SOL-641-13-000003.pdf

RFP Issuance Date : December 17, 2012 RFP Closing Date : February 5, 2013 RFP Closing Time : 04:00 p.m. GMT Questions Closing Date : January 4, 2013; 4:00 p.m. GMT

Subject: Request for Proposals No. SOL-641-13-000003

USAID Financing Ghanaian Agriculture Project

To All Prospective Offerors:

The United States Government, represented by the U.S. Agency for International Development (USAID) Ghana Mission (USAID/Ghana) is soliciting proposals from qualified organizations interested in providing the services described in the attached solicitation.

This procurement is being conducted through full and open competition for which the procedures for "contracting by negotiation, trade-off process”, as described in Part 15 of the Federal Acquisition Regulation (FAR), will apply.

Proposals will be accepted from US and Non-US private, for-profit and non-profit organizations, non-governmental organizations (NGOs) including universities, research organizations, professional associations, and relevant special interest associations. Faith-based and community organizations are also eligible for award. In support of implementation and procurement reforms USAID is interested in expanding the number and sustainability of development partners, USAID/Ghana encourages proposals from potential new and/or local partners.

USAID/Ghana plans to award a cost-plus-fixed-fee completion type contract. The maximum amount of the contract (costs and fee) is in the range of $24-$24.5 million, covering a period of performance of five years. However, Offerors should not necessarily strive to equal this amount. Cost-effective approaches to achieving the results stated in the government requirement are highly encouraged. Offerors must propose costs that they believe are realistic and reasonable for the work. Cost proposals will be evaluated as part of the best value procedure in determining the contract award.

Dissemination of this solicitation is through the internet via www.fbo.gov. It is the responsibility of the recipient of this solicitation document to ensure that it has been received in its entirety, including subsequent solicitation amendments, if any. USAID bears no responsibility for data errors resulting from transmission or conversion processes.

Issuance of this solicitation and the submittal of a proposal do not constitute a commitment on the part of the U.S. Government nor USAID to make an award; neither does it constitute an obligation for any costs incurred in the preparation and submission of a proposal. Award will be subject to funds availability following the proper completion of required USAID internal processes and other internal USAID approvals.

USAID/Ghana SOL-641-13-000003 – Cover Letter

Further, the U.S. Government reserves the right to reject any or all proposals received. This RFP is being issued and consists of this cover letter and the text of the attached request for proposals (RFP). All Offerors are cautioned to carefully review this cover letter and the contents of the RFP.

The details associated with the submission requirements for Offerors’ proposals are outlined in Section L of this solicitation. Proposals must be signed by an official who is authorized to bind the organization and are to be submitted to USAID no later than the closing date stated above. Late proposals will be handled in accordance with FAR 15.208. Facsimile submissions are not authorized and will not be accepted as valid.

Offerors are instructed to pay careful attention to Section K - Representations, Certifications and Acknowledgements of the accompanying Request for Proposals. Offerors are now expected to comply with FAR clause 52.204-7, Central Contractor Registration, and complete the annual representations and certifications electronically via the Online Representations and Certifications Application website at http://orca.bpn.gov.

An interested vendors list is not included in this solicitation. Offerors can register and use the interested vendors list found at the Federal Business Opportunities (www.FBO.gov) webpage created for this solicitation so that interested firms and individuals can contact one another for consideration of teaming arrangements and/or small business subcontracting opportunities arising from this solicitation.

Offerors must submit any comments or questions concerning this RFP by the closing date specified above. These must be directed by email to accracontract@usaid.gov with a copy to USAID Senior A&A Specialist Frederique Rakotoarivelo frakotoarivelo@usaid.gov. Oral explanations or instructions given before the award of the contract will not be binding.

Point of required receipt of proposal is USAID/Ghana located in Accra, Republic of Ghana and not USAID offices in Washington, D.C. or any other location. Offerors must take account of the expected delivery time required by the proposal transmission and are responsible to ensure that proposals are received at USAID/Ghana by the due date and time specified above.

Thank you for your interest in working with USAID/Ghana.

Sincerely, /Signed/

Yves B. Kore Supervisory Regional Contracting Officer USAID/West Africa

SOLICITATION, OFFER AND AWARD

CONTRACT NUMBER

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3. 4.

NOTE: In sealed bid solicitations "offer" and "offeror" mean "bid" and "bidder".

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STANDARD FORM 33 (REV. 9-97)

Prescribed by GSA - FAR (48 CFR) 53.214(c)

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THIS CONTRACT IS A RATED ORDER

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CODE ADDRESS OFFER TO (if other than Item 7)

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SOLICITATION NUMBER

Sealed offers in original and

11. TABLE OF CONTENTS

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INFORMATION

CALL:

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(x) SEC. DESCRIPTION PAGE(S) (x) SEC. DESCRIPTION PAGE(S)

PART I - THE SCHEDULE

A SOLICITATION/CONTRACT FORM

B SUPPLIES OR SERVICES AND PRICES/COSTS

C DESCRIPTION/SPECS./WORK STATEMENT

D PACKAGING AND MARKING

E INSPECTION AND ACCEPTANCE

F DELIVERIES OR PERFORMANCE

G CONTRACT ADMINISTRATION DATA

H SPECIAL CONTRACT REQUIREMENTS

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PART I I - CONTRACT CLAUSES

PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.

PART IV - REPRESENTATIONS AND INSTRUCTIONS

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12. In compliance with the above, the undersigned agrees, if this offer is accepted within calendar days (60 calendar days unless a different period is inserted by the offeror) from the date for receipt of offers specified above, to furnish any or all items upon which prices are offered at the price set opposite each item, delivered at the designated point(s), within the time specified in the schedule.

13. DISCOUNT FOR PROMPT PAYMENT 10 CALENDAR DAYS (%) 20 CALENDAR DAYS (%) 30 CALENDAR DAYS (%) CALENDAR DAYS %

14. ACKNOWLEDGMENT OF AMEND-

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10 U.S.C. 2304(c) 41 U.S.C. 253(c)

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SOL-641-13-000003 X 12/17/2012

USAID/WA/RAAO

No. 24, Fourth Circular Road, Cantonments Accra, Ghana refer to Section L.4 1600 GMT February 5, 2013

Frederique Rakotoarivelo 1272 frakotoarivelo@usaid.gov x 1 x 5 x 7 x 34 x 36 x 37 x 45 x 49 x 70 x 88 x 89 x 99 x 114

Yves B. Kore

1 118

USAID/Ghana SOL-641-13-000003

Contents

B.1 PURPOSE

The purpose of this contract is to procure the services of a Contractor to implement the USAID Financing Ghanaian Agriculture Project. This USAID Financing Ghanaian Agriculture Project supports USAID’s Feed the Future (FTF) Initiative designed to contribute to the Government of Ghana’s efforts to help vulnerable Ghanaians, particularly women and children, escape hunger and poverty.

B.2 CONTRACT TYPE AND CONTRACT SERVICES

This is a cost-plus-fixed-fee (CPFF) completion-type contract. For the consideration set forth below, the Contractor must achieve the performance objectives and deliverables or outputs described in Section C and F in accordance with the performance standards specified herein.

B.3 ESTIMATED COST, FIXED FEE, AND OBLIGATED AMOUNT

a) The estimated cost for the performance of the work required hereunder, exclusive of fixed fee, is $TBD. The fixed fee, if any, for the contract period is $TBD. The total estimated cost plus fixed fee is

$TBD.

b) Within the estimated cost plus fixed fee (if any) specified in paragraph (a) above, the amount currently obligated and available for reimbursement of allowable costs incurred by the Contractor (and payment of fee, if any) for performance of the contract period hereunder is $TBD. The Contractor must not exceed the aforesaid obligated amount unless authorized by the Contracting Officer pursuant to the clause of this contract entitled “Limitation of Funds” (FAR 52.232-22). See Section I of this contract.

c) Funds obligated hereunder are anticipated to be sufficient through TBD. Funding for this contract will be on an incremental basis, subject to availability of funds.

B.4 CONTRACT BUDGET AND CEILINGS

a) The contract budget found herein is based on the contractor’s original proposal and/or final proposal revision, which was accepted by USAID through award of this contract.

(b)Without the prior written approval of the contracting officer, the contractor may not exceed the total estimated costs set forth in the budget hereunder or the total obligated amount, whichever is less.

c) The following itemized budget sets forth the estimates for reimbursement of dollar costs for individual line items of cost, and the fixed fee (if any).

Contract Period of Performance Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Total I. Estimated Cost Direct Costs Indirect Costs Subtotal Contract Estimated Cost II. Fixed Fee III. Total Estimated Contract Cost Plus Fixed Fee

B.5 PAYMENT OF FIXED FEE

The Government must pay the Contractor for performing this contract the fixed fee specified in the Schedule.

The fee must be paid in installments at the time of each payment on account of allowable cost. The amount of each such installment being determined by applying to the amount payable as allowable cost a percentage reflecting the ratio of total contract fee to total contract estimated costs.

In the event of discontinuance of the work in accordance with the clause of the contract entitled “Termination (Cost Reimbursement)” (FAR 52.249-6), the fee must be re-determined by mutual agreement equitably to reflect the reduction in the work actually performed. The amount by which such fee is less than, or exceeds, payments previously made on account of the fee must be paid to, or repaid by the Contractor, as applicable.

B.6 INDIRECT COSTS

The contract clause entitled “Allowable Cost and Payment (DEC 2002)”, FAR52.216-7, specifies that the indirect cost rates must be established for each of the Contractor’s accounting periods that apply to this contract. Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs must be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

Description Rate Base Type Period 1/ 1/ 1/ [To be determined]

B.7 REIMBURSABLE COSTS

The US dollar costs allowable must be limited to reasonable, allocable and necessary costs determined in accordance with FAR 31 (Contract Cost Principles), A-21 (Cost Principles for Educational Institutions), A-122 (Cost Principles for Non-Profit Organizations), FAR 52.216-7 (Allowable Cost and Payment), FAR 52.216-8 (Fixed Fee), if applicable, and AIDAR 752.7003 (Documentation for Payment), in order to be reimbursable under this contract.

[END OF SECTION B]

SECTION C ‐ SPECIFICATIONS

STATEMENT OF WORK

USAID / Financing Ghanaian Agriculture Project

ACRONYMS

ADB Agriculture Development Bank ADS Automated Directives System ADVANCE Agricultural Development and Value Chain Advancement Project AOD Unit Agribusiness Opportunity Development Unit ATT Agriculture Technology Transfer Project BAS Business Advisory Support BEO Bureau Environmental Officer BoG Bank of Ghana CDCS Country Development Cooperation Strategy COR Contracting Officer’s Representative DCA Development Credit Authority DFI Development Finance Institution DO Development Objective DP Development Partner DPO Development Policy Operation EA Environmental Assessment EMMP Environmental Mitigation and Monitoring Plan ER Environmental Review ERF Environmental Review Form ERR Environmental Review Report ESF Environmental Screen Form FI Financial Institution FINSSP II Financial Sector Strategic Plan II FTF Feed the Future GCAP Ghana Commercial Agriculture Program GCLMSS Ghana Child Labor Monitoring Systems GDA Global Development Alliance GoG Government of Ghana ICAS Investment Climate Advisory Services IEE Initial Environmental Examination IFAD International Fund for Agricultural Development IFC International Finance Corporation IMF The International Monetary Fund IR Intermediate Results JCAP Joint Country Action Plan LPG Loan Portfolio Guarantee M&E Monitoring and Evaluation M&M Monitoring and Mitigation Plan MASLOC Micro-finance and Small Loans Centre METASIP Medium Term Agriculture Sector Investment Plan METSS Monitoring, Evaluation and Technical Support Services MFI Micro Finance Institution MiDA Millennium Development Authority MSME Micro, Small and Medium Enterprises

MOFA Ministry of Food and Agriculture MOFEP Ministry of Finance and Economic Planning NBFI Non-Bank Financial Institution NGO Non-Governmental Organization NPA National Plan of Action OBA Output Based Aid OVCF Outgrower Value Chain Fund PASA Participating Agency Service Agreement PERSUAP Pesticide Evaluation Report and Safer Use Action Plan PFAN Private Financing Advisory Network PFG Partnership for Growth PFI Participating Financial Intermediary PMP Performance Management Plan PPMED Policy, Planning, Monitoring and Evaluation Department (MoFA) PPP Public-Private Partnership PSE Private Sector Engagement RAFiP Rural and Agricultural Finance Program RCB Rural and Community Banks REP Rural Enterprises Project RING Resiliency in Northern Ghana Project SADA Savannah Accelerated Development Authority SME Small and Medium Sized Enterprises TA Technical Assistance USAID United States Agency for International Development USDA United States Department of Agriculture USG United States Government

SECTION C - SPECIFICATIONS

STATEMENT OF WORK

USAID / Financing Ghanaian Agriculture Project

C.1 BACKGROUND

A. Context

The literature on economic development and small and medium sized enterprise (SME) finance consistently demonstrates that inadequate access to finance is a key barrier to enterprise growth. The World Bank/International Finance Corporation (IFC) Enterprise Survey (2007) finds almost 70% of Ghanaian SMEs report access to finance as a major constraint to doing business, compared to about 40% of large firms.1 This constraint is identified second only to electricity. Further, the Association of Ghana Industries 4th Quarter 2011 Business Barometer reports the agricultural sector identified access to credit and cost of credit as the first and third (respectively) strongest factors limiting the capacity of the sector.

Below are some of the challenges in finance for agriculture:

Lack of availability of agricultural finance in Ghana is a major constraint as the Government of

Ghana (GoG) seeks to modernize and propel the sector into commercial agriculture. About five percent of total commercial bank credit goes to the agriculture sector, and within the sector, critical areas have been very much underserved.2

Agribusiness investment will not happen without timely access to the right kind of capital. The availability of financing is a key determinant of all agribusiness investment, whether large or small.

As part of their decision to commit resources – financial or human –investors want to be assured that financing and financial services are available at terms and conditions appropriate to the investment and when needed. Agribusiness requires a comprehensive suite of short, medium and long-term financial instruments and products along the full project cycle.

Medium and long term capital is especially difficult to access. The International Monetary Fund

(IMF) reports3 the lack of medium and long-term deposit instruments, deposit insurance, or secondary markets for loans severely limits the ability of banks in Ghana to provide needed medium and long-term loans. When financing is available, it is often too short-termed for agriculture.

Ghana’s Agriculture Development Bank (ADB), whose portfolio share of agriculture is much higher than average at about 30%, offers lending tenors that break-down at 65% short-term, 25% medium term and 10% long-term.4 Most agribusiness loans – whether agriculture, processing, or logistics – need to offer long grace and repayment periods until such a time as the project’s cash generation turns positive.

Lack of access to capital for any given value chain actor can prevent or ruin an investment by other actors in the same value chain. Agribusiness companies depend on a “vertical” network of

1 Firm sizes are defined by the Enterprise Survey Methodology by number of employees: 5‐19 (small); 20‐99 (medium); and 100+ (large‐sized firms).

2 While it is not certain how much of this 5% figure goes to food crops or even the Feed the Future focus staple crops, it is not likely to be much, since the larger industries of fisheries, forestry, and cocoa are included in this figure.

3 IMF, Financial Sector Assessment – Ghana, February 2011 4 ADB’s 2008 Annual Report.

input suppliers and output buyers. These suppliers (providing planting materials, extension services, equipment, distribution, etc.) and buyers (including wholesale, retail, export) also need funding.

When approaching the issue of financing, the investor must look holistically and in partnership with his/her suppliers and buyers over the whole value chain and with a variety of financial instruments.

A break in the financing supply chain (e.g., post-harvest financing) can ruin a crop cycle.

‐ Start-ups are at a particular disadvantage. Start-up investors and greenfield and brownfield projects tend to require longer-term capital than projects that are already operational and are therefore at a particular disadvantage. Furthermore, new investors often lack appropriate equity to start and sustain operations. Banks are wary of start-ups which do not yet have a proven track record, existing cash flow, assets to pledge and an equity cushion to withstand business and weather cycles typical of the agriculture sectors.

‐ Medium-sized agricultural enterprises have less access to capital than small or large enterprises. The Availability of Financing report concluded the mid-sized farmer and Ghanaian agribusiness face particular challenges in accessing credit. Several access to finance programs (government or donor) target the smaller farmer5, and the larger multinational investor often has recourse to internal, house bank or development finance institution (DFI) funding.6 But the mid-sized farmer and domestic agribusiness are generally required to rely on the domestic banking sector. Further, medium-sized farmers, who are often the most visionary, may have too little cash to put up as capital to leverage loans. They may be too large to tap into SME financing programs but too small to attract local or DFI bank financing. Mesofinance7 investments would help commercialize the sector and create market opportunities that raise incomes for small scale farmers.

The agriculture sector faces a paradox whereby mid-sized borrowers, especially, say there is no funding and lenders say there are no “bankable” projects. Contributing factors to this paradox are found at both the enterprise level as well as that of the Financial Institution (FI).

‐ Agricultural enterprises in Ghana often lack the education, skills, and access to information required to turn their entrepreneurial spirit into bankable project ideas. Even when enterprises have a strong understanding of the cost/benefit of their own business plan, they may lack the skills to present the opportunity in a format acceptable to a prospective investor or lender. Ghanaian banks universally confirm that prospective agri-enterprises would benefit from business advisory services (BAS) to develop their ideas and present the “business case” for a loan or investment. Agri-enterprises would also benefit from post-financing BAS support to contribute to effectively managed, financially sustainable operations.

‐ Financial Institutions lack capacity and incentives to meet agricultural finance needs. Some commercial banks and Rural and Community Banks (RCB) seek to expand agriculture lending but are challenged by their own funding mismatches, poorly trained staff, Bank of Ghana (BoG) regulated (and prudent) single obligor limits, bad loan recovery experiences and non-performing loan portfolios, and risks inherent to

5 Including: the Outgrower Value Chain Fund; Rural and Agricultural Finance Program (RAFiP); Micro‐finance and Small Loans Centre (MASLOC); Rural Enterprises Project (REP); among others.

6 The International Finance Corporation is one of the largest sources of DFI funding, and it generally requires a minimum transaction size of $5 million.

7 Mesofinance is used here to refer to financial services beyond the scope of microfinance but smaller than the financing available to large enterprises. In the Ghanaian context, mesofinance could refer to a loan size anywhere from $10,000 to $500,000.

agriculture (weather, commodity prices). Further, Ghanaian banks are weighing the risk/rewards of investing in agriculture as opposed to currently high yielding and less risky investments (short-term trade finance and treasury instruments).

In short, there are many reasons why agricultural investments struggle to attract the necessary and appropriate financing and investment funds, including high perceived and actual risks and a relatively limited suite of financial products available. In its Financial Sector Strategic Plan II (FINSSP II), the Ministry of Finance and Economic Planning (MOFEP) identifies the major constraints and challenges to agricultural finance, including a lack of sustainable medium to long-term funds at acceptable interest rates; lack of access to funds by agricultural value chain actors due to inability to meet banks’ collateral and risk management requirements; lack of proper appreciation of agriculture by some banks and their inability to deal with the inherent risks; and lack of easily accessible venture capital funds especially for agribusiness. As a result, while the Ghanaian financial sector has shown remarkable growth and development, at this point it will not provide the financing needed to build out the targeted value chains, unless it is given significant support and encouragement.

Given the critical importance of having financing available to support the Feed the Future (FTF) initiative, workaround solutions are necessary to achieve results in the short term. While measures such as improving macroeconomic stability, alleviating crowding out, strengthening the insolvency framework, and creating competition through strengthening capital markets and non-banks will have positive and broad-reaching benefits,8 consideration of non-traditional workaround initiatives may be just as important as traditional reform measures for the purpose of pulling Ghanaian financial institutions into the agricultural lending space. The Financing Ghanaian Agriculture Project is not intended to comprehensively “fix” the Ghanaian financial sector, but rather simply to ensure that financing is available for the critical agricultural value chain investments that will make or break Ghana’s FTF strategy. Given that private sector-led investment in the agricultural value chains will be critical to accomplishing Ghana’s strategic objectives in this area, financing tailored specifically to the sector will be supported under the Project to facilitate economic development impacts in the near term. The development hypothesis is that sufficient incentives and risk mitigation measures can motivate banks and Non-Bank Financial Institutions (NBFIs) to service the agriculture sector, and once the necessary internal structures and capacity to do so are established, continued incentives will no longer be necessary. More appropriate credit to the agricultural sector will increase investment, decrease costs, expand output and fuel growth, thereby making agriculture more competitive.

B. Alignment with USAID and USG Strategies

The Financing Ghanaian Agriculture Project is consistent with the new USAID/Ghana Country Development Cooperation Strategy (CDCS) and directly responds to the objectives and principles of Feed the Future (FTF). In addition, it plays a key role in the US Government’s (USG’s) response to the USG/GOG Partnership for Growth (PFG).

Feed the Future (FTF) Approved in February 2011, the FTF Multi-Year Strategy for Ghana outlines three Intermediate Results (IR) to achieve the high level of objectives of the FTF Results Framework. These include:

IR 1: Increased Competitiveness of Major Food Value Chains (rice, maize, soya, fisheries) IR 2: Improved Resilience of Vulnerable Communities IR 3: Improved Nutritional Status of Women and Children

8 These efforts are expected to be undertaken by a project under development by MOFEP to implement FINSSP II and are therefore seen as outside the scope of the Financing Ghanaian Agriculture Project.

The USAID / Financing Ghanaian Agriculture Project supports IR 1: Increased Competitiveness of Major Food Value Chains (rice, maize, soya, fisheries).

Ghana Mission’s Country Development Cooperation Strategy USAID/Ghana has recently approved its Country Development Cooperation Strategy (CDCS). The CDCS contains four Development Objectives (DO):

DO 1: Strengthened Responsive, Democratic Governance DO 2: Sustainable and Broadly Shared Economic Growth DO 3: Equitable Improvements in Health Status DO 4: Improved Reading Performance in Primary School

The Intermediate Results for DO 2 are as follows:

IR 2.1: Increased competitiveness of major food chains IR 2.2: Improved enabling environment for private sector investment IR 2.3: Improved resiliency of vulnerable households and communities and reduced under-nutrition IR 2.4: Increased government accountability and responsiveness

The Project directly supports IR 2.1: Increased competitiveness of major food chains and IR 2.2:

Improved enabling environment for private sector investment.

The majority of DO 2 activities support USAID/Ghana’s FTF Strategy, wherein 80 percent of agriculture resources are targeted in the northern regions of Ghana, focusing on rice, maize, and soya. FTF also includes the coastal zone to improve management and governance of marine fisheries, though in the case of this Project, the focus will primarily be supporting beneficiaries in the rice, maize and soya value chains which will have direct positive impact on the northern three regions.

The Financing Ghanaian Agriculture Project is a part of suite of FTF interventions that aim to achieve the objectives under FTF and DO 2. It will provide support to the Ghana Commercial Agricultural Project (GCAP), which is a collaboration between USAID, the GOG, and the World Bank. Specifically, this Financing Ghanaian Agriculture Project may provide Business Advisory Services to agribusiness opportunities to strengthen it for consideration by GCAP. The Financing Ghanaian Agriculture Project may also help GCAP identify sources for viability gap financing for agribusiness opportunities that are otherwise under consideration for GCAP support. In addition, its services will be available to the USAID Agricultural Development and Value Chain Advancement (ADVANCE), Resiliency in Northern Ghana (RING), Agriculture Policy Project, and Agriculture Technology Transfer (ATT) projects.

Partnership for Growth The Financing Ghanaian Agriculture Project plays an integral role in the USG‘s response to the USG/GOG Partnership for Growth (PFG). The PFG constraints analysis identified the following as the key constraints to economic growth in Ghana: (1) inadequate and unreliable supply of electric power, (2) limited access to credit, (3) weak property rights (land use), and (4) lack of access to potable water. The study notes that credit to the private sector in Ghana is low compared with other countries. Evidence from firm surveys identifies credit as a major constraint, while the limited credit that is provided to the private sector is largely short term in nature. In addition, domestic savings remain very low and the cost of borrowing very high. On this basis, the study concludes that lack of access to credit is a binding constraint to growth in Ghana. This Project overall will be critical to this effort. After initial negotiations with the GOG, it was determined to move forward with negotiations on credit and electrical power as part of the five-year, Joint Country Action Plan (JCAP) to outline areas of reform. Though the JCAP negotiations are still ongoing, the language within has been generally accepted and negotiations are expected to be finalized within the 2013 fiscal year. The goal of the credit component was stated as:

Improve Access to Credit and Strengthen the Financial System, with the following sub-goals: 1) Reduce government engagement in the banking sector; 2) Strengthen financial sector regulation and supervision;

3) Develop the financial sector infrastructure; 4) Broaden and deepen the financial sector; and 5) Encourage development finance and support SME access to finance. The Project will directly contribute to sub-goals 3 and 5 of this JCAP credit component, specifically in the ways of reducing the risk premium and lowering transaction costs (which should be reflected in reduced interest rates) as well as improving the management and operation capability of SMEs. The Project will also support the overall PFG credit component by providing Technical Assistance within any of the other sub-goals identified.

USAID Forward The Project will contribute to USAID Forward‘s Implementation and Procurement Reform by:

strengthening local private sector (financial institution and agri-enterprise) capacity and working with our implementing partners on local grant or GDA allocations; strengthening collaboration and partnership with other bilaterals, multilaterals, and international organizations to increase synergies and avoid duplication; and rebuilding USAID‘s internal technical capacity in finance by re-entering the financial sector in Ghana after absence for about a decade. The Project also responds to Administrator Shah‘s October 2011 speech on embracing enlightened capitalism by aiming to catalyze private sector investment for broad-based economic growth.

C. Land Tenure and Conflict

There are two aspects of Ghanaian society that need to be considered in the Project’s activities: (1) land tenure, and (2) conflict. Both are tied up in traditional concepts of land ownership.

Land Tenure There are many tribes in Northern Ghana, with 18 in the Northern Region alone.9 These are divided into two types, four tribes that have hierarchical structures—that is a system of chiefs, paramount chiefs and Overchiefs—and those that are based on a family structure without hierarchy.