the unit farm gate price for pineapple by as much as 75%, which will have the effect of doubling farmer net income. It is expected that in the medium term, the multiplication skills will be emulated by other smallholders and lead to a 75% switch from smooth cayenne to MD2. EurepGAP management skills acquired through the nursery and distribution program will further the integration of smallholders in the MD2 supply chain. The mapping of the smallholder farms will enable the development of a practical traceability and production planning system for these farms and improve the supply base management for exporters. It is also expected that the program will further increase the demand for tissue culture plantlets and reinforce current private investments in in-vitro multiplication technology. This will position the industry to respond more appropriately to future changes in the market. Benchmarks: • One thousand (1,000) small farmer pineapple farms mapped and registered in the MD2

distribution program • Fifty (50) MD2 nurseries established Collaborating partners: MOFA-AgSSIP/HEII, District Directors of Agriculture of MOFA of the selected districts, MD2 plantlet tissue culture laboratories and farmer groups. A.1.b. Structuring the Cashew nut supply chain The expansion of TIPCEE’s activities to Ghana’s transitional zone and northern areas during Year 2 will increase TIPCEE’s work in the cashew sector. Farms in key growing areas of the Ashanti, Brong Ahafo, Northern and Upper West regions will be mapped using GIS to establish a database on current production and operations to guide interventions at farmer group level. The mapping exercise will be conducted in collaboration with the Cashew Development Project of MOFA and will initially focus on the 140 farmer organizations which have obtained credit from rural banks and which represent an important base from which to work. TIPCEE will support the introduction and dissemination to identified farmer groups of a nut grading standard to serve as an incentive for production of high quality raw nuts. The establishment of this farm gate standard will be developed through partnering with industry players from the raw nut export trade and the processing sector The initial mapping will facilitate the establishment of traceability systems and enable the monitoring of the dispersed production base by downstream market partners. The grading system with incentive pricing will motivate farmers to improve the quality of their raw nuts. Exporters buying and exporting higher grade raw cashew nut will be able to negotiate for higher contract prices thus increasing Ghana’s export earnings. Benchmarks: • 1,500 cashew farms mapped • 140 farmer groups (up to 20 farmers per group) and purchasing clerks trained in nut

grading • Seven (7) processing and raw nut export companies trained in nut grading



Collaborating partners: Cashew Development Project – MOFA; BDS provider of mapping services; cashew farmers; exporters; processing companies; Cocoa Research Institute of Ghana (CRIG); Cashew Processors and Raw Cashew Nut Exporters’ Association. A.2 NUCLEUS ENTERPRISE MODELS

The successful integration of small holder farms into modern supply chains relies on the management and technical capacity as well as the marketing clout of strong nucleus entities. TIPCEE supports enterprises that demonstrate a will to step up their smallholder based sourcing activities. Firms selected for this enterprise focused support have innovative projects that warrant support to ensure successful mainstreaming of innovative production, processing, management and marketing practices. Selection criteria cover the following: a well appropriated innovative idea, demonstrated successful commercial activity in the fresh produce sector, significant level of investment, specific technical ability and capacity to innovate, existing smallholder base or proximity to a sizeable small farmer population to be integrated in the project, and significant investments in post harvest or processing installations which will serve as pooling and logistics platforms for small farmer production. For 2006, eight such firms have been identified and selected for TIPCEE support in the development of new areas of activity, which will provide sustainable outlets for the production of small farmers across the project’s selected commodities. Other such enterprises could be brought on board during the year, depending on their developing sound projects focused on small farmer sourcing. The cumulative impact of these nucleus projects will reinforce the market integration and significantly increase farm gate revenues of an initial base of more than 1,000 small farmers, a population which should grow steadily as the nucleus units progress and the approach is picked up by other firms. A.3 QUALITY MANAGEMENT SYSTEMS

Quality management is a cross-cutting issue which covers aspects linked to the physical and commercial characteristics of the products, as well as the implementation of management systems and production practices which aim to guarantee food safety and ensure consistency and reliability of supply. Quality management aspects are present in smallholder and enterprise level interventions, mainly focused on achieving the EurepGAP international benchmark in terms of good agricultural practices. TIPCEE will support industry led programs aiming to develop skills which will reinforce the country’s quality management capacity. Specific activities will aim to mainstream product norms and standards, adapt EurepGAP protocols to the Ghanaian context and introduce ICT based technologies such as the establishment of a Geographic Information System standard for the horticulture industry, the development of traceability software and the introduction of a bar code pallet tracking and tracing system. All of these activities will generate industry tools which will strengthen the industry as a whole since they will represent a pool of know-how, available in the public domain, for each business model to pick up and implement. A.3.a. Quality standards implementation An area that constrains business development and the competitiveness of many Ghanaian industry associations is private, voluntary standards and certification systems. In 2004, draft product standards for eight commodities and inspection manuals for three, pineapple, papaya and mango, were developed by a technical committee of horticultural industry stakeholders led by the Ghana Standards Board (GSB) with funding from USAID. In order to ensure that the private sector appropriates these preliminary quality standards and inspection documents to increase their competitiveness, TIPCEE is working with a number of partners including the GSB, FAGE and the Ministry of Food & Agriculture (MOFA) to



implement a road map for the mainstreaming of these norms. An inspection program will be piloted by an international inspections body over a period of one year, through testing at pack houses of exporters and at export departure points. These inspections will generate monthly conformity profiles which will enable exporters to take action to improve on their product quality. After a year, pending acceptable performance, the norms will be taken through a legalization process with assistance from GSB. As part of the inspections program, TIPCEE will also work with industry associations to develop norms and tests for shipping pallets and paperboard boxes. TIPCEE will support the design of pallets and boxes which conform to norms regarding strength and ventilation for adoption by the industry associations. Current regulations require that only treated or kiln-dried pallets are used for sea and air shipments to the EU. Similar restrictions on boxes could follow suit. TIPCEE will work with industry to establish a consequent normative framework for these treatments, in accordance with EU regulations. The program will have as an immediate effect, improving the consistency of export quality pineapple, papaya, mango and chilies. This should result in increased sales and a reduction of losses due to importer claims resulting from non-conformity to standard. The necessary skill set to provide inspections services to exporters will be developed and institutionalized, ensuring a continuation of monitoring beyond the TIPCEE supported trial. The ensuing reliability of supply should translate over the mid term in a stronger integration capacity of the Ghanaian firms to the more restrictive supermarket distribution networks, and progressively lead to a form of branding of the Ghanaian origin focused on a demonstrated reputation for quality. Benchmarks: • Three (3) norms appropriation workshops completed • Twenty five (25) firms engaged in pilot inspections program for pineapple, mango,

papaya and chilies (vegetable). • Pallet and paper board standard in use by the pineapple industry Collaborating partners: Industry Associations (SPEG, HAG, GAVEX, VEPEAG, PAMPEAG), GSB, Inspections Companies, MOFA PPRSD, FAGE A.3.b. GhanaGAP EurepGAP remains a hurdle to the entrance of smallholders into the high value EU market. Ghana’s emerging strategy to overcome this constraint is the development of a country based GAP framework that is approved by EurepGAP as an equivalent in all respects. Over the past few months TIPCEE has conducted consultative meetings which resulted in the establishment of a technical working group under the auspices of the National Horticultural Task Force (NHTF). The Technical Working Group is consolidating all existing initiatives on Good Agricultural Practices (GAP) including data on all existing country specific GAPs as a resource for the initiative. In the coming year, TIPCEE will assist the technical working group in the following: • Development of a concept note which will be presented at the annual EurepGAP

conference. This, in addition to contacts already made with the EurepGAP secretariat, is expected to facilitate the process and ensure an effective benchmarking and a speedy approval from EurepGAP.

• Development of a first version of the GhanaGAP framework as a follow up to the concept note. This “alpha version” will be reviewed by the NHTF who will make the draft document available to all stakeholders and the general public for their comments. This is expected to generate public interest and most importantly, stakeholder buy-in.

• TIPCEE in collaboration with the NHTF will undertake a series of pilots to implement the framework at the small farmer level. This will allow the testing and adoption of the key



elements of the framework and facilitate adoption especially among smallholders. This activity will interact with the TIPCEE initiatives supporting MD2 small farmer groups as well as those supporting the creation of enterprise led nucleus systems.

It is expected that the GhanaGAP framework will provide the Ghanaian industry with an internationally recognized tool which will facilitate the compliance of national farmers with the EurepGAP requirements. This will ensure a better integration of smallholders into the supply chain by providing them with simplified and easy to use tools that can enhance compliance with norms. It will also eliminate the communication constraints facing smallholders associated with the highly technical format of EurepGAP. The implementation of GhanaGAP will be accompanied by local auditor training and certification which will reduce compliance costs by more than half. TIPCEE will facilitate the development of various simplified tools targeted at smallholders and mainstream the GhanaGAP approach through its other activities. Benchmarks: • Alpha version of GhanaGAP framework produced and circulated for public comments • Five (5) BDS firms and/or NGOs trained in GhanaGAP implementation or certification Collaborating partners: PPRSD/MOFA; SPEG; HAG; VEPEAG; FAGE/NHTF; GSB; EPA; GFDB. GTZ-MOAP; EurepGAP. A.3.c Geographical Information System (GIS) Ghana’s smallholder production systems are currently being challenged by recent industry regulations on traceability as well as the distribution networks’ requirements for precise monitoring and planning of supply and productivity forcing the replacement of current informal practices by more precise crop management systems. Currently, TIPCEE is supporting various initiatives which include the use of Geographic Information System technology to provide spatial information on pineapple and mango smallholder production bases. Even though these applications are still in their early stages, it is becoming clear that this technology will have a significant impact on production monitoring methods. TIPCEE will therefore support the development by the users of a set of industry standards in order to ensure the compatibility and quality of the ensuing databases. Issues to be addressed will be defined by the users and will cover the following: standard compatible farmer codes and descriptive tables, crop specific information profiles, associated climate and soil data, linkage to traceability software, pest and pathology scouting information formats, and selected information transfer platforms to a central MOFA database. This will involve the setting up of computer hardware and software platforms, the collection of geographic data and the training of personnel and selected stakeholders in the efficient capture, updating, manipulation, analysis and display of all forms of geographically referenced information. TIPCEE will collaborate with SAKKS/GSSP and will share findings with IFPRI, both in the design of the data profiles and the sharing of database content. The GIS system and its application will transform smallholder production, which is characterized by an atomized production base spread over a relatively large area, by improving significantly the tracking and providing a spatial understanding of the industry. The long term perspective of TIPCEE’s GIS initiative will be to develop a strong capacity within the industry as well as in the supporting state and associative agencies to document, manage and monitor distributed production systems. These will provide an objective address standard for future traceability systems and the spatial analysis required for effective planning for production, harvesting, post harvest treatments and relevant export programs. The effort to achieve EurepGAP and eventual GhanaGAP compliance by smallholders will be accelerated with an effective application of the system to produce accurate address systems, traceability codes and identification maps of all farms. The



system will be used by industry and crop extension services to address critical issues of the effect of cultivation on the availability of cropland and even more importantly the volume of crop production under specific sets of inputs and farming methods, crop yields and area under cultivation. These databases will also be used to map the farms and outgrowers in associations, such as HAG, GAVEX and VEPEAG. The associations can then use this tool for effective planning at the association level. Benchmarks • TIPCEE GIS platform operationalized • GIS central database established for 3,200 farmers including 1,200 pineapple farms,

1,500 cashew farms and 500 mango farms at various locations in Ghana • A GIS database technical standard established for industry and stakeholders Collaborating partners: Ministry of Food and Agriculture (MOFA), Centre for Remote Sensing and Geographical Information System (CERSGIS) – University of Ghana, GISMO Consult (Private Service Provider), Farmapine; Farmer Groups, IFPRI. A.3.d Traceability The central goal of food safety on the international market is to ensure a high level of traceability to protect consumer health and safety. Goods exported into the international market must therefore respect strict documentation procedures. TIPCEE supports the development by industry of documentary standards for traceability systems. In this perspective, two separate projects will be sponsored in 2006. The first one concerns improving the documentation supporting the shipment of Asian vegetables. In Ghana, fresh vegetable exports are air-freighted mainly to the EU by the members of the Ghana Association of Vegetables Exporters (GAVEX) through Air Ghana, KLM and British Airways at Kotoka International Airport, Accra. The statutory bodies responsible for inspections are the Customs, Excise & Preventive Service (CEPS) and Plant Protection & Regulatory Services (PPRSD). Data obtained, from these institutions do not provide adequate and detailed breakdown of fresh vegetables exports. TIPCEE will work with PPRSD, CEPS, Air Ghana and other stakeholders to modify the EUR1 supporting documentation and/or the phytosanitary certificate to capture the required data on the various vegetables exported. This will ensure documentary tie-in with the upstream documents and provide detailed data on the numerous individual product lines currently shipped out of Ghana. The second project will be the development by a Ghanaian software firm of a low cost open source traceability system. This system will be based on off-the shelf software packages and will be made available to the industry for firm level tailoring if required. This activity will be supported by TIPCEE with the objective of mainstreaming traceability techniques by providing universal access to a specific implementation framework. The promotion of the shareware approach will aim to offer Ghanaian software developers the opportunity to provide traceability software support and enhancement services to industry players. Benchmarks: • New shipping documentation system developed for the vegetable industry • New traceability software beta tested by selected firms Collaborating partners: GAVEX, PPRDS, Customs, Excise & Preventive Service (CEPS), Air Ghana, KLM, British Airways, Aviance, HEII, BDS service consultant.



A.3.e. Bar code pallet tracking and tracing The Ghanaian horticulture supply chain logistics remain at very rudimentary levels. Worldwide standards for logistics continues to rise, integrating ICT at all stages of the supply chain and providing real time tracking capabilities that enable just in time inventory management. To bridge that gap, TIPCEE will support a pineapple industry initiative, in collaboration with existing shipping lines and SPEG, to implement a bar-coded pallet tracking and tracing system to complement the norms and standards assessment program. Participating SPEG members will cost share the acquisition of equipment and ensure that pallets from pack houses have bar codes which can provide traceability information to buyers. Tracking information will be transmitted to logistics service providers downstream (shipping line, port handling company at destination, trucking companies, forwarders and importers), enabling accurate and rapid dispatching of goods upon arrival. Traceability information will be fed back to the exporters to enable them to monitor the itinerary of their produce. Bar coding will provide real time pallet tracking and tracing from field to reception by the importer documenting and compiling critical data at every stage of the shipping process. This technology will greatly reduce transaction costs and give Ghanaian exporters access to integrated distribution networks. Benchmarks: • Five (5) firms adopt and use pallet bar coding system Collaborating partners: SPEG, Express Fruit Logistics, ICT BDS provider A.4 INNOVATION PILOTS

Growth in the horticulture sector will depend on the industry’s effectiveness to innovate both on the technical and commercial level. In 2006, TIPCEE will work with private firms to conduct a series of trial operations that will constitute breakthroughs on which the industry will be able to build. In carrying out certain innovation pilots, TIPCEE will aim to establish public/private partnerships between private firms, both exporters and input/technology suppliers, and institutional capacities. These interventions will aim to institute a methodology for market focused innovations which the various industry associations will be able to appropriate beyond the life of the project. A.4.a Trial shipments TIPCEE worked with exporters to successfully pilot a mango shipment by sea to Europe in June 2005 to establish benchmarks for harvesting, packaging and shipment of mangoes by sea. Previous exports from Ghana by air were more expensive and imposed a limitation on volume expansion. To build on the initial success, a second pilot is planned for February 2006 to address key constraints identified in growing areas around Dodowa and Somanya in the Eastern region before the major season in June 2006. The results of this second pilot will be disseminated to industry stakeholders to increase industry competitiveness. A similar pilot will be carried out with papaya exporters to establish benchmarks for harvesting, packaging, pre-cooling and transporting of papaya for sea shipments. It is projected that under the second mango trial sea shipment, approximately 20 small holder farmers will participate and under the papaya trial, five small holders will be involved. An appropriate sea shipment packing line, generic box and pallet design will be developed for the papaya industry and results disseminated to stakeholders.



Benchmarks: • Two (2) trial sea shipments completed Collaborating partners: Mango farmers associations (Yilo Krobo Mango Farmers Association, Mango Farmers Association of Dangbe West), private exporter firms, packaging suppliers, logistics companies, MOFA. A.4.b. 2006 Mango Export Program Building on lessons learnt from the two trial mango sea shipments in June 2005 and February 2006, TIPCEE will assist the industry to establish a database to guide interventions through mapping farms in the North, Eastern, Volta and Greater Accra regions to enable forecasting of export grade volumes. Data on planted varieties, age of trees, flowering sequences, pest risks, fruit set and yield will be collected into a database which will provide exporters with a better understanding of the production patterns of each zone. Technical assistance and training will be provided for small holders and harvest and post-harvest workers to tackle production and post-harvest handling constraints. Finally, the establishment of an appropriate packing line within the mango belt will enable shipment of quality fruits acceptable to the EU during the major harvest season from May – July, 2006. This export program will be carried out in partnership with existing interested exporting firms operating in the horticulture industry who have experience in marketing perishables. TIPCEE will facilitate linkages with importing companies specializing in mango and broker financial arrangements to support the cash flow requirements of a mango export program. A credible database and field maps will facilitate the linkage of the small farmer base to export distribution channels and the implementation of traceability systems. Benchmarks: • One hundred fifty (150) farmers trained in pre- and post-harvest handling • One (1) mango packing line established Collaborating partners: Yilo Krobo Mango Farmers Association, Mango Farmers Association of Dangbe West, Equatorial Capital Ventures; VIAD, Bomarts, AEL, Maersk, European importers, GISMO, CSIR/CRI, District Assembly, MOFA, HEII. A.4.c. Technological Pilots Low productivity among smallholders is largely attributable to lack of know-how and inadequate technology. TIPCEE’s innovation program for 2006 aims to reverse this trend through several technologies to be piloted in the coming year and followed with extensive dissemination and exposure programs to facilitate adoption and subsequent emulation. TIPCEE will set up six pilot demonstration sites with a combination of drip irrigation systems, charcoal coolers, and netted protection production systems for vegetables and papaya. These technologies will improve the yields and quality of smallholder production and help secure their integration in these supply chains. TIPCEE will adopt a participatory approach involving established nucleus farmers with strong links to smallholders and adequate post harvest infrastructure of pack houses which are equipped with high humidity coolers. The nucleus farmers will also be required to demonstrate the capacity to expand existing outgrower networks. The pilot sites will become on-farm learning centers for training farmers in good agricultural practices and also serve as sentinel sites where information and other supply base management data can be sourced. Test results will be disseminated through industry workshops and guidebooks which will be targeted to private firms and MOFA crop extension services.



The expectant results and ultimate impact of these technology pilots will include a demonstrated effect of these technologies on productivity and quality of produce. The pilots will enhance exposure to new ideas and technologies for smallholders who will subsequently be supported to adopt these new technologies on their own farms. Benchmarks: • 3 technologies tested for adoption • Six (6) participatory farmer demonstrations conducted and results disseminated Collaborating partners: Ghana Association of Vegetable Exporters (GAVEX); Vegetable Producers and Exporters Association of Ghana (VEPEAG); technology suppliers; Farmer groups; MOFA. A.4.d Diversification Pilots TIPCEE’s interaction with vegetable growers and exporters has brought to the fore the diversification of the current product range as key to raising smallholder incomes and further enhancing the overall competitiveness of the Ghanaian vegetable industry. Okra and baby corn have been initially identified as having good market prospects especially for the EU market. In the coming year, once the program proves successful and the methodology is adopted by both institutional and private partners, other diversification tests will be launched based on identified market opportunities. TIPCEE plans to conduct trials of these crops in partnership with selected nucleus farms, industry associations GAVEX and VEPEAG, and the University of Ghana Out-Station, Kade, with technical support from the Crop Research Institute. In order to provide an institutional anchor to the diversification program, TIPCEE will provide a basic drip irrigation equipment system to the University of Ghana (Kade station) which will conduct the various technological and diversification tests on its premises. This will enable students and crop extension trainees going through the institution’s many programs to have access to the innovations being promoted. On site workshops with industry players will be sponsored by TIPCEE in order to promote linkages between research and the private sector. The okra diversification test will be implemented on multiple sites. Eight (8) on-farm demonstration sites will be selected in different locations for the two associations (VEPEAG & GAVEX) who will recommend lead farmers capable of carrying out documented experimentation protocols. Two additional sites, using drip technologies, will be added to this initial group in order to provide data on the impact of irrigation technologies on these crops. To ensure maximum coverage, other members of the associations will be provided with okra seeds while the demos are on-going. These seeds, along with an IPM production guide, will be disseminated to a wide base of smallholders who have a demonstrated capacity in growing okra. This wide range approach will generate sufficient production volumes to

Selection of new products

To inform the selection of new products, TIPCEE has recently completed an opportunity review, which is a methodology focused on identifying near and mid-term market opportunities based on trends in target markets, understanding underlying market segmentation and competition structure, and assessing Ghana’s chances of establishing a sustainable beachhead from which it may progress. Other factors will be taken into account such as a crop’s capacity to include smallholder production as well as its compatibility with the climate of less favored regions, notably the North of the country. Certain products such as annatto or dried chilies and other food ingredients or medicinal herbs, as well as wide-scale regional crops such as onions and potatoes, will be considered. Other products which have longer production cycles may be selected for exploratory testing which, if positive, could be picked up by the private sector and/or supported by other initiatives such as MCC. Initiatives will also be explored to adapt current crops to the processing sector, aiming to develop high yield and low cost practices for pineapple, mango and passion fruit in order to supply the emerging juice concentrate industry. For all products, the opportunity of organic or fair trade certification will be evaluated to ensure a maximization of the farmer’s income by the capture of the market premium. The design of development programs for all newly selected crops will involve participation of current industry stakeholders: industrialists, exporters, farmer groups and research in order to embed these opportunities in their development agendas and ensure continuity beyond TIPCEE.



generate commercial tests that will be carried out by the exporters. TIPCEE’s support will consist of the provision of PPRSD approved hybrid okra seeds, the technical training and monitoring of the test farms and the production/ dissemination of a simplified IPM production guide for participating small farmers who will receive okra samples. The baby corn trials, due to their perishability, will be limited to nucleus farmers which have the requisite cold store infrastructure to deal with the highly sensitive post harvest handling requirements. TIPCEE will procure the seeds with highly resistant traits from international sources for onward distribution to the participating entities and grower groups. Technical assistance will be provided during the period of the trials. Monitoring data to guide the development of production manuals will be collected on regular basis. It is expected that a successful trial will be widely disseminated to farmers particularly in the Northern region where conditions are considered ideal for okra production. The program anticipates reaching over 500 smallholders. The dissemination will be accompanied by easy-to-use IPM production guides in pictorial and illustrative formats which will be distributed to smallholder farmers. Linkages will be established with seed suppliers through on field farmer/input supplier forums to facilitate availability of the seeds to farmers. This is expected to increase the level of adoption and create a large source of supply of okra for the export market. The test methodology will be documented into a comprehensive working tool for replication for other seed trials in the future. Benchmarks: • 5 new commodities evaluated • One demonstration platform installed • Two (2) seed trials completed. Collaborating Partners: University of Ghana; CRI; GAVEX; VEPEAG; MOFA; Outgrowers. A.5 MARKET INTELLIGENCE

TIPCEE will promote the adoption by the industry of strategies focused on supply chain competitiveness. Support will be provided for the development and dissemination of a set of performance indicators that will become the focus of future industry interventions. TIPCEE will provide training to cluster members on various concepts linked to the assessment of the industry’s competitiveness profile. On a more micro level, TIPCEE will focus on the dissemination of knowledge throughout the industry and its partners. This will be achieved by supporting the publication and widespread distribution of statistical and technical information. Finally, TIPCEE will support the organization or participation by industry of events aiming at the promotion, both nationally and internationally, of Ghana’s horticulture sector as well as linkage with international bodies such as EurepGAP or the International Institute of Horticulture Science. A.5.a. Supply chain mapping, assessments and strategies This activity will analyze the horticulture supply chain system of Ghana, highlighting the competitiveness gaps and making recommendations with a view towards enhancing quality and value. The activity will involve creating a cluster based competitiveness framework that can be applied in both agriculture and other non-agriculture industries which are receiving assistance from TIPCEE. This framework will be widely disseminated to both industry and institutional bodies, in synergy with policy work being carried out by TIPCEE in the sector. The study will be published in magazine format (both print and PDF) as well as in an animated/audio power point presentation set on DVD. In a follow up to the initial baseline study to be completed at the outset of Year 2, TIPCEE will promote the ongoing assessment by the industry of its competitive position through the production of an updated version in



collaboration with FAGE and other sector associations. Based on this experience, TIPCEE will work with industry stakeholders of targeted crops (pineapple, papaya, mango, vegetables and cashews) to extract sector specific versions of these competitive strategies, fully appropriated by industry members. As a complement to this strategic activity, TIPCEE will continue to provide support to the Ghanaian team participating in the World Bank Institute series of capacity building seminars on horticulture supply chain competitiveness. Beyond the initial Distance Learning Seminar series (involving 5 other countries linked by satellite conferencing), a version of the course for local dissemination may be developed, supported by TIPCEE, to further the impact of the initial 6 module training. Another complement will be the extension of the current training module on EU export statistics retrieval software and the development of new modules for other target markets such as the US, the Middle East and Asia. TIPCEE will also support the implementation of a pilot cost share program with SPEG for an ongoing weekly market price and volume monitoring of the EU market with real time dissemination to members via email. The main result of this set of activities will be to empower the industry associations in developing and monitoring the sector’s competitive and general market positioning both on a continuing and strategic basis, rather than having it depend on one time donor funded consultancies. The establishment of widespread dissemination tools will improve understanding of the conditions for the development of a competitive industry as well as its true potential for growth. Benchmarks : • A competitiveness framework for the horticultural industry completed • A Horticulture cluster map completed • Three (3) supply chain strategy documents completed Collaborative partners: FAGE, Industry Associations, WBI, MOFA. A.5.b. Industry Portal This activity is geared towards creating an IT platform that will capture and disseminate market intelligence information to producers and exporters in a timely manner. The objective is to bridge the information gap that has been identified as one of the critical areas that can enhance exporters’ ability to transact business with international buyers of horticulture products. The platform will be developed progressively. It will capitalize on FAGE’s Trade Information System designed with GTZ support in 2005 and planned for implementation in 2006. In collaboration with FAGE and GTZ, TIPCEE will support the development of key applications including: a National Horticulture Task Force web site and a specific environment for GhanaGAP documentation; online access to industry technical documentation; the development of an industry statistics center which will provide up to date and accurate information on volumes and price structures for key commodities; a logistics bulletin board system aiming to provide real time information on freight availability; a market intelligence system disseminating rapidly important industry articles and publication through email and discussion groups. This activity will be reinforced by TIPCEE providing e-readiness support to industry associations which should facilitate communications amongst cluster members. TIPCEE will commission local BDS providers to include support for industry associations in creating their own domain and provide their members with web hosting services such as individual email accounts with firm specific suffix, web mail, downloadable email functions, discussion groups and various electronic bulletin boards. In complement to these activities, TIPCEE will conduct a survey of the industry’s current use of



ICT technologies, both in Ghana and internationally, in order to identify common gaps and develop an adequate industry response. Benchmarks • National Horticulture Task Force web site launched. • Three market information tools established • Industry portal created for one association • E-readiness survey completed for the horticulture industry Collaborative partners: GEPC, FAGE, SPEG, Airlines/Sea freight operators, MOTI, MOFA A.5.c. Technical publications This activity builds on the raw technical content generated through activities supported by TIPCEE (and other donors) and will focus on ensuring that worthwhile initiatives which contribute to the industry’s knowledge base are fully documented, distributed to all concerned stakeholders, securely archived and made available for subsequent retrieval and dissemination to industry newcomers. Initially TIPCEE will support the printing and widespread distribution of the technical guides to be produced under the norms and standards program. Integrated Pest Management (IPM) production guides as well as EurepGAP documentation fieldbooks will also be included in this initiative. TIPCEE will support the re-working of the basic technical documents by specialized graphic designers. The focus will be on communication effectiveness, and quality of illustrated material. TIPCEE will also liaise with FAGE and sector associations as well as MOFA and its development partners working with the industry, to define sustainable dissemination systems involving, for example, the sponsorship of cluster partners through direct advertising services. The immediate result will be an improved dissemination and take-up rate of the technical messages conveyed by in-field capacity building initiatives resulting in widespread quality and productivity improvements. In the longer term, the development of an easily accessible knowledge base will protect the industry against duplication of past initiatives or outright loss of technological assets. Benchmarks: • Three (3) technical manuals published for mass circulation. Collaborative partners: GSB, NHT, EurepGAP, GTZ, Industry Associations, MOFA-AgSSIP, GEPC. A.5.d. Industry links This activity aims to keep TIPCEE clients, the horticultural industry, stakeholders and partners informed of the initiatives and programs of the project as well as industry wide programs and developments, both public and private. This will take two forms. The first will be a periodic TIPCEE Newsletter relative to project specific activities which will keep industry, Government, the public and the donor community abreast of project activities and results. In a second phase, TIPCEE will work with the NHTF to produce a horticulture focused news bulletin which will have wider coverage and may be used to convey a wide array of information: technical, commercial and strategic. This industry news bulletin will be developed in collaboration with FAGE and the NHTF, in coherence with the Trade Information System FAGE is developing with support from GTZ. A special focus will be put on ensuring the sustainability of the publication, involving private sector sponsorship and cost sharing.



The TIPCEE newsletter will ensure wider impact of TIPCEE’s activities as well as provide a tool for the coordination of support efforts to the industry. The impact will be enhanced coordination of resources. An industry bulletin will ensure better cluster coordination, industry awareness by its partners, the Government, the general public and the investment community. The development of a web based version will ensure international visibility and could impact on foreign investment projects. Benchmarks: • Four (4) editions of TIPCEE News published • Industry News Bulletin launched on the web and in print. Collaborative partners: FAGE, SPEG, and other Industry associations. A.5.e Promotional and linkage activities As part of TIPCEE’s strategy to create greater market access for Ghana’s horticulture produce in international markets, the project will support a number of activities that will help position Ghana as an authentic exporter of quality horticultural produce. In line with this goal, a selected number of industry events will be used as platforms to draw the attention of various markets to the developments in Ghana. A central event will be the support to Ghana’s participation at the Fruit Logistica trade fair in Berlin (February 2006). TIPCEE will coordinate its support of industry with GTZ. The current plan is to make the event the occasion to convey a new image of the country as an up and coming origin highlighting the projected infrastructure investments, MD2 and EurepGAP/ GhanaGAP initiatives. The focus will be on partnering rather than plain commercial representation. TIPCEE will also support with other donors such as GTZ and WAFF the organization of “Mango Week” in Ghana which will aim to build industry awareness and initiate linkages with potential partners. TIPCEE will promote the participation of the industry in other events such as the coming International Society for Horticulture Science symposium on Mango to be hosted in South Africa by that country’s mango exporter association and the presentation to the EurepGAP conference of the GhanaGAP program. These technical events, although not directly commercial, serve a definite purpose in establishing supply chain linkages with downstream industry partners on sound technical grounds. This activity should result in more partnerships, investments, new markets and sustainable supply chain partnerships for Ghana. The main impact is a change in our market’s perception of Ghana and the credibility that it creates for Ghana as a reliable exporting country Benchmarks: • Ghana horticulture export cluster participated in 2006 Fruit Logistica • Ghana GAP concept notes presented at EurepGAP conference • Industry-wide mango event completed Collaborative partners: FAGE/NHTF, Industry Associations, MoFA, GTZ, WAFF, GEPC, GIPC. A.6 CLUSTER GOVERNANCE

Over the first work plan period the USAID Partner Institutional Viability Assessment (PIVA) tool was refined and tested in the field. The resulting tool has Governance, Membership Development, Operations & Management systems as the three categories of assessment



and four stages of measurement – from Start Up to Mature. Three associations PAMPEAG, VEPEAG and HAG were assessed and their average scores were below par. A.6.a Association diagnostics The purpose of the diagnostics is to assess the baseline status of the associations in terms of organizational structure, membership recruitment, governance, services to members, and existing structures for information dissemination. These diagnostics are to assist in the capacity building efforts of these associations to provide improved and efficient services to members. In Year 1, diagnostic reviews were carried out on the Horticulturists’ Association of Ghana (HAG), the Vegetable Producers and Exporters Association of Ghana (VEPEAG), and the Papaya and Mango Producers and Exporters Association of Ghana (PAMPEAG) using USAID’s PIVA scale as a tool to guide the analysis. The analysis will be discussed with these associations and corrective measures recommended. In 2006, diagnostic reviews using USAID’s PIVA scale will be carried out on four additional associations. Benchmarks: • Diagnostic reviews carried out on two additional associations • Two Associations adopt improvements based on diagnostics Collaborating partners: SPEG, GAVEX, HAG, VEPEAG, PAMPEAG, Yilo-Krobo Mango Farmers Association, Mango Farmers Association in the Dangbe West, Dodowa A.6.b Association training Our interactions with the associations, participation in their meetings, the lessons learnt from the first mango trial sea shipment and new developments in the horticulture industry indicate that members of the associations could benefit from both technical and management training. Under the management training, each of the associations will have at least two (2) days training in good governance, farm management, record keeping and group dynamics. In the area of technical training, each of the association will undergo three (3) days training in Good Agricultural Practices (GAP), Effective Chemical and Spraying regime, Pruning Techniques, EurepGAP and Fair Trade Certification. Practical training on the farms and pilot demonstrations will be part of the training programs. This training will result in improvement in group cohesion and management skills of members of the Associations. Bench marks: • One (1) technical training program organized for each of the Associations • One (1) management training program organized for each of the Associations Collaborating partners: SPEG, HAG, PAMPEAG, GAVEX, VEPEAG, Yilo-Krobo Mango Farmers Association, Mango Farmers Association in the Dangbe West/ Dodowa. B. Enabling Environment Component The Enabling Environment (EE) component is designed to achieve results that improve the ability of the private sector to grow, attract private investment to Ghana, and compete in world markets. Through improved policy analysis, formulation, implementation, and monitoring; enhanced public-private dialogue; and capacity building of key policy units, the EE component will achieve significant policy changes to improve the private sector operating environment. The Enabling Environment (EE) component is focused on seven sectors that are considered most important to achieving the TIPCEE goals and objectives: macroeconomic, monetary



and fiscal policy; financial markets; labour, trade and other private sector policies; agriculture; energy; and ICT. The focus on these areas is based on the overriding need to achieve and sustain macroeconomic stability through monetary and fiscal policy, improve the efficiency of factor markets particularly labour, financial, and agricultural markets, and improve the regulatory frameworks for key infrastructure sectors such as energy and ICT. The strategy of the EE component is informed by our work with GoG counterparts, interaction with TIPCEE’s Export Business Development Component, and input from our expert panels, held during Year 1. These panels, consisting of five experts mostly from academia and the private sector from each of our target sectors, provided TIPCEE with counsel and recommendations regarding policies, capacity to implement, and public-private dialogues. The EE component work plan agenda falls into three main categories of activities:

1) Policy and regulatory reform work begun under USAID/TIRP that require follow up such as monetary policy and implementation of the Financial Sector Strategic Plan, the Labour Act, and RIA/PIET.

2) Policy and regulatory issues identified as impacting non-traditional agricultural exports, specifically TIPCEE’s focus commodities. Certain constraints have been identified and solutions proposed in this work plan and additional constraints will be identified and appropriate solutions implemented throughout the life of project.

3) Other policy and regulatory changes identified on a case by case basis over the life of project that impact negatively and significantly on the competitiveness of the Ghanaian private sector including those that may be identified by the expert panels for each sector.

Technical assistance, training and public-private dialogue will be the principal tools used to achieve results. The expectation is that over the life of the project in each of the selected areas there will be a significant, measurable improvement in policy and regulatory frameworks and their implementation, which includes supporting institutional structures. B.1 MACROECONOMIC, MONETARY AND FISCAL POLICY

Fiscal and monetary policies impact on competitiveness directly. Exporters cannot be competitive in an environment of high inflation, high interest rates, and an over-valued currency. It is therefore imperative that monetary and fiscal policy is geared towards achieving and maintaining macroeconomic stability. This is characterized by an environment of fiscal and monetary discipline, low inflation, relative exchange rate stability, and low interest rates. The process of achieving and maintaining macroeconomic stability is complex as it involves sometimes politically difficult policy and structural reforms. Major issues affecting monetary and fiscal policy include: • Insufficient policy analysis to inform guidance concerning monetary policy, including

monetary integration; • Lack of appropriate legislation to improve the efficiency of the financial sector; and • Inadequate capacity of key policy units to conduct necessary analyses. B.1.a Support the Passage of the Foreign Exchange Bill Under FINSSIP, the existing foreign exchange regulatory framework has been identified as one of the major constraints to competitiveness of the economy. During Year 2 TIPCEE will support the FINSSIP Secretariat (MOFEP) and the Bank of Ghana to facilitate discussion on and passage of the proposed Foreign Exchange Bill with a forum for stakeholders and a sensitization workshop for parliamentarians. The resulting bill will help rationalize the



existing laws and further liberalize the existing foreign exchange regime. In particular, the new bill is expected to open up the capital account. Benchmarks: • 2 Public-private dialogues, one with stakeholders and one with parliamentarians to

discuss proposed bill. • 1 Foreign Exchange Bill enacted

Collaborating Partners: Bank of Ghana, MOFEP, Select Committee of Parliament on Finance

B.1.b Provide Technical Assistance to Build the Capacity of the BOG Research Department A major constraint to the Bank of Ghana as well as the Government of Ghana’s policy making is the absence of a macroeconomic model of the Ghanaian economy that helps to forecast and to simulate the results of various policy options. The Bank of Ghana Research Department has been tasked with the responsibility of developing a macroeconometric model of the Ghanaian economy. The Bank has put together an Economic Modeling (EMOD) group to undertake this task. The group will also collaborate with a team from IFPRI which is putting together a Computable General Equilibrium (CGE) model of the Ghanaian economy. TIPCEE will assist the research department by engaging a short-term expert in macroeconometric modeling to provide technical assistance to the EMOD group. A properly designed macroeconomic model will inform policy makers regarding alternative policies and should lead to better decisions regarding macroeconomic policies in Ghana. Benchmark: • 1 Macroeconomic model of the Ghanaian economy created

Collaborating Partner: Bank of Ghana Research Department B.1.c. Support the Monetary Policy Committee of the Bank of Ghana Under the Bank of Ghana Act 2002, the responsibility for Monetary Policy decisions rest with the Monetary Policy Committee (MPC). The Committee meets bi-monthly to take a decision on the positioning of the Bank of Ghana Prime Rate, the monetary policy rate. The meeting is held over three days and a press conference is held at the end of the meeting to communicate the MPC decision and the underlying rationale. Five presentations of analytical work are made to the MPC at each meeting covering:

o Fiscal Developments o Monetary and Financial Developments o External Sector Developments o Financial Stability Report o Real Sector Developments/Business and Consumer Confidence Surveys o Inflation Developments and Inflation Forecast

After each MPC meeting, a press release and five reports covering each of the areas of technical analysis described above are made available to the public via the Bank of Ghana website, electronic mail and print. This brings greater transparency to the monetary policy decision making process. During Year 2 USAID and TIPCEE will continue to support the Bank of Ghana with an embedded expert to carry out the following activities:



o Provide technical support in producing the analytical reports presented to the MPC as well as those released to the public.

o Provide advice to the Bank of Ghana on its Monetary Policy framework and undertake analytical research on issues that enhance the monetary policy of the Bank.

o Assist the Bank in putting together its Monetary Policy framework for Ghana’s program with the International Monetary Fund and liaise with the IMF in monitoring Ghana’s monetary program.

o Continue to provide technical advice to the Bank on the Monetary Integration Process within the Sub-region.

Collaborating Partners: Bank of Ghana Monetary Policy Committee, Governor Bank of Ghana B.1.d Build Capacity of Policy Analysis Unit, MOFEP The Policy Analysis Unit of the Ministry of Finance and Economic Planning is responsible for economic policy analysis. The unit is under resourced and requires additional training to perform the analytical work that will support national economic policy. TIPCEE will support a training needs assessment for the unit and will consider providing technical assistance for the training of policy analysts for the unit in order to strengthen the ability of the unit to conduct credible policy analyses. Benchmark: • 1 Training needs assessment completed for the policy unit of MOFEP Collaborating Partner: MOFEP B.1.e. Contribute to National Economic Dialogue The National Economic Dialogue (NED) is an annual consultative forum on economic policy. Participants include policymakers, the private sector, and civil society. TIPCEE will support the NED by providing technical assistance as required. The National Economic Dialogue provides for improved public-private consultation on economic policy. Collaborating Partner: Ministry of Finance and Economic Planning Macroeconomic Policy – Growth and Poverty Reduction Strategy (GPRS II) The National Development Planning Commission (NDPC) is in the process of revising Ghana’s Poverty Reduction Strategy (GPRS II) for 2006-2009. The GPRS is the second generation of the Poverty Reduction Strategy Paper (PRSP) for Ghana after opting for the enhanced HIPC Initiative in 2001. By June 2005, Ghana reached the completion point in the HIPC and earned HIPC relief from both the multilateral and bilateral donors. However, as part of the HIPC process, Ghana must design a strategic document which describes how the HIPC savings will be used to reduce poverty. It is within this context that GPRS II has become crucial. The GPRS II is a comprehensive and integrated national development policy framework. It incorporates the disparate development agendas that compete for inclusion in government budgets into one comprehensive development policy framework for Ghana. It also operationalizes the Millennium Development Goals and the New Partnership for African Development (NEPAD) and is consistent with government’s programmes with development partners. GPRS II encapsulates Ghana’s national goal of accelerated economic growth, wealth creation and poverty reduction. B.1.f. Assistance with the GPRS Process



During Year 1 TIPCEE provided technical assistance for the crafting of the macroeconomic section of the GPRS. TIPCEE specialists also provided support to the NDPC in the consultation process to build consensus on the GPRS as the national agenda for development. During Year 2 TIPCEE will provide technical support to NDPC to ensure that the draft GPRS II is ready to be presented to Cabinet. The tasks to be performed include:

• Edit the macroeconomic section of the draft GPRS II, considering all views from the consultations held with MDAs, donors, NGOs, and civil society organizations.

• Edit the entire GPRS II document for synergy among the various thematic areas to ensure that it serves as a critical blue print for development.

• Assist in the development of indicators to assess the annual progress of the implementation of the GPRS on macroeconomic issues.

• Liaise with MOFEP to ensure that GPRS II feeds the MTEF process, and that there are explicit links between annual budgets and the plans and policy priorities of GPRS II.

Benchmarks: • Completed GPRSII macro section • Completed GPRSII draft ready for submission to Cabinet

Collaborating Partners: National Development Planning Commission (NDPC), Budgetary Division of MOFEP

B.2 FINANCIAL MARKETS

One of the most important drivers of economic development is a sound financial system. A well-functioning financial system provides a mechanism for mobilization of savings and their allocation to productive economic activities. Additionally, the financial system provides a myriad of ancillary services such as payment systems and market information that enhance the efficiency of the private sector. Competitiveness for private sector firms is reflected in the ability of firms to be profitable in open markets. Other things being equal, firms operating in countries with more efficient financial services will have better access to short- and long-term capital and other financial services at a lower cost and will have a competitive edge. TIPCEE’s financial sector activities are designed to improve the delivery of more efficient financial services to the private sector, thus enhancing competitiveness. The major issues facing the financial sector include:

• Low rate of savings; • Lack of access to long-term capital especially for small and medium enterprises; • High intermediation costs reflected in high interest rate spreads; • Poor access to financial services in rural areas; and • Weak regulatory systems.

B.2.a Operationalize Venture Capital Scheme The Venture Capital Trust Fund (VCTF) Act passed in December 2004 established a fund to provide matching funds to private sector venture capital firms for onward equity and quasi-equity investment in Small and Medium Enterprises (SME). The objective is to leverage government funds with private sector funds to support SMEs in growth sectors of the economy. TIPCEE support is targeted at providing technical assistance to the Board of Trustees of the VCTF to establish guidelines for fund operations, training of fund managers, and the establishment of a monitoring and evaluation system. When the Fund is fully



operational, there will be $30 million available for equity investment in SMEs and knowledgeable managers to work with VCTF. Benchmarks: • Monitoring and evaluation system in place • Guideline document for fund operations drafted Collaborating Partners: MOFEP, Venture Capital Trust Fund Board of Trustees, World Bank

B.2.b Provide Assistance to Create Long-Term Savings Plan The Long-Term Savings Scheme Act of 2004 established tax sheltered long-term savings plans for retirement, homeownership, education and all-purpose activities. The objectives of the LTS Act, passed in December 2004, are still generally accepted as valid, however there is a need to address certain issues such as the contribution limits, the role of the LTS Agency, and other areas such as compensation of fund managers. TIPCEE will support the efforts of MOFEP to find a solution which addresses the identified problems while still proceeding with implementation. For example, it may be possible to delete Part I of the Act and replace it with provisions that address the key issues. In addition to amending the Act, the plan needs detailed regulations in order to become operational; and administrative procedures and manuals must be developed. TIPCEE’s support will assist in drafting regulations, administrative procedures, and manuals, conducting stakeholders’ consultations on the regulations, and facilitating workshops for the training of fund managers. When successfully implemented, the Long-Term Savings Plan will increase the pool of long-tem savings available for investment. Benchmarks: • 1 legislative instrument drafted (regulations for LTS plan) • manuals and operating procedures drafted to operationalize LTS plan • 1 public-private dialogue to discuss LTS regulations Collaborating Partners: MOFEP, Long-Term Savings Agency, World Bank

B.2.c Regulatory Reform of the Non-Bank Financial Sector The non-bank financial sector is currently regulated under the Financial Institutions (Non-Banking) Law, 1993. The Financial Sector Strategic Plan (FINSSP) identified several weaknesses in the regulatory regime for non-bank financial institutions and recommended a comprehensive legal and regulatory review. During Year 1, TIPCEE supported the drafting of an issues paper. Year 2 activities will support a best practices review by an international advisor, a stakeholders’ forum to develop a consensus on the framework for NBFI regulation, a sensitization workshop with parliamentarians, and the drafting of a new bill and regulations. This reform when completed will lead to improved non-bank financial intermediation. Benchmarks: • 2 public-private dialogues; one stakeholders’ forum and one workshop for

parliamentarians • 1 bill related to the regulatory regime for non-bank financial institutions drafted and

passed • 1 set of regulations for non-bank financial sector drafted Collaborating Partners: Bank of Ghana, MOFEP



B.2.d Analysis of Interest Rate Spread During Year 1, in response to a request from the Minister of Finance, the TIPCEE policy team undertook a study entitled “Commercial Bank Interest Rate Spread in Ghana: Determinants and Policy Implications” and presented the results at a stakeholders’ forum. TIPCEE activity in Year 2 will include the preparation of a policy brief for submission to the Minister of Finance. This paper will serve to inform policymakers and regulators on the causes of interest rate spread. Benchmark: • 1 policy paper analyzing the interest rate spread in Ghana submitted to MOFEP Collaborating Partners: Bank of Ghana, MOFEP B.2.e Develop and Install a Monitoring and Evaluation System for FINSSP With USAID and TIPCEE support, a monitoring and evaluation system has been developed for FINSSP. To make the system operational, the implementing agencies of FINSSP have to be trained on the system. TIPCEE activities in Year 2 will support the M&E training. At the conclusion of Year 2, the M&E system for FINSSP will be operational, and the FINSSP implementing agencies will be trained on the new system. Benchmark: • Training completed for all the implementing agencies of FINSSP

Collaborating Partners: MOFEP, FINSSP Secretariat B.2.f. Provide Technical Assistance for Regulatory Reforms under the Securities and Exchange Commission FINSSP recommends extensive regulatory reforms for the securities industry. These include a review of the rule book of the Ghana Stock Exchange and securities industry legislation under the Securities and Exchange Commission. During Year 2, TIPCEE will provide technical assistance to the SEC to develop rules for mergers and takeovers (currently absent) and establish a regulatory framework for the over-the-counter (OTC) market. A public-private dialogue for stakeholders will be held on the new regulations. These activities will create a sound framework for takeovers and mergers of public companies, and the over-the-counter market will be enhanced by improved investor confidence. Benchmarks: • 1 Public-private dialogue regarding proposed regulations for mergers and takeovers and

the over-the-counter market • 2 Legislative instruments passed, one for mergers and takeovers and one for the OTC

market Collaborating Partners: Securities and Exchange Commission, MOFEP, FINSSP Secretariat B.2.g. Assist with Financial Sector Governance FINSSP recognizes that the fragmentation of financial services regulation in Ghana has created problems of regulatory arbitrage, weak harmonization and poorly resourced regulatory agencies. To address these problems, FINSSP recommends a) a feasibility study for a single regulator of financial services, and b) harmonization of regulatory responsibilities of the SEC, National Insurance Commission, and the Bank of Ghana to facilitate the



implementation of the universal banking model which has been adopted in the Banking Act of 2004. TIPCEE will provide technical assistance to the Ministry of Finance to develop a formal position on the single regulator option and the harmonization of universal banking with the current regulatory system. This support will include a public-private dialogue to elicit the views of stakeholders. The results of these activities will be the clarification and consolidation of policy options on financial sector regulation and the establishment of a framework for harmonization of the current regulatory system and universal banking. Benchmarks: • 1 Policy paper submitted to MOFEP regarding the single regulator option and the

harmonization of universal banking with the current regulatory system. Collaborating Partner: MOFEP, World Bank B.2.h. Enhance Public-Private Dialogue by Supporting Annual Financial Literacy Week FINSSP notes that low financial literacy in Ghana is a hindrance to financial intermediation. Low financial literacy means that savers and borrowers are not knowledgeable about opportunities available to them in the financial system. Financial literacy programs should educate consumers and businesses on available financial products, how to access these financial instruments, and consumer rights and obligations under the regulatory framework. Accordingly, FINSSP has recommended an annual Financial Literacy Week. USAID and TIPCEE will support the Financial Literacy Week and a public-private dialogue by providing technical assistance for the preparation of educational materials and media presentations. These activities are expected to educate the general public and businesses on financial services and increase their participation in financial markets. Benchmarks: • Educational materials prepared for the general public and businesses on financial

services • Media presentations created to be used during financial literacy week Collaborating Partners: MOFEP, SEC, BoG, Financial Sector Industry Association, Association of Bankers, Ghana Insurers Association, Ghana Securities Industry Association B.2.i. Support the Launch of a Financial Sector Division at the Ministry of Finance and Economic Planning The Ministry of Finance is setting up a Financial Sector Division to enhance the design and implementation of policies for the continued development of the financial sector. The World Bank has encouraged MOEFP to establish this division and is providing support for this effort. The division will also be responsible for the implementation of FINSSP. USAID and TIPCEE will support the set-up of the Financial Sector Division by embedding the Project’s Financial Sector Advisor, Dr. Sam Mensah, in the Division with the following terms of reference: • Advising on design of structure, functions and operating procedures and systems of the

Financial Sector Division • Designing and implementing a training program for staff of the Division • Supporting the implementation of the Financial Sector Strategic Plan, including the

Venture Capital Trust Fund and Long-Term Savings Scheme • Providing ongoing policy advice to the Ministry on financial sector development • Assisting in the deepening of dialogue between the Ministry and private sector financial

institutions



The establishment of a financial sector division is expected to result in improved policy formulation for financial sector development, and enhanced MOFEP dialogue with private sector financial institutions. Benchmarks: • Financial Sector Division established, including training of staff and operating procedures Collaborating Partner: Ministry of Finance and Economic Planning, World Bank. B.3 LABOUR MARKETS

Ghana’s ability to increase its economic growth rate and compete more effectively in the global economy continues to be constrained by a number of factors, including the need to improve the enabling environment with flexible labour markets. The labour market plays an important role in the transmission process of macroeconomic policy shocks and structural reforms aimed at economic growth through flexible wages. As one of the key prices in the macro-economy, the degree of wage inertia is critical in the determination of flexibility of enterprises to respond to both external and internal shocks that might require firms to employ more labour or quickly lay off existing labour to remain profitable and competitive. The regime of labour regulations and industrial relation practices influence wage flexibility. Thus, the structure of the labour market including its laws and regulations is very crucial if labour is to be an attractive input to make Ghana a competitive export economy. While other markets such as financial and product markets received earlier attention to enhance flexibility, it was not until 2003 that the labour market received the attention it required with the passage of Act 651. Prior to the passage of this law, individual employment contracts came with many obligations to the employer. These obligations did not necessarily translate into monetary rewards to the workers but invariably added to the cost of labour employment. Furthermore, although the minimum wage in Ghana is extremely low, employers were of the opinion that it was not the minimum wage per se that was the constraint to increased employment but other legal commitments to individual contracting, termination of labour contracts, collective and contract conflicts, and special regulations governing formal sector employment. It is against this background that the Labour Act 651 of 2003 was crafted to move the economy forward with flexible labour practices. Labour Act 651 has purged labour contracts of most of these inflexible labour practices and has consolidated almost all laws related to industrial practice into one document. Other key features that will enhance Ghana’s labour market are the creation of independent bodies such as:

• The provisions made for the operation of private employment centres in addition to public employment centres established under NLCD 157;

• Establishment for the first time a National Labour Commission with equal representation from Government, organised labour and employers with a chairman jointly nominated by employers and organised labour. Among its functions, the NLC is to receive complaints from workers, trade unions, and employers, or employers’ organization and expedite action on the resolution of industrial disputes without recourse to lengthy judicial processes; and

• Provision of legal status to the National Tripartite Committee to advise on employment and labour market issues, including labour laws, international labour standards, industrial relations and occupational safety and health; and to consult with partners in the labour market on matters of social and economic importance.



Although the Labour Act is now passed, it has not been fully implemented, especially with respect to the National Labour Commission, the National Tripartite Committee, and the passage of legislative instruments that are required to make the new labour law operational. Furthermore, a comprehensible effort to create awareness among employers, labour, and government has yet to take place to sensitize the citizenry that the provisions of the Act 651 call for new ways of doing things. Accordingly, TIPCEE will assist the MMYE, the National Labour Commission and the National Tripartite Committee to give meaning to the critical aspects of Act 651. The major issues facing the labour sector include:

• Lack of various legislative instruments to fully implement the new Labour Law, Act 651;

• Insufficient awareness among stakeholders that the Labour Law calls for new ways of doing things in the labor market;

• Failure to establish the various institutions provided for by the Act 651 such as the National Tripartite Committee; and

• Inadequate capacity for analysis of such issues as income and productivity. B.3.a. Assist the MMYE to Operationalize the Labour Act Although the Labour Act passed in 2003, it has not been implemented, especially with respect to the passage of legislative instruments that are required to make the new labour law operational. TIPCEE will support the MMYE to draft the legislation that will give force to Act 651. The overall impact of the activities in the labour sector will be reflected in a more competitive labour force with a regime of highly transparent labour regulations. Benchmarks: • 1 Legislative instrument to make Labour Act operational passed Collaborating Partner: Ministry of Manpower, Youth, and Employment (MMYE) B.3.b. Assist the MMYE to Operationalize the National Labour Commission During Year 1 the NLC was launched and numerous workshops supported by USAID and TIPCEE. During Year 2 TIPCEE will continue to support the NLC by providing technical assistance for the review of the legislative instrument and regulations to operationalize the NLC. A public-private dialogue will be held to discuss the legislation and regulations. In addition, because a comprehensive effort at awareness creation among employers, labour, and government has yet to take place to educate the citizenry on the provisions of the Labour Act, TIPCEE will offer support to the NLC to design and implement a public information campaign on new labour law. When the NLC is fully operational, there should be expeditious adjudication of labour disputes, less recourse to the courts for the resolution of industrial disputes, and increased formalization of employment contracts.

Benchmarks: • 1 Legislative instrument to operationalize NLC reviewed • 1 Public-private dialogue on NLC legislation and regulations. Collaborating Partners: Ministry of Manpower, Youth, and Employment (MMYE), National Labour Commission



B.3.c Assist the MMYE to Operationalize the Tripartite Committee In Year 2 TIPCEE plans to support the Ministry of Manpower, Youth and Employment (MMYE) to produce a legislative instrument to formally establish the National Tripartite Committee (NTC) and to develop the rules and regulations for the Committee. A stakeholders’ forum will be held to build consensus on the draft rules and regulations. Later in Year 2 TIPCEE proposes to work with the members of the NTC and MMYE to develop a labour policy for Ghana. Finally, TIPCEE will support the NTC to undertake a study on productivity and incomes to inform the national income policy. Public-private dialogues will be held to discuss the national labour policy as well as the study on productivity and incomes. A functioning NLC will enhance the competitiveness of Ghana’s labour market and facilitate progress towards creating a realistic-wage-low-cost labour economy characterized by high labour productivity.

Benchmarks: • 2 Legislative instruments passed to establish the Tripartite Committee and to establish

rules and regulations • 1 workshop to build consensus on draft rules and regulations of Tripartite Committee • 1 policy paper on productivity and incomes submitted Collaborating Partners: Ministry of Manpower, Youth, and Employment (MMYE), National Tripartite Committee, University of Ghana, Department of Economics B.4 TRADE AND OTHER PRIVATE SECTOR POLICIES

Ghana has crafted a Trade Policy within the context of Ghana’s long term strategic vision of achieving middle income status by 2012 and becoming a leading African agro-industrial country. The policy is also designed to ensure a consistent and stable policy environment within which the private sector and consumers can operate efficiently and with certainty. The fundamental principle underlying trade policy is that the private sector is the engine of growth, with government providing an enabling environment to actively stimulate private sector initiatives. The actual implementation of this trade policy will be through a Trade Sector Support Programme (TSSP) whose annual Policy Action Statement will specify activities to be undertaken each year. The TSSP will be driven primarily by the Ministry of Trade and Industry but will be coordinated through a Ministerial Trade Policy Coordinating Committee in recognition of its cross-cutting nature. The major issues facing the trade sector include:

• Inability of private sector to play its critical role as the engine of growth; and • Need for implementation of trade policy in numerous areas such as:

-Standards -Multilateral trade -Fair and transparent import-export regime -Trade facilitation -Production capacity for domestic and export markets -Consumer protection -Protection of intellectual property rights.

B.4.a Assist in the Implementation of the TSSP TIPCEE anticipates that Year 2 will include activities related to the implementation of the TSSP, a draft of which was recently released. After consultation with other donors and



subject to budget and resource considerations, TIPCEE will assist the Ministry of Trade and Industry (MOTI) with certain aspects related to the first year’s implementation of TSSP. Collaborating Partner: Ministry of Trade and Industry B.4.b Assist FAGE/PEF to Study Implications of Tariff Structure for Competitiveness During Year 2, in collaboration with the Export Business Development component, FAGE, and PEF, TIPCEE proposes to build on the FIAS report to do a study to assess the impact of duties, tariffs, levies, and taxes (national and local) on selected commodity chains (e.g., pineapple, papaya, mango, cashew). Following the study TIPCEE will support FAGE and PEF’s dissemination of the results at a stakeholders’ forum with BUSAC. Benchmarks: • 1 policy paper assessing the impact of duties, tariffs, and taxes on selected commodity

chains • 1 Public-private dialogue to discuss the study’s implications for the private sector Collaborating Partners: FAGE, PEF B.4.c. Provide Technical Assistance to BOG Research Department, MOTI and CEPS on Trade Data Accurate and reliable trade data is fundamental to assessing and monitoring the competitiveness of the Ghanaian economy. Over the past 10 years Ghana has used several Customs data/trade data collection systems (often in conjunction); ASYCUDA (Automated System for Customs Data Acquisition); CEDIS (Customs Export Data Information System); Bank of Ghana data (based on A2 and major institution reporting); and GCNET/GCMS (Ghana Community Network/Ghana Customs Management System). The final transition to GCNET collected trade data was in 2004, with the final phasing out of ASYCUDA and CEDIS in the third quarter.

Problems remain:

1. Data extracted from GCNET have yet to prove to be consistent in structure, most likely due to software ‘improvements and modifications’ or inconsistent use of templates. Substantial effort is required to clean each extraction before it is able to be integrated into a single data set to begin data cleaning for final integration to the master set.

2. Data entry by the agents is intended to be cross-checked by customs before

acceptance to the integrated GCNET data set, but this is not always done. 3. With respect to major trading items (e.g., cocoa, gold, diamonds, bauxite,

manganese, oil), GCNET data does not always correlate with the Bank of Ghana data (from different sources) for the same product.

TIPCEE will provide the Bank of Ghana Research Department with technical assistance and training to extract data for monitoring trade flows through the end of 2005. This will involve the extraction, cleaning, integration and reporting for trade data collected by customs. Benchmarks: • 4 reports generated from GCNET data by the BOG staff with consultant assistance



• 1 Training workshop to establish the way forward for future data acquisition and processing

Collaborating Partner: Bank of Ghana Research Department, SAKKS/GSSP, MOTI, CEPS B.4.d Support the Implementation of RIA/PIET A key component of the enabling environment for private sector development is the presence of transparent policy and programme management procedures. During Year 2 TIPCEE will support the development of a roadmap for implementation of the Regulatory Impact Assessment (RIA) and Programme Intervention and Evaluation Template (PIET) frameworks recently developed by government. This roadmap will serve as the basis for consultations with stakeholders to agree on strategies for implementation. Subject to budget and resource constraints, TIPCEE will, in collaboration with other donors, undertake follow-on activities from the roadmap as outlined in the implementation strategies. When fully operational these frameworks will lead to more efficient government programme interventions and an improved policy and regulatory environment to promote private sector development. Benchmarks: • 1 Implementation plan finalized for consultation with donor partners • 1 dialogue with stakeholders and donors to discuss implementation strategies

Collaborating Partners: Ministry for Private Sector Development, Ministry for Public Sector Reform, Office of the President B.5 AGRICULTURAL POLICY

Agriculture continues to dominate economic activity in terms of its contribution to GDP, foreign exchange earnings, and employment levels. The country is highly dependent on agriculture for its foreign exchange earnings from cocoa and timber and from some non-traditional exports such as pineapples and papaya. This sector is also particularly important for food security. Current agricultural policies are not sufficiently supportive of private sector growth.

B.5.a. Facilitate the Review of FASDEP During Year 2 TIPCEE, collaborating with DFID, will support MOFA in the revision of FASDEP. A revised FASDEP will clarify the appropriate roles of government, private sector, academia/research and development partners to improve the competitiveness of the private sector. This revision was deemed necessary because a review of the existing FASDEP and the GPRS revealed that the documents were not explicit enough to motivate and promote private sector activities, nor did FASDEP deal adequately with small holders or women. To ensure buy-in by all stakeholders, the review process will involve extensive analysis and public-private dialogue among stakeholders over a multi-month period. After the new FASDEP is finalized, TIPCEE will coordinate with MOFA on activities emanating from the final report. A revised FASDEP will improve the policy environment and enhance private sector confidence, investment, growth, and competitiveness. It will also bring new focus to the inclusion of women and smallholders in the agricultural strategy. Benchmarks: • Revised FASDEP • 5 public-private dialogues to gather input, review drafts, and finalize FASDEP.



Collaborating Partners: Ministry of Food and Agriculture (MOFA), DFID B.5.b Facilitate the Public-Private Partnership for Shed 9 In collaboration with the Export Business Development component, EE will facilitate the Sea-Freight Pineapple Exporters of Ghana’s (SPEG) understanding of the legal framework for the development and management of Tema Shed 9 by public-private partnership. A successful Shed 9 infrastructure public private partnership will lead to an exponential increase in volume and value of fresh fruit exports from Ghana. Benchmarks: • 20 SPEG members trained in the legal framework for development of shed 9 by PPP.

Collaborating Partner: SPEG B.5.c Explore the Implementation of a Trade Desk at MOFA At the request of the Ministry, TIPCEE will support MOFA in examining the feasibility of a Trade Desk. Collaborating Partners: Ministry of Food and Agriculture (MOFA), IFPRI (SAKSS/GSSP) B.5.d Assist in the Reform of Pesticide Regulation TIPCEE’s recently completed Pesticide Evaluation Report and Safer Use Action Plan (PERSUAP) noted that a serious constraint to the export of horticultural products from Ghana is the management of agro-chemicals. There are two interlinked European Union (EU) statutes associated with pesticide use that hinder developing country growers’ ability to export fruits and vegetables to the EU, the Maximum Residue Level (MRL) and Harmonization Program and the Pesticide Approval Review Program. There is an urgent need to develop cost effective, responsive and efficient mechanisms for pesticide regulatory adjustments to meet private sector needs to respond to market demands. The Ghana Environmental Protection Agency (EPA) has been slow in preparing pesticide regulations after the enactment of Act 528 (1996) to give clear direction to the private sector operators. TIPCEE will prepare an issues paper on pesticide management as it impacts the horticultural sector to support revisions in the current pesticide regulations. This issues paper and subsequent studies will recommend revisions of current pesticide administrative regulations to allow pesticides that are already approved by the EU and USA to automatically be approved by the Ghana EPA based on the equivalence determination provisions of the Agreements on Agriculture (AoA). This improved process and synchronization of approved pesticides between Ghana EPA and the EU and USA will raise the comfort level of importers of horticultural products in those markets. It will also reduce registration costs and remove delays encountered by the Ghanaian private sector. Benchmarks: • 1 policy paper submitted to EPA on pesticide management issues • 1 proposal for regulatory reform to make US and EU approved pesticides automatically

approved by the Ghana EPA. Collaborating Partners: EPA (the Technical Committee on Pesticides), Ministry of Private Sector Development, GTZ



B.5.e Support the Performance of Smallholders FASDEP and GPRS envisage a transformation of rural farmers from a subsistence orientation towards commercially viable businesses. However, Ghana’s smallholder farmers are not homogeneous, and they will modernize in different ways and at different paces. For the poor farmer, the choice of agricultural modernization practices depends upon cost considerations, the compatibility of the practice with his/her livelihood objectives, and an assessment of the risk implications (pest, disease, and market) of the change. The modernization process for the poor farmers will be gradual and cautious unless support for and investment in smallholders increases. TIPCEE will support a study to identify areas of smallholder activities that require policy reform to attract investment, promote growth, and enhance competitiveness. The starting point for the study will be the identified constraints from the EBD study on ‘Strategy for Growth and Management of the Horticultural Cluster”. A subset of identified constraints will be selected to be researched. The problems will be identified, alternative solutions (best practices) examined, and recommendations proposed. A forum will be organized to share the results with the private sector and MOFA. This study will inform public-private dialogue on policy changes favoring smallholders, facilitate the implementation of FASDEP and provide valuable information to nucleus farms regarding the constraints facing their outgrowers. Appropriate policy changes will lead to increased smallholder production and export of horticultural commodities. Benchmarks: • 1 policy paper identifying policy constraints faced by smallholders • 1 Public-private dialogue to discuss proposed policy options and implementation

Collaborating Partner: Ministry of Food and Agriculture (MOFA) B.6 ENERGY SECTOR

An adequate and efficient supply of energy is fundamental to economic development as it constitutes an important resource in production. Ghana’s energy sector consists mainly of electricity (hydroelectricity and thermal), oil and gas, biomass (charcoal), renewable energy sources, and natural gas. Charcoal currently accounts for about 67% of total energy consumption in Ghana, whereas electricity and petroleum products account for 10% and 23% respectively. TIPCEE’s energy sector activities are designed to improve efficiency and reduce the cost of the delivery of energy products to the private sector, thus enhancing competitiveness. TIPCEE’s particular focus will be in the area of natural gas regulation.

B.6.a. Support the Development of a Secondary Market for Natural Gas Gas from the West Africa Gas Pipeline (WAGP) is expected to begin flowing in December 2006. The Ghanaian foundation user of the gas will be the national electric utility of Ghana, the Volta River Authority (VRA). A certain percentage of the gas, as much as 15%, is expected to become available for other users forming a “secondary market.” TIPCEE’s Year 2 activities will focus on this secondary market. USAID and TIPCEE will support the Ministry of Energy in drafting a policy and regulatory framework for the secondary market in natural gas, holding a stakeholders’ forum to review the draft policy and regulatory framework, and finalizing the policy and regulatory framework. A roadmap, prepared in Year 1, will outline other follow-on activities which TIPCEE will undertake subject to budget considerations and agreement with Ministry of Energy, and in collaboration with other donors. These activities are expected to strengthen the capacity of industry and advocacy groups to dialogue with government for policy reforms that encourage private sector development through the process of establishing a stakeholders' consensus on framework for secondary natural gas regulation. The efficient delivery of natural gas to the secondary



market will result in significantly reduced operating costs and an increase in the competitiveness of Ghanaian industries.

Benchmarks: • 1 Policy paper outlining the framework of the secondary market in natural gas • 1 Legislative Instrument (regulations) developed for the secondary market in natural gas • 2 Public-private dialogues regarding the regulations and establishment of a secondary

natural gas market Collaborating Partners: Ministry of Energy, Energy Commission, Public Utilities Regulatory Commission B.7 ICT SECTOR

Access to ICT infrastructure, connectivity, and services is critical to sustained long-term economic growth. Development of the ICT sector leads to a reduction in costs for business relying on ICT-related services and makes it feasible to extend coverage to economically-active rural communities. B.7.a Support ICT-Related Legislation In Year 2 TIPCEE will provide support for the review and finalization of three draft bills for submission to Parliament including the Telecoms Bill, the National Communications (Amendment) Bill, and the E-Legislation Bill. This support will include a review of the draft bills by local experts, a stakeholders’ forum to review the draft bills, and a workshop for the Select Committee of Parliament on Communications on the proposed legislation. The enactment of these bills will result in an improved policy and regulatory environment and the provision of better and more efficient ICT services. Benchmarks: • 3 Acts of Parliament promulgated: Telecoms Bill, the National Communications

(Amendment ) Bill, and the E-Legislation Bill. • 1 Public-private dialogue regarding the draft bills • 1 Forum with Parliamentary Select Committee to discuss the three bills

Collaborating Partners: Ministry of Communications, National Communications Authority, Select Committee of Parliament on Communications, World Bank B.7.b. Facilitate the Advocacy of GISPA with NCA and GT During the ICT Expert Panel discussions a number of private sector participants expressed the desire to have an improved dialogue with the relevant public sector agencies regarding a number of regulatory issues. In Year 2 USAID and TIPCEE will support the Ghana ISP Association (GISPA) and other industry groups to negotiate with NCA and GT for improved access to Sat 3 cable. TIPCEE’s activities will include training to strengthen the capacity of industry and advocacy groups to dialogue with government for policy reforms that encourage private sector development. The result of these activities will be improved access of ICT providers to SAT 3 cable leading to lower costs. Benchmarks: • 2 Public-private dialogues to discuss the most effective methods to gain cheaper access

to Sat 3 cable for the private sector.

Collaborating Partners: Ministry of Communications, Ghana ISP Association


ANNEX A – KEY RESULT AREAS, INDICATORS AND TARGETS This section outlines TIPCEE’s Key Result Areas, indicators and targets and provides 2006 and life of project targets. All quantitative indicators have been given numerical targets, while all qualitative indicators, because it is inconsistent to give a numerical value to a qualitative indicator, have “improved” as the target. Project Objective 1—Strengthened Private Sector Capability to Compete

This project objective houses the Export Business Development (EBD) component of TIPCEE. Through the EBD component, TIPCEE will improve Ghana’s performance by enhancing the systems that increase the value of products including agricultural systems (technology), linkage capacity (quality management, client culture and innovation capacity), cluster dynamics (rivalry and collaboration, support services diversity, information dissemination and focus), logistics (shipping performance, airfreight integration, and cold chain links), and manpower (labor force experience, middle management and entrepreneurship). There are two indicators that are used to measure PO1 impacts:

TIPCEE indicator 2006 Target LOP Target

Value of commodities exported by assisted firms $5 million (CIF) $75 million (CIF)

Volume of commodities exported by assisted firms 3,000 MT 73,000 MT

A1. PIR 1: Expanded Market Access

In order to achieve increased exports, sales, incomes and jobs, the Ghanaian private sector must be able to provide what the market wants and consumers need to purchase Ghanaian products. To expand market access TIPCEE will undertake activities to address the lack of market information, solidify business relationships between buyers and sellers, and market Ghanaian products with a quality seal conveying the industry standard and compliance with market requirements. TIPCEE will measure the results of this PIR through two indicators:


Value of sales by assisted firms $5.15 million $78.65 million

Volume of sales by assisted firms 3,750 MT 91,250 MT

KRA 1.1 – Use of Market Information Expanded This KRA is designed to strengthen and expand market information systems that already exist and develop new systems to respond to specific demands. Activities under this KRA, such as the industry portal and industry newsletters, will focus on developing a private sector oriented framework to capture and disseminate market intelligence

1 Key Result Areas, Indicators and Targets

information. Access to this targeted information will have an immediate impact on producers and enterprises and facilitate buy-in to TIPCEE activities.


Number of ICT market information products implemented 15 40

KRA 1.2 – Market Linkages Expanded This KRA is designed to help the Ghanaian agribusiness community, government, and international partners develop a common way of looking at supply chain performance, investment promotion and smallholder development. The goal of these activities is to initiate market linkages of individual exporters to the downstream industry. These linkages can eventually be scaled up and provide a significant increase in sales of Ghanaian products. TIPCEE’s participation in industry events, such as Fruit Logistica, will establish new business linkages with international buyers.


Number of business relationships formed with non-Ghanaian enterprises 15 65

A2. PIR 2: Increased Capacity of Enterprises and Smallholders to Respond to Market Demand

A fundamental principle of the TIPCEE approach and one that will drive the strategy for achieving this PIR is produce what you can sell, not sell what you produce. PIR 2 comprises the entire commodity supply chain from smallholder to larger enterprises, processors and exporters. At the smallholder level, players include producer groups, contract farmers, and out growers. At the enterprise level, players include nucleus farms, processors, exporters, transporters, packagers, and all other enterprises involved in the supply chain. This PIR is the focal point of all direct assistance to members of a particular export sector. It is linked with PIR 1 in order to ensure that the supply is responding to demand and to PIR 3 to access business services required to improve capacity and performance.

At the smallholder level, the overall PIR 2 strategy seeks to address the underlying causes of the underperformance in the non-traditional export market which includes low productivity, use of inappropriate technology combined with the lack of capacity to respond to market demand. By linking smallholders with exporters, processors and service providers through out-grower schemes, TIPCEE will facilitate the establishment of systems to provide market guidance for improvements in quantity, quality, certification and modern managerial and post harvest techniques. There are three indicators that capture this PIR impact.


Value of sales by assisted producer groups $1 million $15 Million


Volume of sales by assisted producer groups 1,200 MT 39,700 MT

Number of assisted firms meeting EurepGAP or other standards 20 50

KRA 2.1 – Enterprise Performance Improved The objective of this KRA is to increase profitability and performance by improving firm responsiveness to market signals. The medium to large scale enterprise is a critical link in the value chain and often anchors the commodity sector in which it operates. In order for Ghanaian products to obtain a larger market share leading to increased sales, the anchor firms must be managed for performance, efficiency and quality. This KRA is devoted to helping enterprises develop performance and value management techniques for an overall approach to managing exports.


Number of assisted firms purchasing from smallholders 25 60

Number of outgrowers working with assisted firms 2,000 7,000

Number of assisted firms using sustainable NRM practices 20 50

Number of public private partnerships formed involving assisted firms 15 65

Number of persons trained from assisted firms 1,000 5,000

Number of assisted firms 30 90

Number of assisted agricultural-related firms 29 63

KRA 2.2 – Smallholder Productivity Increased The objective of this KRA is to increase productivity in terms of quantity and quality of selected commodities for export in smallholder growing systems. The quality of smallholder produce for export is dependent on their ability to adapt Good Agricultural Practices that improve quality and meet market requirements in terms of EurepGAP and other standards. Smallholder yields and quality of horticulture products are limited by their access to new technologies and best cultivation processes. TIPCEE’s work with MD2 pineapple dissemination, GhanaGAP and technological and diversification pilots will contribute to results under this KRA.


Gross margin per unit land for assisted commodities Improved Improved

Number of smallholders adopting new technologies 2,520 10,500


Share of total commodity area farmed using new technologies 10% 35%

Number of assisted producer groups using sustainable NRM practices 60 250

Number of producers trained 7,000 45,000

Number of rural households benefiting directly from TIPCEE interventions 3,600 15,000

Number of vulnerable rural households benefiting directly from TIPCEE interventions 400 6,000

KRA 2.3 – Smallholder Systems Developed and Strengthened Improving smallholder systems, which include producer groups, outgrower linkages, nucleus farms, contract farmers, and other smallholder arrangements, is essential for growing the production base of Ghanaian exports. Year 2 activities in GIS mapping and traceability will strengthen smallholder systems to allow them to better integrate into the export market.


Number of smallholders linked to markets through enterprises 2,520 10,500

Number of assisted producer groups providing services to members 150 500

Number of assisted producer groups 180 600

A3. PIR 3: Increased Delivery of Effective Demand Driven Services

The best way to develop sustained BDS is to increase the demand for such services. No amount of supply-driven BDS efforts will lead to sustained demand. The focus, therefore, of PIR 2 on enhancing firm performance is the best way to achieve, in time, increased demand for BDS.

In this light, PIR 3 serves as a support function across the supply chain for the selected export industries. The BDS and association team will follow a two pronged strategy: enhance the quality of service by those presently providing BDS, including associations, and increase the exposure of BDS providers to the market through structured and managed TIPCEE activities.


Number of paid services delivered by service providers and associations 800 8,300


KRA 3.1 – Associations and APEX Organizations Capabilities Strengthened Industry associations should be capable of offering their members and clients a full range of value added, fee-based, or brokered support services including but not limited to market segmentation and targeting, market information, logistics, input supply, bulking, storage, certification, and training. This KRA will specifically focus on the capacity of priority industry associations in Ghana to provide necessary services and information to their clients and members. TIPCEE will professionalize associations to provide the needed services to enable members to respond to the export market. By dealing with organizational management issues and providing the skills and tools necessary for technical training, the relevance of industry associations will grow. TIPCEE will also support appropriate apex organizations to improve their service delivery to member groups by establishing systems for transferring market information and requisite quality standards on the international markets. TIPCEE’s work with association training and diagnostics will contribute to this KRA.


Paid-up membership of assisted associations 168 238

Effectiveness of assisted associations Improved Improved

Number of public-private partnerships formed involving associations 15 50

Number of assisted commodity associations 5 12

Number of assisted women’s organizations 1 5

KRA 3.2 – Effective Demand for Business Development Services Increased Business Development Services must be demand-driven to be effective and sustainable. By maintaining focus on the market, in this case the demands of the supply chain enterprises, TIPCEE will help BDS providers offer valued services to their clients. Businesses need support services in financial management, marketing strategies, packaging, and technical training among others but will not pay for such services until BDS providers are offering real value. TIPCEE’s work in establishing a GIS network for smallholders will lead to increased demand for BDS services in this area.


Number of assisted BDS providers serving smallholders 15 50

Number of client firms receiving services from assisted BDS providers 30 70

Number of agricultural-related technologies made available for transfer 20 115


Project Objective 2—Improved Enabling Environment for Private Sector

The Enabling Environment (EE) component is designed to achieve results that impact the ability of the private sector to grow and to attract private investment to Ghana. Through improved policy analysis, formulation, implementation and monitoring; capacity building of key policy units; and enhanced public-private sector policy dialogue, the EE component should achieve significant policy changes that affect the private sector operating environment. The expectation is that over the life of the project in each of the selected areas there will be a significant, measurable improvement in policy and regulatory frameworks and their implementation including supporting institutional structures.


Quality of the enabling environment for the private sector Improved Improved

B1. PIR 4: Improved Selected Economic Policies and Regulatory Framework

PIR 4 aims to complete policy reform efforts begun under TIRP and simultaneously identify and address other reforms to improve the enabling environment, especially those that impact on the sectors served by the EBD component. Under PIR 4 the EE team will assist in selected areas of focus to identify and remove specific constraints to private sector efficiency. This will be achieved by working with government and the private sector on effective public private sector dialogue (i.e. the National Economic Dialogue), research on implication of the tariff structure on competitiveness, and work on legislation such as the Foreign Exchange Bill and ICT related legislation, and the actual implementation of new policy like the Venture Capital Trust Fund Act.


Progress towards reform of targeted policies Improved Improved

Number of policy and regulatory reforms implemented 10 28

KRA 4.1 - Public/Private Dialogue Enhanced This KRA will strengthen public/private policy dialogue on policy issues, mainly in the EE areas of focus and in response to EBD component objectives, through workshops, and other forums. The workshops will provide a venue for public/private sector discussion and debate to build consensus on the way forward. The approach will disseminate information and elicit views of the public, mobilize support for policy reforms, improve transparency in policy-making, and enhance ownership. TIPCEE will seek to encourage use of public/private dialogues for virtually all policy activities planned. In year 2, TIPCEE will support public/private dialogues to support our work in each policy sector.



Quality of dialogue as viewed by stakeholders Improved Improved

Number of private-public policy debates 22 72

Quality of dialogue Improved Improved

KRA 4.2 - Analytic Capacity for Policy Development Increased Under this KRA the EE team undertakes research and policy analysis and disseminates it to policy makers, provides advisory services, and technical assistance. The objective is two fold; to assist policy units on the research and analysis process required for policy formulation, and to contribute directly to the development and formulation of policy changes. The implementation of this KRA will influence the identification of policy issues and progress towards enactment and implementation of changes. Activities planned or underway include a research paper on interest rate spreads, issues papers related to a planned foreign exchange bill and a revised non-banking financial institutions bill.


Effectiveness of assisted policy units Improved Improved

B.2. PIR 5: Strengthened Capability of Selected Policy Units to Administer Policy and Regulatory Framework This PIR aims to strengthen selected policy units to follow up on TIRP activities and to start new endeavors driven by the private sector and the EBD component. The key to success under this PIR will be strengthened capacity of the GoG to identify, develop, formulate, enact, and implement policy reform relying on its own internal resources. And, in that process, draw on special expertise and knowledge mainly in Ghana's private sector and civil society including research institutes. The goal of this PIR is to assist Ghana to strengthen its capability to administer policy. TIPCEE is currently working with the Bank of Ghana Research Department and plans to assist the MOFEP Policy Analysis Unit in Year 2.


Capacity to administer policies and regulations Improved Improved

KRA 5.1 - Management Skills of selected Policy Units Enhanced This KRA will identify capacity needs of selected institutions and design and deliver assistance as appropriate. The support provided will target policy units whose ability to deliver would enhance performance in TIPCEE areas of policy focus. The EE team will work closely with policy units and will monitor policy implementation success. As with above, TIPCEE is focused on the Bank of Ghana Research Department and the MOFEP Policy Analysis Unit



Number of people trained in policy related activities 60 200

Other Strategic Result Areas The TIPCEE Other Results Areas (ORAs) will capture indirect results of TIPCEE activities that support other IRs in SO 6 as well as other strategic objectives. Below we present some specific activities planned for this seven month period that will contribute to these results and some general areas of collaboration with other SOs. ORA 1 - Construction and Maintenance of Economic Infrastructure Supported TIPCEE will support AgSSIP on three key infrastructure projects: Tema fruit terminal, Kotoka airport perishable center, and model field pack houses. TIPCEE will also support SPEG by commissioning a consultant to investigate the PPP framework for “privatizing” Tema Shed 9. This will include the legal, management/ownership and financial set up. Under this ORA, TIPCEE will measure the cold chain throughput at the Accra airport.


Cold chain throughput at Accra airport 0 10,000

ORA 2 - Regional Integration and Policy Harmonization Supported The TPCEE EE team will pick up on collaboration that was begun under WARP on the West African Pipeline. To insure that natural gas is available to the market once it reaches the beach, TIPCEE is working with GoG to develop the secondary market framework for the sale of natural gas in Ghana. The TIPCEE EE team will on a regular basis contact the West Africa Trade Hub and WARP to ensure that their regional integration and harmonization concerns are taken into account in the trade reform, ICT and agricultural policy issues pursued under TIPCEE. ORA 3 - Democratic and Decentralized Governance through Civic Involvement Supported The TIPCEE EE team will seek to work with the USAID Democracy and Governance team to achieve common objectives through activities that complement one another. For example, under KRA 4.2 the issue of impact of local taxes set by district assemblies has been identified as an issue that may affect the agricultural commodity chains that EBD has selected as their target crops. A study will be undertaken to assess the impact of local and national duties tariffs and levies on selected commodity chains. Follow on to this study may involve working with both district assemblies and the parliament to bring about changes in taxes at both the local and national level. Collaboration with the DG team would be sought in the follow up phase.


trade and investment program for a competitive export economy...

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