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Document of The World Bank

Report No: ICR00001460

IMPLEMENTATION COMPLETION AND RESULTS REPORT IDA-31140 IDA-3114A

ON A

CREDIT

IN THE AMOUNT OF SDR 37.6 MILLION (US$50.5 MILLION EQUIVALENT)

TO THE

REPUBLIC OF GHANA

FOR A

GHANA TRADE AND INVESTMENT GATEWAY PROJECT (GHATIG)

June 30, 2010

Finance and Private Sector Department Ghana Country Department Africa Region

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CURRENCY EQUIVALENTS

(Exchange Rate Effective 00000000)

Currency Unit = Ghana Cedi GHc = US$ 0.70 US$1.00 = GHc1.43

FISCAL YEAR

January 1 - December 31

Weight and measures Metric system

ABBREVIATIONS AND ACRONYMS

AGC Ashanti Goldfields Corporation CAS Country Assistance Strategy CEOs Chief executive Officers CEPS Customs, Excise and Preventive Services CIDA Canadian International Development Agency DCA Development Credit Agreement DDI Direct Developer Identification EIA Environmental Impact Assessment EMP Environmental Management Plan EPA Environmental Protection Agency EPZ Export Processing Zone ERSO Economic Reform Support Operation ESAF Enhanced Structural Adjustment Facility ESW Economic Sector Work FIAS Foreign Investment Advisory Services FTZ Free Trade Zone FZ Free Zone GCAA Ghana Civil Aviation Authority GDP Gross Domestic Product GEPC Ghana Export Promotion Council GFZB Ghana Free Zones Board GIAC Ghana Investment Advisory Council GIPC Ghana Investment Promotion Center GIS Ghana Immigration Services GOC Gateway Oversight Committee GOG Government of Ghana GPHA Ghana Ports & Harbor Authority GPN General Procurement Notice GPRS Ghana Poverty Reduction Strategy IDA international Development Association ICB International Competitive Bidding ICR Implementation Completion Report ISO International Standards Organization

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ISR Implementation Status Report JAS Joint Assistance Strategy KIA Kotoka International Airport LRMC Long-run marginal Cost M&E Monitoring and Evaluation MIGA Multilateral Investment Guarantee Agency MDGs Millennium Development Goals MPIP Multipurpose Industrial Park MSME Micro Small and Medium Enterprise MTR Mid-Term Review NCB National Competitive Bidding NIRP National Institutional Renewal Program NPV Net Present Value PEF Private Enterprise Foundation PDO project Development Objectives PCU Project Coordinating Unit PPI Private Participation in Infrastructure PSAC Private Sector Adjustment Credit PSAG Private Sector Advisory Group PSD Private Sector Development PSR Private Sector Roundtable QCBS Quality and Cost-based Selection SOE Statement of Expenditures TA Technical Assistance TEFZ Tema Export Free Zone TIP Trade and Investment Project USAID United States Agency of International Development

Vice President: Obiageli Kathryn Ezekwesili

Country Director: Ishac Diwan Acting Sector Manager: Peter Mousley

Project Team Leader: Papa Demba Thiam ICR Team Leader: Lucy M. Fye

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REPUBLIC OF GHANA GHANA TRADE AND INVESTMENT GATEWAY PROJECT (GHATIG)

CONTENTS

Data Sheet B. Key Dates ....................................................................................................................... 1 C. Ratings Summary ........................................................................................................... 1 D. Sector and Theme Codes................................................................................................ 2 E. Bank Staff ....................................................................................................................... 2 F. Results Framework Analysis .......................................................................................... 2 G. Ratings of Project Performance in ISRs ........................................................................ 7 H. Restructuring (if any) ..................................................................................................... 7 I. Disbursement Profile ...................................................................................................... 8 1. Project Context, Development Objectives and Design ................................................... 9 2. Key Factors Affecting Implementation and Outcomes ................................................ 16 3. Assessment of Outcomes .............................................................................................. 23 4. Assessment of Risk to Development Outcome ............................................................. 30 6. Lessons Learned............................................................................................................ 32 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners ............... 33 Annex 1. Project Costs and Financing .............................................................................. 34 Annex 2. Outputs by Component...................................................................................... 35 Annex 3. Economic and Financial Analysis ..................................................................... 41 Annex 4. Bank Lending and Implementation Support/Supervision Processes ................. 46 Annex 5. Beneficiary Survey Results ............................................................................... 48 Annex 6. Stakeholder Workshop Report and Results ....................................................... 49 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR ......................... 50 Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders ........................... 55 Annex 9. List of Supporting Documents .......................................................................... 56

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A. Basic Information

Country: Ghana Project Name: TRADE GATEWAY & INVESTMENT PROJECT

Project ID: P000970 L/C/TF Number(s): IDA-31140,IDA-3114AICR Date: 06/30/2010 ICR Type: Core ICR Lending Instrument: SIM Borrower: GOV. OF GHANA Original Total Commitment:

XDR 37.6M Disbursed Amount: XDR 36.9M

Revised Amount: XDR 36.9M Environmental Category: A Implementing Agencies: Oversight Committee Cofinanciers and Other External Partners: B. Key Dates

Process Date Process Original Date Revised / Actual

Date(s)

Concept Review: 07/01/1997 Effectiveness: 01/13/1999 01/13/1999

Appraisal: 05/08/1998 Restructuring(s): 11/23/2005 12/31/2005

Approval: 07/09/1998 Mid-term Review: 06/03/2002 Closing: 12/31/2005 12/31/2009 C. Ratings Summary C.1 Performance Rating by ICR

Outcomes: Moderately Satisfactory Risk to Development Outcome: Moderate Bank Performance: Satisfactory Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings

Quality at Entry: Satisfactory Government: Satisfactory

Quality of Supervision: Moderately Satisfactory Implementing Agency/Agencies: Satisfactory

Overall Bank Performance: Satisfactory Overall Borrower

Performance: Satisfactory

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C.3 Quality at Entry and Implementation Performance IndicatorsImplementation

Performance Indicators

QAG Assessments (if any)

Rating

Potential Problem Project at any time (Yes/No):

No Quality at Entry (QEA):

Satisfactory

Problem Project at any time (Yes/No):

No Quality of Supervision (QSA):

None

DO rating before Closing/Inactive status:

Satisfactory

D. Sector and Theme Codes

Original Actual

Sector Code (as % of total Bank financing) Central government administration 32 32 General transportation sector 19 19 General water, sanitation and flood protection sector 39 39 Other domestic and international trade 5 5 Power 5 5

Theme Code (as % of total Bank financing) Export development and competitiveness 25 20 Infrastructure services for private sector development 25 50 Other financial and private sector development 25 15 Trade facilitation and market access 25 15 E. Bank Staff

Positions At ICR At Approval

Vice President: Obiageli Katryn Ezekwesili Jean-Louis Sarbib Country Director: Ishac Diwan Sergiy V. Kulyk Sector Manager: Peter J. Mousley Thomas W. Allen Project Team Leader: Papa Demba Thiam Demba Ba ICR Team Leader: Lucy M. Fye ICR Primary Author: Lucy M. Fye F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The Project' s development objective is to at tract a critical m ass of export-oriented investors to Ghana to accelerate export-led growth as well as facilitate trade.

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At the m id-term review, the Governm ent re-affirm ed the relevance of the project development objectives The Performance Indicators relating to the project development objectives are listed in the Annex 2 of the PAD Revised Project Development Objectives (as approved by original approving authority) The objectives of the Project are: (a) the de velopment of a multi-purpose industrial park; and (b) th e improvement of the quality and stan dards of services delivered to inv estors and to exporters by the Borrower' s institutio ns and agencies responsible for trade and investment aiming to attract a critical mass of export-oriented firms and facilitate trade in the territory of the Borrower for accelerated growth. (a) PDO Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised Target Values

Actual Value Achieved at

Completion or Target Years

Indicator 1 : Off-site infrastructure is completed and the MPIP is fully functional in the intervention area.

Value quantitative or Qualitative)

0% on-site infrastructure. 50% of infrastructure at the Tema EPZ (converted into MPIP) completed.

Off-site infrastructure completed

Off-site and on-site infrastructure completed

Off-site and on-site infrastructure is fully completed by 100%

Date achieved 12/19/2005 12/19/2005 12/31/2005 12/31/2009 Comments (incl. % achievement)

Achieved.

Indicator 2 : Percentage of prospective MPIP settlers that are motivated by the new MPIP.


0 None

Increased numbers of enterprises settling in the MPIP due to the quality of services available to them

The existing operators at the MPIP are satisfied at 80% of services provided in the MPIP


Partially Achieved.

Indicator 3 : Free Zone Act has been amended and adopted by Parliament.


Free Zone Act to be amended to allow Non EPZ firms settle at the EPZ

EPZ Act is amended to allow non EPZ firms to settle

Non EPZ firms can settle at the EPZ/MPIP

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at the EPZ/MPIP

Date achieved 12/19/2005 12/31/2009 12/31/2009 Comments (incl. % achievement)

Achieved. 3 non EPZ firms settled at the MPIP.

Indicator 4 : Implementing regulations implemented.


No Implementing regulations on the Free Zone Act.

Implementing regulations on the Free Zone Act are adopted

Implementing regulations to convert part of EPZ into MPIP was completed


Achieved.

Indicator 5 : Percentage increase of companies/investors that express satisfaction with the revamped EPZ Act


one enterprise in EPZ/MPIP

The on-site infrastructure for the Furniture City and the ICT Park is set up. At least 90% of enterprises in the MPIP express satisfaction with the revamped EPZ environment which allows flexibility in the Tema EPZ/ MPIP.

The existing operators The on-site infrastructure for the Furniture City and the ICT Park were completed and fully functional. At least 80% of enterprise are satisfied with services offered at the MPIP


Achieved. A scorecard system introduced to identify issues and gauge level of satisfaction by the firms.

Indicator 6 : Percentage of actual and/or prospective MPIP settlers expressing satisfaction with the quality of services available to them


No on-site infrastructure for ICT Park and Furniture City.

On-site infrastructure for ICT Park and Furniture City set-up and fully functional.

on-site infrastructure for ICT Park and Furniture City completed and fully functional. Based on a survey by

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MPIP settlers express satisfaction on quality of services available

GFZB at least 80% of firms are satisfied by services provided to them.


Achieved.

Indicator 7 : Improved trade and investment activities that are directly linked to the quality of services provided to investors through the project


Ghana's ability to attract invest in the country is limited. FDI levels are very low.

Ghana's level of FDI increases by at least 20% since 2004.

Ghana's levels of FDI has increased by over 1000% to $2.2 billion in 2009 from $139 million in 2004 of which 1.6 million is from EPZ


Achieved. This indicator has problems of measuring project's attribution to indicator.

Indicator 8 : Evidence of improved business activity, increased volume of exports and improved export revenue as a result of the construction of physical infrastructure to ease container storage and transit.


Congestion at Tema ports and takes 25 days to clear cargo. 2004 export volumes are $500 million

Reduce congestion at Tema container terminal by constructing a container devanning area and storage for transit cargo to Burkina Faso.

Container devanning area completed. Clearance of cargo at Tema ports takes 2 days. Transit cargo to Burkina Faso has proper storage. Export values have increased to $1.5 billion in 2009


Achieved

Indicator 9 : Percentage of companies satisfied with the simplification of customs and immigration procedures


Ghana's customs and immigration formalities are cumbersome and unpleasant

Increased # of companies and passengers satisfied by

CEPS reduced number of border checks to Togo from 5 to 1;

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services from CEPS and GIS

Burkina Faso and Cote d'Ivoire from 18 to 2. GIS reduced gives Visa within 2 days and over 1 million passengers processed at KIA. Impact study shows client satisfaction at 90% CEPS and 100% GIS


Achieved. CEPS is ISO 9000 certified and GIS is best practice in Africa for immigration services and training other countries

Indicator 10 : Improved capacity of the Ghana Investment Advisory Council (GIAC) to provide strategic advice on investment opportunities and policy initiatives


Ghana's ranking in WB 2005 Doing Business Report is mediocre. Reforms identified but not elaborated and implemented.

None

Inclusion in the top 10 reformers in Africa.

Doing Business Report 2007: Ghana was ranked nr 1 reformer in Africa, and 9 in the world. Doing Business Report 2008: Ghana was ranked nr 3 in the world. 2010 report places Ghana at number 92 down from 87 due to other countries reforming faster.


Achieved. PPD was operational for three years and results of reforms reflected in DB reports of 2007,2008 and 2009. There is a disconnect between indicator and target value.

(b) Intermediate Outcome Indicator(s)

Indicator Baseline Value

Original Target Values (from

approval documents)

Formally Revised

Target Values

Actual Value Achieved at

Completion or Target Years

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G. Ratings of Project Performance in ISRs

No. Date ISR Archived

DO IP Actual

Disbursements (USD millions)

1 03/12/1999 Satisfactory Satisfactory 2.49 2 11/30/1999 Satisfactory Satisfactory 3.39 3 05/26/2000 Satisfactory Satisfactory 3.89 4 11/27/2000 Satisfactory Satisfactory 4.57 5 05/22/2001 Satisfactory Satisfactory 5.37 6 11/15/2001 Satisfactory Satisfactory 9.43 7 05/15/2002 Satisfactory Satisfactory 13.28 8 12/04/2002 Satisfactory Satisfactory 19.22 9 03/31/2003 Satisfactory Satisfactory 21.71

10 11/26/2003 Satisfactory Satisfactory 27.52 11 05/12/2004 Satisfactory Satisfactory 28.69 12 06/15/2004 Satisfactory Satisfactory 28.89 13 10/19/2004 Unsatisfactory Unsatisfactory 28.98 14 06/28/2005 Moderately Satisfactory Unsatisfactory 30.23 15 12/20/2005 Satisfactory Moderately Satisfactory 31.02 16 06/28/2006 Satisfactory Satisfactory 31.50 17 12/22/2006 Satisfactory Satisfactory 32.15 18 06/28/2007 Satisfactory Satisfactory 36.06 19 12/19/2007 Satisfactory Satisfactory 40.50 20 06/30/2008 Satisfactory Satisfactory 45.88 21 12/29/2008 Satisfactory Satisfactory 48.58 22 06/29/2009 Satisfactory Satisfactory 49.96 23 12/28/2009 Satisfactory Satisfactory 50.64

H. Restructuring (if any)

Restructuring Date(s)

Board Approved

PDO Change

ISR Ratings at Restructuring

Amount Disbursed at

Restructuring in USD millions

Reason for Restructuring & Key Changes Made

DO IP

11/23/2005 N MS U 30.91

12/31/2005 N S MS 31.09

The restructuring was necessary due to poor performance of the project. On-site infrastructure was added and the EPZ also became a multipurpose industrial park to enable non exporting firms to locate at the enclave. Funds were reallocated to reflect additional activities.

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I. Disbursement Profile

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1. Project Context, Development Objectives and Design

1. 1 Context at Appraisal 1.1.1 Sector Background1 At the tim e of project design, the Govern ment of Ghana (GOG) was moving towards more liberal economic policies. The ec onomic performance between 1992 and 2000 was an issue as its fiscal and monetary policy performance was mixed. Tax revenue collection had im proved and public investm ent expend itures were rationalized but inflation and interest rates continued to rem ain at un acceptably high levels. Satisfactory growth was recorded in aggregate out put, mining and services, bu t not in agricu lture and manufacturing. At the sam e time, savings and private investm ent2 had remained low. A major shortcoming of the Ghana refor m program was the s low pace in eliminating the government m onopoly in cocoa marketing . However, in 1994, elev en years after the initiation of structural adjustm ent progr ams, Ghana finally opened dom estic cocoa marketing to private operators and producers be gan to receive up to 50 percent of the fob price of cocoa. The liberalization of cocoa m arketing m eant that there was a huge attitudinal change towards the private sector. The link s between private investment, accelerated growth and poverty reduction was adequately recognized. As a result, th e policy environment for the private sector started to im prove and the publ ic-private sector dial ogue initiated in 1991 was broadened and strengthened through the P rivate Sector Roundtable and the P rivate Enterprise F oundation (PEF). Changes in poli cies included the S tatutory Corporations Act, under which public corporations were converted into companies with saleable shares. Ghana's privatization effort, after m any year s of unsatisfactory perform ance started to pick-up3. To achieve accelerated growth, the Gove rnment r eaffirmed its intentions to make the pr ivate sector the engine of ec onomic growth. It was also acknowledged that the ability of the private sector to become this engine depended on how rapidly m edium-term macro-stability was to be achieved and the measures taken towards addressing its other key constraints. 1.1.2 Government’s Development Strategy Ghana's business environment in 1999 was termed as one of the best in A frica for private sector development due to its political stability. The enactment of the Ghana Investm ent Promotion Center Act of 1994 and the Free Zone Act of 1995 were the first crucial actions taken under the strategy. The Acts constituted an ad equate framework, providing favorable investm ent and export incentives to enterprises, especially free zone

1 Based on 1995/1997 CAS and CAS 2008-11(G-JAS 2007) 2 Almost at 4.55 of GDP 3 The sale of Ashanti Goldfields Corporation (AGC) marked an important threshold in generating broad-based support for

privatization and in signaling the Government's support for the private sector.

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companies, while setting out the rules an d regulations governing private sector participation in the d evelopment of f ree zo nes. The in centives includ ed extens ive tax holidays, accelerated depreciation, and sales of up to 30 percent of th e value of free zone products in the dom estic market. The Government acquired sites in Tema, Takoradi, and Kumasi which have been reserved for private development as free zones. To further assess the v iability of the Free Z one (FZ) concept, the Governm ent of Ghana (GOG) co mmissioned a survey of foreign in vestors to compare Ghana's investm ent climate to those of Mauritius and Du bai (considered best practices) and Togo and Kenya (potential com petitors). Ghana was shown to have the required env ironment which, combined with an E xport Processing Zone (EPZ) to address the infrastructure shortcomings, can enab le it to attract a critical m ass of exporte rs an d accelerate the growth of exports. In the final analysis, it was the quality of infrastructure and business services which would attract investors and not the incentive code and thus great attention was given in assessing needed upgrades to the infrastructure including the utilities. 1.1.3 Project fits into Bank and Government’s strategy The Gateway Project was fully aligned with IDA's Country Assistance Strategy (CAS) of 1995/7, which defined poverty reduction as its central goal. The CAS recognized that one of the key requirem ents for sustainable pove rty reduction w as higher rates of econom ic growth by restoring sustainabl e fiscal balance and prom oting private investm ent for exports. A population growth ra te of 3 percent per annu m, an average annual GDP growth rate of less than 5 percent duri ng the last decade, proved insufficient to significantly reduce poverty levels. It was estimated that an annual GDP growth rate of 8-10 percent would be required for significant poverty reduction and in order to achieve such levels of investments required to obtain the targeted growth rate, Ghana was obliged to consciously develop and consolidate its "competitive advantages" and cater to export markets. Thus, the Gateway Project was designed to help remove identified constraints to bring about developm ent of trade and export s, and to attract di rect investm ents for industrial and infrastructure developm ent. The Project was an integral part of the G hana Gateway Program, designed to make Ghana a middle-income country by year 2020 under Ghana’s Poverty Reduction Strategy (GPRS). 1.1.4 Sector Issues to be addressed by the Project The Project was designe d to address two critic al constraints to the incr eased inflows of foreign direct investment for the acceleration of exports:

the provision of limited off-site infrastructure around the Tema EPZ, to attract a private developer who would provide poten tial investors with required on-site infrastructure in the Tema EPZ; and

the removal of important, but narrow, institutional capacity constraints to

increase foreign investment in the country.

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1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) The Project' s developm ent objective was to attract a critical m ass of export-oriented investors to Ghana to accelerate export-led growth as well as facilitate trade. The Key Perform ance Indicators (K PIs) relati ng to the project developm ent objective s are as follows:

10 firm s have been established and ar e operating in the second year after completion of civil works; 20 fir ms by end-third year and 30 fir ms by end fourth year.

Net export revenues are increa sed by 25 percent in second year; by 30 percent in third year; and by 40 percent in fourth year after completion of the civil works.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The objectives of the Project are (a) the de velopment of a multipurpose industrial park; and (b) th e improvement of the quality and stan dards of services delivered to inv estors and to exporters by the Borrower' s institutio ns and agencies responsible for trade and investment aiming to attract a critical mass of export-oriented firms and facilitate trade in the territory of the Borrower for accelerated growth. The Performance Indicators relating to the revised project development objective were:

Off site and on-site infrastructure is completed and MPIP is fully functional in the intervention area by the Closing Date of the Project.

Percentage of prospective Multipurpose I ndustrial Park (MPIP) settlers that are motivated by the new MPIP regime.

Free Zone Act has been amended and adopted by Parliament. Implementing regulations implemented. Percentage of com panies/investors that express satisfactio n with the revam ped

EPZ Act. Percentage of actual and/or prospective MPIP settlers expressing satisfaction with

the quality of services available to them. Improved trade and investm ent activities that are directly linked to the quality of

services provided to investors through the project. Evidence of i mproved business activit y, increased volum e of exports and

improved export revenue as a result of the construction of physical infrastructure to ease container storage and transit.

Percentage of com panies sa tisfied with th e sim plification of custo ms and immigration procedures.

Improved capacity of the Ghana Investm ent Advisory Council (GIAC) to provide strategic advice on investment opportunities and policy initiatives.

These new indicators were included in the amended Development Credit Agreement (DCA).

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1.4 Main Beneficiaries According to the Project Appraisal Docum ent (PAD) and in keeping with Ghana' s objective of sustainable poverty reduction thro ugh job creation and increased levels of economic growth, the Gateway Pr oject was designed to facil itate the higher levels of private foreign and domestic investm ent nece ssary to achie ve this gro wth. The Project identified benefits for three broad target groups: (a) the local population; (b) private investors; and (c) the GOG. For the local population, the Project was expected to lead to a reduction in unem ployment through the creati on of m ore job opportu nities and through improvements in the skills and mobility within the labor fo rce. For the GOG, the Project was expected to attract a flow of foreign direct investm ent that would have a positive effect on the balance of payments. It would also help increase the capacity of government agencies dealing with the priv ate sector. In addition, the fisc al impact was estim ated at US$75 m illion for the 15-year p eriod, m ostly from personal in come taxes of new employees and service businesses operating around the EPZ and estim ated leasing fees from the developer of the EPZ. For private foreign and dom estic investors, benefits would come from reduced uncertainties and transaction costs associated with d oing business in Ghana, as well as the availabi lity of ready sites for export processing industries and the simplification of trade procedures.

1.5 Original Components (as approved) The project was originally designed with two components as follows: Component 1: Infrastructure Investments (US$ 38.9 million)

A. Off-site Infrastructure Investment for the Tema EPZ, including: (i) Acce ss road, side drainage and associat ed civil works.(ii) Water supply system s, wastewater disposable systems and off-site drainage systems. (iii) Supply and installation of electrical p ower and tran sformers. (i v) a Telecom Infrastructure (local private).Feasibility study for ra ilway corridor. (v) C ontracting to Oversee Civil works.

B. Construction of Container devanning area outside of the port, and improvement of

port container and Airport cargo facilities.

C. Implementation of the Environmental Management Plan (EMP). Component 2 - Investment promotion and Removal of administrative bottlenecks (US$ 14.7 million)

A. Customs, Excise and Preventive Services (CEPS): The Project would finance the implementation of CEPS strategic business plan covering changes in operational procedures and human resources and ISO 9000 compliance.

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B. Ghana Ports and Harbor Authority (GPHA): The project would provide expertise, equipm ent, trai ning, operational support to re-e ngineer GPHA into a Landlord A uthority. Feasibility study for extension and dredging of quay 2, development of Electronic Data Intercha nge (E DI) at Tema port. Put in place Private Sector participation in port activities.

C. Ghana Civil Aviation Authority (GCAA): The Project would finance the

conversion of GCAA i nto a regulatory ag ency and the operat ionalization of the "liberalized skies policy" with e mphasis on policy ref orm and institu tional redesign, increased private participati on in provision of infrastructure and obtaining private participat ion in m anagement and developm ent of Kotoka International Airport (KIA).

D. Ghana Immigration Services (GIS): The Project would finance (i) assistance in

preparing operating procedures, benchm arking GIS processing of i mmigration functions as they relate to trade facilitation; (ii) technology infrastructure and; (iii) retraining of staff in trade facilitation.

E. Ghana Investment Promotion Center (GIPC). Country and Investment Promotion: Preparation and im plementation of well tar geted inve stment and country promotion activities; staff training and private sector surveys; preparation and involvem ent i mplementation of a st rategy to develop backward linkages between foreign investors and local supp liers; and support for a program to build consensus amongst domestic stakeholders in favor of reforms.

F. Ghana Free Zone Board (GFZB): The Projec t will f inance implementation of

the Developer & Tenants m arketing plans, improvem ent of building service delivery of staff in prom otion and f acilitation, developm ent of oversight capabilities.

G. Gateway Project Coordination and Project Management: The Project would

help finance recurrent expenditures and develops the institutiona l capa city to manage and coordinate the Gateway Project and infrastructure unit.

H. Setting the Stage for Gateway II The Project would support work aim ed at

developing further policies, instrum ents building and implem entation strategies for exam ple in pro ject f inance; vocation sk ills deve lopment, and tourism development.

1.6 Revised Components The original structure of the project was maintained with two components, but the activities w ere s lightly reorg anized. Som e activities we re cance lled; where else som e were added or expanded. For example:

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a) The scope under component 1 was increased to include (i) “on-site “infrastructure for the Tem a EPZ; (ii) Provision of technical advisory serv ices for th e construction of container devann ing area o utside the Port of Tem a; (iii) Reconstruction of a bridge and around 4 km of arterial roads outside the inner security perim eter of t he port of Tem a providing access to the contain er devanning area and other cargo m arshalling facilities; and (iv) can cellation of improvement of airport facilities.

b) The scope under com ponent 2 was reduced by cancellation of subcom ponent 2.8

Preparation of Gateway II. Reason for revising the component and changing some of the subcomponents was greatly to address the non perform ance of the intern ational private developer for the Tem a EPZ towards provision of “on-site” infrastructure and ease the congestion at the Tema Port.

Table 1: Original and Restructured Components and Sub Components

No. Original Components Revised Components 1 Infrastructure and Development of Geographically sited

EPZ (US $38.9 million) Infrastructure and Development of Geographically sited EPZ (US $43.1 million)

1.1 Implementation of EMP Implementation of EMP

1.2 Construction of the off-site infrastructure for the Tema EPZ Construction of the off-site and on-site infrastructure for the Tema EPZ

1.3 Construction of the devanning area outside port and improvement of port container facilities

Construction of the devanning area outside port and improvement of port container facilities and reconstruction of a bridge and around 4 km of arterial roads outside the inner security perimeter of the port of Tema.

2 Trade Facilitation Capacity of Front Line Institutions (US $14.7 million) Trade Facilitation Capacity of Front Line

Institutions (US$10.0 million). 2.1 CEPS – conforming CEPS processing standards to ICC and

ISO 9000 CEPS – conforming CEPS processing standards to ICC and ISO 9000

2.2 GPHA Concessioning of ports activities to the private sector and building capacity to regulate PPI; feasibility for the extension and dredging of quay 2, landlord port

GPHA Concessioning of ports activities to the private sector and building capacity to regulate PPI; feasibility for the extension and dredging of quay 2, landlord port

2.3 Converting GCAA into a regulatory agency, operationalization of open skies.

Converting GCAA into a regulatory agency, operationalization of open skies.

2.4 Modernization of Immigration Legal Framework, regulations and standard operating procedures.

Modernization of Immigration Legal Framework, regulations and standard operating procedures.

2.5 Country and Investment Promotion support to GIPC. Country and Investment Promotion support to GIPC and Public Private Dialogue through GIAC.

2.6 Search for developer and oversight capacity of GFZB. Search for developer and oversight capacity of GFZB.

2.7 Project Management & Program Coordination. Project Management & Program Coordination. 2.8 Preparation of Gateway II. Dropped.

Source WB

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1.7 Other significant changes Extension of Project Closing Date: The Project closing date was extended three tim es. The first extension was from December 31, 2005 to June 30, 2007 which was necessary due to the restructuring and retrofitting exercise which to ok longer to com plete. The second extension was from June 30, 2007 to June 30, 2008 to enab le all the project activities to be implemented and completed on time to consolidate project’s achievements. The Third extension was from June 30, 2008 to December 31, 2009 to allo w for completion of the remaining few project activities. Shift in Project approach: The Gateway Project supported th e GOG to es tablish its first EPZ/MPIP and at the sam e tim e provide su pport to the overall Free Zones progra m through GFZB. Therefore, there were two aspe cts of the F Z program (i) single factory free zones and (ii) free zone enclave. Th e FZ program had focused on sectors i.e. agribusiness/agro-processing and light m anufacturing. The conclusion drawn from the ICR assess ment was t hat the FZ program succeeded in attracting more single FZ enterprises than FZ enclave enterprises and it also succeeded to attract more agribu siness sector firms, in particular cocoa, while that of light m anufacturing e.g. textiles was poor. The FZ program has attracted over 260 fir ms of which 24 are located in the Tema EPZ/MPIP over a period of 14 years. The developm ent of the Tem a EPZ did not ta ke off as expected b ecause the p rivate developer did not deliver requir ed infrastructure and services in the enclave. The second developer was slow in providing the necessary on-site infrastructure in its leased land. As a result firms who were interested to invest in Tema EPZ faced the pr ospect of having to undertake their own investments. In addition, ECOWAS issued a formal interpretation on rules of origin relating to Special E conomic Zones including EPZ in the W est Afri can region which essentially treated products as imports from outside the trade bloc. This meant that goods from Ghana EPZ would attract a higher duty than non Ghana EPZ goods and thus becoming e competitive in serving the regional market from Ghana EPZ. Therefore, in order to get m ore operators in the Te ma EPZ, the concept of Multipurpose Industrial Park (MPIP) was added to that of an EPZ to enrich the Free Zone Program of Ghana by introducing more flexibility on the part of the investors. With an MPIP in place, both the G overnment and the private deve lopers were qualified to develop the EPZ/industrial Park. Therefore, by GOG beari ng the cost of “on-site” infrastructure development through the project and by developing Common Se rvice Centers (CSCs) in the MPIP, the Government would create the conditions for making the Tema EPZ/MPIP more attractive to non EPZ private enterprises. The Results Framework was revised to reflect the changes in the PD O and additional activities. The revised PDO indicators as shown in section 1.3 were m ore descriptive and so was the result framework. Re-allocation of Funds: Funds were reallocated between components and categories to support the agreed changes. Th e Project benefited from the exchange rate between SDR and USD which made more funds available for Project’s use.

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2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry Factors that positively affected quality at entry. 2.1.1 Lessons from previous operations Key lesson incorporated in the de sign of the Gateway Project was lack of adequate institutional capacity to im plement Bank operations. Ban k was comm itted to develo p local capacities to enable im provements in the country portfolio which was then (1998) recorded as unsatisfactory. In this regard, a more participatory approach was adopted in the preparation of the Gateway Project to ensure greater commit ment and ownership by GOG. E fforts were m ade to include all identi fied stakeholders on Project discussions which were held with potential investors an d private sector representatives. Concerns raised by these groups were addr essed in the design of the Proj ect to ensure relevancy of the Project. In addition certain issues were identified and earmarked for closer monitoring and strengthening. 2.1.2 Adequacy of Participatory Approach The Gateway Project was prepared in a satisfa ctory participatory m anner. Private sector views were solicited; developm ent partners involved in PSD consulted and various government institutions, directly and indirect ly involved in the Project participated in different f orms. Line m inistries o f f rontline agencie s an d regulator y agencies were continuously consulted throughout the design phase to ensure effective internalization. In addition, GOG had inc luded private sector repr esentation in the Board of Directors of GFZB and GOC. 2.1.3 Soundness of analytical work Gateway Project incorporated recommendations from Economic Sector Work (ESW), on private sector developm ent (three FIAS reports, MIGA reports, USAID and CIDA reports) and most importantly the work done by GIPC and GFZB. The GOG initiated a self-need-assessment by all key agencies con tributing to the high cost of doing business in Ghana which resulted into an action plan for each agen cy coordinated by the M inistry of Finance and the Gateway Secretariat. Th ese actio n plan s includ ed easy to m onitor performance indicators. Therefore, the Ga teway Project dedicated a whole com ponent towards developm ent of GOG’s project bene ficiary agencies im plementation capacity. The Ghana Free Zones Act of 1995 had clea rly recognized the im portance of most lessons learned in FZ projects. It laid out an attractive in centive pac kage for private investors in the free zone. The proposed EP Z at Tem a was to b e en tirely p rivately-financed, owned and managed, which would be one of the first in Africa. It was p art of the overall Free Zone program of the count ry which was designed from the on-set to include processing and services of all kind. The FZ program created a regim e for free zone companies which could be established eith er within or as a s ingle factory enterprise called Ghana Free Zone Enterprises. In this regard, Te ma EPZ was a small part of the

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overall FZ program. GOG had planned to lease the land to private investors for a period of 50 years including provision of off-site infrastructure servic es. In addition, GOG provided funds under com ponent 2 of the Gateway Projec t to GFZB and GIPC for continuous investment promotion and trade facilitation activities. 2.1.3 Strong Government Commitment The high level of Government commitment was critical for a project such as the Gateway Project which was a multi-m inisterial, m ulti-sectoral p roject. It was im portant to recognize at the preparation stage the com plexity and challenges that m ight e merge during im plementation of proj ect com ponents which cut hori zontally across m ultiple, government agencies and across the "exclusive territorial" domains of specific functional agencies. In this regard, the Gateway Project had strong ownership and commitment from top governm ent decision m akers which enab led the creation of Gateway Oversight Committee (GOC) and i ncluded private sector representatives. GOC was chaired by the Vice President and was able to continually monitor implementation performance and put pressure for funda mental changes while reso lving inter-jurisdictional issues as they emerged.4 2.1.6 Quality at Entry The project’s overall concept was appropria te and conform ed to the GPRS and the Bank’s CAS of 1995 and 1997. The project underwe nt Quality at Entry review and was rated satisfactory. There was adequate level of anal ytical work un dertaken an d th e participatory process in design was intensiv e. T he project d esign took into account of country’s lim ited capacity and thus relied on international private sector responses to make the EPZ operational. In this regard quality at entry is rated satisfactory. Factors that negatively affected quality at entry. 2.1.4 Assessment of Risks and mitigation measures The PAD rated the ov erall risk as moderate. One critic al risk was id entified but was under rated. This was stated as “ Finding a developer; and on-site investments by developers and off-site investment by GOG are completed”. The Bank team had put a lot of emphasis in having an international private developer for the on-site infrastructure and management of the EPZ. The risk should have been rated “substantial” and more options should have been explored in case the developer fails to perform. Since the risk was rated moderate th e m itigation m easures applied wh ere insuf ficient to add ress the s ituation when the international private developer faile d to perform. GOG continued to encounter difficulties with the private dev eloper who retained more than 100 acres of un-developed

4 During 2005/6 critical macroeconomic difficulties, the Chairperson of the Oversight Committee ordered directives to give The Gateway Project priority in allocation of critical inputs to its civil works e.g. cement.

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land at the Tema EPZ. In this regard, assessment of risk and mitigation measures is rated moderately satisfactory. 2.1.5 Inadequate design of Monitoring and Evaluation (M&E) The selec ted indica tors for the rev ised re sult f ramework were de scriptive and lacked quantitative targets and values. They did not allow proper monitoring of progress towards PDO as they lacked baseline and target values.

2.2 Implementation Factors that have positively contributed to project implementation. 2.2.1 Project Management Arrangement The Ministry of Trade and Industry was th e m ain i mplementing agency, for which it created a Project Coordinating Unit (PCU) known as the Gateway Secr etariat and it had fifteen5 staff m embers. The Gateway Secretar iat was well m anaged for a good part of project’s duration. The project had seven beneficiary agen cies critical for trade facilitation and spanned the fields of i nvestment prom otion, free zone m anagement, customs, immigration, civil aviation, ports, e nvironment and the line m inistry. Activities implemented by the sev en agencies were c oordinated by the Gateway Secretariat under the supe rvision of the Gate way Oversigh t Co mmittee. Su ccessful perfor mance of the project activities were uniformly characterized by relatively strong managerial leadership and interest of the beneficiaries6. 2.2.2 Partnership between Government and private sector GOG worked in partnership with the privat e sector during project im plementation. The private sector was represented at the Project Oversight Committee. When it was clear that the international private developer for the Tema EPZ was not perform ing; GOG awarded part of the enclave to a national private developer who now have most of the 24 tenants. 2.2.3 Changes/Restructuring The Gateway Project w as rest ructured in 2005 to m odify the DCA and am ended (i) extension of project clo sing date b y 18 m onths to Decem ber 2007; (ii) reallocation of credit proceeds; (iii) application of the May 2004 Procurem ent and Consultan t Selection Guidelines and increas e certain procurem ent thresholds, and (iv) revise the key performance indicators.

5 Of which 3 were consultants. 6 In particular GIS, CEPS, EPA and GPHA.

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The first key amendment of the D CA was on the PDO which was am ended to incorporate “on-site infrastructure” as an activity under component 1. GOG was also required to amend the EPZ Act to regulate the settlement of enterprises in the Tema zone and allow all categories of ente rprises to locate in the zone, including certified free zone companies and non exporters.

The second major amendment to the DCA was related to the reconstruction of a bridge and approxim ately 4 km of acces s roads outsid e the port of Tem a under Subcomponent B (1). It was proposed to increase the allo cation for civil works under Subcomponent B (1) to US$ 6.0 million for this additional activity.

The third major amendment was to regularize funding of the Ghana Investment Advisory Council (GIAC) under a new Subcomponent A (6). The activities of the GIAC were core private sector development and investment climate/trade reforms.

The fourth major amendment was related to the proposed transition to the new World Bank Procurem ent and Consultant Guidelines adopted in May 2004. The revised Guidelines aimed at streamlining the procurement function.

The fifth major amendment was related to the revision of the key perf ormance indicators for the restructured Project and specified in a new Schedule of the DCA. Success of such a project, dealing with in stitutional and struc tural r eforms, is expected to become visible in the medium-long term.

Meanwhile the activities under Component 2: Trade Facilitation Capacity of Front Line Institutions were largely left as is with th e exception of: (i) inc lusion of activities of The Ghana Investm ent Advisor y Council ( GIAC) which was a consultative group composed of private sector CEOs that act as a watch dog “custodians” and providers of feedback on im plementation of governm ent trade facilitation and inv estment clim ate reforms, as well as b est pra ctices in in stitutional ref orms f rom a private se ctor perspective; and (ii) cancellation of subcomponent 2.8: Preparation of Gateway II. Factors that negatively affected implementation 2.2.4 Long duration of Project implementation The project was im plemented over a period of approxim ately elev en years, f rom effectiveness in January 1999 to closing in December 2009 almost doubling the original duration of the project. The long duration compromised the efficiency of use of economic resources (see section 3.3) a nd required the GOG to com e up with a prolong period of additional counterpart funds due to increased civil works under the project. Total project cost am ounted to an estim ated US$52.5 million equivalent due to exchange rate fluctuations against the SD R, approxim ately 3.2 percent higher than the appraisal estimate of US$50.7 m illion equivalent. GOG’ s contribution am ounted to US $4.4 million. 2.2.5 Continuous emphasis for an international private developer After the MTR in 2002, it became clear that there was a need to secure another competent and reputable developer for the enclave si nce Business Focus had failed to perform.

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GFZB was urged to term inate the lease ag reement with the non-perform ing developer and it secured an agreem ent for a release of part of that deve loper’s land. Since the emphasis was still to look for an internat ional private developer, GFZB undertook a second search for a private developer using an international competitive tender process to develop the TEPZ and to market the available land in the Tema EPZ. 2.2.6 Lack of correctional actions after the Mid Term Review (MTR) By MTR, the project had disbursed only 29 pe rcent of the Credit p roceeds but the Bank continued to rate project perform ance as satisfactory despite the substantial outstanding issues. These issues cau sed delays in im plementation progress due to mostly lack of an operational private developer for the EPZ, c ounterpart funds and input m aterials for the off-site infrastructure. The MTR did not recommended restructu ring of the pro ject although the key performance indicators were far from being reached. T he proactivity of the Project team led to comm ence project rest ructuring in 2004 a year before the project was due to close. 2.2.7 Project at Risk The project’s DO rating was downgraded to “Unsatisfactory” in October 2004 due to (i) lack of progress in termination of the l ease agreement with the non-perfor ming private developer, (ii) slow progress wi th construction of the of f-site infrastructure, (iii) la ck of development in on-site infrastructure, and (iv) insufficient count erpart funding fro m GOG. The GOG reacted quickly to the downgrad ing and initiated actions on all of the issues which gave sufficient confid ence to the Bank to change the DO rating back to “Moderately Satisfactory” by June 2005. This was later upgraded to “satisfactory” in December 2005 and the PDO has thereafter been rated satisfactory up to the closing of the Project.

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

2.3.1 M&E Design – indicators and data collection The original M&E framework was well designed and could be monitored, but the revised Result Framework lacked baselin e data and quantitativ e perfor mance indicato rs, which were too descriptive and outputs not easily linked to the PDO. This created something of a disconnect between the indicators and the P DO. Measu ring such indicators gives rise to the question of attributi on for indicators trying to m easure export volum es, export earnings and FDI. Measuring the impact of GIAC through Doing Busi ness (DB) Report ratings is also another exam ple of unclear connection between the outcome and indicator being used. This indicator was put in place to reflect the many reforms that were ongoing and demonstrate their results by linking activities to the DB report and the Project. More appropriate indicators to measure the PDO could have been : (i) increases in num ber of firms operating in the TEPZ to measure the efforts and level of attracting the critical mass of companies into the TEPZ; (ii) number of developers operating in the TEPZ; (iii) value of exports produced from the TEPZ; (iv) number of jobs created by the operating

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companies in the TEPZ; (v ) es timated number of ind irect jobs created due to the backward linkages to the TEPZ; (vi) annual in creased levels of investments in the TEPZ; etc. This information was available but not reported in the Implem entation Status Report (ISRs) because of the way the Result Fram ework was designed. Interm ediate Outcome indicators could have been better identified for each implementing agency to monitor and collect data. Against this back ground the design of M&E is rated moderately unsatisfactory.

2.3.2 Implementation and quality of data The M&E was coordinated by th e Gateway Secretariat which sub mitted quar terly progress reports, including an annual operating plan describing the project activities to be carried out during the next calendar year and an adequate justif ication and a com plete appraisal of each new activity. Durin g the restructuring of the project in 2005, the Result Framework in the Implementation Status Report (ISR) was revised by replacing the PDO and Outcome indicators but these changes di d not produce the desire d results as it was difficult to m easure the project’ s attribution to e.g. percenta ge changes of the industry sector to the GDP. The implementation of Result Framework was inconsistent as most of the time it was not updated and the perfor mance indicators with data were discussed in other sections of the ISRs. However, the Gateway Secretariat and implementing agencies continued to gather data on the original pe rformance indicators for their subcom ponents and activities. To further facilitate proj ect monitoring, bi-m onthly audio-conference meetings were held b etween the Bank Team and the Gateway Secretariat. Bank supervision m issions were regularly c onducted and the PDO and IP were rated satisfactory except for October 2004 and June 2005 when the ratings were downgraded to unsatisfactory and moderately satisfactory. In this regard, the im plementation of M&E is rated moderately unsatisfactory.

2.3.3 Utilization With a weak Result Fr amework, the Projec t t eam worked with what they had as the quality of data was good and easily availa ble. The Progres s repo rts fro m the Gate way Secretariat were sent to th e Bank and were utilized as background docum ents during the supervision m issions. The Project did not fully utilize the M&E as a tool for decision making with exception to reallo cation of funds between the two com ponents. In this regard, the utilization of M&E is rated moderately unsatisfactory. Note of caution. In 1999 there w as less em phasis on designing of M&E and the log framework was used as the result fram ework. However, the revised result fram ework as approved by the Board in 2005 di d not provide baseline data or tim eframe targets or values towards achieving the end of project targets. Even if the ind icators are considered inadequate for today’s standa rds, at the tim e of restructu ring th ey were accepted as sufficiently appropriate to evaluate project outcome.

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2.4 Safeguard and Fiduciary Compliance

2.4.1 Safeguard

The Ghana Gateway Project was classified as Category A due to the fact that it comprised both off-site and on-site infrastructure deve lopment that included: (a) water connection; (b) sewage and solid waste tre atment f or the EPZ; (c) e lectricity link ; (d) telecommunication link; and (e ) access roads to the P roject s ite. The Environm ental Impact Assessment (EIA) study ca rried out during project prep aration stated that there were no major negative environm ental pr oblems envisaged from the project. The anticipated environm ental prob lems f rom c onstruction works (dust, noise from he avy machinery) and other problem s expected during project implementation were adequately addressed in the study. Project prepara tion, bidding and im plementation therefore incorporate specific m easures to avo id negative impacts, and to im prove any inadequ ate environmental conditions in the Project area such as: (i) e nvironmentally safe construction m ethods and techniques; (ii) en vironmental and social criteria to avoid environmental degradation of the Project si te; and (iii) improvem ent of solid waste management in the final waste disposal sites in the Tema municipality. The EIA included a costed Environm ental Mitigation Plan a nd Monitoring Plan (EMP) and an Industrial Risk Contingency Plan, all of which clear ly identified the in stitutional arrangements for the execution of the respective plans. In order to ensure full implem entation of the EMP, the GOG transferred the com ponent cost to the plan' s executing ag ency, the Env ironment Protection Agency (EPA). In addition, GOG created a Gateway Environm ental Managem ent Offic e in Tem a and ensured that the requisite hum an and institutional capacities were provided. The capacity built in the EPA was adequate for the management of environmental issues of the Project to the exte nt the Bank environm ental spe cialists were no t always ne eded in all the supervision missions. OP 4.12 Involuntary Reset tlement was triggered when the P roject was to comm ence construction at the Tem a EPZ but this was reso lved by GOG prior to project effectiveness. The EPA was able to im plement the EMP satisfactorily as required by the Gateway Project. The perform ance of safegua rd issues is therefore rated satisfactory.

2.4.2. Financial Management

The Projec t complied with the f inancial covenants stated in the lo an agreement and all Audit reports were subm itted on tim ely manner. The overa ll performance of the Project in financial management is rated satisfactory. 2.4.3 Procurement management Overall, the perform ance of the procurem ent function under the Project was satisfactory despite a fe w challenges it encountered at the beginning of project implem entation. The Project complied with the specified procurement procedures and any procurem ent issues were properly and tim ely handled by the Bank team . All the Pro ject procu rement

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processes and implementation activities were pl anned to be completed bef ore the Project closing date of Dece mber 31, 2009. One excep tion was m ade for the financial audit for the year 2009, which can only be started fo llowing the closing of the Project and the completion of all its paym ents. The overall performance of the Project in procurem ent management is rated satisfactory.

2.5 Post-completion Operation/Next Phase The Gateway Project supported th e GOG to establish its first EPZ/MPIP and at the same time provide support to the overall Free Zone s program through GFZB. In this regard, one has to distinguish the two aspects of the FZ program (i) single factory free zones and (ii) free zone enclave. The FZ program also had focused on sectors i.e. agribusiness/agro-processing sector and light m anufacturing. The conclusion drawn from the ICR assessment was that the FZ program succeeded in attracting m ore single FZ en terprises than FZ enclave en terprises and it also su cceeded to attr act m ore agribusin ess s ector firms, in particular cocoa, while that of light m anufacturing e.g. textiles and electronics was poor. The development of the Tem a EPZ/MPIP accounted for almost 60 percent of the pro ject proceeds. This was a training ground for GF ZB on m anagement of the FZ program and the enclave. Sim ilarly, 40 percen t of the project p roceeds went to support ex isting Government institutions responsible for tr ade facilitation and investment prom otion. These institutions would con tinue with their ac tivities and will be fully funded by GOG. In this regard, there are no transitional issues for the Gateway Project. Most of the indicators were institutionalized and would con tinue to be m easured by the respective institu tions; f or exam ple, CEPS would con tinue being IS O certif ied in its administrative standards and proced ures; FDI flows would continue to be m onitored by GIPC; GPHA would continue m onitoring the ef ficiency in goods clea rance at the ports; GIS would continue to be m easured by the tim e it takes to issue approv al for visa etc. in this regard the sustainability of the project achievements is high. The Bank has recently engaged GOG on discussi ons to develop the western corridor. Since GFZB has two areas iden tified for EPZ (Takoradi and Kum asi) and GPHA ha s ports ope rations in T akoradi, th ere is a high probability of rep licating s imilar developments in the western region. Both institutions are confident to carry out a Phase II of Gateway initiatives, in particular, now when there are oil operations prospects at the western region.

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation One of the pillars of the Government’s overall econom ic strategy (GPRS) at the tim e of project preparation was to s upport private sector developm ent and employment creation. These goals were compatible with the Bank’s CAS of 1998 as described in the two prong

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strategy: (i) m ore rapid, broa d-based, export oriented sustai ned growth; and (ii) social sustainability. There w ere four operational sub-areas under the firs t strategic area: (a) macro-economic stability, (b) private sector development, (c) supporting infrastructure, and (d) rural developm ent. Pillar I of the Ghana Poverty Reduction S trategy II (GP RS - 2007) is Private Sector Competitiveness. The objectives supported by this project are still relevant with the Governm ent’s GPRS II and the Bank’s 2007 Joint-CAS (G-JAS). The GPRS II puts th e priv ate s ector d evelopment at the forefront to ach ieve h igher and broader based growth. Moderniza tion of agricu lture and linkages to ind ustry are seen as central to structural transfor mation of the economy that will be needed to sustain higher growth and drive poverty reduction. This is adequately reflected in the Ghana Joint Assistance Strategy (G-JAS) 2007 covering th e period 2008 -11. Therefore, im proving business environm ent, including trade and financial services, facilitating regional integration to stimulate productivity and trade links are key priorities for GOG. The goals of the Gateway Project in terms of institutional and private sector development were clear and appropriate concerning the prio rities of GOG in pub lic sector reforms, its economy and political context. The design of the components was appropriate at the time as the project was intended to suppor t the Free Zone Program of GOG through establishment of a Tem a EPZ by providing re quired infrastructure with appropriate environmental standards; strengthen institu tions which will m anage the Tem a EPZ (GFZB and EPA); stren gthen institu tions invo lved in trade and trade f acilitation (G IS, CEPS, GP HA, GIPC, GCAA); incorporate ke y stakeholders in project oversight committee, both public and private representa tives to provide adequate feedback and support to project m anagement under the Minist ry of Trade and Industry. The levels of FDI continued to increase as m ore com panies register under the EPZ fram ework therefore enabling GOG reaching one of its m ajor goals for econom ic growth. Based on the experience of the Gateway project, GOG th rough GFZB is determ ined to establish new EPZs in Takoradi in the western region and Kum asi in the central region of the country. For these reasons, the overall relevance of this project is rated high.

3.2 Achievement of Project Development Objectives PDO performance prior to restructuring As designed during project preparation, the lin kages of the Project’s outputs to outcomes occurred first, through institutional strengthening of the participating agencies and second, through their project-speci fic activities in assisting the i nvestors establish in the country and enter their respectiv e export markets. In this regar d, the relevance of project design is high as the number and details of the components were appropriate using the right tool to develop the EPZs. However, there was a need t o rest ructure the project to m ake provision for on-site inf rastructure which the international private developer failed to provide and expanded access of Tema EPZ/MPIP to non e xport processing firm s. As a result, the overall duration of the project was doubled and Project funds were disbursed at a low average rate of 8 percent per annum . Although, it enabled th e completion of all infrastructure and civ il works and institu tional capacity building unde r the pro ject there was som e losses in efficien cy. Therefore, project im plementation before res tructuring

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was moderately satisfactory despite the near co mpletion of major off-site infrastructure activities. Achievement of PDO after restructuring The assessment of the extent to which the pr oject‘s objectives were achieved should take into consideration the fact that the PDOs while appropriate, were defined rather broadly. According to ICR Gui delines, “ ….whenever the stated PDOs stated in the board documents are so broad and/or vaguely worded as to preclude any meaningful evaluation, intended objectives are inferre d by evaluator from key associated outcom e targets ..” 7. Therefore, consisten t with the appro ach recommended by the ICR Guidelines, the ICR team built its assessm ent by (i) outlining logic al linkage between key indicators (revised at restructuring) and pro ject objectives (see Table 2 below), and (ii) complem enting the observation and assessment of the extent to which the key perform ance indicators were achieved, with a qualitative and quantitativ e assessment of the outputs delivered under the project (reference to Table 3 below a nd A nnex 2). Based on the above m ode of assessment, the ICR team is of the view that the achievement of the project objectives can be considered to be overall moderately satisfactory. Qualitative Assessment of the Achievement of the PDO In addition to the above assessm ent the ICR team was required to provide a m ore qualitative assessm ent of the pro ject achie vements. By cross-referencing the f ield information with the information produced during implementation, the ICR team believes that the project produced a reasonable satisfactory outcome. The provision of key off-site and on-site infrastructure increased occupation of the Tema EPZ, eased logistics between Team EPZ and Tem a Ports. GFZB and the developer utilize a score card to measure level of satisfaction of tenants in the enclav e. The investm ent in Ghana’s Customs Management System (GCNet) as a joint effort between public and private sector, enabled electronic flow of cust oms documentation and has reduced the tim e for processing shipping documents from 14 days to half a day and customs clearance for ms have been reduced from 15 to 1. In additi on, CEPS is also ISO 9000 certified. GIS processes Visa-on-arrival applications on-line and response is given within 24 hours. Smooth Departure and Arrival procedures at the Kotoka International Ai rport have been achieved. The construction of the devanning area facilitated decongestion at the Tem a Port. The provision of dual carriage access road resulted into reduced time in cargo clearance from 25 to 2 days. GIPC attracted private investment worth $12.6 billion between 1999 and 2009, derived from 3,214 projects w hich created 305,874 jobs for Ghanaians and almost 11, 000 for Non Ghanaians. Export oriented production in industry and m anufacturing companies increas ed to US$ 3.0 billion in 200 7 while total exports were at US$ 4.2 billion. Critical mass of export oriented firms amounting to 260 firm s were registered at generating 28,433 direct jobs of which 28 perc ent are in the Tem a EPZ/MPIP with an estimated additional 30,000 indirect jobs.

7 OPCS (August 2006, updated on 1/18/2007), Implementation Completion and Results report – Guidelines, pg 31.

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Table 2:Logical Linkage between performance indicators and project objective Key performance indicators Causal relationship between

performance indicator and outcome

Project objective related to performance indicators

1. Off-site infrastructure is completed and the M PIP is fully functi onal in the intervention area.

Development of of fsite and on-site infrastructure for a MPIP

Development of off-site and on-site infrastructure for multipurpose industrial park (MPIP)

2. Percentage incre ase of actual and/or prospective MPIP settlers satisfaction with quality of services available to them

Create a platf orm of hardwar e externalities in th e MP IP which will trigger entrepreneurship

The i mprovement of the quality and standards of services delivered to investors and t o expor ters by the Borrower's institutions and agencies responsible for trade and investment aiming to attract a critical mass of export-oriented firms and facilitate trade in the territory of the Borrower for accelerated growth

3. Free Zone Act h as been amended and adopted by parliament

Draft amendments to the EPZ Act the improvement of the quality and standards of services delivered to investors and t o expor ters by the Borrower's institutions and agencies responsible for trade and investment aiming to attract a critical mass of export-oriented firms and facilitate trade in the territory of the Borrower for accelerated growth

4. Implementing r egulations implemented

Draft amendments to the EPZ Act The improvement of the quality and standards of services delivered to investors and t o expor ters by the Borrower's institutions and agencies responsible for trade and investment aiming to attract a critical mass of export-oriented firms and facilitate trade in the territory of the Borrower for accelerated growth

5. Percentage incre ase of companies/investors that express satisfaction with the revamped EPZ Act.

Draft amendments to the EPZ Act The improvement of the quality and standards of services delivered to investors and t o expor ters by the Borrower's institutions and agencies responsible for trade and investment aiming to attract a critical mass of export-oriented firms and facilitate trade in the territory of the Borrower for accelerated growth

6. Percentage of actual and /or prospective MPIP set tlers expressing satisfaction with the quality of services available to them.

Improve quality of ser vices to investors in the MPIP


7. Improved tr ade and investment activit ies that a re directly linked to the quality of services available to them.

Improve trade facilitation at ports and airports


8. Evidence of i mproved business activity, increased volume of expor ts and improved expor t revenue as a result of the constr uction of physical infrastructure to ease container storage and transit.

Improve t rade faci litation at ports and airports


9. Percentage of com panies satisfied with si mplification of customs and im migration procedures.

Improve t rade faci litation at ports and airports


10. Improved capacity of t he Ghana I nvestment Advisor y Council to pr ovide str ategic advice to the GOG on investment opportunities and policy initiatives

Strengthen public policy dialogue The improvement of the quality and standards o f services delivered to investors and t o expor ters by the Borrower's institutions and agencies responsible for trade and investment aiming to attract a critical mass of export-oriented firms and facilitate trade in the territory of the Borrower for accelerated growth

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Table 3: Assessment of the extent to which performance indicators have been achieved Key performance indicators Baseline Target Achievement Assessment

1. Off-site infrastructure is completed and t he MPIP is fully functiona l in the intervention area.

50% of o ff-site infrastructure 0% of o n-site infrastructure

100% o f of f-site and on-site infrastruct ure of selected area to e nable the EP Z to be fully functional.

Off-site infrastructure and on-site infrastructure completed by 100%.

Achieved.

2. Percentage increase of actual and/or prospective MPIP settlers sa tisfaction with quality of services available to them

0 Increased nu mbers of enterprises settling in the MP IP due t o the quality of services available to them

The existing operators at the MP IP are sati sfied by 80% of ser vices pr ovided in the MPIP

Achieved

3. Free Z one Act has been am ended an d adopted by parliament

Free Zone Act to be a mended to allow non EPZ f irms to settle at the EPZ

Creating a r egulatory environment conducive to encour age non E PZ firms to locate a t the Tema EPZ/MPIP

No need to a mend Act as decree was issued to allow non EPZ fir ms to settle at the EPZ/MPIP. 3 non E PZ fir ms have settled in the EPZ

Achieved

4. Implementing regulations implemented

None Im plementing regulations for the conversion o f par t of EPZ into a MPIP are adopted to cr eate an enabling environ ment for non EPZ firms

Implementing r egulations to conver t par t of the E PZ into an MPIP was completed.

Achieved

5. Percentage increase of companies/investors that express satisfaction with the revamped EPZ Act.

0 T he on-site infrastructure for the Furniture City an d the ICT Park is set up. At least 90% of enterprises in the MPIP express satisfaction with the reva mped EPZ environment which allows flexibility i n the Tema EPZ/ MPIP.

The on-site infra structure for the Furniture City and the ICT Park were completed and fully functional. At least 80% of enter prise are satisf ied with services offered at the MPIP

Partially achieved.

6. Percentage of ac tual and /or pr ospective M PIP settlers e xpressing satisfaction with the quality of services avai lable to them.

0 Percentage incr ease of MPIP s ettlers expressing satisf action with the qualit y of services availabl e to them.

70 % of inter viewed firms in the M PIP showed 80% satisfaction on services provided at the T ema EPZ/MPIP

Achieved

7. Improved tr ade and investment activi ties that are dir ectly linked to the quality of services available to them.

Ghana’s ability to attract FDI is limited FD I is low

Ghana’s levels of FDI increases b y at least 20% since 2004.

Ghana’s levels of FDI in 2008 were $2.2 b illion of which fr om E PZ was 1. 6 million. FDI has increased by over 1000%

Achieved

8. Evidence of improved business activity, increased volume of expor ts and improved export revenue as a result of the construction of physical infrastructure to ease container sto rage and transit.

Congestion at Tema por ts and takes 25 days to clear cargo. Export levels were $500 million in 2004

Reduce congestio n at Tema container terminal by constructing a container devanning ar ea and storage for transit cargo to Burkina Faso

Container devann ing ar ea completed. Clearance of cargo at Tema ports takes 2 days. Transit cargo to Burkina Faso has proper storage. Export levels have increased to $1.5 billion in 2009

Achieved

9. Percentage of companies satisfied with simplification of custo ms and im migration procedures.

Cumbersome customs and immigration procedures

Improved custo ms procedures and immigration processes.

CEPS has r educed nu mber of bor der check points from 5 to 1; Bur kina Faso and Cote d’ Ivoire fr om 18 to 2. GIS r educed num ber of days for Visa to 2 days and over a million pa ssengers processed at KI A. An impact assess ment survey showed that inve stors ar e satisfied with CEPS

Achieved

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services by 90% and GI S by 100%.

10. Improved capacity of the Ghana Investment Advisory Council to provide str ategic advice to the GOG on investm ent opportunities and policy initiatives

Ghana ranking in DB Report is mediocre.

GIAC is fully operational. Ghana is included in the DB Repor t as one of top 10 r eformers in Africa

GIAC was operational. Ghana r anked #1 r eformer in Afr ica in 2 007 DB report; r anked 3 rd in 2 008 DB report.

Achieved

3.3 Efficiency Overall, the economic returns are 16.2 percen t with a negative Net Present Value (N PV) of US$ 48.7 m illion which is much lower than the es timates at appraisal. This does not mean that the Project is unprofitable, it inst ead demonstrates that the econom ic benefits would have been of m ore value to the society if the Tem a EPZ/MPIP was completed on schedule, fully occupied w ith a critical m ass of fir ms, and generating m ore export products. The econom ic benefits in the an alysis were those accrued from foreign exchange earnings from value added from exports and FDI flows as investm ents made per firm in the EPZ. The benef its from institutional capacity building were not included in the calculations. The job ge neration benefit was estim ated at 3,210 direct jobs by year 5 of Te ma EPZ/MPIP being operational but the actual is 8,000 by year 4 of Tem a EPZ/MPIP being operational. It is therefore es timated that by year 2013 there will be over 85,000 direct and indirect jobs created around the Tema EPZ/MPIP. The participating agencies were satisfied with the work performed by the consultants and with the quality of the equipm ent purchas ed. The Gateway Secretariat tho roughly reviewed all bids for co nsultant services and for equipment purchases as revealed by the Bank’s procurem ent evaluations. Appropria te guidance was provi ded to the project through the GOC and the Bank team provided appropriate and tim ely advice. Based on these experiences of the project, efficiency is considered to be moderately satisfactory.

3.4 Justification of Overall Outcome Rating Rating: Moderately Satisfactory The develo pment obje ctives of the Gateway Proje ct re mained rele vant to G OG’s priorities and continue to be consistent with the Bank’s JAS. The Project showed achievements of its developm ent objectives as de monstrated by Tables 2 and 3 and Annex 2. The revised PDO KPIs were mostly met although there could be some question of whether they could entirely be attributed to the project. GFZB a nd GIPC were able to attract alm ost US $2.2 billion (of which 1.6 million is from EPZ) worth of private investment which enabled the creation of 260 EPZ firms in the country and over 3,000 projects. The first two KPIs; industrial and exports outputs show that the EPZ firms have contributed substantially towa rds the overall industr ial output and tota l exports of the country. The EPZ program is responsible for almost 45 percent of Ghana’s exports of which 8% is from the Tema EPZ/MPIP. The Pr oject also satisfactorily achieved its third PDO KPI by generating 8,000 jobs accounting for 9 percent of overall jobs created by the

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EPZ firms. Institutional strengthening was achieved as all the six institutions dealing with private investors and trade f acilitation were m odernized and improved their serv ices to the satisfaction of investors as demonstrated in Table 3. The Bank team was proactive in conducting the restructuring of the project which was necessary despite happening almost at the end of the project. W ithout the re structuring, the PDO would not have been successfully met. Disbursement was at 98 percent of the cred it proceeds. TAs mentioned earlier, the efficiency o f use of project reso urces is reflected in a m oderate EIR R of 16.2%. The Gateway Project showed that, in general, the resources were efficiently utilized with an EIRR of 16.2 percent. In other circum stances the project would have been rated satisfactory but for its longevity issues, with a m oderately satisfactory performance during the first 5 years of its life. In this regard, therefore, the overall outcome of the Project is rated moderately satisfactory.

3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development The Gateway Project has been able to contribute towards GOG’s 2020 Vision and GPRS II where poverty reduction is a m ajor goal. The Proje ct was able to c reate more employment than estim ated at appraisal. The econom ic analysis estim ates that approximately 85,000 direct and indi rect jobs will be created in 15 years. This is due to the fact that the Tema EPZ/MPIP will be fully occupied with approximately 80 firms. (b) Institutional Change/Strengthening CEPS is now ISO 9000 certified on its adm inistrative procedures. The Gateway Project was able to reengineer the institution with a new m ission and vision. As a result, the simplification of its pro cedures ena bled Ghan a to be recorded as one of the top ten reformers in the Africa in 2007 and 2008. The GCNet system for CEPS, it has enabled flow of information among institutions e.g. GIPC and GPHA and as a result, clearance of goods has improved trem endously from 25 days in 1999 to 14 days in 2005 to 2 days in 2009. The improved services have been c onfirmed by the ISO 9000 certification in November 2009. GIS: The Gateway Project initiated trade an d investment facilitation awareness and modernization of GIS which included providing adequate capacity building activities and technology equipm ent for the institution. It received a fu lly equipped Electronic Data Management Centre from the gateway Proj ect which enabled GIS to process Visa-on-Arrival applications on-line and to reduce the waiting peri od to less than 48 hours. Additionally, there has been a trem endous improvem ent with Departure and Arrival procedures at KIA. New st andard operational procedures for GIS were upgraded to accommodate the expans ion in its mandate incl uding border patro ls. GIS is now a best practice and has been recruited by other deve loping agencies to train other countries immigration officers.

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EPA was able to take this opportunity to de centralize its offices to Tem a. The EPA Office in Tem a is well equipped and capable to addres s a ll environmental issues tha t could occur at the enclave and it’s environ. GFZB is confident that it has bu ilt adequate in stitutional capacity to manage the Tema EPZ/MPIP and would establish new ones in Sekondi/Shamaa and Takoradi. (c) Other Unintended Outcomes and Impacts (positive or negative) Apart from job creation within the Tem a EP Z/MPIP and its neighboring township, the companies in the enclave have engaged local farmers for their inputs. This is the case for the collection of Shea nuts which are an input for the production of Shea butter and other cosmetic oils. The Shea nuts are collected by wo men in the villages and collected by the contracted drivers to deliver to the plant at the E PZ. This line of product engages m any villages including those from the neighbori ng countries. T his backward linkage has a great impact in reducing income poverty, in particular, for the women.

3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops A stakeholder workshop was held on Ap ril 14, 2010 to present overall GOG assessm ent of implementation completion report. The workshop was attended by public and private sector representatives. Major findings: the stakeholders felt that the impact of the project was high and would be sustainable. The capacity building activities were highly appreciated for exam ple most of the project focal point staffs were promoted to higher positions in CEPS. Among key Lessons Learned were (i) th at Monthly Technical Committee helped project im plementation through continuous decisions m aking and collaboration of implementation; ( ii) Institutional capacity built f rom the projec t should be maintained to b enefit other p rojects e.g. EPA office in Tem a. (iii) Accountability of Project funds is high in Bank projects whic h is good. (iv) Extension of Project Closing date has enabled funds to be disbursed up to 98 percent (even if it has a cost on duration and efficiency) was seen as flexibility on the part of the Bank; and (v) targets and planned activities w ere too ambitious – n eeded to h ave rea listic targ ets b ased on ex isting capacities.

4. Assessment of Risk to Development Outcome Rating: Moderate The risk to m aintaining the Dev elopment Objectiv es is r ated moderate. The support provided to the GOG institu tions is sustainable while the quality of phy sical infrastructure had sound technical design. Based on the ICR findings during the site visits, various types of arrangem ents and partne rships were f orged betw een the v arious institutions and the Ministry of Trade and Industry and othe r private sector stak eholder groups to continue m onitoring the quality of services for trade facilitation. Moreover, GOG intends to scale u p its EPZ activ ities by estab lishing additiona l sites in Takoradi which will benefit from the oil and gas industry developments in the country.

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5. Assessment of Bank and Borrower Performance

5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry Rating: Satisfactory The quality at entry of the Bank’s perf ormance was rated satisfactory by the QEA . The project was designed to reflect international best practice as well as experience with prior Bank operations. Preparation was done in a highly collaborativ e m anner with an appropriate skill m ix in the team (includ ing in frastructure and environ ment sectors). However, the Bank team should have put less emphasis on the role of the international private developer for the succe ss of the Tem a EPZ althou gh it was best practice at th e time. Appropriate op tions would have been thought ou t as part of risk m itigation measures. In this regard, quality at entry is rated satisfactory. (b) Quality of Supervision Rating: Moderately Satisfactory The quality of supervision is rated moderately satisfactory. The Bank undertook regular supervision missions and in som e cases the missions were intensified to ensure progress in performance. There was effective and candid dialogue between GOG and Bank team. The Bank team was quick to take action to re structure project after exhausting all options to resolve issues, in particula r those rela ted with the inte rnational private developer and provision of on-site infras tructure. The Team Leaders were supported by a team of specialists, in particular, procurem ent and financial m anagement throughout implementation. The cooperation, sharing of pr ogress reports, re-orientation of policies and seeking im proved i mpact through cons tant innovation was greatly enhanced. The presence of part of the team in the country office allowed for more continuous monitoring and participation in the GOC m eetings. De spite the cooperation effort by both team s, more attention should have been given to the revised perform ance indicators during project restructuring. Monitori ng of indicators was irregular even though m ost of the indicators were difficult to measure or attribute to the project. (c) Justification of Rating for Overall Bank Performance Overall Bank performance is rated satisfactory. This takes in to c onsideration th e satisfactory perform ance at qual ity at en try and m oderately satisf actory at superv ision, the cooperation between the proj ect team and the GOG, the Bank’ s ability to play a lead role in coordinating private s ector developm ent, the achievem ent of a lmost all of the project developm ent objectives, as well th e sustained policy di alogue with the GOG leading to continuing Bank engagement in the sector.

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5.2 Borrower Performance (a) Government Performance Rating: Satisfactory This project was conceived by the Governm ent with the d esire to build on previous macroeconomic reforms to address key obstacl es to export growth. This policy initiative had a high priority which translated into a fi rm commitment to the proje ct. The changes in government did not disrupt th e support to the proj ect as its objectiv es were properly aligned to government priorities and the GPRS 1 and II. The GOC wa s very active and it met regularly with continued m embership and participation from the private sec tor. The initial counterpart funds problem s were resolved and GOG contributed m ore than originally envisaged during appraisal. Government performance in this project is rated as satisfactory. (b) Implementing Agency or Agencies Performance Rating: Satisfactory The Gateway Secretariat was respon sible for a complex project with seven participating agencies. The PCU was strong ly c ommitted to the deve lopment objec tives. The s enior members of the s taff were high ly qualified. The quality of management practices were reflected in the favorable outcom es of all operational and financial audits. The unit effectively utilized periodic meetings with pa rticipating agencies to s erve as a forum for discussion of im plementation issues and for cr oss-learning from individual experiences. All project docum entation was well organized a nd maintained in the ar chives. Financial management was m eticulous with tim ely repor ting of f inancial inf ormation in easy to understand for mat. Project m anagement was consistently rated as satisfactory by most ISRs starting in 2005. Quality of M&E was good and reports were av ailable on a tim ely basis. This evaluation thus confirms the rating of satisfactory for I mplementing Agency Performance. (c) Justification of Rating for Overall Borrower Performance Rating: Satisfactory The Government’s commitment and the high qual ity of staff coupled with their sustained excellent performance were im portant factors in the overall perform ance of the project. The overall Borrower Performance is thus rated satisfactory.

6. Lessons Learned Private Developers for EPZ do not have to be international. Attracting firms

to the Export Processing Zone does not have to be led by an in ternational private developer. The international private deve loper failed to perform and the national developers took over and the EPZ is fully operational.

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To attract a critical mass of firms into an EPZ all the facilities have to be

functional. Firm s are n ow considering lo cating at the TEPZ since th e entire infrastructure and services are available.

Strong Project Coordinating Unit is critical to Project’s success. Monthly technical Comm ittee helped project im plementation substantially as decisions were made and collaboration was easy.

Timely restructuring of a project can lead to a successful implementation of a project. When a project becom es very difficult to im plement it’s usually a sign that there is a need to revisit the funda mentals of the design and its concepts to enable retrofitting or adjustments of key features of the project for it to work.

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies The GOG generally agree with the assessment of the report and the summary of its contribution is in Annex 7. (b) Cofinanciers N/A (c) Other partners and stakeholders N/A

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Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent)

Components Appraisal Estimate

(USD millions)

Actual/Latest Estimate (USD

millions)

Percentage of Appraisal

INFRASTRUCTURE INVESTMENTS 38.90 0.00

INVESTMENT PROMOTION & REMOVAL OF ADMINISTRATIVE BOTTLENECKS

14.70 0.00

Trade Facilitation & Inv. Promotion 7.37 7.77 105.43

Development of a Multi-Purpose Industrial Park 40.93 41.6 6 101.78

Total Baseline Cost 47.30 49.4 3 101.50

Physical Contingencies 0.40

0.00

Price Contingencies 0.00

0.00

Total Project Costs 47.70 49.4 3 102.34 Front-end fee PPF 2.00 2.49 124.50 Front-end fee IBRD 0.00 0.00

Total Financing Required 49.70 51.9 2 102.40

(b) Financing

Source of Funds Type of Co-

financing

Appraisal Estimate

(USD millions)

Actual/Latest Estimate

(USD millions)

Percentage of Appraisal

Ghana Government 3.40 4.40 123% International Development Association (IDA) 50.50 52.4 0 103%

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Annex 2. Outputs by Component Component Sub-components/planned cluster of

activities Outputs (at completion) Project Outcome National level

Outcomei

1. Infrastructure and Development of Geographically site EPZ ($43.1 million)

1.1 Implementation of EMP 1.1.1. Operationalize EMP for TEPZ 1.1.2 Implement Industrial Risk and Contingency Management System for Tema EPZ tenants 1.1.3 Monitor and enforce compliance

EMP developed and implemented. A digitized base map of Tema EPZ/MPIP has been prepared with Environmental Compatibility Matrix software to assist in tenant location at the enclave Tema EPA office established and equipped. Unit has capacity to regulate and monitor industrial development through the country An Environmental Protection and Pollution Control legislation was prepared and endorsed by Cabinet and awaits Parliament approval to be pass as law.

Increased awareness by Tema EPZ/MPIP tenants on environmental issues. Sustainable capacity built at Tema EPA with high quality equipment.

New legislation on Environmental Protection and Pollution Control will put Ghana on world standards on environment issues.

1.2 Construction of off-site and on-site infrastructure for Tema EPZ

1.2.1 Construction of access road, side drainage and associated works.

Offsite and onsite infrastructure for Team EPZ/MPIP is completed Construction of access road, side drainage and associated works completed.

Tema EPZ/MPIP is attracting more firms to locate increasing levels of interest by firms

24 firms located at Tema EPZ/MPIP

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Component Sub-components/planned cluster of activities

Outputs (at completion) Project level Outcome

National level Outcome

1.2.2 Construction of water supply systems, wastewater disposable systems and off-site drainage systems. 1.2.3 Supply and installation of electrical power and transformers. 1.2.4 Construction of security fence wall, administrative block. 1.2.5. Carry out a study on rational to construct a railway link from Tema EPZ/MPIP to port of Tema

. Study on rational to construct a railway link from Tema EPZ/MPIP to port of Tema was carried out.

. Services provided are of high quality and standards. Availability of power and water supply at the enclave important to tenants. Security fence provides additional security to the tenants

Invested $511 million worth of capital investment; generated 8,000 direct jobs; generated exports valued at $741 million; paid taxes/duties worth $ 2 million and paid $23 million worth of salaries to employees.

1.3 Construction of devanning area and improvement of port container terminal

Devanning area has been constructed outside the ports. Storage facilities have been constructed for transit good to Burkina Faso.

Decongestion at the Tema ports has been removed. Cargoes can be cleared with 2 days Transit cargo to Burkina is safely stored away from the Ports

Increased in efficiencies at the Tema ports. Cote d’Ivoire, Togo and Burkina prefer to use Tema ports due to increased efficiency.

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Component

Sub-components/planned cluster of activities

Outputs (at completion)

Project level Outcome

Trade Facilitation Capacity of Front line Institutions ($ 10.0 million)

2.1 Customs, Excise and Protection Services (CEPS) 2.1.1 Simplification and streamlining of customs procedures and installation of automated electronic platform for processing customs documents 2.1.2 CPS becomes ISO 9000 compliance

Simplification of procedures reduced number of forms to fill from 15 to 1. CEPS became ISO 9000 in November 2009 CEPS has new corporate image and vision.

Reduced number of road blocks due to automation of procedures and processes. Burkina Faso and Cote d”Ivoire reduced from 15 to 2 and to Togo from 5 to 1.

CEPS has a good image in the country. Revenues for GOG have increased and are around 22% of GDP in 2009

2.2 Ghana Ports and Harbor Authority (GPHA) 2.2.1 Reengineering of GPHA into a landlord Authority 2.2.2 Feasibility study for the extension and dredging of quay 2 2.2.3 Development of Electronic Data Interchange at Tema Ports 2.2.4 Put in place private sector participation in ports activities.

Not able to pass into law the Land Lord Port bill. Feasibility study was completed Electronic Data Interchange at Tema Ports done. Use of GCNet has improved turnaround of ships and cargo clearance at the ports. Extension of private sector participation in ports activities achieved through existing law. Reduction of cost of clearance of cargo not yet achieved.

Functional collaboration with GIPC and CEPS achieved through use of GCNet. Extensive participation of private sector in ports activities through outsourcing and use of agencies. Congestion of container terminal reduced or eliminated. The reduction of cost not yet achieved still at $300.

Improved DB rating in cross border trade. Increased demand on services due to efficiency from neighboring countries, in particular, Cote d’Ivoire.

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2.3 Ghana Civil Aviation Authority (GCAA) 2.3.1 Conversion of GCAA into a regulatory agency 2.3.2 Operationalize liberal skies policy with emphasis on policy reform 2.3.3 Increase private participation in provision of infrastructure and private management of Kotoka International Airport (KIA)

GCAA have separated its commercial activities into a new company called Ghana Airport Company Limited which manages airports facilities. Work ongoing to make GCAA a regulator. Project funded a study and its under discussions by GOG. Liberal skies policy is enforced. Ghana Airways collapsed. Many new international airlines operate in Ghana including Delta Airlines to the USA

Study provided way forward for GCAA. Collaborations with CEPS and GIS, services at the airports and have improved tremendously. Both departure and arrival procedures are smooth.

More international carriers operate into Ghana, more passengers use KIA for arrival, departure and transiting services.

2.4 Ghana Immigration Services (GIS) 2.4.1 Undertake organizational restructuring and developing a corporate strategy 2.4.2 Review of immigration laws and regulations 2.4.3 Develop and install MIS 2.4.4 Retraining of staff in trade facilitation

Organizational structure and new strategy done. Installation of electronic data management system enabled introduction of visa-on-arrival which is issued on-line within 21 hours Streamlined issuance of working permits Improved departure and arrival formalities through the use of automated systems.

GIS has been modernized with quality technology. GIS provided training to other immigration departments in Zambia and Liberia. Introduction and automation of visa-on-arrival which are issued within 24 hrs online.

Overall positive image of GIS in the country.

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Over 200 staff trained and all new staff get training on trade facilitation.

Improvement of departure and arrival Formalities at the airport –KIA. Streamlined issuance of work permit.

2.5 Ghana Investment Promotion Center (GIPC) and Ghana Investment Advisory Council (GIAC) 2.5.1 Preparation and implementation of well targeted investment promotion activities; 2.5. 2 Training of staff and

GIPC prepared and implemented targeted investment promotion plan GIPC staffs were trained.

GIPC carried out 92 workshops for 617 targeted firms of with 8% site visits GIPC capacity is strengthened. Investors formalities reduced

Ghana ranked in 2007 and 2008 as one of the ten top reformers in Africa as reported by DB reports. Substantial increases in FDI in 2008 it was 14% of GDP

2.5.3 Design and installation of a MIS with investor tracking capacity; 2.5. Reduction of formalities and procedures for investors and 2.5.7 support for a program to build consensus amongst domestic stakeholders in favor of reforms

MIS designed and installed for GIPC. Investors formalities were reduced GIAC built consensus on domestic stakeholders to favor reforms

FDI amounting $12 billion has been mobilize through GIPC from over 3000 projects and creating over 300,000 jobs for Ghanaians and over 10,000 for foreigners

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2.6 Ghana Free Zone Board (GFZB) 2.6.1 Search for developer and 2.6.2 Build oversight capacity

One international developer was recruited and failed to bring a critical mass of firms for the enclave. Still owns part of enclave and intends to develop. Two national developers are in place for the Tema EPZ/MPIP. MPIP is under GFZB/GOG management GFZB capacity built to manage EPZ program nationwide.

24 firms operating in the Tema EPZ/MPIP. 25 on the pipeline to settle at the enclave. 8,000 direct and 30,000 indirect jobs created at the Tema EPZ/MPIP

236 firms operating elsewhere in the country near supply of raw materials. 28,000 direct jobs created. $1.6 billion cumulatively entered Ghana through EPZ program. Generated exports worth $1.3 billion from 2004 to 2008

2.7 Project Management and Coordination 2.7.1 Building institutional capacity

Capacity built at Gateway Secretariat Project management was satisfactory

Satisfactory project management including fiduciary responsibilities.

Project staff deployed to other new and ongoing project and GOG offices.

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Annex 3. Economic and Financial Analysis Major Assumptions Simplifying assum ptions have been necess ary in verifying the econom ic analysis prepared during appraisal of the project. Efforts have been made not to be biased towards social profitability of the EPZ. In this regard, assumptions are as follows:

The Governm ent of Ghana' s was fully comm itment towards the Proje ct and continued im provement of the m acroeconomic environm ent; especially in the reduction of the inflation and domestic interest rates;

The firms that en tered the EPZ wo uld have delayed their entry for three years without the zone;

The identified basket of industries did not materialize; The national developer was in place during the fourth year of the project; The value added for export is betw een 10 -15 percent of total value of

export sales; There was s ome "catalytic effects" fr om the existence of th e EPZ. These

will be in activities like service businesses and other industries which will be suppliers of raw m aterials and other services, and thus creating a backward linkage to th e EPZ. Ther e will also be som e em ployment creation in these industries and creation of new ones;

The m inimum wage rate for the EPZ is be equal to th at of exis ting manufacturing firms; i.e. US$ 50.00 per month;

It was assum ed that the EPZ firm s will export up to 100 percent of their production; and

The numbers of fir ms i n the zone ar e actual including those outside the enclave.

Components of Cost- Benefit Analysis of EPZ Six main benefits and types of costs have been quantified. These are as follows: Employment Generation. Based on the inform ation provided by the Gateway Secretariat and the GFZB, about 8,000 jobs have been created from 24 fir ms within 4 years in part of the EPZ. A second national private developer is expected to bring in equal amount of firms or more. Adding the MPIP which has 19 firms under consideration, the number of fir ms is expected to reach 80. In 15 years, it is, therefore, estimated that, more than 40,000 jobs will be created in th e Te ma EPZ/MPIP. Fro m the basket of industries operating at the enclave, 5 were in apparel but 3 closed due to global economic crisis. These tend to create m ore jobs than other industries which could be highly capital intensive e.g. seafood processing. However, Ghana compares favorably with its competitors in term s of labor cos ts. A sec ondary ef fect was expecte d in em ployment creation which created additional jobs from ac tivities f rom the periph eral of the E PZ.

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These jobs have been estim ated at 140 percent of the total j obs created in the EPZ. Thus within 4 years, 30,000 addition al jobs were created and by year 15 a total of 45,000 will be created. The concern of most governments is to create jobs through the EPZ reflecting the belief that the social benefits of creating additional jobs outweigh the costs. Foreign Exchange Earnings. The foreign exchange earnings of foreign-owned EPZ firms m erely constitu te transac tions betw een these f irms and f irms abroad. They, therefore, have marginal direct effects on economic welfare of domestic nationals, except for the m oney that is converted into dom estic currency to be spent on wages and purchases from local economy. The importance of this effect creates a net benef it to the host country from these purchases. This econo mic analysis has quantified these benefits to represent foreign exchange earnings from investment by the firms and value added of exports. Technology Transfer. EPZ norm ally involves labor-int ensive production and thus promote technology in the host country. This constitu tes the most important externality that com es with the presence of the EP Z. In the long-run, the learning by doing mechanism will com e into play through the "cataly tic effect" th at will result in gains in managerial practices and notions of quality con trol transferred to local m iddle managers employed by the EPZ firm s. This is expected to increase productivity and efficiency in domestic firms which would have otherwise not improved without the influence of the EPZ. This benef it is dif ficult to m easure a nd has thus not been in cluded in the cost-benefit analysis. Domestic Sales. EPZ firms will be perm itted to sell up a to maximum of 30 percent of their output in any year on th e domestic m arket. Such sales are treated as im ports, and duty is paid at norm al rate. The net value to the host country of the goods consumed is the value of c.i.f. prices of the imports, which also the net p rice is actually paid by EPZ firms. Thus, domestic sales have no net welfare effect and have been ignored by the cost-benefit analysis. Electricity. EPZ firms are heavy us ers of electricity. Thus, the cost-benefit analysis must compare the tariff rates paid with estim ates of the long-run m arginal cost (LRMC) of supplying the extra power. If the average tariff exceed the LRMC, the electricity u sed by EPZ would entail net tax, or, in the revers e case, a net subsidy. There will be no special tariffs for the EPZ. However, the cur rent utilities tariffs in Ghana are ex tremely low, but EPZ pay in foreign cu rrency and thus there was no subsidy to the EPZ firm s. However, these rates are currently being revised to reflect cost-recovery market rates. It is therefore assumed that there are no net welfare effects to the economy, and thus, have been ignored by the cost-benefit analysis. Taxes. Although taxes raised from EPZ fir m t end to be sm all, they represent a clear source of benefit for the dom estic economy. They would not have been received if the EPZ firms were not present although fir ms which transfer to the zone from elsewhere in the country are an exception. Taxes will, therefore, be expected from wages of both EPZ employees, EPZ firm s (after the expiration of the incom e t ax-holiday) and other taxes

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from domestic firms that will prov ide raw m aterials to the EPZ f irms as they provide a backward linkage to the rest of the economy. Infrastructure Costs. Public expenditures requ ired to set up the zon e represents a clea r economic cost. Therefore, the off-site and on-s ite infrastructure investm ent costs will be included as the major costs for the EPZ project. Administrative Costs. The establishment of the zone site, its maintenance, and administration all represents economic costs and in principle should be evaluated at shadow prices. In the absence of data the financial costs will be used. Economic Analysis Evaluation: Results Experience in other countries suggests that th e main quantifiable benefits from EPZ are: (i) foreign exchange earnings from value added of exports; and (ii) creation of additional direct and indirect em ployment. However, this econom ic analysis uses value added of exports from the EPZ to quantify the foreign exchange earnings. To measure this benefit a set of figures generated by GF ZB for firm in the EPZ were used. The value of export sales minus imported inputs which equals to value added. The value added for ms a mere 10-15 percent of the export values. Since th e Project supports the acceleration of a process that leads to an outcom e -- incr eases in exports -- the m ethodology adopted assumed that the Project would accelerate th e increase in exports by three years. This increase in exports would not have been ach ieved without the Project. Investments on the off- site and on-site infrastructure for the encl ave completed at year four and five of the Project but firm s have been registered and started operating elsewhere than the enclave. Therefore, substantial benefits stream started in year five of the Project. All project costs and benefit shave been consid ered over a period of 15 years. In the bas e case, an EPZ firm was estim ated to invest at least $4 m illion and em ploy an average of 300 workers. The growth of EPZ firm has been steady at average of 33 firms a year due to the successful prom otional cam paigns organized by both GFZB and GIPC. The net value added of exports was taken from the act ual value of exports and multiplied b y 10 percent per annum. The EPZ is expected to create about 40,000 jobs and 45,000 indirect jobs in the 15 years. Based on the above stated assumptions, the Project has ERR of 16.2 percent w ith a negative NPV of US$ 48.7 million, which compares similarly with the rates of returns for successful EPZ elsewhere. ERR on Penang EPZ fir ms (Malays ia) is 28 percen t; 2 6 percent in Indonesia, 23 percent in Shenzhen (China); 15 percent in Korea and 18 percent in Kenya). In this regard the project was ec onomical beneficial to the country. The main reason for the very low then appraisal estimates was due to the prolong project investment period resulting into the econom y t o continue to incur costs as the benefits were postponed. Nonetheless, to conclude, the project has beat en all odds to becom e successful due to its high levels of political stab ility, reasona ble stable m acroeconomic environm ent,

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availability of a cheap and large labor force with both skills and semi-skilled workers and two credible national developers to manage the EPZ over the watch of GFZB.

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Ghana Gateway Project Economic Analysis Summary (all figures in US$ million)

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Financial cost 3.1 0.9 2.8 7.6 10.0 4.5 1.3 1.3 4.5 9.8 4.4 2.2 2.2 54.6Economic cost 2.8 0.8 2.5 6.9 9.0 4.1 1.2 1.2 4.1 8.8 4.0 1.9 1.9 49.2Net Economic Benefits

FDI Flow 0.0 0.0 1.7 10.0 10.0 17.5 11.5 12.0 104.0 148.0 140.0 80.0 80.0 80.0 80.0 774.7Value Added on Exports 0.0 0.0 0.0 0.0 0.0 125.5 102.0 104.6 154.8 126.7 60.1 78.1 101.5 131.9 171.5 1156.5Net Economic Benefits 0.0 0.0 1.7 10.0 10.0 143.0 113.5 116.6 258.8 274.7 200.1 158.1 181.5 211.9 251.5 1931.3Benefits minus Cost 2.1 0.6 ‐0.2 4.9 3.3 140.0 112.6 115.7 255.7 268.1 197.1 156.6 180.0 211.9 251.5 1899.9

NPV ($48.68)

EIRR 16.2%

Rate 12

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Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members

Names Title Unit Responsibility/

Specialty Lending Demba Ba Country Manager MNCLB TTL Kofi Boateng-Agyen Senior Operations Officer AFTFW TTL Serigne Omar Fye Sr. Environmental Specialist AFTEN Safeguards Georgette Johnson Program Assistant AFTPS Project Support

Supervision/ICR Papa Demba Thiam Sr. Private Sector Development Specialist AFTFW TTL Chad Leechor Sr. Private Sector Development Specialist AFTPS TTL Sherri Achondo Sr. Private Sector Development Specialist AFTFE TTL Sharma Sr. Private Sector Development Specialist AFTPS TTL Michael Wong Sr. Private Sector Development Specialist SASFP TTL Kofi Boateng-Agyen Sr. Operations Officer AFTFW TTL

Amos Abu Sr. Environmental Specialist AFTEN Environmental / Safeguard

Adu-Gyamfi Abunyewa Procurement Specialist AFTPC Procurement Ferdinand Tsri Apronti Procurement Specialist AFTPC Procurement Andrew Osei Asibey Sr. Monitoring & Evaluation Specialist AFTRL M&E Sylvester Kofi Awanyo Senior Procurement Specialist EAPPR Procurement Adu-Gyamfi Abunyewa Procurement Specialist AFTPC Procurement

Samuel Bruce-Smith Consultant AFTFM Financial Management

Irene F. Chacon Operations Analyst AFTFW Program Support Wolfgang M. T. Chadab Senior Finance Officer CTRFC Disbursement Rona P. Cook Program Assistant AFTFE Program Support Lucy M. Fye Sr. Private Sector Development Specialist AFTFW ICR Ronald Kopicki Consultant AFTPS

Irene Chacon Operational Analyst AFTPS Operational support

Andrea Vasquea-Sanchez Sr. program Assistant AFTPS Program Support Manush A. Hristov Sr. Counsel LEGAF Legal Sidonie Jocktane Executive Assistant AFMGA Program Support

Ronald J. Kopicki Consultant EASCS Transport Logistics

Anthony Mensa-Bonsu Consultant AFTPC procurement Annette E. Minott Temporary AFTHD Program Support Isselmou Ould Louleid Junior Professional Associate AFTPS Program Support Lydia Sam Procurement Asst. AFCW1 Procurement Andrea Vasquez-Sanchez Sr. Program Asst. AFTFW Program SupportMelissa Bennet Private Sector Development Specialist AFTPS PPD

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Salli Wondergem Executive Assistant AFCW1 Program SupportTony Mensah-Bonsu Procurement Specialist AFTPC Procurement Salli Cudjoe Program Assistant AFC10 Program SupportJessica Dodoo Program Assistant AFCW1 Program Support Frederick Yankey Sr. Financial Management Specialist AFTFM Financial

(b) Staff Time and Cost

Stage of Project Cycle Staff Time and Cost (Bank Budget Only)

No. of staff weeks USD Thousands (including travel and consultant costs)

Lending FY94 0.29 FY95 17.60 FY96 3.54 FY97 29.18 FY98 129.70 FY99 51.54 FY00 2 0.31 FY01 4.03 FY02 0.42

Total: 2 236. 61

Supervision/ICR FY99 45.46 FY00 54 109.40 FY01 33 72.64 FY02 31 132.57 FY03 21 79.70 FY04 38 122.74 FY05 36 148.62 FY06 31 94.78 FY07 26 78.62 FY08 30 117.32 FY09 90.00

Total: 300 1091 .85

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Annex 5. Beneficiary Survey Results (if any)

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Annex 6. Stakeholder Workshop Report and Results (if any)

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Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR

GHANA TRADE AND INVESTMENT GATEWAY PROJECT PROJECT COMPLETION REPORT

Executive Summary 1. The Im plementation of the Ghana Trade and Investm ent Gateway Project was

for 7 years from January 1999 to De cember 2005 but was extended after project restructuring to close o n Decem ber 2009. Th e Gateway Project was m ulti-sectoral in nature and was implemented under the auspices of the MOTI – as part of a Governm ent (NDC 1) programme to “attract a critical m ass of Export oriented FDI into Ghan a – to accelerate export – led Growth of the National Economy”.

Please find attach ed th e Final Draft of the Project Com pletion Report (ICR) prepared by the Gateway Project Secretariat.

2. The main project objective was the development of a 1200 acre Export Processing

Zone (EPZ) near the port of Tem a through the provision of in ternational quality ‘off-site’ infrastructure, limited ‘on-site’ infrastructure and access road.

The resulting Industrial Park called Tema Export Processing Zone/Multi Purpose Industrial Park (TEPZ/MPIP) is being m anaged by the GFZB. In addition the project funded a variety of ‘ limited but high impact’ in terventions to selected frontline Government Institutions for institutional strengthening, capacity building and in som e cases tech nical ass istance in the f orm of critical equ ipments – to enable these institutions improve the quality of s ervice rendered to Investors and the Priv ate Sector. T hese agencies were GFZB, CE PS, GIS, GP HA EP A, GCAA/GACL and the GIPC. The focus of this component of the pr oject was to reduce the cost of doing business in Ghana and for targeted investment promotion by the GIPC.

3. The project was f inanced with an I DA Credit of SDR37.6m illion an d Ghana Government contribution of US$3.2million over the extended project du ration of 10 years from January 1999 – December 2009.

At project closure in Decem ber 2009 the fo llowing amounts had been expended to fund the various project activ ities – i.e. IDA Credit of SD R36.63million (US$49.20m illion) representing 97.4% and GoG contribution ha s increa sed to US$4m illion (i.e. a 23% increase) 4. The m ajor project achievem ents as on 31 st Decem ber 2009 are summ arized below:

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4.1`GFZB The Tem a Export Processing Zone TEPZ/MPIP developm ent has been com pleted with two m ajor private enclave develo pers – Messrs ILD C and OctoGlow deve loping and m anaging 240 acres and 240 acres respectively. An area of 179 acres was developed with project funds for the direct managem ent by the GFZB – in addition to GFZB regulatory and monitoring functions for the whole enclave. The GFZB official report indicate occupancy and employment statistics are as follows:

i. No. of functioning factories - 24

ii. No. of firm s who have acquire d land and in the process of developing - 40

iii. Direct Employment created - 8000 iv. Indirect employment created - 30,000

Challenges being encountered incl ude – irregular water supply and institution of an accepta ble arrangement for tariff setting and interna l electric power distribution.

4.2`CEPS The Project has funded the developm ent of a new Ghana Custom s

Management System ( GCMS) which has m ade is possible to electronically process custom s documentation on a W ide Area Network (WAN) platform – GCNet. This electronic system has greatly reduced the time for processing sh ipping documents. The full im pact of this breakthrough is yet to be realized when GPHA and other stakeholders in the cargo clearance process also update and interface their systems with the GCNet.

Additionally, unregulated charges by various operators have m ade the cost of clearing goods higher than was anticipated. CEPS has now acquired internationa l ( service) qua lity assuranc e certificate i.e. ISO 9001- 2008 for thre e of its collections (accounting for 80% of CEPS revenue collection). This is expec ted to ins till a culture of continual improvem ent in CEPS operations. Sem i-annual mandatory Surveillance Audit by the Certification Agency is expected to ensure sustainable quality service delivery. It is essential that CEPS makes budgetary funds allocation f or undertaking this routine audits and to extend the certification to all other major collections.

4.3 GIS The Gateway Project initiated trade and investm ent facilitation

awareness and m odernization proce ss in GIS. The service was also provided with a fully equipped Elec tronic Data Managem ent Centre. The GIS now processes Visa-on- Arrival applications on-line. Additionally, there has been a tremendous im provement with Departure and Arrival pr ocedures at KIA. Ne w standard operating

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procedures for GIS are again be ing revised to accommodate the expansion in the GIS mandate to include border patrols.

4.4 GPHA The project has ass isted the Authority to construct a 3km dual carriage

access road and two fly over bridges to facilitate the op erations of off-dock terminals.

The GPHA has on its own undertaken major physical infrastructure improvement at Tem a Port which far exceeds what which was envisaged under the Gateway Project. The GPHA is y et to a ccomplish the obje ctive of im plementing the proposed “L and Lord Port Act”. T his notwithstanding the GPHA has undertaken a systematic unbundling of a variety of port activities to the private sector – under the existing port Law. However it appears the existing La w lacks the author ity r equired by GPHA to e ffectively regulate and set standards for the operations at the port.

4.5 GCAA/GACL

The GCAA has been separated by Law into a purely civ il Aviation Regulatory Authority and a new entity – the Ghana Airpor ts Company Limited (GACL) whic h is tasked to develop, m anage and operate airports in the country. The project has extended extensive c onsultancy services for St rategic Aviation S ector Studies and anot her consultancy study for post-separation restructuring and viabil ity options for the new G ACL. The two studies are exp ected to guid e th e future d irection of the aviation industry in Ghana.

The project has also provided a 1000KVA sta ndby generator for the new Airport Company. The im plementation of the recomm endation in these two studies n eeds to be pu rsued diligently. The m anagement Aviation Authority is reported to be considering further separation of the “residual” GCAA into two new entities. It is recommended that this proposal should be programm ed to al low time for the consolidation of the original unbundling exercise.

4.6 EPA The EPA has been a beneficiary of a number of far reach ing

interventions which has successfully provided an Environmental Action Plan for the implementation of the TEPZ and for continued monitoring of the environm ental impact of the operations of the TEPZ – which is Ghana’s first Industrial Estate. Th e EPA offic e set up at Tem a now has the capacity for m onitoring and regulation of other industrial parks elsewhere in the country. The project financed the drafting of an ENVIRONMENTAL PROTECTION AND POLLUTION CONTROL LEGISLATION which

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is waiting to be passed into law to allow enf orcement of environmental guidelines.

CONCLUSION AND RECOMMENDATIONS

The key p roject objective of creatin g a purpose-built Export Processing Zone (EPZ ) in close proximity to the m ain entry port of Te ma Habour has essentially been achieved. In addition, substantial progress has been made in strengthening and building capacity in the selected Go vernment agencies to enable them im proves their serv ice deliv ery. W ith respect to projec t im plementation, the in stitution of a monthly project technical committee m eetings comprising all im plementing agencies to m onitor im plementation progress, was found to be an invaluable tool and is recommended for other multi sectoral projects. Challenges encountered include the unrealization of planned system expansion of electric power and water supply in the project area whic h needs to be tackled in order to realize the full potential of Ghana’s f irst Export Processing Zone. T he experience gained in the design, im plementation and operatio n will be i nvaluable in the setting up of industrial parks elsewhere in the country - especially in the em erging industrial focal area of the Western Region for the downstream activities expected as a result of the oil find. It will be desirable to start im mediately the initia l steps to create industrial parks elsewhere outside the capital city and the western region, preferably in all the regions. There is th e urgent need to ensu re that p lanned infrastructure system (i.e. access ro ads, electricity and water production and distribution networks, waste collection and treatment plants) expansions in the targeted areas in clude the incremental demand of the proposed industrial developm ents. The li mited but targeted interventions undertaken by the Gateway Project in various Governm ent ag encies have been quite successful in improving the quality of their service delivery . In som e cases the p roject kick-s tarted modernization as well as changing the mind set of these institutions to providing quality service and reorienting them to investm ent and trade facilitation and general custom er care. As the nation seeks to pursue the objective of accelerated development in a decentralized democratic environment, it is imperative that attention be also directed to the following:-

i. Ensuring that the gains achieved with respect to the service delivery in frontline agencies are sustained and continually improved upon; and similar interventions designed f or identif ied f rontline agencie s which were excluded f rom the Gateway Project.

ii. It is necessary that the level of service delivery achieved at the institutional Head Offices be imm ediately ex tended to the regional offices to supp ort th e decentralization process.

It m ust be noted that over 80% of all i ndustries is concentrated in the Greater Accra area. This earth-quake prone area is also the home of a whopping 25% of

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Ghana’s population. This situat ion is to say the least, very alarming. Definitive actions hav e to be tak en to accelerate the decentralizatio n process and spread development throughout the country to curb the influx of mass pools of unemployed youth into this area.

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Annex 8. Comments of Cofinanciers and Other Partners/Stakeholders NA

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Annex 9. List of Supporting Documents 1. Country Assistance Strategy FY07-11. March 2007 2. Ghana: Country Assistance strategy Progress Report. Match 2010. 3. Ghana: An Assessment of Investment Climate May 2009 4. Doing Business 2010 5. Project Appraisal Document Report No.17736-GH 6. Development Credit Agreement 7. PSR Sequence No. 1 to 18 8. ISR Sequence No. 19 to 23 9. Mission Aide Memoires and Management Letters 10. Miscellaneous Project documents (posted in the IRIS). 11. Ghana: Economy Wide Impact of Oil Discovery in Ghana. November 2009.

PREM 4 Africa Region 12. Ghana: Country Profile 2008. Economic Intelligent Unit 13. Ghana: Country Report August 2009. Economic Intelligent Unit 14. Sub-Saharan Africa – Regional Overview. Economic Intelligent Unit. March

2009 15. Article IV Consultation and Request for a Three Year Arrangement under PRGF.

IMF Staff Report. August 2009. 16. Project Results and Impact Assessment Report – GFZB December 2009. 17. ICR Guidelines 2006 and 2007

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MAP

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i All numbers are excluding gold or oil and gold investments and activities