for official use only report no: pad2866 · omc operational management committee pdo project...

FOR OFFICIAL USE ONLY Report No: PAD2866

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT AND INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED IBRD LOAN IN THE AMOUNT OF USD 25 MILLION

TO THE REPUBLIC OF ANGOLA

A PROPOSED IDA CREDIT

IN THE AMOUNT OF SDR 14.5 MILLION (USD 20 MILLION EQUIVALENT)

TO THE KINGDOM OF LESOTHO

AND

A PROPOSED IDA GRANT IN THE AMOUNT OF SDR 3.6 MILLION

(USD 5 MILLION EQUIVALENT) TO

THE CENTER FOR COORDINATION OF AGRICULTURAL RESEARCH AND DEVELOPMENT FOR SOUTHERN AFRICA (CCARDESA)

FOR AN

AGRICULTURAL PRODUCTIVITY PROGRAM FOR SOUTHERN AFRICA - ANGOLA & LESOTHO

November 27, 2018 Agriculture Global Practice Africa Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

(Exchange Rate Effective October 31, 2018)

Currency Unit = XDR

XDR 1 = USD 1.38

USD 1 = AOA 308.33 (Angola Kwanza)

USD 1 = LSL 14.71 (Lesotho Maloti)

FISCAL YEAR

July 1 - June 30

Regional Vice President: Hafez M. H. Ghanem

Country Director: Paul Noumba Um

Senior Global Practice Director: Juergen Voegele

Practice Manager: Mark E. Cackler

Task Team Leader(s): Tahira Syed, Melissa Brown, Aniceto Timoteo Bila

ABBREVIATIONS AND ACRONYMS

APPSA Agricultural Productivity Program for Southern Africa AWP Annual Work Plan BCC Behavioral Communication Campaign CCARDESA Centre for Coordination of Agricultural Research and Development for Southern Africa CEA Campo Experimental Agrícola (Agricultural Research Field) Angola CERC Contingency Emergency Response Component CGIAR Consultative Group on International Agricultural Research COMESA Common Market for Eastern and Southern Africa DA Designated Account DAE Department of Agriculture Extension DAR Department of Agricultural Research (Lesotho) EEA Estação Experimental Agrícola (Agricultural Research Station) Angola ESIA Environment and Social Impact Assessment ESMF Environmental and Social Management Framework ESMP Environmental and Social Management Plan FM Financial Management FMS Financial Management System FY Fiscal Year GDP Gross Domestic Product GHG Green House Gas GRM Grievance Redress Mechanism GRS Grievance Redress Service IBRD International Bank for Reconstruction and Development ICT Information and Communication Technology IDA International Development Association IDA Instituto de Desenvolvimento Agrário (Agricultural Development Institute) Angola IFPRI International Food Policy Research Institute IFR Interim Unaudited Financial Report IIA Instituto de Investigacão Agronómica (Agricultural Research Institute) Angola INDCs Intended Nationally Determined Contributions ISAs International Standards of Auditing M&E Monitoring and Evaluation MAFS Ministry of Agriculture and Food Security (Lesotho) MINAGRIF Ministério da Agricultura e Florestas (Ministry of Agriculture and Forestry) Angola MSc Master of Science NARS National Agricultural Research System MIS Management Information System MSc Master of Science MoU Memorandum of Understanding NCB National Competitive Bidding NGO Non-Governmental Organization OMC Operational Management Committee PDO Project Development Objective PhD Doctor of Philosophy

PIM Project Implementation Manual PMP Pest Management Plan PPDS Project Procurement Development Strategy P-RAMS Procurement Risk Assessment Management System PIU Project Implementation Unit QCBS Quality and Cost-based Selection R&D Research and Development RCoL Regional Center of Leadership RPF Resettlement Policy Framework RSC Regional Steering Committee SADC Southern African Development Community SDR Special Drawing Right SOE Statement of Expenditure TA Technical Assistance ToC Theory of Change ToR Terms of Reference USD United States Dollar

The World Bank Agricultural Productivity Program for Southern Africa - Angola & Lesotho (P164486)

TABLE OF CONTENTS

DATASHEET ........................................................................................................................... 1

I. STRATEGIC CONTEXT ...................................................................................................... 8

A. Country Context................................................................................................................................ 8

B. Sectoral and Institutional Context .................................................................................................... 9

C. Relevance to Higher Level Objectives ............................................................................................. 11

II. PROJECT DESCRIPTION .................................................................................................. 12

A. Project Development Objective ..................................................................................................... 13

B. Project Components ....................................................................................................................... 13

C. Project Beneficiaries ....................................................................................................................... 17

D. Results Chain .................................................................................................................................. 18

E. Rationale for Bank Involvement and Role of Partners ................................................................... 21

F. Lessons Learned and Reflected in the Project Design .................................................................... 22

III. IMPLEMENTATION ARRANGEMENTS ............................................................................ 23

A. Institutional and Implementation Arrangements .......................................................................... 23

B. Results Monitoring and Evaluation Arrangements......................................................................... 24

C. Sustainability ................................................................................................................................... 24

IV. PROJECT APPRAISAL SUMMARY ................................................................................... 25

A. Technical, Economic and Financial Analysis ................................................................................... 25

B. Fiduciary .......................................................................................................................................... 27

C. Safeguards ...................................................................................................................................... 29

V. KEY RISKS ..................................................................................................................... 33

VI. RESULTS FRAMEWORK AND MONITORING ................................................................... 34

ANNEX 1: Implementation Arrangements and Support Plan .......................................... 45

ANNEX 2: APPSA Key Results to Date ............................................................................ 72

ANNEX 3: Detailed Project Description .......................................................................... 74

ANNEX 4: Economic and Financial Analysis .................................................................... 93

ANNEX 5: Green House Gas (GHG) Accounting ............................................................ 105


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DDATASHEET

BASIC INFORMATION

BASIC INFO TABLE

Country(ies) Project Name

Africa, Angola, Lesotho Agricultural Productivity Program for Southern Africa - Angola & Lesotho

Project ID Financing Instrument Environmental Assessment Category

P164486 Investment Project Financing B-Partial Assessment

Financing & Implementation Modalities

[ ] Multiphase Programmatic Approach (MPA) [ ] Contingent Emergency Response Component (CERC)

[ ] Series of Projects (SOP) [ ] Fragile State(s)

[ ] Disbursement-linked Indicators (DLIs) [ ] Small State(s)

[ ] Financial Intermediaries (FI) [ ] Fragile within a non-fragile Country

[ ] Project-Based Guarantee [ ] Conflict

[ ] Deferred Drawdown [ ] Responding to Natural or Man-made Disaster

[ ] Alternate Procurement Arrangements (APA)

Expected Approval Date Expected Closing Date

18-Dec-2018 31-Jan-2025

Bank/IFC Collaboration

No

Proposed Development Objective(s)

To increase the availability of improved agricultural technologies in participating countries in the Southern Africa Development Community (SADC) region.

Components

Component Name Cost (US$, millions)


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Technology Generation and Dissemination 16.66

Strengthening the Institutional and Enabling Environment for Technology Adoption 17.75

Contingency Emergency Response Component 0.00

Project management, monitoring and evaluation, and regional coordination 15.59

Organizations

Borrower: Leostho Ministry of Finance

Angola Ministry of Finance CCARDESA

Implementing Agency: Angola Ministry of Agriculture Lesotho Ministry of Agriculture and Food Security

PROJECT FINANCING DATA (US$, Millions)

SUMMARY-NewFin1

Total Project Cost 50.00

Total Financing 50.00

of which IBRD/IDA 50.00

Financing Gap 0.00

DETAILS-NewFinEnh1

World Bank Group Financing

International Bank for Reconstruction and Development (IBRD) 25.00

International Development Association (IDA) 25.00

IDA Credit 20.00

IDA Grant 5.00

IDA Resources (in US$, Millions)

Credit Amount Grant Amount Total Amount

Lesotho 6.70 13.30 20.00

National PBA 6.70 0.00 6.70


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Regional 0.00 13.30 13.30

Africa 0.00 5.00 5.00

Regional 0.00 5.00 5.00

Total 6.70 18.30 25.00

Expected Disbursements (in US$, Millions)

WB Fiscal Year 2019 2020 2021 2022 2023 2024

Annual 3.41 5.99 9.38 12.23 12.20 6.79

Cumulative 3.41 9.40 18.78 31.01 43.21 50.00

INSTITUTIONAL DATA Practice Area (Lead) Contributing Practice Areas Agriculture

Climate Change and Disaster Screening This operation has been screened for short and long-term climate change and disaster risks

Gender Tag

Does the project plan to undertake any of the following?

a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF

Yes

b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment

Yes

c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes

SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT)

Risk Category Rating 1. Political and Governance Moderate

2. Macroeconomic Moderate


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3. Sector Strategies and Policies Moderate 4. Technical Design of Project or Program Substantial

5. Institutional Capacity for Implementation and Sustainability Substantial

6. Fiduciary Substantial

7. Environment and Social Moderate

8. Stakeholders Moderate

9. Other

10. Overall Moderate

COMPLIANCE

Policy Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [ ] No Does the project require any waivers of Bank policies?

[ ] Yes [ ] No

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01

Performance Standards for Private Sector Activities OP/BP 4.03

Natural Habitats OP/BP 4.04

Forests OP/BP 4.36

Pest Management OP 4.09

Physical Cultural Resources OP/BP 4.11

Indigenous Peoples OP/BP 4.10

Involuntary Resettlement OP/BP 4.12

Safety of Dams OP/BP 4.37

Projects on International Waterways OP/BP 7.50

Projects in Disputed Areas OP/BP 7.60


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Legal Covenants

Sections and Description Angola: The Borrower shall not later than three (3) months after the Effective Date, establish and thereafter maintain the Project Steering Committee (PSC) with a mandate, resources and terms of reference and a mandate, satisfactory to the Bank. The PSC shall be responsible for providing guidance and oversight and policy guidance, in accordance with the Project Implementation Manual. (Schedule 2, Section 1, a)

Sections and Description Angola: The Borrower shall, not later than two (2) months after the Effective Date appoint to the PIU Team adequate staff, including PIU Team a Project coordinator, a financial management specialist, a procurement specialist, a monitoring and evaluation specialist, a communication specialist, and a social and environmental safeguards specialist, all in accordance with provisions of the Procurement Regulations. (Schedule 2, Section 1, b, ii)

Sections and Description Angola: Withdrawal (disbursement Conditions): (Schedule 2, Section III, B.1): Notwithstanding the provisions of Part A of the Loan Agreement, no withdrawal shall be made: for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed $1,000,000, may be made for payments made prior to this date but on or after January 1, 2018, for Eligible Expenditures under Category (1); or

Sections and Description Angola: Withdrawal (disbursement Conditions): (Schedule 2, Section III, B.1): Notwithstanding the provisions of Part A of the Loan Agreement, no withdrawal shall be made: (b) under Category (2), unless: (i) the Implementation Agreement, acceptable to the Bank, has been duly executed on behalf of the Borrower and CCARDESA; and (ii) the Bank has received a legal opinion or opinions satisfactory to the Bank of counsel acceptable to the Bank, showing that the Implementation Agreement has been duly authorized, executed and delivered on behalf of the Borrower and CCARDESA and is legally binding upon the Borrower and CCARDESA in accordance with its terms; or

Sections and Description Angola: Withdrawal (disbursement Conditions): (Schedule 2, Section III, B.1): Notwithstanding the provisions of Part A of the Loan Agreement, no withdrawal shall be made: (c) under Category (3) for Emergency Expenditures under Part C of the Project, unless the Bank is satisfied, and has notified the Borrower of its satisfaction, that all of the following conditions have been met in respect of said activities

Sections and Description Angola: Withdrawal (disbursement Conditions): (Schedule 2, Section III, B.1): Notwithstanding the provisions of Part A of the Loan Agreement, no withdrawal shall be made: (i) the Borrower has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Bank a request to include said activities in the CERC Part in order to respond to said Eligible Crisis or Emergency, and the Bank has agreed with such determination, accepted said request and notified the Borrower thereof

Sections and Description Angola: Withdrawal (disbursement Conditions): (Schedule 2, Section III, B.1): Notwithstanding the provisions of Part A of the Loan Agreement, no withdrawal shall be made: (ii) the Borrower has prepared and disclosed all


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safeguards instruments required for said activities, and the Borrower has implemented any actions which are required to be taken under said instruments, all in accordance with the provisions of Section I.G of Schedule 2 to this Agreement; and

Sections and Description Angola: Withdrawal (disbursement Conditions): (Schedule 2, Section III, B.1): Notwithstanding the provisions of Part A of the Loan Agreement, no withdrawal shall be made: (iii) the Borrower has adopted a CERC Operations Manual in form, substance and manner acceptable to the Bank and the provisions of the CERC Operations Manual

Sections and Description Lesotho: The Recipient shall not later than three (3) months after the Effective Date, establish and thereafter maintain the Project Steering Committee (PSC) with a mandate, resources and terms of reference and a mandate, satisfactory to the Association. The PSC shall be responsible for providing guidance and oversight and policy guidance, in accordance with the Project Implementation Manual. (Schedule 2, Section 1, a)

Sections and Description Lesotho: The Recipient shall, not later than three (3) months after the Effective Date, establish, and thereafter maintain the Project Implementation Unit (PIU) within MAFS Department of Agricultural Research. Said PIU with four (4) Regional Research Offices in Mokhotlong, Mahobong, Siloe and Nyakosoba, all with a mandate, terms of reference and resources, satisfactory to the Association, including adequate staff with qualifications, experience, and terms of reference, satisfactory to the Association, for the purpose of effective communication and implementation of the Project, in accordance with the Project Implementation Manual. (Schedule 2, Section 1, c)

Sections and Description Lesotho: The Recipient shall, not later than three (3) months after the Effective Date, establish, and thereafter maintain Regional Center for Leadership (RCoL)for horticulture at its Maseru main station, with a mandate, terms of reference and resources, satisfactory to the Association, including adequate staff with qualifications, experience, and terms of reference, satisfactory to the Association. (Schedule 2, Section 1, e)

Sections and Description Lesotho: Withdrawal (disbursement Conditions): Schedule 2, Section III, B, 1, b): Notwithstanding the provisions of Part A of the Financing Agreement, no withdrawal shall be made: under Category (3) for Emergency Expenditures under Part C of the Project, unless the Association is satisfied, and has notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (i) the Recipient has determined that an Eligible Crisis or Emergency has occurred, has furnished to the Association a request to include said activities in the CERC Part in order to respond to said Eligible Crisis or Emergency, and the Association has agreed with such determination, accepted said request and notified the Recipient thereof;

Sections and Description Lesotho: Withdrawal (disbursement Conditions): Schedule 2, Section III, B, 1, b): Notwithstanding the provisions of Part A of the Financing Agreement, no withdrawal shall be made: under Category (3) for Emergency Expenditures under Part C of the Project, unless the Association is satisfied, and has notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (ii) the Recipient has prepared and disclosed all safeguards instruments required for said activities, and the Recipient has implemented any actions which are required to be taken under said instruments, all in accordance with the provisions of Section I.G of


Page 7 of 110

Schedule 2 to the Financing Agreement; and

Sections and Description Lesotho: Withdrawal (disbursement Conditions): Schedule 2, Section III, B, 1, b): Notwithstanding the provisions of Part A of the Financing Agreement, no withdrawal shall be made: under Category (3) for Emergency Expenditures under Part C of the Project, unless the Association is satisfied, and has notified the Recipient of its satisfaction, that all of the following conditions have been met in respect of said activities: (iii) the Recipient has adopted a CERC Operations Manual in form, substance and manner acceptable to the Association and the provisions of the CERC Operations Manual

Sections and Description CCARDESA: The Recipient shall: (i) not later than thirty (30) days after the Effective Date, update the Project Implementation Manual, in form and substance satisfactory to the World Bank, and thereafter (ii) take all actions required to carry out the Project in accordance with the relevant provisions and requirements set forth in the Project Implementation Manual; and (ii) not assign, amend, abrogate or waive the Project Implementation Manual or any of its provisions without the Association’s prior written agreement. Notwithstanding the foregoing, if any of the provisions of the Project Implementation Manual is inconsistent with the provisions of this Agreement, the provisions of this Agreement shall prevail and govern. (Schedule 2, C, 1)

Conditions

Type Description Effectiveness Lesotho: The Additional Condition of Effectiveness consist of the following, namely, that

Implementation Agreement has been executed, in form and substance satisfactory to the Association, on behalf of the Recipient and CCARDESA. (Article 4.01)

Type Description Effectiveness Angola: The Additional Condition of Effectiveness consist of the following, namely, that the

Borrower has prepared and adopted the Project Implementation Manual, in form and substance satisfactory to the Bank. (Article 4.01)


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I. STRATEGIC CONTEXT A. Country Context 1. Southern Africa’s increasingly integrated regional market presents opportunities for improved economic growth and poverty reduction. Southern Africa is a diverse region of both low-income and middle-income countries and is home to over 330 million people connected through an increasingly dynamic regional market. The region hosts two well-established pan-African institutions covering agriculture and commerce - the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) – both of which are actively pursuing a regional integration agenda. 2. Agriculture varies in importance among countries within the region but remains the primary source of subsistence, employment, and income for most of the population. Particularly in the lower income countries, agriculture is the largest contributor to Gross Domestic Product (GDP) and the performance of the agricultural sector has a strong influence on growth, employment, food security, and poverty. In Angola, while the agriculture sector contributes only on average 5.5 percent to GDP, 44 percent of the employed population works in the sector. More than half of Angola’s poor are in rural areas and depend almost exclusively on agriculture for their livelihood. In Lesotho, agriculture contributes around 6 percent to the GDP, employs almost 60 percent of the labor force (on subsistence farms) and provides livelihood sustenance for 90 per cent of the rural population. More than half the country’s population – 57 percent – lives below the poverty line, many of who rely on agricultural activities for basic sustenance. 3. Both Angola and Lesotho have experienced development challenges common to the Southern Africa region: economies heavily reliant on natural resource exports and characterized by high levels of unemployment, food insecurity and malnutrition in rural areas. In Angola, malnutrition is high with 38 percent of children under five being stunted (an increase from 29 percent in 2007), 45 percent being vitamin A deficient, and 48 percent of women being anemic. In Lesotho, malnutrition is widespread with one-third of children under five being stunted and 44 percent being vitamin A deficient. Among women of reproductive age, 27 percent are anemic, and 38 percent are obese. These impacts on women’s nutritional status also directly contribute to childhood stunting and adult malnutrition. The impacts of these on the economy are significant. In 2014, the total income and productivity losses in Lesotho associated with under-nutrition were calculated at USD184.4 million which represented a total of 6.56 percent of GDP.1 4. For many countries in Southern Africa over-reliance on oil and mineral-resource driven growth have led the Government to an increased focus on economic diversification and more inclusive growth. Within Angola, the 2015/2016 oil price shock highlighted the need to more forcefully address vulnerabilities and dependence on oil, diversify the economy and better manage oil revenue volatility. The shock prompted the Government of Angola to accelerate efforts to diversify the economy and reduce dependence on food imports. The Government’s strategy placed a strong emphasis on agriculture as an immediate pathway to increase domestic production and reduce imports. Increased agricultural production (particularly cereals and vegetables) and productivity have the potential to ease the current 1 “The Cost of Hunger in Africa Lesotho study report.”


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account pressures and the foreign exchange scarcity. The economic growth in Lesotho has been driven by natural resource-based exports – water and diamonds – and is strongly linked to trade with South Africa, where Lesotho also struggles to compete with South Africa’s more efficient farms. Lesotho’s National Strategic Development Plan prioritized development of agriculture and rural economy through measures to develop processing and manufacturing capacity – including agro-based – are important for diversification efforts and addressing rural unemployment. 5. Despite the region’s rich land and water resources, the productive potential of the agriculture sector has not been fully exploited which has undermined economic transformation. Southern Africa region falls within the so-called Guinea Savannah zone which has significant potential for highly productive commercial agriculture, similar to agro-ecologies in other parts of the world such as Brazil and Thailand. Angola is the third largest country in sub–Saharan Africa in terms of geographic size and much of its agricultural land is within the underexploited Guinea Savannah zone. A major agricultural producer before the civil war, today Angola’s agricultural performance remains a fraction of its potential. Similarly, Lesotho, over the past 50 years, has gone from a position of virtual self-sufficiency in grain production to being highly dependent on imports of grain. A mountainous country with limited amounts of arable land, Lesotho nonetheless has areas of high agricultural potential and the possibility to exploit its extensive water resources and a unique highland growing environment – particularly for higher value crops. B. Sectoral and Institutional Context 6. Raising agricultural productivity is necessary if agriculture is to contribute to economic growth and poverty reduction. While agricultural productivity has increased in the countries of southern Africa, it remains well below potential. In the case of Angola and Lesotho, even average yields are well below southern Africa’s regional averages. Most of the growth in production in Africa has come from bringing previously uncultivated land into production, rather than from intensification made possible by technological improvements. Comparisons of total factor productivity growth in recent decades have shown that technical change has accounted for a larger share of agricultural productivity growth in Asia and Latin America vis-à-vis Africa. Although Southern Africa has experienced more technology-driven productivity growth than other regions in Africa, the gains have occurred mainly in just a few middle-income countries e.g. South Africa. Analysis has identified significant yield gaps that could be narrowed with additional investments in technology adaptation and dissemination. 7. Regional approaches to technology generation and dissemination are more effective and strategic than national efforts alone. Regional integration has proven to be an effective strategy that can allow groups of countries facing common research challenges to increase the efficiency of their investments in agricultural research and development (R&D). Adoption of a regional approach to research, based on the concentration of resources within a reduced number of large, specialized research institutes serving an expansive, shared technology space, can deliver key benefits. First, it can reduce duplication by allowing a single regional research institute to undertake work that otherwise would be done in parallel within multiple national research institutes. Second, it can help capture economies of scale by concentrating resources within a single institute where they can achieve a critical mass. Third, it can increase the payoffs to research by facilitating dissemination of improved technologies across national borders, thereby vastly increasing the number of beneficiaries. Fourth, it can mitigate the isolation that frequently occurs in small, fragmented research institutes by creating effective mechanisms for facilitating knowledge exchange and technology transfer.


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8. Southern African continues to offer attractive opportunities for regional research. Groups of countries within southern Africa share similar agro-ecological zones and farming systems, suggesting that there is potential for finding shared solutions to common problems. Technology spillover is already occurring within the sub-region and many high-yielding crop varieties and improved crop and livestock management practices have been successfully disseminated across borders. Significant unrealized potential remains, however, for expanding spillovers. 9. Southern Africa is also vulnerable to climate shocks and many countries are likely to face increased climate variability and more pronounced extremes of temperature and rainfall. Adaptation measures—particularly the adoption of climate-smart agricultural practices—will be needed to maintain and enhance productivity and ensure resilience in the face of more frequent and more severe shocks. For Angola, the country’s vulnerability to climate change poses serious threats to Angolan production systems, infrastructure and markets, and therefore livelihoods and food security. The study on the impact of climate change on the production of six key crops— cassava, maize, sorghum, rice, wheat, and millet— shows that Angola is one of seven countries in which climate change would result in a reduction of total crop yield by the 2030s for all studied climate scenarios2. Lesotho is expected to experience increased vulnerability due to changes in temperature and precipitation patterns leading to dryer and hotter conditions. In addition, the intensity and frequency of extreme events, such as floods and droughts, are expected to increase, especially in the western and northern lowlands3. 10. Regional coordination mechanisms have increasingly pointed to the need for regional collaboration on agriculture research, policy and service delivery systems. The Regional Agriculture Policy (RAP) for SADC, which is the regional compact of the African Union’s Comprehensive Africa Agriculture Development Program (CAADP), heavily emphasizes regional cooperation on agricultural research and technology transfer with a focus on climate smart agricultural practices. Both Angola4 and Lesotho5 have prepared their respective Intended Nationally Determined Contributions (INDCs) that include agriculture as the priority sector for adaptation measures. 11. National systems for generating and disseminating agricultural technology are operating well below their potential, constrained by inadequate facilities, shortages of qualified staff, and low levels of overall investment and budget support. These factors, in turn, are linked to the high degree of fragmentation in the deployment of resources within the sector as limited financing is spread over a range of priorities. Given the small size of many countries and economies in the sub-region, few can afford fully elaborated technology development systems capable of addressing all the crops and livestock breeds in their highly diversified production systems. This is particularly true for Angola and Lesotho which have a small number of PhD scientists (particularly in Lesotho) and a weak infrastructure that has been largely decimated by the civil war (in Angola). 12. Recognizing the benefits of a regional approach to increasing agricultural productivity, the Governments of Angola and Lesotho have requested Bank support as provided under the ongoing Bank-financed Agricultural Productivity Program for Southern Africa (APPSA) (P094183). APPSA, approved in 2 https://www.climatewatchdata.org/countries/AGO 3 http://www.adaptation-undp.org/explore/southern-africa/lesotho 4 INDC Angola, UNFCCC November 2015 5 Lesotho’s INDC, UNFCCC September 2015


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March 2013, is a USD90 million IDA-financed regional operation comprising Malawi, Mozambique and Zambia that aims to increase the availability of improved agricultural technologies in these countries through: (i) technology generation and dissemination; (ii) strengthening regional centers of leadership; and (iii) coordination and facilitation. The project will close in January 2020. 13. The APPSA project is on track to achieving its developmental objectives and has achieved several key results to date. 74 R&D sub-projects have been supported which are currently making 156 technologies available to farmers (new and “on the shelf” technologies). This includes 47 technologies in Malawi (37 seed varieties; 10 agronomic practices); 63 technologies in Mozambique (11 seed varieties; 28 agronomic practices, 16 pest and diseases management practices, three water management practices, and five post-harvest technologies); and 46 technologies in Zambia (31 seed varieties; 15 agronomic practices). APPSA has contributed to improving cross-border movement of technologies including new plant material and varieties; scaling up extension and dissemination of improved technologies to reach more farmers; improved seed production; building a pipeline of qualified agricultural scientists – particularly women scientists; and upgrading of laboratory and fields to modern standards. Annex 2 provides a summary of APPSA results to date. 14. APPSA is part of the Bank’s larger portfolio of regional agricultural productivity programs and is the third regional operation in a series that followed the successful implementation of the West Africa Agricultural Productivity Program (WAAPP) (P094084) and the East Africa Agricultural Productivity Program (EAAPP) (P112688)6. 15. APPSA is the first-generation program designed as a Series of Projects (SOP). APPSA is under way in three countries—Malawi, Mozambique, and Zambia and as was envisaged at the onset of APPSA, additional countries within the SADC region could join the program as it evolved. Both Angola and Lesotho recognized the mutual advantage of tapping into the APPSA design to access research and technology resources as well as strengthen their capacities in a strategic manner. The proposed APPSA Angola and Lesotho is the second in the SOP operations under the APPSA. C. Relevance to Higher Level Objectives 16. APPSA’s focus on agricultural technology within the context of a regional approach is well aligned with the objectives of the World Bank’s Africa Strategy7 which emphasizes the need for investments to improve the competitiveness and resilience of African agriculture using regional integration mechanism for higher rates of growth and poverty reduction. The Africa Strategy also highlights the importance of drawing lessons from middle-income countries and taking advantage of opportunities for them to serve as catalysts for growth and development in the region. 17. APPSA contributes to World Banks twin goals of ending extreme poverty and promoting shared prosperity by enhancing the access to improved technologies, agricultural practices, reduced post-harvest losses for improving agricultural productivity especially for the smallholders. Linking farmers directly with

6 WAAPP and EAAPP were successful in developing several tools to facilitate regional integration including the regional seed market, the regional technology and innovation market, the centers of specialization and the common rating process 7 Supporting Africa’s Transformation: Regional Integration and Cooperation Assistance Strategy FY18-23, December 15, 2017


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improved technologies that are climate smart, nutrition-smart, and gender-sensitive, is expected to open opportunities for farmers in general and women-farmers to directly benefit from agricultural technology. 18. APPSA design is aimed at building resilience to climate change including potential geophysical hazards and other natural disasters, including disease/pest outbreaks. For instance, the original APPSA addressed the spread of Fall Army Worm outbreak by providing just-in-time technical support in Southern Africa, especially to participating countries. Support under the proposed expansion of APPSA to Angola and Lesotho is further strengthened by adding the new component on contingency emergency response (CERC) as a mechanism to enable countries to respond to potential climate-induced or other disasters. 19. APPSA is part of a larger commitment by the International Development Association (IDA) to help countries enhance long-term availability of safe and nutritious food by providing a mix of short-term interventions designed to stimulate rapid supply responses and sustainable medium- and longer-term investments in agricultural productivity, considering opportunities for food security, safety and nutrition enhancement. 20. APPSA aims to support closing the gender gap in agriculture R&D. A recent study8 shows that the gender gap in African agricultural research, while remaining substantial, has continued to decline over the past years, especially in the lower tiers of researchers, but remains substantially high in specialization (PhD) and management tiers. APPSA will continue to reinforce the training and capacity building opportunity to affirmatively increase the intake of female scientists, as well as increase women farmers’ access to agricultural technologies. These interventions are increasingly becoming the key avenues to close gender gaps. APPSA will introduce mechanisms that address women’s specific constraints in accessing technology and advisory services to ensure effective outreach to women farmers and include women’s preferences within the R&D sub-project cycle. 21. APPSA is consistent with the World Bank’s Regional Integration Assistance Strategy (RIAS), specifically with the third pillar, which calls for interventions to boost agricultural productivity; improve preparedness to analyze and respond to trans-boundary pandemics, other infectious diseases, and pests; and the rationalization of regional research and tertiary education efforts. APPSA meets the regional project eligibility criteria of IDA. The Project will: (i) support activities that will be coordinated across three or more countries; (ii) generate benefits that spill over country boundaries; (iii) continue to enjoy strong support from SADC; (iv) provide a platform for policy harmonization; and (v) be part of the regional agricultural strategy. 22. APPSA is also well-aligned with the national development strategies of Angola and Lesotho:

In Angola, APPSA will directly support Government’s strategy to increase domestic production and reduce import reliance through increased agricultural productivity. In Lesotho, APPSA will support Government’s priorities in National Strategic Development

Plan that calls for investing in agricultural R&D, agro-based processing and manufacturing. II. PROJECT DESCRIPTION

8 Beintema, N., An assessment of the gender gap in African agricultural research capacities.


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A. Project Development Objective PDO Statement 23. The PDO would remain the same as the original APPSA, which is to increase the availability of improved agricultural technologies in participating countries in the Southern Africa Development Community (SADC) region. PDO Level Indicators 24. The APPSA Angola and Lesotho specific indicators and targets are based on the regional Results Framework. The PDO indicators are as following: Number of technologies that are being made available to farmers and other end users Percentage of Lead Farmers in targeted areas who are aware and adopt an improved technology

promoted by the Project Number of technologies generated or promoted by the Project in one participating country that are

released in another participating country Direct Project beneficiaries (number) of which female (percentage) Farmers reached with agricultural assessts or services

B. Project Components 25. Changes to the original design were considered but rejected. Continuation of the original APPSA design in Angola and Lesotho is considered most appropriate given the limited capacity of their respective National Agricultural Research Systems (NARs). Implementation of the original APPSA design will allow both countries to make core capacity building investments and collaborate on the existing set of developed R&D activities. 26. While the components under APPSA Angola and Lesotho would remain largely the same as those under the original APPSA, a few modifications are introduced based on lessons to date. The original APPSA design is structured around three components: (1) technology generation and dissemination; (2) strengthening regional centers of leadership; and (3) coordination and facilitation. This structure largely remains the same for the expansion to Angola and Lesotho with some key modifications: (i) the R&D sub-project cycle will be strenthenged by including ‘concept incubation’ to ensure higher quality sub-projects are developed; (ii) component 2 is being renamed and adjusted to allow institutional capacity building investments not just in Regional Centers of Leadership (RCoLs) but the larger enabling environment for technology dissemination and movement of technology within the region, and (iii) a new component on contingency emergency response has been added to redirect project resources for responding to an emergency or crisis, should the need arises. The summary description of each component is as follows and additional details are in Annex 3. 27. Component 1: Technology Generation and Dissemination (SDR 4.96 million equivalent USD 6.8 million IDA and SDR 7.19 million equivalent USD 9.86 million IBRD). This component will finance innovative R&D technology generation and dissemination activities associated with the commodity


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groups or technology themes being targeted by countries participating in APPSA. These will include: (i) regional R&D activities developed in the initial set of APPSA participating countries in the areas of maize, rice, grain legumes, conservation agriculture/climate adaptation, and climate smart agriculture technologies; (ii) additional activities in horticulture and cassava as part of the expansion of regional collaboration to include Angola and Lesotho; and new frontier R&D activities to be developed over the course of implementation by participating countries. 28. All R&D activities financed will be undertaken through collaborative R&D sub-projects involving the participation of at least two countries. The sub-project modality is an important mechanism that enables regional collaboration and also allows for flexiblity during implementation to adjust the technical focus of activities to meet emerging priorities or test new technologies. Under the original APPSA, 77 R&D sub-projects were developed covering a range of topics as provided in Table 1 below.

Table 1: Current APPSA R&D Thematic Areas within maize, rice, grain legumes farming systems Breeding for resistance to pests and diseases and tolerance to abiotic stresses (drought, heat) Germplasm collection, characterization and conservation Integrated pest and disease control Management of newly emerging pest and disease threats (Fall Army Worm, Maize Lethal Necrosis Disease) Seed production, supply and delivery systems Conservation agriculture and climate adaptation measures Soil fertility improvement Water management and water use efficiency Animal traction Crop-livestock production systems

Post-harvest processing, marketing and value addition Improved storage practices (maize, beans) Food safety (mycotoxin/aflatoxin management) Reducing pre- and post-harvest losses Agricultural mechanization (tools for pre- & post-harvest operations; labor-saving devices) Marketing/ trade of crop produce - linking Farmers to Markets Nutrition (vitamin A maize, Quality Protein Maize, high iron/zinc beans, utilization of grain legumes)

29. Under APPSA Angola and Lesotho, preparation of the sub-project cycle has been strengthened (see Annex 3). Building on lessons from the ongoing implementation of APPSA,the current methodology for development and approval of R&D sub-projects has been further improved to ensure higher quality sub-projects are developed. The main changes have focused on introducing increased technical assistance and quality backstopping during R&D sub-project design as part of the preparation stages. In addition, the role of the CCARDESA in ensuring quality of R&D sub-projects is also being enhanced through strenghtening the regional coordination and quality control role of CCARDESA. As in the ongoing APPSA, Angola and Lesotho will participate in R&D sub-projects related to the commodity farming system being targeted by the RCoL that they are hosting – i.e. cassava in Angola and horticulture in Lesotho. Angola and Lesotho will also participate in the R&D sub-projects related to the commodity farming systems being targeted by RCoLs in other countries or additional R&D priorities that are agreed collectively by all participating countries. Also building on the lessons derived from the ongoing APPSA, and to enhance the countries’ ability to address climate change impacts, the APPSA design will provide support for conducting vulnerability assessments as one of the criterion for selection of R&D sub-projects. 30. APPSA’s sustainability depends on effectiveness of dissemination and adoption by end users. To achieve this, component 1 will also finance the dissemination of improved technologies by providing resources to RCoLs to engage with a range of partners in scaling up the use of promising innovations under the targeted commodities. Where needed, behavioral communication campaign (BCC) messages


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will be incorporated to promote adoption of the technologies, including nutrition-sensitive varieties with the aim of increasing consumption of nutritious foods thereby enhancing dietary consumption effects. 31. APPSA will help to strengthen the links between researchers, extension agents, input distributors, farmers and other end users. For this, APPSA will not only support the national extension systems in the respective countries, but will promote dedicated sub-projects on technology dissemination by extension services and also outsourcing dissemination through civil society networks, private sector collaborators, and other stakeholders. In addition, special focus on reaching women farmers for technology awareness will be included in the dissemination pathways. 32. Component 2: Strengthening the Institutional and Enabling Environment for Technology Adoption (SDR 6.35 million equivalent USD8.7 million IDA and SDR 6.6 million equivalent USD9.05 million IBRD). This component will finance: (i) upgrading of research infrastructure including rehabilitation and construction of on-farm infrastructure, the Estação Experimental Agrícola (Agricultural Research Stations) (EEAs) and Campo Experimental Agrícola (Agricultural Research Fields) (CEAs) research laboratory, and research and office equipment; and information technology and knowledge management systems; (ii) upgrading of infrastructure for sanitary and phytosanitary (SPS) management and regulatory systems; (iii) improving institutional administration and performance management systems within RCoLs; (iv) developing human capital, with special focus on promoting women scientists, by providing scientific or technical training at the post graduate level and by upgrading skills through short courses or targeted training, and scientific exchanges; (v) strengthening seed production capacity, seed regulatory functions, and related services, and (vi) improving national research regulatory system to facilitate NARS functionality and implementation of research and dissemination activities. 33. As the need for upgrading infrastructure remains a priority for each country participating in APPSA, the project will prioitize financing policy and regulatory framework in conjuction with infrastrucure. This component will finance technical assistance for policy analysis and harmonization through analytical work, needs assessments, and policy dialogue or policy harmonization activities in key areas that affect R&D at national and regional levels. Analytical work will focus on seed prodcution systems, intellectual property rights, operationalization of the SADC harmonized seed regulatory system, implementation of biosafety regulations, and similar topics. Some of these studies already exist for ongoing APPSA countries and will be updated to include Angola and Lesotho. APPSA will also support key players other than the RCoLs, through CCARDESA, to facilitate the policy harmonization process. 34. Component 3: Contingency Emergency Response Component (SDR 0 equivalent USD0). The CERC would be implemented should the need arise to redirect some project resources to contribute to responding to an eligible emergency or crisis. APPSA resources would be pooled with resources from other projects in the participating countries’ portfolio. Resources would be made available to finance emergency response activities and to address crisis and emergency needs. If such a crisis develops, the government may request the World Bank to reallocate project funds to cover some costs of emergency response and recovery. If triggered, detailed operational guidelines acceptable to the World Bank for implementing the project CERC at national level will be prepared as a disbursement condition for this component. All expenditures under the CERC will be in accordance with World Bank Policy: Investment Project Financing. The operational guidelines and expenditures will be appraised and reviewed to determine if they are acceptable to the World Bank before any disbursement is made. Disbursements will be made against an approved list of goods, works, and services required for crisis mitigation, response,


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recovery, and reconstruction. In case this component is to be used, the project will be restructured to re-allocate financing. 35. Component 4: Project management, monitoring and evaluation, and regional coordination (SDR 3.28 million equivalent USD 4.5 million IDA and SDR 4.44 milion equivalent USD 6.09 million IBRD and SDR 3.6 million equivalent USD 5 million IDA Grant to CCARDESA). This component will finance: (i) overall program management, (ii) national and regional coordination; and (iii) monitoring and commision of independent impact evaluation of results. The national level coordination will include planning and budgeting, management and administration, monitoring and evaluation, safeguards compliance, and regional engagement. If necessary, APPSA would finance consultants to ensure that all essential project coordination activities are carried out effectively. Government counterpart resources will be used to pay staff-related costs not eligible for IDA or IBRD funding. To ensure regional level coordinaiton, CCARDESA will act as the key facilitation partner to support each country at all stages of the implementation cycle including (i) planning, monitoring and tracking results related to regional collaboration; (ii) regional exchange of information, knowledge and technologies; and (iii) technical assistance and capacity building. CCARDESA, will play an important role in facilitating the development of R&D sub-projects, including quality assurance of sub-project proposals and organizing the peer review process. The regional facilitation activities of CCARDESA will be supported using funds from a subsidiary agreement between the APPSA participating countries and CCARDESA. Similar subsidiary agreements already exist between CCARDESA and orignal APPSA countries (Malawi, Mozambique and Zambia). CCARDESA will also receive an IDA Grant to undertake actvities that add to regional integration with all five countries participating in APPSA (Angola, Lesotho, Malawi, Mozambique, and Zambia), as well as other countries that are interested in joining the program in future. CCARDESA will support all participating countries in the implementation of the regional M&E framework through setting up a joint Management Information System (MIS) between countries implementing the ongoing APPSA – Malawi, Mozambique and Zambia – as well as the new countries joining APPSA – Angola and Lesotho. In collaboration with the participating countries, CCARDESA will undertake additional assessments, feasibility studies, and program development studies that enable countries to achieve regional harmonization on policies, practices and governing systems and for additional countries to undertake preliminary studies to enable their joining the program as well as for existing countries to prepare for second phase and follow on operations. As is being done under the ongoing APPSA, CCARDESA will also commission independent impact evaluations of APPSA at regular intervals, including at mid-term and project closing. 36. Under the ongoing APPSA, participating countries each paid nearly 3 percent of their Credit to finance CCARDESA’s regional facilitation services. This arrangement would be expected to continue under APPSA Angola and Lesotho and the contribution will be increased to 5 percent to enable CCARDESA to provide additional technical quality control services to Angola and Lesotho based on their comparatively lower capacity. In addition, based on lessons derived from the original program, the increased contribution to CCARDESA will enhance its capacity to provide regular hands-on support for R&D quality. The country contribution to CCARDESA will be used for: (i) regional coordination and facilitation, (ii) technical strengthening of R&D sub-project proposals through ‘concept incubation’, which will require additional resources for conducting just-in-time studies during concept development and proposal preparation stages, and (iii) support implementation of M&E framework by all countries including establishment of a common MIS for effective results monitoring. The proposed regional IDA Grant to CCARDESA will be used for: (i) joint knowledge and scientific exchanges between all participating countries, (ii) coordination and information sharing between APPSA countries and the SADC countries,


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between APPSA countries and countries from East, Central and West Africa, and between APPSA and other regional partner institutions, and (iii) strengthening institutional capacity of CCARDESA. 37. The total project cost is USD50 million of which USD25 million is IBRD financing for Angola, USD20 million is IDA financing for Lesotho, and USD5 million is Regional IDA Grant for CCARDESA. The Lesotho IDA allocation comprises USD6.7 million from the country IDA envelope and USD13.3 million from the Regional IDA window. Table 2 provides Summary of costs by country, recipient and financing sources.

Table 2: Summary of Project Costs (USD million)

Project Components Project Costs Financing Source

% of Total IBRD

% of Total IDA

Angola Lesotho CCARDESA Total IBRD Loan

Country IDA

Regional IDA CARDESA Total

IDA

Component 1: Technology Generation and Dissemination 9.86 6.8 - 16.66 9.86 1 5.8 - 6.8 39 27

Component 2: Strengthening the Institutional and Enabling Environment for Technology Adoption

9.05 8.7 - 17.75 9.05 3.5 5.2 - 8.7 36 34

Component 3: Contingency Emergency Response Component - - - - - - - - - - -

Component 4: Project management, monitoring and evaluation, and regional coordination

4.84 3.5 - 8.34 4.84 1.7 1.8 - 3.5 19 14

Total Project Base Costs 23.75 19 42.75 23.75 6.2 12.8 - 19

Country contribution to CCARDESA 1.25 1 - 2.25 1.25 0.5 0.5 - 1 5 5

Regional IDA for CCARDESA - - 5 5 - - - 5 5 20

Overall Project Financing 25 20 5 50 25 6.7 13.3 5 25 100 100

C. Project Beneficiaries 38. The primary beneficiaries of APPSA are farmers, livestock producers, and other potential end users of the improved technology and knowledge generated and/or disseminated by the Project. APPSA will work through Lead Farmers (Agricultores Líderes), who will contribute to setting R&D priorities and participate in on-farm trials, technology demonstrations, and training activities. APPSA will also benefit other stakeholders within the NARS: agricultural researchers; extension agents and advisory services providers; and seed producers and suppliers. These groups will participate in sub-projects and training activities, or by using technology and knowledge. Every R&D sub-project financed under APPSA will have a dissemination plan and will support activities designed to ensure that new technologies do not remain “on the shelf” but instead begin to move into the dissemination pipeline. At least 30 percent of all Lead Farmers and other targeted beneficiaries will be female. In addition, to ensure quality citizen engagement that includes feedback from project beneficairies and key stakeholders, robust mechanisms such as interactive voice response (IVR) and other online feedback and information sharing platforms will be considered to ensure that when feedback is received from beneficiaries and other stakeholders, it is acknowldged and monitored for appropriate responses.


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D. Results Chain 39. The Results Chain is aligned with the PDO by supporting regional collaboration in agricultural research, technology dissemination, and training; as wel as providing regional specialization around priority farming systems through RCoLs. The key drivers of change are: (i) regional system for generating and disseminating improved technologies; (ii) harmonization of policies and regulatory systems; and (iii) regional facilitation and coordination. These drivers of change contribute to the achievement of the PDO by enabling availability of improved technologies for SADC member countries. 40. APPSA will achieve the establishment of a regional system for generating and disseminating improved technologies by supporting research and development of improved technologies, ensuring that mechanims exist to make improved technologies available across countries, and that farmers are able to adopt improved technologies in all countries participating in APPSA. The key inputs required to derive the change will include generating new technologies through research, commercialization in partnership with private sector, raising awareness on new technologies through Lead Farmers and other extension agents, and dissemination of technologies to farmers and end users. 41. APPSA will achieve the regional harmonization of policies and regulatory system by establishing the RCoLs for the commodities beneficial to countries in the region. In addition, to achieve regional harmonization, building capacity at country-level to meeting quality assurance at regional level will be supported. The key inputs needed to derive the regional harmonization include improving research facilities and investing in advancement of scientists and technical staff, with especial emphasis on women in agricultural sciences. APPSA will ensure regional faciltiation and coordination by providing technical assistance through CCARDESA to countries and at regional scale. This will include technical quality control of R&D sub-projects, joint systems for M&E and results tracking, and analytical and feasibility studies. 42. The proposed APPSA Angola and Lesotho design is improved from the original APPSA based on several important lessons also reflected in the results chain and critical assumptions for achieving the desired outcomes. Firstly, it is assumed that for quality R&D: (i) research institutions collaborate with each other and with the regional institutions, (ii) farmers respond positively to the technologies, and (iii) other actors, e.g. extension services and private sector recognize that R&D by 2 or more countries is likely to achieve greater productivity. Secondly, harmonizing policies and regulatory frameworks in addition to investing in institutions and human resources will better achieve collective outcomes for the SADC region. This is also an entry point for narrowing the gender gap in agricultural research, policy and decision-making, using the platform of strengthening institutions and investing in human resources with a focus on gender balance for meaningful addressing the preferences and constraints of female farmers. And thirdly, strong coordination and results monitoring at regional level will maintain steady progress for achieving collective outcomes. Enhanced regional harmonization will also require quality coordination by CCARDESA. 43. To ensure that the Theory of Change (ToC) for APPSA progresses through the project implementation period, a focus on joint monitoring of results, frequent interactions among all implementers, regular communication with relevant stakeholders and an information feedback-loop will be put in place under the program management and coordination component (Component 4). In addition, the project will also incorporate mechanisms for addressing any unforeseen and emergency situations by including a new component on CERC (Component 3).


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44. Figure 1 below shows the proposed ToC for APPSA9.

9 Component 3 pertains to emergency response and hence not reflected in the Theory of Change.


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Figure 1. Theory of Change for APPSA

Activities Outputs PDO/Outcomes Long Term Outcomes/Impact

Collaborative R&D sub-projects Lead Farmers’ awareness of technologies Dissemination of technologies through: • Extension

services • Private sector • Lead Farmers Commercial dev. with private sector

Research institutions collaborate inter-country and with regional institutions Farmers positively respond to technologies Positive response from national extension services and private sector

Technologies meet market demand Commercial companies agree to sign contract/MoU Lead Farmers actively promote improved technologies

Technologies available in all countries Ag extension services ready to disseminate technologies Mechanisms in place for commercial dev. with private sector Lead Farmers in each country promote improved technologies

Functional regional system of generation & dissemination of improved technologies Strengthened private sector participation in ag R&D Famers aware of improved technologies

Stronger regional agricultural production system for targeted crops Quality services and inputs available in each country Functioning regional mechanism for priority setting

Famers adopt new technologies

Productivity improves in participating

countries

Regional alignment of policies and regulatory standards

Com

pone

nt 1

: Tec

hnol

ogy

gene

ratio

n

and

diss

emin

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Assumptions Assumptions

Establishing RCoLs and upgrading research stations & MIS

Improving SPS systems, human capital and scientific exchanges (especially for women scientists)

Strengthening seed production, regulation and

Sufficient resources are available to upgrade RCoLs

In-country and international training is available to all countries

Countries agree to align policies & regulations with SADC standards

RCoLs able to meet quality performance standards

Training opportunities are widely advertised & women are especially encouraged

Countries take timely action for policy & regulatory changes

RCoLs have required institutional and technical capacity

Systematic development of human capacity (with focus on women)

Countries align policies and regulatory systems with SADC/COMESA

RCoLs performance evaluated

Critical mass of human capital developed & no. of women scientists increased

Aligned policies and regulatory systems boost confidence in all stakeholders e.g. private sector Co

mpo

nent

2: S

tren

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ning

inst

itutio

nal &

En

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viro

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t for

tech

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Attribution

Regional procedures for collaborative R&D, M&E and knowledge exchange

Quality control of research sub-projects

CCARDESA as key agent for cross-country policy and regulatory coordination

Harmonized procedures for R&D priority setting are agreed

Countries can avail additional inputs to select and deliver quality R&D

CCARDESA is capable with necessary human and systems

Country agree to jointly contract technical advice on planning and M&E

Countries agree on topics for joint analytical and feasibility studies

Counties’ contribution to CCARDESA increased

Regional systems established for planning and M&E

Regional analytical studies and feasibilities

CCARDESA is operations and technical coordination role are sustained

Functional regional MIS and M&E system

Analytical and feasibility studies lead to new priorities and new countries joining APPSA

CCARDESA facilitate APPSA scale-up Co

mpo

nent

4: P

roje

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E. Rationale for Bank Involvement and Role of Partners Relationship to CPF 45. APPSA is consistent with the emerging priorities of the new Africa Regional Integration Strategy and the Africa Region priorities. The Africa region has prioritized IBRD and IDA funding around macroeconomic stability, improving competitiveness and economic diversification, improving human capital and access to basic services; and resilience to shocks. The activities supported under APPSA are closely aligned with these goals, with the focus on increasing agricultural productivity that would facilitate commercialization and diversification thereby contributing to the creation of rural employment and improving rural incomes. Climate smart agricultural practices would be supported that would help establish a climate resilient, low-emissions agricultural sector. 46. APPSA is aligned with relevant Country Partnership Frameworks (CPFs). The current Angola CPF accords high priority status to the agricultural sector. APPSA is well aligned with Pillar I of the current Angola CPF (FY15–20), which focuses on supporting integrated national economic diversification and regionally balanced development. A new CPF for Angola for FY20–25 is currently under preparation which also prioritizes agricultural productivity through increasing yields, developing post-harvest processing technologies and increasing job opportunities under the proposed Pillar of Creating Opportunities for Participation and a Sustainable Growth. APPSA is also consistent with Lesotho’s FY16 – 20 CPF Focus Area II: Promoting Private Sector Jobs Creation, which will direct support towards improving smallholder and medium- and small-enterprises for agriculture productivity. The CPF specifically prioritizes raising productivity, strengthening farmers’ capacity (with special focus on women farmers), fostering stronger marketing linkage, substituting imports from South Africa, creating job opportunities, and promoting women’s status in rural communities. Rationale for Public Sector Financing 47. Because much of the investment made under APPSA will result in the generation of public goods, continued financial support for the next series of countries joining the program will depend on similar levels of technical and financial support being made available to these countries. This will support the relevance and quality of technology outputs generated in each participating country and that these technology outputs are developed in a harmonized fashion with regional mechanisms being adopted at country level. In addition to generating relevant outputs, APPSA will need to show that its regional approach is robust and will continue to get strengthened as countries participate in a regional framework instead of acting alone. Role of Partners 48. APPSA will not only strengthen national agricultural R&D systems in the participating countries but also promote a more regional approach to technology generation and dissemination. APPSA’s operational design is embedded in collaboration – both inter-country, inter-region and with institutional partners including public, private, civil society and other R&D technical institutions, especially the Consultative Group for International Agricultural Research (CGIAR) centers, the Alliance for a Green Revolution in Africa (AGRA) and the Forum for Agricultural Research in Africa (FARA). APPSA countries will explore joint implementation of R&D activities with RCoLs and sharing of knowledge, expertise, materials and coordination for synergetic research. Similarly, APPSA will work in collaboration with regional or continental political bodies such as SADC, COMESA and the Africa Union Commission (AUC) for facilitating the broader policy and regulatory environment and establishing synergies for movement of technologies


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within the region. In addition, RCoLs are expected to work closely with national universities as well as universities in other participating countries to conduct joint R&D sub-projects and promote linkages with international, and national research training centers and universities for training, knowledge exchange and networking at regional level. F. Lessons Learned and Reflected in the Project Design 49. The proposed APPSA Angola and Lesotho builds on the lessons learned under the ongoing APPSA. While the ongoing APPSA has established the the need for developing coordinated mechanisms for knowledge and experience learning among countries, this lesson is not unique to Southern Africa as the sub-regional programs from West Africa and East and Central Africa have shown similar need for countries to learn from each other for achieving impact at scale. Following are some of the key lessons included in the APPSA Angola and Lesotho design: 50. Countries require adequate support based on the assessment of existing institutional capacities to effectively participate in regional programs. APPSA is designed with the intention to ensure that each country joining can take full advantage of ongoing research and technology dissemination activities. This requires CCARDESA to play a crucial role in coordinating and advising individual countries as they identify and participate in the R&D activities. Building on the lessons learned from the ongoing APPSA, CCARDESA’s role will be enhanced through building a dedicated regional R&D coordination unit that will also be responsible to engage with each new country (Angola and Lesotho in this series). The mechanism for inclusion of Angola and Lesotho in the ongoing R&D sub-projects is outlined in Appendix B of Annex 3. 51. Sustaining regional collaboration requires strong facilitation capacity. The institutional arrangements for collaboration, including strong regional coordination entities, regular networking and information exchanges among scientists, joint monitoring and evaluation and use of virtual information platforms, etc. are needed to instill a mindset for systematic collaboration. The ongoing APPSA program has underscored the need for strengthening CCARDESA as the regional entity that can take on the role of regional facilitation among SADC member countries overall and among countries participating in APPSA specifically. 52. Regional harmonization of policies and technology transfer requires coordination among government, private sector and development partners. Countries in the Southern African region are at varrying stages of developing legislation, policies and regulatory frameworks for generating and sharing technologies. Regional harmonization of these would require a coordinated effort to ensure participation of relevant stakeholders including private sector in the development process. Similarly, meeting the regional protocols established by SADC and COMESA would mean that the harmonization process is customized to the needs of individual countries to ensure they have the required institutional mechanisms in place for compliance and providing technical assistance for drafting regulations, procedures, and implementation arrangements. 53. While establishing regional centers of leadership instead of national centers remains cost-effective, strengthening the regional centers needs a graduated approach. APPSA has established that linkages between the regional centers of leadership and the national satellite centers can enable countries to draw upon each other’s expertise on several crop systems and sustained exchange of knowledge and expertise. However, to help these centers of leadership achieve the leadership status will require


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concerted, incremental efforts and institutional support corresponding with their stage of development. 54. Early involvement of private sector in technology development ensures that new technologies are rapidly commercialized and disseminated. To accelerate adoption of new technologies, attracting private investment during the R&D process is critical for improved dissemination rates. Under the proposed APPSA Angola and Lesotho, the R&D sub-project cycle will be adjusted to ensure a stronger focus on technology dissemination through integrating private sector participation at proposal development stage rather than after completion of the sub-project. 55. Increasing agricultural productivity is not sufficient to get agricultural transformation. This is an important lesson as also reflected in the other sub-regional programs in West and East/Central Africa. The proposed APPSA design will take into account R&D sub-projects that are holistic and multisectoral in nature and more comprehensively address productivity challenges. Selected sub-projects will also focus on post-harvest food losses, private sector involvement, market asssessments and digital technologies in the agricultural production systems. APPSA countries will be provided with technical resources to undertake sectoral analyses and systems support. III. IMPLEMENTATION ARRANGEMENTS

A. Institutional and Implementation Arrangements 56. As in the original APPSA, implementation will be carried out through national entities within the ministries of agriculture in each country and supported by the regional coordination and facilitation role of CCARDESA. 57. CCARDESA would continue to play its regional facilitation role and subsidiary project agreements would be signed to finance the costs. Under the ongoing APPSA, participating countries each paid nearly 3 percent of their Credit to finance CCARDESA’s regional facilitation services. This arrangement would be expected to continue under APPSA Angola and Lesotho and will be enhanced to 5 percent to undertake additional activities by CCARDESA. 58. In Angola, the proposed implementing agency is the Instituto de Investigacão Agronómica (IIA), a public research institute mandated with scientific research and technology development in the fields of agriculture, forestry and pastures. IIA has a national mandate and is part of the Ministry of Agriculture and Forestry (MINAGRIF), responding directly to the Minister. IIA’s internal organization is composed of central management and administrative units; central technical services; and 11 Research Stations (EEAs and CEAs) of which 7 EEAs and 2 CEAs would be possible locations for APPSA activities (Chianga, Cela, Mazozo, Malange, Nsosso, S. Vicente, Namibe, Zaire and Ceilunga) but other EEAs and CEAs could be included. The proposed RCoL will be part of the existing IIA research network and will host the specialized center for cassava R&D. 59. In Lesotho, the proposed implementing agency is the Department of Agricultural Research (DAR) under the Ministry of Agriculture and Food Security. DAR maintains its headquarters in Maseru with regional research stations representing each of the three major agro-ecologies of Lesotho: mountains, foothills and lowlands (southern, northern and central), which are complemented by six substations as


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research trial sites used to verify agro-ecological adaptations. APPSA would not operate in the Senqu River Valley zone. The detailed description of implementation arrangements – including organogram, fiduciary and safeguards arrangements are provided in Annex 1. B. Results Monitoring and Evaluation Arrangements 60. APPSA has developed an overall Regional Results and M&E Framework with support from CCARDESA. The APPSA Angola and Lesotho project will primarily follow same Regional M&E Framework to track the use of project resources, monitor the delivery of activities, quantify the impacts and disaggregate by gender, and provide timely and accurate information and clear guidance to the decision-making process. The Framework has been improved during the implementation of the initial APPSA based on the experiences and lessons learnt10. The methodology is also refined to include monitoring, reporting, and evaluation mechanisms and a joint MIS agreed among the original APPSA participating countries (Malawi, Mozambique and Zambia). Angola and Lesotho will undertake the same methodology and MIS to contribute to the overall results reporting of APPSA as well as country specific results11. 61. An important lesson from the original APPSA has been the emphasis on results reporting and attribution of results to APPSA investments. To strengthen results attribution, APPSA will introduce use of digital technologies and ICT based tools for results monitoring and reporting. Further capacity building and technical assistance will be provided by CCARDESA to identify and adapt appropriate tools that make use of spatial-analysis, remote-monitoring and geo-tracking of investments. C. Sustainability 62. APPSA’s sustainability depends on effectiveness of technology dissemination and adoption by end users. The investments made under APPSA are intended to generate public goods in the form of improved technologies to boost productivity. The relevance and quality of technologies generated under APPSA will be directly reflected as regionally available varieties, technologies and practices being shared across participating countries. To ensure that regional approach is well-represented throughout the project implementation period and in all aspects of the project financed activities, APPSA will continue to support strong partnerships with other institutions and organizations, such as agricultural services providers, input and equipment dealers, national and international agricultural research centers, universities and other public and private educational institutions, farmer associations, and non-governmental organizations (NGOs), among others. 63. The capacity of RCoLs will be crucial in ensuring APPSA investments remain viable and demand-oriented. A systematic approach to strengthening RCoLs will be supported by APPSA through building financial, human, and service delivery capacities in each of the RCoLs. Introducing mechanisms for cost recovery e.g. certification, licensing, and sale of rights and breeding materials, provision of training and accreditation, etc. are some of the potential areas where APPSA will provide support to RCoLs. Similarly, establishing clear and well-functioning mechanisms for regional exchange of knowledge, materials and financial and human expertise between SADC countries will be promoted.

10 CCARDESA 2017, Annual Report 11 The consolidated Results and M&E Framework is available in project file


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64. Sustained regional integration on agriculture productivity will also depend on the effectiveness of coordination mechanisms. Ensuring financial and human resources from SADC countries to CCARDESA will be a critical indicator to show individual countries’ commitment towards regional integration. Sustainability strategies will be evaluated as part of the mid-term review during APPSA implementation. IV. PROJECT APPRAISAL SUMMARY

A. Technical, Economic and Financial Analysis 65. Investments to be made under Component 1 in R&D projects are expected to generate benefits in the form of increased agricultural productivity and production, greater stability of production, enhanced resilience in the face of climate shocks, more diversified farming systems, improved nutritional status of rural households. Investments to be made under Component 2 in strengthening RCoLs are expected to generate benefits in the form of increased capacity of the RCoLs to design and carry out high-quality scientific research and to make the results of that research available to farmers and other end users. Investments to be made under Component 4 in enhancing regional coordination and promoting regional dialogue around key regulatory and policy issues could play a catalytic role in stimulating important changes in the policy environment that could lead to increased efficiency in regional research and facilitate flows of technology, information, and knowledge throughout the SADC region, but these benefits also are difficult to quantify. 66. The added value from the World Bank financing arises in the technical input based on international experience for similar agricultural productivity improvement and introduction of innovation and technology transfer mechanisms that create opportunities for regional market linkages for farmers and other stakeholders. APPSA is expected to contribute to World Banks twin goals of ending extreme poverty and promoting shared prosperity through enabling direct access of farmers to technologies, improved agricultural practices and reduced post-harvest losses for achieving agricultural productivity. Linking farmers directly with improved technologies that are climate smart, nutrition-smart, and gender-sensitive, is expected to open opportunities for farmers in general and women-farmers, in particular, to directly benefit from agricultural technology transfer. In addition, as an important development partner in promoting economic and agricultural development in Angola and Lesotho, the World Bank’s involvement will continue to strengthen the regionally harmonized framework among government as well as other development partners for supporting agricultural productivity. Because of its convening power, the World Bank has created an important space for dialogue and work with other development agencies that are active in agricultural productivity improvement in Angola and Lesotho. 67. Analysis conducted at the macro level suggests that it is highly likely that the project will generate attractive rates of return. IFPRI/RESAKSS (201112) collected data in all 15 SADC countries to create a model of regional market demand for agricultural products based on various growth scenarios. The analysis identified the degree of correlation between the agricultural production environments of SADC countries for 10 major crops (beans, cassava, cotton, groundnut, millet, potato, rice, sorghum, sugarcane, and

12 Chilonda, P.; Matchaya, G.; Chiwaula, I.; Kambewa, P.; Musaba, E.; Manyamba, C. 2013. Agricultural growth trends and outlook for Southern Africa: Enhancing regional food security through increased agricultural productivity. ReSAKSS-SA Annual Trends and Outlook Report 2011. International Food Policy Research Institute (IFPRI) and the International Water Management Institute (IWMI)


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wheat) and four major livestock production systems (cattle, pigs, sheep/goats, and poultry). Country coefficients were generated that showed the degree of similarity for each crop or livestock model between countries; these coefficients were then combined with data on variations in yields to identify opportunities for technology spillover. The analysis revealed numerous opportunities for technologies that are suitable for a given production environment to spill over across national boundaries. These results were then incorporated into a larger model that estimated potential contribution to agricultural growth based on regional demand for each product. The analysis concluded that the potential benefits generated from technology spillovers are enormous, vastly exceeding the investments that would theoretically be needed to generate the spillovers. These results instill confidence that the APPSA investments will generate attractive returns. 68. The IFPRI/RESAKSS study generated a prioritized list of the most attractive opportunities to generate technology spillovers in the SADC region. Table 3 shows the priority ranking based on the study – with maize, cassava, rice, cattle, fruits and vegetables in the top five priorities for technology generation and dissemination.

Table 3: R&D priorities based on growth and technology spillover potential

Commodity

Potential contribution to agricultural growth

(% share in higher agricultural growth scenario)

Regional spillover potential (share of total regional

spillover gains)

Final ranking (weighted ranking based

on contribution to growth and spillover potential)

all SADC countries

low income countries

all SADC countries


all SADC countries


Maize 25.6 31.4 39.1 39.1 1 1

Cassava 14.5 13.7 8.4 8.6 2 3

Rice 8.9 13.3 13.6 13.9 3 2

Cattle 5 3.5 9.4 9.5 4 4

Fruit and Veg. 10.2 10 0.9 0.9 5 5

Beans 3.2 2.2 5.9 6.0 6 7

Fisheries 7.3 7.3 0.9 0.9 7 6

Sorghum 1.6 0.9 6.1 6.0 8 8

Wheat 4.3 0.9 2.3 2.3 9 13

Potato 3.5 3.7 2.5 2.6 10 9

Source: IFPRI, 2011 69. These findings about the likely profitability of APPSA are well supported by an extensive body of empirical literature showing that investments in agricultural research and development frequently generate attractive rates of returns, often as high as 40-60 percent per year. A frequently cited meta-analysis carried out by the International Food Policy Research Institute (IFPRI) covering 293 studies on agricultural R&D published between 1953 and 1997 found returns to certain sub-categories of agricultural research—for example, plant breeding targeting the leading food staples—have been particularly high.13 13 Alston, J.; C. Chan-Kang; M. Mara; P.G. Pardey; and T.J. Wyatt. 2000, A Meta-Analysis of Rates of Return to Agricultural


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Spillover of research benefits across national borders can be important and can raise overall rates of return considerably. Abdulai, Diao, and Johnson (2005) showed that investments yielding regional benefits in African agriculture delivered as much as three to four times the gain over and above the direct benefits in the country of origin.14 Not all commodities produce the same high returns to research, confirming the need for selection of commodities and prioritization of efforts. 70. A separate economic and financial analysis was undertaken for Angola and Lesotho APPSA investments using both traditional cost benefit analysis and net present value. The analysis also estimated the internal rate of return (IRR) and utilized a modified IRR (MIRR) analysis that corrects for some of the potential over-estimation under traditional IRR calculations within the agriculture sector. A shadow price for carbon was also calculated based on analysis of the potential of the Greenhouse Gas emissions under APPSA, which indicate the net carbon balance for Angola and Lesotho constitutes a carbon sink corresponding to a mitigation capacity of 0.80 tCO2e per hectare per year. Result of the analysis are presented in Table 4 below and in full detail in Annex 4.

Table 4: Summary Economic Analysis

Analysis Without Shadow Price of Carbon

With High Shadow Price of Carbon

With Low Shadow Price of Carbon

Net Present Value (NPV) -USD 54,668,318 58,039,312 61,391,507

Internal Rate of Return (IRR)- % 31% 34% 35%

Modified IRR (12%)-% 16% 16% 16%

Modified IRR (14%)-% 17% 18% 18%

Benefit Cost Ratio (Ratio) 2.44 2.69 2.89

B. Fiduciary Financial Management 71. Financial Management (FM) assessments. The Bank has carried out FM assessments of the IIA under the MINAGRIF in Angola, the DAR head Office in Maseru in Lesotho, and CCARDESA. The objective of the assessments was to determine whether the proposed FM arrangements: (i) are capable of correctly and completely recording all transactions and balances relating to the project; (ii) would facilitate the preparation of regular, accurate, reliable, and timely financial statements; (iii) would safeguard the project’s assets; and (iv) would be subject to acceptable auditing arrangements.15 72. Fiduciary risk is considered as Substantial, due to the following key risk factors: (i) Both for Angola and Lesotho new PIUs need to be established, and even though initial support will be provided by line

R&D: Ex Pede Herculum, Research Report 113, IFPRI, Washington, DC.

14 Abdulai, A.; X. Diao; and M. Johnson, 2005. Achieving Regional Growth Dynamics in African Agriculture, Development Strategy and Governance Decision Discussion Paper No. 17, IFPRI, Washington, DC.

15 FM assessments were carried out in compliance with Bank Directive: Financial Management Manual for World Bank Investment Project Financing Operations and related Guidance Notes, including Bank Directive: Financial Management Manual for World Bank Investment Project Financing Operations issued February 4, 2015 and effective from March 1, 2010; and the Bank Guidance: Financial Management in World Bank Investment Project Financing Operations Issued and Effective February 24, 2015


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staff or staff from other projects, it might take some time to have a fully dedicated, experienced and operational team. (ii) there are significant concerns about CCARDESA’s financial sustainability which would affect its ability to continue operating, and to properly support project implementation, (iii) CCARDESA’s performance under the other Bank-financed projects was affected by weaknesses in the governance and control environment partly caused by the lack of qualified staff and funding constraints; iv) while a direct flow of funds has been discussed for CCARDESA to receive the contributions from Angola and Lesotho, there might still be some potential delays in the reporting arrangements which would affect the flow of funds and that would cause some delays in implementation; (iv) neither DAR, nor IIA have an accounting software in place, which may affect timely preparation of financial reports. 73. Mitigating measures agreed for the project include: i) agreed during Negotiations with the Angola’s and Lesotho’s Ministries of Finance on the proposed funds flow arrangement for CCARDESA; (ii) dated covenants for the hiring/designation of FM staff under the respective PIUs; (iii) purchase and implementation of an accounting software for DAR and IIA; and (iv) full FM section of the PIM by effectiveness. Mitigating measures agreed with CCARDESA include: (i) detailed breakdown of project activities, expenditures and costs to be financed under Component 4; (ii) use of separate and dedicated bank accounts for each of sources of financing to facilitate expenditure tracking and accounting; (iii) dedicated technical and fiduciary staff to be financed out of the Regional IDA Grant to be maintained throughout the life of the project; (iv) periodic reporting on the use of the funds; and (v) definition of performance indicators to assess CCARDESA’s support to the project. These arrangements will be reflected in the agreements to be entered into between CCARDESA and participating countries, which would also be reviewed by the Bank. Subject to successful implementation of the actions above, the financial management arrangements proposed for the Project can be considered acceptable to the Bank. Procurement 74. Procurement procedures. The Borrowers will carry out procurement under the proposed project in accordance with the World Bank’s “Procurement Regulations for IPF Borrowers” (Procurement Regulations) dated July 2016 and revised in November 2017 under the “New Procurement Framework (NPF), and the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011 and as of July 1, 2016 as stipulated in the Financing Agreements. 75. PPSD Summary. Angola, Lesotho and CCARDESA have each prepared a simplified Project Procurement Strategies for Development (PPSDs) for their respective project activities. The Bank procurement team has provided the necessary support and guidance for preparation of the PPSDs. Taking in to account the complexity of the project the simplified PPSDs will be used initially and updated during implementation as the need arises. 76. Procurement Risk Assessment and Mitigation (PRAMS). As part of the project preparation process, an assessment of the procurement capacity of the implementing entity has been conducted at appraisal using PRAMS and accordingly, risk mitigation measures have been proposed. A preliminary assessment of the DAR procurement capacity focusing on staffing revealed that procurement capacity is very weak. 77. Procurement risk. The overall procurement risk associated with the project in view of the project’s risk profile and the prior experiences of IIA and DAR with previous World Bank-financed projects


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is assessed as Substantial. Annex 1 provides detailed procurement assessment for both countries. 78. Oversight and monitoring by the World Bank. All contracts not covered under prior review by the World Bank will be subject to post review during implementation support missions including missions by consultants hired by the World Bank or through supreme audit institutions as part of the financial audit. The World Bank may, at any time, conduct Independent Procurement Reviews of all the contracts financed under the credit. C. Safeguards Environmental Safeguards 79. APPSA is expected to have an overall positive impact by supporting the development and dissemination of agricultural technologies that promote sustainable use of land and water. From an environmental safeguards point of view, APPSA is a category B project. The Environmental and Social Management Frameworks (ESMFs) for both Angola and Lesotho identified that the Project’s potential environmental and social impacts are expected to be minor, noncumulative, and site-specific and can be easily managed to an acceptable level. The potential risks or negative environmental impacts that could arise from implementation are as follows: Increased vulnerability to pests due to poor pest management or introduction of new cultivars;

Localized agro-chemical soil and water pollution and reduction of water quality from agro-chemical use or poor handling of pesticides and disposal of empty chemical containers;

Unintended movement or transmission of plant varieties within or between countries because of field trials or other research activities;

Land or water degradation due to maintenance and rehabilitation of existing small-scale irrigation systems at research stations, or the construction or rehabilitation of additional buildings at existing research stations.

80. None of the proposed project activities are expected to have significant adverse environmental impacts that are sensitive, diverse, cumulative, irreversible, or unprecedented. The measures proposed in the ESMFs and Pest Management Plans (PMPs) are considered sufficient to prevent or mitigate adverse impacts. Transgenic research or the use of biotechnology tools is neither promoted nor precluded by the project and the current regulatory framework for biosafety within each country is considered sufficient to manage any risks associated with this type of research project. 81. The project will also contribute towards reducing the vulnerability of poor rural households to climate shocks by promoting the adoption of climate smart agricultural practices. Under component 1, the project shall finance research activities which could include breeding, germ-plasm and farm technology testing that can involve the application of agro-chemicals including chemical pesticides; under component 2, activities will involve civil works such as rehabilitation of research buildings and small irrigation schemes. Given the nature of the foreseen works, it is anticipated that most activities will fall under Category B, since potential environmental and social impacts are site-specific, minimal, and can be easily mitigated using appropriate tools. 82. The implementing agency in Angola is not familiar with Bank safeguards requirements, however


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the IIA team responsible for the preparation of safeguards instruments (ESMF, PMP and Resettlement Policy Framework (RPF)) has received training on Safeguard Policies and on Occupational Health and Safety both prepared by the Bank. In addition, the World Bank safeguard team has been constantly providing guidance to ensure that the client will have the adequate capacity to implement, monitor and report on environmental and social issues. OP/BP 4.01 Environmental Assessment. The policy is triggered because under component 2 project

funds will be used to support upgrading, rehabilitation and construction of research infrastructure such as on-farm small-scale infrastructure (including irrigation facilities), germplasm storage facilities, research and phytosanitary laboratories, office accommodation and research equipment. These civil works are likely to result in adverse impacts that are however localized, reversible and cost-effectively mitigable. Also, the proposed research activities under component 1 will include breeding for resistance to pests and diseases and tolerance to abiotic stresses, germplasm collection, characterization and preservation, and on-farm technology testing and demonstration that can involve the application of agro-chemicals including chemical pesticides. The framework approach has been adopted since the specific sites, nature and scope of risk were not known prior to appraisal. In this regard, both Angola and Lesotho have prepared separate ESMF as the safeguard instruments which will provide a uniform approach for addressing identified potential negative environmental impacts as well as screening procedures and monitoring plans for compliance management. The project has been classified as a Category B under OP/BP 4.01 Environmental Assessment.

Pest Management OP 4.09. Notwithstanding the fact that the project will finance breeding programs

for resistance to pests and diseases and consequently in reducing the application of pesticides, it is likely that other activities such as the propagation and production of selected crops may result in emergence of pests beyond economic threshold and thereby resulting in the need to apply pesticides. No pesticides or agrochemicals will be purchased and supplied by the project to farmers outside of their participation in research trials or demonstrations activities. Each participating country has prepared a Pest Management Plan (PMP) which incorporates Integrated Pest Management (IPM) procedures.

Safety of Dams OP/BP 4.37. The policy is triggered because the project will finance repairs,

improvements, where needed, of irrigation reservoirs/ponds (which are ground level structures with embankment heights of less than 10 meters). These ponds are located on the existing research stations and fields in Angola and Lesotho. Other investments will include rehabilitation of existing irrigation systems and small-scale drainage channels. For all rehabilitation works, guidelines provided in the United Nations Food and Agriculture Organization (FAO) manual on small dams will be used and the design and construction will be supervised by qualified engineers.

Physical Cultural Resources OP/BP 4.11. This policy is triggered because lessons learned from other

projects in Lesotho have shown that in some of the districts where the project will be implemented, such as Leribe and Butha Buthe, artefacts from historical cultural resources have been found at some places. While there are no indications that the encumbered sites in Lesotho may have physical cultural resources, the Chance Find Procedures have been included in the ESMF in case of chance finds during implementation of the project. The policy will not be triggered for Angola because project investments are not likely to involve any significant excavations, demolition or large movements of earth, or presence of a cultural resources site within the project areas, or in its vicinity.


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Social Safeguards 83. APPSA is expected to have significant positive effects on rural households, especially those engaged in smallholder farming, and more specifically on the women and children in these households who disproportionately bear the burden of food insecurity and nutritional deficiency. The project will enable farmers—including women farmers—to identify priorities for research, partner with research agencies, and participate in technology demonstrations, field learning, and other training activities. In addition, technologies generated and disseminated under the Project are expected to improve resilience of poor rural households to climate shocks and reduce their vulnerability to food insecurity and poverty. 84. Women make up a significant proportion of the agricultural work force in Angola and Lesotho. The project will work to ensure that R&D sub-projects will be sensitive to gender-differentiated priorities as these relate to household food security and nutritional sufficiency. Recognizing that research and extension programs in the participating countries in the past have attracted mainly men as participants, the project will ensure that at least 30 percent of the farmers and other end users who participate in project-supported activities will be women. To achieve this, focused awareness campaigns will be organized to encourage women’s participation as potential Lead Farmers. 85. The project will undertake some construction related activities at existing research stations in both Angola and Lesotho. Experience shows that construction related activities may require hiring of non-local labor for some skills or that additional labor may need to be brought in from outside project areas. In many cases, this influx is compounded by an influx of other people (followers), who follow the incoming workforce with the aim of selling their goods and services or in pursuit of job or business opportunities. To mitigate the potential negative impacts of labor influx (including issues of child labor), the project will include, in the contract documents for civil works and supervision, explicit codes of conduct, satisfactory to the World Bank, setting out requirements on, among others, labor (including child labor), environmental health and safety, and Gender Based Violence (GBV) for contractual workers and staff. The implementing agency (IIA) will be required to closely monitor and supervise in accordance with the ESMF, to prevent and, if needed, adequately address possible associated tension with local communities, including violence against women related with the project. 86. In addition to the World Banks standard Grievance Redress Service (GRS), the project will set up a Grievance Redress Mechanism (GRM) building on both traditional conflict-resolution mechanisms as well as project-based steps to ensure community members and all stakeholders have an opportunity and means to raise their concerns or to provide suggestions regarding project-related activities. From the community to the national level, there will be focal persons to receive, record and address grievances, queries and suggestions. A reporting line of received (and addressed) grievances will be clearly defined, so that Implementing Agencies in both Angola and Lesotho will have a full set of data. Complaints will be categorized, recorded and consolidated periodically. The database will also be an effective management tool to monitor progress and detect potential obstacles in the Project implementation. The Project’s GRM rules and communication steps will be explained so that all stakeholders are aware and encouraged to use the mechanism for transparency and better project implementation. To better inform stakeholders, the project will prepare materials in local languages to be displayed in public areas as part of the communication activities. In Angola and Lesotho, more detailed plans on the GRM will be explained in the ESMF and PIM (and in the RPF for Angola).


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87. The overall social risk of the project expected to be moderate and following social safeguards are triggered: Involuntary Resettlement OP/BP 4.12. The policy is triggered in Angola only. Although no land

acquisition is expected under the project and activities will take place on land already under the management of agricultural research stations or farmers, in some cases land is currently fallow or not actively used and local communities may have encroached into fields for their own farming. While all land which is required for project activities belongs to the respective clients, there is a risk that informal occupation or use is occuring or may occur during project implementation. OP4.12 is therefore triggered to avoid involuntary resettlement impacts and to guide implementation of mitigation/ compensation measures in case physical or economic displacements occur. An RPF has been prepared and consulted upon in Angola. In Lesotho, screening conducted prior to appraisal of all potential project sites determined that there is no encroachment on land utilized for research stations. Research stations are located in areas under traditional land management, but are fully recognized by chiefs and communities. The stations are staffed and fenced. Existing community benefit mechanisms will remain in place throughout the project.

Indigenous Peoples OP/BP 4.10. In Angola, the Bank’s IP policy is triggered due to the likely presence of indigenous (autóctone) communities in the project area and the need for alternative interventions to meet their unique needs. The San have been identified as an autóctone community that is likely to be in the project area. If there are other groups in the project area that may meet the criteria of OP 4.10, the project will undertake a screening, social assessment and other measures, per the requirements of the policy. The project is not expected to affect negatively or impact autóctone communities as there is no plan for expansion of agricultural production on land owned by these communities. The project will neither displace communities from areas where they live nor alter their ability to engage in economic activity. No resettlement is envisioned either in economic or physical terms. However, as these communities are present in the project areas, and their livelihood systems include commodities targeted by APPSA (cassava) and they may experiment with crops, technologies and systems on their land, an Indigenous Peoples’ Policy Framework (IPPF) has been prepared, consulted upon and disclosed in Angola. The IPPF includes provisions for providing appropriate guidance on sharing R&D project findings and benefits to autochtone communities. The IPPF was consulted on 15 and 16 May 2018 and was disclosed both on WB website and in-country on IIA website.

Grievance Redress Mechanisms 88. Communities and individuals who believe that they are adversely affected by a World Bank (WB) supported project may submit complaints to existing project-level grievance redress mechanisms or the WB’s Grievance Redress Service (GRS). The GRS ensures that complaints received are promptly reviewed in order to address project-related concerns. Project affected communities and individuals may submit their complaint to the WB’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of WB non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and Bank


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Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service (GRS), please visit http://www.worldbank.org/en/projects-operations/products-and-services/grievance-redress-service. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.

. KEY RISKS 89. The overall risk rating is Moderate. The risks associated with technical design of project; institutional capacity for implementation and sustainability and fiduciary are rated substantial. The key risks to technical design of project relate to the challenge of generating national and regional benefits from R&D investments and improving performance of the national research systems to ensure that the regional facilitation function is carried out effectively by CCARDESA. These risks will be mitigated through ensuring that national and regional priorities are aligned, and all R&D subprojects include resources for regional dissemination activities. The demand-driven design and emphasis on complementing research with dissemination are expected to help ensure the relevance of APPSA research outputs and ensure their availability to farmers and other end users in multiple countries. The key risks to institutional for implementation and sustainability and fiduciary relate to the capacity constraints that exist within implementing entities. These risks will be mitigated through providing support for capacity building activities intended to address longer term capacity constraints in R&D, while the most urgent capacity gaps will be filled in the short term by relying on partnerships and technical assistance as well as by hiring additional staff for performing project management, monitoring and fiduciary (finance, procurement) and safeguards responsibilities. The CCARDESA is currently recruiting core staff and updating key systems including for financial management and monitoring and evaluation to support APPSA implementation. In addition, CCARDESA is also preparing a long-term resource mobilization plan that will include resource generation beyond member states and diversify sources of financing for sustaining CCARDESA.

.


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VI. RESULTS FRAMEWORK AND MONITORING

Results Framework COUNTRY: Africa

Agricultural Productivity Program for Southern Africa - Angola & Lesotho Project Development Objectives(s)

To increase the availability of improved agricultural technologies in participating countries in the Southern Africa Development Community (SADC) region. Project Development Objective Indicators

RESULT_FRAME_T BL_ PD O

Indicator Name DLI Baseline Intermediate Targets End Target

1 Technology generation and dissemination

Number of technologies that are being made available to farmers and other end users (Number)

0.00 100.00

Number of nutrition-sensitive technologies made available to farmers and other end users (Number)

0.00 20.00

Number of improved seed varities (Number) 0.00 30.00

Number of improved agronomic, pest and disease management and water management practices (Number)

0.00 20.00

Number of improved post-harvest storage, labor saving and processing technologies

0.00 30.00


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1 (Number)

Lead Farmers aware and adopt new technologies

Percentage of Lead Farmers in targeted areas who are aware and adopt an improved technology promoted by the Project (Percentage)

0.00 100.00

Percentage of female Lead Farmers in targeted areas who are aware and adopt improved technologies (Percentage)

0.00 30.00

Percentage of Lead Farmers aware of nutrition-sensitive technologies promoted by the project (Percentage)

0.00 50.00

Technologies available across participating countries

Number of technologies generated or promoted by the Project in one participating country that are released in another participating country (Number)

0.00 25.00

Number of nutrition-sensitive technologies generated in one country and released in another country (Number)

0.00 10.00

Number of improved seed varities (Number) 0.00 5.00

Number of improved agronomic, pest and disease, and water management practices (Number)

0.00 5.00

Number of improved post-harvest storage, labor saving and processing technologies (Number)

0.00 5.00

Project beneficiaries


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1 Beneficiaries (Number) 0.00 50,000.00

of which female (Number) 0.00 10,000.00

Farmers reached with agricultural assets or services (CRI, Number) 0.00 50,000.00

Farmers reached with agricultural assets or services - Female (CRI, Number) 0.00 100.00 100.00

PDO Table SPACE

Intermediate Results Indicators by Components

RESULT_FRAME_T BL_ IO

Indicator Name DLI Baseline End Target

Technology Generation and Dissemination

Number of collaborative research and development sub-projects under implementation (Number) 0.00 50.00

Technology generation (Number) 0.00 25.00

Technology dissemination (Number) 0.00 25.00

Number of improved technologies formally recommended by the national research centers and subsequently promoted by the extesnion and advisory services (Number)

0.00 25.00

Number of improved varieties (Number) 0.00 5.00

Improved agronomic, pest and disease, and water management practices (Number) 0.00 5.00

Improved post-harvest storage, labor saving and processing technologies (Number) 0.00 5.00

Number of technologies generated (Number) 0.00 50.00


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Percent of beneficiaries (gender disaggregated) reporting satisfaction with technologies generated under APPSA (Percentage)

0.00 80.00

Number of improved varieties newly released (Number) 0.00 50.00

Number of improved agronomic, prest and disease, and water management practices developed and formally recommendedto the national extension and advisory services (Number)

0.00 10.00

Number of improved post-harvest storage, labor saving and processing technologies developed and formally recommended to the national extension and advisory services (Number)

0.00 10.00

Percentage of collaborative R&D Projects completed (Percentage) 0.00 100.00

Technology generation (Percentage) 0.00 100.00

Technology dissemination (Percentage) 0.00 80.00

Strengthening the Institutional and Enabling Environment for Technology Adoption

Actions taken to encourage women scientists’ increased access or participation to either employment in ag research or scholarships (Text)

None List of actions taken to promote/encourage women's participation

Number of clients (RCoL staff) days of training (disaggregated by gender and type of training) (Number) 0.00 2,000.00

Number of funded scholarship holder that have successfully completed long term training (Number) 0.00 15.00

Of which female (Number) 0.00 5.00

Number of research centers rehabilitated or equipped (Number) 0.00 3.00

Project management, monitoring and evaluation, and regional coordination

Regionally harmonized quality assurance of science (Text) Lack of harmonized R&D Regionally harmonized R&D between 2 or more countries

Participating country alignment with the SADC Regional Policies 0.00 2.00


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(Number)

Common M&E system being used by APPSA participating institutions (Yes/No) No Yes

Undertake citizen engagement mechanisms e.g. interactive voice response (IVR), online feedback platforms etc. (Yes/No) No Yes

IO Table SPACE

RESULT_FRAME_T BL_ UL

Indicators to be Mapped Baseline End Target

PDO Indicators

Number of technologies that are being made available to farmers and other end users (Number) 0.00 50.00

Percentage of Lead Farmers in targeted areas who are aware of an improved technology promoted by the Project (Percentage) 0.00 100.00

Number of technologies generated or promoted by the Project in one participating country that are released in another participating country (Number) 0.00 30.00

Direct Project beneficiaries (Number) 0.00 50,000.00

of which female (Percentage) 0.00 30.00

UL Table SPACE


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Monitoring & Evaluation Plan: PDO Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

Number of technologies that are being made available to farmers and other end users

Quarterly and Annual

Principal Investigator and Co-Principal Investigator reports

Surveys, RCoL reports, and M&E reports

RCoL and PIU M&E team

Number of nutrition-sensitive technologies made available to farmers and other end users

Annual

M&E reports

Reports from RCoLs

RCoLs and PIU M&E team

Number of improved seed varities Annual

R&D sub-projects

Survey

RCoL and PIU M&E

Number of improved agronomic, pest and disease management and water management practices

Annual

R&D sub-projects

Survey

RCoL and PIU M&E


Annual

R&D sub-projects

Survey

RCoL and PIU M&E

Percentage of Lead Farmers in targeted areas who are aware and adopt an improved technology promoted by the Project


RCoL and Extension Departments' reports

Farmer surveys through random sampling

PIU M&E team

Percentage of female Lead Farmers in targeted areas who are aware and adopt improved technologies

Quarterly

Female Lead Farmers

Survey and key informant interviews

RCoLs and PIU M&E Team


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Percentage of Lead Farmers aware of nutrition-sensitive technologies promoted by the project

Annual

Lead Farmers

Survey and/or interviews of Lead Farmers

PIU M&E team

Number of technologies generated or promoted by the Project in one participating country that are released in another participating country


RCoL reports

Follow up on dissemination and adoption of technologies

PIU M&E team

Number of nutrition-sensitive technologies generated in one country and released in another country

Annual

RCoLs

RCoLs annual reports


Number of improved seed varities Annual

RCoL reports

Survey

RCoL and PIU M&E

Number of improved agronomic, pest and disease, and water management practices

Annual

RCoL reports

Survey

RCoL and PIU M&E


Annual

RCoL reports

Beneficiaries Quarterly and annual

Farmers and other stakeholders

Surveys, interviews and reports


of which female Quarterly and annual

Farmers and other stakeholders

Surveys and reports


Farmers reached with agricultural assets or services Quarterly

M&E reports

Survey and/or field observations



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Farmers reached with agricultural assets or services - Female Quarterly

M&E reports

Survey and/or field observations


ME PDO Table SPACE

Monitoring & Evaluation Plan: Intermediate Results Indicators

Indicator Name Definition/Description Frequency Datasource Methodology for Data Collection

Responsibility for Data Collection

Number of collaborative research and development sub-projects under implementation

Quarterly and annual

PI and Co-PIs

Progress reports


Technology generation Quarterly and annual

PIs and Co-PIs reports

Progress reports


Technology dissemination Quarterly and annual

PIs and Co-PIs, Extension Departments, Lead Famers

Surveys and reports


Number of improved technologies formally recommended by the national research centers and subsequently promoted by the extesnion and advisory services

Annual

RCoL reports

Enumeration from reports

RCoL and PIU M&E

Number of improved varieties Annual

RCoL reports


RCoL and PIU M&E

Improved agronomic, pest and disease, and water management Annual

RCoL reports


RCoL and PIU M&E


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practices

Improved post-harvest storage, labor saving and processing technologies Annual

RCoL reports


RCoL and PIU M&E

Number of technologies generated Quarterly and annual

PIs and Co-PIs

Progress reports


Percent of beneficiaries (gender disaggregated) reporting satisfaction with technologies generated under APPSA

Annual

M&E Reports and surveys

Survey of end users and key informant interviews

PIU M&E team

Number of improved varieties newly released

Semi-annual

RCoL reports


RCoL and PIU M&E

Number of improved agronomic, prest and disease, and water management practices developed and formally recommended to the national extension and advisory services

Semi-annual

RCoL reports


RCoL and PIU M&E

Number of improved post-harvest storage, labor saving and processing technologies developed and formally recommended to the national extension and advisory services

Semi-annual

RCoL reports


RCoL and PIU M&E

Percentage of collaborative R&D Projects completed


PIs and Co-PIs

Progress reports


Technology generation Quarterly and annual

PIs and Co-PIs

Progress reports

RCoL


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Technology dissemination Quarterly and annual

PIs and Co-PIs, Extension Department, Lead Farmers

Surveys and reports

RCoL, Extension Department, PIU M&E team

Actions taken to encourage women scientists’ increased access or participation to either employment in ag research or scholarships

Quarterly

M&E Reports

Interviews of women in universities, research stations, etc.

PIU M&E team and RCoL

Number of clients (RCoL staff) days of training (disaggregated by gender and type of training)


Training assessment and plan, training reports

Progress reports

PIU M&E team

Number of funded scholarship holder that have successfully completed long term training


Progress reports

Surveys and reports

PIU M&E team

Of which female Quarterly and annual

RCoL and other research staff and students

Surveys and reports


Number of research centers rehabilitated or equipped


Procurement plan and progress reports

Monitoring of contracts awarded

Procurement and PIU M&E team

Regionally harmonized quality assurance of science


Reports of PIs and Co-PIs

Surveys and reports



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Participating country alignment with the SADC Regional Policies


Certification Services reports, progress reports, legislation database

Surveys and reports

PIU M&E team

Common M&E system being used by APPSA participating institutions


Regional MIS

Progress reports generated from regional MIS

PIU M&E teams and CCARDESA

Undertake citizen engagement mechanisms e.g. interactive voice response (IVR), online feedback platforms etc.

Establishing mechanisms for citizen engagement e.g. interactive voice response (IVR) system, online information and feedback platforms, etc.

Quarterly reporting

Responses received from beneficiaries and other stakeholders via online platorms

Digital surveys

PIUs and M&E team

ME IO Table SPACE


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ANNEX 1: Implementation Arrangements and Support Plan

COUNTRY: Africa Agricultural Productivity Program for Southern Africa - Angola & Lesotho

90. As in the original APPSA, implementation will be done through national entities within the Ministry of Agriculture and Food Security (MAFS) and supported by the regional coordination and facilitation by CCARDESA. Regional Implementation Arrangements 91. Under the ongoing APPSA, participating countries each paid nearly 3 percent of their Credit to finance CCARDESA’s regional facilitation services. This arrangement would be reviewed for Angola and Lesotho where 5 percent of the financing will be provided for CCARDESA since the role of CCARDESA is being enhanced to provide additional technical support for R&D sub-project cycle implementation. This arrangement is building on the lessons from ongoing APPSA, and CCARDESA will be strengthened by establishing a dedicated regional R&D coordination unit with key technical staff responsible to engage with each country at all steps of the R&D sub-project cycle. CCARDESA would continue to play its regional facilitation role and subsidiary project agreements would be signed between Government of Angola and Government of Lesotho to finance the costs for CCARDESA. 92. Being a regional program, the success of APPSA is entirely based upon functional partnerships and effective collaboration between the participating countries. APPSA countries will continue working together to: (i) undertake joint technology generation and dissemination activities through collaborative R&D projects; (ii) coordinate activities taking place at the national level to contribute to the achievement of common regional objectives; and (iii) share knowledge and technological outputs from their national programs throughout the region. To the extent possible, APPSA implementation will rely on existing regional platforms, networks, and partnerships to share information and create opportunities for collaboration. 93. The implementation of research activities under Component 1 will be funded through the R&D sub-project mechanism to facilitate regional collaboration and ensure that APPSA investments generate not only national but also regional benefits. The R&D sub-projects will support research, technology dissemination, training, knowledge management and other activities that will contribute to and benefit from enhanced regional collaboration. The eligibility of R&D sub-projects will be based on the following criteria: Participation of at least two countries; Consistency with the regional R&D agenda (e.g. aimed at solving a regional research problem,

dissemination priority or draw on a regional resource or expertise); Potential for dissemination across the region (including an action plan for dissemination); Compliance with peer reviewed technical and scientific quality standards; Compliance with social and environmental standards; Compliance with minimum financial and budgeting standards


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94. The detailed process for selection, implementation, reporting and dissemination of technologies and varieties developed under R&D sub-projects are described in Appendix A. In addition, Angola and Lesotho will participate in the ongoing R&D sub-project being financed under the original APPSA. To facilitate participation of Angola and Lesotho – in the R&D program under the ongoing APPSA, the proposed mechanism for identification and participation of is developed in consultation with Angola and Lesotho (see Appendix B in Annex 3). 95. Lead Farmers are expected to play a critical role in APPSA to ensure successful dissemination and adoption of technologies. The selection of Lead Farmers has followed veracious approaches in Malawi, Mozambique and Zambia according to country context including geographical spread of research and dissemination activities. The Lead Farmers have been successful agents of change in their communities for being progressive farmers themselves who have readily taken on the role of adopters of technologies. In APPSA Angola and Lesotho, Lead Farmers will continue to remain an important implementation tier and will be provided with training and additional resources to ensure information, advice and new practices flow to other farmers and secondary beneficiaries. APPSA has set performance evaluation structures for Lead Farmer which will be used in Angola and Lesotho. 96. Regional facilitation mechanisms through CCARDESA. The success of APPSA will depend on a strong commitment on the part of participating countries to work within a framework of regional collaboration. Given differences between the participating countries in terms of institutional structures and implementation capacity, regional facilitation will be done by CCARDESA by coordinating implementation and monitoring for results. CCARDESA secretariat based in Botswana, managed by an Executive Director, and governed by a Board of Directors drawn from SADC member states.

97. Activities to be implemented by CCARDESA will be governed by a Grant Agreement between the World Bank and CCARDESA and Implementation Agreements drawn up between CCARDESA and the principal executing ministry or institution in each participating country. The Grant Agreement and the Implementation Agreements will describe the roles and responsibilities, activities, and reporting modalities of CCARDESA in facilitating APPSA implementation. During implementation, CCARDESA will prepare costed annual work plans for its activities, and these work plans will be endorsed by the participating countries. Based on the annual work plans, resources will be disbursed in tranches by the participating countries to CCARDESA, in the case of IDA Credit resources, and directly from the World Bank to CCARDESA in the case of Regional IDA Grant resources.

98. Links to CGIAR centers. The Project will strengthen national agricultural R&D systems in the participating countries and promote a more regional approach to technology generation and dissemination. The national systems will be able to deepen their partnerships with international agricultural research institutes including CGIAR centers, for example by increasing the amount of collaborative research, stepping up exchanges of improved germplasm, and engaging in joint training activities. The Project will not be a funding source for CGIAR centers, however, and RCoLs would not seek to replace CGIAR centers or assume their global mandates. APPSA is expected to complement investments made by the CGIAR centers and to support the ongoing CGIAR reform process by building strong partnership in southern Africa.


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Implementation Arrangements for Angola 99. In Angola, the implementing agency is the Instituto de Investigacão Agronómica (IIA) under the Ministério da Agricultura e Florestas (Ministry of Agriculture and Forestry). IIA is a public research institute mandated for scientific research and technology development in the fields of agriculture, forestry and pastures, will be the implementing agency for APPSA-Angola. The Director of IIA will be the executive, responsible for providing strategic and scientific direction to the APPSA R&D funded projects, supported by the IIA Scientific Council16. Dissemination of validated technologies will be the responsibility of Instituto de Desenvolvimento Agrário (Agricultural Development Institute) (IDA) within the MINAGRIF and other organizations, such as NGOs, smallholder producer’s organizations, and commercial farms. 100. The Cassava RCoL will be established within IIA structure as a specialized unit based at Malange Research Station and serving as the center of a network of other research satellite centers also active in cassava investigation. Malange Research Station will take the responsibility to host and to provide the technical leadership of the Cassava R&D activities. In addition to hosting the Cassava RCoL, Malange Experimental Station (ES) also carries out research activities related to other crops such as Sweet potatoes, Irish potato, and Legumes. Other experimental sites that will form part of the Cassava RCoL include Nsosso, S. Vicente, Mazozo, Cela, Namibe ESs, and Zaire, Luso and Ceilungo Experimental Fields (EF). Additional R&D activities financed by APPSA for maize, legumes, rice and horticulture, will take place across all IIA experimental network, agriculture universities and other R&D related entities, interested to join APPSA R&D agenda.

101. For regional coordination of APPSA Angola, CCARDESA will closely liaise with IIA and RCoL to facilitate the implementation of regional R&D activities and provide technical assistance for R&D quality control, regional M&E, knowledge exchanges amongst APPSA countries and other partner institutions, and overall coordination and facilitation for APPSA implementation. CCARDESA will also act as the secretariat for Regional Steering Committee (RSC) co-chaired by each of the APPSA participating country. The RSC meetings will be held annually to provide an opportunity for program review, lessons sharing and networking and knowledge exchange among APPSA countries. The organogram for APPSA Angola is shown in Figure 1.2 below.

16 According to IIA statutes, the Scientific Council is comprised by the IIA Director and deputy Directors, Heads of scientific departments, IIA research program and project coordinators; other national and/or international scientist and academics may be invited according to the topic under discussion.


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Figure 1.2. Organogram for APPSA Angola

102. Project Implementation Unit (PIU). For day-to-day APPSA management, IIA will recruit a Project Implementation Unit (PIU) team. The APPSA PIU team will be recruited as part of the existing PIU under the World Bank financed Smallholder Agriculture Development and Commercialization Project (SADCP), however, the APPSA PIU team will report to the IIA Director. The APPSA PIU team will be responsible for all the core project fiduciary aspects and for assuring a sound project coordination and management. The PIU team will consist of: a) Project Coordinator, b) Financial Management Specialist, c) Procurement and contract management specialist, d) Monitoring and Evaluation Specialist, e) Communication specialist, f) combined Safeguard specialist for Environmental and Social, Pest Management and Indigenous people framework plans and, g) other functions that may be necessary. The PIU team will be located in Mazozo close to Luanda. This proposal is based on criteria such as availability of staff, systems, in house capacity, proximity to management/decision makers, fiduciary arrangements and flow of funds. 103. Capacity of APPSA Angola PIU. The APPSA PIU team will function as part of the existing Project Implementation Unit (PIU) for the Smallholder Agriculture Development and Commercialization Project (SADCP). This arrangement is expected to ensure initial support and onboarding for the newly recruited APPSA team. The joint PIU arrangement is also expected to ensure that implementation delays in setting

Project Steering Committee (PSC) (headed by Minister for Agriculture or his/her designate, with members as Director of IIA, IDA, SNSE, representatives from Ministries of Finance, Environment, Higher Education, Science and Technology,

Commerce, and representatives of UNACA)

IIA Director and Deputy

CCARDESA (and other APPSA participating

countries)

IIA Scientific Council

APPSA PIU Project Coordinator, Financial Officer, Procurement Officer, M&E Officer,

Communications Officer, Safeguards Specialist, and other as required

Operational Management Committee (OMC) (IIA and IDA Directors, Head of ESs, Head of Prov IDA, Head of Research Programs, Representatives of

Provincial Farmers Associations, relevant stakeholders and invited external specialists as required)

APPSA research activities (R&D sub-projects) RCoL on Cassava

Identified IIA Research sites: RCoL headquarters, Nsosso Cela ES, Mazozo ES, Namibe ES, S. Vincente ES, Luso EF, Ceilungo EF,

Zaire EF, & other R&D institutions participating in APPSA

Other APPSA Commodities R&D sub-projects

All IIA Research sites and other R&D institutions

participating in APPSA

Regional Technical Committee


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up financial management and procurement planning activities for APPSA are avoided. Subject to implementation progress, the arrangement for a single PMU will be reviewed at a mutually agreed time. 104. Project Steering Committee (PSC). To ensure a regular overall supervision and strategic guidance of APPSA, a PSC will be established. The PSC will be chaired by the Minister of Agriculture or his/her designated. The PSC will include the Directors of the IIA, IDA, SENSE and the GEPE, Representatives of the Ministries of Finance; Environment; Higher Education, Science and Technology; Trade and Representatives of the Confederation of Agricultural Associations of Peasants and Cooperatives of Angola (UNACA). Main responsibility of the PSC is to provide strategic guidance to the R&D agenda, overall supervision of APPSA/RCoL activities and assessment of the progress of R&D activities, evaluation and decision on the proposed Annual Work Plan and Budget (AWP&B) and on any other pertinent strategic matter. For these purposes, the PSC will meet twice a year.

105. Operational Management Committee (OMC). To improve the institutional follow up of APPSA, an OMC will be established, to provide technical support to management and implementation of APPSA, to revise and propose improvements of the AWP&B, bring additional experience and knowledge to support APPSA research agenda, and providing assistance in preparing the matters to be examined at the PSC meetings. The OMC will be co-shared by the IIA and IDA Directors, with membership comprised of Head of ES, Head of Provincial IDA, Commodities team leaders17, relevant stakeholders18 and external specialists19. OMC will convene on a semester to quarterly basis as appropriate. Both PSC and OMC would undertake regular field monitoring to ensure quality of science and provide technical backstopping where needed.

106. Inter-directorate arrangements. IIA and IDA will agree on inter-directorate arrangements and mechanisms concerning R&D sub-projects, where implementing responsibility may fall under IDA and where a flow of funds from one institution to another may be required, inter-directorate arrangement shall be put in place. Like other implementing partners leading R&D sub-projects, a MoU type of agreement shall be considered between IIA and IDA, defining responsibilities of each part and the administrative procedures to be followed. The PIM will establish the institutional arrangements and the administrative procedures to follow for innovation and technology dissemination, inter-directorate arrangements for sub-projects – particularly concerning the flow of funds for the implementation activities and the principles of accountability.

Implementation Arrangements for Lesotho 107. In Lesotho, the proposed implementing agency is the Department for Agricultural Research (DAR) under the Ministry of Agriculture and Food Safety (MAFS). Lesotho has a total of 12 research stations and field trial stations across the country (see Table 1.1).

17 Head of Research programs supported by APPSA 18 According to the topic under discussion, it may include representatives and commercial sector, NGOs operating in regions of APPSA intervention or collaborating with APPSA. 19 According to the topics under discussion, it may include CGIARs scientists, representatives of CCARDESA peer reviewers, and academia.


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Table 1.1: Research stations and field trial station across all agro-ecological zones in Lesotho No Station District Agro-ecological zones Crops 1 Maseru Maseru Main RCoL station- central lowlands Fruits Tree20, Vegetables, Potato 2 Nyakosoba Maseru Regional Station- foothills Fruits Tree, Vegetables, Potato 3 Mahobong Leribe Regional Station - Northern lowlands Beans, Fruits Trees, Potato 4 Mokhotlong Mokhotlong Regional-station-mountains Seed Potato, Fruit trees 5 Sakoane Berea Field trial -Lowlands Sorghum, Beans, Vegetables 6 Machache Maseru Field trial - foothills Fruits Tree, Vegetables, Potato 7 Siloe Mohales’Hoek Regional Station –Southern lowlands Sorghum, Beans, Fruits Tree 8 Tsifa-li-mali Leribe Field trial station - lowlands Beans, Fruits Tree, Sorghum 9 Molumong Mokhotlong Field Trial Station- Mountains Fruits Tree21, Potato 10 National University of

Lesotho (NUL) Maseru Field Trial Station - Central lowlands Vegetables, Potato, Beans, Sorghum

11 Lesotho Agricultural College (LAC)

Leribe Field Trial Station – Northern lowlands Beans, Fruits Tree, Potato

12 District Agricultural Office (DAO)

Mafeteng Field Trial Station – Southern Lowlands Sorghum, Beans, Fruits Tree22

108. Out of the total 12 locations, APPSA will provide financing for rehabilitation and upgrading of 9 regional and field trial stations to prioritize the limited resources available under APPSA. The Partner sites that will be used as field trial sites will be mainly strengthened through equipment except where need arises. Further details of the scale of rehabilitation and/or upgrading of the selected research stations would be assessed during implementation in consultation with stakeholders including famers groups. Table 1.2 below provides list of stations covered under APPSA.

Table 1.2: Research stations and field trial station to be supported under APPSA Lesotho No Station District Agro-ecological zones Crops 1 Maseru Maseru Main RCoL station- Central lowlands Fruits Tree, Vegetables, Potato 2 Nyakosoba Maseru Regional Station- Foothills Fruits Tree, Vegetables, Potato 3 Mahobong Leribe Regional Station - Northern lowlands Beans, Fruits Trees, Potato 4 Mokhotlong Mokhotlong Regional-station-mountains Seed Potato, Fruit trees

5 Siloe Mohales’Hoek Regional Station –Southern lowlands Sorghum, Beans, Fruits Tree 6 Machache Maseru Field trial - Foothills Fruits Tree, Vegetables, Potato 7 National University of

Lesotho (NUL) Maseru Field Trial Station - Central lowlands Vegetables, Potato, Beans, Sorghum

8 Lesotho Agricultural College (LAC)

Leribe Field Trial Station – Northern lowlands

Beans, Fruits Tree, Potato

9 District Agricultural Office (DAO)

Mafeteng Field Trial Station – Southern Lowlands

Sorghum, Beans, Fruits Tree

109. APPSA Lesotho implementation arrangement will consist of 6 tiers: (i) PSC providing oversight and policy guidance, (ii) Research Technical Committee (RTC) ensuring that the programmes are technically sound and adhere to standards for scientific studies, (iii) Project Implementation Unit (PIU) providing day-to-day management, coordination, fiduciary and safeguards compliance, (iv) Regional Center for Leadership (RCoL) for horticulture crop farming system for technical implementation of R&D sub-projects, (v) Regional Research Offices (RROs) for implementation and access to farmers at district level in Lesotho,

20 Fruits tree (Apples, Peaches, Apricot, Plums, cherries and Pears) 21 Fruits tree (Apples, Peaches, Apricot, Plums, cherries and Pears) 22 Fruits tree (Apples, Peaches, Apricot, Plums, cherries and Pears)


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and (vi) the CCARDESA for regional coordination and harmonization at SADC level. 110. Regional Coordination for APPSA Lesotho. CCARDESA will closely liaise with DAR and RCoL to facilitate the implementation of regional R&D activities and provide technical assistance for R&D quality control, regional M&E, knowledge exchanges amongst APPSA countries and other partner institutions, and overall coordination and facilitation for APPSA implementation. CCARDESA will also act as the secretariat for Regional Steering Committee (RSC) co-chaired by each of the APPSA participating country. The RSC meetings will be held annually to provide an opportunity for program review, lessons sharing and networking and knowledge exchange among APPSA countries. The organogram for APPSA Lesotho is shown in Figure 1.3 below.

Figure 1.3: Organogram for APPSA Lesotho

111. Project Implementation Unit (PIU). The APPSA PIU team will be recruited to implement the APPSA project under the direct reporting to the Director DAR. The APPSA PIU team will be initially facilitated by the existing Project Management Unit (PMU) for the Smallholder Agriculture Development Project (SADP) through an inter-departmental arrangement. This arrangement would be reviewed during implementation at a mutually agreed time. The APPSA PIU team will be located at DAR Head office in Maseru with 4 Regional Research Offices (RROs) in Mokhotlong, Mahobong, Siloe and Nyakosoba. Under the APPSA financing, Lesotho will establish the RCoL for Horticulture at its Maseru main station. The RROs will comprise of district research and extension officers and additional support staff. The RCoL will also coordinate with the external agricultural stakeholders including extension services, private

Project Steering Committee (PSC)

Director DAR

CCARDESA Secretariat: Regional M&E, R&D Quality Control

& TA, Knowledge exchange, Coordination & facilitation

RCoL for Horticulture located in Maseru

Plant breeding, agronomy, soil & water mgt., irrigation, extension,

agr-processing, farm mechanization, socioeconomics, training &

dissemination, support services

Research Technical Committee

CGIAR

Extension

Private sector /horticulture value chain

Academia/ training

Regional Research Office Nyakosoba

Regional Research Office Siloe

Regional Research Office Mokhotlong

APPSA Lesotho PIU headed by Program Coordinator and

comprises fiduciary (FM, procurement), safeguards

(environment and social), and other day-to-day management and

coordination functions

Regional Research Office Mahobong

Regional Technical Committee


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sector/horticulture value chain stakeholders, CGIAR institutions, and academia and other research organizations. 112. The PIU team will be headed by a Program Manager and consist of a financial management team (accounts manager and accounts officer), a procurement officer, a monitoring and evaluation (M&E) officer, an environment and social safeguards officer. The RCoL team will consist of RCoL Coordinator, Technology Dissemination Officer, International Horticulture Expert and an Information Management Officer. The RCoL coordinator will also act as the head of the RCoL. The RCoL will carry out the technical coordination of all R&D sub-projects especially those related to horticulture crop systems but will also work closely with the Commodity Team Leaders who in turn will be coordinating the activities within their commodities. The RCoL will assume the regional coordination role for R&D and collaborate with other APPSA countries including Angola, Malawi, Mozambique and Zambia. 113. Capacity of APPSA Lesotho PIU. The support from SADP PMU is is expected to ensure initial support and onboarding for the newly recruited APPSA team. The single PMU arrangement is also expected to ensure that implementation delays in setting up financial management and procurement planning activities for APPSA are avoided.

114. Regional Technical Committee. The Regional Technical Committee will ensure that the improved technologies, varieties and practices being developed under APPSA programmes are of technically sound quality and adhere to standards for scientific studies.

115. Research Committee. The Research Committee will be convened at agreed intervals to oversee the quality and approval processes for improved technologies, varieties and practices being generated under APPSA for release in Lesotho and at regional level.

116. Inter-directorate arrangements. DAR will agree on inter-departmental arrangements and mechanisms with other departments of the MFAS including the Department of Agriculture Extension (DAE) to coordination on the R&D sub-projects, in particular related to the dissemination of improved technologies and practices. Inter-departmental Memorandum of Understanding (MoU) shall be signed where needed to define responsibilities of each department and the administrative procedures to be followed. The Project Implementation Manual (PIM) will include the institutional arrangements and the administrative procedures to follow for inter-departmental arrangements for APPSA including the flow of funds for the implementation activities and the principles of accountability for each department.

Financial Management and Disbursement Arrangements for APPSA Angola and Lesotho 117. As part of project preparation, financial management (FM) assessments were carried out by the Bank to evaluate the adequacy of FM arrangements to support project implementation. The assessments focused on the IIA under the MINAGRIF in Angola and the DAR under the MAFS in Lesotho. The objective of the assessments was to determine whether the proposed FM arrangements: (i) are capable of correctly and completely recording all transactions and balances relating to the project; (ii) would facilitate the preparation of regular, accurate, reliable, and timely financial statements; (iii) would safeguard the project’s assets; and (iv) would be subject to acceptable auditing arrangements23. 23 FM assessments were carried out in compliance with Bank Directive: Financial Management Manual for World Bank Investment Project Financing Operations and related Guidance Notes, including Bank Directive: Financial Management Manual


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118. The Bank also carried out an assessment of CCARDESA, that would be in charge of certain activities under Component 4, which would be financed by: (i) IDA regional grant, and (ii) by Angola’s and Lesotho’s contributions under their respective IBRD loan/IDA Credit. The assessment of CCARDESA built on the prior experience with the entity and mainly focused on the strengthening and mitigating measures needed to support project implementation. FM arrangements under CCARDESA are further discussed in this Annex at two levels: i) as grantee (direct recipient of an IDA Grant), and ii) to fulfill its responsibility in the use of the funds transferred by Angola and Lesotho. The financial management arrangements for each of the three entities, as well as mitigating measures and action plan are summarized in the following sections. A conclusion of the assessments is presented in the section IV. Project Appraisal Summary. Organization and Staffing 119. Angola. As part of the APPSA PIU team, the overall responsibility of project FM matters will rest with the Project Financial Management Specialist (FMS) who will report to the Project Coordinator and will be supported by one accountant. ToRs for both positions would be approved by the Bank. The appointment of project FMS should be completed within two months after the project effectiveness and the accountant should be recruited within three months after the project effectiveness. In the meantime, startup of the project would be supported by the PIU handling the FM matters of the ongoing Smallholder Agriculture Development and Commercialization Project. Both positions will be financed through project proceeds. 120. Lesotho. The Project Implementation Unit (PIU) team will be established at the DAR head Office in Maseru and will be reporting to the Director (DAR). The PIU will be headed by the Program Manager and will consists of financial management team (accounts manager and account officer), procurement, M&E, environment and social safeguards officer. The Accounts Manager and Account Officer positions will be filled by effectiveness. Meanwhile the recruitment of the two positions is ongoing, the Senior Accountant at the Ministry of Agriculture and Food Security (MAFS) will fill in the role of the accounting function on a part-time basis. Qualifications and experience of the Senior Accountant are assessed to be adequate to fulfil this role.

Planning and Budgeting 121. Country budgetary requirements and regulation in terms of budget formulation, execution and monitoring will be followed in each country, as applicable. The respective PIU teams – through the FM Specialist in Angola and the Accounts Manager in Lesotho – will prepare annual budgets based on the approved annual work plans and procurement plan. Variance analysis reports comparing planned to actual expenditures on monthly and quarterly bases will be produced and will be used to timely identify deviations. These variance analysis reports will be part of the periodic IFRs. The budget preparation and monitoring of budget execution will be described in the project FM Manual/FM section of the PIM. Accounting Systems, Policies and Procedures 122. Angola. Project transactions -expenditures and resources- will be accounted for using a computerized accounting software following the cash basis of accounting. The computerized accounting

for World Bank Investment Project Financing Operations issued February 4, 2015 and effective from March 1, 2010; and the Bank Guidance: Financial Management in World Bank Investment Project Financing Operations Issued and Effective February 24, 2015.


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package will be purchased and installed within four months after the effectiveness date, and it will be financed with project proceeds. Throughout project implementation the implementing agency should maintain a sound computerized accounting software that enables key controls, records project transactions correctly, and can produce timely and reliable financial information. 123. Lesotho. The project will use the computerized accounting software (opted for TOMPRO as the commonly used accounting system in Maseru for peer learning) for project financial management and the production of accounts. The accounting package will be capable of transaction processing, production of project annual financial statements, IFRs, and other reports as required for the effective management and monitoring of the project. The project will use the cash basis of accounting as prescribed under the Cash Basis Standard issued by the International Public-Sector Accounting Standards Board. The accounting procedures will be spelt out in the Project Implementation Manual. Internal Controls and Internal Audit 124. Internal Control: Internal control comprises the whole system of control, financial or otherwise, established by management to: (a) carry out project activities in an orderly and efficient manner; (b) ensure adherence to policies and procedures; (c) ensure maintenance of complete and accurate accounting records; and (d) safeguard the project’s assets. 125. Angola. The Inspectorate General of Finance (Inspecção Geral das Finanças), based at the Ministry of Finance, is responsible for the internal audit functions across the entire government. However, it has limited capacity, and therefore, the project may not benefit from its review of this operation. Therefore, the review of the adequate operation of the internal control system and compliance with key procedures will be done mainly as part of the external audit and through regular Bank supervision -desk review and field visits (that include expenditures and asset reviews). The finance and administrative procedures to be employed by the implementing agency are documented in the project FM Manual to be finalized and adopted by effectiveness. This manual will cover institutional arrangements, budget and budgetary control, disbursement procedures and banking arrangements, receipt of goods and payment of invoices, internal control procedures, accounting system and transaction records, reporting requirement, and audit arrangement. 126. Lesotho. The experience in Lesotho has proven that the Internal Audit Department is thinly stretched to even cover the government program, however, DAR will be encouraged to include the project in the internal audit plans. As it relates to the Internal Control Systems, the project will use the Project Implementation Manual to govern and execute transactions under the project. As part of the preparation of the PIM, the Bank will review and discuss the basic internal control mechanisms, providing for an adequate segregation of duties, clear roles and responsibilities for the approval of commitments, acceptance of goods and services and authorization and processing of payments for different activities. In addition, specific disbursement and reporting arrangements for the implementation of R&D subprojects, in case these are implemented by third parties will be defined. Financial Reporting 127. Each implementing agency will prepare periodic unaudited financial reports (IFRs) and annual project audited financial statements. The financial reports will be designed to provide quality and timely information to the project management, implementing agencies, and various stakeholders to monitor the


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project’s financial performance. Specific formats and content has been agreed, together with the internal controls required to ensure reliability of the financial information. Details of the content, periodicity and due date of the IFRs are further specified below. 128. Angola. The PIU/IIA will prepare semi-annual IFRs for the project, in form and content satisfactory to the World Bank, which will be submitted to the World Bank within 45 days after the end of the calendar semester to which they relate. The reports should include all sources and uses of funds reports by project components and categories and uses of funds by project components and activities (including comparison of budget and actual expenditures). 129. The PIU/IIA will also produce annual project financial statements, which will comprise:

a statement of sources and uses of funds/cash receipts and payments, which recognizes all cash receipts, cash payments, and cash balances controlled by the entity for this project and separately identifies payments by third parties on behalf of the agency;

the statement of uses of funds by project components and activities, including comparison of budget and actual project expenditures;

the accounting policies adopted and explanatory notes. The explanatory notes should be presented in a systematic manner with items on statement of cash receipts and payments being cross-referenced to any related information in the notes. Examples of this information include a summary of fixed assets by category of assets; and

a management assertion that IDA funds have been expended in accordance with the intended purposes as specified in the relevant World Bank Legal Agreement.

130. Lesotho. The project will prepare quarterly un-audited IFRs for the project in form and content satisfactory to the Bank, which will be submitted to the Bank within 45 days after the end of the quarter to which they relate. The project will use the current formats of the IFRs. 131. The IFRs submitted to the Bank will contain the following statements:

Statement of Sources and Uses of Funds; Statement of Uses of Funds by Project Activity/Component; Designated Account (DA) Activity Statement; Bank Statements for both the Designated and Project Account; Summary Statement of DA Expenditures for Contracts subject to Prior Review; and Summary Statement of DA Expenditures not subject to Prior Review.

132. The annual financial statements will be prepared using International Public-Sector Accounting Standards. These statements shall be submitted to the Bank within 6 months after the end of the accounting year. The accounts/financial statements will comprise of:

A Statement of Sources and Uses of Funds/Cash Receipts and Payments, which recognizes all cash receipts, cash payments and cash balances controlled by the entity; and separately identifies payments by third parties on behalf of the entity.

The Accounting Policies Adopted and Explanatory Notes. The explanatory notes should be presented in a systematic manner with items on the Statement of Cash Receipts and Payments being cross referenced to any related information in the notes; and

A Management Assertion that Bank funds have been expended in accordance with the


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intended purposes as specified in the relevant World Bank legal agreement. External Audit 133. In accordance with Bank policy, implementing entities are required to submit annual project financial statements audited in accordance with international standards of auditing (ISAs), by an acceptable external auditor and following ToRs approved by the Bank. Specific arrangements are detailed in the Table 1.3 below:

Table 1.3: Auditing Arrangements Country Implementing

Entity Audit Type Auditor Due Date

Angola PIU/IIA Project Financial statements Management Letter

Private audit firm acceptable to the Bank (audit cost to be financed through Bank proceeds).

June 30th (six months after the financial year-end.

Lesotho DAR Project Financial statements Management Letter

Office of the Auditor General September 30th (six months after each fiscal year-end).

Regional CCARDESA Project Financial statements Management Letter (IDA Grant + Angola/Lesotho Contributions)

Private audit firm acceptable to the Bank

TBC

134. The external auditor will be required to express a single opinion on the project financial statements. The management letter containing the auditor’s assessment of the internal controls, accounting system and compliance with financial covenants in the financing agreement, suggestions for improvement, and management’s response to the auditor’s management letter will be prepared and submitted to management for follow-up actions. In line with the WB access to information policy, the implementing agencies are required to make the annual audited financial statements publicly available on its official website. Accordingly, the WB will also publish the reports upon receipt. Financial Management Arrangements for CCARDESA 135. CCARDESA has developed some experience and familiarity with WB requirements, mainly through the implementation of the AFCC2/RI-Centre for Coordination of Agricultural Research and Development for Southern Africa Project. However, some governance and accountability issues were identified back in 2015. Since then, the entity has been working on the implementation of corrective actions under the guidance of its Board, but still there are areas that require further strengthening and mitigation. One of the key concerns is CCARDESA’s financial sustainability, and ability to continue funding its regular operation, which in the past has led to inadequate staffing and governance issues. The latter would significantly affect CCARDESA’s ability to properly support implementation of APSSA. To mitigate the situation, the Board approached the member states for capital injection for the years ending 2017, 2018 and 2019. However, at the time of the review, some member states were still in arrears with their contributions. To mitigate delays in member states contributions, CCARDESA is also preparing a long-term resource mobilization plan that will include resource generation beyond member states and diversify sources of financing for sustaining CCARDESA.


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136. In view of the above, specific mitigating measures have been agreed including: i) detailed breakdown of project activities, expenditures and costs to be financed under Component 4, differentiating between activities to be financed under the IDA grant and under participating country contributions; ii) use of separate and dedicated bank accounts for each of those two sources of financing to facilitate expenditure tracking and accounting; iii)assign/hire dedicated technical and fiduciary staff to support project implementation, who would be financed out of the Regional IDA grant to be maintained throughout the life of the project; iv) periodic reporting on the use of the funds; and v) definition of performance indicators to assess CCARDESA’s support to the project. These arrangements will be reflected in the agreements to be entered between CCARDESA and participating countries, which will also be reviewed by the Bank. 137. From the organizational point of view, CCARDESA’s organigram has 22 positions, but only 8 positions are currently filled due to funding constraints. CCARDESA has completed the hiring of a Financial Manager however, funding constraints may prevent them from maintaining qualified and experienced staff as it happened in the past. For project purposes, it has been agreed that the Finance Manager will be mainly dedicated to support project implementation; however, as need arises CCARDESA will strengthen the FM capacity by hiring and maintaining a competent financial management team to handle the accounting function for the APPSA project throughout the life of the Project. 138. For recording and reporting of transactions, the entity uses an accounting package called Oracle, which is not tailor made for the organization, and in practice, its level of sophistication makes it difficult to understand and operate in a small organization like CAARDESA. The format, content and periodicity of the Interim Unaudited Financial Monitoring Reports (IFRs) to be submitted to the Bank, copying Lesotho and Angola has been agreed. The IFRs should include, both expenditures financed under the IDA Grant and under the contributions received from Angola and Lesotho. 139. The entity’s internal control environment has been strengthened, and CCARDESA has in place operating Finance, HR and Governance manuals. For segregation of duties, the organization has a finance intern who prepares the payments packages. The assistant finance officer performs validation functions and the Acting Executive Director is the final approver. While financial constraints prevent the entity from having in place an internal audit, the review of the external audit management letter for December 2015 and 2016 noted an acceptable internal control environment. 140. As grant recipient, CCARDESA will be subject to annual audit reviews. Following the entity’s corporate governance guidelines in relation to rotation of external auditors, CCARDESA will communicate to the Bank the name of the audit firm, once appointed, and confirm, they are acceptable to the Bank. Likewise, the ToRs for the audit will be submitted to the Bank for no-objection. Funds Flow and Disbursement Arrangements 141. Disbursement arrangements will follow Bank’s disbursement guidelines and general practice and procedures applicable in each country. Accordingly, the following disbursement methods may be used to withdraw funds from the IDA credit/IBRD loan or IDA Grant for CCARDESA: (a) advance, (b) reimbursement, (c) direct payment, and (d) special commitment. Under the advance method, a Designated Account (DA) in US dollars will be opened in an acceptable financial institution and it will be


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used exclusively for deposits and withdrawals of DA proceeds for eligible expenditures. Funds deposited into the DA as advances would follow Bank’s disbursement policies and procedures, to be described in the Financing Agreement, the Disbursement Letters, and Disbursement Guidelines24. Following the current practices advances made to the DA would be documented through the use of SOEs or summary reports as Interim Financial Reports (IFRs), and supporting documents defined in the DL. Specific arrangements are summarized in the Table 1.4 below:

Table 1.4: Disbursement Arrangements

Country Imp. Entity Designated

Account (USD) Other project bank accounts Supporting documents (to be

further detailed in DL) Angola IIA-PIU DA (Commercial

bank acceptable to the Bank)

Sub -account denominated in local currency (at same commercial bank)

Statement of Expenditures (SOE)

Lesotho DAR DA (Central Bank) Project account denominated in Maloti (local currency)

Quarterly un-audited IFRs Six-month forecast

Regional CCARDESA DA – IDA Grant DA – Lesotho cont. DA – Angola cont. (all DAs in a commercial bank acceptable to the Bank)

Pending definition Statement of Expenditures (SOE)

142. The Figure 1.4 below shows the funds flow mechanism for the project.

Figure 1.4: Funds flow mechanism for APPSA Angola and Lesotho

143. Lesotho. The project account denominated in Maloti will be opened and used to make local payments. This local account will be reimbursed with funds from US dollar account, although minimum balance needs to be kept in this account. 24 Disbursement Guidelines for Investment Project Financing (issued in February 2017)

International Bank for Reconstruction and Development (IBRD)

Designated Account (U.S. dollar)

Sub-Account (Kwanza)

Providers of Goods and Services

Dire

ct

Paym

ents

upo

n

Requ

est f

rom

PI

U/IIA

Funds Flow for APPSA Angola

International Bank for Reconstruction and Development (IBRD)

Designated Account (U.S. dollar)

Sub-Account (Maloti )

Providers of Goods and Services

Dire

ct

Paym

ents

upo

n

Requ

est f

rom

PI

U/IIA

Funds Flow for APPSA Lesotho


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144. Disbursement arrangements to CCARDESA. Under the Project, CCARDESA will receive funds from two sources of financing: i) IDA Grant (USD5 million) through a grant agreement to be entered between the World Bank (IDA) and CCARDESA, and ii) contributions from Lesotho and Angola, out of their respective IBRD loan (Angola) and IDA credit (Lesotho). 145. Disbursements of the USD5 million grant will follow Bank standard procedures and will flow directly from the WB to a segregated Designated Account to be opened and maintained by CCARDESA in an acceptable commercial bank, as detailed in Table 1.4 above. 146. Disbursements of funds to CCARDESA from the Angola’s IBRD Agreement and Lesotho’s IDA Agreement have been agreed. In an effort to secure the timely availability of funds for the activities under CCARDESA’s responsibility, both Angola and Lesotho have agreed on requesting direct disbursement of funds from the WB to a separate Designated Account to be opened and maintained by CCARDESA subject to the authorization of the respective country. Overall arrangements are summarized below:

The IBRD loan agreement and IDA credit agreement will establish that Angola and Lesotho

shall make part of the proceeds of their respective financing available to CCARDESA on a grant basis under an implementation/subsidiary agreement between the Angola/Lesotho and CCARDESA, under terms and conditions approved by the World Bank.

The subsidiary agreements will clearly define the roles and responsibilities of Angola/Lesotho and CCARDESA and it will describe the funds flow arrangements, as well as the reporting and auditing requirements.

The amount allocated for the activities to be implemented by CCARDESA will be reflected in a specific expenditure cost category in each legal agreement.

CCARDESA will prepare an Annual Work Plan (AWP) that will be approved by Lesotho and Angola through the mechanisms to be established in the PAD and Project Implementation Manual.

The approved AWP will provide the basis to define the amount to be transferred to CCARDESA, either on an annual or semi-annual basis.

Figure 1.5 presents the flow of funds to CCARDESA for Angola’s and Lesotho’s contributions:


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Figure 1.5: Funds Flow to CCARDESA from Angola and Lesotho

147. Explanation of the funds flow mechanism show in Figure 1.5 is provided below:

B.1 CCARDESA provides Angola/Lesotho with an annual work plan (to be approved following the arrangements defined in the Project Implementation Manual).

B.2 Based on the approved AWP, CCARDESA’s prepares and submits a Withdrawal Request to Lesotho/Angola for approval and submission to the WB. [this procedure will be confirmed based on Client Connection Operation]

B.3 Lesotho/Angola [or CCARDESA] submit the withdrawal request to the WB.

B.4 WB disburses the funds directly to CCADESA’s US Designated Account.

B.5 CCARDESA implements the activities and makes payments to providers of goods and services, and keeps separate accounting records.

B.6 CCARDESA reports to Lesotho/Angola on the use of the funds to Lesotho/Angola on a quarterly basis together with and Statement of Expenditure (SOE), for subsequent submission to the Bank. [SOE, once approved by Lesotho/Angola may also be submitted by CCARDESA]

Under this model, CCARDESA would prepare and submit audited project financial statements for both sources - the USD 5 million Grant and Lesotho/Angola contributions, clearly


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identifying funds received under each source and expenditures made. Audit report would be also submitted to Angola and Lesotho.

148. CCARDESA’s obligations and requirements in the administration of funds provided by Angola and Lesotho will be reflected in the related subsidiary agreements, and related Project Implementation Manual that will be subject to Bank’s review. Disbursements to CCARDESA from the World Bank, under the IDA grant will follow standard WB procedures, as stipulated in the DFIL, and detailed in Table 1.4. Financial Management Action Plan

Table 1.5: FM Action Plan Action Responsibility Completion date

GEN

ERAL

Confirm with the Angola/Lesotho respective ministries of finance the arrangements for the disbursement of funds from Lesotho and Angola to CCARDESA under Component 4, including the accounting, reporting and auditing arrangements).

IIA, DAR WB Team

Confirmed at Negotiations

Prepare the FM section of the Operations Manual/PIM

IIA, DAR, CCARDESA

Before Effectiveness

ANGO

LA

Appointment of qualified and experienced project FMS

IIA Within two months after effectiveness

Appointment of one qualified and experienced project accountants

IIA Within three months after effectiveness

Preparation and adoption of project FM Manual acceptable in form and substance to the World Bank

IIA Complete an outline by Appraisal and full draft by Effectiveness

Purchase and installation of automated accounting software for the project

IIA Within three months after effectiveness

Appointment of the project external auditors IIA No later than four months after effectiveness

LESH

OT

O

Fill in the Accounts Manager and Accounts Officer positions in the PIU

DAR

By effectiveness

Purchase and/or installation of automated accounting software for the project

DAR Within three months after effectiveness

CCAR

DESA

Hire a dedicated FM Specialist to support APPSA Project throughout the life of the projects under ToRs approved by the Bank.

CCARDESA

Confirmed at Negotiations

Put in place the adequate FM arrangements for the management of Project proceeds, including, opening separate bank accounts, separate accounting records, internal controls for timely reconciliation of different sources, etc.

CCARDESA

To be reviewed by the Bank three months following effectiveness

Implementation Support and Supervision Plan 149. Bank’s FM team will provide implementation support over the project’s lifetime. The project will be supervised on a risk-based approach. Supervision will cover but not be limited to the review of audit reports and IFRs and advice to the task team on all FM issues. Based on the current assessed risks, and on


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a preliminary basis, the project will be supervised at least twice a year and may be adjusted when the need arises.

Table 1.6: Implementation Support Plan

FM activity Frequency Desk reviews IFR review Quarterly/Semi-annual. Audit report review of the program Annually. Review of other relevant information such as interim internal control systems reports

Continuous as they become available.

On-site visits Review of overall operation of the FM system Semi-annually (implementation support mission) Monitoring of actions taken on issues highlighted in audit reports, auditors’ management letters, internal audit, and other reports

As needed, but at least during each implementation support mission.

Transaction reviews (if needed). As needed. Capacity-building support FM training sessions by World Bank FM team. Following the project transition and thereafter as

needed. Procurement Arrangements for APPSA Angola, Lesotho and CCARDESA 150. Applicable procedures: The Borrower will carry out procurement under the proposed project in accordance with the World Bank’s “Procurement Regulations for IPF Borrowers” (Procurement Regulations) dated July 2016 and revised in November 2017 under the “New Procurement Framework (NPF), and the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011 and as of July 1, 2016 as stipulated in the Financing Agreements. 151. Procurement strategy: Angola, Lesotho and CCARDESA have each prepared a simplified Project Procurement Strategies for Development (PPSDs) for their respective project activities. The Bank procurement team has provided the necessary support and guidance for preparation of the PPSDs. Taking in to account the complexity of the project the simplified PPSDs will be used initially and updated during implementation as the need arises. The PPSDs are prepared to determine the approach to market, the selection methods, evaluation options and any other sustainability considerations that may need to be included. The project will carry out all procurement during implementation in accordance with the ‘Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011 and as of July 1, 2016.

152. Procurement arrangements: Procurement arrangements will include hiring of a dedicated procurement specialist as part of the APPSA PIU team in Angola. The procurement specialist will closely work with the procurement specialist of SADCP, while reporting to the APPSA Project Coordinator for day-to-day planning and management of all procurement actions. The procurement specialist will receive training on the use of STEP and policy guidelines of the World Bank Procurement Framework. The procurement specialist will prepare detailed procurement plans and update/revise these in accordance with the APPSA work plan.


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153. Procedures for selection of consultants: Open competition will be the main approach. Other methods may be used based on the market analysis as defined in the PPSD and reviewed during implementation.

154. Procedures for works, goods and non-consulting services: Open competition will be the main approach. Other methods may be stipulated in the PPSD depending on the market analysis reviewed during implementation.

155. Procurement Plan: The implementing agencies have prepared respective Procurement Plans in the Systematic Tracking of Exchanges in Procurement (STEP) system. The Procurement Plans, which were reviewed and approved by the Bank, include: (a) a brief description of the activities/contracts to be procured during the first 18 months of project implementation, (b) the approach to market and selection methods to be applied, (c) the cost estimates, (d) time schedules, and (e) the World Bank’s review requirements. Procurement arrangements for the CERC (component 3) are described in the Project Operational Manual.

156. Review by the World Bank of procurement decisions. The table below indicates the initial values for prior review by the World Bank. All activities estimated to cost below these amounts shall be treated as post review and will be reviewed by the World Bank during the Implementation Support Mission under a Post Procurement Review exercise. Direct Contracting/Single Source will be subject to prior review only above the amounts given in the table. The World Bank may, from time to time, review the amounts based on the performance of the implementing agencies.

Table 1.3: Prior Review Thresholds Procurement Type Prior Review (USD)

Works 5,000,000

Goods and Non-Consulting Services 1,500,000

Consultants (Firms) 500,000

Individual Consultants 200,000

Angola Assessment of National Procedures 157. The Angola Procurement Regulation, Law nº. 9/16 of June 16, has been assessed as required under the World Bank’s Procurement Framework. The assessment indicated that the Country’s Regulations are generally consistent with international best practice, although some weaknesses were identified, which should be mitigated with adequate measures: (a) there is adequate advertising in national media; (b) procurement is generally open to eligible firms from any country; (c) contract documents have an appropriate allocation of responsibilities, risks, and liabilities; (d) publication of contract award is generally not done (but the PIU of the project has a good record of contract publications); (e) the national regulations do not preclude the World Bank from its rights to review procurement documentation and activities under the financing; (f) claims are decided at the procuring


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entity level for administrative complaints but there is possibility of appeal to the court; and (g) maintenance of records of the procurement process needs improvement overall but the PIU for the project will put in place an adequate filing system of procurement processes as provided in the Project Implementation Manual.

158. The request for bids/request for proposals document shall require that bidders/proposers submitting bids/proposals present a signed acceptance at the time of bidding, to be incorporated in any resulting contracts, confirming application of, and compliance with, the World Bank’s Anti-Corruption Guidelines, including without limitation, the World Bank’s right to sanction and the Bank’s inspection and audit rights.

159. With the incorporation of the above provision, the Angola Procurement Regulation will be acceptable to be used under those procurements not subject to the World Bank’s Prior Review, as the thresholds indicated in Table 1.3, or any updates indicated by the World Bank in the Procurement Plan.

Lesotho Assessment of National Procedures 160. The project will follow the Procurement Regulations for IPF Borrowers and will use the World Bank standard bidding documents. Environmental and Social Safeguards Arrangements 161. The responsibility for environmental and social (E&S) safeguards including screening, impact monitoring and reporting for the respective country implementation agencies are elaborated in the ESMFs. While some capacity exists in both Angola and Lesotho on safeguards at the Ministry level owing to on-going engagement on World Bank supported projects, IIA in Angola is not familiar with Bank safeguards requirements. However, the IIA team responsible for the preparation of safeguards instruments (ESMF, PMP and RPF) has received training on Safeguard Policies and on Occupational Health and Safety guidelines by the Bank. In addition, the World Bank safeguards team has been constantly providing guidance to ensure that the client will have the adequate capacity to implement, monitor and report on environmental and social issues. During implementation of APPSA, specific capacity for addressing safeguards will be enhanced through dedicated staffing and training programs in Angola and Lesotho. For both Angola and Lesotho, the PIU teams in each country will include dedicated environment and social (E&S) safeguards officers. The E&S officers will be responsible for monitoring and reporting of compliance of safeguards policies for all project activities as part of the regular monitoring reports. Where needed, special assessments and reports may be prepared from time to time for providing additional information on safeguards compliance.


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Appendix A: APPSA R&D Sub-Project Cycle 162. Building on lessons learned in APPSA implementation, the current methodology for development and approval of R&D sub-projects is further improved to ensure higher quality sub-projects are developed. The R&D sub-project cycle is adjusted to include an additional step of ‘concept incubation’ where Principal Investigators (PIs) and Co-Principal Investigators (Co-PIs) will have access to additional resources to improve the quality of their approved concept note into detailed proposals including scoping studies to identify new technologies, mechanization, use of digital technologies (mobile apps, etc.), integration of dissemination strategies, and farmer-feedback mechanisms, etc. The improved R&D sub-project cycle will require a longer timeframe than was used in the ongoing APPSA implementation – 12 to 18 months rather than 12-month period – and will involve greater engagement between PIs/Co-PIs and technical experts. 163. Also building on the lessons from ongoing APPSA, the role of CCARDESA in ensuring quality of R&D sub-projects will be enhanced. CCARDESA will be strengthened by establishing a dedicated regional R&D coordination unit with key technical staff responsible to engage with each country at all steps of the R&D sub-project cycle. 164. All R&D sub-projects will be subject to quality review through a peer review process. The R&D sub-projects will be selected through joint national and regional planning meetings to identify priority themes that are of common interest among APPSA countries. The R&D sub-projects will follow a two-tier approach: (i) concept development for initial selection, and (ii) full proposal for selected sub-projects. All R&D sub-projects will be invited through a call for proposals mechanism. The call for proposals and selection of R&D sub-projects will follow the following steps.

165. Step 1: National planning. Development of R&D projects will start at the country level. One or more consultations will be organized by each country coordination unit, bringing together the principal stakeholders involved in research, training, and dissemination. It is expected that these consultations will form part of the annual national research planning meetings that are already taking place. The results of these consultations will be incorporated into a draft country Annual Work Plan (AWP) with budget that covers all APPSA components. The AWP will identify priority themes for R&D projects that have received endorsement at national level; researchers and other individuals that the national authorities have deemed eligible to prepare APPSA proposals are cleared to develop concept notes around these priority themes. 166. Step 2: Concept note development at national level. Concept notes will be developed for R&D projects in each of the three RCoL commodity systems (horticulture crops, sorghum, and food legumes). Concept notes will be based on a standard template of 2-3 pages and will identify: the focal point (Principal Investigator) for the R&D project; other participating partner(s); and indicative research activities and budgets. The R&D project concept notes should be endorsed at national level. Informal communication among partners in projects under development will be advisable to produce a concept note, but in some cases, countries could develop concept notes to take to the regional planning meetings to identify partners.

167. Step 3: Regional planning and concept note endorsement at regional level. CCARDESA will convene regional planning meetings of technical staff during which concept notes will be finalized in


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consultation with other country partners and the final list of R&D projects selected. Participants in the meetings will agree on R&D projects to be implemented. The final list of R&D project concept notes will be assured funding, subject to the proposal preparation process being completed (Steps 4-6, below). 168. Step 4: Concept incubation. Following the regional meetings and the emergence of a consensus on the final list of R&D project concept notes, The R&D sub-project cycle is adjusted to include an additional step of ‘concept incubation’ where Principal Investigators (PIs) and Co-Principal Investigators (Co-PIs) will have access to additional resources to improve the quality of their approved concept note into detailed proposals through targeted scoping studies to identify new technologies, mechanization, use of digital technologies (mobile apps, etc.), integration of dissemination strategies, and farmer-feedback mechanisms, value chain analysis, etc. These efforts will ensure R&D is taking place at the frontier of science and technology development. 169. Step 5: R&D sub-project proposals preparation. Based on scoping studies during the incubation step, teams will proceed to develop the full project proposals with detailed budgets, using an agreed template. The proposals will describe: (i) research/dissemination objective(s), (ii) detailed activities and inputs with cost estimates and timelines, (iii) arrangements for implementation including individual roles and responsibilities, (iv) expected outputs and outcomes, (v) detailed results and supporting technical/scientific information. 170. Step 6: Peer review. CCARDESA will organize a peer review process to ensure that the R&D project proposals meet certain minimum levels of quality. For each commodity/commodity group, a peer review panel consisting of two to three experts will assess the proposals. Experts will be drawn from within and outside the SADC region. The roster of peer reviewers will be developed by CCARDESA and endorsed by national programs. Every proposal will be reviewed by two peer reviewers; if the two peer reviewers cannot agree on the quality of the proposal, a third peer reviewer will be added. 171. The purpose of the peer review is to promote quality within R&D projects. The peer reviewers will not have the power to approve or reject proposals. Peer reviewers will assess proposals for: (i) technical quality; (ii) the relevance of the problem to the region; (iii) consistency with the regional priority agenda as developed by RCoLs, CCARDESA and approved by the participating countries; (iv) compliance with minimum technical and scientific quality standards, and social and environmental standard that are consistent with the APPSA ESMF framework; (v) potential for dissemination, replicability across the region and potential impact on competitiveness; and (vi) compliance with minimum financial and budgeting standards. 172. The peer review process is intended to provide recommendations to strengthen R&D sub-projects, but it may also identify proposals that do not meet minimum quality standards. If the peer reviewers judge that an R&D project proposal does not meet minimum quality standards, a separate process will be triggered to provide technical assistance to improve the proposal, after which it would be reviewed again. Once the peer review process has been completed and the quality of the proposal has been ensured, the proposal will be included in the regional work plan. 173. Step 7: Agreement on R&D sub-project implementation. The proposed partners in R&D projects will formally indicate their intention to participate by having an authorized representative sign the MOU


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cover page. By doing so, the proposed partners will commit to financing the activities described in the R&D project proposal and meeting all implementation obligations. 174. Figure A.1 shows the APPSA R&D sub-project cycle and associated timelines.

Figure A.1: APPSA R&D Sub-Project Cycle and Timelines

175. Implementation of R&D sub-project. Following the signing of the MOU, the R&D project will start implementation in accordance with the approved proposal. Funds will flow to the R&D project through the primary implementing agency as part of the overall work plan, and not as a separate sub-grant, and the primary implementation agency will retain responsibility for all fiduciary functions. In some cases, the

Regional R&D Sub-Project Implementation Mechanism

Step 1: National planning Output: Draft combined annual work plan and budget consisting of approved R&D

Step 2: Concept note development at national level Output: Draft concept notes that identify lead focal point, partners, activities and budgets

Step 3: Regional planning and concept note development Output: Agreed list of R&D sub-project concept notes consistent with regional R&D agenda.

Recommended updates to regional R&D agenda

Step 4: R&D Sub-project preparation Output: R&D sub-project proposals that conform to the agreed format

Step 5: Peer review of full proposals Output: Peer review report on quality of proposals and recommendations on areas requiring

improvement. If a proposal does not meet minimum standards, a separate process will be triggered to develop an action plan and provide TA to bring proposal up to standard.

Step 6: Agreement on R&D Sub-project implementation Output: Agreed R&D project proposal with formal agreement of partners to implementation

Timing

To be determined based on planning

Within 1 month of national planning

Within 3 months after concept notes

Within 6 months of regional planning

Within 3 months after completing scoping

t d

Within 3 months after proposal submission

Step 4: Concept incubation Output: Scoping study to identify new technologies, mechanization, digital technologies,

integration of dissemination strategies, and farmer-feedback mechanisms, value chain analysis,

Within 1 month after peer review


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implementing agency for an R&D project may however be other than the primary implementing agency of APPSA (for example, it could be a civil society organization, a university, or a private firm). In these cases, a sub-grant arrangement will be needed to allow the transfer funds from the primary implementing agency to the secondary implementing agency. 176. Reporting on implementation progress and financial management will take place on a six monthly and quarterly basis, in line with the overall arrangements for APPSA implementation. Regional meetings will also serve as fora for reporting on R&D project progress and findings. 177. Dissemination of technologies. The payoffs to investments in agricultural R&D made under APPSA will depend ultimately on the success of technology dissemination efforts, so promoting technology adoption remains an important long-term goal of the Project. While APPSA lacks the resources to finance dissemination activities on a large scale, it will leverage existing technology transfer systems and focus on supporting linkages between research and extension systems. It is expected that some of the R&D projects supported under Component 1 will focus exclusively on dissemination activities. During the first few years of Project implementation when few, if any, technologies developed with APPSA funding will be ready for transfer to farmers, dissemination activities could involve technologies developed prior to the launching of the project and already available “on the shelf. 178. APPSA financing will be used to address a range of bottlenecks known to slow technology dissemination: weak research-extension links; lack of human capacity within the national extension systems; inadequate technology reference manuals, bulletins, information leaflets at extension level; lack of harmonization of information packaging; inappropriate packaging of extension messages; limited information flow and feedback within the system; limited use of mass communication channels; and inadequate training. While it cannot and should not replace national extension systems, APPSA can play a useful role in addressing some of the bottlenecks between technology generation and dissemination, for example by improving the content and accessibility of technology messages and knowledge products; improving the capacity of lead farmers, extension agents and advisory service providers; and improving farmer research-extension feedback mechanisms. 179. Through R&D projects, APPSA will support a range of activities designed to promote enhanced dissemination of improved agricultural technology including:

• On-farm participatory research will be carried out in collaboration with a range of partners, including researchers, extension agents, seed companies, and NGOs. The data generated will be used to improve plant breeding efforts and meet varietal registration requirements.

• Demonstrations, field days, and science fairs will be supported to promote interaction with the farming community, raise awareness of new technologies, and facilitate their dissemination.

• Electronic and print media will be mobilized to communicate information about research and dissemination activities being supported by APPSA.

• Posters, brochures, pamphlets and other technical publications will be produced for use in technology transfer activities.

• Training manuals, booklets, policy briefs and scientific publications will be produced to facilitate knowledge transfer.


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Appendix B: Mechanism for new countries to participate in APPSA R&D sub-projects 180. The proposed mechanism for participation of new countries in the ongoing APPSA R&D sub-project cycle is designed with the intention to ensure that each country joining APPSA can take full advantage of ongoing research activities as well as technology dissemination. In line with the lessons learned under ongoing APPSA, it is essential to ensure that high level of quality assurance is maintained for all participating countries. This requires CCARDESA to play a crucial role in coordinating and advising individual countries as they identify and participate in the R&D activities. 181. Also building on the lessons from the ongoing APPSA, the role of CCARDESA will be enhanced through the dedicated regional R&D coordination unit that will also be responsible to engage with each new country (Angola and Lesotho for now) at all steps of the R&D sub-project cycle. 182. All new countries will be informed about the ongoing R&D sub-projects to have an opportunity for learning about APPSA’s research portfolio and status of individual sub-projects. The joining countries will identify R&D sub-projects in which they wish to participate through joint national and regional consultative process. With Angola and Lesotho joining the APPSA overall program framework, the following mechanism will be put in place to ensure inclusion of Angola and Lesotho in R&D sub-projects being implemented by Malawi, Mozambique and Zambia in their respective crop systems. The proposed mechanism is explained in following steps: 183. Step 1. Identify R&D sub-project for collaboration. Each new joining country undertaken consultations at national level, bringing together the principal stakeholders involved in research, training, and dissemination. Presentation on the ongoing R&D sub-projects will be made during the national level consultations by CCARDESA and respective countries. The consultations will form the basis for identifying research topics in which new countries are interested and wish to collaborate with APPSA countries. The output of these consultations will be a draft list of sub-projects that identify priority themes for R&D projects where new countries will participate. 184. Step 2: Establish contact with PIs/Co-PIs. With assistance from CCARDESA, contacts will be established between researchers from new countries and the PIs and Co-PIs of the ongoing R&D sub-projects. The output from this step will be to reach an agreement with PIs on sharing knowledge and update on ongoing R&D sub-projects. 185. Step 3: Concept note development at national level. CCARDESA will convene joint meetings of APPSA countries – PIs and Co-PIs from the ongoing regional sub-projects and the research teams and interested scientists from new countries to support joint planning meetings. The joint planning meeting will result in the output of draft concept notes that provide detailed information about focal points in each country, collaborating partners, activities, timeline and budgets. 186. Step 4: Agreement on R&D sub-project implementation. Following the joint planning meetings facilitated by CCARDESA, and with the emergence of a consensus on the final list of R&D sub-projects with new countries joining APPSA and ongoing APPSA countries agree to collaborate, a formal agreement in the form of Memorandum of Understanding (MOU) will be developed. The MOU will include list of agreed R&D sub-projects and finalized concept note with formal agreement of all partners to implementation


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arrangements, timeline and budgets, reporting requirements and names of Co-PIs from new countries joining APPSA. 187. Step 5: Implementation of R&D sub-projects. Following the signing of the MOU, the R&D sub-project will start implementation in accordance with the approved concept notes. As in case of original APPSA, funds will flow to the R&D sub-projects through the respective implementing agencies. In some cases, the implementing agency for an R&D project may however be other than the primary implementing agency of APPSA (for example, it could be a civil society organization, a university, or a private firm). In these cases, a sub-grant arrangement will be needed to allow the transfer funds from the primary implementing agency to the secondary implementing agency. The implementation progress reports will be submitted to the PIs through CCARDESA. 188. Figure B.1 shows the mechanism for identification and participation in ongoing APPSA R&D sub-projects:

Figure B.1: Steps for new countries to participate in APPSA R&D sub-project cycle

189. Dissemination of technologies. In all ongoing R&D sub-projects, the primary focus will be on effective technology dissemination in new countries joining APPSA. Where needed, additional activities will be included in the concept notes to finance dissemination activities on a large scale, leverage existing technology transfer systems and focus on supporting linkages between research and extension systems.

Step 1: Identify R&D Sub-projects for Collaboration Output: List of ongoing R&D sub-projects where new countries will collaborate

Step 2: Establish Contact with PIs Output: Agreement with PIs on sharing knowledge and update on ongoing R&D sub-projects

Step 3: Concept note development at national level Output: Draft concept notes that identify focal point, partners, activities, timeline and budgets

Step 4: Agreement on R&D Sub-project implementation Output: Agreed R&D sub-project concept note with formal agreement of all partners to

implementation arrangements, timeline and budgets

Timing

To be determined in national consultation

Within 1 month after national consultation

Within 3 months after concept notes

Within 6 months after finalization of concept

Mechanism for Angola & Lesotho Participation in ongoing R&D Sub-projects

Step 5: Implementation of R&D Sub-project Output: Implementation progress reports to Principal Investigators through CCARDESA

Aligned with reporting of ongoing sub-project


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190. APPSA will finance specific areas to address rapid technology dissemination including leveraging private sector stakeholders in R&D sub-project implementation for interventions including, but not limited to, multiplication and commercialization of technologies, private sector-based extension services for farmers, and improved communication and accessibility of technology messages for reaching Lead Farmers, extension agents and advisory service providers with clear feedback mechanisms.


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ANNEX 2: APPSA Key Results to Date


191. APPSA has launched 74 R&D sub-projects which have currently making 156 technologies available to farmers (new and “on the shelf technologies). This includes 47 technologies in Malawi (37 seed varieties; 10 agronomic practices); 63 technologies in Mozambique (11 seed varieties; 28 agronomic practices, 16 pest and diseases management practices, 3 water management practices, and 5 post-harvest technologies); and 46 technologies in Zambia (31 seed varieties; 15 agronomic practices). 192. New technologies are being generated by the project. Malawi generated 2 rice seed varieties. Mozambique generated 9 technologies: 2 seed varieties, 1 agronomic practice, 2 pest and disease management practices and 4 post-harvest technologies. Zambia generated 9 seed varieties, (6 legume; 1 rice and 2 maize). These technologies are being promoted in the three countries. 193. APPSA supported technologies are addressing nutrition priorities through biofortification and food safety. In line with larger efforts initiated within the global agricultural science community, APPSA is supporting the introduction, testing, release and promotion of biofortified varieties of maize (vitamin A maize, quality protein maize) and beans (high iron and zinc beans). These biofortified varieties can provide critical micronutrients that are important for reducing persistent nutrient deficits, especially among children. APPSA R&D activities also focus on testing measures to reduce mycotoxin/aflatoxin contamination levels in groundnuts, which have negative health consequences. 194. Investing in new technologies to respond to climate variability and align to the Bank’s climate change adaptation goals. APPSA’s R&D activities also include a focus on breeding for climate resilience (drought tolerant varieties of maize and grain legumes) as well as testing and promoting agronomic practices under the conservation agriculture umbrella. 195. Providing a more effective response to emerging transboundary pest and disease threats. In 2016 a new pest that is endemic in the Americas spread to Africa (Fall Army Worm) and poses a serious threat to major food and commercial crops. APPSA is providing support to agricultural researchers and extension agents to test and promote management options to control the pest. It will also support development of non-chemical options as agro-chemicals represent an unsustainably high cost for poor farmer to utilize as regular control options. APPSA funds have also been used to increase the capacity and surveillance for Maize Lethal Necrosis Disease, which is present east Africa and could spread to Southern Africa. The availability of APPSA funds allowed public research systems to respond relatively quickly to the threat. 196. Scaling up seed production to disseminate technology more widely. Availability of improved seed has been a constraint in many countries, particularly for open or self-pollinated crops that commercial seed companies are less likely to commercialize. APPSA financing has supported the more robust maintenance of genetic parent material and scaling up seed multiplication, often through community-based efforts and farmers groups.


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197. Moving technology off the shelf and into the field and strengthening research – extension – farmer linkages. APPSA has enabled a significant scale up support of research into extension through demonstrations and field testing, training of extension workers and use of media, including radio to reach farmers. This has strengthened the linkage between research, extension and farmers which should promote adoption and feedback between downstream technology users and upstream technology generators. 198. Building infrastructure and labs that will upgrade scientific capacity for the long term. APPSA financing has supported establishment of regional center of leadership within each of the participating countries that cover multiple research stations. To date seven research centers have been rehabilitated. Mozambique: 6 (these include rehabilitation of offices, staff houses, rice and seed warehouses, threshing floor, greenhouses, laboratory, and storerooms). Zambia: 1 (wall fence, tractors, laboratory equipment, street lights). More are planned. 199. APPSA is building a stronger pipeline of female scientists. Although progress has been made in recent years the number female scientists remains low in Africa. In 2014, the overall share of female researchers in Zambia’s agricultural research systems was only 28% and the share of female PhD level researchers was 14%. In Malawi 20% of agricultural researchers were female and 10% of PhD qualified researchers are women. In Mozambique 35% of agricultural researchers were female and 32% of PhD level researchers are female. (ASTI, 2016) 200. APPSA financed post graduate training opportunities prioritized eligible women and as a result shows promise in building a pipeline of female scientist from BSc, MSc and PhD levels. For example, of the 92 students financed under APPSA long term training window in Zambia, currently 43% are female. 201. APPSA is helping expand the human capital base from a relatively low level. Many countries in Africa have a limited number of PhD equivalent scientists, who often cannot cover the full range of disciplines in the sector. In 2014 it was estimated that there were 35 full time equivalent PhD researchers in agriculture in Zambia, 35 in Mozambique and only 18 in Malawi (ASTI, 2016). The current number of currently enrolled APPSA financed PhD students will represent a nearly 30% increase in the number of PhDs over 2014 levels for Zambia once they complete their studies. 202. Filling gaps in high priority disciplines and bringing in new skills. Science and innovation is constantly evolving. New plant breeding techniques such as marker assisted selection are becoming more common and at the same time new data collection and management techniques mean scientists have more tools available to them. Upgrading skills and bringing in partnerships to allow for new innovations to enter the system is being supported under APPSA. APPSA supported 1,048 days on short term training in 2016 which covered: Results Based Farm Management, M&E, Development Evaluation-IPDET, refresher training on Results framework, safeguards compliance, benefits of certified seed, CA practices, Integrated Pest and Disease Management, soybean production, utilization and processing.


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ANNEX 3: Detailed Project Description


Regional Design 203. Similar to APPSA’s regional design, the APPSA Angola and Lesotho will also support agricultural research, technology dissemination, and capacity building activities associated within a regional collaborative framework around priority farming systems/commodities value chains. These have been identified on the basis of a regional priority-setting study that identified R&D priorities for the SADC region, as well as the priorities indicated by each country. To date APPSA is actively supporting research and dissemination activities around maize, sorghum, legumes (beans, soybean, cowpea, pigeon pea), rice, cassava, and cross cutting climate smart agriculture practices. Regional Centers of Leadership (RCoLs) have been established for legumes in Zambia, maize based farming systems in Malawi and rice based farming systems in Mozambique. 204. The proposed expansion would allow the addition of horticulture and roots and tubers (cassava and potato) to APPSA activities with Angola taking lead on cassava and Lesotho taking lead on horticulture. This adds a valuable dimension to APPSA with a stronger focus on higher value production (fruits, vegetables, potatoes) and processing. Alignment of APPSA Investments across Countries 205. The proposed APPSA Angola and Lesotho investment will come in the last two years of the APPSA investment for the original set of countries (Malawi, Mozambique and Zambia). A staggered sequencing is proposed for the newly joining countries (Angola, Leostho) so that it can better align with for the ongoing APPSA under implementaiton in Malawi, Mozambique and Zambia. This will allow the relatively weak R&D systems in Angola and Lesotho to catch up and develop implementation experience before a second phase of more experienced countries is launched. Implementation Focus 206. As a result, the first two years of implementation of the APPSA Angola and Lesotho will therefore focus on building human and physical capacity within R&D systems and facilitating collaboration on the already existing set of regional R&D activities generated under the first phase of APPSA. Development of wider range of new R&D projects would be initiated but launched and implemented with the original APPSA countries (Malawi, Mozambique, and Zambia). This sequencing builds on lessons learned from the first phase of APPSA, which experienced substantial start up delays and occasional challenges in developing high quality sub-projects. The proposed approach would allow Angola and Lesotho to collaborate immediately on existing regional activities while taking a longer timeframe to develop full set of new regional activities. The original APPSA countries would be expected to launch their participation more quickly given their implementation experience and the capacity built from the first phase. Regional Coordination 207. As in the ongoing APPSA design, CCARDESA would continue to play an important role in facilitating this arrangement in line with their regional mandate under SADC and through the financing provided by APPSA. For Angola and Lesotho, CCARDESA’s role will be expanded for providing technical and


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coordination oversight and the participating countires will partially finance CCARDESA for its services. 208. The original APPSA design is structured around three components: (1) Technology Generation and Dissemination; (2) Strengthening Regional Centers of Leadership; and (3) Coordination and Facilitation. This structure would largely remain the same for the expansion to Angola and Lesotho with two key modifications: (i) the R&D sub-project cycle will be strenthenged by including ‘concept incubation’ to ensure higher quality sub-projects are developed; and (ii) the second component will be renamed and adjusted to allow institutional capacity building investments not just in Regional Centers of Leadership (RCoLs) but the larger enabling environment for technology dissemination and movement of technology within the region. 209. These adjustments are expected to facilitate alignment to a follow on phase for the original APPSA participating countries, who are expected to build on their implementation experience to scale up technology generation and dissemination but also further develop regional market linkages and strengthen the regulatory capacity in line with the larger agricultural transformation agenda. Rationale for Cassava for APPSA Angola 210. Main agriculture production ecosystems in Angola (FAO, 2012) are: (i) the coastal zone, with predominance of cassava and maize; (ii) the northern zone, with predominance of cassava, complemented by the plantations of coffee and palm; (iii) the central zone, with predominance of maize, (iv) the eastern zone, with cassava production in north and cereals in south; (v) the southern region, with predominance of livestock and cereals, and where cassava has been recently introduced (IIA, 2016). 211. Traditionally cassava production areas cover almost half of the country, becoming more dominant and intensive in the northern and northeastern regions (Figure 2), where it becomes the most important component of the families food habits (Diniz, 1998). According to MINAGRIF data, in 2016, the northern part of Angola25 accounted for 71% of the national cassava production while the central26 and southern parts27 contributed with 25 percent and 3 percent respectively (MINAGRIF-GEP, 2016). 212. The cassava production system is dominantly held by small farmers. Average national crop yields is 10.1 ton/ha (FAOSTAT, 2014; MINAGRIF-GEP, 2016), ranging from 7.1 ton/ha in the South to 11.4 ton/ha in the North (MINAGRIF-GEP, 2016). A study carried out by Fews Net in 2013, identified and described 12 livelihood zones in Angola. From these 12 livelihood zones, 10 are described as having cassava either as cash or subsistence crop. Figure 1.3 illustrates the most relevant production zones of cassava and the respective trade flow; the dark green areas indicating the zones of major surplus for market supply, and the light green zones the ones of minor surplus, mostly used for self-sufficiency (Fews Net, 2013). 25 North: Provinces of Cabinda, Zaire, Uíge, Malange, Kwanza Norte, Bengo, Lunda Norte and Lunda Sul. 26 Centre: Provinces of Kwanza Sul, Benguela, Huambo, Bié, and Moxico 27 South: Provinces of Huíla, Namibe, Cunene, and Kuando Kubango


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Figure 1.3: Cassava production areas and major trade flows in Angola (Source: FEWS Net, 2013)

213. The trend of Cassava roots production and productivity in Angola is illustrated in Figure 1.4. The country cassava production increased from 1.4 million tons in the 80´s to 7.6 million tons in 2014, while crop productivity increased from 4 to 10 ton/ha during the same period. These figures only refer to cassava root production and yields. However, the whole cassava plant is used either for human consumption or animal feeding. Roots are used in fresh, boiled, fried as chips, toasted or processed as flour and as wet paste; cassava leaves are also eaten, cooked as vegetable, often in a form of sauce with meat or fish, together with rice, boiled roots or funge; the plant stems are the propagation material used to start a new crop; the crop residues can be used for animal feed and as a manure. 214. In the beginning of the 90´s, a significant increase of cassava production and productivity was registered. This is linked to the post-war effort from the GoA, that promoted a massive production and distribution of cassava cuttings for planting (emergency program in 1990). In addition to that, IIA also released a number of improved cassava varieties, after adhering to the Southern Africa Root Crops Research Network (SARRNET)28 in 1994; this regional collaboration resulted in the introduction of a considerable number of improved genetic material from IITA, during the period 1996 to 2006. 28 SARRNET - Regional Network for Research on Root Crops, created under SACCAR (Southern Africa Centre for Cooperation in Agricultural Research and Natural Resources). Twelve Southern Africa Development community (SADC) countries were members of the network (Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe and the Democratic Republic of Congo (DRC))


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Figure 1.4: Evolution of annual Cassava production in Angola from 1961 to 2014 (Source: FAOSTAT)

215. Considering the potential and long tradition of cassava farming in Angola and its importance in terms of production and cultivated area, and the country needs to overcome the current deficit between the food demand and supply, the GoA selected the cassava crop as its priority crop and focus for the RCoL under the APPSA project. As cassava production is commonly associated with sweet potato, beans and groundnuts, these crops are also considered as part of the cassava farming system and therefore also shall be considered in the cassava-based farming systems research agenda. 216. Under the APPSA support, Angola will establish the Cassava RCoL to generate technological solutions to increase production and productivity and to add value to cassava crop in the country and in the region. It is also expected that RCoL, through its dynamics, scientific and technical relevance as well as through its regional and international linkages, becomes a boosting element to reinforce the agricultural research system in Angola. Rationale for Horticulutre for APPSA Lesotho 217. Lesotho has 4 agro-ecological zones namely Lowlands; Foothills; Highlands (Mountains) and Senqu River Valley (Figure 1.5). DAR maintains its headquarters in Maseru as the RCoL station with regional research stations representing 3 of the major agro-ecological zones of Lesotho: (i) highlands, (ii) foothills and (iii) lowlands (southern and northern, and central lowlands) together with 6 sub-stations or otherwise referred to as field trial stations. APPSA Lesotho will cover only 3 agro-ecological zones.


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Figure 1.5. Distribution of research stations across agro-ecological zones of Lesotho

218. Vegetables and Fruit trees production has presented the country with a myriad of growth opportunities, and is getting an increasing focus after the implementation of the World Bank-supported Private Sector Competitiveness (PSC) and Diversification Project (PSCEDP). The project has two sub-components: the production of vegetables and the production of fruit trees, specifically apples and cherries. Although, other deciduous fruits have been piloted with success at Mahobong. Two South African companies, Alpha Farms and Denmar estates, have partnered with Basotho farmers to produce for the Lesotho, South Africa and EU markets.29 The foothills and lowlands of Lesotho are major fruit-tree production areas (See Figure 1.6) and the fruits tree of interest includes: Peaches, Apples, Plums, Apricot and Cherries30. There are about 34 seedling nursery facilities installed in the southern districts which supply seedlings to farmers country wide. A total of 74 farmers are involved in seedling production to support horticultural farming. However, these nurseries have of late not been able to meet the country’s domestic seedling needs as their production is curtailed by extreme climatic events mainly hail, frost and temperature borne diseases. As a coping strategy, farmers have installed plastic insulation sheets nurseries (greenhouses) to minimize climatic hazards on their produce. However, occurrences of severe thunderstorms associated with hail often destroy these facilities. Due to poor insulation of these facilities frost kill temperatures associated with cold front surges often destroy the seedlings. It has been projected that cold fronts will be more frequent and more severe under climate change conditions.31

29http://documents.worldbank.org/curated/en/439161468056376076/pdf/E15340HORTICUL1UARY0121007011EDITED.pdf 30 Interview with Mr. Chaba Mokuku, Project Manager PIU-PSCD project. October 19, 2017 31 Lesotho: National Adaptation Program of Action: Project Profile https://unfccc.int/files/adaptation/application/pdf/lesotho_napa_proj.pdf


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Figure 1.6: Suitability Map for Commercial Horticultural Production in Lesotho

Source: World Bank PSCDP. Component Description 219. Component 1: Technology Generation and Dissemination (SDR 4.96 million equivalent USD 6.8 million IDA and SDR 7.19 million equivalent USD 9.86 million IBRD). This Component will finance innovative R&D technology generation and dissemination activities associated with the commodity groups or technology themes being targeted by countries participating in APPSA. These will include: (i) regional R&D activities developed in the initial set of APPSA participating countries in the areas of maize, rice, grain legumes, conservation agriculture/climate adaptation, and sorghum; (ii) additional activities in horticulture and cassava as part of the expansion of regional collaboration to include Angola and Lesotho; and new fronteir R&D activities to be developed over the course of implementation by participating countries. 220. All R&D activities financed will be undertaken through collaborative R&D sub-projects involving the participation of at least two countries. The sub-project modality is important mechanism to enable regional collaboration and also allows for flexiblity during implementation to adjust the technical focus of


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activities to meet emerging priorities or test new technologies. Under the first phase of APPSA financing in Malawi, Mozambique and Zambia 77 R&D sub-projects were developed covering a range of topics throughout the value chain. Table 4.1 summarizes the major areas of activities.

Table 4.1: Current APPSA R&D Projects Thematic Areas within maize, rice, grain legumes farming systems

Breeding for resistance to pests and diseases and tolerance to abiotic stresses (drought, heat) Germplasm collection, characterization and conservation Integrated pest and disease control Management of newly emerging pest and disease threats (Fall Army Worm, Maize Lethal Necrosis Disease) Seed production, supply and delivery systems Conservation agriculture and climate adaptation measures Soil fertility improvement Water management and water use efficiency Animal traction Crop-livestock production systems

Post-harvest processing, marketing and value addition Improved storage practices (maize, beans) Food safety (mycotoxin/aflatoxin management) Reducing pre- and post-harvest losses Agricultural mechanization (tools for pre- & post-harvest operations; labor-saving devices) Marketing/ trade of crop produce - linking Farmers to Markets Nutrition (vitamin A maize, Quality Protein Maize, high iron/zinc beans, utilization of grain legumes)

221. As part of APPSA Angola and Leosotho preparation the sub-project cycle has been strengthened (see Annex 2). Building on lessons from the ongoing APPSA implementation, the current methodology for development and approval of R&D sub-projects has been further improved to ensure higher quality sub-projects are developed. The main changes have focuswed on introducing greater technical assistance and quality backstopping during R&D sub-project design as part of the preparartion phase. In addition, the role of CCARDESA in ensuring quality of R&D sub-projects is also being enhanced through strenghtening the regional coordination and quality control role of CCARDESA. As in the ongoing APPSA, Angola and Lesotho will participate in R&D sub-projects relating to the commodity farming system being targeted by the RCoL that they are hosting – i.e. cassava in Angola and horticulture in Lesotho. In addition, Angola and Lesotho will also participate in the R&D sub-projects relating to the commodity farming systems being targeted by RCoLs in other countries; or additional R&D priorities that are agreed collectively by all participating countries. 222. This component will also finance the dissemination of improved technologies by providing resources for RCoLs to engage with a range of partners in scaling up the use of promising innovations of relevance to the targeted commodities. APPSA will help to strengthen the links between researchers, extension agents, input distributors, farmers and other end users, but lead responsibility for technology dissemination will remain with the national extension systems in the respective countries. In addition, special focus on reaching women farmers for technology awareness will be included in the dissemination pathways. 223. Component 2: Strengthening the Institutional and Enabling Environment for Technology Adoption (SDR 6.35 million equivalent USD 8.7 million IDA and SDR 6.6 million equivalent USD 9.05 million IBRD). This Component will finance: (i) upgrading of research infrastructure including rehabilitation and construction of physical infrastructure; farm, laboratory, and office equipment; and information technology and knowledge management systems; (ii) upgrading of infrastructure for sanitary and phytosanitary (SPS) management; (iii) improving institutional administration and performance


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management systems within RCoLs or SPS systems; (iv) developing human capital, with special focus on promoting women scientists, by providing scientific or technical training at the post graduate level; by upgrading skills through short courses or targeted training, and scientific exchanges; and (iv) strengthening seed production capacity, seed regulatory functions, and related services. 224. This component will also finance regional policy analysis and harmonization through analytical work, needs assessments, and policy dialogue or policy harmonization activities in key areas that affect R&D at national and regional level. Work will focus on analysis of relevant policies and legislation for intellectual property rights, operationalization of the SADC harmonized seed regulatory system, implementation of biosafety regulations, and similar topics. Discussions will take place during implementation to determine whether Project resources could be used productively to advance the regional seed agenda. If the participating countries agree that APPSA could play a useful role by supporting key players other than the RCoLs, support for these key players could be channeled through CCARDESA. 225. The proposed research priorities, objectives and expected results for Cassava under APPSA in Angola and Horticulture under APPSA in Lesotho are described in Table 4.2 and Table 4.3 below.


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Table 4.2: Casava research prioties in Angola Research Priorities Objectives Expected Results

1. Cassava genetic diversity in the Country and within the Region

To collect, characterize, register rand preserve the country genetic patrimony as way to protect cassava local genetic diversity and use it in crop breeding

a) Germplasm collected, b) Country genetic diversity characterized, registered and mapped, c) Gene banks for genetic conservation and sharing established, d) Genetic diversity and relevant characteristic for cassava breeding studied.

2. Cassava Crop breeding To promote the development and make available more productive varieties, with high quality and nutritional value, adapted to diverse biotic and a-biotic factors and to different agro-ecological conditions.

a) High productivity varieties, adapted to different agro/ecological conditions and farming systems developed,

b) Varieties with the quality required by the local and regional markets (such as, high dry matter percentage, starch content, sweetness or bitterness, low cyanide concentration) obtained;

c) Healthy varieties, with high nutritional value (rich in Beta carotene, Vitamin A, Fe, and Zn) developed,

d) Varieties with tolerance to different biotic stresses (pests and diseases) and abiotic stresses (water deficits, thermic regime, soil acidity and other toxicities) developed and recommended,

e) Varieties for specific uses such as: human consumption (roots and leaves), processing industries (flour and “fubas”), animal feed (forages) selected and recommended.

3. Agronomy and farming systems

To develop strategies and high productivity crop practices and technologies towards sustainable and climate smart management cassava production systems.

a) Sustainable farming systems (agro-forestry, intercropping, alley cropping, and sole cropping) developed and recommended,

b) Integrated nutrient management for local conditions, tested and recommended, c) Main pests and diseases identified and mapped, and its epidemiology studied, d) Measures of integrated pest and diseases management identified and developed, e) Adequate agronomic practices and measures (such as planting methods, planting dates,

planting density, soil and water conservation, fertilizer applications, phytosanitary measures to control pests, diseases, and weeds, conservation agriculture measures) tested and recommended;

f) Land preparation technology aiming at better water and soil fertility management and weeds control improved;

g) Soil conservation for the upland and agroforestry production ecosystems (Congolese forest) tested and validated,

h) Impact of climatic changes expected in the cassava production systems studied, and crop practices and technologies leading to increased adaptation of cassava production systems to climatic variability and change, identified and tested.


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Research Priorities Objectives Expected Results 4.Biotechnology To produce and make available for distribution

healthy and clean planting material of improved varieties, use of modern biomolecular processes, methods and tools for plant breeding and for in-vitro and in-field conservation of the genetic material.

a) Biotechnological procedures applied to clean cassava planting material from main diseases, particularly the CMV and the CBSV, used,

b) Confirmed clean and disease-free planting material for rapid multiplication developed and available,

c) Cassava accesses and varieties confirmed through molecular biology techniques, d) Cassava genetic material conserved in-vitro and in-situ, e) Rapid multiplication of clean and healthy planting material for distribution of

recommended varieties, promoted. 5. Post-harvest technologies

To add value to cassava post-harvest products, through the use of more innovative and efficient processing methods and technologies, in order to reach a better conservation and a cassava final product of better quality for the markets

a) Technologies and business models for cassava post-harvest products and crop residues (“fuba” and flours, starch extraction and animal feed) in order to improve the product quality and its market value, consequently increasing farmers revenue, developed,

b) Technologies to process cassava leaves as a food supplement for human and animal consumption, tested and validated,

c) Machinery and tools for cassava processing, tested and promoted, d) Artisans and operators, trained, and e) Improved forms of packaging for more attractive market display, developed

6. Socio-economic studies To understand, characterize and evaluate existing farming systems and identify the needs for products and technologies that meet farmers and market’s needs, to enhance the impacts of the research agenda

a) Socio economic studies for identification and assessment of main farmers needs for technologies and products, in order to maximize the productivity and income, carried out,

b) Market studies to quantify products demand (types, tastes and quality, new products derived from, use of by-products and residues and its degree of quality), realized,

c) Strategic vision for research and development priorities for each period, established, d) Impact of research in agriculture development, evaluated and data base on research

results and technological advancements, which can be used at national and regional level, established.

7. Innovation and transference of technologies

To support the development of Cassava in the country and in the Region, through communication, share of knowledge and technology transfer

a) Innovative tools for training and communication produced, b) Capacity for extension and dissemination of technologies, developed; c) Sustainable and easily adopted Cassava technology packages, including agro-

processing and other added value techniques, for the Country and for the Region, developed.


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Table 4.3: Horticulture research priorities in Lesotho

Priority Objective Activity Expected Output Crop genetic diversity improvement (collection; characterization; conservation and germplasm exchange).

To characterise and evaluate potato, tomato and fruit crops germplasm to preserve distinctive plant genetic resources integrity/identity and promote their management for continuous use.

1. Collect fruit crop, potato and vegetable germplasm, profile and compare the descriptive of these lines (passport data). 2. Conduct morphological characterization of collected Germplasm. 3. Conduct biochemical characterization of collected germplasm. 4. Conduct molecular characterization and develop genetic markers of lines collected and varieties released regionally.

1. Horticulture Germplasm collected and profiled. 2. Morphological characterization of horticulture documented. 3. Biochemical characterization of horticulture crops documented. 4. Genetic makers for horticulture crops developed and varieties released for regional use.

To enhance genetic diversity of adaptable species.

1. Exchange the genetic material with desirable traits. 2. Establish national on-farm conservation sites in areas with high diversity.

1. Regional genetic materials exchange kick started. 2. National on-farm conservation sites established.

Crop breeding and improvement for adaptability, economic and spillover effect.

To develop and promote quality seeds and seedlings for tomato, potato and fruit crops.

1. Develop sustainable system for production of certified seed of tomato, potato and fruit tree seedling. 2. Characterize and evaluate the root stalks of tomato and fruit trees for adaptability 3. Develop protocols for disease free potato seed production. 4. Identification of crafted trees???

1. Sustainable production system developed for tomato, potato and fruit tree. 2. Tomato, potato and fruit tree root stalks characterized and evaluated. 3. Potato seed disease free protocols developed.

To enhance development of new horticultural crop varieties and cultivars.

1. Conduct varietal/cultivar adaptability studies for specific agro-zones. 2. Conduct molecular and mutation breeding using biotechnology applications. 3. Assess standardized propagation techniques. 4. Develop varieties/cultivars with high nutritional value (e.g. Beta-carotene) and desired cooking qualities for the local and regional markets. 5. Identify and promote suitable other non-traditional horticultural crops of high value and cash generation potential. 6. Determine appropriate varieties and other inputs as well as optimum planting dates for various horticultural crops. 7. Introduce apiculture into fruit trees to study bee-tree productivity interaction.

1. Horticultural crops’ adaptability/suitability mapped to agro-zones. 2. Propagation techniques assessed. 3. High nutritional varieties/cultivars developed. 4. Horticultural crops of high values and cash generation potential identified and promoted. 5. Appropriate varieties and inputs for horticultural crops. 6. Bee-tree productivity interaction studies undertaken.

Integrated pest and disease management development.

To develop IPDM for cost effective crop management and protection techniques.

1. Identify and promote botanical /natural pest management techniques for vegetable and fruit production. 2. Develop and promote traditional organic methods for pest and disease control.

1. Natural pest management techniques identified and promoted. 2. Traditional pest and disease organic methods developed and promoted.


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3. Identification of semio-chemicals for pest management. 4. Develop economic and environmental friendly use of chemicals for pest and disease control.

3. Semio chemicals for pest management identified. 4. Economically and environmentally friendly use of chemicals developed.

Development of postharvest technology and innovation techniques.

To develop postharvest technologies for improved utilization of horticulture commodities.

1. Add value to horticultural crops for introduction of new food products. 2. To assess viable technologies for reducing postharvest losses. 3. Processing, marketing and development of labor saving technologies. 4. Develop appropriate systems for handling, cleaning, sorting, grading and packaging of horticultural crops. 5. Determine the appropriate storage facilities (locally available materials). 6. Develop cost effective storage facilities.

1. Value added horticultural commodities available. 2. Viable technologies assessed. 3. Labor saving technologies developed and used. 4. Appropriate systems for postharvest management developed. 5. Appropriate storage facilities using locally available materials developed. 6. Cost effective storage facilities developed and in use.

Irrigation technologies/innovations development.

Develop and test appropriate machineries, irrigation and agricultural implements to support the different activities of the horticulture production cycle.

-Machineries and agricultural tools of different technology levels for pre-harvest operations developed and tested; -Machineries and agricultural tools of different technology levels for post-harvest operations developed and tested; -Develop technologies that reduce evaporation losses and optimize the use of soil moisture. -Develop and test different irrigation designs for water application in vegetables, fruit trees and potatoes. -Select water harvesting techniques suitable for both small holder irrigation and commercial purposes. -Design of efficient technologies for gravity fed and drip irrigation.

Production systems and management technologies integration (e.g. planting dates, soil fertility improvement).

To evaluate land (soil) suitability for potato, fruits and vegetables production in Lesotho

1. Soil survey and classification. 2. Standardize soil suitability evaluation procedure. 3. Identify and discuss issues on sustainable land management in Lesotho. 4. To evaluate land use planning as a prerequisite for sustainable use of soils. 5. To make recommendations on how to sustain Lesotho soil resources. 6. Develop sustainable system for production of certified seed of tomato, potato and fruit tree seedlings.

Lesotho soils classified. 2. Soil suitability procedure standardized. 3. Land management issues identified and reviewed. 4. Land use planning evaluated. 5. Recommendations on how to sustain soil resource developed. 6. Sustainable production systems of certified seed (tomato, potato and fruit crops) developed.

To improve husbandry practices and management

1. Study soil fertility management practices for production of tomato potato and fruit trees (peaches, berries, grapes and apples).

1. Soil fertility management practices studied. 2. Organic fertilizers developed for production of


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techniques. 2. Organic fertilizers development for production of tomato, potato and fruit trees (peaches, berries, grapes and apples). 3. Improve Soil health for production of tomato potato and fruit trees (peaches, berries, grapes and apples). 4. Develop and promote hydroponics and organic farming techniques. 5. Improve and promote Good Agricultural Practices (GAP) under protected agriculture. 6. Identify and test cost effective crop management practices and technology options that are ecologically sustainable and climate smart. 7. Develop and recommend use of sustainable farming systems (e.g. agroforestry and intercropping) to farmers. 8. Develop and promote appropriate storage facilities.

tomato, potato and fruit trees. 3. Soil health improved for production of tomato, potato and fruit crops. 4. Hydroponics and organic farming techniques developed. 5. GAP under protected agriculture improved and promoted. 6. Crop management practices and other technology options that are cost effective identified and tested. 7. Sustainable farming systems developed and their use recommended. 8. Appropriate storage facilities developed and promoted.

Dissemination and technology transfer.

To empower and enhance capacity of Famers for enhanced productivity, supporting livelihoods and household economic growth.

1. Establish nurseries and demonstration trial sites. 2. Establishment of Research and Training Centre 3. Conduct hands on training workshops for Extension staff and farmers in innovative vegetable production techniques and entrepreneurship related skills. 4. Develop manuals, guidelines and publications to enhance technical capacity. 5. Develop sustainable and easy adoption technological packages for different horticultural crops. 6. Undertake market studies to map demand. 7. Improve information flow among various value chain actors and the market. 8. Identify marketing channels. 9. Establish sustainable specific commodity-based platforms. 10. Assess the economic viability of commercial deciduous fruit, potato and vegetable production in Lesotho.

1. Nurseries and demonstration sites established.


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226. Component 3: Contingency Emergency Response Component (SDR 0 equivalent USD 0). The CERC would be available should the need arise to redirect some project resources to contribute with other projects in the participating countries portfolio to respond to an eligible emergency or crisis. Resources would be made available to finance emergency response activities and to address crisis and emergency needs. If such a crisis develops, the government may request the World Bank to reallocate project funds to cover some costs of emergency response and recovery. Detailed operational guidelines acceptable to the World Bank for implementing the project CERC at national level will be prepared as a disbursement condition for this Component. All expenditures under the CERC will be in accordance with Bank Directive: Financial Management Manual for World Bank Investment Project Financing Operations. The operational guidelines and expenditures will be appraised and reviewed to determine if they are acceptable to the World Bank before any disbursement is made. Disbursements will be made against an approved list of goods, works, and services required for crisis mitigation, response, recovery, and reconstruction. In case this component is to be used, the project will be restructured to re-allocate financing. 227. Component 4: Project management, monitoring and evaluation, and regional coordination (SDR 3.28 million equivalent USD 4.5 million IDA and SDR 4.44 milion equivalent USD 6.09 million IBRD and SDR 3.6 million equivalent USD 5 million IDA Grant to CCARDESA). This Component will finance: (i) national coordination; (ii) regional facilitation; and (iii) monitoring for results. The national level coordination will include planning and budgeting, management and administration, monitoring and evaluation, safeguards compliance, and regional engagement. If necessary, APPSA could finance consultants to ensure that all essential project coordination activities are carried out effectively. Government counterpart resources will be used to pay staff-related costs not eligible for IDA or IBRD funding. To ensure regional level coordinaiton, CCARDESA will act as the key facilitation partner to support each country at all stages of implementation cycle including (i) planning, monitoring and evaluation activities related to regional collaboration; (ii) regional exchange of information, knowledge and technologies; and (iii) technical assistance and capacity building. CCARDESA, which will play an important role in facilitating the development of R&D sub-projects, including quality assurance of sub-project proposals and organizing the peer review process. The regional facilitation activities to be performed by CCARDESA will be supported using funds from a subsidiary agreement between the APPSA participating countries. CCARDESA will also support all participating countries in implementation of the regional monitoring and evaluation framework through setting up a joint Management Information System (MIS) between countries implementing the ongoing APPSA – Malawi, Mozambique and Zambia – as well as the new countries joining APPSA – Angola and Lesotho. 228. Reporting responsibilities. The reporting responsibilities for Angola, Lesotho and CCARDESA are described below:


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Angola Lesotho CCARDESA

Component 1

Report on all R&D sub-projects where Angola is leading, and participating with other countires Report on dissemination of technologies in Angola and other APPSA countries Performance of Casava RCoL in Angola

Report on all R&D sub-projects where Lesotho is leading, and participating with other countires Report on dissemination of technologies in Lesotho and other APPSA countries Performance of Horticulture RCoL in Lesotho

Cumulative report on all R&D sub-projects in all APPSA countires Cumulative report on dissemination of technologies in Angola and Lesotho and other APPSA countries Performance of RCoLs in Angola and Lesotho

Component 2

Report on upgrading of research infrastructure including rehabilitation of and construction of physical infrastructure; farm, laboratory, and office equipment; and information technology and knowledge management systems Report on upgrading of infrastructure for sanitary and phytoanitary (SPS) management improving institutional administration and performance management systems within RCoLs Report on all training activities including the post graduate level, short courses or targeted training, and scientific exchanges Report on strengthening seed production capacity, seed regulatory functions, and related services

Report on upgrading of research infrastructure including rehabilitation of and construction of physical infrastructure; farm, laboratory, and office equipment; and information technology and knowledge management systems Report on upgrading of infrastructure for sanitary and phytoanitary (SPS) management improving institutional administration and performance management systems within RCoLs Report on all training activities including the post graduate level, short courses or targeted training, and scientific exchanges Report on strengthening seed production capacity, seed regulatory functions, and related services

Report on regional policy analysis and harmonization through analytical work, needs assessments, and policy dialogue or policy harmonization activities Undertaking analysis of relevant policies and legislation for intellectual property rights, operationalization of the SADC harmonized seed regulatory system, implementation of biosafety regulations, and similar topics Report on channeling support of other institutions e.g. CGIAR institutions, academia and private sector partners, for APPSA countries


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Angola Lesotho CCARDESA

Component 4

Report on all aspects of project management including fiduciary and safeguards compliance Report on country-level M&E including progress against Results Framework Report on national level planning and budgeting, management and administration, M&E, safeguards compliance, and country engagement with other countries

Report on all aspects of project management including fiduciary and safeguards compliance Report on country-level M&E including progress against Results Framework Report on national level planning and budgeting, management and administration, M&E, safeguards compliance, and country engagement with other countries

Report on regional facilitation and coordination including convening of the Regional Steering Committee meetings Report on regional monitoring for results against the Resutls Framework and establishement of the joint MIS Report on CCARDESA’s facilitation and support to each coutnry for planning, M&E, regional exchanges, and capacity building Report on CCARDESA’s role in facilitating the development of R&D sub-projects, including quality assurance of sub-project proposals and organizing the peer review process

229. Project costs. The total project cost is USD50 million of which USD25 million is IBRD financing for Angola, USD20 million is IDA financing for Lesotho, and USD5 million is Regional IDA Grant for CCARDESA. The Lesotho IDA allocation comprises USD6.7 million from the country IDA envelope and USD13.3 million from the Regional IDA window. Detailed project costs for each country and CCARDESA along with financing sources are provided below.


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Table 4.4: Summary of Project Costs (USD million)

Project Components Project Costs Financing Source % of

Total IBRD

% of Total IDA

Angola Lesotho CCARDESA Total IBRD Loan

Country IDA

Regional IDA CCARDESA Total

IDA

Component 1: Technology Generation and Dissemination 9.86 6.8 - 16.66 9.86 1 5.8 - 6.8 39 27

Component 2: Strengthening the Institutional and Enabling Environment for Technology Adoption

9.05 8.7 - 17.75 9.05 3.5 5.2 - 8.7 36 34

Component 3: Contingency Emergency Response Component - - - - - - - - - - -

Component 4: Project management, monitoring and evaluation, and regional coordination

4.84 3.5 - 8.34 4.84 1.7 1.8 - 3.5 19 14

Total Project Base Costs 23.75 19 42.75 23.75 6.2 12.8 - 19

Country contribution to CCARDESA 1.25 1 2.25 1.25 0.5 0.5 - 1 5 5

Regional IDA for CCARDESA - - 5 5 - - - 5 5 20

Overall Project Financing 25 20 5 50 25 6.7 13.3 5 25 100 100

Table 4.2: Detailed Costs for Angola (USD million)

Project Components Local Foreign Total IBRD

Component 1: Technology Generation and Dissemination

1.1 Collaborative R&D on Cassava 0 3.2 3.2 3.2 1.2 Collaborative R&D on other crop systems 0 5.5 5.5 5.5

1.3 Technology dissemination 0 1.16 1.16 1.16

Sub-total 0 9.86 9.86 9.86 Component 2: Strengthening the Institutional and Enabling Environment for Technology Adoption 2.1 R&D infrastructure 0 7.1 7.1 7.1

2.2 Training and capacity building 0 1.5 1.5 1.5

2.3 Policy and regulatory framework 0 0.3 0.3 0.3

2.4 Regional coordination 0 0.15 0.15 0.15

Sub-total 0 9.05 9.05 9.05

Component 3: Contingency Emergency Response Component

Sub-total 0 0 0 0

Component 4: Project Management, Monitoring and Evaluation, and Regional Coordination

4.1 Project management 0 3.23 3.23 3.23

4.2 Monitoring and evaluation 0 0.36 0.36 0.36

4.3 Regional coordination (CCARDESA) 0 1.25 1.25 1.25

Sub-total 0 4.84 4.84 4.84


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Project Components Local Foreign Total IBRD

Total Project Base Costs 0 23.75 23.75 23.75

Contingencies (5%) 0 1.25 1.25 1.25

Overall Project Financing 0 25 25 25

Table 4.3: Detailed Costs for Lesotho (USD million)

Project Components Local Foreign Total IDA

Component 1: Technology Generation and Dissemination

1.1 Collaborative R&D on Horticulture 0 2.7 2.7 2.7 1.2 Collaborative R&D on other crop systems 0 1.3 1.3 1.3

1.3 Technology dissemination 0 2.8 2.8 2.8

Sub-total 0 6.8 6.8 6.8 Component 2: Strengthening the Institutional and Enabling Environment for Technology Adoption 2.1 R&D infrastructure 0 5.3 5.3 5.3

2.2 Training and capacity building 0 2.3 2.3 2.3

2.3 Policy and regulatory framework 0 0.9 0.9 0.9

2.4 Regional coordination 0 0.2 0.2 0.2

Sub-total 0 8.7 8.7 8.7

Component 3: Contingency Emergency Response Component

Sub-total 0 0 0 0

Component 4: Project management, Monitoring and Evaluation, and Regional Coordination

4.1 Project management 0 2.1 2.1 2.1

4.2 Monitoring and evaluation 0 0.4 0.4 0.4

4.3 Regional coordination (CCARDESA) 0 1 1 1

Sub-total 0 3.5 3.5 3.5

Total Project Base Costs 0 19 19 19

Contingencies (5%) 0 1 1 1

Overall Project Financing 0 20 20 20

Table 4.4: Detailed Costs for CCARDESA (USD million)

Activities IBRD IDA Credit

Regional IDA Grant Total

Regional Steering Committee meetings 0.2 0.05 0.5 0.75

Regional RCoLs for R&D sub-project quality assurance 0.3 0.3 1.05 1.65

Scoping studies for regional R&D sub-projects 0.2 0.3 0.3 0.8

Training, workshops and regional exchanges 0.1 0.1 0.8 1

Policy harmonization and advisory services 0.12 0.13 0.03 0.28

Peer review 0.23 0.1 0.05 0.38

Project coordination and administrative costs 0.1 0.02 2.27 2.39


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Activities IBRD IDA Credit

Regional IDA Grant Total

Management fees (14%) 0.014 0.003 0.7 0.72

PIU Staff 0 0 1.57 1.57

Total 1.25 1 5 7.25


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ANNEX 4: Economic and Financial Analysis


Rationale for public investment in agricultural R&D 230. Agricultural R&D can create gains in agricultural production and productivity while stimulating broader economic growth. The driving force behind the increase in cereal production during the green revolution was agricultural R&D, which led to the adoption of high yielding crop varieties and complementary inputs, resulting in higher yields rather than area expansion (Lipton 200132). 231. Much of the investment made under APPSA will result in the generation of public goods and will not displace private sector activity but complement the limited private sector R&D that exists around commercial seed production (mostly maize and horticulture). 232. An alternative measure of IRR – the modified IRR (MIRR - see Box 1 below for full definition) – has also been used when evaluating public investments in R&D to address over-estimation issues. A study by Rao, Hurley, and Pardey (2012) recalculated the rates of return to agricultural research for a large set of studies globally assuming the reinvestment rate is 3%. They found a reduced MIRR calculation from 33 % to 12 %. This is still shows an acceptable return for agriculture R&D projects. The IFPRI review has shown that large SSA countries without the support of CGIAR, reportedly had an IRR of 34% on average, while they had an IRR of 40% and a MIRR of 19.6% (assuming a 10% discount rate) if they collaborated with CGIAR in their R&D. For midsize countries, the mean IRR was 28 %, and the MIRR was 16%. Small countries that collaborated with CGIAR centers earned a mean IRR of only 17% (and a MIRR of 12%). Even though the estimated returns to research are much higher in larger countries, the IFPRI report concludes that the returns estimated for most small countries are sufficiently high to justify investment in NARSs.33

Box 1. MIRR vs IRR Traditionally, when calculating IRR, it was assumed that net cash flow of investment was reinvested under the same rate of IRR. However, if IRR is too high, then it cannot be expected to be reinvested as net cash flow under such high interest rates. The use of modified IRR or MIRR is based on the assumption that net cash flow is reinvested per costs of capital (the same case as calculating investment’s NPV). Therefore, the MIRR is seen as a better indicator of actual rate of return of invested assets. The MIRR gives lower rate of return than the classical IRR and cannot cause overestimation of rate of return. However, it has also been noted that the MIRR method also has its disadvantages, such as determination of accurate reinvestment rate (see: Green, 1991). 34 Nonetheless, the MIRR is a better measure than IRR of the project’s true rate of return and is a more accurate measure of the attractiveness of an investment because the return

32 Lipton, M., 2001. Reviving global poverty reduction: what role for genetically modified plants?. Journal of International Development, 13(7), pp.823-846 33IFPRI, 2016. Agricultural Research in Africa. Investing in Future Harvests. (Eds: John Lynam, Nienke Beintema, Johannes Roseboom, and Ousmane Badiane) 34 Sanjin Ivanovic, Lana Nastić, Bojana Bekic. 2015. Possibilities of MIRR Method Application for Evaluation of Investments in Agriculture: An Example of Pigs Fattening. Economics of Agriculture 2/2015


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depends not only on the investment itself, but also the return expected on the cash flows it generates. 35 36 Additionally, the use of the MIRR has also been suggested as a way of assessing the sensitivity of a proposed investment and deals with weaknesses in relying on NPV and IRR alone.37 Economic Estimation of returns under APPSA 233. The added value from the World Bank financing arises in the technical input based on international experience for similar agricultural productivity improvement and introduction of innovation and technology transfer mechanisms that create opportunities for regional market linkages for farmers and other stakeholders. The support for capacity development of agricultural R&D as well as farmers’ adoption of new and improved technologies and cross-country knowledge sharing, and policy harmonization are key inputs that this operation will complement through national and regional level coordination. In addition, as an important development partner in promoting economic and agricultural development in Angola and Lesotho, the World Bank’s involvement will continue to strengthen the regionally harmonized framework among government as well as other development partners for supporting agricultural productivity. Because of its convening power, the World Bank has created an important space for dialogue and work with other development agencies that are active in agricultural productivity improvement in Angola and Lesotho. this is reflected in the econominc and financial assessment conducted for this operation as described below. 234. To estimate the economic effectiveness of the APPSA project, a cost benefit analysis (CBA) was conducted, but focusing on estimating the net economic internal rate of return (EIRR), the present value (ENPV), the present value of costs (PVC), and the present value of benefits (PVB). The Economic Internal Rate of Return (EIRR) and the Economic Modified Internal Rate of Return (EMIRR) from the investment in APPSA agricultural R&D have been estimated under the assumptions that, after agricultural technologies are released to smallholder farmers, they have an economic life of 20 years where the smallholders will be planting and benefiting from the new innovations. 38 Some studies have shown a 10-year lag between agricultural R&D expenditure and agricultural productivity growth. An expenditure growth on R&D of about 2 percent per year in the 1970s led to strong productivity growth after the mid-1980s. And, literature shows that the stagnation of R&D expenditure in the 1980s and early 1990s led to slower productivity growth in the 2000s.39 235. In the APPSA estimation, we used the total project costs for the first six year to calculate discounted project benefits from year 6 (2024) to year 21 (2039)40. The World Bank accepted discounted 35Pamela Peterson Drake: Capital budgeting techniques. Available: https://aggie-horticulture.tamu.edu/faculty/hall/EAGL/Finance%20Readings/Capital%20budgeting/Capital%20budgeting%20techniques.pdf). 36 R. Brian Balyeat, Julie Cagle, and Phil Glasgo, 2013. Teaching MIRR to Improve Comprehension of Investment Performance Evaluation Techniques. Journal of Economics and Finance Education · Volume 12· Number 1 ·Summer 2013 37 Herbert Kierulff, 2008. MIRR: A better measure Business Horizons: 51, 321—329 38Uttam Deb used 15 years as the economic value for newly introduced rice in Bangladesh. For details, See: Uttam Deb. 2016. Benefits and Costs of Adopting the Golden Rice in Bangladesh. Bangladesh Priorities, Copenhagen Consensus Center, 2016. License: Creative Commons Attribution CC BY 4.0. 39Uttam Deb used 15 years as the economic value for newly introduced rice in Bangladesh. For details, See: Uttam Deb. 2016. Benefits and Costs of Adopting the Golden Rice in Bangladesh. Bangladesh Priorities, Copenhagen Consensus Center, 2016. License: Creative Commons Attribution CC BY 4.0. 40Using the Bass model, we have estimated that in Angola, the peak of adoption of the new agricultural technologies will be around the year 2035 when almost 74% of smallholders (1,857,408) will have adopted the new technologies. By 2039, we have estimated that 95% of smallholders in Angola will have adopted new technologies. Similarly, for Lesotho the peak of adoption of the new agricultural technologies will be around the year 2035 when almost 74% of smallholders (m), 248,893 will have adopted the new technologies, and almost 95% (316,764) of the smallholders will have adopted the new technologies by 2039.


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factor was used (8 %).41 Literature recommends the use of MIRR as a better measure than IRR of the project’s true rate of return and as a more accurate measure of the attractiveness of an investment. We therefore estimated the MIRR using the formula:

…………………………………………………………………1

Where: COF is the cash outflows; CIF is the cash inflows; k the cost of capital; MIRR is the modified internal rate of return; n is the numbers of years of investment use; and t is the individual year of

investment use.

236. In almost all agricultural project analyses, costs are easier to identify (and value) than benefits.42 There is uncertainty about what any given agricultural research project will achieve biologically and about what would have happened without the research. In agricultural research projects it has been difficult to place an economic value on a biological outcome, especially where the research affects a product that is not sold but is used as an input to another enterprise on the farm.43 237. Agricultural research projects seek to advance knowledge. Thus, the outcome of research can be information rather than a new technology. In practice, the difficulty of estimating the value of information can be considerable as it depends on each farmer's perceptions and levels of adoption of a given agricultural research outcome.44 The benefits from agricultural research projects typically arise only after there has been a sufficient accumulation of knowledge. Hence these can be measured by the increase in economic surplus resulting from adoption.45 Therefore, in most cases, the benefits do not accrue until producers begin to adopt the innovations resulting from the research.46 238. The challenge in estimating the benefits from agricultural research projects is calculating how long it will take to complete all the follow-up research activities required to arrive at an adoptable innovation. This becomes more difficult when specific project deals with more research activities. This is the case with the APPSA project. 239. The APPSA project involves upfront costs, with the benefits coming later. One way to weigh future costs and benefits against current costs and benefits is to compare costs and benefits that accrue at different times then calculate their present value. We could not find a reliable methodology from literature to determine benefits from agricultural research projects. We therefore developed a

41IFPRI has shown that there are significant variations discount rates, with developing countries applying higher SDR rates (8%–15%) than developed countries (3%–7%). 42See: Economic Analysis of Agricultural Projects. https://web.stanford.edu/group/FRI/indonesia/reader/Output/gittingerreader.html 43David J. Pannell, 2013. On the estimation of on-farm benefits of agricultural research. Agricultural and Resource Economics, University of Western Australia, Nedlands 6907 44David J. Pannell, 2013. On the estimation of on-farm benefits of agricultural research. Agricultural and Resource Economics, University of Western Australia, Nedlands 6907 45Graham R. Marshall and John P. Brenna, 2001. Issues in benefit-cost analysis of agricultural research projects. The Australian Journal of Agricultural and Resource Economics, 45:2, pp. 195-213 46Graham R. Marshall and John P. Brenna, 2001. Issues in benefit-cost analysis of agricultural research projects. The Australian Journal of Agricultural and Resource Economics, 45:2, pp. 195-213


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methodology whereby all the APPSA project costs from year 1-6 were added up and thereafter discounted annually at 10% as the project estimated benefits at each annual period. 240. For some social sector projects, quantification of the monetary value of project benefits is sometimes difficult. Outside the social sectors, it is also possible that some benefits, particularly external effects, may not be quantifiable. Where it is important, but difficult to establish monetary values for such effects, they should be identified, and a qualitative discussion be provided. However, in identifying project benefits, two distinctions are particularly important. The first is whether the benefits are derived from incremental outputs or from no incremental outputs.47 The APPSA project has an incremental output component. The second distinction is whether project outputs are sold in markets, and whether there are market prices that can be used as the starting point to value project benefits. 48 Most of the APPSA project outputs such as capacity development is not sold in the market. 241. The amounts and structure of APPSA investments cash inflows, cash out flows and net cash flow are shown are shown in Table 5.1. The MIRR is estimated at two reinvestment rate levels: 12 percent and 14 percent. Overall, the economic analysis shows that the project’s NPV is estimated at USD54.67 million at 10 percent discount rate. The findings further show that the project is viable, as both the IRR and the MIRRs produce rates above the discount rate (DR) of 10%. The value of the estimated IRR is 31% percent while the MIRRs are 16% and 17%, at the reinvestment rates of 12% and 14%, respectively (Table 5.1). 242. While the NPV analysis offers a better measure of the impact of an investment, the present estimation of the MIRR and the NPV support the conclusion that the APPSA project is financially attractive. Additionally, the APPSA PVB is valued at USD81.76 million, while the PVC is valued at USD34.7million. The benefit-cost ratio (BCR) of 2.44 shows that APPSA could expect $2.44 in benefits for each $1 invested.

Table 5.1: Economic Analysis of the APPSA Project (Angola and Lesotho)

YR

ESTIMATED PROJECT

BENEFITS $

PROJECT COSTS (USD)

DF

DISCOUNTED BENEFITS

(USD)

DISCOUNTED COSTS (USD)

DISCOUNTED NET BENEFITS

(USD)

NET BENEFITS

(USD)

CUMULATIVE # OF BENEFICIARIES

ANGOLA LESOTHO

2019 2,910,000 1.00 2,910,000 -29100D0 (2,910,000) 0 0

2020 5,490,000 0.91 4,990,909 -4990909 -5490000 600 915

2021 9,380,000 0.83 7,752,066 -7752066 -9380000 1,426 2,173

2022 11,230,000 0.75 8,437,265 -8437265 -11230000 2,559 3,900

2023 11,200,000 0.68 7,649,751 -7649751 -11200000 4,111 6,267

2024 24,967,246 4,790,000 0.62 2,974,213 2,974,213 12528483 20177246 6,229 9,495

2025 25,401,327 0.56 14,338,387 14,338,387 25,401,327 9,104 13,876

2026 23,092,115 0.51 11,849,906 11,849,906 23,092,115 12,979 19,782 2027 20,992,832 0.47 9,793,311 9,793,311 20,992,832 18,152 27,666 2028 19,084,393 0.42 8,093,646 8,093,646 19,084,393 24,969 38,057

2029 17,349,448 0.39 6,688,963 6,688,963 17,349,448 33,798 51,514 2030 15,772,225 0.35 5,528,069 5,528,069 15,772,225 44,969 68,541 2031 14,338,387 0.32 4,568,652 4,568,652 14,338,387 58,680 89,439 2032 13,034,897 0.29 3,775,745 3,775,745 13,034,897 74,860 114,100

2033 11,849,906 0.26 3,120,451 3,120,451 11,849,906 93,035 141,801

47Asian Development Bank. Guidelines for the economic analysis of projects. Mandaluyong City, Philippines: Asian Development Bank, 2017. 48Asian Development Bank. Guidelines for the economic analysis of projects. Mandaluyong City, Philippines: Asian Development Bank, 2017.


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YR

ESTIMATED PROJECT

BENEFITS $

PROJECT COSTS (USD)

DF

DISCOUNTED BENEFITS

(USD)

DISCOUNTED COSTS (USD)

DISCOUNTED NET BENEFITS

(USD)

NET BENEFITS

(USD)

CUMULATIVE # OF BENEFICIARIES

ANGOLA LESOTHO

2034 10,772,642 0.24 2,578,885 2,578,885 10,772,642 112,263 171,109 2035 9,793,311 0.22 2,131,310 2,131,310 9,793,311 131,241 200,034 2036 8,903,010 0.20 1,761,413 1,761,413 8,903,010 148,593 226,482 2037 8,093,646 0.18 1,455,713 1,455,713 8,093,646 163,260 248,838 2038 7,357,860 0.16 1,203,069 1,203,069 7,357,860 174,767 266,377 2039 6,688,963 0.15 994,272 994,272 6,688,963 183,222 279,263 2040 6,080,876 0.14 821,712 821,712 6,080,876 189,113 288,242 2041 5,528,069 0.12 679,101 679,101 5,528,069 193,057 294,254

2042 5,025,517 0.11 561,240 561,240 5,025,517 195,625 298,167 2043 4,568,652 0.10 463,835 463,835 4,568,652 197,264 300,666 2044 4,153,320 0.09 383,335 383,335 4,153,320 198,298 302,241 2045 3,775,745 0.08 316,806 316,806 3,775,745 198,944 303,227 2046 3,432,496 0.08 261,823 261,823 3,432,496 199,346 303,840 2047 3,120,451 0.07 216,383 216,383 3,120,451 199,596 304,220 2048 2,836,773 0.06 178,829 178,829 2,836,773 199,750 304,456

Present Value of Benefits (PVB) = $ 81,764,855 Present Value of Costs (PVC) USD = $ 34,714,204 Net Present Value (NPV) USD = $54,668,318 IRR= 31% MIRR (reinvestment 12%) = 16%

MIRR (reinvestment @14%) = 17%

Benefit-Cost Ratio (BCR) = 2.44

Sensitivity Analysis 243. Sensitivity analysis was performed to improve the robustness of a BCR. We varied the discounting factor to test the sensitivity of the BCR. With discount rates from 6-14%, the NPV and BCR values are positive and support the economic justification for the APPSA project to go ahead. However, with discount rates above 14%, the costs outweigh the discounted benefits (See Table 5.2).

Table 5.2: Results of the sensitivity analysis

Analysis Discount Factor Sensitivity Analysis Level

6% 8% 10% 12% 14% Present Value of Benefits (PVB) 190,898,151 122,147,495 81,764,855 56,705,612 40,440,397 Present Value of Costs (PVC) 38,317,152 36,442,235 34,714,204 33,118,534 31,642,400 Economic Net Present Value (ENPV) 108,461,793 76,074,207 54,668,318 40,063,445 29,839,460 Economic Internal Rate of Return (EIRR) 39% 35% 31% 28% 25% Modified EIRR (@12% Re-investment) 17% 16% 16% 15% 14% Modified EIRR (@14% Re-investment) 19% 18% 17% 17% 16% Benefit-Cost Ratio (BCR) 5.08 3.44 2.44 1.79 1.36

244. The sensitivity analyses demonstrate that the APPSA project can absorb substantial negative impacts and still generate an EIRR and MIRR above the opportunity cost of capital. The analysis thus supports the public investment decision. Internal shadow price of carbon 245. The internal shadow price of carbon (SPC) presents the marginal abatement cost of carbon emission consistent with the core objective of the Paris Agreement of keeping temperature rise below 2 degrees. It is estimated as the present value of the stream of future economic damages of increased GHG emissions.


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246. Carbon pricing essentially monetizes GHG and the shadow price of carbon (SPC) therefore presents the marginal damage cost of carbon emissions. In line with the High-Level Commission on Carbon Prices, the World Bank guidance note recommends that projects’ economic analyses use a low and high estimate of the carbon price starting at USD 40 and USD 80, respectively, in 2020 and increasing to USD 50 and USD 100 by 2030. Given that the High-Level Commission report does not prescribe any specific carbon price values beyond 2030, the carbon prices are extrapolated from 2030 to 2050 using the same growth rate of 2.25% per year, leading to values of USD 78 and USD 156 by 2050. Figure 9 shows the low and high values of the shadow price of carbon that all projects are recommended to use for the 2017-2050 period. 247. As indicated above, the net carbon balance for Angola and Lesotho under APPSA constitutes a carbon sink corresponding to a mitigation capacity of 0.80 tCO2e per hectare per year. To monetize these benefits as an avoided cost to society, we use the SPC net payments, as presented in Figure 9.

Figure 5.1: Recommended shadow price of carbon in USD per 1 metric ton of CO2 equivalent (constant prices)49

248. In order to incorporate carbon externalities into the economic analysis, we adopted a cost benefit analysis (CBA), again focusing on estimating the net economic internal rate of return (EIRR), the net present value (ENPV), the present value of costs (PVC), the present value of benefits (PVB), and the Benefit-Cost Ratio (BCR). In this analysis, the benefits and costs associated with the carbon externalities were added to the net present value of the costs and benefit streams, following the formula: 49Shadow price of carbon in economic analysis. World Bank Guidance note on shadow price of carbon in economic analysis Nov 12, 2017

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249. Table 5.3 shows the results of without, with high, and with low shadow price of carbon (SPC). The high SPC analysis shows that the project’s NPV is estimated at USD 61.4 million at 10 percent discount rate. The value of estimated IRR is 35 percent while the MIRR is 16 percent, and 18 percent, at the reinvestment rates of 12 percent and 14 percent, respectively. Similar to the economic analysis (without SPC), the findings show that the project is viable as both MIRRs produce rates above the discount rate (DR) of 10 percent. On the other hand, the low SPC analysis shows that the project’s NPV is estimated at USD 58 million at 10 percent discount rate. The value of estimated IRR is 34 percent while the MIRR is 16 percent, and 18 percent, at the reinvestment rates of 12 percent and 14 percent, respectively. In all cases, the APPSA BCR is above 2.4, meaning, benefits of more than USD 2 for each USD 1 invested.

Table 5.3: Economic analysis and the Shadow price of carbon Analysis Without

SPC With HIGH

SPC With LOW

SPC Present Value of Benefits (PVB)-USD 81,764,855 88,561,525 95,346,694 Present Value of Costs (PVC) -USD 34,714,204 34,031,191 34,031,191

Net Present Value (NPV) -USD 54,668,318 58,039,312 61,391,507

Internal Rate of Return (IRR)- % 31% 34% 35%

Modified IRR (12%)-% 16% 16% 16%

Modified IRR (14%)-% 17% 18% 18%

BCR (Ratio) 2.44 2.69 2.89 Crop financial analyses for selected commodities in Angola 250. Financial analysis was undertaken on major crops based on underlying yield data from the MOSAP project in Angola.50 Overall, the financial models for selected crops show positive incremental net benefits for adopting new technologies developed under the “With APPSA project” scenario. Although input costs like fertilizer and planting materials are included in the model, it should be noted, however, that most of the inputs such as seeds and fertilizers are either given free to farmers or hugely subsidized in Angola.51 Also, it is important to note that in the models we only assumed yield increases for maize (data from CIMMYT) and beans (from CIAT reports). These are higher than the yield used in the MOSAP project.

Table 5.4: Results of the financial analyses for selected commodities in Angola (per 1 hectare)

CROP Without Project With Project NET INCOME

Rate of change (%)

Total Revenue (USD)52

Variable & Fixed Costs

(USD)

Net Income (USD)

Total Revenue

(USD)


(USD)

Net Income (USD)

Maize 64 96 -32 406 101 305 1043%

50Angola Market Oriented Smallholder Project. Working Paper 1. Detailed Cost Estimates, Financial & Economic Analysis 51Personal communication with stakeholders in Luanda and Huambo-February 2018 52 1USD= 217 AOA (April 2017)


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CROP Without Project With Project NET INCOME

Rate of change (%)

Total Revenue (USD)52


(USD)

Net Income (USD)

Total Revenue

(USD)


(USD)

Net Income (USD)

Beans 241 121 120 1,253 126 1,122 868%

Irish Potatoes 1,692 536 1,156 2,198 547 1,651 43%

Cassava 587 176 411 762 192 570 39%

Soybean 426 108 318 553 114 439 38%

Cabbage 2,080 609 1,470 2,625 631 1,994 36%

Onion 3,922 1,012 2,910 4,950 1,040 3,911 34%

Tomato 2,854 599 2250 3,603 646 2,952 31%

251. The results presented on Table 5.4 under the “With APPSA project” scenario, maize assumes the introduction of improved seed, application of fertilizer, and soil management practices, which are known to result in yields of up to 3.5 t/ha53. Hence, the higher income realized for maize. Note, however that, under the “With APPSA project” scenario, the use of improved seed, application of fertilizer, and associated increase in labor time also increase production costs (variable & fixed Costs) compared to the “Without APPSA project” scenario for almost all commodities, except for onion. Estimating Potential Adoption of APPSA Technologies 252. Investing in agricultural R&D to develop and transfer new technologies with the ultimate goal of increasing agricultural productivity and incomes requires a four-stage process: (i) creation of the institutional capacity to develop improved techniques of production; (ii) expansion of the technology frontier; (iii) transfer of improved techniques; and (iv) the adoption and use of these techniques (Oehmke and Crawford, 1996). Investments in agricultural R&D will have immediate effect on the first two stages of this process. Traditional indicators of research output such as number of varietal trials, number of crosses, improvements in research techniques, number of varieties released, and potential yield improvements on experiment stations, are important indicators of research success, but they are measures of success at intermediate stages. They do not quantify impacts of research on farm income, consumer welfare or agricultural growth, which depend on the actual adoption of new technology by end-users. 253. The adoption and diffusion (spread) of new technology tends to follow an exponential growth pattern until a limit is reached. These kinds of processes often produce S-shaped growth curves, where after some threshold level the population grows exponentially and eventually it reaches equilibrium. A central theme of diffusion of agricultural technologies has been the mathematical modelling of the diffusion of different types of technologies under different assumptions, which has its roots in diffusion models developed in the 1950s and 1960s. The Bass diffusion model has been used in the prediction and explanation of different innovation diffusion perspectives. It is appropriate because it is based on the imitation and innovation effects. The Bass model has been applied to a wide range of new products and technologies including consumer durables and agricultural input chemicals. The Bass model is a useful tool for predicting the adoption (first purchase) of an innovation (more generally, of a new product) for which there are no competing alternatives on the market. A key feature of the model is that it incorporates 53 CIMMYT data


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a process of contagion to characterize the dissemination by word-of-mouth between those who adopted the innovation and those who have not yet adopted the innovation. 254. The Bass model is a product of Rogers’ (1962) “Diffusion of Innovations Theory”54, where he classified adopters of an innovation according to the timing of their adoption. A normal distribution is specified for the timing of adoption, and five classes of adopters are: (1) Innovators; (2) Early Adopters; (3) Early Majority; (4) Late Majority; and (5) Laggards (Figure 5.2).

Figure 5.2: Five classes of adopters identified based on the timing of adoption.

255. The model is useful to researchers in forecasting new technologies innovations before investing significant resources in them.55 The Bass model offers a good starting point for forecasting the long-term adoption pattern of new technologies under two types of conditions: (i) APPSA researchers have recently introduced the new technology and have observed its adoption by farmers for a few time periods; or the APPSA researchers have not yet introduced the new technology, but it is similar in some way to existing technologies whose adoption history is known. Most of the new technologies to be developed by APPSA aren’t new, they are basically improved technologies with a history of use in both Angola and Lesotho. 256. For the purposes of modelling adoption under APPSA, maize is used to compute the potential adoption trend of APPSA supported innovations using the Bass Model. Some of the assumptions of the Basic Bass (1969) Model include:

Diffusion process is binary (consumer, in APPSA’s case smallholder, either adopts, or waits to adopt) Constant maximum potential number of smallholders (m)

54This Theory was mostly used to the adoption of agricultural technologies. The Bass model made this a mathematically proven model to look at adoption of new technologies in marketing science. However, not many agricultural scientists have used the mathematical model. See: Frank M. Bass, (2004) Comments on “A New Product Growth for Model Consumer Durables the Bass Model”. Management Science 50(12_supplement):1833-1840. https://doi.org/10.1287/mnsc.1040.0300]. 55 This is common in marketing science, but the model has its origin in agriculture and development.


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Eventually, all m will buy the product No repeat purchase (adoption-once a smallholder has adopted, there is no way they can dis-adopt the

new technology), or replacement purchase The impact of the word-of-mouth is independent of adoption time Innovation is considered independent of substitutes The marketing strategies supporting the innovation are not explicitly included

257. The simplified Mathematical Formulation of the Bass Model is shown as follows:

Figure 5.3: Simplified Bass model mathematical formulation

Where: p = coefficient of innovation (or coefficient of external influence, APPSA R&D)

q = coefficient of imitation (or coefficient of internal influence, farmer to farmer knowledge sharing). 258. Table 5.556 below shows the coefficients used in the modeling of Angola and Lesotho which were generated based on the full mathematical model (see working document for detailed equations). In Angola, m is estimated as 2,500,000 smallholder farmers. In Lesotho the total economically, active population in agriculture was estimated to be around 335,000 (in 2011). Almost all farmers in Lesotho are subsistent, cultivating on plots of less than 1.5-hectare size. The main crops cultivated include maize, sorghum, wheat and barley while major vegetables include beans, potatoes, and peas. Peaches, apples, apricot, peaches and walnut are main fruits. Cattle, sheep (for high quality wool and mohair), goats, horses, donkeys, pigs and poultry constitute the livestock domain. When data is available, the model could be conducted for the specific crop and animal enterprises.

Table 5.5: Coefficients used in the model for Angola and Lesotho

Potential Adopters M p q Angola 2,500,000 0.03 0.38 Lesotho 335,000 0.03 0.38

259. Substituting these coefficients in the mathematical model generated an estimate of technology diffusion for the potential adopters in Angola and Lesotho. We us the following estimates for the application of the mathematical models for the potential adoption (m) = 2,500,000 for Angola (Figure 5.4) and 335,000 Lesotho smallholders (Figure 5.4), for the rate of innovation p = 0.03 and q= 0.38 the coefficient of imitation, to adopt the new technology. As indicated in Figure 3, for Angola, it shows that

56In a meta-analysis of 213 studies, Sultan, Farley and Lehmann found the coefficient of innovation (p) was small (on average 0.03) when compared with the coefficient of imitation (q) (on average 0.38). The coefficient of innovation was stable under a range of conditions, whereas the coefficient of imitation varied widely with the innovation being examined.

# of smallholders who will adopt the new technology from the APPSA project at time t

p x Remaining

q x Adopters x Remaining Potential

Innovation Effect Imitation Effect

= +


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the peak of adoption of the new agricultural technologies will be around the year 2035 when almost 74% of smallholders (m), 1,857,408 will have adopted the new technologies. In about 2039, 2,363,910 smallholders (95%) will have adopted new technologies. For Lesotho (Figure 5.5), the trend is the same. The peak of adoption of the new agricultural technologies will be around the year 2035 when almost 74% of smallholders (m), 248,893 will have adopted the new technologies. By 2039, almost 95% (316,764) of the smallholders will have adopted the new technologies.

Figure 5.4: Adopters and cumulative adoption of new agricultural technologies in Angola

Figure 5.5: Adopters and cumulative adoption of new agricultural technologies in Lesotho

260. The results show that the impact of the APPSA R&D investments will be felt for a very long time, more than the 20 years presented in the financial model. Since the p and q values used are the same, the years of upper adoption levels are similar for both countries. Once the new technology is brought to the

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attention of the potential adopters by innovators, imitators appear and thus along the diffusion process of the new technology the number of innovators gradually decreases and the number of imitators increases. The economic returns from such APPSA R&D investments will emerge over a longer time frame. The economic social benefits of agricultural R&D far outstrip the costs. 261. Annual adoption figures obtained using the Bass model can be useful for predicting future adoptions, even when the product has not been launched yet. Hence, the estimates from the model can be used to populate the targets of the Monitoring and Evaluation framework. Estimated number of beneficiaries 262. As highlighted in the project document, the APPSA project will target 50,000 farming families. This target group are the direct beneficiaries, who will be positively affected by the APPSA project activities and are expected to directly gain from the results of APPSA.57

Table 5.6: Annual and Cumulative number of target group reached annually Year Annual Targets Cumulative Targets % Reached 2019 0 0 0 2020 8,000 8,000 16% 2021 12,701 20,701 41% 2022 15,484 36,185 72% 2023 11,109 47,293 95% 2024 2,712 50,005 100%

263. Table 5.6 shows the estimated number of direct beneficiaries (target group)58 that will have been reached by the project annually. The results show that more than 70% of the target group will have been reached by the 4th year of project implementation.

57See: GLOSSARY: http://web.undp.org/evaluation/documents/mae-glo.htm 58In a meta-analysis of 213 studies, Sultan, Farley and Lehmann found the coefficient of innovation (p) was small (on average 0.03) when compared with the coefficient of imitation (q) (on average 0.38). The coefficient of innovation was stable under a range of conditions, whereas the coefficient of imitation varied widely with the innovation being examined.


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ANNEX 5: Green House Gas (GHG) Accounting


Background and Methodology 264. In its 2012 Environment Strategy, the World Bank has adopted a corporate mandate to conduct greenhouse gas (GHG) emissions accounting for investment lending. The quantification of GHG emission is an important step in managing and ultimately reducing GHG emission and is becoming a common practice for many international financial institutions. 265. To estimate the impact of agricultural investment lending on GHG emission and carbon sequestration, the World Bank has adopted the Ex-Ante Carbon-balance Tool (EX-ACT), which was developed by the Food and Agriculture Organization of the United Nations (FAO) in 2010. EX-ACT allows the assessment of a project's net carbon-balance, defined as the net balance of CO2 equivalent GHG that were emitted or sequestered because of project implementation compared to a without project scenario. EX-ACT estimates the carbon stock changes (emissions or sinks), expressed in equivalent tons of CO2 per hectare and year. 266. Project boundaries. The GHG accounting estimates the impact of agricultural investment projects and programs on the GHG-balance. EX-ACT enables investment planners to design program activities that target high return outcomes in terms of climate change mitigation and is intended to complement conventional ex-ante economic analysis. The proposed Agricultural development Project promotes technology generation and dissemination across national borders of participating countries in the SADC region by (i) supporting regional collaboration in agricultural research, technology dissemination, and training; (ii) establishing Regional Centers of Leadership (RCoLs) on commodities of regional importance, and (iii) facilitating increased sharing of agricultural information, knowledge, and technology among participating countries based on partnerships and collaboration in pursuit of common objectives which directly impacts rural poor livelihoods participating in these activities. 267. Basic Assumptions. The project implementation phase is six years and the capitalization period of 24 years. In the analysis it is assumed that the implementation phase will happen according to a linear dynamic of change as no specific information is available about the adoption rate of the project activities among project participants59. 268. The “without project scenario” is assumed not to differ from the “initial scenario”. This default assumption is deemed reasonable as changes in Agriculture activity crucially depend on the kind of technologies that will be made available and cross country scientific knowledge sharing and transfer, which is a major contribution of the project. The analysis further assumes the dynamics of change to be linear over the duration of the project. The analysis uses Tier 1 default emission coefficients. 269. Data source. Activity data for the analysis is based on assessment of project task team and experience from past projects in both countries.

59 The Bass model analysis does not apply to the adoption of land use and management technologies


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270. Climate and soil regime. Angola’s average climate is considered as Tropical with a mean annual temperature equal to 22 degrees Celsius and a moisture regime classified as wet. As per the IPCC classification, the soil type is Low Activity Clay (LAC). The Institute de Investigacão Agricola (IIA), under the Ministry of Agriculture and Forestry (MINAGRIF), has 23 Research Stations of which 11 would be possible locations for APPSA activities (Chianga, Cela, Mazozo, Kilombo, Malange, Nsosso, Cavaco, S.Vicente, Humpata, Namibe, and Sacaala). 271. Lesotho has a warm Temperate climate and a dry moisture regime and a High Activity clay (HAC) soil type, which is accounted for in EX-ACT. The Department of Agricultural Research, under the Ministry of Agriculture and Food Security (MAFS) has the main campus situated in Maseru and four Regional stations across the four agro-ecological zones of the country which includes: Mahobong-representing the Northern lowlands; Siloe-representing the Southern lowlands; Mokhotlong-representing the mountains/highlands and Nyakosoba-representing the central foothills. Activities considered in EX-ACT: Lesotho and Angola 272. Improved crop production. In both countries, project Component 1, supports crop breeding and improvements, genetic diversity and efficient production systems and management technologies. Project activities will focus on the dissemination of crop varieties and cultivars, adapted to the specific agro-ecological zones in each country, and providing support services to farmers to adopt practices. The adoption of these technologies, accounted for as “improved agronomic practices” in EX-ACT, will be accompanied by new crop management practices such as “improved water management” and “improved nutrient management”. The project expects to target 50,000 beneficiaries, shared equally between Lesotho and Angola. It is assumed that farmers adopt improved technologies and practices on 0.5 ha land, resulting into 25,000 ha land project target area considered in EX-ACT. 273. Irrigation. As part of Component 1, the testing and promoting of irrigation and mechanization technologies will play a role and it is expected that 10 percent of area in Lesotho and Angola, thus 2,500 ha, will be supported to adopt drip irrigation systems instead of using flood irrigation systems as in the without project scenario. 274. Agroforestry. Promoting improved husbandry practices and managing soil erosion in Lesotho highlands, may entail the development of terraces and introduction of agroforestry on existing cropland, as supported by project Component 1. It is expected that this will be relevant on 15 percent of the target area in Lesotho, thus 3,750 ha. 275. Agriculture research stations. Due to the dilapidated nature of some of the major research facilities including laboratories intended for use in implementing the project, the component 2 of the project will support (i) upgrading of research infrastructure, including construction and rehabilitation of existing physical infrastructure and (ii) improving management and performance systems, including knowledge and information systems. In Lesotho, 4 metal offices used as laboratories in the regional research stations will be upgraded, as well as 8 office spaces spread around the country, including the rehabilitation of greenhouses. In Angola, construction of 5 office facilities is expected at participating regional offices of the RCoL and an estimated 6 buildings will be constructed for warehousing, cassava processing and laboratories the same number of upgrades is expected. An average size of 50m2 for offices


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and 100m2 for warehouses and associated buildings is assumed. 276. Agricultural inputs. Conversations with farmers during field visits showed that farmers are already using fertilizer but not consistently on their entire cropland and not each season. For instance, a recent study shows that farmers in Lesotho use on average 25kg nitrogen (N) per hectare, while the economically optimal amount for maize production was assessed 141 kg/ha60 Farmers in Angola use on average 8.1kg/ha61, while up to 271.6962 kg/ha is recommended amount. The promotion of improved technologies by APPSA is expected to encourage farmers to shift crop production from staple crops to horticulture, which is expected to change fertilizer requirements. Typically, horticulture requires less fertilizer than field crops, in particular if drip irrigation systems are used, which allows farmers to fine-tune fertilizer amounts to the needs of the crop per hectare. For instance, recommended quantities for horticulture, e.g. tomatoes production in tropical Africa is between 80-180 kg N, 80-200 kg P and 80-200 kg K per hectare63. On the other hand, the expected increase in cropping intensity per hectare and the expansion of horticulture cultivation, the entire area on which fertilizer will be applied will increase could imply an increased use in fertilizer in the with-project scenario. Thus, we assume that fertilizer quantities are expected to increase with the shift to horticulture crops. In Lesotho from 25kg/ha of N per hectare and Angola from 8 kg/ha of N to 130kg of N, P and K per ha64. 277. Electricity. Since electricity will not be needed to irrigate on-farm as drip irrigation will use gravity from the farm level storage, in this module, only irrigation systems of demonstration plots and research stations are taken into account which are likely to require requiring pumping machines that use electricity. In Angola 11 research stations are expected to fall under APPSA and in Lesotho 9. It is assumed that irrigation demonstrations take place in the with-project scenario consuming 1.9 Kwh a day per research station65. Table 6.1 present details of inputs to EX-ACT for Angola and Lesotho, comparing the initial situation, the baseline scenario and the APPSA project scenario. This provides details of the information entered in EX-ACT in all topic modules.

60 Cuvaca, IB, lambert, DM, Walker, FR, Marake, M, Easj, NS (2015): Economically Optimal N Fertilizer Rates for Maize Produced on Vertisol and Inceptisol Soils under No-Till Management: A Case Study in Maphutseng, Lesotho. International Journal of Plant & Soil Science 8(2): 1-12 61 https://knoema.com/atlas/Angola/Fertilizer-consumption 62 Kassie, G. T., O. Erenstein, W. Mwangi, R. La Rovere, P. Setimela, and A. Langyintuo. 2012. Characterization of Maize Production in Southern Africa: Synthesis of CIMMYT/ DTMA Household Level Farming System Surveys in Angola, Malawi, Mozambique, Zambia and Zimbabwe. Socioeconomics Working paper 4. CIMMYT. https://repository.cimmyt.org/xmlui/bitstream/handle/10883/1352/97197.pdf?sequence=3 page 39. 63 Everaarts, AP, ePutter, H., Maerere, AP (2015) profitability, labor input, fertilizer application and crop protection in vegetable production in Arusha, Tanzania. http://edepot.wur.nl/359792 64 Assuming a 10-10-10 NPK fertilizer is used (meaning equal parts of all active ingredients) cited values derived for each crop (per tons of P205, N and K). The average fertilizer amounts for horticulture production in tropical Africa are considered. This value is probably overestimated because farmers may not be able to access and/or afford the recommended amount at all times. 65 Calculated thus: 1 horsepower = 0.746 kilowatt-hour of electrical energy, most larger pumps consume between 2-1/2 HP, 3 HP (1.5-2.24 kilowatt/per hour). To get the most from irrigation, best allowed for an hour which allows water to get soaked in. If an irrigation scheme is conducted an average of an hour per day for a year. Martin et al, 2011. Evaluating energy use for pumping irrigation water. Proceedings. Irrigation conference. Kansas. https://www.ksre.k-state.edu/irrigate/oow/p11/Kranz11a.pdf


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Table 6.1: Activities considered in EX-ACT

Project activity Initial State Without project With project

Introduction of drip irrigation systems (Lesotho and Angola) 0 0 2,500 ha Introduction of improved crop management practices 0 0 25,000 ha Introduction of agroforestry in Lesotho on agricultural land 0 0 3,750 ha

Nitrogen N 312 t (Lesotho) 100 t (Angola)

312 t (Lesotho) 100 t (Angola) 3,250 t

Phosphorus P 0 0 3,250 t Potassium K 0 0 3,250 t Electricity consumption for irrigation systems(kwh) 0 0 13,860 KwH Agricultural Buildings 0 0 1,650m2

Results of EX-ACT Net Carbon Balance Analysis 278. Results are presented in Table 6.2. The project shows to be a net carbon sink, with a net carbon balance of -687,209 tCO2e emissions over 30 years. This results in an annual carbon sink of -22,907 tCO2e. it is evident that the introduction of improved husbandry practices has the largest mitigation potential, followed by the introduction of improve crop management practices. The results are considered conservative because assumptions of fertilizer quantities in the with-project scenario are considered rather high.

Table 6.2: GHG Accounting results, all GHG in tCO2eq

Activities

Gross fluxes Net carbon

Balance

Result per year Without project

With project Without With Balance

Land use change to agroforestry (Lesotho) -64,625 -64,625 -2,154 -2,154 Improved crop management (Lesotho) - 52,352 -294,510 -242,158 -1,745 -9,817 -8,072 Improved crop management (Angola) -285,000 -285,000 -9,500 -9,500 Perennial (Lesotho) -789,938 -789,938 -26,331 - 26,331 Inputs & Investments (Lesotho) 79,645 471,347 391,702 2,655 15,712 13,057 Inputs & Investments (Angola) 28,391 330,897 302,506 946 11,030 10,084 Total (Lesotho and Angola) 55,684 -631,524 -687,209 1,856 -21,051 -22,907 Per hectare 1.94 - 21.97 - 23.90 Per hectare per year 0.06 - 0.73 - 0.80 0.06 - 0.73 - 0.80


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Page 110 of 110

for official use only report no: pad2866 · omc operational management committee pdo project...

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