[Federal Register Volume 71, Number 161 (Monday, August 21, 2006)]
[Notices]
[Pages 48648-48693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6914]



[[Page 48647]]

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Part IV





Millennium Challenge Corporation





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Notice of Entering Into a Compact With the Government of the Republic 
of Ghana; Notice

  Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / 
Notices  

[[Page 48648]]


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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 06-11]


Notice of Entering Into a Compact With the Government of the 
Republic of Ghana

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: In accordance with section 610(b)(2) of the Millennium 
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium 
Challenge Corporation (MCC) is publishing a summary and the complete 
text of the Millennium Challenge Compact between the United States of 
America, acting through the Millennium Challenge Corporation, and the 
Government of the Republic of Ghana. Representatives of the United 
States Government and the Government of the Republic of Ghana executed 
the Compact documents on August 1, 2006.

    Dated: August 9, 2006.
William G. Anderson Jr.,
Vice President & General Counsel (Acting).

Summary of Millennium Challenge Compact With the Government of the 
Republic of Ghana

I. Introduction

    The five-year, approximately $547 million Millennium Challenge 
Compact aims at reducing poverty by raising farmer incomes through 
private sector-led, agribusiness development. To this end, the program 
focuses on increasing the production and productivity of high-value 
cash and food staple crops in certain areas of Ghana, and on enhancing 
the competitiveness of Ghana's export base in horticultural and other 
traditional crops.
    Agriculture is the backbone of Ghana's economy; it accounts for 
approximately 40 percent of the country's gross domestic product, 
directly employs approximately 60-70 percent of the labor force, and 
generates more than 55 percent of foreign exchange earnings.
    The program will operate in 23 districts in the northern region, 
the central Afram Basin region and the southern horticultural belt in 
the southeastern region (each region, an Intervention Zone), where 
poverty rates are generally above 40 percent. In fact, in the northern 
region and parts of the Afram Basin region, the incidence of poverty in 
the rural population is as high as 90 percent, with incomes below $2 a 
day.

II. Program

    The program consists of three projects: (i) Agriculture Project; 
(ii) Transportation Project; and (iii) Rural Services Project.
Agriculture Project
     Farmer and Enterprise Training in Commercial Agriculture: 
Accelerate the development of commercial skills and capacity among 
Farmer-Based Organizations (FBOs) and their business partners, 
including entities adding value to agricultural crops such as 
processors and marketers.
     Irrigation Development: Establish a limited number of 
retention ponds and weirs requested by the FBOs and FBO partnerships 
for whom access to water is critical to the success of their 
businesses.
     Land Tenure Facilitation: Improve tenure security for 
existing land users and facilitate access to land for higher value 
agricultural crops in the Intervention Zones.
     Improvement of Post Harvest Handling and Value Chain 
Services: Facilitate strategic investments by FBOs and FBO partnerships 
in post-harvest infrastructure improvements and build the capacity of 
the public sector to introduce and monitor compliance with 
international plant protection standards.
     Improvement of Credit Services for On-Farm and Value Chain 
Investments: Augment the supply of, and access to, credit provided by 
financial institutions operating in the Intervention Zones, providing 
seasonal credit to FBOs through commercial and rural banks, as well as 
through non-traditional channels such as input suppliers, and medium-
term credit through banks to finance capital goods such as irrigation 
and post-harvest processing and storage facilities.
     Rehabilitation of Feeder Roads: Rehabilitate up to 950 
kilometers of feeder roads in eight districts in the Intervention Zones 
to reduce transportation costs and time, to increase access to major 
domestic and international markets, and to facilitate transportation 
linkages from rural areas to social service networks (including, for 
instance, hospitals, clinics and schools).
Transportation Project
     Upgrades to Sections of N1 Highway: Reduce the bottleneck 
in accessing the International Airport and the Port of Tema and support 
an expansion of Ghana's export-directed horticulture base beyond 
current production, by upgrading of 14 kilometers of the National 
Highway (N1 Highway) between Tema and Accra.
     Improvements of Trunk Roads: Facilitate the growth of 
agriculture and access to social services by rehabilitating or 
constructing up to 230 kilometers of trunk roads in the Afram Basin 
region.
     Improvements of Lake Volta Ferry Services: Facilitate the 
growth of agriculture in the Afram Basin region by improving the ferry 
service of Volta Lake Transport Company that connects Adawso on the 
southern shore to Ekye Amanfrom on the northern shore.
Rural Services Project
     Strengthening of Public Sector Procurement Capacity: 
Support the development of procurement professionals and reinforce the 
capabilities of the Government of Ghana (GoG) to procure goods and 
services, reinforcing execution of the overall program and, in 
particular, the community services.
     Support for Community Services: Complement the Agriculture 
Project by funding construction and rehabilitation of educational 
facilities, construction and rehabilitation of water and sanitation 
facilities and electrification of rural areas, and by providing 
capacity building support to local government institutions.
     Strengthening of Rural Financial Services: Automate and 
interconnect 121 rural banks that are private, community-owned banks, 
and provide other improvements in the national payments systems that 
will draw a large number of people currently not served or under-served 
into the financial system.
    The table below outlines the estimated MCC contribution to the 
program by year and category over the term of the Compact.

                                                 [US $ million]
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                  Description                     Year 1     Year 2     Year 3     Year 4     Year 5     Total
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Agriculture Project...........................       32.6       47.1       70.3       65.1       25.9      241.0
Transportation Project........................       14.8       20.1       35.4       43.1       29.7      143.1
Rural Services Project........................       15.6       21.1       30.5       34.1  .........      101.3

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Administration of Program & Audits............        8.8        8.8       10.0       10.3        8.7       46.6
Monitoring & Evaluation of Program............        3.0        3.0        3.0        3.0        3.0       15.0
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    Total.....................................       74.8      100.1      149.2      155.6       67.3      547.0
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III. Impacts

    Under the Agriculture Project, approximately 51,000 farm households 
are expected to complete a comprehensive program in agronomic, 
organizational and business skills training as members of FBOs. These 
households with five members on average comprise over 250,000 people. 
Less directly, the improvement of the GoG's Ministry of Food and 
Agriculture's extension services and the agents' work with FBOs will 
have collateral spillover benefits for a large number of farmers which 
are not quantified.
    The Agriculture Project will also support the development and 
improved operations of approximately 120 small- and medium-size 
enterprises providing services to agriculture where concentrations of 
farmer and FBO training will have taken place. Increased access to 
credit will finance a majority of these changes, including irrigation 
and post-harvest infrastructure. Its support to facilitate the formal 
acquisition of land will decrease the transaction costs associated with 
negotiating and formalizing land leases with traditional land 
custodians, enhancing the willingness and ability of farmers to invest 
in on-farm improvements. As a further measure to improve the local 
profitability of agriculture, the Agriculture Project will finance the 
improvement of over 950 kilometers of feeder roads, which, along with 
the trunk roads below, will benefit a total population of more than 
120,000 farming households with over 600,000 members. These activities 
will increase farm incomes from cultivation by U.S. $450 to about U.S. 
$1,000. For many of the poor, the compact intervention will represent 
an increase of one dollar or more in average income per person per day.
    The Transportation Project is expected to open new economic 
opportunities for rural households by lowering transportation costs, 
including travel times, for both individuals and cargo, to markets and 
social service delivery points. Because the N1 Highway is a principal 
route from the south to the Port of Tema, widening the N1 Highway 
should benefit approximately 150,000 daily users. Upwards of 500,000 
people in the surrounding area of Accra, including consumers and 
agricultural export producers and other users of the highway in the 
Greater Accra Metropolitan Area, would benefit from the improved 
operation of the N1 Highway. Rehabilitation and upgrading of trunk 
roads and expansion of the ferry service in the Afram Basin region are 
expected to benefit up to 100,000 farm households, most of which are 
among the rural poor.
    By improving both the community-service infrastructure and 
enhancing local government capacity to provide, operate and maintain 
community services related to this infrastructure, the Rural Services 
Project should benefit several tens of thousands of households, 
decrease the incidence of disease and the time spent collecting water 
and fuel, and increase school attendance, which in turn should lead to 
greater productivity. Linking banks and their branches nationwide via a 
wide-area network should increase access to financial services for the 
entire population of Ghana, especially in remote rural areas, in the 
form of savings, credit or cash transfers and remittances. Finally, 
strengthening of public sector procurement capacity will improve 
execution of the Support for Community Services activity directly and, 
more generally, all citizens of Ghana with material improvements in 
performance of the entire public sector.
    In conclusion, as a first approximation, the program is anticipated 
to help directly alleviate the poverty of over 230,000 Ghanaians, and 
to substantially enhance the livelihoods and welfare of over one 
million Ghanaians in the aggregate.

IV. Program Management

    Through an act of its Parliament, the GoG has created the 
Millennium Development Authority (MiDA) that will serve as the entity 
accountable for the implementation of the program under the Compact. 
MiDA will be governed by a Board of Directors comprised of members of 
GoG, the private sector, and the non-governmental organization (NGO) 
community. A chief executive officer will manage the day-to-day 
activities of MiDA and will be supported by key officers in the areas 
of operations, agriculture, infrastructure, financial services, land, 
and administration. MiDA will remain accountable for the successful 
execution of the program while working through project implementers, 
whose interaction will be facilitated by a fiscal and procurement 
agent. As an organ of the GoG, MiDA will be subject to GoG audit 
requirements alongside those audit requirements of MCC under the 
Compact.

V. Other Highlights

A. Consultative Process
    Ghana's Poverty Reduction Strategy process provided the basis for 
its process of consultation regarding the development of its proposal 
for the program. Specifically, in 2004, the GoG held the first of a 
series of Compact-related consultations with civil society members of 
the Ghanaian Association of Private and Voluntary Organizations in 
Development. Subsequent consultations included: (i) Initial 
consultations with stakeholders at both the national and local levels 
to focus the program's objectives; (ii) consultations with stakeholders 
in each district within each Intervention Zone throughout the design of 
the program regarding the exact type of interventions, proposed 
locations, arrangements for implementation, as well as the ownership 
structure for certain infrastructure investments; (iii) consultations 
with NGOs representing the environmental and social sector (including 
women and youth), local agribusinesses and farmers. MCC observed a 
number of the consultations, both local and national. The consultative 
process is ongoing and is expected to continue through the term of the 
Compact.
B. GoG Commitment and Effectiveness
    The GoG is committed to assembling a capable team to staff MiDA. 
Recruitment is underway currently for the chief executive officer of 
MiDA and 13 other key officers who will directly support the 
implementation of the program. The incumbent Minister of Public Sector 
Reform, who led the GoG's team to develop the Compact, will become the 
chair of the board of

[[Page 48650]]

directors of MiDA. Other members of the board will come from line 
ministries directly relevant to the program, and the private sector and 
NGOs as a means to provide feedback on the implementation of the 
program. One advisory committee for each Intervention Zone will be 
formed to bring the on-the-ground perspective back to the MiDA. 
President Kufuor remains engaged, providing leadership and ensuring 
that MiDA will have the inter-ministerial cooperation necessary for the 
success of the program. In addition, the GoG will undertake to make up 
eventual shortfalls in funding, if any, necessary to sustain the 
program in such areas as road maintenance, community services recurrent 
costs, and environmental mitigation.
C. Sustainability
    The activities under the Agriculture Project will create new and 
strengthen existing input suppliers, processors and marketers and 
enhance a climate that attracts additional outside investment in the 
agriculture sector, thus leading to its continued growth. The GoG has 
affirmed that it will maintain the rehabilitated roads in accordance 
with standards that have been agreed with the broad donor community and 
will increase funding commitment to the road sector accordingly. MCC is 
requiring from GoG that it will provide for the staffing, equipping, 
and other recurrent costs of new (and some existing) infrastructure 
investments. Selection criteria for community services infrastructure 
will also stipulate a minimum level of community contribution to 
investment and participation in upkeep of new facilities. Environmental 
and social sustainability of the program will be enhanced through 
oversight and ongoing public consultation. The Rural Services Project 
will include a capacity building component to reinforce participatory 
planning, procurement, financial management, maintenance planning and 
budgeting, operations and maintenance of physical infrastructure. MCC 
investments in secure land access will emphasize community consultation 
and resolution of disputes, important for durable secure tenure.
D. Environment and Social Assessments
    According to MCC's environmental guidelines, the Agriculture 
Project is classified as ``Category A'' (with the exception of the 
credit-related activity that is classified as a ``Category D'' and 
requires lending guidelines that stipulate environmental requirements). 
Specifically, potentially adverse environmental impacts may result from 
the irrigation retention ponds and weirs, the feeder roads, and large-
scale agricultural intensification and conversion (e.g., deforestation, 
monoculture). The Transportation Project is classified as ``Category 
A'' due to potentially adverse site-specific impacts resulting from 
improvements to the N1 Highway and select trunk roads, including the 
acquisition of, or compensation for, approximately 800 permanent and 
temporary structures (e.g., containers and kiosks) on the N1 Highway's 
right of way. Furthermore, there will be both induced and cumulative 
impacts on the Afram Basin region resulting from increased access 
provided by the trunk roads and ferries. The Rural Services Project is 
classified as ``Category B'' and will require selection criteria for 
provision of community services that take into account environmental 
and social impacts.
    Overall, because of the breadth and scope of the proposed program, 
strategic environmental assessments and baseline studies will be 
required for each Intervention Zone prior to initiating any required 
project-specific environmental impact assessments and substantial 
investment in physical infrastructure. Environmental management plans 
and resettlement action plans will be developed for all Projects as 
necessary. The environmental and social benefits expected from the 
Compact include enhanced livelihoods, greater access to social 
services, and more sustainable agricultural practices, ultimately 
leading to reduced slash and burn agriculture and improved soil 
quality.
E. Donor Coordination
    The $547 million Compact will place the U.S. among the top three 
donors to Ghana. As such, donor coordination is particularly important 
to ensure that MCC's investment is building upon and complementing the 
work of other donors.
    There are significant complementarities between the program and 
current donor activity in Ghana. The Agriculture Project, for instance, 
will build upon activities pioneered by U.S. Agency for International 
Development's Trade and Investment Program for a Competitive Export 
Economy (TIPCEE), and those developed under the Agricultural Services 
Sub-Sector Investment Project supported by the World Bank, the UK's 
Department for International Development (DfID), African Development 
Bank, the International Fund for Agricultural Development and others. 
TIPCEE activities are expected to continue during the course of the 
Compact.
    In implementing the Transportation Project, MCC is working 
alongside several other donors active in the sector, namely the World 
Bank, European Union, Danish International Development Agency and DfID 
to avoid duplication and to ensure policy coordination.
    MCC is basing its investments under the Rural Services Project on 
an existing Community Based Rural Development Project (CBRDP) financed 
by the World Bank and Agence Francaise de D[eacute]veloppement. The MCC 
investments will extend the services of the program implementation unit 
developed under the CBRDP and the capacity building activities financed 
in the project will use the existing training program piloted by CBRDP.

Millennium Challenge Compact Between the United States of America 
Acting Through the Millennium Challenge Corporation and the Government 
of the Republic of Ghana

Table of Contents

Article I. Purpose and Term
    Section 1.1 Compact Goal; Objectives
    Section 1.2 Projects
    Section 1.3 Entry into Force; Compact Term
Article II. Funding and Resources
    Section 2.1 MCC Funding
    Section 2.2 Government Resources
    Section 2.3 Limitations on the Use or Treatment of MCC Funding
    Section 2.4 Incorporation; Notice; Clarification
    Section 2.5 Refunds; Violation
    Section 2.6 Bilateral Agreement
Article III. Implementation
    Section 3.1 Implementation Framework
    Section 3.2 Government Responsibilities
    Section 3.3 Government Deliveries
    Section 3.4 Government Assurances
    Section 3.5 Implementation Letters; Supplemental Agreements
    Section 3.6 Procurement; Awards of Assistance
    Section 3.7 Policy Performance; Policy Reforms
    Section 3.8 Records and Information; Access; Audits; Reviews
    Section 3.9 Insurance; Performance Guarantees
    Section 3.10 Domestice Requirements
    Section 3.11 No Conflict
    Section 3.12 Reports
Article IV. Conditions Precedent; Deliveries
    Section 4.1 Conditions Prior to the Entry into Force and 
Deliveries
    Section 4.2 Conditions Precedent to MCC Disbursements or Re-
Disbursements
Article V. Final Clauses
    Section 5.1 Communications
    Section 5.2 Representatives
    Section 5.3 Amendments
    Section 5.4 Termination; Suspension
    Section 5.5 Privileges and Immunities
    Section 5.6 Attachments

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    Section 5.7 Inconsistenecies
    Section 5.8 Indemnification
    Section 5.9 Headings
    Section 5.10 Interpretation
    Section 5.11 Signatures
    Section 5.12 Designation
    Section 5.13 Survival
    Section 5.14 Consultation
    Section 5.15 MCC Status
    Section 5.16 Language
    Section 5.17 Publicity; Information and Marking
Exhibit A: Definitions
Exhibit B: List of Certain Supplemental Agreements
Schedule 2.1(a)(iii): Compact Implementation Funding
Annex I: Program Description
    Schedule 1: Agriculture Project
    Schedule 2: Transportation Project
    Schedule 3: Rural Development Project
Annex II: Summary of Multi-Year Financial Plan
    Exhibit A: Multi-Year Financial Plan Summary
Annex III: Description of the M&E Plan

Millennium Challenge Compact

    This Millennium Challenge Compact (the ``Compact'') is made between 
the United States of America, acting through the Millennium Challenge 
Corporation, a United States Government corporation (``MCC'') and the 
Government of the Republic of Ghana (the ``Government'') (referred to 
herein individually as a ``Party'' and collectively, the ``Parties''). 
A compendium of capitalized terms defined herein is included in Exhibit 
A attached hereto.

Recitals

    Whereas, MCC, acting through its Board of Directors, has selected 
Ghana as eligible to present to MCC a proposal for the use of 
Millennium Challenge Account (``MCA'') assistance to help facilitate 
poverty reduction through economic growth in Ghana;
    Whereas, the Government has carried out a consultative process with 
the country's private sector and civil society to outline the country's 
priorities for the use of MCA assistance and developed a proposal, 
which final proposal was submitted to MCC on October 28, 2005 (the 
``Proposal'');
    Whereas, the Proposal focused on, among others, increasing farmer 
incomes through modernizing Ghana's agricultural sector, together with 
investments in developing transportation infrastructure and rural 
institutions, all designed to dismantle obstacles to realizing Ghana's 
agricultural potential as an engine of economic growth;
    Whereas, MCC has evaluated the Proposal and related documents to 
determine whether the Proposal is consistent with core MCA principles 
and includes projects and related activities that will advance the 
progress of Ghana towards achieving poverty reduction through economic 
growth; and
    Whereas, based on MCC's evaluation of the Proposal and related 
documents and subsequent discussions and negotiations between the 
Parties, the Government and MCC determined to enter into this Compact 
to implement a program using MCC Funding to advance Ghana's progress 
towards poverty reduction through economic growth (the ``Program'');
    Now, therefore, in consideration of the foregoing and the mutual 
covenants and agreements set forth herein, the Parties hereby agree as 
follows:

Article I. Purpose and Term

Section 1.1 Compact Goal; Objectives

    The goal of this Compact is poverty reduction through economic 
growth in Ghana (the ``Compact Goal''). The key to advancing the 
Compact Goal is the two-fold objective of the Program, first, to 
increase the production and productivity of high-value cash and food 
staple crops in the Intervention Zones in Ghana and, second, to enhance 
the competitiveness of Ghana's high-value cash and food crops in both 
local and international markets (collectively, the ``Program 
Objective''). The Parties have identified the following project-level 
objectives (each, a ``Project Objective'') of this Compact to advance 
the Program Objective, and thus the Compact Goal, each of which is 
described in more detail in the Annexes attached hereto:
    (a) Enhance the profitability of cultivation, services to 
agriculture and product handling in support of the expansion of 
commercial agriculture among groups of smallholder farmers (the 
``Agriculture Project Objective'');
    (b) Reduce the transportation costs affecting agricultural commerce 
at sub-regional and regional levels (the ``Transportation Project 
Objective''); and
    (c) Strengthen the rural institutions that provide services 
complementary to, and supportive of, agricultural and agri-business 
development (the ``Rural Development Project Objective'').
    The Government expects to achieve, and shall use its best efforts 
to ensure the achievement of, the Compact Goal, Program Objective and 
Project Objectives during the Compact Term. The Program Objective and 
the individual Project Objectives are collectively referred to herein 
as ``Objectives'' and each individually as an ``Objective.''

Section 1.2 Projects

    The Annexes attached hereto describe the specific projects, the 
policy reforms and other activities related thereto (each, a 
``Project'') that the Government will carry out, or cause to be carried 
out, in furtherance of this Compact to achieve the Objectives and the 
Compact Goal.

Section 1.3 Entry into Force; Compact Term

    This Compact shall enter into force on the date of the last letter 
in an exchange of letters between the Principal Representatives of each 
Party confirming that each Party has completed its domestic 
requirements for entry into force of this Compact (including as set 
forth in Section 3.10) and that all conditions set forth in Section 4.1 
have been satisfied by the Government and MCC (the ``Entry into 
Force''). This Compact shall remain in force for five (5) years from 
the Entry into Force, unless earlier terminated in accordance with 
Section 5.4 (the ``Compact Term'').

Article II. Funding and Resources

Section 2.1 MCC Funding

    (a) MCC's Contribution. MCC hereby grants to the Government, 
subject to the terms and conditions of this Compact, an amount not to 
exceed Five Hundred Forty Seven Million and Nine Thousand United States 
Dollars (US$ 547,009,000) (``MCC Funding'') during the Compact Term to 
enable the Government to implement the Program and achieve the 
Objectives.
    (i) Subject to Sections 2.1(a)(ii), 2.2(b) and 5.4(b), the 
allocation of the MCC Funding within the Program and among and within 
the Projects shall be as generally described in Annex II or as 
otherwise agreed upon by the Parties from time to time.
    (ii) If at any time MCC determines that a condition precedent to an 
MCC Disbursement has not been satisfied, MCC may, upon written notice 
to the Government, reduce the total amount of MCC Funding by an amount 
equal to the amount estimated in the applicable Detailed Budget for the 
Program, Project, Project Activity or sub-activity for which such 
condition precedent has not been met. Upon the expiration or 
termination of this Compact, (A) any amounts of MCC Funding not 
disbursed by MCC to the Government shall be automatically released from 
any obligation in connection with this Compact and (B) any amounts of 
MCC Funding disbursed by MCC to the Government as provided in Section 
2.1(b)(i), but not re-disbursed as

[[Page 48652]]

provided in Section 2.1(b)(ii) or otherwise incurred as permitted 
pursuant to Section 5.4(e) prior to the expiration or termination of 
this Compact, shall be returned to MCC in accordance with Section 
2.5(a)(ii).
    (iii) Notwithstanding any other provision of this Compact and 
pursuant to the authority of Section 609(g) of the Millennium Challenge 
Act of 2003, as amended (the ``Act''), upon the conclusion of this 
Compact (and without regard to the satisfaction of all of the 
conditions for Entry into Force required under Section 1.3), MCC shall 
make available Ten Million and Three Hundred Seventy One Thousand 
United States Dollars (US$ 10,371,000) (``Compact Implementation 
Funding'') to facilitate certain aspects of Compact implementation as 
described in Schedule 2.1(a)(iii) attached hereto; provided, such 
Compact Implementation Funding shall be subject to (A) the limitations 
on the use or treatment of MCC Funding set forth in Section 2.3, as if 
such provision were in full force and effect, and (B) any other 
requirements for, and limitations on the use of, such Compact 
Implementation Funding as may be required by MCC in writing; provided, 
further, that any Compact Implementation Funding granted in accordance 
with this Section 2.1(a)(iii) shall be included in, and not additional 
to, the total amount of MCC Funding; and provided further, any 
obligation to provide such Compact Implementation Funding shall expire 
upon the expiration or termination of this Compact or five (5) years 
from the conclusion of this Compact, whichever occurs sooner, and in 
accordance with Section 5.4(e). Notwithstanding anything to the 
contrary in this Compact, this Section 2.1(a)(iii) shall provisionally 
apply prior to Entry into Force.
    (b) Disbursements.
    (i) Disbursements of MCC Funding. MCC shall from time to time make 
disbursements of MCC Funding (each such disbursement, an ``MCC 
Disbursement'') to a Permitted Account or through such other mechanism 
agreed by the Parties under and in accordance with the procedures and 
requirements set forth in Annex I, the Disbursement Agreement or as 
otherwise provided in any other Supplemental Agreement.
    (ii) Re-Disbursements of MCC Funding. The release of MCC Funding 
from a Permitted Account (each such release, a ``Re-Disbursement'') 
shall be made in accordance with the procedures and requirements set 
forth in Annex I, the Disbursement Agreement or as otherwise provided 
in any other Supplemental Agreement.
    (c) Interest. Unless the Parties agree otherwise in writing, any 
interest or other earnings on MCC Funding that accrue (collectively, 
``Accrued Interest'') shall be held in a Permitted Account and accrue 
in accordance with the requirements for the accrual and treatment of 
Accrued Interest as specified in Annex I or any Supplemental Agreement. 
On a quarterly basis and upon the termination or expiration of this 
Compact, the Government shall return, or ensure the return of, all 
Accrued Interest to any United States Government account designated by 
MCC.
    (d) Conversion; Exchange Rate. The Government shall ensure that all 
MCC Funding that is held in any Permitted Account shall be denominated 
in the currency of the United States of America (``United States 
Dollars,'' ``US$'' or ``$'') prior to Re-Disbursement; provided, that a 
certain portion of MCC Funding may be transferred to a Local Account 
and may be held in such Local Account in the currency of the Ghana 
prior to Re-Disbursement in accordance with the requirements of Annex I 
and any Supplemental Agreement. To the extent that any amount of MCC 
Funding held in United States Dollars must be converted into the 
currency of Ghana for any purpose, including for any Re-Disbursement or 
any transfer of MCC Funding into a Local Account, the Government shall 
ensure that such amount is converted consistent with Annex I, including 
the rate and manner set forth in Annex I, and the requirements of the 
Disbursement Agreement or any other Supplemental Agreement between the 
Parties.
    (e) Guidance. From time to time, MCC may provide guidance to the 
Government through Implementation Letters on the frequency, form and 
content of requests for MCC Disbursements and Re-Disbursements or any 
other matter relating to MCC Funding. The Government shall apply such 
guidance in implementing this Compact.

Section 2.2 Government Resources

    (a) The Government shall provide or cause to be provided such 
Government funds and other resources, and shall take or cause to be 
taken such actions, including obtaining all necessary approvals and 
consents, as are specified in this Compact or in any Supplemental 
Agreement to which the Government is a party or as are otherwise 
necessary and appropriate effectively to carry out the Government 
Responsibilities or other responsibilities or obligations of the 
Government under or in furtherance of this Compact during the Compact 
Term and through the completion of any post-Compact Term activities, 
audits or other responsibilities.
    (b) If at any time during the Compact Term, the Government 
materially reallocates or reduces the allocation in its national budget 
or any other governmental authority of Ghana at a departmental, 
municipal, regional or other jurisdictional level materially 
reallocates or reduces the allocation in its respective budget of the 
normal and expected resources that the Government or such other 
governmental authority, as applicable, would have otherwise received or 
budgeted, from external or domestic sources, for the activities 
contemplated herein, the Government shall notify MCC in writing within 
fifteen (15) days of such reallocation or reduction, such notification 
to contain information regarding the amount of the reallocation or 
reduction, the affected activities, and an explanation for the 
reallocation or reduction. In the event that MCC independently 
determines, upon review of the executed national annual budget that 
such a material reallocation or reduction of resources has occurred, 
MCC shall notify the Government and, following such notification, the 
Government shall provide a written explanation for such reallocation or 
reduction and MCC may (i) reduce, in its sole discretion, the total 
amount of MCC Funding or any MCC Disbursement by an amount equal to the 
amount estimated in the applicable Detailed Budget for the activity for 
which funds were reduced or reallocated or (ii) otherwise suspend or 
terminate MCC Funding in accordance with Section 5.4(b).
    (c) The Government shall use its best efforts to ensure that all 
MCC Funding is fully reflected and accounted for in the annual budget 
of Ghana on a multi-year basis.

Section 2.3 Limitations on the Use or Treatment of MCC Funding

    (a) Abortions and Involuntary Sterilizations. The Government shall 
ensure that MCC Funding shall not be used to undertake, fund or 
otherwise support any activity that is subject to prohibitions on use 
of funds contained in (i) paragraphs (1) through (3) of section 104(f) 
of the Foreign Assistance Act of 1961 (22 U.S.C. 2151b(f)(1)-(3)), a 
United States statute, which prohibitions shall apply to the same 
extent and in the same manner as such prohibitions apply to funds made 
available to carry out Part I of such Act; or (ii) any provision of law 
comparable

[[Page 48653]]

to the eleventh and fourteenth provisos under the heading ``Child 
Survival and Health Programs Fund'' of division E of Public Law 108-7 
(117 Stat. 162), a United States statute.
    (b) United States Job Loss or Displacement of Production. The 
Government shall ensure that MCC Funding shall not be used to 
undertake, fund or otherwise support any activity that is likely to 
cause a substantial loss of United States jobs or a substantial 
displacement of United States production, including:
    (i) Providing financial incentives to relocate a substantial number 
of United States jobs or cause a substantial displacement of production 
outside the United States;
    (ii) Supporting investment promotion missions or other travel to 
the United States with the intention of inducing United States firms to 
relocate a substantial number of United States jobs or a substantial 
amount of production outside the United States;
    (iii) Conducting feasibility studies, research services, studies, 
travel to or from the United States, or providing insurance or 
technical and management assistance, with the intention of inducing 
United States firms to relocate a substantial number of United States 
jobs or cause a substantial displacement of production outside the 
United States;
    (iv) Advertising in the United States to encourage United States 
firms to relocate a substantial number of United States jobs or cause a 
substantial displacement of production outside the United States;
    (v) Training workers for firms that intend to relocate a 
substantial number of United States jobs or cause a substantial 
displacement of production outside the United States;
    (vi) Supporting a United States office of an organization that 
offers incentives for United States firms to relocate a substantial 
number of United States jobs or cause a substantial displacement of 
production outside the United States; or
    (vii) Providing general budget support for an organization that 
engages in any activity prohibited above.
    (c) Military Assistance and Training. The Government shall ensure 
that MCC Funding shall not be used to undertake, fund or otherwise 
support the purchase or use of goods or services for military purposes, 
including military training, or to provide any assistance to the 
military, police, militia, national guard or other quasi-military 
organization or unit.
    (d) Prohibition of Assistance Relating to Environmental, Health or 
Safety Hazards. The Government shall ensure that MCC Funding shall not 
be used to undertake, fund or otherwise support any activity that is 
likely to cause a significant environmental, health, or safety hazard. 
Unless MCC and the Government agree otherwise in writing, the 
Government shall ensure that activities undertaken, funded or otherwise 
supported in whole or in part (directly or indirectly) by MCC Funding 
comply with environmental guidelines delivered by MCC to the Government 
or posted by MCC on its website or otherwise publicly made available, 
as such guidelines may be amended from time to time (the 
``Environmental Guidelines''), including any definition of ``likely to 
cause a significant environmental, health, or safety hazard'' as may be 
set forth in such Environmental Guidelines.
    (e) Taxation.
    (i) Taxes. The Government shall ensure that the Program, any 
Program Assets, MCC Funding and Accrued Interest shall be free from any 
taxes imposed under the laws currently or hereafter in effect in Ghana 
during the Compact Term. This exemption shall apply to any use of any 
Program Asset, MCC Funding and Accrued Interest, including any Exempt 
Uses, and to any work performed under or activities undertaken in 
furtherance of this Compact by any person or entity (including 
contractors and grantees) funded by MCC Funding, and shall apply to all 
taxes, tariffs, duties, and other levies (each a ``Tax'' and 
collectively, ``Taxes''), including:
    (1) To the extent attributable to MCC Funding, income taxes and 
other taxes on profit or businesses imposed on organizations or 
entities, other than nationals of Ghana, receiving MCC Funding, 
including taxes on the acquisition, ownership, rental, disposition or 
other use of real or personal property, taxes on investment or deposit 
requirements and currency controls in Ghana, or any other tax, duty, 
charge or fee of whatever nature, except fees for specific services 
rendered; for purposes of this Section 2.3(e), the term ``national'' 
refers to organizations established under the laws currently or 
hereafter in effect in Ghana, other than MiDA or any other entity 
established solely for purposes of managing or overseeing the 
implementation of the Program or any wholly-owned subsidiaries, 
divisions, or Affiliates of entities not registered or established 
under the laws currently or hereafter in effect in Ghana;
    (2) Customs duties, tariffs, import and export taxes, or other 
levies on the importation, use and re-exportation of goods, services, 
or the personal belongings and effects, including personally-owned 
automobiles, for Program use or the personal use of individuals who are 
neither citizens nor permanent residents of Ghana and who are present 
in Ghana for purposes of carrying out the Program or their family 
members, including all charges based on the value of such imported 
goods;
    (3) Taxes on the income or personal property of all individuals who 
are neither citizens nor permanent residents of Ghana, including income 
and social security taxes of all types and all taxes on the personal 
property owned by such individuals, to the extent such income or 
property are attributable to MCC Funding; and
    (4) Taxes or duties levied on the last transaction for the purchase 
of goods or services funded by MCC Funding, including sales taxes, 
tourism taxes, value-added taxes or other similar charges; for purposes 
of this Section 2.3(e)(i)(4), the term ``last transaction'' refers to 
the last transaction by which the goods or services were purchased for 
use in the activities funded by MCC Funding.
    (ii) This Section 2.3(e) shall apply, but is not limited to (A) any 
transaction, service, activity, contract, grant or other implementing 
agreement funded in whole or in part by MCC Funding; (B) any supplies, 
equipment, materials, property or other goods (referred to collectively 
in this Section 2.3(e) as ``goods'') or funds introduced into, acquired 
in, used or disposed of in, or imported into or exported from, Ghana by 
MCC, or by any person or entity (including contractors and grantees) as 
part of, or in conjunction with, MCC Funding or the Program; (C) any 
contractor, grantee, or other organization carrying out activities 
funded in whole or in part by MCC Funding; and (D) any employee of such 
organizations (the uses set forth in clauses (A) through (D) are 
collectively referred to herein as ``Exempt Uses'').
    (iii) If a Tax has been levied and paid contrary to the 
requirements of this Section 2.3(e), whether inadvertently, due to the 
impracticality of implementation of this provision with respect to 
certain types or amounts of taxes, or otherwise, the Government shall 
refund promptly to an account designated by MCC the amount of such Tax 
in the currency of Ghana, within thirty (30) days (or such other period 
as may be agreed in writing by the Parties) after the Government is 
notified in writing of such levy and tax payment, in accordance with 
procedures agreed by the Parties, whether by MCC or otherwise; 
provided, however, the Government shall apply national funds to satisfy 
its obligations under this paragraph and no MCC Funding,

[[Page 48654]]

Accrued Interest, or any assets, goods, or property (real, tangible, or 
intangible) purchased or financed in whole or in part (directly or 
indirectly) by MCC Funding (``Program Assets'') may be applied by the 
Government in satisfaction of its obligations under this paragraph.
    (iv) At MCC's request, the Parties shall memorialize in a mutually 
acceptable Supplemental Agreement, Implementation Letter or other 
suitable document the mechanisms for implementing this Section 2.3(e), 
including (A) a formula for determining refunds for Taxes paid, the 
amount of which is not susceptible to precise determination, (B) a 
mechanism for ensuring the tax-free importation, use, and re-
exportation of goods, services, or the personal belongings of 
individuals (including all Providers) described in Section 2.3(e)(i)(2) 
above, (C) a requirement for the provision by the Government of a tax-
exemption certificate which expressly includes, inter alia, the thirty 
(30) day refund requirement of Section 2.3(e)(iii) above, and (D) any 
other appropriate Government action to facilitate the administration of 
this Section 2.3(e).
    (f) Alteration. The Government shall ensure that no MCC Funding, 
Accrued Interest or Program Assets shall be subject to any impoundment, 
rescission, sequestration or any provision of law now or hereafter in 
effect in Ghana that would have the effect of requiring or allowing any 
impoundment, rescission or sequestration of any MCC Funding, Accrued 
Interest or Program Asset.
    (g) Liens or Encumbrances. The Government shall ensure that no MCC 
Funding, Accrued Interest, or Program Assets shall be subject to any 
lien, attachment, enforcement of judgment, pledge, or encumbrance of 
any kind (each a ``Lien''), except with the prior approval of MCC in 
accordance with Section 3(c) of Annex I, and in the event of the 
imposition of any Lien not so approved, the Government shall promptly 
seek the release of such Lien and if required by final non-appealable 
order, shall pay any amounts owed to obtain such release; provided, 
however, the Government shall apply national funds to satisfy its 
obligations under this Section 2.3(g) and no MCC Funding, Accrued 
Interest, or Program Assets may be applied by the Government in 
satisfaction of its obligations under this Section 2.3(g).
    (h) Other Limitations. The Government shall ensure that the use or 
treatment of MCC Funding, Accrued Interest, and Program Assets shall be 
subject to and in conformity with such other limitations (i) as 
required by the applicable law of the United States of America now or 
hereafter in effect during the Compact Term, (ii) as advisable under or 
required by applicable United States Government policies now or 
hereafter in effect during the Compact Term, or (iii) to which the 
Parties may otherwise agree in writing.
    (i) Utilization of Goods, Services and Works. The Government shall 
ensure that any Program Assets, services, facilities or works funded in 
whole or in part (directly or indirectly) by MCC Funding, unless 
otherwise agreed by the Parties in writing, shall be used solely in 
furtherance of this Compact.
    (j) Notification of Applicable Laws and Policies. MCC shall notify 
the Government of any applicable United States law or policy affecting 
the use or treatment of MCC Funding, whether or not specifically 
identified in this Section 2.3, and shall provide to the Government a 
copy of the text of any such applicable law and a written explanation 
of any such applicable policy.

Section 2.4 Incorporation; Notice; Clarification

    (a) The Government shall include, or ensure the inclusion of, all 
of the requirements set forth in Section 2.3 in all Supplemental 
Agreements to which MCC is not a party and shall use its best efforts 
to ensure that no such Supplemental Agreement is implemented in 
violation of the prohibitions set forth in Section 2.3.
    (b) The Government shall ensure notification of all of the 
requirements set forth in Section 2.3 to any Provider and all relevant 
officers, directors, employees, agents, representatives, Affiliates, 
contractors, sub-contractors, grantees and sub-grantees of any 
Provider. The term ``Provider'' shall mean (i) MiDA and any Government 
Affiliate or Permitted Designee involved in any activities in 
furtherance of this Compact or (ii) any third party who receives at 
least US$ 50,000 in the aggregate of MCC Funding (other than employees 
of MiDA) during the Compact Term or such other amount as the Parties 
may agree in writing, whether directly from MCC, indirectly through Re-
Disbursements, or otherwise.
    (c) In the event the Government or any Provider requires 
clarification from MCC as to whether an activity contemplated to be 
undertaken in furtherance of this Compact violates or may violate any 
provision of Section 2.3, the Government shall notify MCC in writing 
and provide in such notification a detailed description of the activity 
in question. In such event, the Government shall not proceed, and shall 
use its best efforts to ensure that no relevant Provider proceeds, with 
such activity, and the Government shall ensure that no Re-Disbursements 
shall be made for such activity, until MCC advises the Government or 
such Provider in writing that the activity is permissible. MCC shall 
use good faith efforts to respond timely to such notification for 
clarification.

Section 2.5 Refunds; Violation

    (a) Notwithstanding the availability to MCC, or exercise by MCC, of 
any other remedies, including under international law, this Compact or 
any Supplemental Agreement:
    (i) If any amount of MCC Funding, Accrued Interest or any other 
Program Asset is used for any purpose prohibited under this Article II 
or otherwise in violation of any of the terms and conditions of this 
Compact, any guidance in any Implementation Letter, or any Supplemental 
Agreement between the Parties, MCC may, upon written notice, require 
the Government to repay promptly to MCC to an account designated by 
MCC, or to others as MCC may direct, the amount of such misused MCC 
Funding or Accrued Interest, or the cash equivalent of the value of any 
other misused Program Asset, in United States Dollars, plus any 
interest that accrued or would have accrued thereon, within thirty (30) 
days after the Government is notified, whether by MCC or other duly 
authorized representative of the United States Government, of such 
prohibited use; provided, however, the Government shall apply national 
funds to satisfy its obligations under this Section 2.5(a)(i) and no 
MCC Funding, Accrued Interest, or any other Program Assets may be 
applied by the Government in satisfaction of its obligations under this 
Section 2.5(a)(i); and
    (ii) If all or any portion of this Compact is terminated or 
suspended and upon the expiration of this Compact, the Government 
shall, subject to the requirements of Sections 5.4(e) and 5.4(f), 
refund, or ensure the refund of, to such account designated by MCC the 
amount of any MCC Funding, plus any Accrued Interest, promptly, but in 
no event later than thirty (30) days after the Government receives 
MCC's request for such refund; provided, that if this Compact is 
terminated or suspended in part, MCC may request a refund for only the 
amount of MCC Funding, plus any Accrued Interest, then allocated to the 
terminated or suspended portion; provided, further, that any refund of 
MCC Funding or Accrued Interest shall

[[Page 48655]]

be to such account(s) as designated by MCC.
    (b) Notwithstanding any other provision in this Compact or any 
other agreement to the contrary, MCC's right under this Section 2.5 for 
a refund shall continue during the Compact Term and for a period of (i) 
five (5) years thereafter or (ii) one (1) year after MCC receives 
actual knowledge of such violation, whichever is later.
    (c) If MCC determines that any activity or failure to act violates, 
or may violate, any Section in this Article II, MCC may refuse any 
further MCC Disbursements for or conditioned upon such activity, and 
may take any action to prevent any Re-Disbursement related to such 
activity.

Section 2.6 Bilateral Agreement

    All MCC Funding shall be considered United States assistance under 
the General Agreement for a Programme of Technical Co-operation by and 
between the Government of the United States of America and the 
Government, dated June 3, 1957, as amended from time to time (the 
``Bilateral Agreement''). If there are conflicts or inconsistencies 
between any parts of this Compact and the Bilateral Agreement, as 
either may be amended from time to time, the provisions of this Compact 
shall prevail over those of the Bilateral Agreement.

Article III. Implementation

Section 3.1 Implementation Framework

    This Compact shall be implemented by the Parties in accordance with 
this Article III and as further specified in the Annexes and in 
relevant Supplemental Agreements.

Section 3.2 Government Responsibilities

    (a) The Government shall have principal responsibility for 
oversight and management of the implementation of the Program (i) in 
accordance with the terms and conditions specified in this Compact and 
relevant Supplemental Agreements, (ii) in accordance with all 
applicable laws then in effect in Ghana, and (iii) in a timely and 
cost-effective manner and in conformity with sound technical, financial 
and management practices (collectively, the ``Government 
Responsibilities''). Unless otherwise expressly provided, any reference 
to the Government Responsibilities or any other responsibilities or 
obligations of the Government herein shall be deemed to apply to any 
Government Affiliate and any of their respective directors, officers, 
employees, contractors, sub-contractors, grantees, sub-grantees, agents 
or representatives.
    (b) The Government shall ensure that no person or entity shall 
participate in the selection, award, administration, or oversight of a 
contract, grant or other benefit or transaction funded in whole or in 
part (directly or indirectly) by MCC Funding, in which (i) the entity, 
the person, members of the person's immediate family or household or 
his or her business partners, or organizations controlled by or 
substantially involving such person or entity, has or have a direct or 
indirect financial or other interest or (ii) the person or entity is 
negotiating or has any arrangement concerning prospective employment, 
unless such person or entity has first disclosed in writing to the 
Government the conflict of interest and, following such disclosure, the 
Parties agree in writing to proceed notwithstanding such conflict. The 
Government shall ensure that no person or entity involved in the 
selection, award, administration, oversight or implementation of any 
contract, grant or other benefit or transaction funded in whole or in 
part (directly or indirectly) by MCC Funding shall solicit or accept 
from or offer to a third party or seek or be promised directly or 
indirectly for itself or for another person or entity any gift, 
gratuity, favor or benefit, other than items of de minimis value and 
otherwise consistent with such guidance as MCC may provide from time to 
time.
    (c) The Government shall not designate any person or entity, 
including any Government Affiliate, to implement, in whole or in part, 
this Compact or any Supplemental Agreement between the Parties 
(including any Government Responsibilities or any other 
responsibilities or obligations of the Government under this Compact or 
any Supplemental Agreement between the Parties) or to exercise any 
rights of the Government under this Compact or any Supplemental 
Agreement between the Parties, except as expressly provided herein or 
with the prior written consent of MCC; provided, however, the 
Government may designate MiDA or, with the prior written consent of 
MCC, such other mutually acceptable persons or entities (each, a 
``Permitted Designee'') to implement some or all of the Government 
Responsibilities or any other responsibilities or obligations of the 
Government or to exercise any rights of the Government under this 
Compact or any Supplemental Agreement between the Parties each in 
accordance with the terms and conditions set forth in this Compact or 
such Supplemental Agreement (referred to herein collectively as 
``Designated Rights and Responsibilities''). Notwithstanding any 
provision herein or any other agreement to the contrary, no such 
designation shall relieve the Government of such Designated Rights and 
Responsibilities, for which the Government shall retain ultimate 
responsibility. In the event that the Government designates any person 
or entity, including any Government Affiliate, to implement any portion 
of the Government Responsibilities or other responsibilities or 
obligations of the Government, or to exercise any rights of the 
Government under this Compact or any Supplemental Agreement between the 
Parties, in accordance with this section 3.2(c), then the Government 
shall (i) cause such person or entity to perform such Designated Rights 
and Responsibilities in the same manner and to the full extent to which 
the Government is obligated to perform such Designated Rights and 
Responsibilities, (ii) ensure that such person or entity does not 
assign, delegate or contract (or otherwise transfer) any of such 
Designated Rights and Responsibilities to any person or entity and 
(iii) cause such person or entity to certify to MCC in writing that it 
will so perform such Designated Rights and Responsibilities and will 
not assign, delegate, or contract (or otherwise transfer) any of such 
Designated Rights and Responsibilities to any person or entity without 
the prior written consent of MCC.
    (d) The Government shall, upon a request from MCC, execute, or 
ensure the execution of, an assignment to MCC of any cause of action 
which may accrue to the benefit of the Government, a Government 
Affiliate or any Permitted Designee, including MiDA, in connection with 
or arising out of any activities funded in whole or in part (directly 
or indirectly) by MCC Funding.
    (e) The Government shall ensure that (i) no decision of MiDA is 
modified, supplemented, unduly influenced or rescinded by any 
governmental authority, except by a non-appealable judicial decision, 
and (ii) the authority of MiDA shall not be expanded, restricted, or 
otherwise modified, except in accordance with this Compact, the 
Governance Agreement, any other Governing Document or any other 
Supplemental Agreement between the Parties.
    (f) The Government shall ensure that all persons and individuals 
that enter into agreements to provide goods, services or works under 
the Program or in furtherance of this Compact shall do so in accordance 
with the Procurement Guidelines and shall obtain all necessary 
immigration, business and

[[Page 48656]]

other permits, licenses, consents and approvals to enable them and 
their personnel to fully perform under such agreements.

Section 3.3 Government Deliveries

    The Government shall proceed, and cause others to proceed, in a 
timely manner to deliver to MCC all reports, notices, certificates, 
documents or other deliveries required to be delivered by the 
Government under this Compact or any Supplemental Agreement between the 
Parties, in form and substance as set forth in this Compact or in any 
such Supplemental Agreement.

Section 3.4 Government Assurances

    The Government hereby provides the following assurances to MCC that 
as of the date this Compact is signed:
    (a) The information contained in the Proposal and any agreement, 
report, statement, communication, document or otherwise delivered or 
communicated to MCC by or on behalf of the Government on or after the 
date of the submission of the Proposal (i) are true, correct and 
complete in all material respects and (ii) do not omit any fact known 
to the Government that if disclosed would (A) alter in any material 
respect the information delivered, (B) likely have a material adverse 
effect on the Government's ability to implement effectively, or ensure 
the effective implementation of, the Program or any Project or 
otherwise to carry out its responsibilities or obligations under or in 
furtherance of this Compact, or (C) have likely adversely affected 
MCC's determination to enter into this Compact or any Supplemental 
Agreement between the Parties.
    (b) Unless otherwise disclosed in writing to MCC, the MCC Funding 
made available hereunder is in addition to the normal and expected 
resources that the Government usually receives or budgets for the 
activities contemplated herein from external or domestic sources.
    (c) This Compact does not conflict and will not conflict with any 
international agreement or obligation to which the Government is a 
party or by which it is bound.
    (d) No payments have been (i) received by any official of the 
Government or any other government body in connection with the 
procurement of goods, services or works to be undertaken or funded in 
whole or in part (directly or indirectly) by MCC Funding, except fees, 
taxes, or similar payments legally established in Ghana (subject to 
Section 2.3(e)) and consistent with the applicable requirement of the 
laws of Ghana or (ii) made to any third party, in connection with or in 
furtherance of this Compact, in violation of the United States Foreign 
Corrupt Practices Act of 1977, as amended (15 U.S.C. 78a et seq.).

Section 3.5 Implementation Letters; Supplemental Agreements

    (a) MCC may, from time to time, issue one or more letters to 
furnish additional information or guidance to assist the Government in 
the implementation of this Compact (each, an ``Implementation 
Letter''). The Government shall apply such guidance in implementing 
this Compact.
    (b) The details of any funding, implementing and other arrangements 
in furtherance of this Compact may be memorialized in one or more 
agreements between (i) the Government (or any Government Affiliate or 
Permitted Designee) and MCC, (ii) MCC or the Government (or any 
Government Affiliate or Permitted Designee) and any third party, 
including any of the Providers or Permitted Designee or (iii) any third 
parties where neither MCC nor the Government is a party, before, on or 
after the Entry into Force (each, a ``Supplemental Agreement''). The 
Government shall deliver, or cause to be delivered, to MCC within five 
(5) days of its execution a copy of any Supplemental Agreement to which 
MCC is not a party.

Section 3.6 Procurement; Awards of Assistance

    (a) The Government shall ensure that the procurement of all goods, 
services and works by the Government or any Provider in furtherance of 
this Compact shall be consistent with the procurement guidelines (the 
``Procurement Guidelines'') reflected in a Supplemental Agreement 
between the Government (and a mutually acceptable Government Affiliate 
or MiDA) and MCC (the ``Procurement Agreement''), which Procurement 
Guidelines shall include the following requirements:
    (i) Internationally accepted procurement rules with open, fair and 
competitive procedures are used in a transparent manner to solicit, 
award and administer contracts, grants, and other agreements and to 
procure goods, services and works;
    (ii) Solicitations for goods, services, and works shall be based 
upon a clear and accurate description of the goods, services or works 
to be acquired;
    (iii) Contracts shall be awarded only to qualified and capable 
contractors that have the capability and willingness to perform the 
contracts in accordance with the terms and conditions of the applicable 
contracts and on a cost effective and timely basis; and
    (iv) No more than a commercially reasonable price, as determined, 
for example, by a comparison of price quotations and market prices, 
shall be paid to procure goods, services, and works.
    (b) The Government shall maintain, and shall use its best efforts 
to ensure that all Providers maintain, records regarding the receipt 
and use of goods, services and works acquired in furtherance of this 
Compact, the nature and extent of solicitations of prospective 
suppliers of goods, services and works acquired in furtherance of this 
Compact, and the basis of award of contracts, grants and other 
agreements in furtherance of this Compact.
    (c) The Government shall use its best efforts to ensure that 
information, including solicitations, regarding procurement, grant and 
other agreement actions funded (or to be funded) in whole or in part 
(directly or indirectly) by MCC Funding shall be made publicly 
available in the manner outlined in the Procurement Guidelines or in 
any other manner agreed upon by the Parties in writing.
    (d) The Government shall ensure that no goods, services or works 
may be funded in whole or in part (directly or indirectly) by MCC 
Funding which are procured pursuant to orders or contracts firmly 
placed or entered into prior to the Entry into Force, except as the 
Parties may otherwise agree in writing.
    (e) The Government shall ensure that MiDA and any other Permitted 
Designee follows, and uses its best efforts to ensure that all 
Providers follow, the Procurement Guidelines in procuring (including 
soliciting) goods, services and works and in awarding and administering 
contracts, grants and other agreements in furtherance of this Compact, 
and shall furnish MCC evidence of the adoption of the Procurement 
Guidelines by MiDA no later than the time specified in the Disbursement 
Agreement.
    (f) The Government shall include, or ensure the inclusion of, the 
requirements of this section 3.6 into all Supplemental Agreements 
between the Government, any Government Affiliate or Permitted Designee 
or any of their respective directors, officers, employees, Affiliates, 
contractors, sub-contractors, grantees, sub-grantees, representatives 
or agents, on the one hand, and a Provider, on the other hand.

Section 3.7 Policy Performance; Policy Reforms

    In addition to the specific policy and legal reform commitments 
identified in Annex I and the Schedules thereto, the Government shall 
seek to maintain and

[[Page 48657]]

to improve its level of performance under the policy criteria 
identified in section 607 of the Act, and the MCA selection criteria 
and methodology published by MCC pursuant to section 607 of the Act 
from time to time (``MCA Eligibility Criteria'').

Section 3.8 Records and Information; Access; Audits; Reviews

    (a) Reports and Information. The Government shall furnish to MCC, 
and shall use its best efforts to ensure that all Providers and any 
other third party receiving MCC Funding, as appropriate, furnish to the 
Government (and the Government shall provide to MCC), any records and 
other information required to be maintained under this Section 3.8 and 
such other information, documents and reports as may be necessary or 
appropriate for the Government to carry out effectively its obligations 
under this Compact, including under section 3.12.
    (b) Government Books and Records. The Government shall maintain, 
and shall use its best efforts to ensure that all Providers maintain, 
accounting books, records, documents and other evidence relating to 
this Compact adequate to show, to the satisfaction of MCC, without 
limitation, the use of all MCC Funding, including all costs incurred by 
the Government and the Providers in furtherance of this Compact, the 
receipt, acceptance and use of goods, services and works acquired in 
furtherance of this Compact by the Government and the Providers, 
agreed-upon cost sharing requirements, the nature and extent of 
solicitations of prospective suppliers of goods, services and works 
acquired by the Government and the Providers in furtherance of this 
Compact, the basis of award of Government and other contracts and 
orders in furtherance of this Compact, the overall progress of the 
implementation of the Program, and any documents required by this 
Compact or any Supplemental Agreement between the Parties or reasonably 
requested by MCC upon reasonable notice (``Compact Records''). The 
Government shall maintain, and shall use its best efforts to ensure 
that all Covered Providers maintain, Compact Records in accordance with 
generally accepted accounting principles prevailing in the United 
States, or at the Government's option and with the prior written 
approval by MCC, other accounting principles, such as those (i) 
prescribed by the International Accounting Standards Committee (an 
affiliate of the International Federation of Accountants) or (ii) then 
prevailing in Ghana. Compact Records shall be maintained for at least 
five (5) years after the end of the Compact Term or for such longer 
period, if any, required to resolve any then pending litigation, claims 
or audit findings or any statutory requirements.
    (c) Access. Upon the request of MCC, the Government, at all 
reasonable times, shall permit, or cause to be permitted, authorized 
representatives of MCC, the Inspector General, the United States 
Government Accountability Office, any auditor responsible for an audit 
contemplated herein or otherwise conducted in furtherance of this 
Compact, and any agents or representatives engaged by MCC or a 
Permitted Designee to conduct any assessment, review or evaluation of 
the Program, the opportunity to audit, review, evaluate or inspect 
activities funded in whole or in part (directly or indirectly) by MCC 
Funding or undertaken in connection with the Program, the utilization 
of goods and services purchased or funded in whole or in part (directly 
or indirectly) by MCC Funding, and Compact Records, including of the 
Government or any Provider, relating to activities funded or undertaken 
in furtherance of, or otherwise relating to, this Compact, and shall 
use its best efforts to ensure access by MCC, the Inspector General, 
the United States Government Accountability Office or relevant auditor, 
reviewer or evaluator or their respective representatives or agents to 
all relevant directors, officers, employees, Affiliates, contractors, 
representatives and agents of the Government or any Provider.
    (d) Audits.
    (i) Government Audits. The Government shall, on at least an annual 
basis and as the Parties may otherwise agree in writing, conduct, or 
cause to be conducted, financial audits of all MCC Disbursements and 
Re-Disbursements during the year since the Entry into Force or since 
the prior anniversary of the Entry into Force in accordance with the 
following terms, except as the Parties may otherwise agree in writing. 
As requested by MCC in writing, the Government shall use, or cause to 
be used, or select or cause to be selected, an auditor named on the 
approved list of auditors in accordance with the ``Guidelines for 
Financial Audits Contracted by Foreign Recipients'' (the ``Audit 
Guidelines'') issued by the Inspector General of the United States 
Agency for International Development (the ``Inspector General''), and 
as approved by MCC, to conduct such annual audits. Such audits shall be 
performed in accordance with such Audit Guidelines and be subject to 
quality assurance oversight by the Inspector General in accordance with 
such Audit Guidelines. An audit shall be completed and delivered to MCC 
no later than ninety (90) days after the first period to be audited and 
no later than ninety (90) days after each anniversary of the Entry into 
Force thereafter, or such other period as the Parties may otherwise 
agree in writing.
    (ii) Audits of U.S. Entities. The Government shall ensure that 
Supplemental Agreements between the Government or any Provider, on the 
one hand, and a United States non-profit organization, on the other 
hand, state that the United States organization is subject to the 
applicable audit requirements contained in OMB Circular A-133, 
notwithstanding any other provision of this Compact to the contrary. 
The Government shall ensure that Supplemental Agreements between the 
Government or any Provider, on the one hand, and a United States for-
profit Covered Provider, on the other hand, state that the United 
States organization is subject to audit by the cognizant United States 
Government agency, unless the Government and MCC agree otherwise in 
writing.
    (iii) Audit Plan. The Government shall submit, or cause to be 
submitted, to MCC no later than twenty (20) days prior to the date of 
its adoption a plan, in accordance with the Audit Guidelines, for the 
audit of the expenditures of any Covered Providers, which audit plan, 
in the form and substance as approved by MCC, the Government shall 
adopt, or cause to be adopted, no later than sixty (60) days prior to 
the end of the first period to be audited (such plan, the ``Audit 
Plan'').
    (iv) Covered Provider. A ``Covered Provider'' is (A) a non-United 
States Provider that receives (other than pursuant to a direct contract 
or agreement with MCC) US$ 300,000 or more of MCC Funding in any MiDA 
fiscal year or any other non-United States person or entity that 
receives, directly or indirectly, US$ 300,000 or more of MCC Funding 
from any Provider in such fiscal year or (B) any United States Provider 
that receives (other than pursuant to a direct contract or agreement 
with MCC) US$ 500,000 or more of MCC Funding in any MiDA fiscal year or 
any other United States person or entity that receives, directly or 
indirectly, US$ 500,000 or more of MCC Funding from any Provider in 
such fiscal year.
    (v) Corrective Actions. The Government shall use its best efforts 
to ensure that Covered Providers take, where necessary, appropriate and 
timely corrective actions in response to audits, consider whether a 
Covered Provider's

[[Page 48658]]

audit necessitates adjustment of its own records, and require each such 
Covered Provider to permit independent auditors to have access to its 
records and financial statements as necessary.
    (vi) Audit Reports. The Government shall furnish, or use its best 
efforts to cause to be furnished, to MCC an audit report in a form 
satisfactory to MCC for each audit required by this Section 3.8, other 
than audits arranged for by MCC, no later than ninety (90) days after 
the end of the period under audit, or such other time as may be agreed 
by the Parties from time to time.
    (vii) Other Providers. For Providers who receive MCC Funding under 
this Compact pursuant to direct contracts or agreements with MCC, MCC 
shall include appropriate audit requirements in such contracts or 
agreements and shall, on behalf of the Government, unless otherwise 
agreed by the Parties, conduct the follow-up activities with regard to 
the audit reports furnished pursuant to such requirements.
    (viii) Audit by MCC. MCC retains the right to perform, or cause to 
be performed, the audits required under this Section 3.8 by utilizing 
MCC Funding or other resources available to MCC for this purpose, and 
to audit, conduct a financial review, or otherwise ensure 
accountability of any Provider or any other third party receiving MCC 
Funding, regardless of the requirements of this Section 3.8.
    (e) Application to Providers. The Government shall include, or 
ensure the inclusion of, at a minimum, the requirements of:
    (i) Paragraphs (a), (b), (c), (d)(ii), (d)(iii), (d)(v), (d)(vi), 
and (d)(viii) of this Section 3.8 into all Supplemental Agreements 
between the Government, any Government Affiliate, any Permitted 
Designee or any of their respective directors, officers, employees, 
Affiliates, contractors, sub-contractors, grantees, sub-grantees, 
representatives or agents (each, a ``Government Party''), on the one 
hand, and a Covered Provider that is not a non-profit organization 
domiciled in the United States, on the other hand;
    (ii) Paragraphs (a), (b), (c), (d)(ii), and (d)(viii) of this 
Section 3.8 into all Supplemental Agreements between a Government Party 
and a Provider that does not meet the definition of a Covered Provider; 
and
    (iii) Paragraphs (a), (b), (c), (d)(ii), (d)(v) and (d)(viii) of 
this Section 3.8 into all Supplemental Agreements between a Government 
Party and a Covered Provider that is a non-profit organization 
domiciled in the United States.
    (f) Reviews or Evaluations. The Government shall conduct, or cause 
to be conducted, such performance reviews, data quality reviews, 
environmental and social audits, or program evaluations during the 
Compact Term or otherwise and in accordance with the M&E Plan or as 
otherwise agreed in writing by the Parties.
    (g) Cost of Audits, Reviews or Evaluations. MCC Funding may be used 
to fund the costs of any audits, reviews or evaluations required under 
this Compact, including as reflected on Exhibit A to Annex II, and in 
no event shall the Government be responsible for the costs of any such 
audits, reviews or evaluations from financial sources other than MCC 
Funding.

Section 3.9 Insurance; Performance Guarantees

    The Government shall, to MCC's satisfaction, insure or cause to be 
insured all Program Assets and shall obtain or cause to be obtained 
such other appropriate insurance and other protections to cover against 
risks or liabilities associated with the operations of the Program, 
including by requiring Providers to obtain adequate insurance and post 
adequate performance bonds or other guarantees. MiDA or the 
Implementing Entity, as applicable, shall be named as the payee on any 
such insurance and the beneficiary of any such guarantee, including 
performance bonds, to the extent permissible under applicable laws 
unless otherwise agreed by the Parties. MCC, and to the extent it is 
not named as the insured party, MiDA shall be named as additional 
insureds on any such insurance or other guarantee, to the extent 
permissible under applicable laws unless otherwise agreed by the 
Parties. The Government shall ensure that any proceeds from claims paid 
under such insurance or any other form of guarantee shall be used to 
replace or repair any loss of Program Assets or to pursue the 
procurement of the covered goods, services, works, or otherwise; 
provided, however, at MCC's election, such proceeds shall be deposited 
in a Permitted Account as designated by MiDA and acceptable to MCC or 
as otherwise directed by MCC. To the extent MiDA is held liable under 
any indemnification or other similar provision of any agreement between 
MiDA, on the one hand, and any other Provider or other third party, on 
the other hand, the Government shall pay in full on behalf of MiDA any 
such obligation; provided, further, the Government shall apply national 
funds to satisfy its obligations under this Section 3.9 and no MCC 
Funding, Accrued Interest, or Program Asset may be applied by the 
Government in satisfaction of its obligations under this Section 3.9.

Section 3.10 Domestic Requirements

    The Government shall proceed in a timely manner to seek 
ratification of this Compact as necessary or required by the laws of 
Ghana, or similar domestic requirement, in order that (a) this Compact 
(and any Supplemental Agreement to which MCC is a party) shall be given 
the status of an international agreement, (b) no laws of Ghana (other 
than the Constitution of Ghana) now or hereafter in effect shall take 
precedence or prevail over this Compact (or any Supplemental Agreement 
to which MCC is a party) during the Compact Term (or a longer period to 
the extent provisions of this Compact remain in force following the 
expiration of the Compact Term pursuant to Section 5.13) and (c) each 
of the provisions of this Compact (and each of the provisions of any 
Supplemental Agreement to which MCC is a party) is valid, binding and 
in full force and effect under the laws of Ghana. The Government shall 
initiate such process promptly after the conclusion of this Compact. 
Notwithstanding anything to the contrary in this Compact, this Section 
3.10 shall provisionally apply prior to Entry into Force.

Section 3.11 No Conflict

    The Government shall undertake not to enter into any agreement in 
conflict with this Compact or any Supplemental Agreement during the 
Compact Term.

Section 3.12 Reports

    The Government shall provide, or cause to be provided, to MCC at 
least on each anniversary of the Entry into Force (or such other 
anniversary agreed by the Parties in writing) and otherwise within 
thirty (30) days of any written request by MCC, or as otherwise agreed 
in writing by the Parties, the following information:
    (a) The name of each entity to which MCC Funding has been provided;
    (b) The amount of MCC Funding provided to such entity;
    (c) A description of the Program and each Project funded in 
furtherance of this Compact, including:
    (i) A statement of whether the Program or any Project was solicited 
or unsolicited; and
    (ii) A detailed description of the objectives and measures for 
results of the Program or Project;

[[Page 48659]]

    (d) The progress made by Ghana toward achieving the Compact Goal 
and Objectives;
    (e) A description of the extent to which MCC Funding has been 
effective in helping Ghana to achieve the Compact Goal and Objectives;
    (f) A description of the coordination of MCC Funding with other 
United States foreign assistance and other related trade policies;
    (g) A description of the coordination of MCC Funding with 
assistance provided by other donor countries;
    (h) Any report, document or filing that the Government, any 
Government Affiliate or any Permitted Designee submits to any 
government body in connection with this Compact;
    (i) Any report or document required to be delivered to MCC under 
the Environmental Guidelines, any Audit Plan, or any Implementation 
Document; and
    (j) Any other report, document or information requested by MCC or 
required by this Compact or any Supplemental Agreement between the 
Parties.

Article IV. Conditions Precedent; Deliveries

Section 4.1 Conditions Prior to the Entry into Force and Deliveries

    As conditions precedent to the Entry Into Force, the Parties shall 
satisfy the conditions set forth in this Section 4.1.
    (a) The Government (or a mutually acceptable Government Affiliate), 
a Permitted Designee, and MCC shall excute a Disbursement Agreement, 
which agreement shall be in full force and effects as of the Entry into 
Force.
    (b) The Government (or a mutually acceptable Government Affiliate), 
a Permitted Designee, and MCC shall execute a Procurement Agreement, 
which agreement shall be in full force and effect as of the Entry into 
Force.
    (c) The Government (or a mutually acceptable Government Affiliate), 
a Permitted Designee, and MCC shall execute a governance agreement (the 
``Governance Agreement''), which agreement shall be in full force and 
effects as of the Entry into Force.
    (d)(i) The Government shall deliver one or more of the Supplement 
Agreements or other documents identified on Exhibit B attached hereto, 
which agreements or other documents shall be fully executed by the 
parties thereto and in full force and effect, or (ii) the Government 
(or a mutually acceptable Government Affiliate), a Permitted Designee, 
and MCC shall execute one or more term sheets that set forth the 
material and principal terms and conditions that will be included in 
any such Supplemental Agreement or other documents that have not been 
entered into or effective as of the Entry into Force (the 
``Supplemental Agreement Term Sheets'').
    (e) The Government shall deliver a written statement as to the 
incumbency and specimen signature of the Principal Representative and 
each Additional Representative of the Government executing any document 
under this Compact, such written statement to be signed by a duly 
authorized official of the Government other than the Principal 
Representative or any such Additional Representative.
    (f) The Government shall deliver a certificate signed and dated by 
the Principal Representative of the Government, or such other duly 
authorized representative of the Government acceptable to MCC, that:
    (i) Certifies the Government has completed all of its domestic 
requirements in order that (1) this Compact (and any Supplemental 
Agreement to which MCC is a party) shall be given the status of an 
international agreement, (2) no laws of Ghana (other than the 
Constitution of Ghana) now or hereafter in effect shall take precedence 
or prevail over this Compact (or any Supplemental Agreement to which 
MCC is a party) during the Compact Term (or a longer period to the 
extent provisions of this Compact remain in force following the Compact 
Term pursuant to Section 5.13) and (3) each of the provisions of this 
Compact (and each of the provisions of any Supplemental Agreement to 
which MCC is a party) shall be valid, binding and in full force and 
effect under the laws of Ghana; and
    (ii) Attaches thereto, and certifies that such attachments are, 
true, correct and complete copies of all decrees, legislation, 
regulations or other governmental documents relating to its domestic 
requirements for this Compact to enter into force and the satisfaction 
of Section 3.10 (including any requirements under section 96 of the 
Ghana Public Procurement Act, 2003 (Act 663) to cause the Procurement 
Guidelines (as defined in Section 3.6(a)) to apply to the transactions 
contemplated by this Compact, which MCC may post on its website or 
otherwise make publicly available.
    (g) MCC shall deliver a written statement as to the incumbency and 
specimen signature of the Principal Representative and each Additional 
Representative of MCC executing any document under this Compact such 
written statement to be signed by a duly authorized official of MCC 
other than the Principal Representative or any such Additional 
Representative.
    (h) The Government has not engaged subsequent to the conclusion of 
this Compact in any action or omission inconsistent with the MCA 
Eligibility Criteria, as determined by MCC in its sole discretion.

Section 4.2 Conditions Precedent to MCC Disbursements or Re-
Disbursements

    Prior to, and as condition precedent to, any MCC Disbursement or 
Re-Disbursement, the Government shall satisfy, or ensure the 
satisfaction of, all applicable conditions precedent in the 
Disbursement Agreement.

Article V. Final Clauses

Section 5.1 Communications

    Unless otherwise expressly stated in this Compact or otherwise 
agreed in writing by the Parties, any notice, certificate, request, 
report, document or other communication required, permitted, or 
submitted by either Party to the other under this Compact shall be (a) 
in writing, (b) in English and (c) deemed duly given: (i) upon personal 
delivery to the Party to be notified; (ii) when sent by confirmed 
facsimile or electronic mail, if sent during normal business hours of 
the recipient Party, if not, then on the next business day; or (iii) 
three (3) business days after deposit with an internationally 
recognized overnight courier, specifying next day delivery, with 
written verification of receipt to the Party to be notified at the 
address indicated below, or at such other address as such Party may 
designate:

To MCC:

    Millennium Challenge Corporation, Attention: Vice President for 
Operations (with a copy to the Vice President and General Counsel), 875 
Fifteenth Street, NW., Washington, DC 20005, United States of America, 
Facsimile: (202) 521-3700, Phone: (202) 521-3600, E-mail: 
[email protected] (Vice President for Operations); 
[email protected] (Vice President and General Counsel).

To the Government:
    Ministry of Public Sector Reform, Attention: Minister of Public 
Sector Reform, Private Mail Bag, Stadium Post Office, Accra, Ghana, 
Facsimile: (233-21) 670295, Phone: (233-21) 684086, E-mail: 
[email protected].

With a copy to MiDA:

    At an address, and to the attention of the person, to be designated 
in writing to MCC by the Government.
    Notwithstanding the foregoing, any audit report delivered pursuant 
to

[[Page 48660]]

Section 3.8, if delivered by facsimile or electronic mail, shall be 
followed by an original in overnight express mail. This Section 5.1 
shall not apply to the exchange of letters contemplated in Section 1.3 
or any amendments under Section 5.3.

Section 5.2 Representatives

    Unless otherwise agreed in writing by the Parties, for all purposes 
relevant to this Compact, the Government shall be represented by the 
individual holding the position of, or acting as, Minister of Public 
Sector Reform of Ghana, and MCC shall be represented by the individual 
holding the position of, or acting as, Vice President for Operations 
(each, a ``Principal Representative''), each of whom, by written notice 
to the other Party, may designate one or more additional 
representatives (each, an ``Additional Representative'') for all 
purposes other than signing amendments to this Compact. The names of 
the Principal Representative and any Additional Representative of each 
of the Parties shall be provided, with specimen signatures, to the 
other Party, and the Parties may accept as duly authorized any 
instrument signed by such representatives relating to the 
implementation of this Compact, until receipt of written notice of 
revocation of their authority. A Party may change its Principal 
Representative to a new representative of equivalent or higher rank 
upon written notice to the other Party, which notice shall include the 
specimen signature of the new Principal Representative.

Section 5.3 Amendments

    The Parties may amend this Compact only by a written agreement 
signed by the Principal Representatives of the Parties and subject to 
the respective domestic approval requirements to which this Compact was 
subject.

Section 5.4 Termination; Suspension

    (a) Subject to Section 2.5, either Party may terminate this Compact 
in its entirety by giving the other Party thirty (30) days' written 
notice.
    (b) Notwithstanding any other provision of this Compact, including 
Section 2.1, or any Supplemental Agreement between the Parties, subject 
to Section 2.5, MCC may suspend or terminate this Compact or MCC 
Funding, in whole or in part, and any obligation or sub-obligation 
related thereto, upon giving the Government written notice, if MCC 
determines, in its sole discretion, that:
    (i) Any use or proposed use of MCC Funding or Program Assets or 
continued implementation of the Compact would be in violation of 
applicable law or United States Government policy, whether now or 
hereafter in effect;
    (ii) The Government, any Provider, or any other third party 
receiving MCC Funding or using Program Assets is engaged in activities 
that are contrary to the national security interests of the United 
States;
    (iii) The Government or any Permitted Designee has committed an act 
or omission or an event has occurred that would render Ghana ineligible 
to receive United States economic assistance under Part I of the 
Foreign Assistance Act of 1961, as amended (22 U.S.C 2151 et seq.), by 
reason of the application of any provision of the Foreign Assistance 
Act of 1961 or any other provision of law;
    (iv) The Government or any Permitted Designee has engaged in a 
pattern of actions or omissions inconsistent with the MCA Eligibility 
Criteria, or there has occurred a significant decline in the 
performance of Ghana on one or more of the eligibility indicators 
contained therein;
    (v) The Government or any Provider has materially breached one or 
more of its assurances or any covenants, obligations or 
responsibilities under this Compact or any Supplemental Agreement;
    (vi) An audit, review, report or any other document delivered in 
furtherance of the Compact or any Supplemental Agreement or any other 
evidence reveals that actual expenditures for the Program, any Project 
or any Project Activity were greater than the projected expenditure for 
such activities identified in the applicable Detailed Budget or are 
projected to be greater than projected expenditures for such 
activities;
    (vii) If the Government (A) materially reallocates or reduces the 
allocation in its national budget or any other Government budget of the 
normal and expected resources that the Government would have otherwise 
received or budgeted, from external or domestic sources, for the 
activities contemplated herein, (B) fails to contribute or provide the 
amount, level, type and quality of resources required to carry out 
effectively the Government Responsibilities or any other 
responsibilities or obligations of the Government under or in 
furtherance of this Compact, or (C) fails to pay any of its obligations 
as required under this Compact or any Supplemental Agreement, including 
such obligations which shall be paid solely out of national funds;
    (viii) If the Government, any Provider, or any other third party 
receiving MCC Funding or using Program Assets, or any of their 
respective directors, officers, employees, Affiliates, contractors, 
sub-contractors, grantee, sub-grantee, representatives or agents, is 
found to have been convicted of a narcotics offense or to have been 
engaged in drug trafficking;
    (ix) Any MCC Funding or Program Assets are applied, directly or 
indirectly, to the provision of resources and support to, individuals 
and organizations associated with terrorism, sex trafficking or 
prostitution;
    (x) An event or condition of any character has occurred that: (A) 
Materially and adversely affects, or is likely to materially and 
adversely affect, the ability of the Government or any other party to 
effectively implement, or ensure the effective implementation of, the 
Program or any Project or otherwise to carry out its responsibilities 
or obligations under or in furtherance of this Compact or any 
Supplemental Agreement or to perform its obligations under or in 
furtherance of this Compact or any Supplemental Agreement or to 
exercise its rights thereunder; (B) makes it improbable that the 
Objectives will be achieved during the Compact Term; (C) materially and 
adversely affects the Program Assets or any Permitted Account; or (D) 
constitutes misconduct injurious to MCC, or constitutes a fraud or a 
felony, by the Government, any Government Affiliate, Permitted Designee 
or Provider, or any officer, director, employee, agent, representative, 
Affiliate, contractor, grantee, subcontractor or sub-grantee of any of 
the foregoing;
    (xi) The Government, any Permitted Designee or Provider has taken 
any action or omission or engaged in any activity in violation of, or 
inconsistent with, the requirements of this Compact or any Supplemental 
Agreement to which the Government or any Permitted Designee or Provider 
is a party;
    (xii) There has occurred a failure to meet a condition precedent or 
series of conditions precedent or any other requirements or conditions 
in connection with MCC Disbursement as set out in and in accordance 
with any Supplemental Agreement between the Parties; or
    (xiii) Any MCC Funding, Accrued Interest or Program Asset becomes 
subject to a Lien without the prior approval of MCC, and the Government 
fails to obtain the release of such Lien (at its own expense and not 
with MCC Funding, Accrued Interest, or Program Assets) within thirty 
(30) days after the imposition of such Lien.
    (c) MCC may reinstate any suspended or terminated MCC Funding under 
this

[[Page 48661]]

Compact or any Supplemental Agreement if MCC determines, in its sole 
discretion, that the Government or other relevant party has 
demonstrated a commitment to correcting each condition for which MCC 
Funding was suspended or terminated.
    (d) The authority to suspend or terminate this Compact or any MCC 
Funding under this Section 5.4 includes the authority to suspend or 
terminate any obligations or sub-obligations relating to MCC Funding 
under any Supplemental Agreement without any liability to MCC 
whatsoever.
    (e) All MCC Disbursements and Re-Disbursements shall cease upon 
expiration, suspension, or termination of this Compact; provided, 
however, (i) reasonable expenditures for goods, services and works that 
are properly incurred under or in furtherance of this Compact before 
such expiration, suspension or termination of this Compact and (ii) 
reasonable expenditures for goods and services (including certain 
administrative expenses) properly incurred within one hundred and 
twenty (120) days after such expiration, suspension or termination of 
the Compact in connection with the winding up of the Program may be 
paid from MCC Funding, provided, further, that, in cases described in 
clauses (i) and (ii), the request for such payment shall be (A) 
properly submitted within ninety (90) days after such expiration, 
suspension or termination of the Compact and (B) subject to the prior 
written consent of MCC.
    (f) Other than the payments permitted pursuant to Section 5.4(e), 
in the event of the suspension or termination of this Compact or any 
Supplemental Agreement, in whole or in part, the Government, at MCC's 
sole discretion, shall suspend, for the period of the suspension, or 
terminate, or ensure the suspension or termination of, as applicable, 
any obligation or sub-obligation of the Parties to provide financial or 
other resources under this Compact or any Supplemental Agreement, or to 
the suspended or terminated portion of this Compact or such 
Supplemental Agreement, as applicable. In the event of such suspension 
or termination, the Government shall use its best efforts to suspend or 
terminate, or ensure the suspension or termination of, as applicable, 
all such noncancelable commitments related to the suspended or 
terminated MCC Funding. Any portion of this Compact or any such 
Supplemental Agreement that is not suspended or terminated shall remain 
in full force and effect.
    (g) Upon the full or partial suspension or termination of this 
Compact or any MCC Funding, MCC may, at its expense, direct that title 
to Program Assets be transferred to MCC if such Program Assets are in a 
deliverable state; provided, for any Program Asset(s) partially 
purchased or funded (directly or indirectly) by MCC Funding, the 
Government shall reimburse to a United States Government account 
designated by MCC the cash equivalent of the portion of the value of 
such Program Asset(s), such value as determined by MCC.
    (h) Prior to the expiration of this Compact or upon termination of 
this Compact, the Parties shall consult in good faith with a view to 
reaching an agreement in writing on (i) the post-Compact Term treatment 
of MiDA, (ii) the process for ensuring the refunds of MCC Disbursements 
that have not yet been released from a Permitted Account through a 
valid Re-Disbursement or otherwise committed in accordance with Section 
5.4(e), or (iii) any other matter related to the winding up of the 
Program and this Compact.

Section 5.5 Privileges and Immunities

    MCC is an agency of the Government of the United States of America 
and its personnel assigned to Ghana will be notified pursuant to the 
Vienna Convention on Diplomatic Relations as members of the mission of 
the Embassy of the United States of America. The Government shall 
ensure that any personnel of MCC so notified, including individuals 
detailed to or contracted by MCC, and the members of the families of 
such personnel, while such personnel are performing duties in Ghana, 
shall enjoy the privileges and immunities that are enjoyed by a member 
of the United States Foreign Service, or the family of a member of the 
United States Foreign Service so notified, as appropriate, of 
comparable rank and salary of such personnel, if such personnel or the 
members of the families of such personnel are not a national of, or 
permanently resident in, Ghana.

Section 5.6 Attachments

    Any annex, schedule, exhibit, table, appendix or other attachment 
expressly attached hereto (collectively, the ``Attachments'') is 
incorporated herein by reference and shall constitute an integral part 
of this Compact.

Section 5.7 Inconsistencies

    (a) Conflicts or inconsistencies between any parts of this Compact 
shall be resolved by applying the following descending order of 
precedence:
    (i) Articles I through V, and
    (ii) Any Attachments.
    (b) In the event of any conflict or inconsistency between this 
Compact and any Supplemental Agreement between the Parties, the terms 
of this Compact shall prevail. In the event of any conflict or 
inconsistency between any Supplemental Agreement between the Parties 
and any other Supplemental Agreement, the terms of the Supplemental 
Agreement between the Parties shall prevail. In the event of any 
conflict or inconsistency between Supplemental Agreements between any 
parties, the terms of a more recently executed Supplemental Agreement 
between such parties shall take precedence over a previously executed 
Supplemental Agreement between such parties. In the event of any 
inconsistency between a Supplemental Agreement between the Parties and 
any Implementation Document, the terms of the relevant Supplemental 
Agreement shall prevail.

Section 5.8 Indemnification

    The Government shall indemnify and hold MCC and any MCC officer, 
director, employee, Affiliate, contractor, agent or representative 
(each of MCC and any such persons, an ``MCC Indemnified Party'') 
harmless from and against, and shall compensate, reimburse and pay such 
MCC Indemnified Party for, any liability or other damages which (a) are 
directly or indirectly suffered or incurred by such MCC Indemnified 
Party, or to which any MCC Indemnified Party may otherwise become 
subject, regardless of whether or not such damages relate to any third-
party claim, and (b) arise from or as a result of the negligence or 
willful misconduct of the Government, any Government Affiliate, MiDA or 
any Permitted Designee, directly or indirectly connected with, any 
activities (including acts or omissions) undertaken in furtherance of 
this Compact; provided, however, the Government shall apply national 
funds to satisfy its obligations under this Section 5.8 and no MCC 
Funding, Accrued Interest, or Program Asset may be applied by the 
Government in satisfaction of its obligations under this Section 5.8.

Section 5.9 Headings

    The Section and Subsection headings used in this Compact are 
included for convenience only and are not to be considered in 
construing or interpreting this Compact.

Section 5.10 Interpretation

    (a) Any reference to the term ``including'' in this Compact shall 
be

[[Page 48662]]

deemed to mean ``including without limitation'' except as expressly 
provided otherwise.
    (b) Any reference to activities undertaken ``in furtherance of this 
Compact'' or similar language shall include activities undertaken by 
the Government, any Government Affiliate, any Permitted Designee, any 
Provider or any other third party receiving MCC Funding involved in 
carrying out the purposes of this Compact or any Supplemental 
Agreement, including their respective directors, officers, employees, 
Affiliates, contractors, sub-contractors, grantees, sub-grantees, 
representatives or agents, whether pursuant to the terms of this 
Compact, any Supplemental Agreement or otherwise.
    (c) References to ``day'' or ``days'' shall be calendar days unless 
provided otherwise.
    (d) Defined terms importing the singular also include the plural, 
and vice versa.

Section 5.11 Signatures

    A signature to this Compact or an amendment to this Compact 
pursuant to Section 5.3 shall be delivered only as an original 
signature. With respect to all other signatures, a signature delivered 
by facsimile or electronic mail in accordance with Section 5.1 shall be 
deemed an original signature, and the Parties hereby waive any 
objection to such signature or to the validity of the underlying 
document, certificate, notice, instrument or agreement on the basis of 
the signature's legal effect, validity or enforceability solely because 
it is in facsimile or electronic form. Without limiting the foregoing, 
a signature on an audit report or a signature evidencing any 
modification identified in Sections 2(b) and (4)(a)(iv) of Annex I, 
Section 4 of Annex II or Section 5(c) Annex III shall be followed by an 
original in overnight express mail. Such signature shall be accepted by 
the receiving Party as an original signature and shall be binding on 
the Party delivering such signature.

Section 5.12 Designation

    MCC may designate any Affiliate, agent, or representative to 
implement, in whole or in part, its obligations, and exercise any of 
its rights, under this Compact or any Supplemental Agreement between 
the Parties. MCC shall inform the Government of any such designation.

Section 5.13 Survival

    Any Government Responsibilities, covenants, or obligations or other 
responsibilities to be performed by the Government after the Compact 
Term shall survive the termination or expiration of this Compact and 
expire in accordance with their respective terms. Notwithstanding the 
termination or expiration of this Compact, the following provisions 
shall remain in force: Sections 2.2, 2.3, 2.5, 3.2, 3.3, 3.4, 3.5, 3.8, 
3.9 (for one year), 3.12, 5.1, 5.2, 5.4(d), 5.4(e) (for one hundred and 
twenty (120) days), 5.4(f), 5.4(g), 5.4(h), 5.5, 5.6, 5.7, 5.8, 5.9, 
5.10, 5.11, 5.12, this Section 5.13, 5.14, and 5.15.

Section 5.14 Consultation

    Either Party may, at any time, request consultations relating to 
the interpretation or implementation of this Compact or any 
Supplemental Agreement between the Parties. Such consultations shall 
begin at the earliest possible date. The request for consultations 
shall designate a representative for the requesting Party with the 
authority to enter consultations and the other Party shall endeavor to 
designate a representative of equal or comparable rank. If such 
representatives are unable to resolve the matter within twenty (20) 
days from the commencement of the consultations, then each Party shall 
forward the consultation to the Principal Representative or such other 
representative of comparable or higher rank. The consultations shall 
last no longer than forty five (45) days from date of commencement. If 
the matter is not resolved within such time period, either Party may 
terminate this Compact pursuant to Section 5.4(a). The Parties shall 
enter any such consultations guided by the principle of achieving the 
Compact Goal in a timely and cost-effective manner and by the 
principles of international law. Any dispute arising under or related 
to this Compact shall be determined exclusively through the 
consultation mechanism set forth in this Section 5.14.

Section 5.15 MCC Status

    MCC is a United States Government corporation acting on behalf of 
the United States Government in the implementation of this Compact. As 
such, MCC has no liability under this Compact, is immune from any 
action or proceeding arising under or relating to this Compact and the 
Government hereby waives and releases all claims related to any such 
liability. In matters arising under or relating to this Compact, MCC is 
not subject to the jurisdiction of the courts or other body of Ghana or 
any other jurisdiction and all disputes arising under or relating to 
this Compact shall be determined in accordance with Section 5.14.

Section 5.16 Language

    This Compact is prepared in English and in the event of any 
ambiguity or conflict between this official English version and any 
other version translated into any language for the convenience of the 
Parties, this official English version shall prevail.

Section 5.17 Publicity; Information and Marking

    The Government shall give appropriate publicity to this Compact as 
a program to which the United States, through MCC, has contributed, 
including by posting this Compact, and any amendments thereto, on the 
Web site operated by MiDA (``MiDA Web site''), identifying Program 
activity sites, and marking Program Assets; provided, any announcement, 
press release or statement regarding MCC or the fact that MCC is 
funding the Program or any other publicity materials referencing MCC, 
including the publicity described in this Section 5.17, shall be 
subject to prior approval by MCC and shall be consistent with any 
instructions provided by MCC from time to time in relevant 
Implementation Letters. Upon the termination or expiration of this 
Compact, MCC may request the removal of, and the Government shall, upon 
such request, remove, or cause the removal of, any such markings and 
any references to MCC in any publicity materials or on the MiDA Web 
site. MCC may post this Compact, and any amendments thereto, on the Web 
site of MCC. MCC shall have the right to use any information or data 
provided in any report or document provided to MCC for the purpose of 
satisfying MCC reporting requirements or in any other manner.
    In Witness Whereof, the undersigned, duly authorized by their 
respective governments, have signed this Compact this 1st day of 
August, 2006 and this Compact shall enter into force in accordance with 
Section 1.3.

    Done at Washington, DC, in English.

    For the United States of America, acting through the Millennium 
Challenge Corporation,

Name: John J. Danilovich,
Title: Chief Executive Officer.

    For the Government of the Republic of Ghana,

Name: Dr. P. Kwesi Nduom,
Title: Minister of Public Sector Reform.

Exhibit A--Definitions

    The following compendium of capitalized terms that are used herein 
is provided for the convenience of the reader. To the extent that there 
is a conflict or inconsistency between the definitions in this Exhibit 
A and the

[[Page 48663]]

definitions elsewhere in the text of this Compact, the definition 
elsewhere in this Compact shall prevail over the definition in this 
Exhibit A.
    Accrued Interest shall have the meaning set forth in Section 
2.1(c).
    Act shall have the meaning set forth in Section 2.1(a)(iii).
    Additional Representative shall have the meaning set forth in 
Section 5.2.
    ADR shall have the meaning set forth in Section 2(c)(ii) of 
Schedule 1 to Annex I.
    Affiliate means the affiliate of a party, which is a person or 
entity that controls, is controlled by, or is under the same control as 
the party in question, whether by ownership or by voting, financial or 
other power or means of influence. References to Affiliate herein shall 
include any of their respective directors, officers, employees, 
affiliates, contractors, sub-contractors, grantees, sub-grantees, 
representatives, and agents.
    Afram Basin Zone shall have the meaning set forth in Section 1(a) 
of Annex I.
    Agriculture Project shall have the meaning set forth in the 
Preamble to Schedule 1 to Annex I.
    Agriculture Project Objective shall have the meaning set forth in 
Section 1.1(a).
    Attachments shall have the meaning set forth in Section 5.6.
    Audit Guidelines shall have the meaning set forth in Section 
3.8(d)(i).
    Audit Plan shall have the meaning set forth in Section 3.8(d)(iii).
    Auditor shall have the meaning set forth in Section 3(h) of Annex 
I.
    Auditor/Reviewer Agreement shall have the meaning set forth in 
Section 3(h) of Annex I.
    Bank(s) means any bank holding a Permitted Account.
    Bank Agreement shall have the meaning set forth in Section 4(d) of 
Annex I.
    Beneficiaries shall have the meaning set forth in Section 2(a) of 
Annex III.
    Bilateral Agreement shall have the meaning set forth in Section 
2.6.
    Board shall have the meaning set forth in Section 3(d)(i)(2) of 
Annex I.
    CEO shall have the meaning set forth in Section 3(d)(iii)(2) of 
Annex I.
    Chair shall have the meaning set forth in Section 3(d)(ii)(2)(A)(i) 
of Annex I.
    Civil Member shall have the meaning set forth in Section 
3(d)(ii)(2)(A) of Annex I.
    Civil Society Stakeholders shall have the meaning set forth in 
Section 3(e)(iv) of Annex I.
    Commercial Training Activity shall have the meaning set forth in 
Section 2(a) of Schedule 1 to Annex I.
    Community Services Activity shall have the meaning set forth in 
Section 2(b) of Schedule 3 to Annex I.
    Compact shall have the meaning set forth in the Preamble.
    Compact Goal shall have the meaning set forth in Section 1.1.
    Compact Goal Indicator shall have the meaning set forth in Section 
2(a) of Annex III.
    Compact Implementation Funding shall have the meaning set forth in 
Section 2.1(a)(iii).
    Compact Records shall have the meaning set forth in Section 3.8(b).
    Compact Reports shall have the meaning set forth in Section 
3(d)(ii)(3)(C) of Annex I.
    Compact Term shall have the meaning set forth in Section 1.3.
    Covered Provider shall have the meaning set forth in Section 
3.8(d)(iv).
    Credit Activity shall have the meaning set forth in Section 2(e) of 
Schedule 1 to Annex I.
    DACF shall have the meaning set forth in Section 2(b)(ii) of 
Schedule 3 to Annex I.
    Designated Rights and Responsibilities shall have the meaning set 
forth in Section 3.2(c).
    Detailed Budget shall have the meaning set forth in Section 
4(a)(ii) of Annex I.
    DFID shall have the meaning set forth in Section 4 of Schedule 2 to 
Annex I.
    DFR shall have the meaning set forth in Section 6 of Schedule 2 to 
Annex I.
    Disbursement Agreement shall have the meaning set forth in the 
Preamble to Annex I.
    DUR shall have the meaning set forth in Section 6 of Schedule 2 to 
Annex I.
    EIA shall have the meaning set forth in Section 6(b) of Annex I.
    EMP shall have the meaning set forth in Section 6(b) of Annex I.
    eNGO Invitee shall have the meaning set forth in Section 
3(d)(ii)(2)(F) of Annex I.
    Entry into Force shall have the meaning set forth in Section 1.3.
    Environmental Guidelines shall have the meaning set forth in 
Section 2.3(d).
    EU shall have the meaning set forth in Section 1 of Schedule 1 to 
Annex I.
    Evaluation Component shall have the meaning set forth in Section 1 
of Annex III.
    Exempt Uses shall have the meaning set forth in Section 2.3(e)(ii).
    FBOs shall have the meaning set forth in Section 2 of Schedule 1 to 
Annex I.
    Feeder Roads Activity shall have the meaning set forth in Section 
2(f) of Schedule 1 to Annex I.
    Ferry Activity shall have the meaning set forth in Section 2(c) of 
Schedule 2 to Annex I.
    Final Evaluation shall have the meaning set forth in Section 3(a) 
of Annex III.
    Financial Plan Annex shall have the meaning set forth in the 
Preamble to Annex II.
    Financial Services Activity shall have the meaning set forth in 
Section 2(c) of Schedule 3 to Annex I.
    Fiscal Accountability Plan shall have the meaning set forth in 
Section 4(c) of Annex I.
    Fiscal Agent shall have the meaning set forth in Section 3(g) of 
Annex I.
    Fiscal Agent Agreement shall have the meaning set forth in Section 
3(g) of Annex I.
    GDP shall have the meaning set forth in Section 1(a) of Annex I.
    GHA shall have the meaning set forth in Section 6 of Schedule 2 to 
Annex I.
    Ghana means the Republic of Ghana.
    Governance Agreement shall have the meaning set forth in Section 
4.1(c).
    Governing Document shall have the meaning set forth in Section 
3(c)(i)(9) of Annex I.
    Government shall have the meaning set forth in the Preamble.
    Government Affiliate means an Affiliate, ministry, bureau, 
department, agency, government, corporation or any other entity 
chartered or established by the Government. References to Government 
Affiliate shall include any of their respective directors, officers, 
employees, affiliates, contractors, sub-contractors, grantees, sub-
grantees, representatives, and agents.
    Government Member shall have the meaning set forth in Section 
3(d)(ii)(2)(A) of Annex I.
    Government Party shall have the meaning set forth in Section 
3.8(e)(i).
    Government Responsibilities shall have the meaning set forth in 
Section 3.2(a).
    GPRS shall have the meaning set forth in Section 1(a) of Annex I.
    GRF shall have the meaning set forth in Section 6 of Schedule 2 to 
Annex I.
    Implementation Document shall have the meaning set forth in Section 
3(a) of Annex I.
    Implementation Letter shall have the meaning set forth in Section 
3.5(a).
    Implementing Entity shall have the meaning set forth in Section 
3(f) of Annex I.
    Implementing Entity Agreement shall have the meaning set forth in 
Section 3(f) of Annex I.
    Indicators shall have the meaning set forth in Section 2(a) of 
Annex III.
    Inspector General shall have the meaning set forth in Section 
3.8(d)(i).
    Interim Evaluations shall have the meaning set forth in Section 
3(b) of Annex III.

[[Page 48664]]

    Intervention Zone shall have the meaning set forth in Section 1(a) 
of Annex I.
    IPPC shall have the meaning set forth in Section 2(d) of Schedule 1 
to Annex I.
    Irrigation Activity shall have the meaning set forth in Section 
2(b) of Schedule 1 to Annex I.
    Land Activity shall have the meaning set forth in Section 2(c) of 
Schedule 1 to Annex I.
    LAP shall have the meaning set forth in Section 2(c) of Schedule 1 
to Annex I.
    Lien shall have the meaning set forth in Section 2.3(g).
    Local Account shall have the meaning set forth in Section 4(d)(ii) 
of Annex I.
    M&E shall have the meaning set forth in Section 3 of Annex I.
    M&E Annex shall have the meaning set forth in the Preamble to Annex 
III.
    M&E Plan shall have the meaning set forth in Section 2(e) of Annex 
I.
    Management shall have the meaning set forth in Section 3(d)(i)(2) 
of Annex I.
    Material Agreement shall have the meaning set forth in Section 
3(c)(i)(4) of Annex I.
    Material Re-Disbursement shall have the meaning set forth in 
Section 3(c)(i)(7) of Annex I.
    MCA shall have the meaning set forth in the Recitals.
    MCA Eligibility Criteria shall have the meaning set forth in 
Section 3.7.
    MCC shall have the meaning set forth in the Preamble.
    MCC Disbursement shall have the meaning set forth in Section 
2.1(b)(i).
    MCC Disbursement Request shall have the meaning set forth in 
Section 4(b) of Annex I.
    MCC Funding shall have the meaning set forth in Section 2.1(a).
    MCC Indemnified Party shall have the meaning set forth in Section 
5.8.
    MCC Representative shall have the meaning set forth in Section 
3(d)(ii)(2)(B)(i) of Annex I.
    MiDA shall have the meaning set forth the Preamble to Annex I.
    MiDA Web site shall have the meaning set forth in Section 5.17.
    MOFA shall have the meaning set forth in Section 2(a)(i) of 
Schedule 1 to Annex I.
    Monitoring Component shall have the meaning set forth in Section 1 
of Annex III.
    MoT shall have the meaning set forth in Section 6 of Schedule 2 to 
Annex I.
    Multi-Year Financial Plan shall have the meaning set forth in 
Section 4(a)(i) of Annex I.
    Multi-Year Financial Plan Summary shall have the meaning set forth 
in Section 1 to Annex II.
    N1 Activity shall have the meaning set forth in Section 2(a) of 
Schedule 2 to Annex I.
    N1 Highway shall have the meaning set forth in Section 2 of 
Schedule 2 to Annex I.
    NGOs shall have the meaning set forth in Section 1(b) of Annex I.
    Northern Zone shall have the meaning set forth in Section 1(a) of 
Annex I.
    Objective(s) shall have the meaning set forth in Section 1.1.
    Objective Indicator shall have the meaning set forth in Section 
2(a) of Annex III.
    Observer shall have the meaning set forth in Section 3(d)(ii)(2)(B) 
of Annex I.
    Officer shall have the meaning set forth in Section 3(d)(iii)(1) of 
Annex I.
    Outcome shall have the meaning set forth in Section 2(a) of Annex 
III.
    Outcome Indicator shall have the meaning set forth in Section 2(a) 
of Annex III.
    Party or Parties shall have the meaning set forth in the Preamble.
    Permitted Account(s) shall have the meaning set forth in Section 
4(d) of Annex I.
    Permitted Designee shall have the meaning set forth in Section 
3.2(c).
    Pledge shall have the meaning set forth in Section 3(c)(i)(8) of 
Annex I.
    Post-Harvest Activity shall have the meaning set forth in Section 
2(d) of Schedule 1 to Annex I.
    PPB shall have the meaning set forth in Section 4 of Schedule 3 to 
Annex I.
    PRDs shall have the meaning set forth in Section 2(c)(ii) of 
Schedule 1 to Annex I.
    Principal Representative shall have the meaning set forth in 
Section 5.2.
    Procurement Agent shall have the meaning set forth in Section 3(i) 
of Annex I.
    Procurement Agent Agreement shall have the meaning set forth in 
Section 3(i) of Annex I.
    Procurement Agreement shall have the meaning set forth in Section 
3.6(a).
    Procurement Capacity Activity shall have the meaning set forth in 
Section 2(a) of Schedule 3 to Annex I.
    Procurement Guidelines shall have the meaning set forth in Section 
3.6(a).
    Procurement Plan shall have the meaning set forth in Section 3(i) 
of Annex I.
    Program shall have the meaning set forth in the Recitals.
    Program Annex shall have the meaning set forth in the Preamble to 
Annex I.
    Program Assets shall have the meaning set forth in Section 
2.3(e)(iii).
    Program Objective shall have the meaning set forth in Section 1.1.
    Project shall have the meaning set forth in Section 1.2.
    Project Activity shall have the meaning set forth in Section 2(b) 
of Annex I.
    Project Objective shall have the meaning set forth in Section 1.1.
    Proposal shall have the meaning set forth in the Recitals.
    Provider shall have the meaning set forth in Section 2.4(b).
    RAP shall have the meaning set forth in Section 6(b) of Annex I.
    Re-Disbursement shall have the meaning set forth in Section 
2.1(b)(ii).
    Reviewer shall have the meaning set forth in Section 3(h) of Annex 
I.
    RICU shall have the meaning set forth in Section 2(b)(i) of 
Schedule 3 to Annex I.
    RSDP shall have the meaning set forth in Section 1 of Schedule 2 to 
Annex I.
    Rural Development Project shall have the meaning set forth in the 
Preamble to Schedule 3 to Annex I.
    Rural Development Project Objective shall have the meaning set 
forth in Section 1.1(c).
    SEA shall have the meaning set forth in Section 6(a) of Annex I.
    SMEs shall have the meaning set forth in Section 2(a)(ii) of 
Schedule 1 of Annex I.
    Southern Zone shall have the meaning set forth in Section 1(a) of 
Annex I.
    Special Account shall have the meaning set forth in Section 4(d)(i) 
of Annex I.
    Supplemental Agreement shall have the meaning set forth in Section 
3.5(b).
    Supplemental Agreement between the Parties means any agreement 
between MCC on the one hand, and the Government, any Government 
Affiliate or Permitted Designee on the other hand.
    Supplemental Agreement Term Sheets shall have the meaning set forth 
in Section 4.1(d).
    Target shall have the meaning set forth in Section 2(a) of Annex 
III.
    Tax(es) shall have the meaning set forth in Section 2.3(e)(i).
    TIPCEE shall have the meaning set forth in Section 5 of Schedule 1 
to Annex I.
    TQM shall have the meaning set forth in Section 2 of Schedule 2 to 
Annex I.
    Transportation Project shall have the meaning set forth in the 
Preamble to Schedule 2 to Annex I.
    Transportation Project Objective shall have the meaning set forth 
in Section 1.1(b).
    Trunk Roads Activity shall have the meaning set forth in Section 
2(b) of Schedule 2 to Annex I.

[[Page 48665]]

    United States Dollars, US$ or $ shall have the meaning set forth in 
Section 2.1(d).
    United States Government means any branch, agency, bureau, 
government corporation, government chartered entity or other body of 
the Federal government of the United States.
    USAID shall have the meaning set forth in Section 5 of Schedule 1 
to Annex I.
    VLTC shall have the meaning set forth in Section 2 of Schedule 2 to 
Annex I.
    Work Plan shall have the meaning set forth in Section 3(a) of Annex 
I.
    Zonal Advisory Committee shall have the meaning set forth in 
Section 3(e)(i) of Annex I.

Exhibit B--List of Certain Supplemental Agreements

    1. Fiscal Agent Agreement.
    2. Procurement Agent Agreement.
    3. Bank Agreement.
    4. Implementing Entity Agreement.

Schedule 2.1(a)(iii)--Compact Implementation Funding

    The Compact Implementation Funding provided pursuant to Section 
2.1(a)(iii) of this Compact shall support the following activities:
    (a) Three strategic environmental assessments, one for each 
Intervention Zone in connection with the requirements of Section 6 of 
Annex I.
    (b) Development or refinement of FBO and staple food and 
horticulture crop curriculum (including production of materials) and 
related training and certification of MOFA and private sector extension 
agents, training in set-up and launching of effective technology 
demonstrations, and related international tours, all in connection with 
the Commercial Training Activity under Section 2(a) of Schedule 1 of 
Annex I.
    (c) Community sensitization and information gathering, inventorying 
of land rights, and production of composite maps of community 
boundaries and parcels in the rural areas of Awutu Efutu Senya to pre-
test the first steps in the pilot land registration activity, 
accompanied by a gender consultant to provide guidance on gender issues 
and women's participation, and coordinated by a supervisory consultant, 
in connection with the Land Activity under Section 2(c) of Schedule 1 
of Annex I.
    (d) A feasibility study; and an EIA, an EMP and a RAP, each as may 
be necessary, and design, in connection with the Feeder Roads Activity 
under Section 2(f)(ii)(1) of Schedule 1 of Annex I.
    (e) A feasibility study; and an EIA, an EMP and a RAP, each as may 
be necessary, and design, in connection with the N1 Activity under 
Section 2(a)(ii)(1) of Schedule 2 of Annex I.
    (f) A feasibility study; and an EIA, an EMP and a RAP, each as may 
be necessary, and design, in connection with the Trunk Roads Activity 
under Section 2(b)(ii)(2) of Schedule 2 of Annex I.
    (g) A feasibility study; and an EIA, an EMP and a RAP, each as may 
be necessary, and design, in connection with the Ferry Activity under 
Section 2(c)(vii)(1) of Schedule 2 of Annex I.
    (h) Start-up costs such as staff salaries and administrative 
support expenses of MiDA (or mutually acceptable Government Affiliate) 
such as rent, computers and other information technology or capital 
equipment.
    The total amount of funds disbursed in accordance with Section 
2.1(a)(iii) shall not exceed the amount set forth in Section 
2.1(a)(iii).

Annex I--Program Description

    This Annex I to the Compact (the ``Program Annex'') generally 
describes the Program that MCC Funding will support in Ghana during the 
Compact Term and the results to be achieved from the investment of MCC 
Funding. Prior to any MCC Disbursement or Re-Disbursement, including 
for the Projects described herein, MCC, the Government (or a mutually 
acceptable Government Affiliate) and Millennium Development Authority 
(``MiDA'') shall enter into a Supplemental Agreement that (i) further 
specifies the terms and conditions of such MCC Disbursements and Re-
Disbursements, (ii) is in a form and substance mutually satisfactory to 
the Parties and (iii) is signed by the Principal Representative of each 
Party (or in the case of a Government Affiliate, the principal 
representative of such Government Affiliate) and of MiDA (the 
``Disbursement Agreement'').
    Except as specifically provided herein, the Parties may amend this 
Program Annex only by written agreement signed by the Principal 
Representative of each Party. Each capitalized term in this Program 
Annex shall have the same meaning given such term elsewhere in this 
Compact. Unless otherwise expressly stated, each Section reference 
herein is to the relevant Section of the main body of the Compact.

1. Background and Ghana Development Strategy; Consultative Process

    (a) Background; Ghana Development Strategy. Bordering the Gulf of 
Guinea and located between C[ocirc]te d'Ivoire and Togo, Ghana is a 
West African country of 22 million people. Approximately a third of its 
population lives in poverty. Its gross domestic product (``GDP'') is 
growing at about 6% per year. Ghana's agricultural sector, the backbone 
of its economy, plays an important role in the socio-economic 
development of the country by ensuring food security for its people, 
providing raw material for local industries and offering employment and 
income for a large portion of its population.
    In 2003, the Government developed, through a broad consultative 
process, the Ghana Poverty Reduction Strategy (the ``GPRS''), a 
comprehensive development policy framework to support poverty reduction 
in Ghana over a three-year period from 2003 to 2005. The GPRS 
identified, as one of the key strategies for poverty reduction, 
increasing the production from, and employment in, the agricultural 
sector. Specifically, the strategy entailed, among others, modernizing 
the agricultural practices so as to increase the production of staple 
crops and to encourage additional agro-processing and value-added 
production of high-value agricultural crops, while at the same time 
reforming the land acquisition process. The GPRS indicated that such 
modernization efforts should be supported by developing both 
transportation and social infrastructure targeted on certain areas of 
the country in order to ensure the enhanced delivery of educational, 
health and other social services to such areas.
    Consistent with the aims of the GPRS, the Program consists of a 
series of strategic investments in an effort to modernize Ghana's 
agricultural sector, together with investments in developing 
transportation infrastructure and rural institutions in the following 
three areas of the country (each, an ``Intervention Zone''): \1\
---------------------------------------------------------------------------

    \1\ Some of the N1 Activity will take place in the district of 
Ga West.
---------------------------------------------------------------------------

     The Northern area consisting of the following five 
districts: Savelugu Nanton, Tolon Kumbungu, Tamale, West Mamprusi and 
Karaga (the ``Northern Zone'');
     The Afram Basin area consisting of the following six 
districts: Ejura Sekyedumasi, Kwahu South, Fanteakwa, Afram Plains, 
Sekyere East and Sekyere West (the ``Afram Basin Zone''); and
     The Southern Horticultural Belt area consisting of the 
following twelve districts: Gomoa, Awutu Efutu Senya, Akuapim South, 
Manya Krobo, Dangme West, Yilo Krobo, North Dayi, Hohoe, Ketu, Keta, 
South Tongu and Akatsi (the ``Southern Zone'').

[[Page 48666]]

    (b) Consultative Process. In order to develop the Proposal, 
beginning in 2004, the Government held a series of consultations with 
various stakeholders at both the national and local levels, in which 
numerous policymakers, farmers, FBOs, exporters, industry associations, 
environmental organizations, gender organizations, the media, and other 
civil society groups participated. The objective of the consultations 
was the selection, as well as the prioritization, of the proposed 
interventions under the MCA assistance that are consistent with the 
GPRS and complement existing donor-supported and government-funded 
programs for poverty reduction in Ghana.
    These consultations revealed that the proposed interventions should 
primarily target the agricultural sector, with a special focus on the 
production of high-value crops for exports. Subsequently, the 
Government formed a team of managers and sector experts to develop 
further the details of the proposed interventions.
    As the proposed interventions became better defined, additional 
consultations with the stakeholders were held in each district within 
each Intervention Zone to discuss the exact type of the interventions, 
their locations, the arrangements for their implementations as well as 
the ownership structure for certain infrastructure resulting from the 
interventions. The non-governmental organizations (``NGOs'') 
representing the environmental and social sector participated in the 
early rounds of these additional consultations and influenced the 
design of the interventions eventually included in the Proposal. During 
MCC's due diligence of the Proposal, the Government made additional 
efforts to consult the various NGOs representing the environment and 
social sector as well as the farmers and FBOs. MCC observed the 
consultations both at the local level and the national level. This 
consultative process is still ongoing, and is expected to continue 
through the Compact Term.

2. Overview

    (a) Program Objective. The Program consists of a series of specific 
and complementary Projects that the Parties expect will achieve the 
two-fold Program Objective, thus advancing the Compact Goal. 
Specifically, the two-fold Program Objective is, first, to increase the 
production and productivity of high-value cash and food staple crops in 
the three Intervention Zones and, second, to enhance the 
competitiveness of Ghana's agricultural products in both regional and 
international markets. To this end, the Program aims to strengthen the 
contribution of other agricultural sub-sectors to the growth of the 
economy and to reduce, through diversification, risks of not achieving 
consistently strong agricultural performance. As such, the Program 
Objective is fully consistent with, and directly supports, the GPRS.
    (b) Projects. The Parties have identified the Projects that the 
Government will implement, or cause to be implemented, using MCC 
Funding to advance each Project Objective. Each Project is described in 
the Schedules to this Program Annex. The Schedules to this Program 
Annex also identify one or more of the activities that will be 
undertaken in furtherance of each Project (each, a ``Project 
Activity'') as well as the various activities within each Project 
Activity. Notwithstanding anything to the contrary in this Compact, the 
Parties may agree to modify, amend, terminate or suspend these Projects 
or to create a new project by written agreement signed by the Principal 
Representative of each Party without amending this Compact; provided, 
however, any such modification or amendment of a Project or creation of 
a new project is (i) consistent with the Objectives; (ii) does not 
cause the amount of MCC Funding to exceed the aggregate amount 
specified in Section 2.1(a) of this Compact; (iii) does not cause the 
Government's responsibilities or contribution of resources to be less 
than specified in Section 2.2 of this Compact or elsewhere in this 
Compact; and (iv) does not extend the Compact Term.
    (c) Beneficiaries. The intended beneficiaries of each Project are 
described in the respective Schedule to this Program Annex and Annex 
III to the extent identified as of the date hereof. The intended 
beneficiaries shall be identified more precisely during the initial 
phases of implementation of the Program. The Government shall provide 
to MCC information on the population of the areas in which the Projects 
will be active, disaggregated by gender, income level and age. The 
Parties shall agree upon the description of the intended beneficiaries 
and the Parties will make publicly available a more detailed 
description of the intended beneficiaries of the Program, including 
publishing such description on the MiDA Web site.
    (d) Civil Society. Civil society shall participate in overseeing 
the implementation of the Program through its representation on the 
Board and the three Zonal Advisory Committees (which will include 
representatives from NGOs and private sector entities), as provided in 
Section 3(d) and Section 3(e), respectively, of this Program Annex. In 
addition, ongoing consultations with the civil society regarding the 
manner in which each Project is being implemented will take place 
throughout the Compact Term.
    (e) Monitoring and Evaluation. Annex III of this Compact generally 
describes the plan to measure and evaluate progress toward achievement 
of the Compact Goal and Objectives (the ``M&E Plan''). As outlined in 
the Disbursement Agreement and other Supplemental Agreements, continued 
disbursement of MCC Funding under this Compact (whether as MCC 
Disbursements and Re-Disbursements) shall be contingent, among others, 
on successful achievement of certain targets as set forth in the M&E 
Plan.

3. Implementation Framework

    The implementation framework and the plan for ensuring adequate 
governance, oversight, management, monitoring and evaluation (``M&E'') 
and fiscal accountability for the use of MCC Funding is summarized 
below and in the Schedules attached to this Program Annex, and as may 
otherwise be agreed in writing by the Parties.
    (a) General. The elements of the implementation framework will be 
further described in the relevant Supplemental Agreements and in a set 
of detailed documents for the implementation of the Program, consisting 
of (i) a Multi-Year Financial Plan, (ii) a Fiscal Accountability Plan, 
(iii) a Procurement Plan, (iv) an M&E Plan and (v) a Work Plan (each, 
an ``Implementation Document''). MiDA shall adopt each Implementation 
Document in accordance with the requirements and timeframe as may be 
specified in this Program Annex, the Disbursement Agreement or as may 
otherwise be agreed by the Parties from time to time. MiDA may amend 
any Implementation Document without amending this Compact, provided 
that any material amendment of such Implementation Document has been 
approved by MCC and is otherwise consistent with the requirements of 
this Compact and any relevant Supplemental Agreement. By such time as 
may be specified in the Disbursement Agreement, or as may otherwise be 
agreed by the Parties from time to time, MiDA shall adopt a work plan 
for the overall administration of the Program (the ``Work Plan''). The 
Work Plan shall set forth, with respect to (i) the administration of 
the Program, (ii) the monitoring and evaluation of the Program, and 
(iii) the implementation of each Project: (1) Each activity to be 
undertaken or funded by MCC Funding

[[Page 48667]]

(to the level of detail mutually acceptable to MiDA and MCC), (2) the 
Detailed Budget, and (3) where appropriate, the allocation of roles and 
responsibilities for specific activities, other programmatic 
guidelines, performance requirements, targets, and other expectations 
related thereto.
    (b) Government.
    (i) The Government shall promptly take all necessary and 
appropriate actions to carry out the Government Responsibilities and 
other obligations or responsibilities of the Government under and in 
furtherance of this Compact, including undertaking or pursuing such 
legal, legislative or regulatory actions or procedural changes and 
contractual arrangements as may be necessary or appropriate to achieve 
the Objectives, to successfully implement the Program, to designate any 
rights or responsibilities to any Permitted Designee, and to establish 
MiDA, which shall be a Permitted Designee and shall be responsible for 
the oversight and management of the implementation of this Compact on 
behalf of the Government. The Government shall promptly deliver to MCC 
certified copies of any documents, orders, decrees, laws or regulations 
evidencing such legal, legislative, regulatory, procedural, contractual 
or other actions.
    (ii) The Government shall ensure that MiDA is duly authorized and 
organized, sufficiently staffed and empowered to carry out fully the 
Designated Rights and Responsibilities. Without limiting the generality 
of the preceding sentence, MiDA shall be organized, and have such roles 
and responsibilities, as described in Section 3(d) of this Program 
Annex and as provided in any Governing Documents; provided, however, 
the Government or another Permitted Designee may, subject to MCC 
approval, carry out any of the roles and responsibilities designated to 
be carried out by MiDA and described in Section 3(d) of this Program 
Annex or elsewhere in this Program Annex, any Governing Document or any 
other Supplemental Agreement prior to and during the initial period of 
the establishment and staffing and operational formation of MiDA, but 
in no event longer than the earlier of (1) the formation and convening 
of organizational meetings of the Board and the formation and 
operational establishment of MiDA (including the selection and 
engagement of Officers and other key employees) and (2) three months 
from the Entry into Force, unless otherwise agreed by the Parties in 
writing.
    (c) MCC.
    (i) Notwithstanding Section 3.1 of this Compact or any provision in 
this Program Annex to the contrary, and except as may be otherwise 
agreed upon by the Parties from time to time, MCC must approve in 
writing each of the following transactions, activities, agreements and 
documents prior to the execution or carrying out of such transaction, 
activity, agreement or document and prior to MCC Disbursements or Re-
Disbursements in connection therewith:
    (1) MCC Disbursements;
    (2) Each Implementation Document (including each component thereto) 
and any material amendments and supplements thereto;
    (3) Any Audit Plan;
    (4) Agreements (i) between the Government and MiDA, (ii) between 
the Government, a Government Affiliate, MiDA or any other Permitted 
Designee, on the one hand, and any Provider or Affiliate of a Provider, 
on the other hand, which require such MCC approval under applicable 
law, the Procurement Agreement, any Governing Document, or any other 
Supplemental Agreement or (iii) in which the Government, a Government 
Affiliate, MiDA or any other Permitted Designee appoints, hires, or 
engages any of the following in furtherance of this Compact:
    (A) Auditor;
    (B) Reviewer;
    (C) Fiscal Agent;
    (D) Procurement Agent;
    (E) Bank;
    (F) Implementing Entity; and
    (G) A member of the Board (including any Observer), any Officer or 
any other key employee of MiDA (including agreements involving the 
terms of any compensation for any such person). (Any agreement 
described in clause (i) through (iii) of this Section 3(c)(i)(4) of 
this Program Annex and any amendments and supplements thereto, each, a 
``Material Agreement'');
    (5) Any modification, termination or suspension of a Material 
Agreement, or any action that would have the effect of such a 
modification, termination or suspension of a Material Agreement;
    (6) Any agreement that is (A) not at arm's length or (B) with a 
party related to the Government, MiDA or any of their respective 
Affiliates;
    (7) Any Re-Disbursement (each, a ``Material Re-Disbursement'') that 
requires such MCC approval under applicable law, any Governing 
Document, or any other Supplemental Agreement;
    (8) Any pledge of any MCC Funding or any Program Assets, or any 
guarantee, directly or indirectly, of any indebtedness (each, a 
``Pledge'');
    (9) Any decree, legislation, regulation, contractual arrangement 
(including the Governance Agreement and the Millennium Development 
Authority Act of 2006 (Act 702)), or other charter document 
establishing or governing MiDA (each, a ``Governing Document'');
    (10) Any disposition, in whole or in part, liquidation, 
dissolution, winding up, reorganization or other change of (A) MiDA, 
including any revocation or modification of or supplement to any 
Governing Document related thereto, or (B) any subsidiary or Affiliate 
of MiDA;
    (11) Any change in character or location of any Permitted Account;
    (12) Formation or acquisition of any direct or indirect subsidiary, 
or other Affiliate, of MiDA;
    (13)(A) Any change of any member of the Board (including any 
Observer), of the member serving as the Chair or in the composition or 
size of the Board, and the filling of any vacant seat of any member of 
the Board (including any Observer), (B) any change of any Officer or 
other key employee of MiDA or in the composition or size of the 
Management, and the filling of any vacant position of any Officer or 
other key employee of MiDA, and (C) any material change in the 
composition or size of any Zonal Advisory Committee;
    (14) Any decision by MiDA to engage, to accept or to manage any 
funds from any donor agencies or organizations in addition to MCC 
Funding during the Compact Term;
    (15) Any decision to amend, supplement, replace, terminate, or 
otherwise change any of the foregoing; and
    (16) Any other activity, agreement, document or transaction 
requiring the approval of MCC in this Compact, applicable law, any 
Governing Document, the Procurement Agreement, the Disbursement 
Agreement, or any other Supplemental Agreement between the Parties.
    (ii) MCC shall have the authority to exercise its approval rights 
set forth in this Section 3(c) of this Program Annex in its sole 
discretion and independent of any participation or position taken by 
the MCC Representative at a meeting of the Board. MCC retains the right 
to revoke its approval of any matter, agreement, or action if MCC 
concludes, in its sole discretion, that its approval was issued on the 
basis of incomplete, inaccurate or misleading information furnished by 
the Government, any Government Affiliate, MiDA or any other Permitted 
Designee. Notwithstanding any provision in this Compact or any 
Supplemental Agreement to the contrary, the exercise by MCC of its 
approval rights under this Compact or any Supplemental Agreement shall 
not (1) diminish or

[[Page 48668]]

otherwise affect the Government Responsibilities or any other 
obligations or responsibilities of the Government under this Compact or 
any Supplemental Agreement, (2) transfer any such obligations or 
responsibilities of the Government, or (3) otherwise subject MCC to any 
liability.
    (d) MiDA.
    (i) General. Unless otherwise agreed by the Parties in writing, 
MiDA shall, as a Permitted Designee, be responsible for the oversight 
and management of the implementation of this Compact. MiDA shall be 
governed by applicable law and the Governing Documents, each such 
Governing Document to be in form and substance satisfactory to MCC and 
effective on or before the time specified in the Disbursement 
Agreement, and based on the following principles:
    (1) The Government shall ensure that MiDA shall not assign, 
delegate or contract any of the Designated Rights and Responsibilities 
without the prior written consent of the Government and MCC. MiDA shall 
not establish any Affiliates or subsidiaries (direct or indirect) 
without the prior written consent of the Government and MCC.
    (2) Unless otherwise agreed by the Parties in writing, MiDA shall 
consist of (A) an independent board of directors (the ``Board'') to 
oversee MiDA's responsibilities and obligations under this Compact 
(including any Designated Rights and Responsibilities) and (B) a 
management unit (the ``Management'') to have overall management 
responsibility for the implementation of this Compact.
    (ii) Board.
    (1) Formation. The Government shall ensure that the Board shall be 
formed, constituted, governed and operated in accordance with the terms 
and conditions set forth in the Governing Documents and any 
Supplemental Agreement.
    (2) Composition. Unless otherwise agreed by the Parties in writing, 
the Board shall consist of at least nine (9) but no more than eleven 
(11) voting members and four (4) non-voting observers identified below.
    (A) The Board shall initially be composed of nine (9) voting 
members as follows, provided that the members identified in subsections 
(i)-(vi) below (each, a ``Government Member,'' and each of the other 
voting members, a ``Civil Member'') may be replaced by another 
government official from a ministry or other government body relevant 
to the Program activities pursuant to the Governing Documents, subject 
to approval by MCC (such replacement to be referred to thereafter as a 
Government Member):
    (i) Dr. P. Kwesi Nduom, the incumbent Minister of the Ministry of 
Public Sector Reform, appointed as the chair (``Chair'') as provided in 
the Governing Documents;
    (ii) The Minister, or any other government official of the rank of 
director or higher, from the Ministry of Food and Agriculture, 
initially to be the Minister of Food and Agriculture;
    (iii) The Minister, or any other official of the rank of director 
or higher, from the Ministry of Trade, Industry, Private Sector and 
Presidential Special Initiatives, initially to be the Minister of 
Trade, Industry, Private Sector and Presidential Special Initiatives;
    (iv) The Minister, or any other official of the rank of director or 
higher, from the Ministry of Local Government, Rural Development and 
Environment, initially to be the Minister of Local Government, Rural 
Development and Environment;
    (v) The Minister, or any other official of the rank of director or 
higher, from the Ministry of Finance and Economic Planning, initially 
to be the Minister of Finance and Economic Planning;
    (vi) The CEO;
    (vii) Two representatives, each selected by the Private Enterprise 
Foundation; and (viii) A representative, selected by the Ghana 
Association of Private Voluntary Organizations in Development.
    (B) The non-voting observers of the Board (each, an ``Observer'') 
shall be:
    (i) A representative designated by MCC (the ``MCC 
Representative''); and
    (ii) Three representatives, each selected by lot by the district 
assemblies within each Intervention Zone.
    (C) Each Government Member position (other than the Chair) shall be 
filled by the individual, during the Compact Term, holding the office 
identified and all Government Members (including the Chair) shall serve 
in their capacity as the applicable Government officials and not in 
their personal capacity.
    (D) The voting members identified in Section 3(d)(ii)(2)(A) of this 
Program Annex, by majority vote, may alter the size of the Board in 
accordance with the Governing Documents so long as the total does not 
exceed eleven (11) members.
    (E) Each Observer shall have rights to attend all meetings of the 
Board, participate in the discussions of the Board, and receive all 
information and documents provided to the Board, together with any 
other rights of access to records, employees or facilities as would be 
granted to a member of the Board under the Governing Documents.
    (F) The Board shall, pursuant to the Governing Documents, invite a 
representative selected by the registered NGOs representing the 
environmental community (the ``eNGO Invitee'') to all meetings of the 
Board, and the eNGO Invitee shall receive all information and documents 
provided to the Board as more specifically provided in the Governance 
Agreement.
    (G) The voting members identified in Section 3(d)(ii)(2)(A) of this 
Program Annex shall exercise their duties solely in accordance with the 
best interests of MiDA, the Program and the Objectives, and shall not 
undertake any action that is contrary to those interests or would 
result in personal gain or a conflict of interest.
    (3) Roles and Responsibilities.
    (A) The Board shall oversee the Management, the overall 
implementation of the Program, and the performance of the Designated 
Rights and Responsibilities.
    (B) Certain actions may be taken and certain agreements, documents 
or instruments executed and delivered, as the case may be, by MiDA only 
upon the approval and authorization of the Board as provided under 
applicable law or as set forth in any Governing Document, including 
each MCC Disbursement Request, selection or termination of certain 
Providers and any Implementation Document.
    (C) The Chair, unless otherwise provided in the applicable 
Governing Documents, shall certify any documents or reports delivered 
to MCC in satisfaction of the Government's reporting requirements under 
this Compact or any Supplemental Agreement between the Parties (the 
``Compact Reports'') or any other documents or reports from time to 
time delivered to MCC by MiDA (whether or not such documents or reports 
are required to be delivered to MCC), and that such documents or 
reports are true, correct and complete.
    (D) Without limiting the generality of the Designated Rights and 
Responsibilities that the Government may designate to MiDA, and subject 
to MCC's contractual rights of approval as set forth in Section 3(c) of 
this Program Annex, elsewhere in this Compact or any Supplemental 
Agreement, the Board shall have the exclusive authority as between the 
Board and the Management for all actions defined for the Board in any 
Governing Document and which are expressly designated therein as 
responsibilities that cannot be delegated further.
    (4) Indemnification of Civil Members, Observers, and Officers. The 
Government shall ensure, at the Government's sole cost and expense, 
that appropriate insurance is obtained

[[Page 48669]]

and appropriate indemnifications and other protections are provided, 
acceptable to MCC and to the fullest extent permitted under the laws of 
Ghana, to ensure that (A) Civil Members and Observers shall not be held 
personally liable for the actions or omissions of the Board or MiDA and 
(B) Officers shall not be held personally liable for the actions or 
omissions of the Board, MiDA or actions or omissions of the Officer so 
long as properly within the scope of Officer's authority. Pursuant to 
Section 5.5 and Section 5.8 of this Compact, the Government and MiDA 
shall hold harmless the MCC Representative for any liability or action 
arising out of the MCC Representative's role as an Observer on the 
Board. The Government hereby waives and releases all claims related to 
any such liability and acknowledges that the MCC Representative has no 
fiduciary duty to MiDA. In matters arising under or relating to the 
Compact, the MCC Representative is not subject to the jurisdiction of 
the courts or any other body of Ghana. MiDA shall provide a written 
waiver and acknowledgement that no fiduciary duty to MiDA is owed by 
the MCC Representative.
    (iii) Management. Unless otherwise agreed in writing by the 
Parties, the Management shall report, through the CEO or other Officer 
as designated in any Governing Document, directly to the Board and 
shall have the composition, roles and responsibilities described below 
and set forth more particularly in the Governing Documents.
    (1) Composition. The Government shall ensure that the Management 
shall be composed of qualified experts from the public or private 
sectors, including such offices and staff as may be necessary to carry 
out effectively its responsibilities, each with such powers and 
responsibilities as set forth in the Governing Documents, and from time 
to time in any Supplemental Agreement between the Parties, including 
without limitation the following: (A) CEO; (B) Internal Auditor; (C) 
Legal Counsel; (D) Director of the Agricultural Transformation Program; 
(E) Director of Procurement; (F) Director of Monitoring and Evaluation; 
(G) Director of Finance and Administration; (H) Director of 
Environmental and Social Impact; and (I) Director of Community and 
Public Outreach. The Management shall also include: (J) 
Commercialization of Agriculture Project Manager, (K) Community 
Services Project Manager, (L) Transportation and Agricultural 
Infrastructure Project Manager, and (M) Land Administration Project 
Manager, each of whom shall report to the Director of Agricultural 
Transformation Program and (N) Agricultural Financial Services and Bank 
Capacity Building Manager, who shall report to the Commercialization of 
Agriculture Project Manager. Each person holding the position in any of 
the sub-clauses (A) through (N), and such other offices as may be 
created and designated in accordance with any Governing Document and 
any Supplemental Agreement, shall be referred to as an ``Officer.'' The 
Management shall be supported by appropriate administrative and support 
personnel consistent with the Detailed Budget for Program 
administration and any Implementation Document.
    (2) Appointment of Officers. The Chief Executive Officer (``CEO'') 
of MiDA shall be selected after an open and competitive recruitment and 
selection process, and appointed in accordance with the Governing 
Documents, which appointment shall be subject to MCC approval. Such 
appointment shall be further evidenced by such document as the Parties 
may agree. Unless otherwise specified in the Governing Documents, the 
Officers of MiDA other than the CEO shall be selected and hired by the 
Board after an open and competitive recruitment and selection process, 
and appointed in accordance with the Governing Documents, which 
appointment shall be subject to MCC approval. Such appointment shall be 
further evidenced by such document as the Parties may agree.
    (3) Roles and Responsibilities. 
    (A) Management shall assist the Board in overseeing the 
implementation of the Program and shall have principal responsibility 
(subject to the direction and oversight of the Board and subject to 
MCC's contractual rights of approval as set forth in Section 3(c) of 
this Program Annex or elsewhere in this Compact or any Supplemental 
Agreement) for the overall management of the implementation of the 
Program.
    (B) Without limiting the foregoing general responsibilities or the 
generality of Designated Rights and Responsibilities that the 
Government may designate to MiDA, Management shall develop each 
Implementation Document, oversee the implementation of the Projects, 
manage and coordinate monitoring and evaluation, ensure compliance with 
the Fiscal Accountability Plan, and such other responsibilities as set 
out in the Governing Documents or otherwise delegated to Management by 
the Board from time to time.
    (C) Appropriate Officers as designated in the Governing Documents 
shall have the authority to contract on behalf of MiDA under any 
procurement undertaken in accordance with the Procurement Agreement 
(including the Procurement Guidelines) in furtherance of the Program.
    (D) Management shall have the obligation and right to approve 
certain actions and documents or agreements, including certain Re-
Disbursements, MCC Disbursement Requests, Compact Reports, certain 
human resources decisions and certain other actions, as provided in the 
Governing Documents.
    (e) Zonal Advisory Committees. 
    (i) Formation. The Government shall ensure the establishment of 
three (3) zonal advisory committees with governmental representatives 
(each, a ``Zonal Advisory Committee''), each representing one of the 
three Intervention Zones.
    (ii) Composition. Each Zonal Advisory Committee shall be comprised, 
unless otherwise agreed by the Parties, of the following members: (A) A 
district planning officer from each district within the applicable 
Intervention Zone; (B) a district director of agriculture from each 
district within the applicable Intervention Zone; (C) a district chief 
executive from each district within the applicable Intervention Zone; 
(D) an elected representative from each district assembly from the 
applicable Intervention Zone; and (E) a regional environmental officer 
from each region within the applicable Intervention Zone. The 
Government shall take all actions necessary and appropriate to ensure 
that each Zonal Advisory Committee is established consistent with this 
Section 3(e) of this Program Annex and as otherwise specified in the 
Governing Documents or otherwise agreed in writing by the Parties. The 
composition of each Zonal Advisory Committee may be adjusted by 
agreement of the Parties from time to time to ensure, among others, an 
adequate representation of the intended beneficiaries of the Program. 
Each member position identified in this Section 3(e)(ii) of this 
Program Annex shall be filled by the individual, during the Compact 
Term, holding the office identified and such individual shall serve in 
his capacity as the applicable Government official and not in his 
personal capacity. In the event that such member is unable to 
participate in a meeting of the respective Zonal Advisory Committee, 
such member's deputy may participate in the member's stead.
    (iii) Roles and Responsibilities. Each Zonal Advisory Committee 
shall be a mechanism to provide representatives of the private sector, 
civil society and local and regional governments the

[[Page 48670]]

opportunity to provide advice and input to MiDA regarding the 
implementation of the Compact. At the request of each Zonal Advisory 
Committee, MiDA shall provide such information and documents as it 
deems advisable, subject to appropriate treatment of such information 
and documents by the members of each Zonal Advisory Committee. 
Specifically, during each meeting of each Zonal Advisory Committee, 
MiDA shall present an update on the implementation of this Compact and 
progress towards achievement of the Objectives. Each Zonal Advisory 
Committee shall have an opportunity to provide regularly to MiDA its 
views or recommendations on the performance and progress on the 
Projects and Project Activities, any Implementation Document, 
procurement, financial management or such other issues as may be 
presented from time to time to each Zonal Advisory Committee or as 
otherwise raised by each Zonal Advisory Committee.
    (iv) Meetings. Each Zonal Advisory Committee shall hold at least 
two meetings per year as well as such other periodic meetings of the 
Zonal Advisory Committee or the respective subcommittees thereof, 
designated along sectoral, regional, or other lines, as may be 
necessary or appropriate from time to time. Representatives of the 
FBOs, banking organizations, microfinance institutions, farmer 
associations, horticultural product associations, women's associations, 
chambers of commerce, anti-corruption associations, environmental and 
social organizations (``Civil Society Stakeholders''), among others, 
shall be provided timely advance notice of all such meetings, invited 
to participate in all such meetings and afforded an opportunity during 
each such meeting to present their views or recommendations to the 
Zonal Advisory Committee.
    (v) Accessibility; Transparency. The members of each Zonal Advisory 
Committee shall be accessible to the beneficiaries they represent to 
receive the beneficiaries' comments or suggestions regarding the 
Program. The notices for, and the minutes (including the views or 
recommendations of the Civil Society Stakeholders expressed) of all 
meetings of, each Zonal Advisory Committee and any respective 
subcommittees shall be made public on the MiDA Web site or otherwise 
(including television, radio and print) in a timely manner.
    (f) Implementing Entities. Subject to the terms and conditions of 
this Compact and any other Supplemental Agreement between the Parties, 
MiDA may provide MCC Funding, directly or indirectly through MiDA, to 
one or more (i) pre-determined ministries, bureaus or agencies of the 
Government based on their sector expertise or (ii) government bodies, 
businesses, NGOs, vendors or contractors, selected according to the 
Procurement Guidelines, to implement and carry out any Project, Project 
Activity (or a component thereof), or any other activities to be 
carried out in furtherance of this Compact (each, an ``Implementing 
Entity''). The Government shall ensure that MiDA enters into an 
agreement with each Implementing Entity, in form and substance 
satisfactory to MCC, that sets forth the roles and responsibilities of 
such Implementing Entity and other appropriate terms and conditions 
(including the payment of the Implementing Entity, if any) (the 
``Implementing Entity Agreement''). An Implementing Entity shall report 
directly to the relevant Officer, as designated in the applicable 
Implementing Entity Agreement or as otherwise agreed by the Parties.
    (g) Fiscal Agent. The Government shall ensure that MiDA engages one 
fiscal agent following an international competitive process (a ``Fiscal 
Agent'') who shall be responsible for, among others: (i) Assisting MiDA 
in preparing the Fiscal Accountability Plan; (ii) ensuring and 
certifying that Re-Disbursements are properly authorized and documented 
in accordance with established control procedures set forth in the 
Disbursement Agreement, the Fiscal Agent Agreement and other relevant 
Supplemental Agreements; (iii) Re-Disbursement from, and cash 
management and account reconciliation of, any Permitted Account 
established and maintained for the purpose of receiving MCC 
Disbursements and making Re-Disbursements (to which Fiscal Agent has 
sole signature authority); (iv) providing applicable certifications for 
MCC Disbursement Requests; (v) maintaining and retaining proper 
accounting, records and document disaster recovery system of all MCC 
funded financial transactions and certain other accounting functions; 
(vi) producing reports on MCC Disbursements and Re-Disbursements 
(including any requests therefore) in accordance with established 
procedures set forth in the Disbursement Agreement, the Fiscal Agent 
Agreement, the Fiscal Accountability Plan, or any other relevant 
Supplemental Agreements; (vii) assisting in the preparation of budget 
development procedures; and (viii) internal management of the Fiscal 
Agent operations. Upon the written request of MCC, the Government shall 
ensure that MiDA terminates the Fiscal Agent, without any liability to 
MCC, and the Government shall ensure that MiDA engages a new Fiscal 
Agent, subject to the approval by the Board and MCC. The Government 
shall ensure that MiDA enters into an agreement with each Fiscal Agent, 
in form and substance satisfactory to MCC, that sets forth the roles 
and responsibilities of the Fiscal Agent and other appropriate terms 
and conditions, such as payment of the Fiscal Agent (each, a ``Fiscal 
Agent Agreement''), such Fiscal Agent Agreement shall not be terminated 
until MiDA has engaged a successor Fiscal Agent or as otherwise agreed 
by MCC in writing.
    (h) Auditors and Reviewers. The Government shall ensure that MiDA 
carries out the Government's audit responsibilities as provided in 
Sections 3.8(d), (e) and (f) of this Compact, including engaging one or 
more auditors (each, an ``Auditor'') required by Section 3.8(d) of this 
Compact. As requested by MCC in writing from time to time, the 
Government shall ensure that MiDA also engages (i) an independent 
reviewer to conduct reviews of performance and compliance under this 
Compact pursuant to Section 3.8(f) of this Compact, which reviewer 
shall have the capacity to (1) conduct general reviews of performance 
or compliance, (2) conduct environmental audits and (3) conduct data 
quality assessments in accordance with the M&E Plan, as described more 
fully in Annex III, and/or (ii) an independent evaluator to assess 
performance as required under the M&E Plan (each, a ``Reviewer''). MiDA 
shall select the Auditor(s) or Reviewer(s) in accordance with any 
Governing Document or other relevant Supplemental Agreement. The 
Government shall ensure that MiDA enters into an agreement with each 
Auditor or Reviewer, in form and substance satisfactory to MCC, that 
sets forth the roles and responsibilities of the Auditor or Reviewer 
with respect to the audit, review or evaluation, including access 
rights, required form and content of the applicable audit, review or 
evaluation and other appropriate terms and conditions such as payment 
of the Auditor or Reviewer (the ``Auditor/Reviewer Agreement''). In the 
case of a financial audit required by Section 3.8(f) of this Compact, 
such Auditor/Reviewer Agreement shall be effective no later than one 
hundred and twenty (120) days prior to the end of the relevant period 
to be audited; provided, however, if MCC requires concurrent audits of

[[Page 48671]]

financial information or reviews of performance and compliance under 
this Compact, then such Auditor/Reviewer Agreement shall be effective 
no later than the date agreed by the Parties in writing.
    (i) Procurement Agent. The Government shall ensure that MiDA 
engages one or more procurement agents through an international 
competitive process (each, a ``Procurement Agent'') to carry out and 
certify specified procurement activities in furtherance of this Compact 
on behalf of the Government, MiDA, or Implementing Entity. The roles 
and responsibilities of such Procurement Agent and the criteria for 
selection of a Procurement Agent shall be as set forth in the 
applicable Implementation Letter or Supplemental Agreement. The 
Government shall ensure that MiDA enters into an agreement with the 
Procurement Agent, in form and substance satisfactory to MCC, that sets 
forth the roles and responsibilities of the Procurement Agent with 
respect to the conduct, monitoring and review of procurements and other 
appropriate terms and conditions, such as payment of the Procurement 
Agent (the ``Procurement Agent Agreement''). Any Procurement Agent 
shall adhere to the procurement standards set forth in the Procurement 
Agreement and Procurement Guidelines and ensure procurements are 
consistent with the procurement plan adopted by MiDA pursuant to the 
Procurement Agreement (the ``Procurement Plan'') unless MiDA and MCC 
otherwise agree in writing.

4. Finances and Fiscal Accountability

    (a) Multi-Year Financial Plan; Detailed Budget.
    (i) Multi-Year Financial Plan. The multi-year financial plan for 
the Program, showing the estimated amount of MCC Funding allocable to 
each Project (and related Project Activities), the administration of 
the Program (and its components) and the monitoring and evaluation of 
the Program (the ``Multi-Year Financial Plan'') over the Compact Term 
on an annual basis, is summarized in Annex II to this Compact.
    (ii) Detailed Budget. During the Compact Term, the Government shall 
ensure that MiDA timely delivers to MCC a detailed budget, at a level 
of detail and in a format mutually acceptable to MiDA and MCC, for the 
administration of the Program, monitoring and evaluation of the 
Program, and the implementation of each Project (the ``Detailed 
Budget''). The Detailed Budget shall be a component of the Work Plan 
and shall be delivered by such time as specified in the Disbursement 
Agreement, or as may otherwise be agreed by the Parties.
    (iii) Expenditures. Unless the Parties otherwise agree in writing, 
no financial commitment involving MCC Funding shall be made, no 
obligation of MCC Funding shall be incurred, and no Re-Disbursement 
shall be made or MCC Disbursement Request shall be submitted, for any 
activity or expenditure unless the expense for such activity or 
expenditure is provided for in the Detailed Budget, and unless 
uncommitted funds exist in the balance of the Detailed Budget for the 
relevant period.
    (iv) Modifications to Multi-Year Financial Plan or Detailed Budget. 
Notwithstanding anything to the contrary in this Compact, MiDA may 
amend or supplement the Multi-Year Financial Plan, the Detailed Budget, 
or any component thereof, without amending this Compact so long as MiDA 
requests and receives the approval of MCC for such amendment or 
supplement and such amendment or supplement is consistent with the 
requirements of this Compact (including Section 4 of Annex II) and any 
relevant Supplemental Agreement between the Parties. If such amendment 
or supplement, if adopted, would reallocate the funds among the 
Projects, the Project Activities, or any activity under Program 
administration or M&E as shown in Annex II, MiDA shall submit a written 
request for approval by MCC of such amendment or supplement. Any such 
amendment or supplement shall (1) be consistent with the Objectives and 
the Implementation Documents; (2) shall not materially adversely impact 
the applicable Project, Project Activity (or any component thereof), or 
any activity under Program administration or M&E as shown in Annex II; 
(3) shall not cause the amount of MCC Funding to exceed the aggregate 
amount specified in Section 2.1(a) of this Compact; and (4) shall not 
cause the Government's obligations or responsibilities or overall 
contribution of resources to be less than as specified in Section 
2.2(a) of this Compact, this Annex I or elsewhere in this Compact. Upon 
any such amendment or supplement, MiDA shall deliver to MCC a revised 
Detailed Budget, together with a revised Multi-Year Financial Plan, 
reflecting such amendment or supplement, along with the next MCC 
Disbursement Request.
    (b) Disbursement and Re-Disbursement. The Disbursement Agreement 
(and any schedules thereto), as amended from time to time, shall 
specify the terms, conditions and procedures on which MCC Disbursements 
and Re-Disbursements shall be made. The obligation of MCC to make MCC 
Disbursements or approve Re-Disbursements is subject to the 
fulfillment, waiver or deferral of any such terms and conditions. The 
Government and MiDA shall jointly submit the applicable request for an 
MCC Disbursement (the ``MCC Disbursement Request'') as may be specified 
in the Disbursement Agreement. MCC will make MCC Disbursements in 
tranches to a Permitted Account from time to time as provided in the 
Disbursement Agreement or as may otherwise be agreed by the Parties, 
subject to Program requirements and performance by the Government, MiDA 
and other relevant parties in furtherance of this Compact. Re-
Disbursements will be made from time to time based on requests by an 
authorized representative of the appropriate party designated for the 
size and type of Re-Disbursement in accordance with any Governing 
Document and Disbursement Agreement; provided, however, unless 
otherwise agreed by the Parties in writing, no Re-Disbursement shall be 
made unless and until the written approvals specified herein or in any 
Governing Document and Disbursement Agreement for such Re-Disbursement 
have been obtained and delivered to the Fiscal Agent.
    (c) Fiscal Accountability Plan. By such time as specified in the 
Disbursement Agreement or as otherwise agreed by the Parties, MiDA 
shall adopt, as part of the Implementation Documents, a plan that 
identifies the principles, mechanisms and procedures to ensure 
appropriate fiscal accountability for the use of MCC Funding provided 
under this Compact, including the process to ensure that open, fair, 
and competitive procedures will be used in a transparent manner in the 
administration of grants or cooperative agreements and the procurement 
of goods, works and services for the accomplishment of the Objectives 
(the ``Fiscal Accountability Plan''). The Fiscal Accountability Plan 
shall set forth, among others, requirements with respect to the 
following matters: (i) Re-Disbursement, timely payment to vendors, cash 
management and account reconciliation; (ii) funds control and 
documentation; (iii) accounting standards and systems; (iv) content and 
timing of reports; (v) preparing budget development procedures and the 
Compact implementation budget; (vi) policies concerning records, 
document disaster recovery, public availability of all

[[Page 48672]]

financial information and asset management; (vii) procurement and 
contracting practices; (viii) inventory control; (ix) the role of 
independent auditors; (x) the roles of fiscal agents and procurement 
agents; (xi) separation of duties and internal controls; and (xii) 
certifications, powers, authorities and delegations.
    (d) Permitted Accounts. The Government shall establish, or cause to 
be established, such accounts (each, a ``Permitted Account,'' and 
collectively ``Permitted Accounts'') as may be agreed by the Parties in 
writing from time to time, including:
    (i) A single, completely separate United States Dollar interest-
bearing account (the ``Special Account'') at the Bank of Ghana to 
receive MCC Disbursements;
    (ii) If necessary, a local currency of Ghana account (interest-
bearing as appropriate and as further specified in the relevant 
Supplemental Agreement) (the ``Local Account'') at the Bank of Ghana to 
which the Fiscal Agent may authorize transfer from any United States 
Dollar Permitted Account for the purpose of making Re-Disbursements 
payable in local currency; and
    (iii) Such other interest-bearing accounts to receive MCC 
Disbursements in such banks as the Parties mutually agree upon in 
writing.
    No other funds shall be commingled in a Permitted Account other 
than MCC Funding and Accrued Interest thereon. All MCC Funding held in 
an interest-bearing Permitted Account shall earn interest at a rate of 
no less than such amount as the Parties may agree in the Bank Agreement 
or otherwise. MCC shall have the right, among others, to view any 
Permitted Account statements and activity directly on-line, where 
feasible, or at such other frequency as the Parties may otherwise 
agree. By such time as shall be specified in the Disbursement Agreement 
or as otherwise agreed by the Parties, the Government shall ensure that 
MiDA enters into an agreement with the Bank, satisfactory to MCC, that 
sets forth the signatory authority, access rights, anti-money 
laundering and anti-terrorist financing provisions, and other terms 
related to the Permitted Account (the ``Bank Agreement'').
    (e) Currency Exchange. The Bank shall convert MCC Funding to the 
currency of Ghana at a rate to which the parties to the Bank Agreement 
mutually agree, subject to MCC approval.

5. Transparency; Accountability

    Transparency and accountability to MCC and to the beneficiaries are 
important aspects of the Program and the Projects. Without limiting the 
generality of the foregoing, and in an effort to achieve the goals of 
transparency and accountability, the Government shall ensure that MiDA:
    (a) Establishes an e-mail suggestion box as well as a means for 
other written comments that interested persons may use to communicate 
ideas, suggestions or feedback to MiDA;
    (b) Considers as a factor in its decision-making the 
recommendations of the Zonal Advisory Committees;
    (c) Develops and maintains, in a timely, accurate and appropriately 
comprehensive manner, the MiDA Web site that includes postings of 
information and documents in English (and other languages where 
relevant);
    (d) Posts on the MiDA Web site, and otherwise makes publicly 
available via appropriate means (including television, radio and 
print), in the appropriate language the following documents or 
information from time to time:
    (i) The Compact;
    (ii) All minutes of the meetings of the Board and the meetings of 
each Zonal Advisory Committee unless otherwise agreed by the Parties;
    (iii) The M&E Plan, as amended from time to time, along with 
periodic reports on Program performance;
    (iv) Such financial information as may be required by this Compact, 
the Disbursement Agreement or any other Supplemental Agreement, or as 
may otherwise be agreed from time to time by the Parties;
    (v) All Compact Reports;
    (vi) All audit reports by an Auditor and any periodic reports or 
evaluations by a Reviewer;
    (vii) All relevant environmental impact assessments and supporting 
documents, and such other environmental documentation as MCC may 
request;
    (viii) A copy of the Disbursement Agreement, as amended from time 
to time;
    (ix) A copy of any document relating to the formation, organization 
and governance of MiDA, including all Governing Documents, together 
with any amendments thereto;
    (x) A copy of the Procurement Agreement (including the Procurement 
Guidelines), as amended from time to time, and any procurement policies 
or procedures and standard documents; and
    (xi) A copy of certain information derived from each Procurement 
Plan, as specified in the Procurement Agreement, and all bid requests 
and notifications of awarded contracts.

6. Environmental Accountability

    (a) The Government shall ensure that MiDA (or any other Permitted 
Designee) undertakes and completes three strategic environmental 
assessments (each, an ``SEA''), each as a condition precedent to 
certain MCC Disbursements as described in the Schedules to this Program 
Annex and further specified in the Disbursement Agreement, and in form 
and substance satisfactory to MCC, covering, respectively, the Northern 
Zone, the Afram Basin Zone and the Southern Zone.
    (b) The Government shall ensure that MiDA (or any other Permitted 
Designee) (i) undertakes and completes any environmental impact 
assessments (each, an ``EIA''), environmental management plans (each, 
an ``EMP'') and resettlement action plans (each, a ``RAP''), each in 
form and substance satisfactory to MCC, and as required under the laws 
of Ghana, the Environmental Guidelines, this Compact or any 
Supplemental Agreement or as otherwise required by MCC and (ii) 
undertakes to implement any environmental and social mitigation 
measures identified in such assessments or plans to MCC's satisfaction.
    (c) Government shall commit to fund all necessary costs of 
environmental mitigation (including costs of resettlement) not 
specifically provided for in the budget for any Project.

Schedule 1 to Annex I--Agriculture Project

    This Schedule 1 generally describes and summarizes the key elements 
of the Agricultural Productivity and Value-Added Development Project 
(the ``Agriculture Project'') that the Parties intend to implement in 
furtherance of the Agriculture Project Objective. Additional details 
regarding the implementation of the Agriculture Project will be 
included in the Implementation Documents and in the relevant 
Supplemental Agreements.

1. Background

    Owing to its ability to grow successfully a wide diversity of 
tropical and sub-tropical crops, Ghana has the potential to become the 
leading West African supplier of horticultural products into the 
markets in neighboring African countries and the European Union 
(``EU'') where the demand for tropical, organic and conventional fruits 
and vegetables is experiencing strong growth. In addition, domestic 
food security can be significantly enhanced by expanding the country's 
utilization of arable land

[[Page 48673]]

dedicated to maize, yams, cassava and other traditional food crops.
    Agriculture is the backbone of Ghana's economy: it accounts for 
approximately 40% of the country's GDP, directly employs more than 60% 
of the labor force and generates more than 55% of the foreign exchange 
earnings. The agricultural sector consists of five sub-sectors: crops 
(other than cocoa) and livestock account for 58% of the GDP 
attributable to the agricultural sector, cocoa for 20%, fisheries for 
11% and forestry for the remaining 11%.
    Ghana's current agricultural production is largely dominated by 
rain-fed production of crops for local consumption by smallholder 
farmers using rudimentary technology. Furthermore, inconsistency in 
both the supply and the quality of agriculture crops hampers Ghana's 
ability to compete against other countries supplying the same to the 
regional and EU markets. Despite non-traditional horticultural crops' 
potential for earning foreign exchange, the agricultural sector 
currently produces mostly traditional crops under sub-optimal 
conditions, including lack of interconnectivity between production 
areas and markets and limited access to credit. Furthermore, insecure 
land access and inefficient land registration processes are key risks 
to the successful expansion of higher-value agribusiness.
    Fortunately, a number of concrete steps can set the stage for 
significant increases in food security, household income, profitable 
agribusinesses, jobs creation and capital investment in Ghana's 
agricultural sector. Specifically, in order to exploit fully its 
agricultural potential, Ghana must improve its yields of high quality 
product, increase the acreage devoted to commercial, high-value 
horticultural crops, and consistently meet the international export 
market standards. Inefficiencies in the value chain will be remedied by 
improving entrepreneurial and technical skills among farmers and 
businesses to maximize their output and sales by building a post-
harvest infrastructure for preserving the quality of crops during their 
transportation from the production site to final market destination.
    A number of mutually reinforcing activities has been identified to 
address the above-described constraints that Ghana is facing in 
achieving the Agriculture Project Objective within the Intervention 
Zones. In addition, the participation in, and benefits from, the 
Agriculture Project may extend to those farmers in nearby districts who 
operate or trade within, or provide supplies to, the Intervention 
Zones.

2. Summary of the Agriculture Project and Related Projects Activities

    The Agriculture Project is designed to enhance the profitability of 
staple food and horticulture crops and to improve delivery of business 
and technical services to support the expansion of commercial 
agriculture among farmer-based organizations (``FBOs''), which are 
groups of eligible farmers, input suppliers selling to such farmers, or 
output processors buying from such farmers. MCC Funding will support 
the following Project Activities:
     Farmer and Enterprise Training in Commercial Agriculture: 
To accelerate the development of commercial skills and capacity among 
FBOs and their business partners (including service providers to FBOs 
and other entities adding value to agricultural crops such as 
processors);
     Irrigation Development: To establish a limited number of 
retention ponds and weirs requested by the FBOs and FBO partnerships 
for whom access to water is critical to the success of their business 
objectives;
     Land Tenure Facilitation: To improve tenure security for 
existing land users and to facilitate access to land for commercial 
crops in the Intervention Zones;
     Improvement of Post-Harvest Handling and Value Chain 
Services: To facilitate strategic investments by FBOs in post-harvest 
infrastructure improvements and to build the capacity of the public 
sector to introduce and monitor compliance with international plant 
protection standards;
     Improvement of Credit Services for On-Farm and Value Chain 
Investments: To augment the supply of, and access to, credit provided 
by financial institutions operating in the Intervention Zones; and
     Rehabilitation of Feeder Roads: To rehabilitate up to 950 
km of feeder roads in eight (8) districts in the Intervention Zones in 
order to reduce transportation costs and time, to increase access to 
major domestic and international markets, and to facilitate 
transportation linkages from rural areas to social service networks 
(including, for instance, hospitals, clinics and schools).
    The M&E Plan (described in Annex III) will set forth anticipated 
results and, where appropriate, regular benchmarks that may be used to 
monitor the progress of the implementation of the Agriculture Project. 
Performance against these benchmarks, as well as the overall impact of 
the Agriculture Project, will be assessed and reported at the intervals 
to be specified in the M&E Plan, or as otherwise agreed by the Parties, 
from time to time. The Parties expect that additional indicators will 
be identified during implementation of the Agriculture Project. The 
expected results from, and the key benchmarks to measure progress on, 
the Agriculture Project, as well as the Project Activities undertaken 
or funded thereunder, are set forth in Annex III.
    Estimated amounts of MCC Funding for each Project Activity for the 
Agriculture Project are identified in Annex II. Conditions precedent to 
each Project Activity under the Agriculture Project, and the sequencing 
of such Project Activities, shall be set forth in the Disbursement 
Agreement, any other Supplemental Agreements and the relevant 
Implementation Documents.
    The following summarizes each Project Activity under the 
Agriculture Project:
(a) Project Activity: Farmer and Enterprise Training in Commercial 
Agriculture (``Commercial Training Activity'')
    Successful FBOs are critical to the development of Ghana's 
agricultural potential. The Program will support FBOs by providing 
training in business management, planning and finance practices, market 
analyses and marketing, customer service and pricing mechanisms. By 
achieving critical mass, FBOs can exercise bargaining power in 
purchasing quality inputs and processing, transport, marketing and 
other services at lower prices, and consistently provide sufficient 
quantities of quality produce and crops in the necessary volume, as 
well as add value to these services, all necessary to enter the 
commercial markets with competitive products. The continued viability 
of the FBOs after the Compact Term will be a key to the Ghanaian 
farmers' continued economic growth, improved farming practices, ability 
to secure best prices for inputs, access to credit and building of 
strong farmer communities.
    The Commercial Training Activity seeks to strengthen and support 
both FBOs and certain agribusiness service providers who offer various 
value-adding services to the FBOs that meet a pre-determined set of 
criteria to be adopted by MiDA with the approval of MCC.
    Specifically, MCC Funding will support the following:
    (i) Extension activities by the Ministry of Food and Agriculture 
(``MOFA''). MOFA will be responsible for providing preliminary 
organizational and technical support to FBOs seeking eligibility to 
participate in the commercial training program. MCC Funding will be 
used for the

[[Page 48674]]

mobilization of MOFA's district level extension agents to identify 
nascent and existing FBOs, as well as farmers and suppliers who are 
good candidates to organize new FBOs in collaboration with the district 
assemblies.
    (ii) Commercial training program for FBOs. An intensive, multi-
phase commercial training program will be offered to the FBOs to 
improve significantly their skills in management, business planning, 
technology applications and marketing. Such FBOs will include small and 
medium-sized enterprises (``SMEs'') that provide agribusiness-related, 
value-adding services to farmers. Each phase of the program will 
incorporate training to improve business literacy and numeracy of the 
members of the FBOs. A priority will be placed on attracting 
significant participation of women and young adults and on encouraging 
their engagement in agriculture business opportunities in the target 
districts in each Intervention Zone. Specifically, the commercial 
training program will consist of the following three phases:
    (1) Phase One: To strengthen the business capacity of FBOs, this 
phase will provide intensive training in strengthening the 
organization, developing a business vision, and learning to use 
realistic planning tools towards commercialization and profitability 
will be provided. Participants will be required to prepare a long-term 
business plan for approval in accordance with evaluation criteria, 
adopted by MiDA with the approval of MCC, before moving on to Phase Two 
of the program. An organization-building incentive in the form of 
business and communication technology will be available to each 
participating entity, whether an FBO or an SME, that completes and 
begins implementing the approved business plan.
    (2) Phase Two: The business plans developed in Phase One will 
determine the specific technical training, infrastructure support and 
inputs to be provided to the participating entities during Phase Two. 
The focus during Phase Two will be to enable the participating entities 
to transition into new agricultural crop varieties and to adopt and 
fully integrate good agricultural practices into their commercial 
operations.
    (3) Phase Three: The assistance during Phase Three will focus on 
helping FBOs to maximize sales volumes in the commercial agriculture 
markets (domestic, regional or export), with consistent, competitive 
products and services. Training will focus on quality assurance 
management (including product handling and preservation, packaging and 
transportation), as well as on improving the linkages with processors 
and traders and facilitating their access to market through branding, 
advertising, information services and promotion of agricultural crops.
(b) Project Activity: Irrigation Development (``Irrigation Activity'')
    In order to combat the frequent crop failure and food shortage due 
to variation in the amount and intensity of rain, along with 
intermittent droughts, the Government has begun to encourage improved 
management of water resources by farmers and to support irrigation 
development programs. For instance, the Government, through the Ghana 
Irrigation Development Authority, has constructed 22 public irrigation 
schemes with a combined area of 8,745 hectares designed to grow rice, 
either double cropped or in rotation with vegetables.
    Nonetheless, Ghana's water resources, composed of Lake Volta, 
formed by the Akosombo Dam and the many tributaries of the Volta River, 
have been only lightly exploited to irrigate the country's vast tracts 
of unused land. The Irrigation Activity aims to support the expansion 
of fruit and vegetable production by smallholder farmers, as well as 
the various farmer groups, by providing irrigated water to them.
    Specifically, subject to the completion of the relevant SEAs to 
MCC's satisfaction, MCC Funding will support the following:
    (i) The construction of small retention ponds in all three 
Intervention Zones, as well as weirs in the Northern Zone, upon 
approval by MiDA of proposals for such ponds and weirs submitted by the 
FBOs. The proposals will be evaluated for funding based on a pre-
determined set of criteria to be adopted by MiDA with the approval of 
MCC, which will include, among others, appropriate assessment of the 
environmental and social impact of, approved permits for, and the 
appropriate screening for the economic effects of, the proposed 
construction.
    (ii) With respect to each construction described in Section 2(b)(i) 
of this Schedule 1 to Annex I, the following activities:
    (1) Feasibility and design studies (that include an assessment of 
the economic rates of return and poverty reduction impacts of the 
relevant irrigation infrastructure), an EIA, an EMP and a RAP, each as 
may be necessary; and
    (2) Implementation of environmental and social mitigation measures, 
as identified in the studies described in Section 2(b)(ii)(1) of this 
Schedule 1 to Annex I, or as otherwise may be appropriate, including 
compensation of individuals, residences and businesses affected by such 
rehabilitation and upgrades, consistent with the World Bank's 
Operational Policy on Involuntary Resettlement (OP 4.12).
(c) Project Activity: Land Tenure Facilitation (``Land Activity'')
    Ghana currently suffers from an inadequate land policy and 
regulatory framework, fragmented institutional arrangements, and an 
underdeveloped land registration system. For instance, six separate 
public agencies operate in loose coordination under two different 
ministries, and each has a role in land administration. In part as a 
result of this institutional fragmentation, land transactions are 
costly and not transparent, and produce numerous tenure disputes. Other 
problems in land administration in Ghana include a lack of formal 
documentation of customary holdings, indeterminate boundaries of 
private and other land holdings, conflicting records of land rights and 
delays in negotiating and registering acquisition and transfer of land 
rights. Currently, there are approximately 40,000 land tenure disputes 
pending before the courts.
    In Ghana, customary rights in land are prevalent and are offered 
strong legal protections by Ghanaian legislation. In addition, 
investors and local farmers access land use rights by long-term lease 
arrangements or other tenancy arrangements, and in some cases by 
purchases negotiated directly with the relevant community or the 
Government on behalf of the community. Sound agricultural development 
in Ghana would be greatly strengthened by making access to land more 
efficient and secure while preserving secure tenure for local 
communities.
    The Government is in the process of implementing, with support from 
multiple donors, the Land Administration Project (``LAP'') that seeks 
to remedy these problems through a systematic reform of the policy and 
institutional framework governing land tenure. Consistent with the 
overall policy and methodological framework of LAP, the Land Activity 
seeks to contribute to an environment of more secure land tenure and 
more efficient land access in the three Intervention Zones.
    Specifically, MCC Funding will support the following:
    (i) Facilitation of land transactions by providing on-demand 
services. To facilitate land transactions on an on-demand basis in all 
the districts within

[[Page 48675]]

the Intervention Zones, MCC Funding will be used to support:
    (1) Assessment of the demand for assistance with land transactions 
and registration, as well as the potential risks to vulnerable people 
in land transactions, in each district within the Intervention Zones;
    (2) Expansion of access to local services, such as information 
provision, legal services, valuation, land surveying and mediation of 
land disputes, in collaboration with the Lands Commission, based on the 
assessment described in Section 2(c)(i)(1) of this Schedule 1 to Annex 
I;
    (3) Development and management of, and creation of awareness for, a 
land market information database, outreach about the process of land 
registration and production and circulation, as necessary, of 
information regarding formal and customary rules and administrative 
practices on land access and registration; and
    (4) Strengthening the capacity of the Lands Commission, and other 
land sector agencies as appropriate, for more efficient processing of 
land registration requests, including, subject to approval by MiDA and 
MCC, supplementing the staffing and providing equipment to automate the 
processing of land registration requests.
    (ii) A pilot program for area-wide registration of rural land 
rights involving, among others, certain preparatory tasks (including, 
among others, community sensitization, composite maps and inventory of 
land rights) and the formalization of land rights consistent with the 
methodology developed under LAP (including, among others, resolution of 
land disputes via alternative dispute resolution (``ADR'') mechanisms, 
formal demarcation of parcel boundaries and issuance of registered land 
titles). The pilot program for registration of land rights will take 
place in two phases. In Phase One, the rural areas of the districts of 
Awutu Efutu Senya, Savalugu-Nanton and Afram Plains will be declared 
pilot registration districts (``PRDs''). In Phase Two, a similar set of 
activities, revised to incorporate the lessons learned in Phase One, 
will be carried out in six additional PRDs selected by MiDA based upon 
a pre-determined set of criteria adopted by MiDA with the approval of 
MCC, incorporating the lessons learned in Phase One.
    (iii) Development of innovative solutions to the land tenure 
problems and the fostering of informed stakeholder dialogue on 
technical, social or policy issues relevant to land tenure and access. 
This activity will include the development and implementation of (1) a 
training action plan to build capacity for public and private sector 
land administration services; (2) an assessment and analysis of the 
legal and administrative aspects of compensation resulting from ADRs; 
(3) a small grants program, in coordination with LAP, designed to 
encourage constructive debate on land issues; (4) workshops and other 
forums for dialogue; and (5) development and adoption of a gender 
strategy for implementation of the Land Activity.
    (iv) Improvement of the courts' ability to process land disputes. 
To establish expeditious and inexpensive ways to resolve land disputes 
and to reduce the backlog of land dispute cases in certain circuit 
courts, MiDA will collaborate with the Judicial Service to refine their 
understanding of the nature and scope of existing land disputes and the 
prospective dispute resolution mechanisms to resolve such disputes; to 
finalize and implement an action plan identifying the most appropriate 
approach; to remove the identified backlog of land disputes in each 
participating court; to automate the records relating to the resolution 
of the land disputes; and to develop a practice manual on the use of 
various ADR procedures for use by various members of the circuit courts 
in the Intervention Zones involved in handling land disputes.
(d) Project Activity: Improvement of Post-Harvest Handling and Value 
Chain Services (``Post-Harvest Activity'')
    A number of post-harvest infrastructure improvements are necessary 
for the Ghanaian horticulture export industry to become a significant 
supplier of fruits and vegetables to the EU and other export markets. 
Therefore, MCC Funding will be used to develop post-harvest handling 
capacity that maintains the quality of product from the farm to the 
market. In addition, the capacity of the public sector will be improved 
to meet International Plant Protection Convention (``IPPC'') standards. 
In order to ensure the long-term growth and sustainability of the post-
harvest infrastructure, the ownership and operation of such 
infrastructure will be privatized during the Compact Term based on a 
privatization plan adopted by MiDA with the approval of MCC.
    Specifically, MCC Funding will support the following:
    (i) Improvements to existing nucleus farm packhouses in the form of 
forced-air cooling and temporary cold storage units, to be owned and 
operated by the current owners of such packhouses. Nucleus farmers that 
procure products from small outgrowers, or are willing to procure 
outgrower-grown product in the future, will be eligible to obtain such 
improvements. Eligibility requirements will also include, among others, 
membership in an agricultural export association that will facilitate 
the collection of the full repayment of the cost of such improvements, 
with interest at market rate comparable to that charged borrowers under 
the Credit Activity, from the nucleus farmer in accordance with 
guidelines on provision of credit adopted by MiDA with the approval of 
MCC. Such repayments will be deposited in a special account established 
by MiDA for reinvestment into activities with the export associations 
that are consistent with the Program Objective selected by MiDA based 
on a pre-determined set of criteria adopted by MiDA with the approval 
of MCC.
    (ii) Construction of packhouses and other post-harvest 
infrastructure for eligible FBOs located in target districts within the 
Intervention Zones to serve the needs of disadvantaged smallholder 
farmers growing pineapple, papaya, mango, and certain vegetable and 
staple crops. The eligibility requirements will include, among others, 
a plan for full recovery of the operation and maintenance costs of such 
packhouses in accordance with guidelines on provision of credit adopted 
by MiDA with the approval of MCC. Any required permits, including 
environmental permits, will be obtained prior to construction. The 
ownership of the packhouses will be transferred from MiDA before the 
expiration of the Compact Term to the relevant FBOs that demonstrate 
sustained commercial operations.
    (iii) Construction of infrastructure for packing and cooling at the 
Kotoka International Airport that meets international standards, which 
will be completed in two phases. The first phase will include the 
construction of basic infrastructure to facilitate packing and storage 
of fresh agriculture produce, with provision for future installation of 
cooling facilities. The installation of cooling facilities in the 
second phase will be triggered by a demonstrated need for such capacity 
and a plan for the full recovery of the cost of installation, 
operations and maintenance of such capacity, in accordance with 
guidelines on provision of credit adopted by MiDA with the approval of 
MCC. Any required permits, including environmental permits, will be 
obtained prior to construction.

[[Page 48676]]

    (iv) Upgrade of Ghana's capacity to meet IPPC standards. Equipment 
installation, systems improvement and staff training of the Plant 
Protection and Regulatory Services Directorate within MOFA, the Ghana 
Standards Board and the Water Resource Institute, will be implemented 
to improve service delivery to the private sector.
(e) Project Activity: Improvement of Credit Services for On-Farm and 
Value Chain Investments (``Credit Activity'')
    Financial service providers are few and far between in most of the 
districts in the Intervention Zones and have limited abilities to 
expand rapidly. Only one commercial bank, the Agriculture Development 
Bank, is meaningfully engaged in making loans to agricultural clients 
in the Northern Zone and the Afram Basin Zone. Although there are 37 
privately-owned rural banks and seven financial NGOs that serve rural 
clients in the Intervention Zones, their resources and capacity are 
very limited. The Credit Activity will support the other Project 
Activities under the Agriculture Project by facilitating access to 
credit in the Intervention Zones and assisting the banks to improve 
their ability to assess, grant and manage agriculture loans.
    Specifically, MCC Funding will support the following:
    (i) Provision of funds for banks, financial NGOs and other eligible 
financial intermediaries for on-lending to borrowers in the 
agricultural sector in the Intervention Zones. It is anticipated that 
rural banks and financial NGOs will access the facility to make 
seasonal and other working capital loans with maturities of less than 
18 months, and commercial banks will access the facility to make 
medium-term loans. The financial intermediaries will assume one-half of 
the credit risk on the loans made using the facility. As an incentive 
to participate in granting and effectively collecting the loans, the 
highest-performing rural banks and financial NGOs will be eligible at 
the end of the Compact Term to receive a portion of the facility as a 
grant based on a set of performance evaluation criteria adopted by MiDA 
with the approval of MCC. This will strengthen the capital base of 
successful banks, enhancing their ability to sustain credit to farmers 
and the agricultural value chain.
    (ii) Establishment of new office locations, branches or loan 
production offices, in all the Intervention Zones, with a special 
preference given to the Northern Zone and the Afram Basin Zone for 
banks, selected based on eligibility criteria adopted by MiDA with the 
approval of MCC to provide access to credit and financial services in 
unserved areas.
    (iii) Training for rural banks and financial NGOs on credit and 
management skills consisting of classroom and on-site training 
throughout the Compact Term, including the purchase of a mobile 
training center for use in the rural areas for banking training classes 
and the necessary technology.
    (iv) Establishment of pilot programs intended to speed the flow of 
credit along the agriculture value chain, such as voucher programs with 
retail input providers.
(f) Project Activity: Rehabilitation of Feeder Roads (``Feeder Roads 
Activity'')
    To improve transportation linkages and to reduce transport costs, 
MCC Funding will support the rehabilitation or upgrading of about 950 
km of feeder roads in the Intervention Zones. The extent to which the 
feeder roads are rehabilitated or upgraded will depend upon, among 
others, their current condition, the present and projected traffic 
volume as a result of increased agricultural activity and productivity 
in those districts, and the results of an EIA, if any, required under 
Section 2(f)(ii)(1) of this Schedule 1 to Annex I.
    Specifically, subject to the completion of the relevant SEAs to 
MCC's satisfaction, MCC Funding will support the following:
    (i) Rehabilitation and upgrading of the identified segments of 
feeder roads as follows:
    (1) Approximately 205 km of feeder roads in Awutu Efutu Senya;
    (2) Approximately 181 km of feeder roads in Akwapim South;
    (3) Approximately 55 km of feeder roads in South Tongu;
    (4) Approximately 7 km of feeder roads in Keta;
    (5) Approximately 49 km of feeder roads in Ketu;
    (6) Approximately 44 km of feeder roads in North Dayi;
    (7) Approximately 66 km of feeder roads in Hohoe; and
    (8) Approximately 337 km of feeder roads in Savelugu Nanton.
    (ii) With respect to each feeder road identified in Section 2(f)(i) 
of this Schedule 1 to Annex I, the following activities:
    (1) Feasibility and design studies (that include an assessment of 
the economic rates of return and poverty reduction impacts of the 
relevant feeder roads), an EIA, an EMP and a RAP, each as may be 
necessary;
    (2) Implementation of environmental and social mitigation measures, 
as identified in the studies described in Section 2(f)(ii)(1) of this 
Schedule 1 to Annex I, or as otherwise may be appropriate, including 
compensation of individuals, residences and businesses affected by such 
rehabilitation and upgrades, consistent with the World Bank's 
Operational Policy on Involuntary Resettlement (OP 4.12);
    (3) Posting of signage and making other safety improvements; and
    (4) Project management, supervision and auditing of such 
rehabilitation and upgrades.

3. Beneficiaries

    The Agriculture Project will directly benefit more than 100,000 
farm and rural households, comprising an estimated 500,000 individuals, 
through the commercial activities of at least 1,200 FBOs and 120 
service providers located throughout the 23 target districts in the 
three Intervention Zones. In addition, the participation in, and 
benefits from, the Agriculture Project may extend to those farmers in 
nearby districts who operate or trade within, or provide supplies to, 
the Intervention Zones. In the Intervention Zones, farmers and others 
will also benefit through more secure land tenure with an estimated 
5,000 tracts of land gaining registered rights, more efficient 
registration services and more efficient circuit courts for resolution 
of land disputes. Over 50 commercial banks, rural banks and financial 
NGOs will benefit from access to new funding, new banking capacity 
skills, and potentially a permanent injection of new capital at the 
expiration of the Compact Term to improve seasonal and medium-term 
credits to rural households and other enterprises engaged in commercial 
agriculture activities. The rehabilitation and upgrades to the feeder 
roads is expected to benefit up to 95,000 farm households and 
agricultural producers by facilitating access to domestic and 
international markets, and to critical social services.

4. Donor Coordination; Role of Private Sector and Civil Society

    Where a number of donors, trade associations and agricultural 
lenders are already supporting capacity building of the agriculture 
industry, the Commercial Training Activity, the Irrigation Activity and 
the Post-Harvest Activity will build upon, and complement, these 
existing efforts. The lessons learned from other donors' experiences, 
especially regarding the need to avoid narrowly targeted lending and 
over-subsidization of interest rates, in order to encourage 
sustainability will be incorporated into the implementation

[[Page 48677]]

of the Credit Activity. The World Bank, Department for International 
Development of the United Kingdom, KfW Entwicklungsbank, Canadian 
International Development Agency, Deutsche Gesellschaft f[uuml]r 
Technische Zusammenarbeit (GTZ) GmbH, and Nordic Development Fund all 
support the LAP. The Land Activity has been conceived within the 
framework of the LAP and the various lessons learned from the LAP to 
date will be considered in the implementation of the Land Activity. 
Selection of feeder roads for inclusion under the Feeder Roads Activity 
has been coordinated with those roads being funded by the EU under its 
Feeder Roads Improvement Project.
    Ongoing consultations with private sector representatives, as well 
as smallholder farmers, large farmers, agricultural input suppliers, 
development organizations, microfinance institutions, processors, 
traders, exporters and transporters of agricultural products, 
agricultural industry associations, formal banking institutions, 
research and higher education institutions, and the representatives of 
women's and environmental NGOs will be held by MiDA throughout the 
implementation of the Agriculture Project.

5. U.S. Agency for International Development (``USAID'')

    In 2005, USAID initiated the Trade and Investment Program for a 
Competitive Export Economy (``TIPCEE'') to achieve growth in Ghana's 
sales of non-traditional exports. TIPCEE seeks to provide, among 
others, certain targeted farmers with training in improved agricultural 
practices and access to new varieties of seeds and inputs. The 
Agriculture Project has been designed with input from USAID so that 
TIPCEE and the Agriculture Project will mutually support each other. 
Furthermore, research on land issues by the Institute of Statistical, 
Social and Economic Research at the University of Ghana will inform the 
implementation of the small grants program under Section 2(c)(iii)(3) 
of this Schedule 1 to Annex I. While USAID currently has no projects 
focusing on the rehabilitation or upgrade of feeder roads in Ghana, the 
Government intends to continue dialoguing with USAID to identify areas 
in which USAID's activities may complement the Feeder Roads Activity. 
Finally, USAID has reviewed and provided input into the designing of 
the Credit Activity, and the goals and methods of the Credit Activity 
are consistent with the practices in favor of financial institution's 
sustainability and the avoidance of subsidies as advocated by USAID.

6. Sustainability

    Each Project Activity under the Agriculture Project is designed to 
advance the food crop and horticulture industry in Ghana and to lay the 
foundation for substantial and sustainable economic growth. To that 
end, the improvements in human resource capacity under the Commercial 
Training Activity, availability of water resources under the Irrigation 
Activity, land tenure security under the Land Activity, production of 
exportable produce under the Post-Harvest Activity, the amount of 
available credit to farmers under the Credit Activity, and efficiency 
gains in transportation of agricultural goods and access to inputs 
under the Feeder Roads Activity, together, are expected to transform 
subsistence and sub-scale cash framers into commercially viable 
operations, to create new, as well as to strengthen existing, 
suppliers, processors and marketers on sound business bases and to 
enhance a climate that attracts additional outside investment in the 
food crop and horticulture sectors in Ghana, thus leading to continued 
and sustainable growth of Ghana's agricultural sector.
    The environmental and social sustainability of the Agriculture 
Project will be assured through ongoing consultations with the public 
regarding the manner in which the Agriculture Project is being 
implemented. SEAs will be conducted in each Intervention Zone affected 
by the Agriculture Project and, as necessary, environmental and social 
analyses (that include an analysis of the gender impacts of the 
Agriculture Project) will be conducted, as part of the technical survey 
and design of major investments in any physical infrastructure under 
the Agriculture Project to determine the environmental impacts and 
existence of economic and physical displacements, if any. Furthermore, 
the Government will ensure, directly or through MiDA (or any other 
Permitted Designee), that environmental and social mitigation measures 
are developed and implemented for each Project Activity under the 
Agriculture Project in accordance with the provisions of this Compact 
and any relevant Supplemental Agreements. MiDA will ensure that 
environmental and social assessment responsibilities will be included 
in the bidding documents for the design or supervisory firms, the 
construction firms, the independent technical auditing firms and any 
project management advisors. MiDA will ensure that HIV awareness and 
worker safety training will be included as well in the bidding 
documents for the construction firms. In addition, any required EIAs, 
EMPs and RAPs, in form and substance satisfactory to MCC, will be 
developed and implemented under the Agriculture Project and monitored 
by MiDA as necessary during the implementation of the Agriculture 
Project. Any MCC Disbursements for construction will be contingent upon 
issuance of environmental permits, as needed, or any Government 
statutory requirements. The Government will fund any project-related 
environmental mitigation costs (including resettlement costs) that are 
not already covered by MCC Funding pursuant to Sections 2(b)(ii) and 
2(f)(ii) of this Schedule 1 to Annex I.

7. Policy; Legal and Regulatory Reform

    The Parties have identified the following policy, legal and 
regulatory reforms and actions that the Government shall pursue in 
support, and to reach the full benefits, of the Agriculture Project, 
the satisfactory implementation of which will be conditions precedent 
to certain MCC Disbursements as provided in the Disbursement Agreement:
    (a) Government shall adopt an amendment to cause the National Plant 
Protection Organization to be in compliance with IPPC standards.
    (b) Government shall take effective measures to implement the 
recommendations for legal and institutional reforms for land 
administration, land management and land tenure as proposed in a 
memorandum submitted by the Minister of Lands, Forests and Mines to the 
Cabinet and approved by the Cabinet on February 9, 2006.
    (c) Government shall harmonize the relevant land legislation and 
regulations with the constitutional mandate related to public taking of 
land for the public good.

8. Proposals

    Public solicitations for proposals are anticipated to procure 
goods, works and services, as appropriate, to implement all Project 
Activities under the Agriculture Project. MiDA will develop, subject to 
MCC approval, a process for consideration of all such proposals. 
Notwithstanding the foregoing, MiDA may also consider, using a process 
developed subject to MCC approval, any unsolicited proposals it might 
receive.

[[Page 48678]]

Schedule 2 to Annex I--Transportation Project

    This Schedule 2 generally describes and summarizes the key elements 
of the Transportation Infrastructure Development Project (the 
``Transportation Project'') that the Parties intend to implement in 
furtherance of the Transportation Project Objective. Additional details 
regarding the implementation of the Transportation Project will be 
included in the Implementation Documents and in the relevant 
Supplemental Agreements.

1. Background

    Agricultural development is critically dependent on a sound 
transport network for access to inputs and markets. Ghana's transport 
system consists of four modes: Road, aviation, rail and maritime. Its 
national road network totals about 60,000 km while it has one 
international airport and four domestic airports. It has approximately 
945 km rail network currently serving the southern half of the country, 
and its maritime infrastructure consists of 350 km of inland water 
transport over Lake Volta, in addition to the two seaports at Tema and 
Takoradi.
    Road transport is the dominant mode of transport in Ghana, carrying 
almost 95% of the passenger traffic and 97% of all movable freight in 
the country. The Government has identified high transport costs as a 
barrier to achieving sustainable economic growth inhibiting the 
expansion of agricultural opportunities by restricting access and 
linkages to major domestic and international agricultural markets.
    In order to address the problem of high transport costs, the 
Government has developed a rolling five-year strategic plan, out of 
which the first three-year segment was used to prepare the Road Sector 
Development Program (``RSDP'') for implementation over the period from 
2002 through 2007. The objective of the RSDP is to reduce poverty and 
disparities in incomes, improve the standard of living in both the 
rural and urban areas, and raise the quality of life by improving 
access to social services, all through improved road infrastructure. In 
addition, under the GPRS, the Government is committed to providing a 
better distribution of the road network and other transportation 
linkages to reduce disparities between the urban and the rural 
communities.
    MCC Funding will, therefore, be used to undertake improvements to 
the road network with emphasis on primary and secondary roads, 
principally in the Intervention Zones, consistent with the Government's 
efforts to remove transport disparities between the rural and urban 
areas, to reduce vehicle operating and maintenance costs and to improve 
the competitiveness of agricultural producers using these roads. In 
addition, MCC Funding will also be used to undertake improvements to 
inland water transport to enhance the transportation network in the 
Afram Basin Zone.

2. Summary of Transportation Project and Related Projects Activities

    The Transportation Project is designed to reduce the transportation 
costs affecting agricultural commerce at sub-regional and regional 
levels in Ghana, in support of the Agriculture Project. MCC Funding 
will support the following Project Activities:
     Upgrades to Sections of N1 Highway: To reduce the 
bottleneck in accessing the International Airport and the Port of Tema 
and to support an expansion of Ghana's export-directed horticulture 
base beyond current production, by upgrading of 14 km of the National 
Highway (``N1 Highway'') between Tema and Accra (specifically, the 
stretch of N1 Highway from Tetteh Quarshie Interchange to Mallam Road 
Junction, also known as ``TQM'') and by constructing two grade 
separation interchanges at the Dimples-Achimota and Mallam Junctions to 
improve traffic management at these locations;
     Improvements of Trunk Roads: To facilitate the growth of 
agriculture and access to social services by rehabilitating or 
constructing up to 230 km of trunk roads in the Afram Basin Zone; and
     Improvements of Lake Volta Ferry Services: To facilitate 
the growth of agriculture in the Afram Basin Zone by improving the 
ferry services of Volta Lake Transport Company (``VLTC'') that connect 
Adawso on the southern shore to Ekye Amanfrom on the northern shore.
    The M&E Plan (described in Annex III) will set forth anticipated 
results and, where appropriate, regular benchmarks that may be used to 
monitor the progress of the implementation of the Transportation 
Project. Performance against these benchmarks, as well as the overall 
impact of the Transportation Project, will be assessed and reported at 
the intervals to be specified in the M&E Plan, or as otherwise agreed 
by the Parties, from time to time. The Parties expect that additional 
indicators will be identified during implementation of the 
Transportation Project. The expected results from, and the key 
benchmarks to measure progress on, the Transportation Project, as well 
as the Project Activities undertaken or funded thereunder, are set 
forth in Annex III.
    Estimated amounts of MCC Funding for each Project Activity for the 
Transportation Project are identified in Annex II. Conditions precedent 
to each Project Activity under the Transportation, and the sequencing 
of such Project Activities, shall be set forth in the Disbursement 
Agreement, other Supplemental Agreements or the relevant Implementation 
Documents.
    The following summarizes each Project Activity under the 
Transportation Project:
(a) Project Activity: Upgrades to Sections of N1 Highway (``N1 
Activity'')
    The TQM runs in an East-West direction, constitutes a part of the 
Accra--Tema Motorway and functions as a part of the larger Trans-West 
Africa Highway. It also supports the urban traffic movement within the 
Greater Accra Metropolitan Area. The existing TQM, a two lane road, is 
severely congested during the greater part of the working day, with an 
estimated traffic flow of between 28,000 and 35,000 vehicles per day.
    Since 1996, traffic has been growing around Accra by approximately 
7 to 7.5% each year. While overall traffic volumes in Accra continue to 
increase at a relatively rapid rate, the rate of increase observed on 
the TQM has been less, reflecting the degree of saturation on the road 
and travelers' decisions not to use the route at congested times. 
Observed ``free-flow'' travel speeds on improved sections of the N1 
Highway reach 50-70 km per hour; however, at narrower sections 
including the TQM, average speeds can drop to less than 10 km per hour.
    As a result of this congestion and the associated high vehicle 
operating costs, the Government and its development partners have 
undertaken to improve and widen sections of the N1 Highway, including 
those that are contiguous to the TQM. Currently, the TQM acts as a 
bottleneck and negatively impacts the returns to the investment on the 
contiguous sections. MCC will fund rehabilitation to, and upgrades of, 
specific sections of the N1 Highway in an effort to improve the 
efficiency of the greater road network in and around Accra, including 
access to the key sea and air export facilities.
    Specifically, MCC Funding will support the following:
    (i) Improvement and upgrade to the 14 km of N1 Highway between 
Tetteh Quarshie and Mallam Junctions as a three lane dual carriageway 
(without service roads) and provision of grade

[[Page 48679]]

separation interchanges at the Dimples-Achimota and Mallam Junctions.
    (ii) With respect to the improvements and upgrades identified in 
Section 2(a)(i) of this Schedule 2 to Annex I, the following 
activities:
    (1) Feasibility and design studies (that include an assessment of 
the economic rates of return and poverty reduction impacts of the 
relevant sections of the N1 Highway), an EIA, an EMP and a RAP;
    (2) Implementation of the environmental and social mitigation 
measures, as identified in the studies described in Section 2(a)(ii)(1) 
of this Schedule 2 to Annex I, or as otherwise may be appropriate, 
including compensation of individuals, residences and businesses 
affected by such improvements and upgrades, consistent with the World 
Bank's Operational Policy on Involuntary Resettlement (OP 4.12);
    (3) Utility relocations, as may be necessary; and
    (4) Project management, supervision and auditing of such 
improvements and upgrades.
    (iii) Feasibility and design studies (that include an assessment of 
the economic rates of return), an EIA, an EMP and a RAP, each as may be 
necessary for service roads and grade separation at an additional six 
interchanges along the TQM (the construction of which shall not be 
funded by MCC Funding).
    (b) Project Activity: Improvements of Trunk Roads (``Trunk Roads 
Activity'')
    MCC Funding will support the assessment and subsequent improvements 
of up to 230 km of trunk roads. Specifically, subject to the completion 
of the relevant SEAs to MCC's satisfaction, MCC Funding will support 
the following:
    (i) Improvements to the following five trunk roads:
    (1) Agogo--Dome Road (77 km). Upgrading of 23 km of road between 
Agogo and Dukusen to bitumen surfacing and rehabilitation or 
construction of 54 km of road between Dukusen and Dome to gravel 
surfacing (including rehabilitation or construction of drainage 
culverts and bridges and contingent upon completion of an environmental 
audit);
    (2) Ejura--Domi Road (22 km). Upgrading from gravel to bitumen 
surfacing of 22 km of road between Ejura and Domi;
    (3) Ekye Amanfrom--Agordeke Road (85 km). Upgrading from gravel to 
bitumen surfacing of about 46 km, and rehabilitation of 39 km of 
existing bitumen-surfaced sections, of the road from Ekye Amanfrom and 
Agordeke;
    (4) Nkawkaw-Mpraeso--Kwahu Tafo Road (22 km). Rehabilitation and 
resurfacing of the bitumen surfaced road from Nkawkaw through Mpraeso 
to Kwahu Tafo; and
    (5) Kwahu Tafo--Adawso (21 km). Completion of paving (into bitumen 
surfacing) of 21 km of road from Kwahu Tafo to Adawso.
    (ii) With respect to the improvements and upgrades identified in 
Section 2(b)(i) of this Schedule 2 to Annex I, the following 
activities:
    (1) A technical and environmental audit of the Agogo--Dome Road (77 
km) to assess the impact of recent rehabilitation activities;
    (2) Feasibility and design studies (that include an assessment of 
the economic rates of return and poverty reduction impacts of the 
relevant trunk roads), an EIA, an EMP and a RAP, each as may be 
necessary;
    (3) Implementation of the environmental and social mitigation 
measures, as identified in the studies described in Section 2(b)(ii)(2) 
of this Schedule 2 to Annex I, or as otherwise may be appropriate, 
including compensation of individuals, residences and businesses 
affected by such improvements and upgrades, consistent with the World 
Bank's Operational Policy on Involuntary Resettlement (OP 4.12); and
    (4) Project management, supervision and auditing of such 
improvements and upgrades.
    (c) Project Activity: Improvements to Lake Volta Ferry Service 
(``Ferry Activity'')
    To facilitate growth of the agricultural sector of the Afram Basin 
Zone, MCC Funding will be used to support improvements to ferry 
services of VLTC, connecting Adawso on the southern shore to Ekye 
Amanfrom on the northern shore.
    Specifically, subject to the completion of the relevant SEAs to 
MCC's satisfaction, MCC Funding will support the following:
    (i) Construction of two double-ended vehicle/pedestrian ferries 
with hydraulic liftable propellers.
    (ii) Training of VLTC staff, including management and occupational 
safety training for workshop foremen from VLTC's staff in Akosombo, 
VLTC's workshop staff, artisans, and ferry crew.
    (iii) Rehabilitation of the Akosombo floating dock to enhance 
VLTC's construction, repair and maintenance capabilities.
    (iv) Civil works at the landing stages at Adawso and Ekye Amanfrom 
to increase the ferry and vehicle handling capacities at the same 
landing stages.
    (v) Rehabilitation of ferry terminals at Adawso and Ekye Amanfrom, 
including all-weather protection and adequate sanitation facilities to 
accommodate additional ferry and passenger traffic.
    (vi) Extraction of tree-stumps from the crossing route between 
Adawso and Ekye Amanfrom to eliminate navigational and safety hazards 
during low water periods.
    (vii) With respect to the improvements and upgrades identified in 
Sections 2(c)(i)-(vi) of this Schedule 2 to Annex I, the following 
activities:
    (1) Feasibility and design studies (that include an assessment of 
the economic rates of return and poverty reduction impacts), an EIA, an 
EMP and a RAP, each as may be necessary;
    (2) Implementation of the environmental and social mitigation 
measures, as identified in the studies described in Section 
2(c)(vii)(1) of this Schedule 2 to Annex I, or as otherwise may be 
appropriate, including compensation of individuals, residences and 
businesses affected by such improvements and upgrades, consistent with 
the World Bank's Operational Policy on Involuntary Resettlement (OP 
4.12); and
    (3) Project management, supervision and auditing of such 
improvements and upgrades.

3. Beneficiaries

    The principal beneficiaries of the Transportation Project are 
expected to be the users of the improved roads and ferry facilities 
since it decreases transportation costs to markets and social service 
delivery points and employees, in addition to the owners of urban and 
rural businesses that rely on the Ghanaian road network.
    More specifically, the N1 Highway upgrades are expected to benefit 
approximately 150,000 daily users and should support a broader 
expansion of Ghana's export-directed horticulture beyond its current 
production base of less than 7,000 hectares. Improvements to the trunk 
roads are expected to open new economic opportunities for approximately 
25,000 agricultural households and users, spurring agricultural 
production in the Afram Basin Zone, most of whom are considered poor or 
very poor. These improvements will also facilitate access to social 
services, including health and education, for these poor households. 
The benefits from time savings by introducing additional ferries will 
accrue to all users of the ferry. More fundamentally, improved reliable 
ferry service in the district of Afram Plains should generate improved 
access to inputs and markets for farmers and

[[Page 48680]]

increased competition among truckers, which should in turn yield 
increased farmgate prices and reduced operating costs. These benefits 
are likely to be divided equally between farmer and users, on the one 
hand, and the vehicle owners, on the other hand, a great majority of 
whom are poor.

4. Donor Coordination

    Donor coordination in the transport sector in Ghana is organized 
through RSDP, bringing together, among others, the World Bank, the 
African Development Bank, Department for International Development 
(``DFID''), EU, Japan International Cooperation Agency and the Arab 
Bank for Economic Development, for a multi-year integrated funding 
program of approximately US$1.2 billion. The collaboration takes place 
through the annual donor conference and in-country monthly meetings to 
review the performance of the sector. The road agencies in Ghana have 
received substantial donor support for construction, maintenance and 
institutional strengthening.
    The Transportation Project coordinates with many ongoing and 
planned donor activities, and has been structured to ensure 
complementarity. For instance, none of the selected roads under the 
Trunk Roads Activity is expected to benefit from other donor-supported 
interventions. In addition, there has been no material donor support to 
the VLTC in recent years whereas the Ferry Activity is designed 
specifically to support this critical transport link to one of the 
poorest districts in Ghana.

5. U.S. Agency for International Development

    USAID currently does not focus specifically on the construction and 
rehabilitation of the transportation infrastructure in Ghana. However, 
MiDA will continue to dialogue with USAID to identify potential 
opportunities for coordination with respect to the Transportation 
Project.

6. Sustainability

    The Ministry of Transportation (``MoT'') is the principal 
institution responsible for the effective and sustainable management of 
the road network in Ghana. As such, it plays a central role in 
coordinating and regulating activities of the road agencies (i.e., 
Department of Feeder Roads (``DFR''), the Department of Urban Roads 
(``DUR''), the Ghana Highway Authority (``GHA'') and the Ghana Road 
Fund (``GRF'')). GHA, DFR and DUR are responsible for the 
administration, planning, control, development and maintenance of the 
trunk road network, feeder roads and urban roads, respectively.
    Approximately 45% of the MoT's annual budget is allocated to 
operation and maintenance of the existing road network. Currently, the 
maintenance of the roads is generally funded through GRF, which 
provides a sustainable and reliable source of funds to pay for 
maintenance of the road network. Its sources of revenue include fuel 
levies, vehicle registration fees, road use fees, road tolls, bridge 
tolls, ferry tolls, and international transit fees (for foreign 
vehicles entering Ghana). The MoT is committed to maintaining this 
funding. It has also developed a plan to increase the total number of 
kilometers of maintainable roads by about 3,600 km a year, primarily 
though spot improvement and rehabilitation of roads previously 
considered as non-maintainable. GRF monies will be used to maintain the 
roads constructed or improved under this Transportation Project.
    While VLTC is financially self-sustaining based on current toll 
levels, a lack of suitable equipment to accommodate an increasing 
number of ferry passengers is a key constraint to consistent, economic 
service by VLTC. Its severely limited maintenance capacity and, by 
extension, its operational abilities endanger continuity and 
dependability of its service. Spare parts for the presently operating 
ferries are difficult to obtain and the main auxiliary engines of the 
current ferry are no longer in production. MCC Funding is critical in 
ensuring efficient and timely services and meeting projected demand. 
MCC Funding will expand VLTC's service and maintenance capabilities and 
is expected simultaneously to reduce its recurrent direct costs.
    The environmental and social sustainability of the Transportation 
Project will be assured through ongoing consultations with the public 
regarding the manner in which the Transportation Project is being 
implemented. SEAs will be conducted in each Intervention Zone affected 
by the Transportation Project (other than the district affected solely 
by the N1 Activity) and, as necessary, environmental and social 
analyses (that include an analysis of the gender impacts of the 
Transportation Project) will be conducted, as part of the technical 
survey and design of major investments in any physical infrastructure 
under the Transportation Project to determine the environmental impacts 
and existence of economic and physical displacements, if any. 
Furthermore, the Government will ensure, directly or through MiDA (or 
any other Permitted Designee), that environmental and social mitigation 
measures are developed and implemented for each Project Activity under 
the Transportation Project in accordance with the provisions of this 
Compact and any relevant Supplemental Agreements. MiDA will ensure that 
environmental and social assessment responsibilities will be included 
in the bidding documents for the design or supervisory firms, the 
construction firms, the independent technical auditing firms and any 
project management advisors. MiDA will ensure that HIV awareness and 
worker safety training will be included as well in the bidding 
documents for the construction firms. In addition, any required EIAs, 
EMPs and RAPs, in form and substance satisfactory to MCC, will be 
developed and implemented under the Transportation Project and 
monitored by MiDA as necessary during the implementation of the 
Transportation Project. Any MCC Disbursements for construction will be 
contingent upon issuance of environmental permits, as needed, or any 
other Government statutory requirements. The Government will fund any 
project-related environmental mitigation costs (including resettlement 
costs) that are not already covered by MCC Funding pursuant to Sections 
2(a)(ii), 2(b)(ii), and 2(c)(vii) of this Schedule 2 to Annex I.

7. Policy; Legal and Regulatory Reform

    The Parties have identified the following policy, legal and 
regulatory reforms and actions that the Government shall pursue in 
support, and to reach the full benefits, of the Transportation Project, 
the satisfactory implementation of which will be conditions precedent 
to certain MCC Disbursements as provided in the Disbursement Agreement:
    (a) Government shall allocate sufficient funds from GRF or other 
sources to ensure proper routine and periodic maintenance of the road 
network through continuing to increase GRF revenues (through fuel 
levies, tolls, vehicle registration/licensing fees, among others) and 
to ensure that GRF revenues are used first for maintenance before any 
allocations are made for other works (such as rehabilitation).
    (b) Government shall adhere to agreements reached with donors under 
the RSDP and the upcoming Transport Sector Development Program.
    (c) Government shall develop a maritime framework governing access 
and operations on Lake Volta with respect to the Ferry Activity.

[[Page 48681]]

    (d) Government shall develop and approve the emergency response 
plans of VLTC with respect to the Ferry Activity.

8. Proposals

    Public solicitations for proposals are anticipated to procure 
goods, works and services, as appropriate, to implement all Project 
Activities under the Transportation Project. MiDA will develop, subject 
to MCC approval, a process for consideration of all such proposals. 
Notwithstanding the foregoing, MiDA may also consider, using a process 
developed subject to MCC approval, any unsolicited proposals it might 
receive.

Schedule 3 to Annex I--Rural Development Project

    This Schedule 3 generally describes and summarizes the key elements 
of the Rural Services Development Project (the ``Rural Development 
Project'') that the Parties intend to implement in furtherance of the 
Rural Development Project Objective. Additional details regarding the 
implementation of the Rural Development Project will be included in the 
Implementation Documents and in the relevant Supplemental Agreements.

1. Background

    Residents of rural areas of Ghana have spotty and frequently poor 
access to basic community services such as potable water, community 
sanitation, schools at all levels and domestic electricity. This has 
both limited the productivity of these people and made it difficult to 
attract or retain skilled entrepreneurs or workers in the rural areas. 
In turn, this has limited Ghana's ability to realize the full potential 
of its agricultural resources.
    In the past, the Government delivered community services, such as 
schools and water or sanitation facilities, with primary direction from 
the central government and little input from the local governments or 
the beneficiaries. Consequently, decisions on the location and the 
design of community resources were frequently suboptimal, and the 
resulting delivery of the related services inefficient. During the past 
few years, however, the Government committed to a strategy of 
decentralization to empower local governments and the beneficiaries in 
the hopes of more efficient delivery of community services.
    One of the major obstacles to successful implementation of this 
strategy is the lack of adequately trained specialists in local 
governments. For instance, the lack of capacity at the local level to 
conduct public procurement results in leakage, misuse, and suboptimal 
use of public resources. Therefore, the Government and the donors have 
increasingly provided support to build the institutional capacity of 
local government units and to support the ability of rural populations 
to influence more directly the provision of community services that 
impact them.
    In addition, currently in Ghana, there is a shortage of credit, as 
well as financial services, available in general to a large portion of 
the rural populations, and in particular to those engaged in 
agriculture. Much of the financial sector currently focuses on 
providing capital to people in the urban areas or on shorter-term 
commercial activity rather than to investments in agricultural 
production, partly owing to the high risks and transaction costs in 
making such loans.
    Insufficiency of rural services has constrained the growth of the 
private sector in rural areas. Ghana's development plans, including the 
GPRS and other strategies, have been designed to foster private sector 
led growth and development. However, the success of these programs has 
been constrained by the lack of services in rural communities. The 
Rural Development Project is designed to address each of these problems 
in a coordinated fashion by improving the design and delivery of 
community services through enhancing the capacity of the local 
government units, by allowing the beneficiaries to provide meaningful 
input on the decisions on investment in community infrastructure and by 
improving the efficiency of the rural financial institutions in order 
that they may serve the people in agriculture more effectively.

2. Summary of Rural Development Project and Related Projects Activities

    The Rural Development Project is designed to support agricultural 
and agri-business development under the Agriculture Project and to 
strengthen the rural institutions that provide complementary services. 
MCC Funding will support the following Project Activities:
     Strengthening of Public Sector Procurement Capacity: To 
support the development of procurement professionals and reinforce the 
capabilities of the Government to procure goods and services;
     Support for Community Services: To complement the 
Agriculture Project by funding construction and rehabilitation of 
educational facilities, construction and rehabilitation of water and 
sanitation facilities and electrification of the rural areas, and by 
providing capacity building support to local government institutions; 
and
     Strengthening of Rural Financial Services: To automate and 
interconnect the 121 rural banks and to provide other improvements in 
the national payments systems that will draw a large number of people 
currently not served or under-served into the financial system, and, if 
there is sufficient funding and appropriate waivers are granted, to 
interconnect the savings and loans institutions to the national 
payments system.
    The M&E Plan (described in Annex III) will set forth anticipated 
results and, where appropriate, regular benchmarks that may be used to 
monitor the progress of the implementation of the Rural Development 
Project. Performance against these benchmarks, as well as the overall 
impact of the Rural Development Project, will be assessed and reported 
at the intervals to be specified in the M&E Plan, or as otherwise 
agreed by the Parties, from time to time. The Parties expect that 
additional indicators will be identified during implementation of the 
Rural Development Project. The expected results from, and the key 
benchmarks to measure progress on, the Rural Development Project, as 
well as the Project Activities undertaken or funded thereunder, are set 
forth in Annex III.
    Estimated amounts of MCC Funding for each Project Activity for the 
Rural Development Project are identified in Annex II. Conditions 
precedent to each Project Activity under the Rural Development Project, 
and the sequencing of such Project Activities, shall be set forth in 
the Disbursement Agreement, other Supplemental Agreements or the 
relevant Implementation Documents.
    The following summarizes each Project Activity under the Rural 
Development Project:
    (a) Project Activity: Strengthening of Public Sector Procurement 
Capacity (``Procurement Capacity Activity'')
    The Procurement Capacity Activity is designed to strengthen the 
capacity of the various procurement entities within the Government to 
procure necessary goods, works and services with greater economy, 
efficiency and effectiveness. It is also intended to allow such 
entities to implement fully Ghana's Public Procurement Act of 2003 (Act 
663) by assisting the development of training materials for the staff 
of such entities, the formation of a career path within the Government, 
and the placement of trainees in such procurement entities to provide 
them with practical application.

[[Page 48682]]

    Specifically, MCC Funding will support the following:
    (i) Development of the modules for training and certification that 
are relevant to the public sector and consistent with Ghana's Public 
Procurement Act of 2003 (Act 663), including consultation with 
educational institutions to develop a standard procurement curriculum 
for use in formal procurement training programs, development of an 
internationally-accepted educational program in procurement in 
conjunction with other international procurement bodies such as the 
Chartered Institute of Purchasing and Supply of the United Kingdom, and 
introduction of such curriculum to the various institutions that will 
offer courses in procurement.
    (ii) Establishment of procurement as a career in public service 
with clear lines of promotion and reporting by assisting the Government 
in attracting a cadre of procurement professionals, in clearly defining 
the career paths as a procurement professional in the Government 
(including formulating the requirements for entry and promotion, 
defining a procurement career path with clear job functions, grades, 
promotion rules and salary structure) and establishing a well-trained 
procurement staff whose duties are institutionalized within the 
Government.
    (iii) Provision of procurement-related training to potential 
procurement professionals by identifying a target group of 
professionals, students and public or civil service members qualified 
to enter into a structured procurement training program, establishing 
agreements, policies, procedures, and protocols with the various public 
and civil service organizations, educational institutions and private 
sector businesses to identify and provide short term and interim 
opportunities for procurement program participants to perform 
procurement and supply chain activities in both public and private 
sectors and establishing a procurement internship program that has 
entry requirements, predetermined procurement training requirements, 
clear job functions for the program, a stipend structure for internship 
assignments, and rules for compliance and completion.
(b) Project Activity: Support for Community Services (``Community 
Services Activity'')
    The Community Services Activity is designed to complement the 
Agriculture Project by providing educational, water and sanitation and 
rural electrification infrastructure in the Intervention Zones and by 
enhancing the capacity of local governments to deliver the related 
services. These interventions are part of a larger effort by the 
Government to expand the provision of basic community services 
throughout Ghana, and are specifically expected to enhance the 
sustainability of the Agriculture Project by providing the necessary 
infrastructure to improve health of communities, to enhance skill 
development through access to education, and to facilitate small-scale 
post-harvest processing of agricultural products. Availability of 
funding to the districts in the Intervention Zones will be a function 
of population, relative poverty and actual investment performance under 
the Agriculture Project. Specific investments will be driven by the 
demands of local communities, prioritized through a broad-based, 
inclusive process to enhance community ownership and strengthen 
sustainability.
    Specifically, MCC Funding will support the following:
    (i) Capacity building by Rural Infrastructure Coordinating Unit 
(``RICU'') of the Ministry of Local Government, Rural Development and 
Environment for the local government units in the Intervention Zones to 
strengthen their ability to deliver community services, to manage 
assets and to ensure transparency and accountability in their 
operations.
    (ii) Rehabilitation and construction of educational facilities in 
the form of primary, junior secondary and senior secondary schools, as 
well as vocational and technical institutions; provided that such 
rehabilitation or construction (1) is consistent with the agreed norms 
of the Ministry of Education, Science and Sports, Ghana Educational 
Service, and other parties as may be agreed from time to time between 
MiDA and MCC, (2) is included in the list of priorities of the relevant 
district's ``District Development Plan,'' and reflected in the annual 
district budget and District Assembly Common Fund (``DACF'') plans, (3) 
is in a community that demonstrates commitment to such rehabilitation 
or construction through contributions of cash or other property 
(including land and raw material) or labor, (4) is consistent with the 
standards on adequacy of the provision of operating costs (including 
staffing, as well as the operation and maintenance, of the facilities) 
adopted by MiDA with the approval of MCC, (5) meets criteria satisfying 
cost effectiveness, (6) is within a district in which the Agriculture 
Project is being implemented and (7) does not create any adverse 
environmental or social impact under the standards adopted by MiDA with 
the approval of MCC; provided, further, that the foregoing may be 
adjusted based on the results of the relevant SEA upon its completion.
    (iii) Construction of water and sanitation facilities to achieve 
improved health, to reduce the incidence of illness and loss of 
productivity due to unsafe drinking water and poor sanitation and 
hygiene, and to reduce the time required to procure potable water. MCC 
Funding will be used to fund boreholes (whether mechanized or using 
hand-pumps), small town pipe systems and community sanitary facilities; 
provided that, such construction (1) is consistent with the agreed 
norms of the Community Water and Sanitation Authority, as well as of 
the Ministry of Water Resources, Works and Housing, and other parties 
as may be agreed from time to time between MiDA and MCC, (2) is 
included in the list of priorities of the relevant district's 
``District Development Plan,'' and reflected in the annual budget and 
DACF plans, (3) is in a community that demonstrates commitment to such 
construction through contributions of cash or other property (including 
land or raw material) or labor, (4) is consistent with the standards on 
adequacy of the provision of operating costs (including staffing, as 
well as the operation and maintenance, of the facilities) and cost 
recovery mechanisms adopted by MiDA with approval of MCC, (5) meets 
criteria satisfying cost effectiveness, (6) is within a district in 
which the Agriculture Project is being implemented, (7) includes a 
hygiene education module and (8) does not create any adverse 
environmental or social impact under the standards adopted by MiDA with 
the approval of MCC; provided, further, that the foregoing may be 
adjusted based on the results of the relevant SEA upon its completion.
    (iv) Expansion of rural electrification to unserved and underserved 
areas for domestic uses as well as for use in irrigation, agricultural 
processing and education. MCC Funding will be used to fund both on-grid 
and off-grid (including photovoltaic, biofuel and micro-hydro) rural 
electricity investments; provided that, such investment (1) is 
consistent with the policy and strategic plans of the Ministry of 
Energy, the Electric Corporation of Ghana, the Volta River Authority 
and other parties as may be agreed from time to time between MiDA and 
MCC, (2) is in a community that demonstrates commitment to such 
construction through contributions of cash or other property (including 
land or raw material) or labor, (3) is

[[Page 48683]]

consistent with the standards on adequacy of the provision of operating 
costs (including staffing, as well as the operation and maintenance, of 
the facilities) and cost recovery mechanisms adopted by MiDA with 
approval of MCC, (4) is within a district in which the Agriculture 
Project is being implemented, (5) meets criteria satisfying cost 
effectiveness, and (6) does not create any adverse environmental or 
social impact under the standards adopted by MiDA with the approval of 
MCC; provided, further, that the foregoing may be adjusted based on the 
results of the relevant SEA upon its completion.
    (v) With respect to the activities identified in Sections 2(b)(ii), 
(iii) and (iv) of this Schedule 3 to Annex I, the implementation of the 
environmental and social mitigation measures including compensation of 
individuals, residences and businesses affected by such improvements 
and upgrades, consistent with the World Bank's Operational Policy on 
Involuntary Resettlement (OP 4.12).
(c) Project Activity: Strengthening of Rural Financial Services 
(``Financial Services Activity'')
    The Financial Services Activity is designed to extend the depth and 
value of financial services provided to rural populations including 
farmers by reinforcing their integration into the cash economy, as well 
as widening their access to savings, credit and cash transfer services. 
It will build on the capabilities of the rural banks that are 
privately-owned generally by members of the local communities. These 
projects will connect the rural banks into the national payments 
systems of Ghana, and will also facilitate internal and international 
remittance flows. In addition, if there is sufficient MCC Funding, and 
if Ghana Microfinance Network lacks other financial support to maintain 
its microfinance institution data collection and performance monitoring 
activities, MCC may, at its option, provide financial support to Ghana 
Microfinance Network for such maintenance.
    Specifically, MCC Funding will support the following:
    (i) Extension and intensification of the program initiated under 
the World Bank Rural Financial Strengthening Project to automate the 
accounting systems of substantially all of the 121 rural banks (and 
their branches) using a common software platform. Priority will be 
given to automating those rural banks and their branches located in the 
Intervention Zones.
    (ii) Connection of the rural banks and their branches to a wide 
area network. The rural banks and their branches will be connected 
through a grid to transform their product offerings and to reduce their 
operating expenses.
    (iii) Support for the software to introduce check truncation, 
hardware to create a system for the automated clearing of electronic 
payments and technical assistance to review and propose amendments to 
the existing legal and regulatory structure for payments under Ghana's 
national payment system.
    (iv) National campaign to educate businesses, banks, and consumers 
regarding the benefits of the Financial Services Activity to generate 
demand for use of the electronic payment products. A broad-based urban 
and rural education campaign will demonstrate the benefits of these new 
products and of the institutions that offer them.

3. Beneficiaries

    The Procurement Capacity Activity will directly benefit Ghana as 
approximately 11 to 15% of all goods and services produced in Ghana are 
consumed through public procurements. The Community Services Activity 
will primarily benefit the same populations as the Agriculture Project, 
that is, the residents of the districts in the Intervention Zones. 
Institutional beneficiaries will also include the local government 
institutions (e.g., the district assemblies and their area councils). 
Finally, rural inhabitants will benefit from the continuing devolution 
and decentralization of provision of a full range of community 
services, thus increasing community empowerment. The beneficiaries of 
the Financial Services Activity will include the economically active 
population in rural areas as actual or potential clients of the rural 
banks, and more broadly, all users of financial services. The outreach 
of new financial services to rural communities and the poor should 
create incentives to de-emphasize cash transactions in favor of checks 
and other payment instruments, and the direct savings from such 
changeover will include, among others, a reduction in the national 
currency printing bill, the very substantial costs of secure currency 
transport, and the material interest expense that the Bank of Ghana 
incurs in issuing securities to absorb excess liquidity at the end of 
the cocoa season. The automation of the rural banks will also improve 
and streamline the supervision of these institutions by the Bank of 
Ghana, and otherwise improve the breadth and speed of management 
reporting systems.

4. Donor Coordination; Role of Civil Society

    The Procurement Capacity Activity complements the activities of 
other donors. DFID is actively supporting the Public Procurement Board 
(``PPB'') in Ghana with an interest in developing procurement capacity 
within existing government bodies. The increased demand for public 
sector procurement capacity created by the recent enactment of the 
Public Procurement Act of 2003 (Act 663) allows for multiple donors to 
be involved without duplication of efforts. In addition, policy and 
regulatory initiatives funded under this Rural Development Project will 
be designed to complement and support the efforts of other donors 
(including the World Bank) that are leading similar initiatives at the 
regional and district levels.
    The Community Services Activity builds on the Community Based Rural 
Development Program, funded by the World Bank and Agence 
Fran[ccedil]aise de D[eacute]veloppement, strengthening local 
government service delivery, providing capacity building to local 
government units and building substantial enhancements to the quality 
and productivity of rural communities. The Community Services Activity 
will also be in line with efforts of the Government and other donors to 
strengthen local government institutions in order to facilitate the 
delivery of education and water and sanitation infrastructure. The 
district assemblies and area councils are assuming increasing 
responsibility for planning, coordinating and executing donor 
activities in their respective areas.
    The efforts to automate the rural banks and to connect them through 
a wide-area-network under the Financial Services Activity are 
extensions and intensifications of the efforts of the World Bank, 
African Development Bank and International Fund for Agricultural 
Development, first, to create Apex Bank to provide services to the 
rural banks and, second, to begin the process of automation using a 
common software.
    Finally, the civil society will play a key role in community by 
overseeing the organization, information dissemination, project 
implementation, and monitoring and evaluation with respect to the Rural 
Development Project.

5. U.S. Agency for International Development

    USAID has supported a number of programs in the education sector 
which led to the construction of classrooms, staff houses and latrines, 
in addition to

[[Page 48684]]

a program entitled Strategies for Advancing Girls' Education. USAID has 
also undertaken projects in community water and sanitation, including 
provision of hygiene education. The Rural Development Project will 
continue to advance the objectives of these USAID programs while also 
greatly expanding on them to complement the Agriculture Project.

6. Sustainability

    The Procurement Capacity Activity will create ``educational 
capital,'' in the form of curricula and diploma programs, which will 
serve a longer-term goal of capacity building within the Government. 
The Procurement Capacity Activity is designed to continue as an 
institutional capacity program after the expiration of the Compact 
Term, under the direction of the PPB. During the Compact Term, the 
various ministries of the Government will be required to present 
sustainable and economically viable plans to maintain and provide 
continuing education for their respective procurement staff. The 
Community Services Activity will ensure appropriate measures for 
adequate cost recovery and continuing operation and maintenance as a 
condition precedent to approval of investments, providing a basis to 
ensure sustainability after construction. Rural banks participate 
voluntarily in the wide area network activity, subject to a commitment 
to maintain equipment and service from their operating budgets beyond 
the Compact Term.
    The environmental and social sustainability of the Rural 
Development Project will be assured through ongoing consultations with 
the public regarding the manner in which the Rural Development Project 
is being implemented. SEAs will be conducted in each Intervention Zone 
affected by the Rural Development Project and, as necessary, 
environmental and social analyses (that include an analysis of the 
gender impacts of the Rural Development Project) will be conducted, as 
part of the technical survey and design of major investments in any 
physical infrastructure under the Rural Development Project to 
determine the environmental impacts and existence of economic and 
physical displacements, if any. Furthermore, the Government will 
ensure, directly or through MiDA (or any other Permitted Designee), 
that environmental and social mitigation measures are developed and 
implemented for each Project Activity under the Rural Development 
Project in accordance with the provisions of this Compact and any 
relevant Supplemental Agreements. MiDA will ensure that environmental 
and social assessment responsibilities will be included in the bidding 
documents for the design or supervisory firms, the construction firms, 
the independent technical auditing firms and any project management 
advisors. MiDA will ensure that HIV awareness and worker safety 
training will be included as well in the bidding documents for the 
construction firms. In addition, EMPs and RAPs, in form and substance 
satisfactory to MCC, will be developed and implemented under the Rural 
Development Project and monitored by MiDA as necessary during the 
implementation of the Rural Development Project. Any MCC Disbursements 
for construction will be contingent upon issuance of environmental 
permits, as needed, or any other Government statutory requirements. The 
Government will fund any project-related environmental mitigation costs 
(including resettlement costs) that are not already covered by MCC 
Funding pursuant to Section 2(b)(v) of this Schedule 3 to Annex I.

7. Policy; Legal Reform; and Procedural Changes

    The Parties have identified the following policy, legal and 
regulatory reforms and actions that the Government shall pursue in 
support, and to reach the full benefits, of the Rural Development 
Project, the satisfactory implementation of which will be conditions 
precedent to certain MCC Disbursements as provided in the Disbursement 
Agreement:
    (a) The PPB shall develop a funding and sustainability plan for 
Procurement Capacity Activity (including the amount of such funding) in 
form and substance satisfactory to MCC.
    (b) Service norms defining expected provision of relevant services 
to rural communities, and standards for appropriate designs, including 
initial capital cost and estimated continuing operating and maintenance 
costs, will be agreed among the various Government Affiliates, 
including the relevant ministries, departments and agencies, and 
adopted by MiDA, subject to approval of MCC, for all investments to be 
undertaken under the Community Services Activity.

8. Proposals

    Public solicitations for proposals are anticipated to procure 
goods, works and services, as appropriate, to implement all Project 
Activities under the Rural Development Project. MiDA will develop, 
subject to MCC approval, a process for consideration of all such 
proposals. Notwithstanding the foregoing, MiDA may also consider, using 
a process developed subject to MCC approval, any unsolicited proposals 
it might receive.

Annex II--Summary of Multi-Year Financial Plan

    This Annex II to the Compact (the ``Financial Plan Annex'') 
summarizes the Multi-Year Financial Plan for the Program. Each 
capitalized term in this Financial Plan Annex shall have the same 
meaning given such term elsewhere in this Compact. Unless otherwise 
expressly stated, each Section reference herein is to the relevant 
Section of the main body of the Compact.

1. General

    A multi-year financial plan summary (``Multi-Year Financial Plan 
Summary'') is attached hereto as Exhibit A. By such time as specified 
in the Disbursement Agreement, MiDA will adopt, subject to MCC 
approval, a Multi-Year Financial Plan that includes, in addition to the 
multi-year summary of estimated MCC Funding and the Government's 
contribution of funds and resources, an estimated draw-down rate for 
the first year of the Compact Term based on the achievement of 
performance milestones, as appropriate, and the satisfaction or waiver 
of conditions precedent. Each year, at least thirty (30) days prior to 
the anniversary of the Entry into Force, the Parties shall mutually 
agree in writing to a Detailed Budget for the upcoming year of the 
Program, which shall include a more detailed budget for such year, 
taking into account the status of the Program at such time and making 
any necessary adjustments to the Multi-Year Financial Plan.

2. Implementation and Oversight

    The Multi-Year Financial Plan and each Detailed Budget shall be 
implemented by MiDA, consistent with the approval and oversight rights 
of MCC and the Government as provided in this Compact, the Governing 
Documents and the Disbursement Agreement.

3. Estimated Contributions of the Parties

    The Multi-Year Financial Plan Summary identifies the estimated 
annual contribution of MCC Funding for Program administration, M&E and 
each Project. The Government's contribution of resources to Program 
administration, M&E and each Project shall consist of (a) ``in-kind'' 
contributions in the form of Government Responsibilities and any other 
obligations and responsibilities of the Government identified in this

[[Page 48685]]

Compact, and (b) such other contributions or amounts as may be 
identified in relevant Supplemental Agreements between the Parties or 
as may otherwise be agreed by the Parties; provided, in no event shall 
the Government's contribution of resources be less than the amount, 
level, type and quality of resources required effectively to carry out 
the Government Responsibilities or any other responsibilities or 
obligations of the Government under or in furtherance of this Compact.

4. Modifications

    The Parties recognize that the anticipated distribution of MCC 
Funding among the various activities for Program administration, M&E, 
the Projects and the Project Activities will likely require adjustment 
from time to time during the Compact Term. In order to preserve 
flexibility in the administration of the Program, as provided in 
Section 4(a)(iv) of Annex I, the Parties may, upon agreement of the 
Parties in writing and without amending the Compact, change the 
designations and allocations of funds among the Projects, the Project 
Activities, or any activity under Program administration or M&E, or 
between a Project identified as of the Entry into Force and a new 
project, without amending this Compact; provided, however, that such 
reallocation (a) is consistent with the Objectives and the 
Implementation Documents, (b) shall not materially adversely impact the 
applicable Project, Project Activity (or any component thereof), or any 
activity under Program administration or M&E as specified in this Annex 
II, (c) shall not cause the amount of MCC Funding to exceed the 
aggregate amount specified in Section 2.1(a) of this Compact, and (d) 
shall not cause the Government's obligations or responsibilities or 
overall contribution of resources to be less than specified in Section 
2.2(a) of this Compact, this Annex II or elsewhere in the Compact.

5. Conditions Precedent; Sequencing

    MCC Funding will be disbursed in tranches. The obligation of MCC to 
approve MCC Disbursements and Material Re-Disbursements for the Program 
is subject to satisfactory progress in achieving the Objectives and on 
the fulfillment, deferral or waiver of any conditions precedent 
specified in the Disbursement Agreement for the relevant activity under 
the Program. The sequencing of Project Activities or sub-activities and 
other aspects of how the Parties intend the Program to be implemented 
will be set forth in the Implementation Documents, including the Work 
Plan for the Program (and each component thereof), and MCC 
Disbursements and Re-Disbursements will be made consistent with such 
sequencing.

                                  Exhibit A.--Multi-Year Financial Plan Summary
----------------------------------------------------------------------------------------------------------------
                                                                           (US $ '000)
                    Project                    -----------------------------------------------------------------
                                                  Year 1     Year 2     Year 3     Year 4     Year 5     Total
----------------------------------------------------------------------------------------------------------------
1. Agriculture Project:
    (a) Commercial Training Activity..........      9,542     14,081     17,511     15,946      8,935     66,015
    (b) Irrigation Activity...................  .........        942      8,679     11,378      6,609     27,608
    (c) Land Activity.........................      2,790      2,698      2,343      1,705      1,152     10,688
    (d) Post-Harvest Activity.................      3,641      6,504      6,747      2,782        702     20,376
    (e) Credit Activity.......................     14,300     12,200     13,100     10,300      8,500     58,400
    (f) Feeder Roads Activity.................      2,344     10,644     21,955     22,954  .........     57,897
                                               -----------------------------------------------------------------
        Sub-Total.............................     32,617     47,069     70,335     65,065     25,898    240,984
                                               -----------------------------------------------------------------
 
2. Transportation Project:
    (a) N1 Activity...........................     13,099     11,200     18,576     28,752     29,669    101,296
    (b) Trunk Roads Activity..................      1,484      6,739     13,900     14,331  .........     36,454
    (c) Ferry Activity........................        263      2,141      2,950  .........  .........      5,354
                                               -----------------------------------------------------------------
        Sub-Total.............................     14,846     20,080     35,426     43,083     29,669    143,104
                                               -----------------------------------------------------------------
 
3. Rural Development Project:
    (a) Procurement Capacity Activity.........        447        921        950  .........  .........      2,318
    (b) Community Services Activity...........      7,500     15,000     22,500     30,000  .........     75,000
    (c) Financial Services Activity...........      7,576      5,189      7,078      4,127  .........     23,970
                                               -----------------------------------------------------------------
        Sub-Total.............................     15,523     21,110     30,528     34,127  .........    101,288
                                               -----------------------------------------------------------------
 
4. Monitoring and Evaluation                        3,000      3,000      3,000      3,000      3,000     15,000
                                               -----------------------------------------------------------------
 
        Sub-Total.............................      3,000      3,000      3,000      3,000      3,000     15,000
                                               -----------------------------------------------------------------
5. Program Administration and Audits:
    (a) Program Administration (MiDA).........      4,915      5,188      5,326      5,573      5,852     26,854
    (b) Fiscal Agent..........................        300      1,073      1,608      1,678        716      5,375
    (c) Procurement Agent.....................        310      1,013      1,519      1,585        677      5,104
    (d) Audit.................................      1,500      1,500      1,500      1,500      1,500      7,500
    (e) Strategic Environmental Assessments...      1,800  .........  .........  .........  .........      1,800
                                               -----------------------------------------------------------------
        Sub-Total.............................      8,825      8,774      9,953     10,336      8,745     46,633
                                               =================================================================
        Total Estimated MCC Contribution......     74,811    100,033    149,242    155,611     67,312    547,009
----------------------------------------------------------------------------------------------------------------


[[Page 48686]]

Annex III--Description of the M&E Plan

    This Annex III to the Compact (the ``M&E Annex'') generally 
describes the components of the Monitoring and Evaluation Plan for the 
Program, and how the progress toward the Compact Goal will be measured. 
Each capitalized term in this M&E Annex shall have the same meaning 
given such term elsewhere in this Compact. This M&E Annex represents 
the agreement between the Government and MCC on the Compact Goal and 
the Objectives of the Program and the timeline for achieving them.

1. Overview

    As a condition precedent to certain MCC Disbursements as provided 
in the Disbursement Agreement, the parties shall formulate an M&E Plan 
that specifies (a) how the implementation of the Program and progress 
toward the Compact Goal and Objectives will be monitored (the 
``Monitoring Component''), (b) a methodology, process and timeline for 
the evaluation of planned, ongoing, or completed Projects and Project 
Activities to determine their impact and likely sustainability (the 
``Evaluation Component'') and (c) other components of the M&E Plan 
described below. Information regarding the Program's performance, 
including the M&E Plan, and any amendments or modifications thereto, as 
well as periodically-generated reports, will be made publicly available 
on the MiDA Web site and elsewhere. The Compact Goal, the Program 
Objective and the Project Objectives are summarized in the following 
diagram:
[GRAPHIC] [TIFF OMITTED] TN21AU06.012

2. Monitoring Component

    To monitor progress toward the achievement of the Compact Goal and 
the Objectives, the Monitoring Component of the M&E Plan shall contain 
the following elements:
    (a) Indicators. The M&E Plan shall measure the results of the 
Program using quantitative, objective and reliable data 
(``Indicators''). Each Indicator will have one or more targets that 
quantify the result and the expected time by which that result will be 
achieved (each, a ``Target''). The M&E Plan will detail the process for 
measuring, and reporting on, the Indicators at several levels. First, 
the indicators for the Compact Goal (each, a ``Compact Goal 
Indicator'') will measure the results for the overall Program on the 
intended beneficiaries (collectively, the ``Beneficiaries''). Second, 
the indicators for the Program Objective (each, an ``Objective 
Indicator'') will measure the ultimate result for the Program. Third, 
intermediate indicators (each, an ``Outcome Indicator'') will measure 
the intermediate results achieved under each of the Project Activities 
(each, an ``Outcome'') in order to provide early measures of progress 
towards the accomplishment of the Project Objective. Further, other 
indicators will be included in the M&E Plan to measure the delivery of 
goods and services under the Project Activities.
    (i) Compact Goal Indicators. The M&E Plan shall contain the Compact 
Goal Indicators and their definitions, as listed in the table below. 
The corresponding Targets to be achieved are in the following tables:

                  Compact Goal Indicators: Definitions
         [Compact Goal: Reduce poverty through economic growth]
------------------------------------------------------------------------
             Indicator                           Definition
------------------------------------------------------------------------
Crop income (Northern Zone) (US$).  Net income per household from
                                     growing yams, sorghum and
                                     groundnuts (as proxies of the most
                                     likely crops grown).\2\ Northern
                                     Zone is comprised of the following
                                     five districts: Savelugu Nanton,
                                     Tolon Kumbungu, Tamale, West
                                     Mamprusi and Karaga.

[[Page 48687]]

 
Crop income (Afram Basin Zone--     Net income per household from
 East) (US$).                        growing maize, yams and cassava (as
                                     proxies of the most likely crops
                                     grown). Afram Basin Zone--East is
                                     comprised of the following two
                                     districts: Fanteakwa and Kwahu
                                     South.
Crop income (Afram Basin Zone--     Net income per household from
 West) (US$).                        growing maize, yams and cassava (as
                                     proxies of the most likely crops
                                     grown). Afram Basin Zone--West is
                                     comprised of the following four
                                     districts: Ejura Sekyedumasi, Afram
                                     Plains, Sekyere East and Sekyere
                                     West.
Crop income (Southern Zone) (US$).  Net income per household from
                                     growing pineapples and vegetables
                                     (as proxies of the most likely
                                     crops grown). Southern Zone is
                                     comprised of the following twelve
                                     districts: Gomoa, Awutu Efutu
                                     Senya, Akuapim South, Manya Krobo,
                                     Dangme West, Yilo Krobo, North
                                     Dayi, Hohoe, Ketu, Keta, South
                                     Tongu and Akatsi.
Aggregate poverty gap of            Income value at the poverty line
 beneficiaries (US$).                minus average income of
                                     beneficiaries, multiplied by the
                                     number of beneficiaries,
                                     disaggregated by each Intervention
                                     Zone. Income value at the poverty
                                     line is defined by the Ghana
                                     Statistical Service's Ghana Living
                                     Standards Survey. The fifth round
                                     of this survey was conducted in
                                     2006.
------------------------------------------------------------------------
\2\ Data will be reported on actual crops grown in all Intervention
  Zones. Proxies were used to estimate baseline and target values.


                                 Compact Goal Indicators: Baselines and Targets
                             [Compact Goal: Reduce poverty through economic growth]
----------------------------------------------------------------------------------------------------------------
                                                                    Targets/Year
             Indicator             -----------------------------------------------------------------------------
                                     Baseline      1          2          3          4                5
----------------------------------------------------------------------------------------------------------------
Crop income (Northern Zone) (US$).   \3\ $700  .........  .........  .........  .........  \4\ 135% increase
                                                                                            over baseline.
Crop income (Afram Basin Zone--       \5\ 820  .........  .........  .........  .........  \6\ 55% increase over
 East) (US$).                                                                               baseline.
Crop income (Afram Basin Zone--       \7\ 540  .........  .........  .........  .........   \8\ 42% increase
 West) (US$).                                                                               over baseline.
Crop income (Southern Zone) (US$).        \9\  .........  .........  .........  .........  \10\ 33% increase
                                        1,860                                               over baseline.
Aggregate poverty gap of                  TBD               TBD (during the second quarter of 2007)
 beneficiaries (US$).
----------------------------------------------------------------------------------------------------------------
\3\ Baseline assumes that 2 hectares are cultivated.
\4\ Target assumes that 2.2 hectares are cultivated.
\5\ Baseline assumes that 1 hectare is cultivated.
\6\ Target assumes that 1.1 hectares are cultivated.
\7\ Baseline assumes that 1 hectare is cultivated.
\8\ Target assumes that 1.1 hectares are cultivated.
\9\ Baseline assumes that 2 hectares are cultivated.
\10\ Target assumes that farmers transition from maize, yam and cassava production to 2 hectares of pineapple
  and 1 hectare of vegetable cultivation.

    (ii) Objective Indicators and Outcome Indicators. The M&E Plan 
shall contain the Objective Indicators and Outcome Indicators and their 
definitions, as listed in the tables below. The corresponding Targets 
to be achieved are in the tables following the definitions.

                    Objective Indicators: Definitions
------------------------------------------------------------------------
             Indicator                           Definition
------------------------------------------------------------------------
Objective: Increase production and productivity of high-value cash and
 food crops in the Intervention Zones in Ghana..
------------------------------------------------------------------------
Production of staple crops (metric  Metric tons of maize, yams, cassava
 tons).                              and groundnuts (as proxies of most
                                     likely crops grown) grown and
                                     produced by the FBOs participating
                                     in the Program.
Production of high-value crops      Metric tons of pineapple (as proxy
 (metric tons).                      of most likely crop grown) grown
                                     and produced by the FBOs
                                     participating in the Program, of
                                     which 60% are for export markets
                                     and 40% for domestic markets.
Productivity of land (metric tons/  Metric tons/hectare of maize (as
 hectare): maize.                    proxy of most likely crop grown)
                                     grown and produced.
Productivity of land in the         Metric tons/hectare of yam (as proxy
 Northern Zone (metric tons/         of most likely crop grown) grown
 hectare): yams.                     and produced.
Productivity of land (metric tons/  Metric tons/hectare of pineapple (as
 hectare): export-grade pineapple.   proxy of most likely crop grown)
                                     grown and produced.
------------------------------------------------------------------------
Objective: Enhance the competitiveness of high-value cash and food crops
 in local and international markets.
------------------------------------------------------------------------
Additional Ghanaian agriculture     Additional metric tons of pineapple
 exports (metric tons): pineapple.   (as proxy of most likely crop
                                     exported) exported.

[[Page 48688]]

 
Additional Ghanaian agriculture     Additional metric tons of Asian
 exports (metric tons): Asian        vegetables (as proxy of most likely
 vegetables.                         crop exported) exported.
The ratio of (i) price of Ghanaian  Price (including cost of Cargo,
 imported into European markets      Insurance and Freight) of pineapple
 (Euro/kg) to (ii) price of non-     (as proxy of most likely crop
 Ghanaian imported into European     exported), imports into the
 market (Euro/kg).                   European markets from Ghana,
                                     divided by price (including cost of
                                     Cargo, Insurance and Freight) of
                                     pineapple imported into the
                                     European markets from countries
                                     other than Ghana. Import data will
                                     be based on information published
                                     by Eurostat.
------------------------------------------------------------------------


                                                       Objective Indicators: Baselines and Targets
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                             Year
              Indicator              -------------------------------------------------------------------------------------------------------------------
                                       Baseline    1               2                        3                        4                       5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Objective: Increase production and productivity of high-value cash and food crops in the Intervention Zones in Ghana.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Production of staple crops (metric      430,000  .....  .......................  1% increase over         4% increase over        11% increase over
 tons).                                                                           baseline.                baseline.               baseline.
Production of high-value crops          225,000  .....  2% increase over         5% increase over         16% increase over       50% increase over
 (metric tons).                                          baseline.                baseline.                baseline.               baseline.
Productivity of land (metric tons/          1.9  .....  .......................  1% increase over         4% increase over        12% increase over
 hectare): maize.                                                                 baseline.                baseline.               baseline.
Productivity of land in the Northern          7  .....  .......................  61% increase over        65% increase over       75% increase over
 Zone (metric tons/hectare): yams.                                                baseline.                baseline.               baseline.
Productivity of land (metric tons/            8  .....  .......................  1% increase over         8% increase over        26% increase over
 hectare): export-grade pineapple.                                                baseline.                baseline.               baseline.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Objective: Enhance the competitiveness of high-value cash and food crops in local and international markets.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Additional Ghanaian agriculture               0  .....  .......................  8,300..................  14,500................  21,700.
 exports (metric tons): pineapple.
Additional Ghanaian agriculture               0  .....  .......................  1,344..................  2,192.................  3,178.
 exports (metric tons): Asian
 vegetables.
The ratio of (i) price of Ghanaian         0.75  .....  .......................  0.75...................  0.78-0.81.............  0.81-0.88.
 imports into European markets (Euro/
 kg) to (ii) price of non-Ghanaian
 imports into European market (Euro/
 kg).
--------------------------------------------------------------------------------------------------------------------------------------------------------


                     Outcome Indicators: Definitions
                          [Agriculture Project]
------------------------------------------------------------------------
             Indicator                           Definition
------------------------------------------------------------------------
Number of farmers adopting new      Number of farmers in the FBOs
 technologies and farming methods.   participating in the Program that
                                     adopt new technologies methods and
                                     farming methods, assuming an 85%
                                     adoption rate.
Percentage of post harvest loss at  (i) Metric tons of post harvest
 farmgate (metric lost/metric tons   lost, divided by (ii) metric tons
 produced).                          of total harvest tons produced at
                                     the farmgate.
SMEs processing products and/or     TBD.
 providing inputs to farmers.
Irrigation Activity:
    Number of hectares irrigated..  Number of hectares irrigated as a
                                     result of the Program.
Land Activity:
    Number of days to conduct a     Number of days to purchase, rent or
     land transaction.               sell a parcel of land from
                                     initiation of negotiation with
                                     current landowner to registration
                                     in title or deeds registry of the
                                     property right acquired.
    Number of land disputes in the  Number of land disputes encountered
     pilot registration districts.   during inventory of land rights for
                                     the pilot registration districts
                                     and on record at the relevant
                                     district courts as of Entry into
                                     Force, disaggregated by region.
    Registration of land rights in  Percentage of targeted parcels
     the pilot registration          registered in the title registry.
     districts.
Post-Harvest Activity:
    Volume of products passing      Metric tons of pineapple, among
     through post-harvest            other crops, passing through small-
     treatment (metric tons).        scale storage facilities, packhouse
                                     pre- coolers or packhouses.
Credit Activity:
    Portfolio-at-risk of            Share of value of all loans
     agricultural loan fund.         disbursed from the agricultural
                                     loan that have one or more fund
                                     installments of principal or
                                     interest past due over thirty (30)
                                     days, disaggregated by short-term
                                     and medium-term loans.

[[Page 48689]]

 
    Value of loans disbursed to     Value of loans disbursed from the
     clients from agricultural       agricultural loan fund for on-farm
     loan fund (US$).                and off-farm investment by
                                     institutions (including financial
                                     institutions, input suppliers,
                                     etc.), disaggregated by short-term
                                     and medium-term loans.
    Number of additional loans....  Number of loans disbursed from the
                                     agricultural loan fund for on-farm
                                     and off-farm investment by
                                     institutions (including financial
                                     institutions, input suppliers,
                                     etc.), disaggregated by short-term
                                     and medium-term loans.
Feeder Roads Activity:
    Vehicle operating costs (on     Vehicle operating costs including
     roads requiring minor           both operation and maintenance
     rehabilitation).                costs and travel time,
                                     disaggregated by road segment.
                                     Minor rehabilitation consists of re-
                                      gravelling (i.e., change from poor
                                     gravel to improved gravel surface).
    Vehicle operating costs (on     Vehicle operating costs including
     roads requiring medium          both operation and maintenance
     rehabilitation).                costs and travel time,
                                     disaggregated by road segment.
                                     Medium rehabilitation consists of
                                     upgrading road surface from average
                                     gravel to bitumen surface.
    Vehicle operating costs (on     Vehicle operating costs including
     roads requiring major           both operation and maintenance
     rehabilitation).                costs and travel time,
                                     disaggregated by road segment.
                                     Major rehabilitation consists of
                                     upgrading road surface from poor
                                     gravel to bitumen surface.
------------------------------------------------------------------------


                     Outcome Indicators: Definitions
                        [Transportation Project]
------------------------------------------------------------------------
             Indicator                           Definition
------------------------------------------------------------------------
N-1 Activity:
------------------------------------------------------------------------


                     Outcome Indicators: Definitions
                        [Transportation Project]
------------------------------------------------------------------------
          Indicator                            Definition
------------------------------------------------------------------------
Volume capacity ratio........  Number of vehicles on road divided by the
                                number of vehicles at road capacity.
Vehicles per hour at peak      Number of vehicles on road, disaggregated
 hour.                          by vehicle type, at peak traffic hour.
Travel time at peak hour.....  Travel time in minutes to traverse the 14
                                kilometers of road upgraded at peak
                                traffic hour.
International roughness index  Road-surface quality measure (meters in
                                height per kilometers distance).
Trunk Roads Activity:
    Annual average daily       Number of vehicles per day adjusted for
     traffic.                   time-of-day and seasonal differences for
                                each road, disaggregated by vehicle
                                type. Rate of increase in traffic volume
                                is in addition to the estimated growth
                                rate in traffic of 6%.
    International roughness    Road-surface quality measure (meters in
     index (of roads            height per kilometers distance) for each
     requiring minor            road. Minor rehabilitation consists of
     rehabilitation).           re-gravelling (i.e., change from poor
                                gravel to improved gravel surface).
    International roughness    Road-surface quality measure (meters in
     index (of road requiring   height per kilometers distance) for each
     major rehabilitation).     road. Major rehabilitation consists of
                                upgrading road surface from poor gravel
                                to bitumen surface.
Ferry Activity:
    Travel time for walk-on    Average time spent by walk-on passengers
     passengers and small       and small vehicles to cross Volta River,
     vehicles.                  including time spent waiting to board
                                ferry and to on- and off-load.
    Travel time for trucks...  Average time spent by trucks to cross
                                Lake Volta, including time spent waiting
                                to board ferry and to on- and off-load.
    Annual average daily       Number of vehicles per day, adjusted for
     traffic (vehicle).         time-of-day and seasonal differences,
                                disaggregated by vehicles type.
    Annual average daily       Number of passengers per day, adjusted
     traffic (passengers).      for time-of-day and seasonal
                                differences.
------------------------------------------------------------------------


                     Outcome Indicators: Definitions
                       [Rural Development Project]
------------------------------------------------------------------------
          Indicator                            Definition
------------------------------------------------------------------------
Procurement Capacity
 Activity:
    Time per procurement.....  Amount of time to execute contract award
                                from the point of receiving a
                                requirement for processing to contract
                                award, disaggregated by the size of each
                                award as follows: (i) US$ 2,500 and
                                below, (ii) US$ 2,501-US$ 10,000, (iii)
                                US$ 10,001-US$ 100,000, (iv) US$ 100,001-
                                US$ 500,000 and (v) US$ 500,001 and
                                above.

[[Page 48690]]

 
    Quality of procurement...  A randomly-selected sample of
                                procurements will be evaluated each year
                                to assess the outcomes of the
                                procurements as compared to the outcomes
                                of similar procurements in the districts
                                not participating in the Program.
Community Services Activity:
Local Government Service
 Delivery Sub-Activity:
    Score card of citizen      TBD.
     satisfaction with
     services.
Education Facilities Sub-
 Activity:
    Gross enrollment rates...  Number of students enrolled in school
                                divided by the number of individuals of
                                appropriate school age, in the relevant
                                district (or other area).
    Gender parity in school    Number of females enrolled in school
     enrollment.                divided by the number of males enrolled
                                in school.
Water and Sanitation
 Facilities Sub-Activity:
    Distance to collect water  Distance between house and water source
                                in kilometers.
    Time to collect water....  Time spent collecting water, including
                                travel and waiting time.
    Distance to sanitation     Distance between house and sanitation
     facility.                  facility in kilometers.
    Travel time to sanitation  Time spent traveling to and waiting at
     facility.                  sanitation facility.
    Incidence of guinea worm,  Number of individuals suffering from
     diarrhea or bilharzia.     illness attributed to guinea worm,
                                diarrhea and bilharzia divided by the
                                number of individuals, in the relevant
                                district (or other area).
    Average number of days     Number of days spent accessing treatment
     lost due guinea worm,      and recovering from illness attributed
     diarrhea or bilharzia.     to guinea worm, diarrhea or bilharzia.
Rural Electrification Sub-
 Activity:
    Percentage of households,  Number of houses, schools and
     schools and agricultural   agricultural processing plants with
     processing plants in       electricity connections divided by the
     target districts with      total number of households, schools, and
     electricity.               agricultural processing plants in the
                                relevant district (or other processing
                                area).
Financial Services Activity:
    Number of inter-bank       Number of checks received by rural banks
     transactions.              plus number of remittances received by
                                rural banks.
    Value of deposit accounts  Cedi value of total deposits in rural
     in rural banks.            banks.
------------------------------------------------------------------------


                                                        Outcome Indicators: Baselines and Targets
                                                                  [Agriculture Project]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Targets / year
              Indicator              -------------------------------------------------------------------------------------------------------------------
                                       Baseline    1               2                        3                        4                       5
--------------------------------------------------------------------------------------------------------------------------------------------------------
Commercial Training Activity:
    Number of farmers adopting new            0  .....  5,100..................  12,750.................  15,300................  17,850.
     technologies and farming
     methods.
    Percentage of post harvest lost         20%  .....  10-14%.................  10-14%.................  10-14%................  10-14%.
     at farmgate (metric tones lost/
     metric tons produced).
    SMEs processing products and/or         TBD                                        TBD
     providing inputs to farmers.
Irrigation Activity:
    Number of hectares irrigated....          0      0  280....................  1,100..................  1,720.................  1,960.
Land Activity:
    Number of days to conduct a land        TBD  .....  50% decrease from        67% decrease from
     transaction.                                        baseline.                baseline.
    Number of land disputes in the          TBD  .....  .......................  30% decrease from        ......................  50% decrease from
     pilot registration districts.                                                baseline.                                        baseline.
    Registration of land rights in          TBD  .....  .......................  30% increase from        ......................  100% increase from
     the pilot registration                                                       baseline.                                        baseline.
     districts.
Post-Harvest Activity:

[[Page 48691]]

 
    Volume of products passing                0  .....  111,820................  129,900................  143,400...............
     through post-harvest treatment
     (metric tons).
Credit Activity:
    Portfolio-at-risk of                     0%  .....  20%....................  20%....................  20%...................  20%.
     agricultural loan fund.
    Value of loans disbursed to               0  .....  4,500..................  12,000.................  14,500................  17,000.
     clients from agricultural loan
     fund(US$).
    Number of additional loans......          0  .....  5,000..................  13,000.................  15,500................  18,000.
Feeder Roads Activity:
    Vehicle operating costs (on             TBD  .....  .......................  20% decrease from        20% decrease from       20% decrease from
     roads requiring minor                                                        baseline.                baseline.               baseline.
     rehabilitation).
    Vehicle operating costs (on             TBD  .....  .......................  30% decrease from        30% decrease from       30% decrease from
     roads requiring medium                                                       baseline.                baseline.               baseline.
     rehabilitation).
    Vehicle operating costs (on             TBD  .....  .......................  40% decrease from        40% decrease from       40% decrease from
     roads requiring major                                                        baseline.                baseline.               baseline.
     rehabilitation).
--------------------------------------------------------------------------------------------------------------------------------------------------------


                                    Outcome Indicators: Baselines and Targets
                                            [Transportation Project]
----------------------------------------------------------------------------------------------------------------
                                                                 Targets / year
          Indicator           ----------------------------------------------------------------------------------
                                   Baseline        1        2          3              4                 5
----------------------------------------------------------------------------------------------------------------
N-1 Activity:
    Volume capacity ratio....  0.85-1..........  .....  .........  .........  ................   0.26.
    Vehicles per hour at peak  >2000...........  .....  .........  .........  ................  3,120.
     hour.
    Travel time at peak hour.  60 minutes......  .....  .........  .........  ................  20 minutes.
    International roughness    TBD.............  .....  .........  .........  ................  2.5.
     index.
Trunk Roads Activity:
    Annual average daily       570.............  .....  .........  .........  35% increase in   35% increase in
     traffic.                                                                  traffic volume.   traffic volume.
    International roughness    9-12............  .....  .........        6.0  6.0.............  6.0.
     index (of roads
     requiring minor
     rehabilitation).
    International roughness    9-12............  .....  .........        3.5  3.5.............  3.5.
     index (of roads
     requiring major
     rehabilitation).
Ferry Activity:
    Travel time for walk-on    150 minutes.....                                TBD
     passengers and small
     vehicles.
    Travel time for trucks...  370 minutes.....                                TBD
    Annual average daily       53..............                                TBD
     traffic (vehicle).
    Annual average daily       541.............                                TBD
     traffic (passenger).
----------------------------------------------------------------------------------------------------------------


                                    Outcome Indicators: Baselines and Targets
                                           [Rural Development Project]
----------------------------------------------------------------------------------------------------------------
                                                                               Targets/years
             Indicator                     Baseline       ------------------------------------------------------
                                                               1          2          3          4          5
----------------------------------------------------------------------------------------------------------------
Procurement Capacity Activity:
================================================================================================================
    Time per procurement........................................................................................
    Quality of procurement......................................................................................
================================================================================================================
Community Services Activity:
================================================================================================================
    Score card of citizen satisfaction with services............................................................
================================================================================================================
Education Facilities Sub-Activity:
================================================================================================================
    Gross enrollment rates......................................................................................
    Gender parity in school enrollment..........................................................................
 
 
 
 
================================================================================================================

[[Page 48692]]

 
Water and Sanitation Facilities Sub-Activity:
================================================================================================================
    Distance to collect water...................................................................................
    Time to collect water.......................................................................................
    Distance to sanitation facility.............................................................................
    Travel time to sanitation facility..........................................................................
    Incidence of guinea worm, diarrhea or bilharzia.............................................................
    Average number of days lost due guinea worm, diarrhea or bilharzia..........................................
================================================================================================================
Rural Electrification Sub-Activity:
================================================================================================================
    Percentage of households, schools and agricultural processing plants in target districts with electricity...
 
 
 
 
 
================================================================================================================
Financial Services Activity:
================================================================================================================
    Number of inter-bank transactions...........................................................................
 
 
 
 
 
    Value of deposit accounts in rural banks....................................................................
----------------------------------------------------------------------------------------------------------------

    (iii) The M&E Plan will also include a number of activity-level 
measures that will track progress toward realizing the direct outputs 
of the Projects and Project Activities. Examples of the indicators 
likely to be included in the M&E Plan are:
    (1) Number of farmers receiving commercial training;
    (2) Number of irrigation facilities built; and
    (3) Kilometers of road upgraded.
    (b) Beneficiaries. The M&E Plan shall describe the Beneficiaries in 
detail, including the expected number of beneficiaries, their income, 
gender and other general demographic characteristics.
    (c) Data Collection and Reporting. The M&E Plan shall establish 
guidelines for data collection and a reporting framework, including a 
schedule of Program reporting and responsible parties. In addition, 
MiDA shall conduct regular assessments of Program performance to 
measure progress on the Compact Goal and the Objectives, and to alert 
all Parties to any problems in implementation of the Program. These 
assessments will report actual results compared to the Targets on the 
Indicators referenced in the Monitoring Component, explain deviations 
between these actual results and Targets, and describe any planned 
actions to address performance problems. MiDA shall promptly deliver 
any data or reports it receives to MCC along with any other related 
documents, as specified in the M&E Plan or as may be requested from 
time to time by MCC, and will make these assessments available to the 
public on their Web site.
    (d) Data Quality Reviews. As determined in the M&E Plan or as 
otherwise requested by MCC, the quality of the data gathered through 
the M&E Plan shall be reviewed to ensure that data reported are as 
reliable, timely and valid as resources will allow. The objective of 
any data quality review will be to verify the quality and the 
consistency of performance data, across different implementation units 
and reporting institutions. Such data quality reviews also will serve 
to identify where consistent levels of quality are not possible, given 
in-country capacity or other constraints.

3. Evaluation Component

    The Program shall be evaluated on the extent to which the Projects 
contribute to the Compact Goal and Objectives. The Evaluation Component 
shall contain the methodology for conducting the most rigorous impact 
evaluations feasible and cost-effective, as well as the process and 
timeline for analyzing data. The Evaluation Component shall contain two 
types of reports: a Final Evaluation and Project, Project Activity, or 
Interim Evaluations.
    (a) Final Evaluation. MCC will engage an independent evaluator to 
conduct an evaluation of the Program at the expiration or early 
termination of the Program (``Final Evaluation''). The evaluation 
methodology, timeline, data collection, and analysis requirements will 
be finalized and detailed in the M&E Plan. The Final Evaluation shall, 
at a minimum, (i) estimate quantitatively and in a statistically valid 
way, the causal relationship between the Compact Goal (to the extent 
possible), the Objectives and Outcomes; (ii) determine if, and analyze 
the reasons why, the Compact Goal, Objectives and Outcomes were or were 
not achieved; and (iii) assess the overlapping benefits of the 
Projects.
    (b) Project, Project Activity or Interim Evaluations. The 
Evaluation Component in the M&E Plan will also describe other 
individual Project, Project Activity, or interim evaluations (``Interim 
Evaluations''). The evaluation methodology, timeline, data collection, 
and analysis requirements will be finalized and detailed in the M&E 
Plan. Determination of the evaluation methodologies will be condition 
precedent for certain MCC Disbursements as provided in the Disbursement 
Agreement.
    (c) Ad Hoc Evaluations or Special Studies. In addition to the 
evaluations described in the M&E Plan, MCC may require ad hoc 
evaluations or special studies prior to the expiration of the Compact 
Term. If MiDA engages an evaluator, the evaluator shall be an 
externally contracted independent source, subject to the prior written 
approval of MCC, for terms of reference and final selection, following 
a tender in accordance with the Procurement Guidelines, and otherwise 
in accordance with any relevant Implementation Letter or Supplemental 
Agreement. The cost of an independent evaluation or special study may 
be paid from MCC Funding. If MiDA requires an ad hoc independent 
evaluation or

[[Page 48693]]

special study at the request of the Government for any reason, 
including for the purpose of contesting an MCC determination with 
respect to a Project or Project Activity or to seek funding from other 
donors, no MCC Funding or MiDA resources may be applied to such 
evaluation or special study without MCC's prior written approval.

4. Other Components of the M&E Plan

    In addition to the Monitoring Component and the Evaluation 
Component, the M&E Plan shall include the following components for the 
Program, Projects and Project Activities, including, where appropriate, 
roles and responsibilities of the relevant parties and Providers:
    (a) Costs. A detailed annual budget estimate for all components of 
the M&E Plan.
    (b) Assumptions and Risks. Any assumptions and risks external to 
the Program that underlie the accomplishment of the Objectives and 
Outcomes; provided such assumptions and risks shall not excuse 
performance of the Parties, unless otherwise expressly agreed to in 
writing by the Parties.

5. Implementation of the M&E Plan

    (a) Approval and Implementation. The approval and implementation of 
the M&E Plan, as amended from time to time, shall be in accordance with 
this M&E Annex, and any other relevant Supplemental Agreement or 
Implementation Document. A review of the completed portions of the M&E 
Plan by the Board of MiDA shall be required prior to the expiration of 
the first year of the Program. Review and approval of the M&E Plan 
shall be completed by time specified in the Disbursement Agreement.
    (b) MCC Disbursement for a Project Activity. As a condition to 
certain MCC Disbursements as provided in the Disbursement Agreement, 
there shall be satisfactory progress on the M&E Plan for the relevant 
Project or Project Activity, and substantial compliance with the M&E 
Plan, including any reporting requirements. In addition, for certain 
activities, collection of baseline data will be condition precedent for 
certain MCC Disbursements as provided in the Disbursement Agreement.
    (c) Modifications. Notwithstanding anything to the contrary in the 
Compact, including the requirements of this M&E Annex, the Parties may 
modify or amend the M&E Plan or any component thereof, including those 
elements described herein, without amending this Compact; provided, any 
such modification or amendment of the M&E Plan shall be reviewed by the 
Board of MiDA and approved by MCC in writing, and is otherwise 
consistent with the requirements of this Compact and its Objectives, 
and any relevant Supplemental Agreement between the Parties.
[FR Doc. 06-6914 Filed 8-18-06; 8:45 am]
BILLING CODE 9210-01-P