Poverty alleviation strategies in Ghana

Ghana Poverty

International Bank ForReconstrcution and Development

Ghana -- Public Private Partnership (PPP) Project

PROJECT at a GLANCE

Country

Ghana

Region

Africa

Project Cost

$17.5 Million

Project Duration 8 Months

Commitment Amount 60% of Total Project Cost (TCP)

Team Leader

Case CountryGHANA

- Scope of the report

Current state of poverty in Ghana

Human Development Index (HDI)

(Human Development Report, P. 2)

Failed States Index

Particular Area in need of development

- Why this particular area is important

- What impact poverty alleviation will create?

Specific Policy plan

- Programs implemented in other countries

Malawi

Conclusion

Conclusion

Resource allocation

- Financial

- Non-monetary

Human resources

- Source of funds

World Bank

African Development Fund AFDB

Public-Private local donors

Possible economic and political challenges

Domestic context

International organization (Private and Public) 28

Private Organizations 28

Public organizations 28

6.2.2 Political challenges 28

7- Conclusion 29

Specific Recommendations 30

Works Cited 32

Appendices 34

Appendix a- 2012 HDI of Ghana 34

Appendix B- Small Farm Productivity Raise in Malawi 35

Table 1 HDI Trends of Ghana 9

Table 2 Statistics of Social Protection Program in Malawi 1994-2010 15

Table 3 List of beneficiary Districts 18

Table 4 Financial Plan 21

Executive Summary

Poverty has been termed as the cause and effect of poor governance that prevails in Least Developed Countries (LDCs). To help the poor nations eliminate poverty, both economic and social, the World Bank African Desk hereby presents poverty alleviation plan for Ghana's rural population, mainly the subsistence farmers, women, and underprivileged sections of rural Ghana. After a thorough review of previous intervention programs and pertinent literature, addressing the issue of rural poverty has been identified as the appropriate intervention area in Ghana for poverty reduction. Sachs (143) has termed 'health' as the most pressing issue in African world that remains the trigger point of pushing large sections of African population under the poverty line. Health issues identified in the report of Commission on Macroeconomics and Health substantiated that under-nutrition and lacking public health services for managing preventable diseases are two of the most prominent causes for poor health and poverty in Africa. World Development Report published in 2013 identified that 21.6% of Ghana's population was vulnerable to multiple deprivations. Similarly, 31.2% of the total population of Ghana lived in multidimensional poverty whereby 40% of the total population of Ghana was associated to agriculture and rural-based livelihoods (IFAD, 1-3).

To help address the issue, 11 districts in rural Ghana within four regions of the country have been shortlisted as the beneficiary locations for proposedprogram. Basic Health Units (BSUs) up gradation, Social Services Up gradation, and Targeted Inputs Program (TIP) are the three main intervention programs proposed in this plan. Approximately $17.5 million of investments will be made by three donning stakeholders i.e. World Bank, African Development Fund, and public-private local donors of Ghana. The division of funds incurred on the proposed project will be 60:25:15 respectively. A three member executive team of WB will be tasked with implementing the project. The project duration has been defined as 8 months from the start of ground breaking ceremony till the completion of development work in all 11 districts. Evaluation of impact of this project will be conducted by third party auditor within two years from the completion of the plan.

1- Introduction

1.1- Scope of the report

This proposal is aimed to present a comprehensive poverty alleviation proposal for an underdeveloped country located in Africa. The choice of country is Ghana and the proposal will also elaborate the specific intervention and respective segment of population for which poverty alleviation intervention is sought. Background of poverty alleviation efforts in Ghana as well as other regional countries will also be part of this report to provide the reader with a holistic picture of poverty and poverty alleviation programs operational in the region.

Background

Ghana is part of the region called 'Sub Saharan Africa'. The whole of this region is known for the poor economic, social, and human development conditions prevailing in each of the country within the region. A crisis of governance due to lack of institutional development, absence of accountability, and no rule of law have resulted in such a situation (Brautigam&Knack, 255). Despite heavy international aid flowing in from different countries, the region is still struggling with high debts, political instability, and poor human health conditions. The lack of an effective structure of bureaucracy, inadequate economic reforms, and imbalance of expenditure vs. revenues has resulted in extreme levels of urban and rural poverty in Ghana. Despite heavy amounts of overseas development assistance (ODA), Ghana has been unable to establish itself on sustainable footing. According to Brautigam and Knack (258), 30% of Ghana's government expenditure has been funded by ODA funds.

Another important area that requires improvement is the monitoring of poverty by Ghana Statistical Service (GSS). There have been serious impediments, both capacity and finance related that have deterred GSS from effectively and timely reporting the poverty statistics in rural areas of Ghana (the World Bank, web.worldbank.org). A detailed analysis of poverty indicators indicated that 60% of the poverty in Ghana is concentrated in Rural Forest areas and Rural Savannah. Welfare indicators of larger populations, such as availability of clean drinking water and school enrolments are poor in rural Savannah. Thus, to propose an area centric and demography specific poverty reduction proposal, the following report is aimed at alleviating poverty in the rural areas of Ghana.

1.2- Overview

This proposal presents detailed picture of poverty in rural Ghana. To present a well-based proposal, following is the format and schema of this proposal. Part 2 of this proposal is composed of detailed discussion on current position of poverty in the rural areas of Ghana. This will be followed in part 3 by identification of particular area in need of poverty alleviation intervention by the World Bank. Rationale of choosing a particular area along with brief implication of applying such framework will also be presented within the same part. Part 4 will carry the specific proposal plan for reducing poverty in the rural areas of Ghana by supporting the farmer communities that have the largest presence in rural Ghana. Part 5 of this proposal will be the resource allocation artifact that will incorporate financial and non-monetary aspects of resource allocation for the proposed plan. Potential source of funds will also be highlighted in same section. Part 6 will discuss in detail the economic and political challenges involved in adoption of the proposed action plan. Domestic, international, and regional challenges will be highlighted. The proposal will be concluded in part 7 by succinctly restating the whole discourse.

Current state of poverty in Ghana

World's 70% of the population lives in rural areas and Ghana's main poverty nexus is also based in rural areas as 60% of the poverty is stemmed in rural Ghana. While not disregarding the urban poverty but keeping it the focus for a separate study, rural areas have been focused as employments over here is labor intense and impacts majority of the population. Agricultural land as a percentage of total land is second highest for sub-Saharan Africa after the Asian region. Of the total land available, Sub-Saharan region has approximately 43.6% of Agricultural land whereas only South Asia has a higher 54.7% of Agricultural land (the World Bank, data.worldbank.org).

Human Development Index (HDI)

HDI is a composite measure of assessing progress in three main dimensions, namely the access to knowledge, life expectancy with healthy life, and the standard of living. There are particular yardsticks for assessing these factors. Access to knowledge is gauged by counting the average schooling years for people aged 25 and above. Data sources being used to develop the HDI is derived from UNESCO Institute of Statistics (UIS), World Bank, and GSS. While not disregarding the enormous efforts made by Ghana to come out of poverty, the country despite higher donor contributions, remain behind Rwanda, Bangladesh and Nepal in fighting poverty. Ghana along with Bolivia, Tanzania, and Cambodia still fights the health issues of aids and lack of education. The HDI value of Ghana for the year 2012 has been estimated to be 0.558. This falls in the medium human development category (Human Development Report 2013, p.2). The rank of HDI awarded to Ghana has been 135 out of 187 countries of the world. During 1980 to 2012, there was an increment of 43% in the HDI value of Ghana. It was 0.391 and now at 0.558. Thus, an improvement is already underway but considerable efforts and plans are required to consolidate this position and shift the HDI of Ghana in developed category. The following table 1 depicts the estimated UN findings on poverty and HDI of Ghana.

Table 1 HDI Trends of Ghana

Source: (Human Development Report, P. 2)

Failed States Index

Failed States Index is a composite index that describes the vulnerability of different world countries to being ranked as failed states. Ghana is amongst 177 countries ranked for being failed states whereby lower rank depicts lower threat of indicates a lower vulnerability of being declared as failed states whereas a higher (80 and above) represent high vulnerability of being failed. Ghana was ranked at 67.5 that depicts that the country is in the median range of being a failed state (FFP, ffp.statesindex.org). This ranking is significantly better as compared to other African countries but significant improvement is desired. Mounting demographic pressures and internal displacement of population of Ghana is within the medium range. Poverty index, part of the failed state index, is at 6.0 for Ghana that represents that there is a threat of poverty coming back if not tackled properly.

3- Particular Area in need of development

3.1- Introduction

The HDI index of Ghana lies at 135 out of 187 whereas failed states index is at 67.7. This implies that the country is not under the threat of potentially high levels of poverty. The country is striving hard to come out of below-poverty line. The main threats to an improving situation are that 21.6% of Ghana's population is vulnerable to multiple deprivations. Similarly, 31.2% of the total population of Ghana lives in multidimensional poverty (World Development Report, P.2). Another important disparity is within different poverty indicators. If compared together, multidimensional poverty index and the income poverty index of Ghana indicate towards a different and more aggravated situation. The income poverty faced by Ghana population, that percentage of their population living below $1.25 per day is lower as compared to multidimensional poverty. Multidimensional poverty headcount was 2.6% more as compared to income poverty. As of year 2008, Ghana's 28.6% of the total population lived below income poverty line (>$1.25), 11.4% in severe poverty, and 21.6% were vulnerable to poverty. This indicates that despite huge progress made in the last one decade, the country still needs to address the poverty issues of more than 60% of its total population. The rural population of Ghana is 60% of the total population and consequently, 60% of the rural population in underdeveloped. Having analyzed such a situation, UNDP in this study will provide a comprehensive framework by setting up benchmarks for achieving higher HDI rankings in coming five years.

3.2- Why this particular area is important

The Urban-Rural divide in population distribution has narrowed down in the recent years. However, there is a considerable disparity in fighting poverty in the northern and rest of the Ghana. The north part of Ghana is the largest of geographical region in Ghana. The Northern part of Ghana is composed of 20 districts but the population during the last few years has emigrated from this region due to poor infrastructure and economic support. Majority of the population in the Northern part is related to agriculture for subsistence. More than 75% of the economically active population of the Northern part is associated to agro business.

Along with the bleak situation prevailing in the Northern part, the other parts of the country are also largely related to agriculture as a source of income. Women are also part of this economic system based on agriculture. Having assessed the importance of rural poverty alleviation, the government of Ghana has also tried in recent years to address the issue of rural poverty. Agricultural and rural development is the main emphasis of government and non-government agencies to eradicate poverty. Nonetheless, to create a lasting impact there needs to be sustainable measures for removing poverty from rural areas. Despite greatest numbers of opportunities, in form of agricultural land, cattle, poultry, and agro business opportunities, the people of rural areas due to lack of social support, lack of education and awareness, and lack of infrastructure and agricultural equipment could not rid themselves of poverty. This lends credence to this endeavor of presenting a poverty alleviation and reduction proposal for the rural areas of Ghana.

It is also observed that most labor intense areas of business are also agro-based such as crop harvesting, fishery farms, poultry farms, and seasonal vegetables farms. All these agro-based businesses require more headcount for cultivation and rearing. Sanitation is also an important issue that develops several health epidemics in the rural areas. Litter and human waste is not properly disposed that causes several life-threatening diseases specifically to the children that are the most vulnerable segment of rural population (Rural Poverty Portal, ruralpovertyportal.org).

Rural agricultural development is necessary since there are large numbers of populations segments attached with agriculture for earning income in Ghana. Some of these main population segments are wage earners, self-employed small farmers, unpaid family members, and indigenous people. Women are part of all the aforementioned population sections. Thus, it is appropriate to eradicate or reduce the poverty in the rural areas of Ghana and emphasis of this proposal shall be on agricultural revival of Ghana.

3.3- What impact poverty alleviation will create?

One of the main poverty consequences in African region has been the undernourishment of their population. Thus, if poverty is alleviated effectively, the population at large will get enhanced nutritional foods. The food intake percentage of Ghana's population indicate that there has been a gradual improvement but implementation of poverty reduction plans need to be closely monitored for enabling a sustained growth rate as well as consumption of foods such as cereals, vegetables, and milk. Since 1980 to 2005, there has been 90% of improvement in cereal intake, 15% in vegetable intake, and 133% in milk intake by Ghana's population. This needs to be brought to reasonable levels. From Banana plantations to Cocoa production Ghana agro sector will completely benefit from poverty reduction efforts.

Education and skills training program is also another area or group of areas that need to be assessed for change. It has been observed that poverty alleviation efforts in Ghana have gained success whenever community participation in planning, implementation, and monitoring phase have been made part of the poverty reduction process. Through sustained participation of community stakeholders the poverty assessment can be more precise and the resultant efforts can gain more footholds in the rural areas. The local government systems help the effective delivery of poverty reduction services and the government also benefits from an enhanced human developed index.

Education: Through poverty reduction efforts, the local governments of rural Ghana will be able to increase the enrolment rate of school children. Since most of the family members in each household participate in the livelihood earning, the children and left without education. Lack of education also forms in itself 'a vicious' circle of enabling more poverty through worsened health and social status.

Employment: Employment generation is another main result that is desired from poverty reduction plans in Ghana. Current plan will also enable the opportunities of employment to be increased on continuing basis.

Good governance: Good governance is also a main aim of poverty alleviation and also a system through which parity in employment and social opportunities is created by the governments, both at the local and provincial level.

Decentralization of power: The poverty reduction plan will also enable the power structure to be devolved and the role of local and small farmers and rural family heads will be increased. Since most of the poverty reduction plans only meet half of their objectives due a lack of feedback and interaction with society, the current program of poverty alleviation will include local stakeholders. These will not only provide feedback but also act as agents of change.

4- Specific Policy plan

4.1- Programs implemented in other countries

There have been quite a number of initiatives by corporate bodies and World Bank to alleviate the extreme poverty levels in Ghana. Some programs have resulted in tremendous support from grass roots level and acclaim from experts in the field of poverty reduction. Decentralization has always remained the 'principal institutional development strategy' (ESCAP, www.unescap.org). There were many models of poverty alleviation adopted during the second half of twentieth century. All the models largely emphasized upon import substitution driven by state authorities, export promotion-based market oriented models, and lastly the trickle down models that emphasized upon rural community and urban community participation. Following are some of the models of poverty reduction applied in different regions of world.

Sub-Saharan Africa SSA Region

SSA region is the largest beneficiary of international development assistance programs of World Bank. Our bank has provided more than $5.7 billion in international development assistance resources in the SSA regions. To help improve the social conditions, social protection program have been vital in reducing poverty and alleviating the vulnerable status of major population segments in African states.

Malawi

Malawi is one of the least developed countries (LDCs) of the world. Due to rampant poverty and malnutrition in general population, World Bank has assisted the country is the drive to alleviate poverty. For this purpose, social protection (SP) programs are considered most essential in eradication poverty. In Malawi as well as other LCDs, the poverty intervention programs are vital for developing short-term safety nets for the vulnerable sections of the society and then these short-term nets are converted into long-term development action plans for the population. From 2003 to 2006, such a SP program funded by the World Bank was initiated in Malawi. The scope, impact, and implications of this program will be discussed after presenting key statistics and attributes of this SP program in Malawi in form of a table.

Table 2 Statistics of Social Protection Program in Malawi 1994-2010

Source: (UNDP Malawi Case Study, www.undp.org)

Particular details: World Bank conducted elaborate assessment study from 2003-2006 to gauge the impact created by the SP program in Malawi. The findings are as below.

Food transfers: This was aimed at eliminating food insecurity and helping the female headed households caring for orphans. 26.233 million people benefited from Food Transfers program and it incurred an expense of approximately $174.74 million from 1994-2010.

Food and cash transfers: The households that were having food insecurity and the ultra-poor female headed households, both were provided with food as well as cash. More than 5000 households benefited from this intervention action. Food for work and cash for work were also provided as intervention steps for the poverty reduction in Malawi. Approximately more than 92,292 households and

Targeted nutrition Program: To address the issue of under-nutrition in children, the United Nation Development Program (UNDP) provided targeted nutrition foods to children under the age of five as well as the expectant and lactating mothers. This intervention proved to be less successful as only 6% of the rural children under five were provided with targeted nutrition. Another program that was particularly successful was that of School Feeding.

School Feeding: Primary school children were targeted for providing them with basic food necessities while being in schools. The program remained successful in providing 28% of the Malawian primary school children with food.

The most important interventions in Malawi case were regarding rehabilitating people on to the work they intend to do. This could be of particular interest in developing poverty reduction proposal for Ghana. These interventions in Malawi were:

Targeted inputs program: This program provided smallholder farm families with land and resources to enable them to grow their own crops. A total of 13.091 million households benefited from this poverty reduction intervention and incurred an expense of $127 million only.

Input subsidiaries: The resource poor households were provided with inputs for farming such as land, fertilizers, and seeds. This significantly benefited the Malawi Rural Population and benefited 6.25 million households in rural Malawi. The cost for this was high as agricultural inputs are capital intense and a total of $542 million were incurred on this poverty reduction initiative.

Input transfers and inputs for work: Both these intervention benefited 3.701 million and 2.39 million households whereas a cost of $49.5 million and $27.4 million were incurred on both these programs.

The intervention programs in Malawi helped the country to increase its small farm productivity. This is represented in Appendix B at the end of this proposal that how maize production in Malawi was increased through three particular poverty intervention programs, namely Input Subsidy Program 2005, Starter Pack Program 1998-2000, and Targeted Input Program 2000-04. The maize production in Malawi was only around 1 million Metric tons (MIT) in fiscal year FY 2004-05 for all the verities of maize crops, hybrid, composite and local. Within next four years, the maize production in Malawi crossed the benchmark of 3.5 MIT in FY 2008-09. This indicates towards the effectives of targeted inputs program and input subsidiaries program.

Conclusion

The 'UNDP Malawi Case Study' provides an effective framework for poverty reduction in Ghana. Nonetheless, the poverty dynamics in Ghana are less severe as compared to Malawi. Therefore, this program will have to be tailored according to the need and requirements of rural Ghana population. Demography and association of people with respective agricultural fields will have to be assessed to implement a sustainablerural community development program for Ghana. Since Ghana is not severely food deprived country, as in case of Malawi, the food for work and cash for food programs will not be included in Ghana's poverty reduction proposal. On the other hand, Starter Pack Program, Targeted Input Program, and Input Subsidy Program will be part of Ghana's poverty reduction plans as these have proved too successful in enabling sustained poverty reduction in Malawi.

4.2 Proposed Poverty Alleviation Plan

Scope

Districts in Ghana are second level of administrative unit. First level is the regions. To execute the poverty reduction project effectively and with close monitoring and evaluation ability, the scope of this poverty reduction project will be limited to poverty ridden districts of Ghana. Therefore, only following districts have been shortlisted as beneficiaries of proposed action plan.

Table 3 List of beneficiary Districts

Volta Region

Ashanti Region

Eastern Region

Greater Accra Region

Krachi East

Afram Plains District

Manya Krobo District

Dangme East District

Jasikan District

Dangme West District

North Tongu District

South Tongu District

Akatsi North District

Akatsi South District

Ketu North District

11 districts from four regions of Ghana have been shortlisted as the beneficiary districts of this poverty reduction project. Thus, the geographic scope of the project is limited to 11 districts (povertynewsblog.blogspot.com).

Aims

To bring rural population above the poverty line (those living on less than $1.25 per day) for the 11 districts shortlisted, with special efforts to up bring economic position of women, children, and vulnerable groups

To help Rural poor, subsistence farmers, rural underemployed people, handicapped people, and poorest sections of 11 districts under the threat of food insecurity to increase their income by 10-30 annually.

To reduce poverty as per the definition of United Nation Development Program (UNDP), thus alleviating poverty holistically rather just income poverty

To identify five (5) best performing districts (in round one) eligible for entering the second round of World Bank's (WB) Social Protection (SP) program under which skills development and higher education will be provided under WB guided project

Methods

By providing sustainable livelihood sources to poor households of 11 districts

Engaging multiple family members in social action program

Provide tailored demand driven community up gradation programs that aim to increase access to public services such as clean drinking water, individual housing sanitation and community sanitation network, and preventive health courses.

Will provide targeted farming inputs.

Will extend and improve water availability for both drinking and agricultural purposes. This will be executed through community participation. No outside labor will be used. Only architects and technical assistance will be hired from project funds.

Renovate and extend primary health care centers through community participation

Conclusion

The scope, aims, and methods section of proposed poverty reduction project in 11 districts of Ghana describe the overall geographic scope of project, what aims will be established before executing the project, and what methods of achieving the project aims will be deployed respectively. This poverty alleviation proposal has been titled as 'World Bank (WB) Social Protection (SP) Program' and shall be initiated in 11 poverty ridden districts of Ghana. These 11 districts have been shortlisted from four main regions of Ghana, namely Volta, Ashanti, Eastern region, and greater Accra region. The main aim of targeting 11 districts will be to bring whole of the population of these districts above the poverty line ($1.25 per day income). Rural poor, subsistence farmers, rural underemployed people, handicapped people, poorest sections that include women and youth will be provided with social support frameworks and farming inputs to help them earn livelihoods. The execution of this project will be community based and only technical/advisory support will be provided. Village council will be the main decision making unit for each village whereby council members will put forth the demand for most essential projects. A background survey of most essential requirements for reducing poverty isup gradation of basic health units (BHUs), also called the primary health units (PHUs). Further, provision of clean drinking water and inputs for agricultural sections of society is also main sources through which poverty will be reduced.

5- Resource allocation

5.1- Financial

The financial resources will be generated from three main sources. These are World Bank (WB), African Development Fund (AFDB), and local donors of Ghana. Local donors have been included, unlike previous projects of WB in order to increase the stake in project's success for each district of Ghana being shortlisted. Following is the table that describes the estimated costs for each activity, respective donors, and beneficiary population.

Table 4 Financial Plan

Intervention

Donor

Target

Beneficiary

Estimated costs

Basic Health Units (BSUs) Up gradation

Includes patient handling capacity, machinery

African Development Bank (AFDB)

Rural Women and Children,

Expectant women

55% of total population in each of the 11 districts

>$2.5 million

Social Services Up gradation

Includes installation of portable water treatment plants, public bathrooms, sanitation,

World Bank (WB)

African Development Fund (AFDB)

Local private donors from each district

Rural households, subsistence farmers, women, children, and men

100% of the pollution in each of 11 districts

Targeted Inputs Program (TIP)

World Bank

AFDB

Subsistence farmers, poor agricultural households, women

Population engaged in farming in each of 11 districts

5.2- Non-monetary

Human resources

Advisory assistance: For advisory assistance, World Bank would provide three member team of experts on poverty reduction projects from Africa desk specifically assigned to oversee the proposed project's implementation in Ghana's 11 districts. The team will establish project office in Ghana during the 8 months project duration and shall be responsible for liaising with all the stakeholders of the project. The respective technical assistance and task specific advisors and subcontractors will be hired by this executive team responsible for implementing the plan.

The main role of executive team of WB will be to conduct a preliminary investigation into signing a memorandum of understanding (MOU) with following primary stakeholders.

Republic of Ghana: The 3 member executive team (ET) will be responsible to prepare the MOU regarding this project to be signed by Executive Director WB and the central government of Ghana on behalf of Republic of Ghana.

African Development Fund (AFDB): World Bank (WB) executive director along with regional head of WB will carry out negotiations with the AFDB to sign an MOU for provision of funds for the proposed project. The terms and conditions of understanding will be communicated to the ET for clarity of scope and content of the project.

Ministry of Local Government and Rural Development: An MOU will also be signed by the ET with Ghana's Ministry of Local Government and Rural Developmentin order to formalize the project and acquire human and technical support as respective ministry will have adequate experience and expertise regarding the Ghana population and social development.

District Assembly: In each district included in the scope of project, the WB will sign an MOU with the executive head of district assembly. This will enable the team to acquire progressive support from each of 11 districts for implementing the project in a swift manner. The human resources required for executing the labor intense projects will be provided by the district governments in collaboration with town municipalities.

Technical assistance: The technical assistance for the project will be required in two board fields. Firstly, technical assistance in water treatment plants establishment will be required. This will be outsourced from any regional country as this will allow for the reduction in operational and maintenance costs of such plants. Secondly, agricultural consultancy assistance will be required to provide the subsistence farmers with appropriate seed varieties, equipment for farming, and fertilizers. Rest of the up gradation activities will be executed through the support of small scale local contractors. A rigorous quality control framework will be developed by the ET.

Labor work: All the mesa and labor work will be performed by the local communities of each district in which the program of poverty alleviation will be applied. This will help not only reduce the cost of the up gradationworks but also increase the sense of ownership. The recently applied poverty reduction plans in African states indicate that community participation helps the project implementation, keeping the quality above expected levels, and effective maintenance of infrastructure (AFDB, 15).

5.3- Source of funds

World Bank:

World Bank is the primary donor for this project and approximately 60% of the total funds required as well as end cost incurred on the project will be provided by the World Bank. The provided funds do not fall in lending category and the government of Ghana will not be obliged to repay the funds. The funds are provided as part of the World Bank (WB) initiative called Debt Initiative for Heavily Indebted Poor Countries HIPC (World Bank, web.worldbank.org).

African Development Fund AFDB

The proposed project is a joint partnership between WB and AFDB as a result of which 25% of the total funds required and total cost incurred on the project will be provided by the African Development Bank. This is a corporate arrangement to reduce the risk of each stakeholder from a financial perspective. The WB team and AFDB team for poverty reduction entered into negotiations after successfully executing a project in Nigeria that resulted in encouraging signs of poverty reduction. A community-based poverty alleviation approach was adopted in Nigeria as well (AFDF, 5).

Public-Private local donors

The local donors will also be involved for acquiring funds for the project and the initial assessment is that 15% of the total funds required and costs incurred on the project will be provided by a consortium of local donors. The consortium comprises of district governments, chamber of commerce from each district, and several small trade associations belonging to each of the 11 districts. Bulk of the funds provided to the private local donors will be reimbursed to mason contractors and local procurement agents for procuring materials and services.

6- Possible economic and political challenges

6.1 Domestic context

The most basic aspect of poverty alleviation in domestic context is to develop en enabling environment for attracting the foreign donor agencies and investors. This challenge is deep rooted and multi-faceted in case of least developed countries (LDCs). Some of the key elements that remain a challenge for international agencies in helping reduction of poverty are as follows: