Document o f The World Bank

FOR OFFICIAL USE ONLY

Report No. 51479-SL

EMERGENCY PROJECT PAPER

ON A

PROPOSED SECOND ADDITIONAL GRANT

FROM THE FOOD PRICE CRISIS RESPONSE TRUST FUND

IN THE AMOUNT OF US$3.0 MILLION

AND

FROM THE FOOD PRICE CRISIS RESPONSE MULTI-DONOR TRUST FUND

IN THE AMOUNT OF US$l .O MILLION

TO THE

REPUBLIC OF SIERRA LEONE

FOR THE

CO-FINANCING OF THE NATIONAL SOCIAL ACTION PROJECT

November 2,2009

Social Protection Sector Unit Country Department AFCW 1 Africa Region

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

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ABU BA CAS CBO CDD CDP CFSVA CfW DCA Dfl D EC FA0 FBO FFS FM FPCR TF GDP GFCRP GoSL IBRD IDA IEC DO IFRs LGFD L C M&E MDAs MoFD MTEF NaCSA NGO NSAP

CURRENCY EQUIVALENTS (Exchange Rate Effective as o f August 25,2009)

CurrencyUnit = Leone US$l.OO = L e 3,600

FISCAL YEAR January 1 -December 31

WEIGHTS AND MEASURES Metric system

ABBREVIATIONS AND ACRONYMS

Agricultural Business Unit Beneficiary Assessments Country Assistance Strategy Community-Based Organizations Community-Driven Development Community-Driven Program Comprehensive Food Security and Vulnerability Assessment Cash for Work Development Credit Agreement Department for International Development (United Kingdom) European Commission Food and Agriculture Organization Faith Based Organization Farmer Field School Financial Management Food Price Crisis Response Trust Fund Gross Domestic Product Global Food Crisis Response Programme Government o f Sierra Leone International Bank for Reconstructions and Development International Development Association Information, Education and Communication Development Objective Interim Financial Management Reports Local Government Finance Department Local Council Monitoring and Evaluation Ministries, Departments and Agencies Ministry o f Finance and Development Planning Medium Term Expenditure Framework National Commission for Social Action Non-Governmental Organization National Social Action Project

FOR OFFICIAL USE ONLY

O M PFM PPA PRRO RPSDP SDR SLRA SOCEP SOE TOR TTL UN UNDP UNICEF WFP

Operational Manual Public Financial Management Participatory Poverty Assessment Protracted Relief and Recovery Operation Sierra Leone Rural and Private Sector Development Project Special Drawing Rights Sierra Leone Roads Authority Social & Economic Opportunities Statement o f Expenditures Terms o f Reference Task Team Leader United Nations United Nations Development Program United Nations Children’s Fund World Food Program

Vice President : Obiageli K. Ezekwesili Country Director : Ishac Diwan

Sector Director : Yaw Ansu Sector Manager : Lynne Sherburne-Benz

Task Team Leader : Mirey Ovadiya

This document has a restricted distribution and may be used by recipients only in the performance o f their off icial duties. I t s contents may not be otherwise disclosed without Wor ld Bank authorization.

REPUBLIC OF SIERRA LEONE

SECOND ADDITIONAL GRANT FOR THE CO-FINANCING OF THE NATIONAL SOCIAL ACTION PROJECT (NSAP)

CONTENTS

EMERGENCY PROJECT PAPER (EPP) DATA SHEET ....................................................................... 1 I. INTRODUCTION ............................................................................................................................. 3 11. EMERGENCY CHALLENGE: CONTEXT AND RATIONALE ................................................ 3

A. MAGNITUDE OF THE CRISIS ........................................................................................................... 3 B. SOCIAL. AND ECONOMIC IMPACT ................................................................................................... 4 C. GOVERNMENT RESPONSE .............................................................................................................. 6 D. SECTOR STRATEGY ....................................................................................................................... 6 E. OTHER DONORS’ ACTIVITIES ........................................................................................................ 6 F. PROJECT DESCRIPTION AND IMPLEMENTATION PERFORMANCE .................................................... 7

111. RESTRUCTURING.... .................................................................................................................................. 8

THE BANK’S STRATEGY FOR EMERGENCY SUPPORT .................................................................... 8

BANK RESPONSE: PROPOSED ADDITIONAL GRANT AND PROJECT

A. B. PROJECT DEVELOPMENT OBJECTIVES ........................................................................................... 9 C. PROPOSED CHANGES ..................................................................................................................... 9 D. ELIGIBILITY FOR PROCESSING UNDER oP/BP 8.00 ..................................................................... 1 1 E. CONSISTENCY WITH C A S ............................................................................................................ 11 F. EXPECTED OUTCOMES ................................................................................................................ 11

APPRAISAL OF ADDITIONAL PROJECT ACTIVITIES ....................................................... 12 IV. A. ECONOMIC AND FINANCIAL ................................................................................................................. 12 B. TECHNICAL .......................................................................................................................................... 13 C. FIDUCIARY ........................................................................................................................................... 13 i. Financial Management ............................................................................................................... 14 ii. Procurement ............................................................................................................................... 16

D. ENVIRONMENTAL AND SOCIAL ............................................................................................................ 16 V. IMPLEMENTATION ARRANGEMENTS AND FINANCING PLAN ..................................... 17 VI. BENEFITS AND RISKS. ................................................................................................................ 18 VII. FINANCIAL TERMS AND CONDITIONS FOR THE GRANT ............................................... 19 Annex 1 : Results Framework and Monitoring ............................................................................. 20 Annex 2: Total Project Costs by Component ............................................................................... 30 Annex 3: Risk Rating Summary Table ......................................................................................... 3 1

Annex 5: Cash for Works Implementation Guidelines ................................................................. 38 Annex 6: Project Preparation and Team Members ....................................................................... 46

Annex 4: Preliminary Budget for Cash for Work Program .......................................................... 34

The Food Crisis Response Co-Financing Grant for Sierra Leone was prepared by an IDA team consisting o f Mirey Ovadiya, Kathryn Bach, John Van Dyck and Josiane Luchmun (AFTSP), John Nyaga (AFTFM), Oluwole Pratt (AFTHE), Tsri Apronti (AFTPC), Douglas Addison (AFTP4), Manush Hristov (LEGAF), and Rajiv Sondhi (CTRFC).

REPUBLIC OF SIERRA LEONE

Date: November 2,2009. Country Director: Ishac Diwan Sector Manager/Director: Lynne Sherburne-BendYaw Ansu Lending Instrument: Emergency Recovery Loan (ERL)

SECOND ADDITIONAL GRANT FOR THE CO-FINANCING OF THE NATIONAL SOCIAL ACTION PROJECT (NSAP)

Team Leader: Mi rey Ovadiya Sectors: 100% Other Social Service Themes: 100% Global Food Crisis Response Environmental Category: B

EMERGENCY PROJECT PAPER (EPP) DATA SHEET

Project ID: P118226 Proposed Terms: Grant from the Food Price Crisis Response Trust Fund (FPCR TF) Expected Effectiveness Date: November 30,2009

Recipient: Republic o f Sierra Leone

Total Amount: US$4.0 mi l l ion Expected Implementation Period: 9- 12 months

Current Closing Date: 12/3 1/2009 Revised Closing Date: 12/3 1/2010 Responsible Agency: National Commission for Social Action (NaCSA)

Project Development Objectives: The project’s development objective i s to assist war-affected or otherwise vulnerable communities to restore infrastructure and services, build local capacity for collective action, and assist vulnerable households to access temporary employment opportunities, with priority given to areas not previously serviced by the government, newly accessible areas (those which were under rebel control until January 2002), food insecure areas, and the most vulnerable population groups within those areas.

Source

FPCR SDTF FPCR MDTF To tal

Recipient

Short Description: The Grants from the FPCR (Food Price Crisis Response Multi-Donor Trust Fund) TF and (FPCR MDTF) would finance the continuation and expansion o f a “Cash for Work” (CfW) program responding to food price increases. The project i s designed to ease the burden o f the price increases on the most vulnerable populations and provide households with incremental resources to cope, helping them to avoid reverting to adverse mechanisms that would diminish their asset and human capital base. The C f W program i s expected to benefit close to 3 1,000 direct beneficiaries (i.e., 180,000 direct and indirect beneficiaries) including unemployed youth, female-headed households, and vulnerable rural and urban households. This translates into about 4 percent o f the poorest in Sierra Leone concentrated in the areas most affected by the food price increases. In this context, th is second additional grant would employ about 15,570 beneficiaries over a 9-12 month period.

Local Foreign Total 0.0 0.0 0.0 3.0 0.0 3.0 1 .o 0.0 1 .o 4.0 0.0 4.0

I

Total IBRD/ IDA Trust Funds - 3.7 0.3

2

Does the emergency operation require any exceptions

Have these been approved by Bank management Are there any critical risks rated “substantial” or

from Bank policies?

‘‘high”? What safeguard policies are triggered, if any?

Yes 1 N o [ X I

Yes [ ] N o [ 1 Yes [ X I N o [ 1

Environmental Assessment (OPBP 4.0 1)

REPUBLIC OF SIERRA LEONE

SECOND ADDITIONAL GRANT FOR THE CO-FINANCING OF THE NATIONAL SOCIAL ACTION PROJECT (NSAP)

I. INTRODUCTION

1. This project paper proposes to provide a second additional grant in support o f scaled-up activities under the ongoing Sierra Leone National Social Action Project (Project ID P079335) (Credit No. 3748-SL) in the amount o f US$4.0 million. The additional grant, which i s being processed under Operational Policy (OP) 8.00 (Rapid Response to Crises and Emergencies) and OP 13.20 (Additional Financing for Investment Lending), i s being undertaken under the Global Food Crisis Program, which was endorsed by the Board on May 29, 2008. It will be financed from the Food Price Crisis Response Trust Fund (FPCR TF) (US$3.0 million) and the Food Price Crisis Response Multi-Donor Trust Fund (FPCR MDTF) (US$l .O million). The additional grant will be submitted for approval by the Africa Region Vice President, with circulation to the Executive Directors on an absence o f objection basis for the portion financed from the Food Price Crisis Response Trust Fund.

2. The proposed grants will finance the costs associated with the continuation and expansion o f a CfW program responding to food price increases. The CfW program was launched under the f i rs t co-financing for NSAP from the FPCR TF (US$4.0 million), approved August 18,2008. The program i s designed to ease the burden o f the price increases on the most vulnerable populations and provide households with incremental resources to cope, helping them to avoid reverting to adverse mechanisms that would diminish their asset and human capital base. To- date the program has shown good progress towards i t s development objectives, with 665,280 person-days o f employment generated, rehabilitation o f 260 km o f roads, and the development o f 85 acres o f arable swamps and woodland.

11. EMERGENCY CHALLENGE: CONTEXT AND RATIONALE

3. The rationale behind the co-financing would be to build on the strong performance o f the on-going CfW program to scale-up safety net interventions to help the poor cope with the continued high food prices in Sierra Leone.

A. MAGNITUDE OF THE CRISIS

4. In Sierra Leone, rice i s the main staple food in both urban and rural areas; furthermore, the country produces only two thirds o f the national consumption (355,000 metric tons per year), with the shortfall sourced through imports and food aid. Although rice cultivation was projected to increase this year (2009) projected harvests are not certain. As such, Sierra Leone i s particularly vulnerable to high food prices, and the Food and Agriculture Organization (FAO)

3

has listed Sierra Leone as one o f the 8 most vulnerable food deficient l o w income countries globally in the food price crisis'.

5. Food price increases reached crisis proportions in 2008, and prices o f most staples have continued to increase, albeit at a slower pace, in 2009. The cost o f imported rice in June 2008 was 44 percent higher compared to that in June 2007 while the June 2009 price was 7 percent higher than the preceding year. Similarly, the price o f wheat flour in June 2008 was 39 percent higher than a year earlier and the June 2009 price was 62 percent higher than June 2008. The rapid depreciation o f the Leone has also contributed to the continued high food prices in the past year. The exchange rate (dollar to Leones) has moved from an average o f US$1:3,000 Leones in January 2009 to US$1:3,700 Leones by August 2009.

T a b l e 1: Pr ices f o r Key Food Staples Leones per kg

June 2007 Dec. 2007 June 2008 Dec. 2008 June 2009

Local Long- Grained Rice 1,958

1,973 Local Medium- Grained Rice

Imported Broken Rice

Local Long- Grained Rice

Local Short Grained Rice

2,134

1,905

1,830

2,258

2,318

2,267

2,182

1,931

3,088

2,864

3,264

2,635

2,525

3,647

3,135

3,209

2,709

2,750

3,209

3,135

3,462

2,759

2,782

Wheat Flour 3,445 3,563 4,805 7,487 7,764

5,029 Yellow Maize Grains 5,172 6,775 8,467 8,593

Source: Statistics Sierra Leone.

B. SOCIAL AND ECONOMIC IMPACT

6. The impacts o f the current food price increases on Sierra Leone have been severe. Sierra Leone i s a fragile state, recently emerging from a brutal conflict. According to a 2003/04 household survey, roughly 66 percent o f the population lives below the poverty line, with 52 percent living on less than US$l.O per day, and 26 percent unable to afford daily minimum caloric requirements. At least 150,000 people could be pushed below the poverty line by the increased cost o f rice alone raising the poverty headcount for rice consumers by at least 3-4

' Vulnerable due to a combination o f high levels o f chronic hunger (more than 30 percent undernourishment; 51 percent in Sierra Leone) while being highly dependent on imports o f petroleum products (100 percent) and, on imports o f major grains (rice, wheat and maize) (53 percent o f grains are imported).

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percentage points to around 69-70 percent.2 S t i l l more will have been adversely affected through other food and fuel price increases. Falling incomes and unemployment, particularly within the mining community, combined with even moderate consumer price inflation, will reduce household purchasing power.

7. The burden i s being felt both by net food consumers and producers in urban and rural areas, although in varying degrees. Most affected by recent price increases are the l o w income urban and peri-urban households that are largely dependent on the market to access food products. Up to a quarter o f the population now lives in the Freetown area, away from major production areas and dependent on imported food. The World Food Program (WFP) estimates that 20,000 low-income urban households can be classified as highly vulnerable. Youth- and female-headed households with limited resources and capacity are severely affected.

8. Rural producers who are able to generate a surplus are clearly poised to benefit from the increasing prices in the long-run; however, many smallholder farming households fai l to cover their own annual consumption requirements and are therefore vulnerable as well. The WFP estimates that 120,000 smallholder farming households produced less than 50 percent o f their r ice consumption requirement for the year in 2007. This situation has not improved significantly between 2007 and 2009. Even rural farming households that planned to sel l their surplus to urban consumers may find themselves having to sel l less due to lower urban purchasing power. This could lead to a temporary acceleration o f migration to Freetown which, in turn, could induce higher levels o f urban unemployment and underemployment. Thus, it i s likely that the need for safety net programs will expand as the impact o f the global recession ripples through the economy.

9. The food price crisis i s also threatening the fragile peace and stability. The months between June and December are traditionally known as the !'lean season" and the Government is deeply concerned about both welfare and peace during this period.

10. Regarding the economy, higher food prices are likely to have an adverse impact on the country's external balance. The terms o f trade in 2009 are expected to decline by 4 percent as export prices fal l faster than import prices3. The decline in export prices has led to a substantial reduction in exports, mainly in the mining sector, as producers scale back activities. This shortfall in export receipts, combined with a reduction in remittances from abroad, is contributing to a slowing in economic activity with forecast real GDP growth in 2009 reduced to 4 percent from 5.5 percent. Similarly, real GDP in 2010 is forecast to grow by another 4 percent rather than the original forecast o f 5.8 percent. Consumer prices, which might benefit f rom falling world prices, are expected to grow by 9 percent due in part to accelerating nominal exchange rate depreciation. The current account deficit i s expected to remain high at 8.5 percent o f GDP compared to 9.0 percent o f GDP in 2008 and 3.4 percent o f GDP in 2007. The balance o f payments current account deficit will be financed by a higher external borrowing and a slower build-up o f foreign reserves. The fiscal impact o f the crisis i s already evident as domestic

Based on 2003/04 household survey data. This i s the impact on net consumers. Excludes impact o f real growth between 2003 and 2008. See World Bank Report No. 44082-SL, Sierra Leone: Poverty Diagnostic.

The forecast i s based on the June 2009 IMF Fourth Review under the ThreeYear Arrangement under the PRGF.

5

revenues are wel l below budget targets. compensate for this loss.

Increased external aid is expected to partially

C.

11.

(0

(ii)

(iii)

D.

12.

GOVERNMENT RESPONSE

The Government has developed a tripartite response to the ongoing crisis:

mitigating and phasing in price increases through reductions in food tar i f fs and discussions with rice importers to hold back passing on price increases to the consumers; increasing national food production by providing various incentives, such as additional seeds and fertilizers, investment encouragement to larger producers, and improvements in handling and transport to ease the access o f food to markets; and mitigating the impact on the poorest and the most vulnerable through targeted programs, such as food or C f W work programs, school feeding and special assistance for particularly vulnerable families for income generating activities.

SECTOR STRATEGY

In M a y 2008, the Bank established a new Global Food Crisis Response Program that aims to allow for a comprehensive response to the crisis across a range o f different instruments. The program provides an overall framework for the Bank to coordinate its own contribution to addressing the crisis in partnership with other multi-lateral organizations and donor agencies.

E. OTHER DONORS’ ACTIVITIES

13. There are a number o f other donors active in responding to the food crisis. FA0 i s promoting the medium-term effort to increase food production through their support for Agricultural Business Units (ABUs). These units, comprised o f Farmer Field School (FFS) members or other community based organizations, have proved to be an effective mechanism in promoting improved productivity and market orientation among the communities. A national coalition o f NGOs including CARE, World Vision International, AfriCare and Catholic Relief Services have also established FFS and market clusters at the sub-district level. United Nations Development Program (UNICEF) i s supporting two therapeutic feeding centers in the northern region, one at Mebesseneh Hospital and one at Magbenteh Community Hospital in Makeni, that provide nutritional supplements. In collaboration with the World Health Organization, World Food Program and other partners, UNICEF plans to expand these programs to cover each o f the 13 districts nationwide. WFP supports basic primary education through primary-school feeding, including an incentive scheme for girls (take-home rations) and seeks to improve health and nutritional status o f women and children through integrated Mother-Child Health and Nutrition programs.

14. Discussions are underway to see if these programs could be scaled-up in response to the current crisis. WFP also supports the Protracted Relief and Recovery Operation (PRRO), which i s designed to provide food assistance to vulnerable populations in the six districts (Kailahun, Kenema, Kono, Bo, Bonthe and Pujehun) that suffered the highest levels o f destruction during the war. Implementation has covered the period July 2007 to June 2009 with a focus on food

6

security improvement, education and health. Both the European Commission (EC) and the Department for International Development (United Kingdom) Dfl D are expected to continue, in principle, to support the Government in its efforts to respond to the crisis and in general to address chronic food insecurity and low agricultural productivity, with l ikely funding for budget support top-ups and through WFP school feeding, mother chi ld health, food for work programs and interventions to improve food security and agricultural productivity.

F. PROJECT DESCRIPTION AND IMPLEMENTATION PERFORMANCE

15. The NSAP, a US$35.0 mi l l ion credit, was approved in April 2003, and became effective in August o f that year. The project was designed to support activities in three components: (i) community-led infrastructure and basic services sub-projects; (ii) employment-generating labor- based public works (roads and other rural infrastructure) and the construction o f housing uni ts for vulnerable groups; and (iii) project management and innovative activities at the community level. With respect to activities in those components, the project’s performance has been consistently satisfactory, both with regard to the development objective and to implementation progress (the project is implemented by the National Commission for Social Action - NaCSA). Currently, disbursements stand at nearly 100 percent o f project funds4, with a scheduled closing date o f December 31, 2009. As o f December 2008, 600 community-based subprojects had been generated (project target i s 600), with 565 completed.

16. In August 2008, the Bank approved a US$4.0 mi l l ion grant to support a safety net program in Sierra Leone, to respond to recent food price increases. Given NSAP’s experience working with communities, c iv i l society, and local government, the rant was processed as co- financing to that project, and the project was restructured accordingly , The grant, which became effective in September 2008 and will close in December 2009, is financing a CfWprogram aimed at supporting household food access and minimizing the nutritional impact o f the crisis. The program consists o f small labor4ntensive public works projects in rural, peri-urban, and urban areas in seven priority districts. All works are demand-driven, with specific requests for labor intensive small works projects originating from and/or confirmed with relevant communities, chiefdoms, districts, or other local government authorities. Participating workers receive weekly payment, in cash, for their labor. In addition, each C f W project must (a) dedicate at least 60 percent o f its budget to labor costs, and (b) employ 30 percent women. The majority o f the projects focus on minor road repairs including drainage work. In suitable geographic areas, land reclamation, swamp development and reforestation activities in support small agriculture will also be financed.

B

17. A year on from effectiveness, the C f W component launched under the first co-financing for NSAP has performed well and achieved promising results. The component aimed to support 360 two-month sub-projects, to be implemented in three ‘waves’. To-date, the f i rst wave (119 sub-projects) has been completed, the second wave (15 1 sub-projects) is approximately 80 percent complete, and the third wave (90 sub-projects) i s ongoing. 90 percent o f the grant i s

About US$50,000 o f the original credit remains to be utilized towards the Beneficiary Assessment which i s underway. The restructuring consisted o f a minor change to the PDO, noted above; an expansion o f the results framework, an extension o f the closing date to December 2009; and the addition o f a fourth CfW component.

4

7

disbursed. So far, these works have reached 12,320 beneficiaries, generating 665,280 person- days o f employment, against the end-of-project target o f 849,000 person-days o f employment. Though temporary j o b creation and income supplementation was the primary objective o f the program, it i s also o f note that the f i rst batch o f sub-projects resulted in the rehabilitation o f 260 km o f roads, and the development o f 85 acres o f arable swamps and woodland.

18. A sample survey o f project impact using Project Completion Reports o f the f i rs t batch o f 119 sub-projects reveals some useful results o n key indicators o f impact including: (i) Project outputs produced - full and timely payments to targeted beneficiaries, appropriateness and quality o f public-works done; (ii) Assessment o f project implementation - targetingjselection o f beneficiaries, participation o f women, contract management; and (iii) Beneficiary utilization o f income from project and their perception o f project impact.

19. The results indicate that while the project faced a few challenges in terms o f a less than optimal participation o f women in the project (21 percent instead o f 30 percent) and late disbursement between the two monthly tranches as a result o f reporting and payment verification requirements, the project has made significant impacts on beneficiaries. O n women’s participation, the project supervision reports and discussions with beneficiaries and implementing entities suggest that a combination o f geographic variations, cultural practices and perhaps inadequate outreach to women may be underlying the shortfall. Over 90 percent o f targeted outputs (in terms o f timely and full payments to beneficiaries and quantum o f works done) were achieved. An assessment o f project implementation across six (6) selected indicators on a 1-4 scale (4 being good) rated project implementation as 4 (Good) on four out of six indicators and 3 (satisfactory) on the remaining two indicators. The majority o f beneficiaries indicated that cash payments were timely in spite o f delays between monthly payments while a significant proportion (25 percent) thought wage rates were low. In terms o f beneficiary utilization o f income earned from the project, income was spent in the following areas: Food - 47.09 percent; Supplementing School Fees - 23.08 percent; Basic Household Needs - 13.12 percent; Medicare - 12.82 percent; and Start Small Businesses - 10.38 percent. A more comprehensive impact evaluation will be launched shortly to collect data on the program’s impact on beneficiary livelihoods.

111. BANK RESPONSE: PROPOSED ADDITIONAL GRANT AND PROJECT RESTRUCTURING

A. THE BANK’S STRATEGY FOR EMERGENCY SUPPORT

20. The expansion o f the C f W program i s part o f the overall World Bank strategy to help the Government o f Sierra Leone mitigate the impact o f the food price increases. Additional measures have included: (i) budget support through a Development Policy Grant to mitigate the impact o f higher prices on budget allocations to key poverty reducing expenditures and assist Government to maintain key basic services targeting vulnerable populations; and (ii) support to improve food production and productivity through the Sierra Leone Rural and Private Sector Development Project (RPSDP) (IDA Grant H290-SL).

8

B. PROJECT DEVELOPMENT OBJECTIVES

21. The project’s development objectives will remain unchanged, i.e., to assist war-affected or otherwise vulnerable communities to restore infrastructure and services, build local capacity for collective action, and assist vulnerable households to access temporary employment opportunities, with priority given to areas not previously serviced by the government, newly accessible areas (those which were under rebel control until January 2002), food insecure areas,‘ and the most vulnerable population groups within those areas.7

C. PROPOSED CHANGES

22. The primary change proposed i s the expansion o f the project to al l fourteen districts scaling the coverage up from the current seven districts which will entail continuation o f program interventions in the most affected areas in existing program districts and expansion to new districts. The expansion will enable affected populations in areas determined based on WFP assessments to benefit from the program.

23. The C f W program is currently operating as an additional project component under the existing NSAP Credit Agreement (‘Part D’ o f Schedule II), and its implementation arrangements will remain essentially unchanged, subject to a few minor adjustments based on lessons learned (see below). NaCSA will continue to act as executing agency, and will be ultimately responsible for fiduciary management, monitoring and evaluation, and reporting. NaCSA will also continue i t s close collaboration with local authorities, including the Sierra Leone Roads Authority (SLRA), and will oversee implementation and provide support where necessary through i t s regional network o f technical staff. For each CfW, NaCSA will contract third party implementing agencies, such as community-based organizations (CBOs), farmers’ organizations, NGOs, or small private contractors to uhdertake actual implementation o f works, while NaCSA and LCs will be responsible for supervision and quality control. All third party implementing agencies will be selected based on their competence, experience, and fiduciary capacity, and all third party implementing agencies that receive funds through NaCSA will provide monthly activity summaries, and quarterly financial reports, which will be consolidated into quarterly Interim Financial Management Reports (IFRs) to be submitted to IDA.

24. The existing Operational Manual for the NSAP, which provides details on eligibility, targeting, implementation, community involvement, and fiduciary management for the public works program and community sub-projects, has been adjusted to include the “Cash for Work” program, with changes and additions made regarding guidelines for roles and responsibilities o f NaCSA, local authorities and third party implementing partners, as wel l as for the identification and confirmation o f the works projects, the targeting and enrollment o f program beneficiaries, and contractual arrangements between NaCSA and third party implementing agencies (Annex V).

As defined per the 2007 Comprehensive Food Security and Vulnerability Assessment (CFSVA) by the WFPIFAO. ’ Parts in italics added during August 2008 restructuring.

9

25. Based on lessons learnt during the implementation o f the current funding o f the C f W project, several minor changes to the implementation strategy would improve efficiency and timeliness in the delivery o f project outputs. These changes include: . A more detailed appraisal o f proposed works be undertaken before approval indicating

specific tasks to be accomplished with available minimal resources. The associated budget should include specifications on scheduled scope o f works per tranche disbursement (disbursement-work schedule) to ensure that works are completed on time. . Provision o f training for contractors (registered small-contractors, local artisans, youth groups and CBOs) on the rudiments o f roads works to improve o n quality o f works (secondary output). . In order to improve program outreach to women and female participation in the project, a piece-rate will be introduced to allow women work for shorter hours thus giving them space to spend time on other domestic chores/engagements. The program will reinforce the practice o f hiring elderly women to take care o f children o f younger women participants at work sites. The Information, Education and Communication (IEC) campaign through local radios and training o f contractors will also reinforce the message on female participation. . Given the nature o f sub-projects (largely road-works) and extent o f supervision required coupled with the extension o f the project to all 14 districts (about 50 percent more geographic coverage), i t is clear that the 90:lO ratio between ‘direct costs’ and ‘management cost’ is unrealistic. It i s therefore proposed to raise the management fee to between 13.5 percent - 15 percent. This proposal is further supported by the fact that under the current funding, the project leveraged from residual funds under the NSAP. . Whi le there i s increasing focus and efforts to improve the quality o f works, the pattern o f budget allocation per sub-project (with only 5 - 8 percent contractor’s fees) and the current operating context (interest o f CBOs and Youth Organizations to implement sub- projects) suggests that highly qualified contractors would be less attracted to these jobs. Given this, there i s a need to: i) employ a simple procurement procedure for prequalifying and selecting local artisandgroups from a short-list to be followed by training indicated in bullet point two above; and/or ii) increase contractor’s fees to about 15 percent in order to attract highly skilled contractors.

26. Because this represents an expansion o f ongoing activities, rather than the introduction o f new ones, the only change to the existing Development Credit Agreement (DCA) for NSAP will be the incorporation o f indicators related to these grants. Specifically, the targets for Part D o f the project will be raised to take into account the new activities, and will read as follows:

3 1,770 people temporarily employed for two-months over a two-year period.

27. Further, the results framework i s being re-formulated to: (a) fo l low the new standard format; (b) incorporate the changes introduced with the amendment to the credit that took effect in January 2008; and (c) improve the collection and reporting o f data on program results.

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28. amendment to be signed upon approval o f the grant by the Executive Directors.

This wi l l be reflected accordingly in the FPCR TF co-financing grant agreement

29. The closing date for the grant is'December 3 1 , 2010. The parent project closing date will be extended fiom December 3 1 , 2009, to December 3 1 , 20 10, to coincide with the closing date o f the grant.

D. ELIGIBILITY FOR PROCESSING UNDER oP/BP 8.00

30. The proposed additional grant conforms to the guidelines for the Global Food Crisis Program, which was endorsed by the Board on May 29, 2008. The additional grant wi l l be processed under Operational Policy (OP) 8.00 (Rapid Response to Crises and Emergencies) to provide urgent support to help vulnerable populations cope with the continued high food prices. Failure to deliver timely support could result in adverse economic and social developments, rapid local increases in poverty, and possible social disturbances o f the social and political environment.

E. CONSISTENCY WITH CAS

31. The new activities proposed are fully consistent with the current CAS (FY06-09). The second CAS strategic priority i s sustainable growth, food security, and job creation, and the CfW program addresses three related over-arching objectives: reduce the share o f the population in poverty; eliminate food-poverty; and reduce unemployment. As the co-financing i s responding to a crisis situation, i t s measures focus on the short-term; however, by supporting public works that improve sanitation and infrastructure and providing short term employment and incremental support to household incomes, the co-financing will also contribute to these goals in the long- te rm by mitigating against further erosions in human capital and the asset base o f poor households.

32. Notably, the CAS emphasizes the need to strengthen social protection and safety nets for vulnerable groups, and recommends the piloting o f innovative strategies to do so. The public works program will provide experience and lessons in developing and implementing a longer term social protection strategy, which wi l l be critical to respond to future crises and shocks.

F. EXPECTED OUTCOMES

33. As the FPCR TF and FPCR MDTF grants co-financing to NSAP i s being processed as an emergency operation, and i s responding to a crisis, i t s results will be monitored with the use o f fairly simple indicators. These indicators have been added to the NSAP results framework. (see Annex 1 for the framework). With the new activities, the targets for two o f those indicators will be changed as follows*:

* Targets for these indicators cover CfW activities under both the f i r s t and second additional grants.

11

(i) Intermediate Outcome Indicators: o At least 1,666,160 person-days provided in labor-intensive public works; and at least

499,848 woman-days provided in labor-intensive public works. o At least 75 percent o f households in targeted areas are aware o f the C f W program.

(ii) Outcome Indicator: o At least 3 1,000 people (directly) benefit from the cash for work program.

34. A Beneficiary Impact Assessment will commence shortly, in addition to smaller qualitative and quantitative studies to assess in-depth the project’s impact on households’ savings and expenditure trends.

Impact Evaluation.

IV. APPRAISAL OF ADDITIONAL PROJECT ACTIVITIES

A. ECONOMIC AND FINANCIAL

35. As highlighted in the Global Food Crisis Response Program document, the urgency o f a response prohibits quantitative economic appraisal. Instead, a four-part decision criterion i s proposed based on: (a) policy context; (b) target beneficiaries; (c) expected benefits; and (d) fiscal affordability.

36. The proposed program i s consistent with the framework set out in the Global Food Crisis Response Program. The overall policy context recognizes the post-conflict nature o f the client government and the absence o f significant, sustainable alternative measures. As noted in paragraph 1 1 , the Government has developed a credible strategy to address the crisis.

37. Targeting i s explicit in the design and focuses on the urban and rural poor and the unemployed. The risk management objective inherent in the C f W program design will ensure the program delivers both immediate benefits and longer-term development gains by mitigating the risk o f households utilizing adverse coping mechanisms such as selling assets, pulling children out o f school, etc. Providing income through C f W programs could partially mitigate the adverse impact o f inflation on real incomes and alleviate the potential for unrest. The program will provide de facto subsidies to poor households.

38. Fiscal affordability i s not an issue since each intervention will be fully funded from the proposed grant. Continued international support to similar safety net interventions i s anticipated in response to the high food prices, but more so over medium to long term to address food security and youth unemployment issues. N o un-programmed demands for government resources will be made.

39. transfer equivalent to 50 percent o f the poverty l ine (2004).

Each beneficiary will enroll in the program for two months and will receive a cash

12

B. TECHNICAL

40. The program will draw on the NaCSA and other in-country expertise, while also utilizing global best practice lessons from public works programs in India and across Africa. These will be labor-intensive works with a minimum o f 60 percent labor content to maximize benefits to participants. There will be several levels o f targeting for the selection o f works sites: the districts will be selected based on the food insecurity criteria established by WFP/FAO and the results o f the 2007 Comprehensive Food Security and Vulnerability Assessment (CFSVA), and intra- district targeting o f sites will be realized in collaboration with communities, the appropriate Ministry, Department and Agency (MDA) (e.g., SLRA) and LCs based on a relative need and vulnerability indexg. The targeting o f the beneficiaries will be realized through self-targeting, using a below market wage rate to attract the neediest. Each beneficiary will be allowed to participate in the program once for duration o f two months (50 workdays). Each household will be eligible to participate with only one member. In case o f number o f applicants exceeding the number o f people to be employed, a lottery system will be utilized to select participants, subject to the stipulation that women should make up 30 percent o f beneficiaries per project.

41. In urban areas, the works will include cleaning drains, garbage collection, street cleaning and other urban maintenance works, and in rural areas the works will consist o f rehabilitation o f small access roads, culverts and bridges and small irrigation schemes. A portion o f these works are expected to be temporary works designed to facilitate access to markets during the rainy season and enable distribution o f food aid in remote areas. The works will be implemented by private contractors, specialized NGOs and civ i l society organizations, and will be supervised by LCs and NaCSA.

42. The second additional grant is expected to finance about 346 small works projects over a 9-12 month period. Each small works project is expected to employ about 40-50 people providing a total o f 816,560 person days o f employment over the extension period". With respect to targeting o f beneficiaries, the program will utilize self-targeting by applying a slightly below-market wage rate in order to attract the neediest to the program and avoid diverting individuals from other productive activities. The wage rate will be adjusted according to the market conditions in the program areas. A minimum o f 30 percent quota for women for each works project will be adhered to.

C. FIDUCIARY

43. The program will rely o n the existing procurement and financial management arrangements o f NSAP and NaCSA. Details o f financial management and procurement arrangements are presented below. t

NaCSA has developed for the NSAP an intra-district targeting methodology which wi l l be refmed with support from WFP, local councils and other data sources.

lo Together with the f i rst additional grant supporting CfW activities, this wi l l bring the cumulative number o f person days provided to 1,666,160.

13

i. Financial Management

44. The project will rely on the existing financial management arrangement o f the current NSAP, which has been reviewed and rated as satisfactory. A summary o f the key elements o f the financial management systems o f the implementing entity is as follows:

Budgeting Arrangements: The budgeting arrangements for the C f W program will fol low the existing budgeting arrangements used for the implementation o f NSAP, which have been satisfactory. NaCSA has discussed the distribution and allocation o f resources o f the NSAP with the Bank, and this will be reflected in the amended D C A for NSAP. Activities under for the C f W program will be assigned best estimated costs and included in the annual program budget. The procurement plan wil l form a good basis for determining the activities and realistic costs.

Accounting Arrangements: The existing finance and accounting unit o f NaCSA i s headed by a Director o f Finance and assisted by a Finance and Accounts Manager responsible specifically for the fiduciary responsibilities o f this project. The existing accounting system (Sun Accounts platform) will continue to be used for recording and reporting on al l financial transactions. Our assessment o f the systems (capturing, bookkeeping and recording) indicates that i t i s capable o f accurately processing and reporting on the use o f the project funds in a timely manner and safeguarding o f the project assets.

0 Internal Control & Internal Auditing: There i s adequate segregation o f duties and functions within NaCSA to guide correct approvals and authorization o f project expenditures under the Grant. The Accounts Manual documents the procedures to guide al l the financial transactions in NaCSA. The various Forms to be used in processing the C f W program have already been designed and these are now being incorporated in the manual. At the present time, NaCSA does not have an internal audit function. In view o f the added activities, it will be desirable for the management o f the project to ensure potential risks are closely monitored and appropriate remedial action taken in a timely fashion. Annex 3 provides the risk mitigation measures that have been assessed with regard to the ongoing project. This will be reviewed and updated during regular supervision o f the Grant. The overall financial management risk for the project i s rated as Substantial, in view o f the new activities involving the C f W program which NaCSA will be contracting out to specialized agencies (NGO and CBOs). The suggested mitigating measures will ultimately be expected to reduce the overall risk level to Moderate. This is a critical indicator o f the resources required to supervise and monitor Financial Management (FM) arrangement for the project during i t s implementation. A time-bound action plan for the key immediate actions has been agreed and i s reflected in the table below.

0 Financial Management Action Plan: The action plan below indicates the actions to be taken to strengthen NaCSA financial management system:

14

Action

Finalize the detailed budget for the CfW program.

Revise the terms o f reference (TOR) for external auditors to incorporate audit requirements for the Grant.

Funds Flow and Disbursement Arrangements: NaCSA will open and manage a Separate Designated Account with a reputable commercial bank acceptable to IDA for the purpose o f disbursement o f the FPCR funds. This i s to ensure funds from the FPCR TF are not mingled with NSAP Credit proceeds and keep the transactions under the ongoing operation separate from those financed by the Grant. Disbursement o f project proceeds will continue to be on transaction basis, and the current level o f Statement o f Expenditures (SOE) threshold will apply for the co-financing. Payment processing will be centralized at NaCSA, who will be responsible for processing payments to implementing agencies (NGOs, CBOs, small enterprises, etc.) in accordance with the updated Operational Manual. In this regard, the financial accountant will ensure that the eligibility criteria such as minimum controls exist prior to processing the cash transfers. These will include the opening o f separate bank accounts by third part implementing partners, signatories to the bank accounts and receipt o f approved application forms indicating budget and activities.

Date Due By Responsible

By effectiveness NaCSA. (done and submitted). Not later than four months NaCSA. after Effectiveness.

0 Financial Reporting Arrangements: The Director o f Finance will be responsible for ensuring that financial transactions are reliable, and they are adequately captured and reported in a timely manner. The project will continue to produce IFRs on a quarterly basis for submission to the IDA, and will include information related to the C f W program in those reports. The quarterly financial reports will consistof a statement o f cash receipts and expenditures described by source and expenditure components/category following the main expenditure classification in the budget.

0 Auditing: The Terms o f Reference (TOR) for the auditor o f the NSAP will be expanded to cover the additional activities related to the C f w program. Thus, there will be no change to the reporting or audit report requirements. It has also been verified that NaCSA i s current in submitting i t s audit reports. The Bank’s process for the appointment o f auditors will be adhered to.

0 Supervision Plan: During implementation o f the program intensive FM supervision will be required and it is planned that FM supervision mission will be conducted at least twice a year based in view o f the Substantial risk rating assigned to the project. The FM supervision mission’s objectives will include that o f ensuring that strong financial management systems are maintained for the project throughout project tenure. Visits to the NGOs and CBOs activity sites by the FM staff will also add value to the supervision work and help to identify problems and resolve them in a timely manner.

15

45. In summary, the conclusion o f the assessment is that the existing FM arrangements in NaCSA for the NSAP, which will be used for the additional activities, are adequate and in compliance with the Bank’s minimum requirement under OP/BP 10.02.

ii. Procurement

46. The provision o f the second co-financing will not affect the established processes and procedures which are currently in use for implementing the main project. The existing procurement arrangements assessed remain adequate and acceptable. Procurement will, however, be guided by the October 2006 version o f the Guidelines: Selection and Employment o f Consultants by World Bank Borrowers; and Guidelines: Procurement under IBRD Loans and IDA Credits.

47. The following steps will be followed:

1. NaCSA field staff, MDAs and LCs will collaborate in the identification and prioritization o f al l works within targeted communities.

2. NaCSA, with the assistance o f appropriate agency (e.g., SLRA), will finalize the scope o f works, bill o f quantities and related tender documents (for the competitive selection o f local contractors) for the selected sub-projects.

3, NaCSA, with assistance o f the appropriate agency, will pre-qualify service providers (Implementing Entities (IEs)), carry out the bidding process and award contracts in accordance with the agreed procurement management requirements. The cost o f each contract will be approximately US$lO,OOO and not exceeding US$15,000.

4. Members o f the village and ward committees will be involved in simple monitoring o f the sub-projects.

5. ~NaCSA, supported by the appropriate agency, will carry out technical supervision o f the works, including preparation o f valuation certificates for payment.

48. In summary, the assessment o f the procurement management arrangements under the project concludes that there are systems in place that satisfy the Bank’s minimum requirement. Overall procurement management arrangement i s rated as Satisfactory.

49. Because specific details o f the new activities will be identified only through the process o f consultation with communities, the general Procurement Plan will be revised periodically after effectiveness. A preliminary budget for the new activities i s attached as Annex 4.

D. ENVIRONMENTAL AND SOCIAL

50. The original NSAP program included a pi lot road rehabilitatiodpublic works program which was covered under the original environmental assessment. As such, the init ial C f W grant did not require any additional assessment, and neither will i t s expansion. N o new type o f works

16

will be introduced which were not included under the existing program. All public works will fol low the environmental safety and mitigation guidelines developed under NSAP. As part o f the supervision o f the program, there will be an assessment done in the first month after effectiveness o f the works in the new intervention areas and mitigation measures. In case o f any revisions and new requirements to take note of, an addendum will be prepared to the existing environmental assessment and will be re-disclosed. W h i l e resettlement i s not anticipated, the existing resettlement pol icy framework will also be re-disclosed within six months o f project effectiveness. It i s o f note that NaCSA staff has had ongoing support f rom Bank safeguards staff over the course o f the project, including help organizing a workshop in 2005 concerning the environmental toolkit for monitoring o f safeguards in projects with multiple sub-projects prepared by the Afr ica region.

5 1. The C f W program will target the most affected poorest groups including women, youth and children and fol low the Community-Driven Development methodology (CDD) which i s currently being used under the NSAP program allowing communities and beneficiaries to participate in program implementation.

V. IMPLEMENTATION ARRANGEMENTS AND FINANCING PLAN

52. Implementation Arrangements. Existing implementation arrangements under NSAP will remain unchanged, with NaCSA as the implementing agency. The Ministry o f Finance and Economic Development will continue to oversee the project. W h i l e Government implementation capacity is often limited in Sierra Leone, NaCSA stands out as an institution with a long and successful experience in coordination o f humanitarian and social protection activities, both during and after the conflict. NaCSA has proven itself capable o f effectively managing not only the Bank’s funds, but also those o f other donors: currently, NaCSA implements five different programs with funding from Islamic Development Bank, KfW, African Development Bank, and the Italian Government. The NSAP Mid-Term Review found NaCSA’s performance to be satisfactory on al l counts, including fiduciary management, monitoring and evaluation, and reporting. The Government o f Sierra Leone recognized the capacity o f the agency when it extended its mandate until 2018, and expanded it to include support for local development/LCs and social assistance programs for the poor, and for the war reparations effort.

53. NaCSA will coordinate with LCs and relevant MDAs in the targeting o f communities that will be covered by the project. The targeted communities will then identify joint ly with NaCSA, LCs, and M D A s the types and exact locations o f C f W activities that will be supported. Approval o f identified activities will be the responsibility o f a committee comprised o f representatives o f NaCSA, LCs, and MDAs (see Annex 5 for further details).

54. available by the indicated dates:

Readiness for Implementation. The following key documents are available or will be

1. Revised Project Operational Manual: available; the section o f the Manual dealing with C f W i s attached as Annex 5.

2. Procurement Plan: The Procurement plan will be revised periodically after effectiveness.

17

3. Budget and Annual Workplan: draft available and attached as Annex 4; to be updated on a quarterly basis after program effectiveness.

55. Financing Plan. The proposed safety net intervention to mitigate the short term impact o f the food price increases will cost US$4.0 million. The proceeds o f the grant will be distributed amongst expenditure categories (as will be reflected in the Grant Agreement) as follows1 ’ :

Table 2: Project Costs by Category - FPCR TF Grants (US$ million)

Breakdown

Project Cost by Category

First Co- Financing

from FPCR TF

Second co-

Financing from

FPCR TF

Second co-

Financing from

FPCR MDTF

Yo of Expenditures

to be Financed

3.82 2.66 .89 100 Works under part D, Consultants’ Services and Training

Operating Costs 0.18 .34 .ll 100

Total Costs 4.00 3.00 1 .oo

VI. BENEFITS AND R I S K S

56. Due to the country environment, the overall risk rating o f the project will remain “substantial”. Regarding institutional setup, it has already been noted that NSAP’s implementation arrangements are satisfactory; furthermore, in i t s capacity as executing agency, NaCSA will build upon its existing central and regional technical and administrative capacity. In case o f need for increased administrative capacity, NaCSA will have the flexibility to make incremental adjustments to ensure effective implementation and monitoring o f the additional activities. The project’s financial management arrangements, including accounting, reporting, and audits, are satisfactory, and will remain unchanged: the financial management staff and system in place will support the implementation o f additional activities. NaCSA’s performance on monitoring and evaluation i s rated “moderately satisfactory” in the latest Implementation Status Report (ISR) due to delays in availability o f results data; as part o f the supervision o f the project, the IDA team will work with NaCSA to ensure an action plan i s developed and implemented to bring performance to a fully satisfactory level. Nevertheless, over the implementation period o f the original credit and the f i rs t additional financing grant for CfWs, NASCA’s management track record has been very good as indicated in the periodic supervision reports.

~ ~~~ ~~

’’ It i s intended that as soon as the Grant i s effective, it wil l finance all NSAP-related operating costs.

18

57. However, at the country level, the financial management risk would be judged as being high due to the historical weak performance in governance, accountability, anti-corruption control and public financial management. Key challenges remain regarding NaCSA's ability to effectively monitor or supervise the beneficiaries during implementation in order to ensure that the project meets i t s stated objectives. As such, the overall financial risk remains substantial. (See Annex 3 for a Risk Table.)

58. The environmental rating o f the project will remain as Category B as the additional activities do not constitute any added risk with respect to the environment. Environmental mitigation measures relating to public works exist as part o f the current program operational manual.

59. There may be political risks related to the targeting o f the additional activities, both in terms o f the focus on food insecure districts, rather than on al l districts, and in terms o f the selection o f specific beneficiaries within targeted districts. To mitigate this risk, the targeting methodology used for the program will be publicized widely through sensitization and a targeted I E C campaign. The IEC campaign will primarily rely on local radio emissions and community mobilization and sensitization sessions prior to and during program implementation.

60. The C f W program i s expected to benefit close to 3 1,000 direct beneficiaries (Le., 180,000 direct and indirect beneficiaries) including unemployed youth, female-headed households, and vulnerable rural and urban households. This translates into about 4 percent o f the poorest in Sierra Leone concentrated in the areas most affected by the food price increases. In th i s context, this second additional grant would employ about 15,570 beneficiaries over a 9-12 month period. The C f W interventions are expected to provide the equivalent o f 30 to 50 percent o f the existing poverty line (2004)12, which i s l ikely to have been eroded with the sharp price increases.

61. The rehabilitated infrastructure will facilitate access to markets' and food, support improved agricultural productivity, and improve sanitation and waste management in urban and peri-urban areas.

VII. FINANCIAL TERMS AND CONDITIONS FOR THE GRANT

62. Standard trust fund grant conditions.

l2 National Poverty Line (2004): 770,678 Leones per year/ per capita. The magnitude o f the transfer per year per household wi l l change based on the daily wage rate utilized. A range of between 6,000 to 8,000 Leones per day i s expected to be utilized in different regions of the country.

19

Annex 1: Results Framework and Monitoring

I

PDO

To assist war-affected or otherwise vulnerable communities to restore infrastructure and services, build local capacity for collective action, and assist vulnerable households to access temporary employment opportunities, with priority given to areas not previously serviced by the government, newly accessible areas (those which were under rebel control until January 2002), food insecure areas, and the most vulnerable population groups within those areas.

I Intermediate Outcomes Component 1: Community- Driven Program (CDP)

Project Outcome Indicators

Access to services in vulnerable areas

- Project investments targeted to newly accessible areas, and areas previously not served (%)

- People with access to improved health and sanitation facilities (number)

- Children with access to improved education facilities (number)

. Beneficiaries o f economic infrastructure projects (number)

Local capacity

. Proportion o f infrastructure operational 12 months after completion (%)

Access to emuloyment . Beneficiaries o f rural public works and

cash for work programs (number o f individuals temporarily employed)

Intermediate Outcome Indicators

- Community-based subprojects implemented (number)

- Completed sub-projects that conform to ministry standards, designs and norms (%)

- All supported communities have conducted participatory needs assessments and project identification using PPA approach (Yes / No)

. Subprojects that reflect priorities o f targeted communities and beneficiaries (%)

. Communities that have project management structures in place and trained community members (%)

Use o f Project Outcome Information

To assess success in targeting such areas

To assess success in providing improved access to social and economic infrastructure

To assess performance o f C f W component in aiding target population

Use o f Intermediate Outcome Monitoring

To verify that intended quantity o f subprojects has been carried out

To assess technical quality o f sub-projects

To assess participatory nature o f the sub- projects

20

Component 2: Pilot and Special Programs in Newly Accessible Areas

Component 3: Project Management and Innovative Activities

Component 4: Food Price Response -Cash for Works

- Roads rehabilitated, rural (km)

- Health facilities constructed, renovated andor equipped (number)

- Classrooms built or rehabilitated (number) - Improved community water points

constructed or rehabilitated under the project (number)

- Latrines built (number)

a) Rural Public Works Program

- Roads rehabilitated, rural (km)

- Person days provided in labor-intensive public works (number)

b) Shelter Program for Vulnerable Groups

- Housing units built (number)

- Beneficiaries in communities with NSAP program aware o f interventions (%)

- Project management costs (NaCSA staff salaries at al l levels as well as operating expenditures) are less than 10% o f total project costs

- Person days provided in labor-intensive public works (number)

- “Woman days” provided in labor intensive public works (number)

- Households in target areas aware o f the program (%)

To measure program outputs

To monitor implementation progress o f Rural Public Works Program

To measure impact on employment

To monitor implementation of Shelter Program

To measure effectiveness of program outreach in target areas

To measure efficiency of program administration

To measure impact on employment

To measure impact on women’s employment

To assess performance o f communications activities

21

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Results Framework: Explanation o f Proposed Changes to Indicators

Project Outcome Indicators [mproved social capital and xganizational development

[ncreased access to and use o f social and economic infrastructure 2nd services

Proportion o f NSAP investments targeted to newly accessible areas, B areas previously not served, and vulnerable people within these ireas

Proportion o f sub-projects that reflect priorities o f targeted :ommunities and beneficiaries Proportion o f sub-projects operative 24 months after completion.

Proportion o f targeted vulnerable households reporting positive benefits from cash for work Dronram

Intermediate Outcome Indicators

ComDonent 1 1 a. 1 Number o f community based sub-projects implemented

1 a.2 % o f completed sub-projects conform to ministry standards, designs and norms 1 b. 1 % o f projects are assessed as

Proposed change to indicator

Dropped

Replaced by :

People with access to improved health and sanitation facilities (number)

Children with access to improved education facilities (number)

Beneficiaries o f economic infrastructure projects (number) Changed to:

Project investments targeted to newly accessible areas, areas previously not served, food insecure areas (%), Moved to intermediate level

Changed to:

Proportion o f infrastructure operational 12 months after completion (%) Replaced by GFRP core indicator:

Beneficiaries o f public work programs (number o f individuals) Proposed change to indicator

No change

No change

Dropped

26

Comments

This indicator lacks specificity and i s dropped. The social capital development i s however s t i l l being tracked through Beneficiary Impact Assessment reports. The original indicator lacked specificity and i s being replaced by more precise indicators as part o f this additional financing.

This indicator combined two different targets and has been refined to facilitate and clarify monitoring.

Comments

Target changed from 1,000 to 600 during restructuring in December 2007.

This i s replaced by tracking

successful by communities (achieve minimum expected outputs and outcomes/impacts)

1 b.2 All supported communities have conducted participatory needs assessments and project identification using Participatory Poverty Assessment (PPA) amroach 1 b.3 % o f communities have project management structures in place and trained community members

Component 2 2a. 1 Feeder roads rehabilitated

2a.2 Person days o f temporary employment created

2a.3 "Woman days" of temporary employment created 2a.4 At mid-term review the cost per day o f wage labor will not exceed US$2.50 2a.5 % o f completed sub-projects are o f satisfactory technical quality or better

No change

No change

Relevant Core indicators added:

Roads rehabilitated, rural (km)

Health facilities constructed, renovated and/or equipped (number)

Classrooms built or rehabilitated (number)

Improved community water points constructed or rehabilitated under the project (number)

Latrines built (number)

Wording changed to reflect core indicator:

Roads rehabilitated, rural (km)

Wording changed to reflect core indicator:

Person days provided in labor- intensive public works (number) No change

Dropped

Dropped

indicators related to specific iutcomes o f sub-projects in terms i f access to different infrastructure ind economic services

Dropped during December 2007 restructuring to streamline monitoring framework. Project i s focusing on monitoring number o f projects operational after 12 months of completion.

27

2a.6 % o f beneficiaries consider projects successful (achieved anticipated outputs and outcomes)

2b. 1 Housing units built

2b.2 % o f houses sustain two or more rainy seasons 2b.3 % o f houses benefit marginalized population groups (female headed households, disabled and their families) 2b.4 % o f beneficiaries were selected by beneficiary communities

ComDonent 3 3a. 1 Number o f successful capacity building events carried out each year 3b.2 % o f chiefdom and district governments aware o f NSAP coverage, targeting, methodology, and results 3b.3 % o f general public aware o f NSAP program and results

3c.l M&E reports used for decision-making by NaCSA; 3d. 1 NaCSA staf f indicate satisfaction with technical assistance, including skill transfer activities

3e.l Project management costs (NaCSA s ta f f salaries at a l l levels as wel l as operating expenditures) are less than 10% o f total project costs

Dropped

No change

Dropped

Dropped

Dropped

Dropped

Dropped

Changed to:

Beneficiaries in communities with N S A P program aware o f interventions (%) Dropped

Dropped

No change

This i s replaced by tracking indicators related to specific outcomes o f sub-projects in terms o f access to different infrastructure and economic services. Target changed from 1,700 to 1,200 during December 07 restructuring. Dropped to streamline monitoring.

Dropped to streamline monitoring.

Dropped to streamline monitoring.

Dropped since indicator i s not key to demonstrate project results.

Dropped to streamline monitoring.

Dropped to streamline moni.toring.

Dropped to streamline monitoring.

Dropped during 2007 restructuring since it was unclear how data on this indicator were to be collected in a relatively small working environment and where organizational culture and management style were being develoDed.

28

3e.2 NaCSA staff and partners indicate satisfaction with the performance o f NaCSA's management

3e.3 NaCSA performance in its Public Expenditure Tracking Survey (PETS) scorecard improves each semester

ComDonent 4 Person days of temporary employment created

"Woman days" of temporary employment created Proportion o f households in target areas aware of the program

Dropped

Dropped

Wording changed to reflect ore indicator:

Person days provided in labor- intensive public works (number) Added during first additional -. financing Added duringjrst additional financing

Dropped during 2007 restructuring since it was unclear how data on this indicator were to be collected in a relatively small working environment and where organizational culture and management style were being developed. Dropped during 2007 restructuring since the Ministry of Finance which i s responsible for the survey has no way to track which of the investments for basic services are financed by NaCSA and which are outside budget support operations.

29

Annex 2: Total Project Costs by Component US$ million

I

I

7.36 3.54

I Project Cost by Sub-Component

50.0

ienc rrugram

4.0

1. Community Developn --I 2. Pilot and Special Programs

blic Works a. Labor Intensive Pul I b. Shelter I 3. Proiect Management with Innovative Amroaches

a. Capacity Building b. IEC c. Monitoring and Evaluation d. Beneficiary and Social Assessments,

Financial and Technical Audits, PPAs, Micro-Finance

e. NSAP - Contractual Staff f. Equipment, Vehicles, Supplies NSAP E. ODerating ExDenses NaCSA

I 4. Cash for Work Program Total Baseline Cost

Physical Contingencies Price Contingencies

Total Project Cost

Of which:

I FPCRTFs sq=j 2.00 9.64 I 0.46 I 2.00 I I 0.40 I I 0.40 I I

1 .oo

2.64 0.46

47.0 I 4.0 I 2.0 I I 1 .o I I

30

Annex 3: Risk Rating Summary Table16

Type Of Risk

Conditions for Risk Risk Mitigating Negotiation or Residual

Rating Measures/Remarb Effectiveness Risk Rating (YesiNo)

Inherent Risk Country Level Weaknesses in public financial management by state institutions due to lack o f capacity. Issues o f accountability and transparency in PFM.

Entity Level Potential weaknesses in FM capacity at the NSAP for monitoring beneficiary agencies in the LCs. Project Level Being an emergency operation, there is the risk associated with inexperience and poor coordination.

Delays in release o f funds to beneficiaries.

H

H

S

There i s a an inherent risk that government entities are too weak to fulfill their functions, implement project activities, and comply with Bank’s environmental, social and fiduciary safeguards

Strengthening the role o f the public institutions in FM capacity building through ongoing reforms in the public financial management.

The current project management unit structure under NSAP will be used and we expect the experience gained in CDP will be beneficial.

The need to get all stakeholders involved and committed especially at the local council level.

The existing financial and internal control procedures incorporate FM procedures to guide fund transfer to communities and this should help minimize delays. Supervision and

N o

N o

N o

S

M

S

l6 This table pertains to the totality o f the NSAP project and not only to the risks associated with the CfW activities.

31

I Conditions for I Risk Mitigating

Measures/Remarks

monitoring will be hastened

Type of Risk Negotiation or Residual Effectiveness Risk Rating (Yes/No)

Delayed availability o f M&E data

Overall IR

Risk Rating

timeliness o f M&E data. H S

Control Risk Budgeting Delays in preparing detailed and quality budget estimates and fund distribution plans.

Accounting Accounting staff may not have sufficient experience in Bank disbursement and procedures.

Internal Controls/Internal Auditing Risk o f non- compliance with internal control procedures and overriding existing controls under the pretext o f an emergency response.

Funds Flow Project may not submit withdrawal applications on timely basis, thereby causing

S

S

S

M

Detail allocation of funds will be completed before the grant i s declared effective. Activities will be identified and costed for each component.

The NaCSA staf f has experience with NSAP and has been trained and i s familiar with World Bank procedures.

Project will use the existing FM arrangements as documented in the Project Manuals for the ongoing World Bank supported parent project.

There i s adequate segregation of duties within NSAP to ensure reasonable level o f an internal control framework.

Delays in processing WA are a systemic problem in Sierra Leone and being addressed bv the MoFD.

No

No

No

No

M

M

M

M

32

Type of Risk

possible delays in implementation. Delay in lead entity could impact on the effectiveness o f the other implementing agencies

Financial Reporting Quality and timeliness in submitting IFR and other reports. There i s likelihood that poor record keeping by implementing partners (at decentralized levels, NGOs, FBOs may delay accountability and slow flow o f funds Auditing Delays in the submission o f audit reports and the timeliness o f management follow up on audit issues.

Overall Risk Rating

H: High

Risk Rating

S

Risk Mitigating MeasuresRemarks

Project will liaise with the LGFD to facilitate transfers to LCS. Close supervision by the project coordinator and monitoring by the TTL and the FM team in Freetown will ensure delays are prevented.

The existing IFR formats will be modified to reflect the expenditure from this project.

Reporting from other implementing agencies and partners (NGOs and FBOs) will be regularly sought and preferably on a month by month basis. Subsequent transfers to the agencies and partners will be subject to timely reporting by them to the lead entity.

The current audit arrangements (TOR) will be expanded to cover the co- financing and the special nature of activities will be noted in the TOR for the auditor to ensure timely report that also include activities at the community level by NGOs and FBOs.

Conditions for Negotiation or Effectiveness

(Yes/No)

N o

N o

Residual Risk Rating

M

M

M

S: Substantial M: Modest L: Low

33

Annex 4: Preliminary Budget for Cash for Work Program under Second Co-financing from FPCR TFs

Qty ItemIActivity description

NATIONAL SOCIAL ACTION PROJECT: Second Co-financing from FPCR TFs

Unit Cost Total Cost

(SLLe) (US$)

(US$)

1.Small labor-intensive Public Works Projects

*Labor

*Materials & Other Costs

A. “CASH FOR WORK” Promam

341 10,000 3,410,000 10,400,500,000

60% 2,076,000 6,240,300,000

40% 1,384,000 4,160,200,000

Total (Community Sub-Projects) 3,410,000 10,400,500,000

B. PRE-IMPLEMENTATION SENSITIZATION

1. For ComrnunitiesLocal Councils

*Implementation Strategy & Complementary Roles

2. For Field-StafUImdernentinp Partners

14 200 2,800 8,540,000

Sub-Total 2,800 8,540,000

*Implementation Strategy and Monitoring & Supervision I 14 I 200 2,800 8,540,000

34

Sub-Total 2,800 I 8,540,000

Total (Sensitization) 5,600 1 17,080,000

C. POST-IMPLEMENTATION EVALUATION

* Beneficiary Impact Assessment (BIA) 1 50,000 50,000 152,500,000 Total 50,000 152,500,000

D. MANAGEMENT COSTS

JSuDervision and Coordination)

*Director

1. HQ 1.1 Cfw PIU - Social & Economic Opportunities

72 I 32.5 1 2,341 I 7,141,463

(SOCEP) Directorate I I I I

*Project Officer

*M&E Manager

*Driver

1.1.1 Per Diems

72 26.0 1,873 5,713,171

72 26.0 1,873 5,7 13,17 1

144 16.3 2,34 1 7,141,463

Sub-Total (Direct Cost) 8,429 25,709,268

* Fuel for vehicle (Field-trip) 720 I 6.4 I 4,636 I 14,140,098

Sub-Total (Direct Cost) 8,008 24,423,805

* Fuel for vehicle (Duty-Station) * Lubricants

480 6.4 3,091 9,426,732

12 23.4 28 1 856.976

1.1.3 Liaison and Reporting

* Telephone cards 480 9.8 4,683 14,282,927 Sub-Total (Indirect Cost)

35

4,683 14,282,927

1.1.4 Maintenance of Vehicles & Equipments (Indirect) 12 2068.7 24,824 75,713,322

1.1.5 Office Supplies

* Stationery 12 * Overheads (Electricity, Admin. Services etc.) 12

Sub-Total (Indirect)

2000.0 24,000 73,200,000

3000.0 36,000 109,800,000 60,000 183,000,000

Total (SOCEP Directorate) 105,944 323,129,322

2. Field Visits bv Parliamentary Over-sivht Committee

2.3.1 Per Diem for Committee members

2.3 -2 Per D iem for Driver

2.3.3 Fuel for vehicles

60 32.8 1,967 6,000,000

10 16.4 164 500,000

200 5.7 1,141 3,480,000

Total 3,272 9,980,000

36

3. Revional Offices

3.1 Per diems

3.2 Fuel & Lubricants

3.3 Maintenance o f Vehicles & Equipments

3.4 Stationery & Offices Supplies

3.5 Bills (Electricity, Water and Telephones etc.)

Sub-Total

24,000

3 11% 2,640 8,052,000.00

3 58% 13,920 42,456,000.00

3 18% 4,320 13,176,000.00

3 7% 1,680 5,124,000.00

3 6% 1,440 4,392,000.00

24,000 73,200,000

4. District Offices

4.1 Per diems

4.2 Fuel & Lubricants

4.3 Maintenance o f Vehicles & Equipments

4.4 Stationery & Offices Supplies

Sub-Total

49,000

14 7% 3,430 10,461,500.0

14 47% 23,030 70,241,500.0

14 33% 16,170 49,3 18,500.0

14 13% 6,370 19,428,500.0

49,000 149,450,000

Sub-Total RO & DO 73,000 222,650,000

- E. STAFF REMUNERATION

1. HQ - CfW PIU 1.1 Programme Director 12 2,400 28,800 87,840,000

1.7 Admin. Assistant 12 I275 3,300 10,065,000

Su b-To tal 140,100 427,305,000

2. Field

2.1 Regional Coordinators

2.2 District Coordinators

r- ~ I I I

36 1440 51,840 158,112,000

84 . 1200 100,800 307,440,000

Sub-Total 152,640 465,552,000

3. Management - Responsibility Allowance 3.1 Commissioner

37

12 2.750 33.000 100.650.000

3.2 Deputy Commissioner 12 2,200 26,400 80,520,000

Sub-Total 59,400 181,170,000

Total (Staff Remuneration) 352,140 1,074,027,000

TOTAL (Direct Cost - Works, Consultant Services and Training) 3,880,469 11,835,431,073

TOTAL (Indirect: Operating Cost) 119,487 364,435,249

GRAND-TOTAL (Direct & Indirect) 3,999,956 11,799,870,705

EFFICIENCY RATIO 0.030

Annex 5: Cash for Works Implementation Guidelines

GUIDELINES FOR THE IMPLEMENTATION OF ‘CASH for WORK’ PROGRAMME AS A SAFETY NET TO FOOD PRICE INCREASES FINANCED

BY THE IDA CREDIT

1. INTRODUCTION

1.1 The modified project development objective o f the National Social Action Project (NSAP) is to assist war-affected or otherwise vulnerable communities to restore infrastructure and services, build local capacity for collective action, and assist vulnerable households to access temporary employment opportunities, with priority given to areas not previously serviced by the government, newly accessible areas (those which were under rebel control until January 2002), food insecure areas,” and the most vulnerable population groups within those areas. This modified objective, introduced in the f i rs t additional grant to NSAP, accommodated the addition o f new activities; namely, a C f W program.

1.2 The C f W program involves labor-intensive public works in rural, peri-urban, and urban areas as a mechanism to provide cash to vulnerable individuals and households. As i s the case with NSAP’s rural labor-based public works component (component 2 o f the NSAP), al l works are demand-driven, with specific requests originating from and/or confirmed with relevant communities, chiefdoms, districts, or other local government authorities. Unlike the original project, the new funds activities are implemented via direct contracting o f Implementing Partners (e.g., YoutWLocal organizations, local contractors/artisans) and not through Project Management Committees or LCs. In rural areas, works focus on rural road rehabilitation, in which case the SLRA i s brought in at the identification stage to ensure a coherent approach. Where swamp cultivation with irrigation systems are identified, the Land and Water Development Division o f the Ministry o f Agriculture are consulted. In urban and peri-urban areas, works can include street cleaning, grass cutting, minor spot repairs on roads, cleaning open drains, waste collection, and others and are identified in collaboration with LCs and appropriate MDAs. The second additional grant entails continuation o f program interventions in the most affected areas in the seven existing program districts, and expansion to seven new districts that were not supported under the f i rst additional grant.

1.3 Targeting is carried out through: (i) geographic selection based on poverty and food insecurity prevalence rates and population ranking; (ii) a wage rate below the average informal day labor rate for casual workers; and (iii) the stipulation that minimum 30 percent o f al l workers b