memorandum of understanding - world...

MEMORANDUM OF UNDERSTANDING

BETWEEN

THE GOVERNMENT OF GHANA

AND

PARTICIPATING DEVELOPMENT PARTNERS

FOR

THE IMPLEMENTATION OF THE GHANA NATIONAL MEDIUM-TERM

PRIVATE SECTOR DEVELOPMENT STRATEGY AND ACTION PLAN

2005-2009

Abbreviations ACWP Annual Composite Work Plan

AFD Agence Française de Developpement

APR Annual Progress Report

BLD Business Law Division of the Ministry of Justice

BSPS Business Sector Program Support

BUSAC Business Sector Advocacy Challenge Fund

CAS Country Assistance Strategy

CEPS Customs, Excise and Preventive Service

CGP Central Governance Project

CPIA Country Policy and Institutional Assessment

CWP Composite Work Plan

DANIDA Denmark Danish International Development Assistance

DFID United Kingdom’s Department for International Development

DP Development Partner

EC European Commission

FDB Food and Drugs Board

FDI Foreign Direct Investment

FIAS Foreign Investment Advisory Service

FINSSP Financial Sector Strategic Plan

GDP Gross Domestic Product

GEPC Ghana Export Promotion Council

GIMPA Ghana Institute of Management and Public Administration

GIPC Ghana Investment Promotion Centre

GoG Government of Ghana

GPRS Ghana Poverty Reduction Strategy

GSB Ghana Standards Board

GTZ German Technical Cooperation

IDA International Development Association

IRS Internal Revenue Service

JICA Japan International Cooperation Agency

LAP Land Administration Project

M&E Monitoring and Evaluation

MDA Ministry, Department and Agency

MDBS Multi-Donor Budget Support

MLFM Ministry of Lands, Forestry and Mines

Memorandum of Understanding – Implementation of Private Sector Development Strategy

2

MLGRD Ministry of Local Government and Rural Development

MOFA Ministry of Food and Agriculture

MOFEP Ministry of Finance and Economic Planning

MOJAG Ministry of Justice and Attorney General’s Department

MOTI Ministry of Trade and Industry

MPSDPSI Ministry for Private Sector Development and President’s Special Initiative

MTEF Medium-Term Expenditure Framework

NALAG National Association of Local Authorities of Ghana

NDPC National Development Planning Commission

PCMEU Policy Coordination, Monitoring and Evaluation Unit

PEF Private Enterprise Foundation

PIET Program Intervention Evaluation Template

PP Procurement Plans

PPMED Policy Planning, Monitoring and Evaluation Division

PPP Public Private Partnership

PPRS Plant Protection and Regulatory Services

PRIA Policy and Regulatory Impact Assessment

PRSC Poverty Reduction Strategy Credit

PSD Private Sector Development

PSDS Private Sector Development Strategy

PSI President’s Special Initiative

PSR Public Sector Reform

RGD Registrar-General’s Department

TA Technical Assistance

TSSP Trade Sector Support Program

UNDP United Nations Development Program

UNIDO United Nations Industrial Development Organization

USAID United States Agency for International Development


3

Memorandum of Understanding Between

The Government of Ghana And

Participating Development Partners For the Implementation of

The Ghana National Medium-Term Private Sector Development Strategy and Action Plan

2005-2009 Preface

The Government of Ghana and the undersigned Development Partners hereby agree to coordinate their support for the implementation of the Government’s National Medium-Term Private Sector Development Strategy and Action Plan (2005-2009), in accordance with the following understandings:

Definitions For purposes of this Memorandum of Understanding (MoU), the following terms have the following meanings:

• “Annual Composite Work Plan” means the annual consolidated work plans and

budgets of Implementing MDAs prepared in accordance with paragraph 2.3 of this MoU, detailing the program of activities to be carried out in each Government financial year;

• “DP Group” means the Development Partner Private Sector Development, Trade

and Financial Sector Group;

• “Government” means the Government of the Republic of Ghana;

• “Implementing MDAs” means the Government Ministries, Departments and Agencies responsible for implementation of the PSD Strategy Action Plan activities;

• “Joint Review Meetings” are meetings held under paragraph 2.6 of this MoU;

• “MoU” means this Memorandum of Understanding;

• “Participating DPs” means all Development Partners signatories to Sections 1

and 2 of this MoU only or to all Sections of the MoU as provided in paragraph 1.2 of the MoU;


4

• “Performance Agreement” means the agreement concluded between each Implementing MDA and the PSD Strategy Oversight Committee in accordance with paragraph 2.6.

• “Pooled Fund DPs” means Participating DPs that will provide support to the PSD

Strategy and Action Plan by way of pooling their funds in accordance with Section 3.

• “Pooled Fund sub-committee” means the main PSD Strategy Working Group,

less those Participating DPs who are not contributing to the PSD Strategy Pooled Fund.

• “PSD Strategy and Action Plan” means the Government’s National Medium-Term

Private Sector Development Strategy and Action Plan (2005-2009);

• “PSD Strategy Action Plan” means the program of activities documented in Volume 2 of the PSD Strategy and Action Plan, summarized in Annex A of this MoU;

• “PSD Strategy Oversight Committee” means the Committee described in Annex

C, set up to oversee the implementation of the PSD Strategy and Action Plan;

• “PSD Strategy Pooled Fund” means the fund set up under Section 3 of this MoU;

• “PSD Strategy Working Group” means the group set up under paragraph 2.5 of this MoU;


5

Section 1: Introduction 1.1 Background

The National Medium-Term Private Sector Development Strategy and Action Plan 2005 – 2009 (“PSD Strategy and Action Plan”) was approved by the Government of Ghana in January 2004 and launched by his Excellency the President in July 2004. The PSD Strategy and Action Plan’s goal, as set out in its logical framework is: sustainable, equitable and widespread private sector-led growth throughout Ghana and the purpose is: to enhance the competitiveness of the private sector.

1.2 Objectives and structure of this MoU Participating DPs accept that the PSD Strategy provides the framework within which their support for private sector development in Ghana will be provided over the Government of Ghana five Financial Years: 2005 – 2009.

This MoU has two main objectives:

(a) to set out a common approach between the Government and Participating DPs for support to private sector development in Ghana, within the framework of the PSD Strategy and Action Plan; and

(b) to set out the arrangements for a PSD Strategy Pooled Fund through which Pooled Fund DPs will provide funding for PSD Strategy and Action Plan activities specified in the Pooled Fund column of the PSD Strategy Action Plan in Annex A.

Section 2 of this MoU relates solely to objective (a), while Section 3 specifies additional arrangements in relation to objective (b) with regard to the Pooled Fund support. Provision is made for signatories to this MoU to signify acceptance of Sections 1 and 2 only, or to signify acceptance of all three Sections.

1.3 PSD Strategy outputs and activities The activities identified in the PSD Strategy and Action Plan are the Government’s priorities for the five financial years 2005 to 2009 to promote private sector led growth in Ghana. The PSD Strategy Action Plan describes the criteria used for the prioritisation process. It recognises that there are other existing and potential pro-private sector development interventions that may be desirable, but that not all of them can be priorities. A key aim of the PSD Strategy and Action Plan is to provide focus, rationalisation and a coherent framework for pro-private sector interventions through a Government-led process. The PSD Strategy and Action Plan identifies four outputs, as follows:

Output 1: Enhance Ghana’s position in global and regional

markets Output 2: Improve the efficiency and accessibility of national

markets Output 3: Improve competence and capacity at the firm level Output 4: Strengthen Government’s private sector policy

formulation, implementation, monitoring and evaluation


6

The PSD Strategy Action Plan identifies activities to be carried out under each output. A summary of the PSD Strategy Action Plan showing activities, implementing responsibility, indicative costing and funding sources; Pool Fund, Government Contribution/Sector Budget Support, and Bilateral Projects/other funding mechanisms, is set out in Annex A.

1.4 Representation and effect

The Government is represented by the Chief Director, Ministry of Finance and Economic Planning as the Accounting Officer responsible for DPs’ assistance to Ghana.

Participating DPs are represented by their authorised representatives.

This MoU is not a binding legal agreement and does not create any rights or obligations under international law. In the event of any conflict between the provisions of the MoU and bilateral agreements or arrangements between the Government and Participating DPs’, the provisions of the bilateral agreements or arrangements will apply.

1.5 Amendment, information and consultation The MoU signatories will approve, in writing, any modification of the MoU.

Signatories to this MoU will co-operate to try and reach mutually acceptable resolution to any problem arising out of the interpretation or execution of this MOU. The signatories accept, however, that formal, policy or budget limitations may exceptionally limit the full participation by individual Participating DPs in all aspects of the MoU. Such limitations will be presented to quarterly PSD Strategy Working Group meetings (held under paragraph 2.5 below), with the aim of finding practical solutions to any implementation problems created by such limitations.

1.6 Withdrawal and admission The MoU is open to participation by other DPs, upon signature of this MoU by their authorised representative.

Signatories to this MoU may withdraw from the MoU at the end of a Joint Review Meeting, having given three month’s written notice of such intention to the joint chairs of the PSD Strategy Working Group, specifying the reasons for such withdrawal.

1.7 Entry into effect and duration This MoU will come into effect on the date of signature on behalf of the Government and at least one Participating DP.

This MoU will terminate on 31 December 2009 unless extended by arrangement between the Government and any of the Participating DPs. Final Progress, and Audit Reports due under the MoU for the fiscal year ending December 31, 2009, will be submitted to Participating DPs no later than March 31, 2010.


7

1.8 Annexes The Annexes to this MoU are -

Annex A Summary - PSD Strategy Action Plan 2005-2009

Annex B Annual Planning, Reporting and Reviews Calendar

Annex C PSD Strategy Management Arrangements

Annex D Monitoring and Evaluation Framework / Plan

Annex E Schedule of Indicative Contributions through Pooled Fund and Sector Budget Support


8

Section 2: Establishing a common approach to Development Partners’ support for private sector development 2.1 Introduction

The purpose of this Section of the MoU is to set out procedures for improved coordination between Government and Participating DPs’ technical, administrative and financial support to private sector development in Ghana, through the framework of the PSD Strategy and Action Plan. The Strategy and Action Plan –

identifies the Government’s priorities for pro-private sector interventions in the public sector; and

sets out the Government’s approach for direct support to the private sector.

The approach to improved development partner coordination in this MoU is consistent with the Paper on Harmonisation and Alignment in Ghana for Aid Effectiveness approved between the Government and Development Partners in February 2005; the Ghana Poverty Reduction Strategy; the Multi-Donor Budget Support Programme and the Medium-Term Expenditure Framework (MTEF). Financial contributions from Participating DPs will be consistent with public sector expenditure as set out in the MTEF and the annual budgeting process.

The signatories to this MoU accept the principles set out in this Section, which will apply to all Participating DPs’ support to private sector development in Ghana, regardless of the financing mechanism used.

2.2 PSD Strategy as the framework

The PSD Strategy and Action Plan, and Annual Composite Work Plans made under it will form the framework for all Participating DP support to private sector development. For this purpose, the structure and content of the PSD Strategy and Action Plan is defined by the PSD Strategy logical framework; and PSD Strategy Action Plan (as may be modified on an annual basis with the written approval by the Government and Participating DPs), respectively. Participating DPs will support the implementation of the PSD Strategy and Action Plan, and will work towards a situation where all their support is consistent with it.

2.3 Common planning approach

The Government and Participating DPs will adopt a common planning approach for the provision of support to private sector development. The core planning document for this purpose is the PSD Strategy Action Plan, which identifies priority development activities decided jointly by the Government and Participating DPs in respect of public sector interventions, and sets out the Government’s approach to direct support to the private sector.

Implementing MDAs will prepare annual workplans and budgets and set targets based on the PSD Strategy Action Plan activities to be implemented in the following financial year. The process will be linked to, and gradually integrated into the Implementing MDAs MTEF and annual budgeting process. The Ministry for Private Sector Development and President’s Special Initiative will collate the annual work plans and budgets into the Annual Composite Work Plan, which will set out detailed costed


9

activities for the implementation of the PSD Strategy Action Plan, and in consultation with Participating DPs, distinguish between activities to be funded by Government, the PSD Strategy Pooled Fund; Sector Budget Support; and by bilateral projects/other mechanisms. The Annual Composite Work Plan will be presented at the November Joint Review Meeting for approval by the PSD Strategy Working Group. Participating DPs will as far as possible, ensure that their implementation plans for their pro-private sector projects to be implemented within the public sector are consistent with the PSD Strategy Action Plan, and with Annual Composite Work Plans, and that approved changes to the PSD Strategy Action Plan are reflected in their own plans.

2.4 Resource envelope and allocation to PSD Strategy and Action Plan activities

In accordance with the calendar in Annex B, Participating DPs and the Government will determine a resource envelope for implementation of the PSD Strategy and Action Plan, which includes all anticipated development partners’ and Government’s contributions. With regard to Participating DPs’ support, the resource envelope will include PSD Strategy Pooled Fund contributions; Sector Budget Support; and other Participating DPs’ commitments whether through bilateral projects or any other mechanism. The allocation of the total resource envelope to PSD Strategy Action Plan activities will be decided jointly by the Government and Participating DPs, to reflect programme priorities and wider national development priorities identified in the Ghana Poverty Reduction Strategy.

2.5 Common management structure

The Government’s management arrangements for the implementation of the PSD Strategy and Action Plan are set out in Annex C.

The co-ordination mechanism for Participating DP support to private sector development is the DP Group.

Co-ordination of Participating DP support to the PSD Strategy and Action Plan with the Government will be carried out by the PSD Strategy Working Group. The PSD Strategy Working Group will be jointly chaired by the Chair of the PSD Strategy Oversight Committee and the chair of the DP Group, and will comprise members of the PSD Strategy Oversight Committee and the DP Group. The PSD Strategy Working Group will meet quarterly, or more frequently if required, and will, among other things:

provide the main forum for joint review and coordination by Participating DPs and the Government of support to private sector development within the framework of the PSD Strategy and Action Plan;

review the Annual Composite Work Plans and budgets, revenue and expenditures and progress against plan through bi-annual Joint Review Meetings, using the approved performance indicators and targets in the M&E Framework;

consider new/revised programme priorities; and

monitor the overall funding envelope for the PSD Strategy and Action Plan, (including contributions from Government; the PSD Strategy Pooled Fund; Sector Budget Support; and bilateral projects/other mechanisms) and identify shortfalls.

The May and November quarterly meetings of the PSD Strategy Working Group will constitute the bi-annual Joint Review Meetings.


10

2.6 Common reporting, monitoring and review framework

Participating DPs and the Government have established a common reporting, monitoring and review mechanism within the framework of the PSD Strategy. Highlights of the monitoring and evaluation arrangements, performance indicators and targets to be used for monitoring progress are specified in Annex D to this MoU. The overall M&E Framework; targets, performance indicators and monitoring and evaluation arrangements, will be finalized by the Ministry for Private Sector Development and President’s Special Initiative and the PSD Strategy Working Group within three months of the coming into effect of this MoU and validated at the November 2005 Joint Review Meeting.

In accordance with the calendar in Annex B, Performance Assessment Reports in the form of progress, impact and financial reports for all PSD Strategy Action Plan activities will be presented to Participating DP/Government Joint Review Meetings held bi-annually in November and May. However the first Joint Review Meeting to launch the process will be held in June 2005.

Participating DPs will base their actual support (whether provided by way of the PSD Strategy Pooled Fund; Sector Budget Support; or bilateral projects/other funding mechanisms) on progress attained in the implementation of the PSD Strategy Action Plan activities. Progress will be measured through the key performance indicators and targets to be agreed as part of the November joint review meetings. Participating DPs and the Government will finalize the list, quantity and quality of annual targets and performance indicators required to assess performance, at the review meeting. The targets and performance indicators will be specified in the Performance Agreements to be signed with the Implementing MDAs.

Performance Assessment Reports will be prepared by the Ministry for Private Sector Development and PSI and distributed to the PSD Strategy Working Group a minimum of two weeks prior to each bi-annual Joint Review Meeting to include the following –

A Consolidated financial report from the Controller and Accountant General (a draft format is included in Annex C and the format and content will be determined by the Government and Participating DPs).

A progress report setting out: the planned activities, the planned implementation time frame, the planned budget for these activities, the implemented activities, the actual implementation time frame, and the actual cost per activity.

The progress report should contain an analysis and an assessment of the implemented activities, including progress against the relevant performance indicators in the M&E Framework and any applicable targets in MDAs Performance Agreements, the time frame and actual cost in relation to the relevant Annual Composite Work Plan, problems encountered, action planned and corrective action taken. There should be an explanation of any deviations from the relevant Annual Composite Work Plan and a description of planned action to resolve such problems. The impact of possible external factors should be taken into consideration. The report should also contain information on the various contributions to meeting the PSD Strategy and Action Plan outputs (Government contributions; PSD Strategy Pooled Fund; Sector Budget Support; and bilateral projects/other funding mechanisms).

Implementing MDAs will be required to sign Performance Agreements with the PSD Strategy Oversight Committee, against which their performance will be measured and monitored. This requirement will however be waived for the 2005 financial year. The content of Performance Agreements will be agreed with Participating DPs. Participating


11

DPs will base their continued support for the PSD Strategy Action Plan activities on the results of performance assessments from the review meetings.

The Government will build capacity within the Implementing MDAs to effectively implement the Annual Composite Work Plans, including procurement, financial management and M&E capacity.

2.7 Funding arrangements Participating DPs and the Government wish to rationalise funding modalities for the PSD Strategy and Action Plan so as to ensure efficient planning, management, and monitoring and evaluation. Participating DP funding for the PSD Strategy and Action Plan will be provided through –

Sector Budget Support;

the PSD Strategy Pooled Fund, arrangements for which are set out in Section 3 below; and

bilateral projects and other mechanisms aligned with the PSD Strategy.

Indicative funding to be provided through the Sector Budget Support and PSD Strategy Pooled Fund mechanisms are set out in Annex E.

The Government contribution to implementation of the PSD Strategy Action Plan activities will be provided through the Annual Budget allocations of the Implementing MDAs and will be indicated in the Annual Composite Work Plans.

2.8 Auditing Arrangements The PSD Strategy and Action Plan activities will be audited annually immediately following the end of the financial year, and will cover all contributions to it irrespective of the funding mechanism used. The audit will include a procurement audit. The procurement audit will however not cover procurement that was executed directly by bilateral projects/other funding mechanisms unless specifically requested for by the respective Participating DP.

The first audit will take place at the end of the 2005 financial year, and the audit reports will be distributed to the PSD Strategy Working Group and discussed at the subsequent bi-annual Joint Review Meeting. The PSD Strategy Oversight Committee will be responsible for ensuring that audit report recommendations are promptly addressed.

The audit will be carried out by an internationally recognised and qualified audit firm contracted by the Auditor-General in consultation with the Participating DPs. The Government will submit proposals for auditing arrangements and terms of reference to the November bi-annual review meeting for approval by the PSD Strategy Working Group.

2.9 Illegalities and Corruption The Government and Participating DPs acknowledge that corruption undermines good governance and wastes scarce resources. The Government and Participating DPs intend to cooperate closely in order to ensure transparency, accountability and probity in the use of public resources. The Government will require that its staff and consultants carrying out activities under the PSD Strategy and Action Plan will not offer third parties, or seek, accept or be promised from or by third parties, for themselves or for any other party, any gift, remuneration, compensation or profit of any kind whatsoever, which is an illegal or corrupt practice.


12

2.10 Remedies In the event that the Government fails to perform any obligation under Sections 1 or 2 of this MoU, Participating DPs may suspend support for all or part of the PSD Strategy and Action Plan. The Participating DPs will inform the Government in a timely manner that suspension may occur and will specify remedial actions which must be taken by a certain date in order to avoid such suspension. Prior to suspension of support, the PSD Strategy Working Group will meet to seek a resolution of the issues at hand.


13

Section 3: The PSD Strategy Pooled Fund 3.1 Introduction

Pooled Fund DPs and the Government have accepted that joint funding modalities would improve the planning, management and monitoring and evaluation of the PSD Strategy and Action Plan activities. This Section sets out the arrangements for establishing and operating a PSD Strategy Pooled Fund, applicable to the Pooled Fund DPs.

The Government will set up and maintain at all times adequate and satisfactory financial management systems capable of meeting the needs of the PSD Strategy and Action Plan and the requirements of the Financial Administration Act 2003 and Regulations of the Government.

3.2 Pooled Fund bank accounts

The Government will open a special US dollar denominated bank account which will be named the PSD Strategy Pooled Fund Dollar Account (“the Dollar Account”) and a special Ghana Cedi denominated bank account which will be named the PSD Strategy Pooled Fund Cedi Account (“the Cedi Account”). Both accounts will be opened with the Bank of Ghana, and will be operated in accordance with laid down Government financial procedures as set out in the Financial Administration Act 2003 and the Financial Administration Regulations 2004.

All contributions by the Pooled Fund DPs will be credited to the Dollar Account. Deposits into the Cedi Account will be made only by transfers from the Dollar Account when necessary to finance Cedi denominated expenditure from the Cedi Account. The prevailing Bank of Ghana exchange rates will be applied to transfers.

The balance of the PSD Strategy Pooled Fund at any time will equal the combined balance, in US dollar equivalent terms, of the Cedi Account and the Dollar Account, adjusted for any uncleared cheques or uncredited lodgements. The Government will be required to disclose balances on the accounts to the Pooled Fund DPs whenever requested.

3.3 Pooled Fund contributions

The Pooled Fund DPs will make financial contributions to the Dollar Account in their respective currency. Contributions will be made in accordance with indicative levels in the Schedule in Annex E and in line with the approved PSD Strategy Pooled Fund component of Annual Composite Work Plans (taking into account any outstanding balances in the PSD Strategy Pooled Fund accounts).

Contributions will be made to the Dollar Account in bi-annual disbursements, the first disbursement being due upon signing this MoU and effectiveness of the respective Pooled Fund DP’s underlying bilateral agreement. Subsequent disbursements will be based on the approved PSD Strategy Pooled Fund component of the Annual Composite Work Plan and budget for the respective Government financial year and will be made upon receipt of satisfactory consolidated progress reports and financial monitoring reports, including bank reconciliation statements and latest bank statement; and forward plans and budgets, which have been reviewed by the PSD Strategy Working Group. PSD Strategy Pooled Fund disbursements will be conditional on positive assessment of performance against planned actions. Disbursements to the Pooled Fund will be made


14

within thirty days of approval of requests from the Ministry of Finance and Economic Planning.

The equivalent in US Dollars on the day of the deposit of the contribution from the individual Pooled Fund DP will represent the value of the contribution in any later calculations of the proportional contributions.

3.4 Pooled Fund expenditure

The PSD Strategy Pooled Fund and any interest earned on it will be used only to finance PSD Strategy Action Plan activities as specified in the Pooled Fund column of the table in Annex A and further detailed in the Pooled Fund component of the Annual Composite Work Plans and budgets approved by the PSD Strategy Working Group. (Denmark, however, is mandated to have interest earned on its contribution to the pool returned). As such, the PSD Strategy Pooled Fund will contribute to the total resource envelope available for the PSD Strategy and Action Plan, which will also include contributions made by way of Sector Budget Support, bilateral projects and any other mechanism aligned with the PSD Strategy, and the Government of Ghana contribution.

The procedures for initiating, authorising and processing payments from the PSD Strategy Pooled Fund will follow laid down Government procedures in the Financial Administration Act 2003 and the Financial Administration Regulations 2004, and in the Financial Management Manuals (referred to in Regulation 3 of the Financial Administration Act as Departmental Accounting Instructions) to be prepared for the Implementing MDAs, in accordance with the Act and Regulations. The Financial Management Manuals will be prepared within four months of the coming into effect of this MoU and presented to the November 2005 Joint Review Meeting.

Funds will be transferred from the Cedi Account to the consolidated bank accounts of the Implementing MDAs, to meet expenditures in accordance with the Pooled Fund components of the PSD Strategy and Action Plan and Annual Composite Work Plans and in line with Government procedures and disbursement arrangements specified in this MoU and Annexes, and in the Financial Management Manuals. The Controller and Accountant-General may make direct payments from the Dollar Account to Implementing MDAs to cover transactions denominated in foreign currency, based on a written request from the Implementing MDA authorizing the transaction. The Implementing MDA will be required to account for the respective transaction.

Disbursements from the Cedi Account to the accounts of Implementing MDAs will be based on satisfactory progress review of financial reports and PSD Strategy Action Plan activities, performance indicators and targets, and will take into consideration any unspent balances on the amounts disbursed from the Pooled Fund remaining in the accounts of the Implementing MDAs, as indicated by expenditure on the activities in the Pooled Fund financial reports. Disbursements to the Implementing MDAs should be made within thirty days of completion of the satisfactory review.

3.5 Management of the Pooled Fund

The PSD Strategy Pooled Fund will be managed by the Government in accordance with the arrangements specified in this MoU, Government procedures and Regulations, and Government procurement rules as laid out in the Public Procurement Act and in Procurement Manuals to be prepared for the Implementing MDAs in accordance with the Act, and subject to the provisions of the respective bilateral agreements between the Government and each Pooled Fund DP.

The Procurement Manuals will be prepared within four months of the coming into effect of this MoU and presented to the November 2005 Joint Review Meeting.


15

The PSD Strategy Pooled Fund activities carried out by Implementing MDAs will be reflected in the Budget Statement as donor-funded activities. The Government will be responsible for ensuring that disbursements from the PSD Strategy Pooled Fund do not offset slow Government budget disbursements. The level of budget execution will be reflected in the quarterly financial management reports and assessed during the Joint Review Meetings. Overall responsibility for the PSD Strategy Pooled Fund will lie with the Chief Director, Ministry of Finance and Economic Planning.

By November 30th of each year, the Government will submit to the Pooled Fund DPs, an annual procurement plan for the following year, describing the methods for procurement of goods and services required to implement the Annual Composite Work Plan and setting out the full procurement cycle for activities. The procurement plans will be prepared by Implementing MDAs and collated by the Ministry for Private Sector Development and PSI. Copies of the Procurement Plans will be made available to the Public Procurement Board. The Pooled Fund DPs will endorse the annual procurement plan no later than January 30th of each year. Any revisions to the approved annual procurement plan will require the approval of all the Pooled Fund DPs. The Procurement Plan for implementation of the 2005 Composite Work Plan will however be submitted in June 2005.

The PSD Strategy Working Group will establish a sub-committee with specific responsibility for oversight of the PSD Strategy Pooled Fund (“the Pooled Fund sub-committee”). The composition of the Pooled Fund sub-committee will be the same as that of the main PSD Strategy Working Group, less those Participating DPs who are not contributing to the PSD Strategy Pooled Fund. The Pooled Fund sub-committee will:

monitor the financial management and operation of the PSD Strategy Pooled Fund,

approve and co-ordinate replenishment of the PSD Strategy Pooled Fund;

review the operation of the PSD Strategy Pooled Fund as part of the bi-annual Joint Review Meetings for the PSD Strategy Working Group, and approve in writing any changes to the arrangements set out in this Section of the MoU as appropriate;

monitor the implementation of procurement arrangements and procedures; and

receive annual audit reports and monitor implementation of approved audit recommendations.

The Government will promptly inform the Pooled Fund sub-committee of any instances of corruption as described in paragraph 2.9 above in relation to the PSD Strategy Pooled Fund.

3.6 Closure of the Pooled Fund

The PSD Strategy Pooled Fund will be closed on 31 December 2009 unless any of the Pooled Fund DPs decides to extend it with the approval of Government. On closure of the PSD Strategy Pooled Fund any balance (including accrued interest) remaining will be remitted to the Pooled Fund DPs in proportion to their contributions. Provision will be made to meet all undischarged commitments before determining the Pooled Fund balance.

3.7 Reporting and review

PSD Strategy Pooled Fund reporting will be part of the bi-annual cycle for PSD Strategy and Action Plan reporting through the Joint Review Meetings as described in paragraph 2.6 above.


16

3.8 Audit Arrangements

The PSD Strategy Pooled Fund will be audited annually as part of the general audit specified in paragraph 2.8 above.

3.9 Remedies In the event that any payment out of the PSD Strategy Pooled Fund is used for any expenditure that is not eligible, or in the event that the Government fails to perform any obligation under this MoU, the Pooled Fund DPs may suspend disbursements for all or part of the PSD Strategy and Action Plan under this MoU. The Pooled Fund DPs will inform the Government in a timely manner that suspension may occur and will specify remedial actions which must be taken by a certain date in order to avoid such suspension. Prior to suspension of disbursements, the PSD Strategy Working Group will meet to seek a resolution of the issues at hand. Deviation from the procurement arrangements and procedures detailed in the Public Procurement Act, the Procurement Manuals and the annual procurement plans may result in misprocurement, in which event each Pooled Fund DP may cancel from its respective contribution an amount equivalent to the contract amount, multiplied by its percentage participation in the Pooled Account in the case of contracts financed out of the Pooled Account.

Each Pooled Fund DP may also, if applicable, exercise its legal remedies pursuant to its bilateral agreement with the Government.


17

Signatures Signed and dated as follows: We accept the arrangements set out in all Sections of this Memorandum of Understanding: GOVERNMENT OF GHANA: Signed by Hon. Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning:

Signature: ____________________

Name: _______________________

Title: _________________________

Date: _________________________

Witnessed by Hon. Kwamena Bartels, Minister for Private Sector Development and President’s Special Initiative

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________

DEVELOPMENT PARTNERS Denmark Danish International Development Assistance (DANIDA)

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________

International Development Association (IDA)

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________


18

United Kingdom’s Department for International Development (DFID)

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________

We accept the arrangements set out in Section 1 and Section 2 of this Memorandum of Understanding only:

DEVELOPMENT PARTNERS:

The European Commission (EC)

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________

Government of France Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________

Government of Germany

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________


19

Government of Italy

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________

Japan

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________

Government of Switzerland

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________ United Nations Development Program (UNDP)

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________

United Nations Industrial Development Organization (UNIDO)

Signature: _____________________

Name: ________________________

Title: __________________________

Date: _________________________


20


21

United States Agency for International Development (USAID)

Signature: _____________________

Name: ________________________

Title: __________________________

Date:__________________________

Signature: _____________________

Name: ________________________

Title: __________________________

Date:__________________________

Signature: _____________________

Name: ________________________

Title: __________________________

Date:__________________________

Signature: _____________________

Name: ________________________

Title: __________________________

Date:__________________________

Signature: _____________________

Name: ________________________

Title: __________________________

Date:__________________________

ANNEX A Summary - PSD Strategy Action Plan 2005-2009

Output 1: Ghana’s position in global and regional markets enhanced

Activity Responsibility Funding Source Funding Plan - Year (US $M) Total

Pool Aligned GoG 2005 2006 2007 2008 2009

1.1 Trade Policy

Implement Trade Policy priority activities under the Trade Sector Support Program

MOTI and other MDAs

2.3M 4.5M 4.5M 3M 3M 17.3M

1.2 Quality Standards

Implement reforms and rationalization of quality standards institutions in line with international best practice and upgrade laboratories to gain international accreditation

MOTI, GSB, FDB, GEPC, PPRS

Incl. in TSSP Budget

- - - - - -

1.3 Investment Promotion

Implement GIPC’s Five-Year Strategic Plan

GIPC Gateway Project, GTZ

- - 0.5M 0.7M 1M 2.20M

1.4 Strategic Export Sectors/PSIs

Improve operational modalities and performance of the PSIs

MPSDPSI, MOTI, MOFA

0.53M 1.5M 1M 0.8M 0.5M 4.33M


22

Output 2: Efficiency and accessibility of national markets improved

Activity Responsibility Funding Source Funding Plan - Year (US $M) Total 2.1 Macroeconomic Environment

Pool Aligned GoG 2005 2006 2007 2008 2009

Involve the private sector in the governance process; budgeting, macroeconomic policymaking and benchmarking of macroeconomic policy for PSD

MOFEP/ MPSDPSI 0.035 0.05M 0.07M 0.09M 0.12M 0.37M

2.2 Financial Sector Reforms

Implement and monitor financial sector reforms under FINSSP

FINSSP/ MPSDPSI FINSSP

Project - - - - - -

2.3 Infrastructure

Monitor the impact of infrastructure programs on the private sector

Infrastructure MDAs/MPSDPSI

Budget in Activity 4.4 M&E

- - - - - -

Review infrastructure programs to ensure opportunities for the private sector and promote private sector participation in infrastructure programs

Infrastructure MDAs/MPSDPSI

UNDP 0.037 0.05M 0.05M 0.05M 0.05M 0.24M

2.4 Public Sector Reforms

Mainstream PSD priorities into retooled PSR Program and build linkages between PSD and PSR

PSR Secretariat, MPSDPSI

1M 1.5M 1.5M 1.5M 1.5M 7.00M


23



Pool Aligned GoG 2005 2006 2007 2008 2009

Undertake institutional review of key PSD-related MDAs and implement recommendations for streamlined, efficient structure consistent with international best practice


1.5M 2M 2.5M 3M 3M 12M

Develop and implement pro-private sector Customer Charters and anti-corruption action plans for key PSD-related MDAs

PSR Secretariat MPSDPSI

0.1M 0.15M 0.15M 0.1M 0.1M 0.60M

Design and deliver culture change program for public servants interfacing with the private sector


0.3M 0.5M 0.4M 0.3M 0.2M 1.70M

Implement FIAS recommendations to improve the service delivery of CEPS and IRS

CEPS, IRS Gateway Project,

GTZ

- - 0.8M 0.5M 0.5M 1.80M

Review and reform Local Government regulation, taxes and charges in relation especially to MSMEs

MLGRD, MOFEP, NALAG

USAID 0.35M 0.35M 0.4M 0.4M 0.4M 1.90M


24



2.5 Legal Sector Reforms Pool Aligned GoG 2005 2006 2007 2008 2009

Develop and implement Policy and Regulatory Impact Assessment methodology across the key PSD-related MDAs

MPSDPSI, CGP 0.23M 0.3M 0.35M 0.4M 0.4M 1.68M

Mainstream commercial dispute resolution within the Justice Sector Reform Program and implement

MOJAG, Judicial Service

DANIDA BSPS

- - - - - -

Undertake study on access to justice especially for MSMEs, develop cost-effective solutions and implement

MOJAG, Judicial Service

DANIDA BSPS

- - - - - -

Develop and implement Registrar-General’s Reform Strategy in light of international best practice

RGD 0.8M 1.5M 1M 0.8M 0.5M 4.60M

Implement business law reforms, including reform of the Companies Code, build capacity of law enforcers and ensure compliance

BLD of MOJAG 0.54M 0.5M 0.45M 0.45M 0.4M 2.34M


25



Pool Aligned GoG 2005 2006 2007 2008 2009

2.6 Agriculture Policy

Undertake M&E of Agriculture Policy/FASDEP that affects private sector competitiveness

MOFA, MPSDPSI

Budget in Activity 4.4 M&E

- - - - - -

2.7 Land Reforms

Monitor implementation of the Land Administration Project in relation especially to MSME property rights and site development

MLFM, LAP Budget in Activity 4.4 M&E

- - - - - -


26

Output 3: Competence and Capacity at the firm level increased


3.1 Best-Practice Framework Pool Aligned GoG 2005 2006 2007 2008 2009

Develop a best-practice framework for firm-level initiatives including identification of priority interventions where there are market failures and audit existing and new initiatives to ensure that they comply with best practice

MPSDPSI, MOTI, MDAs

0.06 0.06M 0.08M 0.05M 0.05M 0.30M

3.2 Phasing out subsidized finance

Develop and implement an action plan to gradually phase out GoG provision of subsidized finance to firms

MOFEP, MOTI, MPSDPSI

- - 0.05 0.05 0.04 0.14M

3.3 M&E of firm-level initiatives

Undertake monitoring and evaluation of and disseminate information about firm-level initiatives

MPSDPSI, MOTI

- 0.1M 0.1M 0.1M 0.1M 0.40M


27

Output 4: Government’s private sector policy formulation, implementation, monitoring and evaluation strengthened


4.1 PSD Program Template Pool Aligned GoG 2005 2006 2007 2008 2009

Develop and implement Program Intervention Evaluation Template to assess the impact of proposed private sector programs

MPSDPSI USAID 0.08M 0.10M 0.12M 0.08M 0.05M 0.43M

4.2 Strengthen sectoral PSD focus

Strengthen private sector focus of Government sectoral policies; train decision-makers/policy formulators and review and monitor sectoral policy processes to ensure pro-private sector policy formulation

MPSDPSI 0.035 0.05M 0.03M 0.03M 0.03M 0.18M

4.3 Strengthen PSD dialogue

Strengthen quality and quantity of Government dialogue with the private sector

MPSDPSI, MDAs

BUSAC

UNDP

- - - - - -


28


29

Output 4: Government’s private sector policy formulation, implementation, monitoring and evaluation strengthened

Activity Responsibility Funding Source Funding Plan - Year (US $M) Total 4.4 Monitoring of PSD Strategy Pool Aligned GoG 2005 2006 2007 2008 2009

Undertake effective monitoring and evaluation of the PSD Strategy

Oversight Ctee, MPSDPSI, PSDS Working Group, MDAs

0.60M 0.70M 1.1M 0.80M 0.80M 4.00M

Undertake baseline and follow-up studies for the PSD Strategy

MPSD UNDP 0.04M 0.05M 0.05M 0.04M 0.04M 0.22M

Provide TA programmatic support for PSD Strategy implementation –

Coordination, Procurement, Financial Management and Auditing

MPSDPSI, MDAs

0.60M 0.60M 0.55M 0.55M 0.50M 2.80M

Build the technical capacity of MDAs to effectively implement the PSD Strategy based on recommendations from the institutional review

MDAs 0.45M 0.6M 0.6M 0.6M 0.6M 2.85M

Implement Marketing and Communications strategy for the PSDS

MPSDPSI, MDAs

0.07M 0.06M 0.05M 0.05M 0.04M 0.27M

TOTAL

9.66 15.22 16.40 14.44 13.92


30

Notes to Annex A:

1. The Annual Composite Work Plan will give a detailed breakdown of the activities to be implemented in the year, the funding source and modalities and the funding plan.

2. No funds are indicated in the funding plan for activities where funds are already available. The budgets in the funding plan are the indicative amounts projected to support the activity under the PSD Strategy and may not reflect the entire amount needed to support the activity.

3. Funding Source - Explanations:

a. The Column ‘Pool’ highlights Action Plan activities that the PSD Strategy Pooled Fund will cover.

b. The Column ‘Aligned’ refers to Bilateral Projects/other funding mechanisms/TA to support implementation of the PSD Strategy Action Plan activities. Participating DPs providing this kind of support to activities will be indicated in the Annual Composite Work Plans. Participating DPs are indicated in this column in Annex A only when the indication is that the respective Participating DP will provide support to the Action Plan activity over the five-year implementation timeline.

c. The Column ‘GoG’ refers to Government’s contribution to implementation of PSD Strategy Action Plan activities, which will be made through the annual budgets of the Implementing MDAs, and will include EU Sector Budget Support of Euros 3M earmarked for implementation of the PSD Strategy Action Plan Activities.

4. DANIDA BSPS comes to an end in 2008, at which time funding provision for Judicial Work under Activity 2.5 comes to an end.


31

ANNEX B Annual Planning, Reporting and Reviews Calendar

Activity Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Meetings Oversight Committee Meetings PSDS Working Group Meetings

Bi-Annual Joint Review Meetings

Planning Cycle MDAs prepare Work Plans and Budgets MPSDPSI collates into Annual CWP PSDS Working Group reviews ACWP Key Targets and Indicators agreed DPs commit Pool Funds and other Support MDAs prepare Procurement Plans (PPs) Pooled Fund sub-committee approves PPs DPs disburse funds into Pooled Account MDAs sign Performance Agreements MOFEP disburses funds to MDAs MDAs submit Financial Reports MOFEP/CAGD collates Financial Reports MOFEP Prepares Consolidated Financial Reports

MDAs submit M&E Reports MPSD and PSI collates M&E Reports MPSD and PSI prepares Performance Assessment Reports

PSD Strategy Financial Audit PSD Strategy Procurement Audit

NB: Government and Participating DPs will ensure that the schedule for implementation of the PSD Strategy and Action Plan remains aligned to Government’s policy planning, monitoring, review and budgeting and accounting cycles.

ANNEX C

PSD Strategy Management Arrangements

1. Introduction

The PSD Strategy Institutional Structure for implementation as recommended in Chapter 8 of the PSD Strategy and Action Plan document was validated by stakeholders in the second half of 2004. At a workshop with the Implementing MDAs, the private sector and civil society in August 2004, there was a general consensus that the Institutional Structure proposed in the PSD Strategy Action Plan was too complex and was likely to be ineffective given Ghana’s weak record with implementation of programs. Participants recommended a simpler structure for implementation. The revised structure was discussed at a DP Group meeting in September 2004. The DPs were in agreement that the original structure proposed was likely to be ineffective and recommended that the revised structure be simplified even further to ensure its effectiveness. Following from the inauguration of the PSD Strategy Oversight Committee in November 2004, the Committee also made further recommendations on the structure.

Details of recommendations that led to the revision of the original institutional structure are recorded in the GIMPA Workshop Report in August, the DP Group Meeting in September, and in the Minutes of the first meeting of the PSD Strategy Oversight Committee in November.

2. Institutional Structure for Implementation

The agreed institutional structure for taking implementation of the PSD Strategy and Action Plan forward is as follows:

a. Cabinet Cabinet has overall responsibility for implementation of the PSD Strategy and Action Plan. The Minister for Private Sector Development and PSI will present general recommendations of the PSD Strategy Oversight Committee to Cabinet, while sector Ministers will present specific recommendations relating to their sectors.

b. PSD Strategy Oversight Committee A PSD Strategy Oversight Committee has been inaugurated to oversee and provide high-level monitoring for implementation of the Strategy. The thirteen-member Committee is a partnership between Government and the private sector; with a nominated private sector Chairperson. The Chairperson is to be retained over the five-year implementation period. Other members of the Committee are the Chief Directors of the Ministries of Finance and Economic Planning, Trade and Industry, Private Sector Development and PSI, Justice and Attorney General, Food and Agriculture and the Coordinator of the Public Sector Reform Secretariat. Representatives from the private sector and civil society include the Private Enterprise Foundation, the Federation of Association of Ghanaian Exporters, the Ghana Union Traders Association and the Trades Union Congress. The Chief Director of the Ministry for Private Sector Development and PSI (MPSDPSI) is the Secretary to the Oversight Committee.

The Technical Working Groups or Sub-Committees proposed in the original institutional structure will not be permanent, but will be formed by the Oversight Committee around issues as and when they come up.


32

The PSD Strategy Oversight Committee will:

i. Meet once a month - two of its monthly meetings will constitute the PSD Strategy Working Group meetings and two others will constitute the bi-annual Joint Review Meetings/PSD Strategy Working Group Meetings.

ii. Hold Joint Review Meetings with the DP Group every six months, in May and November.

iii. Be the focus for dialogue between Government and Development Partners, on implementation of the PSD Strategy and Action Plan.

iv. Prioritise planned interventions, review progress jointly with the DP Group and coordinate direct donor support for implementation within the framework of the PSD Strategy

v. Monitor progress with each component of the PSD Strategy Action Plan using the PSDS Strategic Framework and the Output, Outcome and Impact Indicators as the matrix for monitoring, to ensure that implementation stays on track.

vi. Monitor where appropriate, PSD aspects of other major policy frameworks including the GPRS/APR, MDBS/PRSC and the World Bank CAS.

vii. Hold regular consultations with Government MDAs at the sectoral and cross-sectoral levels.

viii. Establish effective dialogue platforms with the private sector at all levels.

ix. Serve as a platform to address new and emerging PSD concerns relevant to each output area.

x. Oversee the Technical and other Sub-Committees that will be set up in response to the needs of the Oversight Committee.

Through the MPSD PPME Unit, the Oversight Committee will provide quarterly reports on the status/progress of implementation to:

i. The National Development Planning Commission – National Inter-Agency Poverty Monitoring Group on Production and Gainful Employment

ii. PCMEU of the Office of the President

iii. DP Group on PSD, Trade and Financial Sector

iv. Ghana Investor’s Advisory Council

v. Ministry of Finance and Economic Planning – MDBS/PRSC, MTEF, Annual Budget Process

vi. Implementing MDAs

c. The Ministry for Private Sector Development and PSI


33

The Ministry for Private Sector Development and PSI will coordinate implementation of all PSD Strategy Action Plan activities, working with implementing MDAs. The main functions of MPSDPSI will be to:

i. Collate the PSD Strategy Work Plans and Budgets prepared by Implementing MDAs to prepare the Annual Composite Work Plan.

ii. Collate the ACWP procurement plans of Implementing MDAs into the PSD Strategy Annual Procurement Plan

iii. Ensure effective engagement of the private sector and civil society in implementation and monitoring of the PSD Strategy and Action Plan, working closely with the Private Enterprise Foundation and other private sector organizations.

iv. Prepare Performance Assessment Reports in accordance with this MoU for the bi-annual Joint Review Meetings.

v. Undertake Monitoring and Evaluation of the PSD Strategy and Action Plan through its PPME Unit, using the strategic framework and PSD outcome and output indicators, including baseline studies and impact assessments

vi. Link the PSD Strategy, through the Institutional and Legal reforms Unit, with other governance and institutional reforms necessary for an enabling environment for the private sector; the Public Sector Reform Secretariat, Judicial Sector Reform, Business Law Division, LAP Secretariat, FINSSP Secretariat etc.

vii. Link the PSD Strategy to the GPRS through membership of the National Inter-Agency Poverty Monitoring Group, to ensure that the Strategy reflects developing GPRS priorities and provide monitoring and evaluation reports to NDPC on private sector development aspects of the GPRS.

viii. In collaboration with the PSD Strategy Oversight Committee, provide quarterly monitoring reports to the key stakeholders as outlined under b) above.

d. Implementing MDAs

The implementing MDAs will:

i. Prepare detailed work plans, budgets, targets and performance indicators based on the PSD Strategy Action Plan Activities.

ii. Prepare annual procurement plans based on the Annual Composite Work Plans and execute the actual procurement of goods, works and services once the procurement plans are approved by the Pooled Fund sub-Committee.

iii. Be responsible for implementing PSD Strategy Action Plan Activities as specified in Annex A and in the Annual Composite Work Plans.

iv. Report to the PSD Strategy Oversight Committee on progress with implementation of PSD Strategy Action Plan activities.


34

v. Ensure that private sector development priorities are incorporated into their sector strategies and programs and that progress is effectively monitored.

e. PSD/Trade and Finance Donor Coordination Group (DP Group) The DP Group will:

a. Jointly review progress on implementation of the PSD Strategy with the PSD Strategy Oversight Committee through the PSD Strategy Working Group and the bi-annual Joint Review Meetings.

b. Establish structures for Pooled and other aligned funding support to implementation.

c. Approve the Annual Composite Work Plan jointly with the PSD Strategy Oversight Committee at the bi-annual Joint Review Meeting.

d. Give approval for PSD-related ‘prior actions’ and ‘triggers’ for programmatic donor budget support.

f. PSD Strategy Working Group The PSD Strategy Working Group comprises the PSD Strategy Oversight Committee and the DP Group. The PSD Strategy Working Group will be jointly chaired by the Chairman of the PSD Strategy Oversight Committee and the Chair of the DP Group. The Working Group will meet quarterly, with its bi-annual meetings constituting the PSD Strategy Joint Review Meetings.

3. Implementation Arrangements

a. Financial Management The procedures and arrangements set out in this MoU will be complemented by the Financial Management Manuals and Procurement Manuals for the Implementing MDAs, to be prepared in accordance with the Financial Administration Act and Regulations and the Public Procurement Act. The Manuals will be prepared within four months of the coming into force of this MoU and presented at the November 2005 Joint Review Meeting. A Public Financial Management Specialist will be contracted to work with the Implementing MDAs to prepare the Manuals and to provide Public Financial Management capacity building and training.

Funds provided by DPs cannot be used to pay the cost of any import duties, customs duties or domestic taxes imposed directly or indirectly by the Government. It can also not be used to pay sitting allowances at workshops, salaries of civil servants, or for topping-up civil servants salaries.

The formats for Consolidated financial reports required under this MoU will be agreed between the Government and the Pooled Fund DPs. The reporting formats may be modified from time to time by written agreement of the Government and the Pooled Fund DPs. Consolidated financial reports will reflect all sources and uses of funds for the PSD Strategy Pooled Fund Dollar and Cedi Accounts. A sample format is presented below.


35

b. M&E Reporting

All Participating DPs are committed to a joint reporting system, irrespective of whether they are providing PSD Strategy Pooled Funding, Sector Budget Support or support through bilateral projects or other funding mechanism. In order to allow effective joint reporting, the MoU is backed by a well-coordinated M&E system that cuts across the various implementing MDAs. The M&E Framework; targets, performance indicators and the monitoring and evaluation arrangements will be finalized by the Ministry for Private Sector Development and President’s Special Initiative and the PSD Strategy Working Group within three months of the coming into effect of this MoU and validated at the November 2005 Joint Review Meeting.

Bilateral agreements signed between the Government and individual Participating DPs will make reference to the joint reporting system.

c. Procurement Procurement of goods, works and consultancy services under the PSD Strategy will be in accordance with the Public Procurement Act 663 and associated Regulations covering administrative and institutional arrangements for procurement, tendering procedures etc., and the Procurement Manuals for the Implementing MDAs, to be prepared in accordance with the Act. Implementing MDAs will be responsible for procurement of goods, works and services within the approved thresholds and guidelines provided in the Procurement Act. Procurement will be guided by the Procurement Plans (PPs) prepared on the basis of the Annual CWP. Capacity Building on the Public Procurement Act will be provided for all the Implementing MDAs.

In February of each year, a comprehensive review of PSD Strategy procurement activity that took place during the preceding financial year will be undertaken as part of the annual audit. The procurement audit will however not cover procurement that was executed directly by bilateral projects/other funding mechanisms unless specifically requested for by the respective Participating DP.

The PSD Strategy Working Group will agree on the scope and terms of reference of the review (“procurement audit”). The independent firm will be required to prepare a report identifying any areas of concern that require remedial action. The procurement audit report will be presented to the PSD Strategy Working Group to be discussed at the review meeting.


36

Format for Financial Reports - A Ghana

Private Sector Development Strategy and Action Plan

Financial Report for the Quarter ending…………

Statement of Uses of Funds by Program Components/Activities

No Project Components/Activities

Quarter ending… Cumulative to date Program Budget

Planned/ Budget

Actual Variance Planned/Budget

Actual Variance

US $ US $ US $ US $ US $ US $ US $

Output 1

1.1

1.2

1.3

1.4

Output 2

2.1

2.2

2.3

2.4

2.5

2.6

2.7

Output 3

3.1

3.2

3.3

Output 4

4.1

4.2

4.3

4.4


37

Format for Financial Reports - B Ghana

Private Sector Development Strategy and Action Plan

Financial Report for the Quarter ending…………

Statement of Sources and Uses of Funds

Quarter ending… Cumulative to date Program Budget

Pooled Fund

GoG/Budget Support

Total Pooled Fund

GoG/Budget Support

Total

US $ US $ US $ US $ US $ US $ US $

Receipts: Pooled Funds DANIDA DFID IDA GoG/Sector Budget Support

Sub-Total


38

Payments: Output 1 1.1 1.2 1.3 1.4 Output 2 2.1 2.2 2.3 2.4 2.5 2.6 2.7 Output 3 3.1 3.2 3.3 Output 4 4.1 4.2 4.3 4.4

Sub-Total


39

Excess of Receipts over Payments Opening Balances Pooled Fund GoG/Sector Budget Support Add: Excess of Receipts over Expenses

Total

Closing Balances Pooled Fund GoG/Sector Budget Support

Total


40

ANNEX D

Monitoring and Evaluation Framework/Plan

1. Introduction A Monitoring and Evaluation (M&E) Framework for the PSD Strategy and Action Plan was designed by a competitively selected consulting firm during the first quarter of 2005. The draft M&E Framework was submitted by the consultants in April 2005. The PPME Unit of the Ministry for Private Sector Development and PSI has been facilitating consultations on the draft framework with Implementing MDAs and the DP Group. Highlights of the monitoring and evaluation arrangements, performance indicators and targets to be used for monitoring progress are specified in this Annex. The overall M&E Framework; targets, performance indicators and monitoring and evaluation arrangements, will be finalized by the Ministry for Private Sector Development and PSI and the PSD Strategy Working Group within three months of the coming into effect of this MoU and validated at the November 2005 Joint Review Meeting.

2. Objectives of the PSDS Monitoring and Evaluation The objectives of monitoring and evaluation of the PSD Strategy and Action Plan will be to:

measure progress towards the goal, purpose and outputs of the Strategy;

evaluate progress against specific time bound targets;

provide timely, accurate and useful information to the PSD Strategy Working Group and other stakeholders on the status of implementation;

provide a basis for making informed decisions on the future direction of the PSD Strategy and Action Plan, and in the development of PSD policy;

provide a consistent framework within which progress on all key PSD initiatives can be assessed, compared and coordinated;

reduce the potential for overlap and duplication through parallel monitoring of PSD initiatives, and enable economies of scale to be achieved e.g. private sector surveys addressing all PSD constraints rather than separate surveys addressing specific issues;

assess the impact of specific PSD interventions, and provide data for the design of new interventions; and

establish and monitor pro-private sector indicators in programmes which are not primarily focused on PSD but which have a major role to play in creating an enabling environment, e.g. public sector reforms.


41

3. Link with ongoing programmes The MDBS programme and the GPRS II will have segments reporting on progress made in the area of private sector development. Priority triggers/targets are currently being selected as inputs into these key documents to be used as a basis for measuring performance of the PSD Strategy and Action Plan and its contribution towards economic growth and poverty reduction. The PSD Strategy and Action Plan will also be linked to the GPRS II through the key Implementing MDAs’ membership of the National Inter-Agency Poverty Monitoring Group, to ensure that the PSD Strategy and Action Plan reflect developing GPRS priorities. Monitoring and evaluation reports will also be provided to the National Development Planning Commission, on private sector development aspects of the GPRS. Government will continue to ensure consistency across these key policy and programme documents.

The PSD Strategy Action Plan will monitor ongoing and new programs that have an impact on PSD, including the Trade Sector Support Programme, the Financial Sector Reform programme, the Public Sector Reform programme, the Land Administration Project, Agriculture and Infrastructure Programs. Working with the Ministry for Private Sector Development and PSI, Implementing MDAs will develop pro-private sector performance indicators that are common to the PSD Strategy and their respective sector programmes. Existing monitoring instruments will be used wherever possible; for example, by adding PSD related questions to an existing monitoring questionnaire, to ensure that M&E inputs for the PSD Strategy and Action Plan are provided with minimum additional work and disruption. The PSD Strategy M&E will also be coordinated with the M&E of the respective programmes.

4. Targets and Performance Indicators Performance indicators at the Goal, Purpose and Output level in the Logical Framework are presented in Table 1. The entire set of performance indicators in the draft M&E document will be reviewed and finalized during the three-month period. The proposed performance indicators and means of verification in the M&E Framework will be refined to ensure that only SMART indicators and quality assessment measures are included. Performance indicators will be clearly categorized into inputs, outputs, outcome and impact indicators for assessing progress to link the annual activities, performance indicators and outcomes to the longer-term targets and indicators. The categorisation will guide the selection of triggers and key targets to be carried out annually to assess performance. The Ministry for Private Sector Development and PSI will monitor progress at the activity and output level and the PSD Strategy Oversight Committee will provide high level monitoring at the output, outcome and impact level. Table 2 presents some of the key PSD-related targets that have been selected for the monitoring process. The targets will be validated during the process of finalizing the M&E framework and presented at the November 2005 Joint Review meeting.

5. Monitoring instruments To be effective in promoting private sector development in Ghana, the PSD Strategy and Action Plan will incorporate tools to analyse linkages between inputs, outputs and outcomes. The Logical Framework will allow this analysis to be made, and to be fed through into resource allocation through the MTEF and budget processes. A key element of the M&E framework will be the involvement of the private sector in the monitoring and evaluation process, to enhance accountability and transparency.

Proposed monitoring instruments in relation to each performance indicator are set out in the Logical Framework. A key consideration in the selection of indicators was the credibility of the sources of data. Data sources will include established institutions with proven mechanisms for collecting data such as the World Bank, the


42

IMF, the Bank of Ghana, Ghana Statistical Service and the Ghana Institute of Statistical, Social and Economic Research.

The monitoring process will rely on more than one data source for each indicator to give additional credibility to the monitoring process.

As far as possible, in order to ensure cost-effective data collection, monitoring instruments that are already in existence will be used for the PSD Strategy and Action Plan monitoring. The aim will be to establish links with on-going processes, existing databases and M&E tools and users. Baseline surveys will be undertaken where there are gaps and baseline data for all PSD Strategy Action Plan activities will be presented at the May 2006 Joint Review Meeting.

6. Monitoring Roles and Responsibilities

a. PSD Strategy Oversight Committee

The PSD Strategy Oversight Committee will oversee and provide high-level monitoring for the implementation of the strategy. The M&E functions of the Oversight Committee are described in Section 2b in Annex C.

b. The Policy Planning, Monitoring and Evaluation Division (PPMED) of MPSDPSI

The PPMED of the Ministry for Private Sector Development and PSI will undertake detailed monitoring and evaluation of the PSD Strategy and Action Plan. It will also provide technical and administrative support to the PSD Strategy Oversight Committee. Its functions will include the following:

• Setting monitoring and evaluation directives and standards; developing reporting formats that are required to be completed by the Implementing MDAs;

• Setting guidelines and defining jointly with Implementing MDAs, key performance indicators and targets;

• Developing and validating monitoring instruments;

• Budgeting resources for M&E tasks;

• Collating M&E reports of Implementing MDAs;

• Commissioning baseline and follow-up studies;

• Commissioning impact assessments of specific interventions;

• Reviewing the quality of evaluation and reporting done by the Implementing MDAs;

• Preparing Performance Assessment Reports for the bi-annual joint review meetings based on the M&E reports from the Implementing MDAs.

c. Implementing MDAs The Implementing Ministries, Departments and agencies will be responsible for the following:

• Defining monitoring and evaluation plans for the year;


43


44

• Defining jointly with MPSD/PSI PPMED the key performance indicators and targets to be used to assess progress and results;

• Participating in M&E training programmes to be coordinated by MPSD/PSI PPMED;

• Collecting, verifying and processing data on some specified items;

• Preparing and submitting quarterly M&E reports to MPSD/PSI PPMED;

• Informing the PSD Strategy Working Group promptly when solutions to problems lie beyond the scope of their capability;

Extensive M&E capacity building will be provided to the PPMEDs of the Ministry for Private Sector Development and PSI and the Implementing MDAs, to support the M&E Framework.

7. Reporting and Review

Performance Assessment Reports in the form of progress, impact and financial reports for all PSD Strategy Action Plan activities will be prepared by the Ministry for Private Sector Development and PSI and presented at the bi-annual Joint Review Meetings. The format and content for the Performance Assessment Reports is described in paragraph 2.6 of the MoU.

Progress in the implementation of the PSD Strategy Action Plan activities will be measured through the key performance indicators and targets to be agreed as part of the November joint review meetings. Implementing MDAs will define the key performance indicators and targets to be used to assess progress and results, and these will be reflected in the Annual Composite Work Plans. Participating DPs and the Government will finalize the list, quantity and quality of annual targets and performance indicators required to assess performance, at the November review meeting. No disbursement related targets would be used for the 2005 financial year and general progress and performance will be monitored using the activity level indicators in the 2005 Composite Work Plan. For the following financial years, Participating DPs may define and prioritise a sub-group of indicators and targets for disbursement purposes in the framework of Performance Agreements signed with Implementing MDAs.

At the end of each bi-annual Joint Review Meeting, the PSD Strategy Oversight Committee and Participating DPs will agree and sign a joint Aide Memoire, capturing the main issues discussed and concluded during the review in terms of progress in implementing the PSD Strategy and Action Plan and highlighting recommendations for implementation of the PSD Strategy and Action Plan for the following period, including, if relevant, recommendations in relation to budgetary allocations. The Aide Memoire will also stipulate tentative dates for the next review.

Implementing MDAs will be expected to submit quality and timely M&E reports throughout the implementation process, recognizing that delays in submission of reports and poor quality of reports will adversely affect the effective implementation of the PSD Strategy and Action Plan.

Table 1: PSD Strategy and Action Plan Logical Framework

Narrative Summary Performance Indicator Means of Verification Assumptions and Risks

Goal

Sustainable, equitable and widespread private sector-led growth throughout Ghana

Private investment as % of GDP

Credit to private sector as % of GDP

Business Competitive Index

Growth Competitive Index

IMF Statistics Bank of Ghana (BOG) Statistical Bulletin World Economic Forum (www.weforum.org)

Political stability maintained Government macroeconomic management continues to be strengthened No severe external economic shocks

Purpose

To enhance the competitiveness of the private sector

Increase in total exports Growth of non-traditional

exports Increase in profitability of

Club 100 firms Number of women MDs

among the Club 100 Investment rates as a % of

GDP Growth Competitive Index Business Competitive

Index World Bank CPIA scores

for competitiveness Economic Freedom Index Investors confidence level

BOG Statistical Bulletin Ghana Club 100 Magazine IMF Statistical Appendix World Economic Forum (www.weforum.org) World Bank CPIA report www.heritage.orgFIAS report

Private sector responds effectively to increased opportunities created by more efficient markets


45

http://www.weforum.org/

http://www.heritage.org/

Outputs

1. Ghana’s position in global and regional markets enhanced

Economic Freedom Index Increase in value of export Growth of non-traditional

export Composition of exports Growth Competitive Index Business Competitive

Index Increase in regional and

international trade Level of traditional exports Level of non traditional

exports Average level of tariffs FDI as % of total for region; Position in international

league tables of FDI recipients

FDI per annum Level of domestic private

sector investment Number of jobs created

(gender specific) as a direct result of new private sector investments

www.heritage.orgBOG Statistical Bulletin www.heritage.orgWorld Economic Forum (www.weforum.org) BOG Statistical Bulletin West Africa Monetary Institute Report GIPC Quarterly FDI Statistics GIPC annual report Employment Records with Ministry of Manpower Development & Employment

Ghana’s major trade partners cooperate in removing trade barriers


46



Outputs

2. Efficiency and accessibility of national markets improved

Global Competitive Index Economic Freedom Index Reduced interest rates that

reflect efficient financial intermediation

Access to and cost of short and long term credit and venture capital

Government deficit as % of GDP

Inflation rate

Global competitiveness and African competitiveness Report by World Economic Forum Bank

Financing and political support for major investment programmes in infrastructure are maintained, and these programmes are willing to incorporate pro-private sector priorities.

Government continues to pursue sound macroeconomic policies

3. Competence and capacity at the firm level increased

Business Competitive Index

Number of new companies entering Club 100

Number of new enterprises registering

World Economic Forum (www.weforum.org) Club 100 magazine Registrar-General records

Private sector able to respond to opportunities to provide business development services

4. Government’s private sector policy formulation, monitoring and evaluation strengthened

CPIA scores for private sector enabling environment

Private sector perceptions of quality of public policy and implementation

World Bank CPIA score

Baseline and follow up surveys

Government retains commitment to PSD Strategy


47

Table 2: Key PSD Targets

NARRATIVE PERFORMANCE INDICATOR

BASELINE TARGET 2005

TARGET 2006

TARGET 2007

TARGET 2009

SOURCE

Goal

Sustainable, equitable and widespread private sector-led growth throughout Ghana

• Real GDP growth rate

• Per capita income

5.8% (2004)

$374 (2003)

5.8%

$400

6.0%

$450

6.5%

$500

7%

$600

Bank of Ghana (BOG) Statistical Bulletin

Purpose

To enhance the competitiveness of the private sector

• World Bank CPIA scores for competitiveness

3.38 (2002) 3.60 3.8 4.2 4.6 World Bank CPIA report

Output/Activity

1. Ghana’s position in global and regional markets enhanced

• Increase in value of export

• Growth of non-

traditional export • FDI per annum • Level of

domestic private investment

• Number of ISO 9000/1/2 firms

6.7% (2004)

29.5% (2004)

$143.73m

(2004)

$42.55m (2004)

5 (2004)

8%

33%

$150m

$45m

6

15%

45%

$180m

$50m

9

20%

60%

$250m

$60m

13

25%

70%

$300m

$75m

20

BOG Statistical Bulletin GIPC Quarterly FDI Statistics Ghana Standards Board; Foods & Drugs Board


48


49

NARRATIVE PERFORMANCE INDICATOR

BASELINE TARGET 2005

TARGET 2006

TARGET 2007

TARGET 2009

SOURCE

2. Efficiency and accessibility of national markets improved

• Interest rates 11.8% (Dec 2004)

13% 11% 9.5% 9% Ghana Statistical Services

2.3c Commercial courts established and strengthened for efficient and effective commercial dispute resolution

• Number of days for resolution of commercial disputes

200 days 195 days 185 days 170 days 150 days Doing Business Report

2.3f Business registration reforms implemented

• Number of days to register a new business

85 days (2004)

80 days 70 days 55 days 45 days Doing Business Report

2.6 Progress of Land Administration Project

• Acquiring clear title to land

365+ days 350 days 320 days 300 days 250 days LAP Secretariat Lands Department

3. Competence and capacity at the firm level increased

• Business Competitiveness Index

Rank: 64 (2004)

Rank: 63 Rank: 60 Rank: 55 Rank: 50 World Economic Forum (www.weforum.org)

4. Government’s private sector policy formulation, implementation, monitoring and evaluation strengthened

• Number of business sector associations actively participating in public policy formulation

- 5 10 15 20 [email protected]

mailto:[email protected]

ANNEX E Schedule of Indicative Contributions through Pooled Fund and Sector

Budget Support Indicative contributions in US$ (using exchange rate as at May 2005)

2005 US$

2006 US$

2007 US$

2008 US$

2009 US$

Total

DANIDA 2.9M 2.4M 2.4M 1.5M - 9.2MPooled DFID 2.2M 2.9M 2.9M 2.4M 1.8M 12.2MFund IDA 1.0M 1.0M 1.0M 1.0M 1.0M 5.0MSector budget support

EU - 1.2M 1.2M 1.2M - 3.6M

TOTAL 6.1M 7.5M 7.5M 6.1M 2.8M 30.0M

NB: Denmark’s existing appropriation ends in 2008. New might be prepared with possible disbursement late 2008/early 2009.

Indicative contributions in DP’s own currencies

2005 2006

2007

2008

2009

Total

DANIDA DKK 16.7M 16.7M 13.82M 8.64M - 55.8MPooled DFID GBP 1.2M 1.6M 1.6M 1.3M 1.0M 6.7MFund IDA USD 1.0M 1.0M 1.0M 1.0M 1.0M 5.0MSector budget support

EU EUR - 1.0M 1.0M 1.0M - 3.0M


50

memorandum of understanding - world...

Documents