Rural Development Project

$101,288,000Original Compact Project Amount
$76,030,565Total Disbursed

Estimated Benefits

While the original compact budget for this project was $101 million, funds were shifted to other important projects during implementation. Estimated benefits correspond to $42.3 million of project funds, where cost-benefit analysis was conducted. This excludes the Procurement Capacity Activity and Financial Services Activity.

Estimated Benefits for Activities and Sub-Activities
Activity and Sub-Activity		Time	Estimated Economic Rate of Return (ERR) over 20 years	Estimated beneficiaries over 20 years	Estimated net benefits over 20 years
Community Services Activity	Education Sub-Activity	At the time of signing	12.1 percent	149,456	$10,900,000
	Electrification Sub-Activity	At the time of signing	20 percent	149,456	$49,600,000
	Water & Sanitation Sub-Activity	At the time of signing	20.5 percent	356,296	$3,300,000
Financial Services Activity		At the time of signing	N/A	N/A	N/A
Procurement Capacity Activity		At the time of signing	N/A	N/A	N/A

No ERR was calculated for the Procurement Capacity or Financial Services Activities. The Procurement Capacity Activity was so small relative to the rest of the project ($2.3 million at signing) that MCC decided not to move forward with a separate ERR. The Financial Services Activity does not have an ERR due to the high cost of the analysis relative to the size of the investment.

Original ERRs for the Rural Development Project were not updated following re-scoping of activities. Some activity or sub-activity-level ERRs may be updated using data from evaluations currently underway.

Project Description

Rural farmers in Ghana have spotty and often poor access to basic community services such as drinkable water, safe school infrastructure, electricity, and efficient financial services. This limits the economic potential of rural communities, making it difficult to reinforce entrepreneurial growth and retain skilled workers. The Rural Development Project was designed to strengthen rural institutions that provide services complementary to and supportive of agricultural and agribusiness development. The Project consisted of three activities:

Procurement Capacity Activity

The objective of the Procurement Capacity Activity was to strengthen the capacity of public sector entities to carry out transparent and competitive procurements at all levels of government. Investments included the establishment of a career path system for procurement practitioners, strengthening of local training institutions with curricula, modules and provision of textbooks, and the creation of an internship program for procurement students and graduates.
Community Services Activity

The Community Services Activity was designed to complement the Agriculture Project by providing educational, water and sanitation, and rural electrification infrastructure in the Intervention Zones and enhancing the capacity of local governments to deliver related services. These interventions were part of a larger effort by the Government of Ghana to expand the provision of basic community services throughout the country, and were specifically expected to enhance the sustainability of the Agriculture Project by providing the necessary infrastructure to improve health of communities, enhance skill development through access to education, and facilitate small-scale post-harvest processing of agricultural products. The Activity included:

Education Sub-Activity: This sub-activity sought to improve education delivery in beneficiary communities consistent with Ghana Government policy and support the compact’s agriculture investments in these communities. It included construction and rehabilitation of school infrastructure and ancillary facilities in farming communities.

Water and Sanitation Sub-Activity: The water and sanitation component of the Community Services Activity was designed to provide improved water systems to selected communities. The objective was to improve water systems in districts participating in the compact so that the households’ economic productivity and income would increase, and households would reduce unproductive time spent caring for the sick, and/or collecting water.

Rural Electrification Sub-Activity: The rural electrification component was designed to promote economic activities in crop storage, agricultural processing, and other agricultural cottage industries through the provision of electricity.

The scope of the Community Services Activity was reduced following a compact-wide restructuring (see details below). The Rural Electrification component was re-scoped to focus on linking post-harvest facilities to the national electrical grid, and the number of planned education facilities and water supply points were also reduced.
Financial Services Activity

The Financial Services Activity was aimed at improving financial service delivery, operations, and access to information at rural banks to enhance the depth and value of rural financial services and widen access to savings services and cash transfers. It improved the efficiency of the National Payments and Settlement System through the establishment of an electronic payment system and established a computerized networking system between rural banks and the Apex Bank Server.

At the end of the compact, the project funded the creation of curricula and training for instructors in the procurement sector, as well as placement of nearly 1,300 students in procurement internships to reduce leakage, misuse, and suboptimal use of public resources in local communities. It also funded the construction and rehabilitation of 250 classroom blocks in 204 communities – making them more accessible for all students and teachers – the construction of water and sanitation facilities in 26 communities, and the electrification of farms and packhouses in rural areas. Finally, the project strengthened rural financial services, automating and connecting rural banks and providing other improvements intended to bring a large number of unserved community members into the financial system.

Evaluation Findings

Procurement Capacity Activity

The Procurement Capacity Activity’s evaluation was canceled. An assessment determined that the evaluation would not provide additional insights into accountability or learning in a cost effective way given the limitations of existing pre-project data for this limited investment.

Status of the evaluation: The evaluation has been canceled.

Community Services Activity

Education Sub-Activity

The evaluation of the Education Sub-Activity is designed to investigate the following hypothesis: an investment in education infrastructure to improve access and the learning environment would result in increased enrollment, reduced dropout rates, and higher completion rates. These intermediate outcomes could then be linked to the overarching programmatic objective of an increase in long-term earnings by increasing the education level of individuals in the community.

Status of the evaluation
Component	Status
Endline	The final evaluation is expected in 2018.

Water and Sanitation Sub-Activity

Since the investment aimed to improve the quality of water for selected communities, the hypothesis was that the prevalence of illness, particularly diarrhea, would be reduced and overall health status for members of the communities would improve. In addition, this sub-activity could help shift time formerly reserved for collecting water to income producing activities. An impact evaluation of the improved water and sanitation facilities will seek to determine if the intervention led to a decline in the incidence of diarrhea, a decline in time devoted to acquiring water, lower prices for drinking water, higher consumption of water by households, and an overall increase in household consumption expenditures.

Status of the evaluation
Component	Status
Baseline	Completed in 2011. Report is public.
Midline	A qualitative analysis was completed and results are expected in 2017.
Endline	The final evaluation is expected in 2017.

Financial Services Activity

This intervention intended to improve the efficiency of financial transactions at rural banks and make it more attractive for people to use the banking system. The computerization of operations and connectivity for the rural banks are expected to have the following effects, which will be tested during the evaluation:

Improvement in the speed and reliability of transactions
Improvement in accuracy and availability of accounts information
Reduction in check clearing times

Status of the evaluation
Component	Status
Endline	The final evaluation is expected in 2017.

Key performance indicators and outputs at compact end date

Key performance indicators and outputs at compact end date
Activity/Outcome	Key Performance Indicator	Baseline	End of Compact Target	Quarter 1 through Quarter 20 Actuals (as of Jun 2012)	Percent Compact Target Satisfied (as of Jun 2012)
Community Services Activity	Additional female students enrolled in schools affected by Education Sub-Activity	0	2,665	2,166	81%
	Agricultural facilities in target districts with electricity du to Rural Electrification Sub-Activity	0	12	13	108%
	Distance to collect water (meters)	1,190	500	522	97%
	Households with access to improved water	0	21,800	27,407	126%
	Kilometers of electricity lines identified and diligenced	0	230	99	43%
	School blocks rehabilitated and constructed	0	288	250	87%
	Students enrolled in schools affected by Education Sub-Activity	37,733	43,393	41,019	95%
	Water points constructed	0	377	392	104%
Financial Services Activity	Inter-bank transactions	516,565	1,475,900	3,286,179	289%
	Rural banks automated under the Financial Services Activity	0	121	130	107%
	Rural banks connected to the Wide Area Network (WAN)	0	121	134	111%
Procurement Capacity Activity	Individuals completing internships at Ministries, Departments and Agencies and Metropolitan, Municipal and District Assemblies	0	1,250	1,274	102%

The Community Services Activity was re-scoped to focus on extending electricity to processing plants, post-harvest infrastructure, packhouses and irrigation facilities as opposed to communities, which rendered original targets irrelevant. As a result, the number of electricity lines identified and assessed for feasibility under the activity was significantly lower than the target.