RATIONALE AND COUNTRY CONTEXT

ANNEX 1. IDENTIFICATION Title/Number Total cost Support to the implementation of the agriculture sector wide approach (ASWAp) and the Green Belt Initiative (GBI) CRIS: MAI/FED/23181 EUR 97 843 000 A Envelope Joint co-financing and project financing Aid method / Method of implementation DAC-code 31110 31150 31140 EDF Contribution: EUR 63 000 000 Government of Malawi contribution: EUR 708 000 Existing funding (ASWAp - Support Project): World Bank EUR 23 500 000 (USD 32 000 000) Global Environment Facility EUR 4 260 000 (USD 5 800 000) Kingdom of Norway EUR 6 375 000 (NOK 50 000 000) Sector Policy Support Programme (SPSP): Component 1: Pool fund (joint management) Component 2: Project mode (partially decentralised management) Sector Agricultural policy and administrative management Agricultural inputs Agricultural water resources 2. RATIONALE AND COUNTRY CONTEXT 2.1. Country context and rationale for SPSP 2.1.1. Economic and social situation and poverty analysis Despite recent gains in economic growth rates (7% annually between 2004-2008), Malawi remains one of the least developed countries in the region, with a per capita Gross Domestic Product (GDP) of USD 288, and is ranked at 153 of the 192 countries, according to the UNDP 1 Human Development Index 2010. According to the Government of Malawi's statistics, the poverty rate decreased from 52% to 39% between 2004 and 2009. Malawi is among the countries with the highest population density in Africa (139 people/km 2 ), and has a rapid population growth of 2.8% per annum, exerting considerable pressure on productive resources, mainly land for agriculture. Smallholder farmers continue to rely almost exclusively on rain-fed agriculture with only 14% of irrigable land being under irrigation. The economy is largely dependent on agriculture, which employs 87% of the population and accounts for about 36% of GDP as well as for more than 70% of export revenues. During the past two years the agricultural sector has grown on average by 11.4%, mainly on account of improved food security supported by the Farm Input Subsidy Programme and good agriculture seasons. However, the overall economic situation remains vulnerable to seasonal changes and commodity price shocks on the international market. Many households suffer from food insecurity, even in years of national food surplus, either because they do not produce enough, or they do not have 1 United Nations Development Programme 1

sufficient income to buy food. Malnutrition also remains endemic due both to a lack of food and to poor diet, and affects childhood development as well as vulnerability to diseases such as HIV/AIDS, malaria and tuberculosis. 2.1.2. National development policy Malawi s overarching development policy document is the Malawi Growth and Development Strategy (MGDS). The MGDS identifies agriculture as the driver of economic growth and poverty alleviation. The main objective of the MGDS 2006-2011 (currently under review) is to create wealth through economic growth and development as a means of achieving poverty reduction. The implementation of the MGDS has been broadly satisfactory since its adoption in November 2006, as indicated in the annual reviews. The MGDS has been guiding national budget resource allocations, with an average of over 60% of expenditures aligned to MGDS priorities. The proposed programme will contribute specifically to the achievements of the following MGDS' priorities: agriculture and food security, irrigation and water development, climate change, natural resources and environmental management, and Integrated Rural Development. 2.2. Sector context: policies and challenges The agriculture sector is facing various challenges, including very small landholdings which are mainly devoted to subsistence farming; low productivity due to land degradation; declining soil fertility; lack of irrigation; lack of diversification in farming systems (dominated by maize production); poorly developed markets for agricultural inputs and produce; and weak service provision, particularly rural financial services and agricultural research and extension. To address these challenges, the Government of Malawi has developed an Agricultural Sector Wide Approach (ASWAp), the strategic framework aiming at increasing agricultural productivity, with a view to improving food security, diversifying food production and increasing agricultural incomes for rural people. The ASWAp has three pillars: 1) food security and risk management; 2) commercial agriculture, agro-processing & market development; and 3) sustainable agricultural land and water management. These are complemented by two key support services: a) technology generation and dissemination; and b) institutional strengthening and capacity building. ASWAp aspires to attain a minimum 6% annual growth in the sector, assuming that at least 10% of the national budget continues to be allocated to agriculture. Support to the operationalisation of the ASWAp is currently provided by the World Bank, the Global Environment Facility and the Kingdom of Norway through the ASWAp-Support Project (ASWAp-SP). The Programme will build on this initiative. For irrigation, the key policy documents are the National Irrigation Act, the National Irrigation Policy and Development Strategy (NIDPS) and the Presidential Green Belt Initiative (GBI), which aims to expand the area under irrigation from 78 000 ha to 1 000,000 ha. The ASWAp refers to the GBI in focal area 3 "Sustainable land and water management", acknowledging that irrigation infrastructure is key to increasing agricultural production and productivity, increasing agricultural exports and promoting crop diversification. Also related is the Land Bill, which was developed with EU support and has yet to be submitted to the Cabinet of the Ministry of Water Development and Irrigation for approval. The Land Bill is expected, among other things, to regulate the adjudication of rights and interests in customary land, and to promote the democratic, transparent and accountable management of current customary land (e.g. through the establishment of Customary Land Allocation Committees, of Dispute Settlement Tribunals to handle customary land disputes). The Government of Malawi is currently implementing a decentralisation programme, whereby some central Government powers, functions and resources are being devolved to local authorities. The progress towards decentralisation has, however, been slow. To achieve greater impact, the 2

programme will work with decentralised structures (e.g. the District Commissioner and District Assemblies). Malawi has now developed its Medium Term Expenditure Framework (MTEF) based on a rolling 3-year budget starting from the 2011/2012 approved budget to 2012/2013 and 2013/2014 as indicative budgets. However, the reliability of the MTEF is greatly compromised due to the over optimistic macroeconomic underlying assumptions. The allocation to agriculture in the fiscal year 2011/2012 was approximately MWK 38 000 000 000 (approx. EUR 172 000 000) i.e. 12% of the total national budget. Total funding requirements for the ASWAp from July 2011 to June 2015 are estimated at USD 2 100 000 000. Current projections show a financing gap of USD 1 100 000 000 (EUR 869 000 000), notably in "Sustainable agricultural water management and irrigation development". The investment framework is, however, under revision. No financial projections for the GBI are available. 2.3. Eligibility for budget support Malawi has been receiving General Budget Support and a Financing Agreement for Sector Budget Support (in the transport sector) has recently been signed. However, disbursements are currently on hold as several general conditions for budget support are currently not met. The Government of Malawi has indicated its preference to support the ASWAp through pool funding. 2.4. Lessons learnt The implementation of the ASWAp as a sector-wide approach has encountered challenges due to, among other things, the multiplicity of projects (with the proliferation of isolated implementation structures). There is an urgent need to vigorously pursue a harmonisation and an alignment agenda for increased impact and scaling up. The programme is designed to promote this agenda through coordinated annual planning and funding arrangements. It is also expected that this approach will promote building on existing capacities (which the programme aims at reinforcing through institutional capacity development) and will foster in a more coherent and effective policy dialogue between development partners and Government. The EU has been supporting various small-to-medium scale irrigation schemes through 9 th EDF programmes. There is, however, the need to support more ambitious irrigation investments. To this end, the Government of Malawi wants to facilitate development partners' / private sector support through the creation of a National Irrigation Fund (as foreseen in the National Irrigation Act, the National Irrigation Policy and the Development Strategy), eventually using national rules and procedures. Further support is needed to ensure that the Fund is based on a robust investment framework and a solid feasibility work covering a range of issues (technical, social, environmental, economic), thus ensuring sustainability. An evaluation carried out in May 2011 on two sugar schemes indicated overall project relevance as good: the projects are suited to the priorities and policies of Malawi, the industry sector and the target group recipients. The evaluation recommended to ensure a longer implementation phase (noting the delays due to land disputes), and the need for timely financial, economic and commercial project analyses (to ensure a short time span between costing and implementation, and thus limit the need for changes in technical designs). Land disputes, particularly in the central region, have caused implementation delays due to the lack of a land tenure strategy. A recent land study on sugar areas (including other potential EU funded irrigated areas) will provide a framework for the government, aspiring farmers and development partners, on land allocation procedures, in the absence of the endorsement by cabinet of the Land Bill. As the implementation modality for the 3

past two projects were through grants, which proved cumbersome for the beneficiaries, the new sugar programme foresees works contracts. 2.5. Complementary actions Programme interventions will seek synergies with other interventions supported by the EDF and thematic budget lines of the EU General Budget to increase impacts. Current 10 th EDF programmes in the sector are the Farm Income Diversification Programme (FIDP) - phase II, which focuses on soil and water conservation, diversification of agricultural production and agri-business; the Improved Forest Management for Sustainable Livelihoods Programme (IFMSL) - phase II, which aims to improve the livelihoods of forest dependent communities through the sustainable use of timber and non-timber production; and the Rural Infrastructure Development Programme (RIDP), which will build capacity of the irrigation sector and undertake feasibility studies as a foundation for future irrigation investments. Under the Food Security Budget Lines financed by the EU Budget, the Multiannual Food Security Programme 2004-2006 has been supporting, among other things, the Farm Input Subsidy Programme and the Food and Nutrition Security Joint Taskforce and its sub-committees. In addition, several grants have been awarded to promote food security. Under the 2010 Food Security Thematic Programme, the EU will support innovative actions to deliver social cash transfers to ultra-poor rural households. Further complementary interventions are supported under the Sugar Accompanying Measures, also financed by the EU budget, aiming at strengthening sugar production. Complementarities also exist with Regional Programmes (e.g. the COMESA 2 Regional Agriculture Inputs Programme funded from the regional Food Facility). Various development partners are active in the agriculture sector, including the World Bank (WB), the International Fund for Agricultural Development (IFAD), the Department for International Development (DfID UK Cooperation), IrishAid, the Flanders International Cooperation Agency (FICA), the Kingdom of Norway, the JICA (Japanese cooperation), the Food and Agriculture Organization of the United Nations (FAO), and the World Food Programme (WFP). In irrigation, the key players include the WB (which is also assisting in the development of a water resource investment framework), the African Development Bank (AfDB which is assisting in the development of an irrigation master plan), IFAD and JICA. Other development partner funded programmes with potential synergies are under formulation in the areas of trade and commercialization. Germany is very active in the area of decentralisation. 2.6. Donor coordination Development partners' coordination in Malawi is ensured through the Donor Committee on Agriculture and Food Security (DCAFS), which meets monthly and provides a forum for defining common positions vis a vis the Ministry of Agriculture and Food Security. The DCAFS is currently chaired by the EU. According to the Malawi Development Assistance Strategy, 16 Sector Working Groups (SWGs), comprising all key stakeholders including development partners, have been set up reflecting the MGDS key priority areas. Relevant to this Programme will be the 'Agriculture' SWG (initial meeting held in April 2011), and the "Water and Sanitation" SWG which includes irrigation. The technical working group "Water for production" builds the platform for more technical discussions between stakeholders active in the sub-sector. It is expected that the EU investment through this programme will be a catalyst for other development partners to further align their 2 The Common Market for Eastern and Southern Africa 4

support to the ASWAp (through the ASWAp Multi-donor Trust Fund or parallel funding) and irrigation development (through the National Irrigation Development Fund). Other development partners (FICA, the Kingdom of Norway, IrishAid) already declared their interests to join the Multidonor Trust Fund. 3. DESCRIPTION 3.1. Objectives The Overall Objective is to contribute to the Malawi Government s objective of poverty reduction in line with the Malawi Growth and Development Strategy (MGDS). The Specific Objective is to increase agricultural productivity and food security of rural communities. This will be done through the improvement of systems and processes, strengthening of implementation capacities and delivery of inputs to final beneficiaries. The programme will directly support the Green Belt Initiative as well as the ASWAp focal areas 1 "Food Security and Risk Management" and 3 "Sustainable Agricultural Land and Water Management", including the key support service "Institutional Strengthening and Capacity Building" (reflecting gaps within the existing and pledged funding to the ASWAp). 3.2. Expected results and main activities The programme consists of 2 components: Component 1) Implementation of the Agriculture Sector Wide Approach (ASWAp) Sub-component a) Capacity development for ASWAp implementation systems and procedures Result 1: Systems and procedures for ASWAp implementation strengthened. This component aims to strengthen administrative and management systems in the Ministry of Agriculture and Food Security to implement the ASWAp. This will facilitate the increased use of harmonised funding in support of the agricultural investment strategy. Main activities are: support to ASWAp Management and Coordination (including a targeted core functional analysis); support to planning, monitoring and evaluation (indicators, underlying statistics and estimates, data collection, analysis and reporting systems to strengthen impact and performance monitoring); support to Administrative System Development (strengthening of administrative systems, human resources and asset management). Sub-component b) Food security risk management Result 2: Food security risks mitigated through improved use of existing risk management instruments. Support will be provided to implement existing instruments of the Government's Food Security Risk Management Strategy, namely the Farm Input Subsidy Programme (seed component and Logistics Unit), market-based risk management instruments such as Macro- and Micro- Weather Insurance (including insurance premium payment, installation of weather stations and improvement of data processing and reporting), as well as enhanced delivery of extension and research services for improved national and household food security. Component 2) Irrigation Sub-component a) Support to the establishment of the National Irrigation Development Fund. Result 3: National Irrigation Development Fund established. 5

In line with existing Government policies, this component aims at preparing the ground for future development partners (including the EU) and private sector investment in the irrigation sector. Capacity development is also required to ensure that the Ministry of Water Development and Irrigation can actively engage in the ASWAp/GBI processes in collaboration with a wide range of development partners, private sector, civil society and across line ministries and other government institutions. Sub-component b) Development of medium and large scale irrigation schemes. Result 4: Farmer's access to irrigated agriculture improved. It is foreseen to develop several medium size (up to 8) and 2-3 large size irrigation schemes in an integrated approach including aspects of institutional, social, economic and environmental sustainability. 3.3. Risks and assumptions The success of ASWAp strongly relies on strengthened structures at all levels. Capacities (notably at district level) remain weak with constraints in equipment, management capacity, technical knowledge and high staff turn-over. The Programme has a significant institutional development component, complemented by the provision of equipment. A human resource management plan is being developed. In the medium term, dialogue on incentive systems to retain staff in the public sector will be needed. There is a risk related to the complexity of the sector wide approach regarding coordination, consensus and timely decision making due to the high number and diversity of stakeholders as well as the further need for institutionalization of the structures designed to guide ASWAp implementation. It is assumed that internal coordination and steering will be effectively ensured by the Executive Management Committee (EMC), a high level Committee which includes Principal Secretaries from Ministries and Departments with a stake in the sector. Such a high level steering will also facilitate the reform process that ASWAp entails, thus winning possible resistance to change. It is also assumed that the Sector Working Groups will provide effective fora for dialogue between stakeholders on financial management, planning, monitoring of impact as well as on broader sectoral issues. Joint missions and reviews will enhance exchanges and consensus creation. While the absorption capacity of the ASWAp-Support Project has not been very high, institutional capacity building will assist in boosting implementation. Also, harmonisation of development partners' support will allow the Government to focus efforts, as the MDTF will use procedures already known and applied. The expansion of irrigation could be compromised by land disputes on "customary land" (i.e. land given by the Government of Malawi to traditional leaders for distribution amongst subjects). The Government of Malawi is committed to addressing land issues by enacting the Land Bill, which has not yet been submitted to Cabinet. To reduce this risk, the feasibility studies currently undertaken include specifically land issues and community sensitisation. Only sites where there is a consensus will be considered for development. It is assumed that no situation of national food emergency or natural disaster occurs to dominate the political agenda and government activities. 6

3.4. Stakeholders The Programme will be implemented by the Ministry of Agriculture and Food Security (for component 1) and the Ministry of Water Development and Irrigation (for component 2). The Ministry of Lands and Housing will play an important role for irrigation infrastructure development and land-related aspects. Other concerned Ministries include the Office of the President and the Cabinet (which hosts the GBI Secretariat), the Ministry of Finance, which includes the National Authorising Officer Office, the Ministry of Economic Planning and Development, the Ministry of Industry and Trade, the Ministry of Local Government & Rural Development, and the Ministry of Environment and Climate Change Management. Non-state actors are also key stakeholders in the sector, including farmers, farmer unions and their associations, faith-based communities and groups. Private firms working in agriculture and agribusiness are key stakeholders as well as potential final beneficiaries. Development partners are crucial stakeholders, notably those who will be supporting ASWAp through coordinated arrangements (or planning to do so). 3.5. Crosscutting Issues Environment: Environmental issues are included in the ASWAp design and related operational manuals. A Strategic Environmental assessment of the ASWAp is foreseen, in coordination with other development partners. Recommendations from the Environmental Impact Assessment (EIA), currently being carried out by DFID, will be followed up. The design of irrigation schemes will respect environmental minimum flow requirements and all developments require an EIA and Environmental Management Plan defining mitigation measures to be undertaken. Elements of catchment protection and training on good agricultural practices will be an integral part of all irrigation schemes. Climate change: To mitigate the effect of climate change, ASWAp supports the implementation of the market-based risk management instruments (Macro and Micro Weather Insurance). Increased use of irrigation will also play an important role. Priority will be given to gravity fed irrigation schemes with improved water storage capacity and lower energy consumption requirements for water lifting/pumping and distribution. Other elements considered are the use of improved crop varieties or the protection of catchment areas, water harvesting. Gender: Gender issues are regularly reviewed in the context of ASWAp support missions. ASWAp acknowledges the need to target women, both at the level of activities and in terms of gender parity within the workplace, and proposes to train at least 30% of female staff. Under the Farm Input Subsidy Programme resource poor female headed household heads are specific beneficiaries. Irrigation development will directly benefit women, who will be represented in the Water User Associations and various committees and clubs. Irrigation clubs and Water User Association members, as well as communities around construction sites, will be sensitized on HIV/AIDS issues. ASWAp also proposes to mainstream HIV/AIDS issues, both at the level of activities (under input subsidy programme HIV positive resource poor household heads are specific beneficiaries), and in terms of training and communication. 4. IMPLEMENTATION ISSUES 4.1. Method of implementation The Programme will be covered by one Financing Agreement. Component 1 - Implementation of the Agriculture Sector Wide Approach (ASWAp) This component will be implemented by joint management through signature of an Administration Agreement between the European Commission and the World Bank (WB), in accordance with 7

Article 29 of the Regulation (EC) No 215/2008 on the financial regulation applicable to the 10 th European Development Fund. The WB complies with the criteria provided in the applicable Financial Regulation and is covered by a framework agreement (the Trust Fund and Co-financing Agreement). Day-to-day implementation will be ensured by the Ministry of Agriculture and Food Security. This includes accounting and procurement management (in line with the provisions and thresholds defined by the World Bank) and progress reporting on expenditures, outputs and outcomes. The World Bank will ensure the oversight of implementation and will be responsible for the management of the Multi-donor Trust Fund (MDTF). The choice of the WB for the management of the MDTF is based on various considerations: the WB has vast experience in multidonor trust funds (examples already exist in Malawi) and a framework agreement with the EU exists; the WB is already implementing the ASWAp-Support Project (and the MDTF will build on this initiative) and is keen to manage the MDTF; there is agreement among development partners to entrust the WB with this task; given the preference of Government for pooling arrangements, there are no viable alternatives acceptable to all stakeholders. Component 2 - Irrigation This component will be implemented through partially decentralised management in accordance with Articles 21 to 23 of the Financial Regulation of the 10 th EDF. The Ministry of Finance (National Authorising Officer - NAO) will be the Contracting Authority and will delegate to the Ministry of Water Development and Irrigation some of its responsibilities and powers for implementation. Day-to-day management will be carried out by the Department of Irrigation within Ministry of Water Development and Irrigation. Implementation will entail signature of Programme estimates (direct decentralised operations), supplies, works, services contracts (e.g. supervision of works, technical assistance) and grants for the medium scale irrigation schemes. Technical assistance to the Department of Irrigation (for management advice in procurement and financial management as well as capacity building and facilitation of inter-ministerial cooperation in areas such as productive irrigation/agribusiness or land management) as well as design and supervision services for the development of large scale irrigation schemes will be recruited through service contracts, awarded following an international restricted tender launched with a suspensive clause. The Commission controls ex ante all the procurement procedures, except in cases where programmes estimates are applied, under which the Commission applies ex ante control for procurement contracts > EUR 50 000 and may apply ex post for procurement contracts < EUR 50 000. The Commission controls ex ante the contracting procedures for all grant contracts. Payments are executed by the Commission except in cases where programmes estimates are applied, under which payments are executed by the beneficiary country for operating costs and contracts up to the ceilings indicated in the table below. The responsible Authorising Officer ensures that, by using the model of financing agreement for decentralised management, the segregation of duties between the authorising officer and the accounting officer or of the equivalent functions within the delegated entity will be effective, so that the decentralization of the payments can be carried out for contracts up to the ceilings specified below. Works Supplies Services Grants < EUR 300 000 < EUR 150 000 < EUR 200 000 EUR 100 000 8

The change of management mode constitutes a substantial change except where the Commission 'recentralises' or reduces the level of tasks previously delegated to the beneficiary country, international organisation or delegated body under, respectively, decentralised joint or indirect centralised management. In light of the Aid Effectiveness agenda, the programme will build on existing initiatives to enhance ownership and alignment. For both components, implementation will be based on existing or planned Government structures. For component 1, this entails using the existing ASWAp structure including the Executive Management Committee (Programme Steering Committee involving all concerned Ministries), and the ASWAp Secretariat. Under component 2, the National Irrigation Development Fund (NIDF) will promote harmonisation of investments. As soon as it is operational, and provided that the systems and procedures meet the required international standards, EU funds might be pooled with other funds and awarded using national procedures. This will require a formal assessment of the procedures as well as a formal amendment to the Financing Agreement. However, in case the development of the National Irrigation Fund is delayed it is possible that a Call for Proposals will be organised using EU rules and procedures. Under component 2, the National Irrigation Development Fund (NIDF) will promote harmonisation of investments and, as soon as it is operational, and provided that the systems and procedures meet the required international standards, EU funds might be pooled with other funds and awarded using national procedures. This will require a formal assessment of the procedures as well as a formal amendment to the Financing Agreement. However, in case the development of the National Irrigation Fund is delayed, it is possible that a Call for Proposals will be organised using EU rules and procedures. The programme also includes a provision for unallocated Technical Assistance to fund studies such as a Strategic Environmental Assessment of the ASWAp or the assessment of national procedures. Also included are allocations for independent monitoring, evaluation and audit. These allocations will be managed by the Commission on behalf of the Government of Malawi/Ministry of Finance. 4.2. Procurement and grant award procedures / programme estimates For component 1, Joint management with the World Bank: All contracts implementing the action are awarded and implemented in accordance with the procedures and standard documents laid down and published by the International Organisation concerned. For component 2, Partially decentralised management: 1) Contracts: All contracts implementing the action must be awarded and implemented in accordance with the procedures and standard documents laid down and published by the Commission for the implementation of external operations, in force at the time of the launch of the procedure in question. Participation in the award of contracts for the present action shall be open to all natural and legal persons covered by the 10 th EDF. Further extensions of this participation shall be subject to the conditions provided for in Article 20 of Annex IV of the revised Cotonou Agreement. 2) Specific rules for grants: The essential selection and award criteria for the award of grants are laid down in the Practical Guide to contract procedures for EU external actions. The maximum possible rate of co-financing for grants is 80%. Full financing may only be applied in the cases provided for in Article 109 of the Council Regulation on the Financial Regulation applicable to the 10 th European Development Fund. 9

3) Specific rules on programme estimates: All programme estimates must respect the procedures and standard documents laid down by the Commission, in force at the time of the adoption of the programme estimates in question (i.e. the Practical Guide to procedures for programme estimates). The EDF financial contribution covers the ordinary operating costs from the programme estimates. 4.3. Budget and calendar The total programme cost is estimated at EUR 97 843 000 of which EUR 63 000 000 to be financed from the 10 th EDF. The indicative budget is given in the table below: COST ITEM Component 1: Implementation of the ASWAp (Administration Agreement with WB) Component 2: Irrigation (Service, work, supply contracts, PE, grants) TA services (unallocated) including independent seed monitoring and verification Evaluations & Audit EU Contribution EUR Government Contribution EUR Other contributions EUR* Total EUR 28 890 000 708 000 34 135 000 63 733 000 29 000 000-29 000 000 1 500 000 1 500 000 1 000 000 1 000 000 (service contracts) Contingencies* 2 410 000 2 410 000 Visibility 200 000 200 000 TOTAL 63 000 000 708 000 34 135 000** 97 843 000 * The EU contribution to the "Contingencies" heading may be used only with prior agreement of the Commission. ** includes only existing contributions through the ASWAp-SP (WB, GEF and Kingdom of Norway funding 2008-2013). The expected grant beneficiaries' contributions under component 2 are excluded. The operational duration will be 60 months from the signature of the Financing Agreement. 4.4. Performance monitoring The ASWAp has 18 prioritized result indicators focusing on food security and risk management (increase in crop production and food crop diversification; food stability at national level); on commercial agriculture, on agro-processing and market development (increase in agricultural exports; increase in agricultural income; improvement of Public Private Partnerships for growth in agriculture); on sustainable agricultural land management (area under sustainable irrigation); on technology generation and dissemination (efficient farmer-led extension and training Services); on institutional strengthening and capacity building (strengthening public management systems; capacity building of the public and private sectors). The Ministry of Agriculture and Food Security acknowledges that the ASWAp result framework requires refinement and improvements in the underlying statistics (base line), data collection and reporting. This will be addressed during the inception phase. Regular monitoring of the ASWAp will be ensured through quarterly and annual progress reports and joint support missions. 10

Detailed monitoring of component 2 will be done in the form of quarterly reports, submitted to the National Authorising Officer (NAO) and the EU Delegation by the Imprest Administrators and Imprest Accounting Officers. The NAO Support Unit will ensure day-to-day monitoring and performance tracking. Progress will be reviewed by the ASWAp management structures. 4.5. Evaluation and audit For component 1, audit will be done in conformity with the administration agreement. Progress reviews, a joint programme mid-term and a final evaluation will be conducted. For component 2, regular audits (in intervals not exceeding six months) will be carried out by a duly appointed firm of public accountants contracted by the European Union Delegation. External evaluations will be conducted at mid-term (if deemed useful) and at the end of the programme. 4.6. Communication and visibility ASWAp visibility activities will be conducted according to the World Bank Group (WBG), and the European Commission signed the Trust Funds and Co-financing Framework Agreement. It will be ensured that each donor contribution is adequately reflected, as currently done in the ASWAp - Support Project. An allocation has been set aside for general visibility activities (which will complement the allocations to be foreseen in the Programme Estimates under component 2). The EU Delegation and the NAO Support Unit in the Ministry of Finance will ensure that programme visibility actions are taken in compliance with relevant EU guidelines. 11