Document of The World Bank FOR OmFCIAF USE ONLY Report No. 5169 t PROJECT COMPLETION REPORT CHAD - SAHELIAN ZONE PPOJECT (CREDIT 739-CD) June 29, 1984 Projects Department Western Africa Regional Office Agriculture D Division lThd documn hs a rausuicted distr-butio and way be used by recpiets ony in te perfonnce of l |dmir officid duies Its contet may not oherwie be didsed withno Wodd Bak auhorizton. ABBREVIATIONS ASECNA Agency for Air Safety in Africa and Madagascar CIDA Canadian International Development Agency GWANC Committee of War Against National Calamities IDA International Development Association ONDR National Rural Development Office SERARRY Rural Water Supply Agency SZP Sahelian Zone Project U1NDP United Nations Development Program FOR OFFICIL USE ONLY CHAD SARELIAN ZONE PROJECT (CREDIT 739-CD) PROJECT COMPLETION REPORT Table of Contents Page No Preface i Basic Data Sheet ii Highlights I. PROJECT FORMULATION AND APPRAISAL 1 A. Background -1 B. Project Objectives and Description 1 C. Appraisal 1 D. Project Cost and Financing Arrangements 2 II. IMPLEMENTATION 2 III. BENEFITS AND JUSTIFICATION 4 IV. INSTITUTIONAL PERFORMANCE 5 V. BANK PERFORMANCE 5 VI. COFINANCING 6 Annex 1 Table 1 - Total Disbursements by Category and Subproject Status 7 Table 2 - Consolidated Project Account as of February 1980 8 Annex 2 Letter from Co-financier CIDA 9 This document has a resiced disdbutxn and may be used by recipients only in the performance of their oMcisd dutieIts contents may not otherwise be disclosed without World Bank authorization. CHAD SA8ELIAN ZONE PROJECT (CREDIT 739-CD) PROJECT COMPLETION REPORT Preface This is a completion report of the Sahel£an Zone Project for which * Credit 739-CD for US$1.9 million was approved in September 1977. In December 1983, after only US$0.23 million Lu disbursements, final agreement was reached between all parties for cancellation of the project. This desk study was prepared by the West Africa Region office on the basis of a review of the project files, Appraisal Report (1585 b-CD) of August 4, 1977, President's Report (P-2107-CD) of August 23, 1977, Credit Agreement of September 28, 1977 and interviews with Bank staff associated with the project. Due to the continuing security problems and the limited achievements of the project, a PCR Field Mission was not undertaken. A copy of the report was sent to the Government and the co-financier CIDA. for comments. While no comments have been received from Government, CIDA's letter is reproduced in Annex 2. This project has not been audited by the Operations Evaluation Department. PROJECT COMPLETION REPORT CHAD - SAHEL1AN ZONE PROJECT (Credit 739-CD) BASIC DATA SHEET Actual or Appraisal Estimated KEY PROJECT DATA Estimate Actual Total Project Cost (USS million) 3.96 0.33 a/ Underrun - 92Z Credit Amount (USs million) 1.9 1.9 t CIDA (Cofinancing) 1.9 - Board Approval Date 09106/77 09/06177 Credit Agreement Date 09/28/77 09/28/77 Effectiveness Date 12/27/77 05/15/78 b/ Closing Date 06/30/80 07/31/84 i/ Date Physical Components Completed 12/31/79 Not completed Proportion Completed on that Date 100Z Not available Economic Rate of Return 21Z d/ Not available CUMUlATIVE DISBURSEMENTS FY78 FY79 FY80 Appraisal Estimate (US$ million) 0.9 1.6 1.9 Actual (USS million) 0.1 0.1 0.2 Suspension of Disbursements 07/19/79 Final Disbursement Date - 03/31/80 Cancellation Date - 04/30(84 c/ MISSION DATA Date (Month/ No. of Manweeks Performance- Types of Mission Year Persons in Field rating h/ Trend i/ Problems j/ identification 12/76 2 1 - - - Appraisal 02/77 2 7 - - - Supervision I 05/78 1 0.5 - - - Supervision II e/ 10/78 1 0.8 2 _ M Supervision III 06/79 1 f/ 0.2 - - - Supervision IV g/ 02/80 1 0.4 2 2 P,C,M Supervision V 12/82 1 0.2 - - - Supervision VI 05/83 1 0.2 - - - OTHER PROJECT DAMA Borrower Government of Chad Executing Agencies CWANC k/ and Eight in-Line Government Agencies: ONDR, Agriculture Dept., Livestock Dept, SERARHY, Water Bureau, Forestry Dept., CWANC, ASECRA Fiscal Year (project) October 1 - September 30 I/ Name of Currency Cormmnaute Financiere Africaine Franc (CFAF) Currency Exchange Rate: Appraisal Year Average (1977) US$1.00 - CFAF 245 Final Disbursements Year Average (1980) USS1.00 - CFAF 211 First Mention in Files or Time Table 11/05/76 Government's Application 10/26/76 g Appraisal 02/77 Negotiations 06/77 Follow-on Project None a/ Very rough estimate based on IDA disbursement data assuming CIDA paid its 50Z share for each disbursement category. Excluding funds from revolving fund account which were transferred to Cr. 664. b/ Although the project became effective in May, 1978 the revolving fund was not operational until January, 1979. cI Cancellation of the credit balance of US$1.6 million is expected in July, 1984. d/ ERR calculated for 3 subprojects only. e/ First supervision mission for which a full supervision report was prepared (specialization , project economist). El The mission was also represented by an official from CIDA. II Second and the last supervision for which a full supervision report was prepared (specialization - proj. economist). hI/ 1 - problem free: 2 - moderate problems; 3 - major problems. i/ 1 - improving; 2 - stationary; 3 - deteriorating. j/ P - political; P - financial; N - managerial; 0 - others. k/ Responsible for overall coordination. 1/ The Government's fiscal year is January 1 - December 31. - iii - HIGHLIGHTS The Sahelian Zone Project (SZP) was the tenth IDA operation, the sixth project in the agriculture sector and the second drought relief project in Chad. It was developed in response to the 1976 crop failure and to Government's decision to allocate investments more equitably between the cotton and Sahelian zones. The project was intended as a two-year non-renewal operation composed of 14 subprojects. It was prepared primarily by Government and was well formulated. Serious delays it project effectiveness and start-up stemmed from the late decision to cofinance the project with the Canadian International Development Agency (CIDA). It was not until a full 13 months beyond the project's expected start-up date that the project revolving fund became operational. By this time, project implementation had come to a standstill due to civil war (see para 2.03). Shortly thereafter, disbursements for all IDA projects in Chad were formally suspended effective July 18, 1979. In February 1980, a supervision mission recommended resumption of disbursements for IDA agriculture projects including SZP, but the political situation in Chad continued to change rapidly and this proved impossible. The subsequent IDA agriculture mission in December 1982 found that only a few of the SZP subprojects were still feasible, due primarily to weakened executing agencies and security issues, and recommended that the viable ones be financed by the Rural Projects Fund (Cr. 664-CD) for which auspension of disbursements was to be partially lifted. By June 1983, IDA and Government had come to a tentative agreement to cancel the SZP since viable subprojects had already been picked up for financing by other donors and the remaining subprojects either needed complete redesign or were located in insecure areas (see Table 1, Annex 1). Final agreement was reached between all parties in December 1983 to cancel the project (see para 2.05). Due to delays in project implementation and the rapidly changing political and security situation in Chad, the project accomplished very little. Only about 8% of the originally estimated project cost was paid out. The vaccination campaign, an on-going activity from the first drought relief project, was the only subproject for which activities were to some extent successfully undertaken. Although expenses were incurred for 4 other subprojects, no activities were completed. * The overall performance of IDA was fully satisfactory particularly in view of the constantly changing political circumstances in which it had to operate. Potential security risks had been taken into account at the time of * appraisal and adequate safeguards had been taken. It was simply not possible to foresee the severity of the situation which arose. Even after the civil war disturbances of 1979, IDA staff believed that certain subprojects could be implemented (see para 2.04). However, Chadian arrears to the Bank soon became an additional limiting factor. One general lesson of this project is that IDA should have considered more carefully the risk of including a bilateral aid agency, which might become subject to substantial organizational constraints, in a cofinancing arrangement for a project which was for a small amount, short time period and for which the processing was well advanced. I. PROJECT FORMULATION AID APPRAISAL A. BACKGROUND 1 .01 The Sahelianx Zone Project (SZP) was the tenth IDA operation, the sixth project in the agriculture sector and the second drought relief project in Chad. The first Drought Relief Project (Cr. 445-CD) was financed by IDA for US$2.0 million in 1973 as part of the Western Africa Drought Relief Program to six Sahelian countries suffering from the region's worst drought in 50 years. Following the 1976 crop failure, the Government of Chad requested IDA assistance to finance activities in the drought affected zone. The project concept was identified by IDA in December 1976 and Government subsequently played the major role in project preparation. B. PROJECT OBJECTIVES AND DESCRIPTION 1.02 The main objective of the project was to initiate quickly actions of a drought-alleviating nature that could sustain or lead to increased development of the crop, livestock and forestry resources of the Sahelian Zone. The project also included two principal secondary objectives: to help Government put into effect its new strategy for the rural sector and to strengthen those Government agencies that had effectively participated in project preparation, notably the National Committee of War Against Natural Calamities (CWANC) and its subordinate technical committee. The project was intended as a two-year non-renewal operation which would finance 14 sub- projects selected on the basis of five criteria established for the first drought relief project. These were that subprojects be of a drought alleviating nature, help restore the productive base of areas seriously affected by the drought, generate benefits quickly, benefit a relatively large number of people, and be demonstrably needed and supported by a local community which would be prepared, where feasible, to make a contribution to its costs through the provision of labor or local materials. An additional criterion was that implementation of the subprojects be done by existing institutions with no significant increase in staff. 1.03 Fourteen subprojects were included in the project. Some of these were pilot operations that might constitute the core of a future broad-based regional development project (bottomland development, village warehouses, Lake Fitri rural development center, forestry management and nurseries, construction wood supplies, and air transport). Others were stop-gap measures to be undertaken prior to and leading into the Second Livestock Project (vaccination campaign, vaccine production equipment, open well repairs, tubewell operations, and groundwater level surveys). The vegetable production and garage construction subprojects were independent operations. 1.04 The CWANC, an interministerial committee, was responsible for overall project management. Its technical committee, composed of directors of technical departments, which had worked with the line agencies to prepare the subprojects was responsible for day-to-day coordination of the eight executing -2- agencies. Financial management was the responsibility of the Office of Foreign Aid Accounting in the Department of Planning. C. APPRAISAL 1.05 The project was appraised in February/March 1977 and there were no serious points of disagreement between the mission and the Government. Four issues were discussed at the Issues Meeting and the two most relevant issues were security and Government's financial capability. It was recognized that the security situation in the Sahelian Zone might have an impact on IDA supervision of five subprojects. The security risks made four of the subprojects partially inaccessible and one subproject totally inaccessible to supervision missions. It was, hovever, decided to retain all the subprojects in the financing plan as the disbursement of funds was subject to IDA staff being afforded all necessary facilities to carryout adequate supervision. Furthermore, due to the discrete nature of the subprojects it was argued that the failur-e to implement some subprojects was not a risk to the project as a whole. 1 .06 It was agreed that a revolving fund would be established in view of Government's inability to pre-finance the initial stages of project implementation. The opening of a special account for the revolving fund was made a condition of project effectiveness. The appraisal mission also examined closely the recurrent cost implications of the subprojects. Only three of the 14 subprojects required continued Government financing but only for a modest amount; the other subprojects were either self-financing or provided for by new activities such as IDA's Second Livestock Project. D. PROJECT COST AND FINANCING ARRAJGEMEITS 1.07 The project costs were estimated at US$4.0 million (net of taxes) with a foreign exchange component of 58 percent. IDA was to finance US$1.9 million (48 percent of the project cost) and the Canadian International Development Agency (CIDA) was to finance an equal amount as a grant which was to be disbursed pari passu with the IDA Credit. The remaining project cost of US$0.2 million was to be contributed by the oubproject beneficiaries and by Government. II. IMPLEMENTATION 2.01 The Credit Agreement was signed in September 1977 and the project was expected to become effective in December. However, Credit effectiveness was conditional upon the signing of an agreement between Canada and Chad which caused a delay until May 15, 1978. Procurement of equipment for the vaccination campaign, vaccine production, well repair and tubewell subprojects began, but no other payments could be made until the establishment of the -3- project revolving fund. The fund did not become operational until the end of January 1979, a full 13 months beyond the project's expected start-up date, when CIDA paid in its US$125,000 share. 2.02 In the light of these delays as well as the security uncertainties, the project executing agencies revised their work programs in September 1978. However, this did not result in a change in the original project content or justification. The first full supervision mission of October 1978 considered that the revised work programs were a wise response to the changed security situation and confirmed the prudence of the Chadian Government. The. mission noted the increasing ineffectiveness of CWAXC. An agreement was reached with all the concerned parties to appoint an executive secretary of CWANC, at least on a part time basis, and to designate the project manager of the IDA financed Rural Projects Fund as the procurement advisor. No executive secretary was appointed and during the renewed outbreak of civil war in February 1979, key staff of CVANC fled the country. 2.03 By the time the revolving fund became operational, project implementation had come to a standstill due to civil war. A May/June 1979 mission which reviewed the broad political/military situation as well as project-specific matters, recommended sending all expatriate staff working on Bank-assisted projects out of the country and formally suspending disbursements for all Bank projects in Chad. Suspension became effective July 18, 1979. However, it made an exception for expenditures and commitments already incurred and permitted the use of remaining resources in the project revolving funds for certain well defined project expenditures that would be useful to protect existing assets and maintain minimal continuity for the full resumption of project work which was expected in September. For the SZP, the bottomland development and village warehouse subprojects would be started in the four sites close to N'Djamena on the basis of the executing agency's detailed cost estimates. For the vaccine production subproject, equipment orders would not be cancelled. In the c.ase of the 11 other subprojects, no activity would be undertaken. At the time of the Nay/June mission there was a balance of CFAF 52.2 million (equivalent to about US$238,792) in the project revolving fund. As a precautionary measure, the mission agreed with the Chadian authorities that the funds not needed to effect outstanding payments for SZP would be transferred into the revolving fund of the Rural Projects Fund (664-CD) which had incurred various expenses for which it lacked funds. This decision was justified by the urgent situation in the field, but IDA headquarters later found it to be legally unacceptable. However, by the time Government was notified of this decision, the funds had already been transferred and spent. 2.04 The second full supervision mission took place in February 1980. This was a full two months after the original completion date of the project yet only about 10 percent of the Credit amount was disbursed and the CWANC was virtually non-existant. The bottomland development and village warehouse projects had not proceeded in part due to the exhaustion of the revolving fund and suspension of disbursements which prevented its replenishment. The mission recommended the lifting of suspension of disbursements for the four IDA-financed agriculture projects in Chad and proposed a work program and budget for the period up to September 1980. Four subprojects of SZP were recommended for implementation. The remaining 10 were considered infeasible due to political insecurity, weakness of executing agencies and, in some - 4 - cases, the need for total redefinition or abandonment of the subproject. The mission recommended the appointment of a liaison officer to be financed by UNDP to take over the coordination of the project in view of the CWANC's failure. 2.05 The political situation in Chad continued to change rapidly and it was not possible to lift suspension of disbursements as recommended. The next IDA mission which included a review of agriculture projects was in December 1982. By this time, in addition to security problems, Government arrears to the Bank had become a matter of concern. This mission recommended the partial lifting of suspension of disbursements for two agriculture projects, Sategui- Deressia (489-CD) and Rural Projects Fund (664-CD). In the case of SZP, the mission found that few of the subprojects were still feasible and that these could be financed by the Rural Projects Fund. Therefore, the SZP was not included in the partial lifting of suspension in April 1983. A supervision mission was sent to Chad in April/May 19853 to review all IDA agriculture projects. In June, this mission recommended the cancellation of the SZP since the viable subprojects had already been picked up for financing by other donors and the remaining projects either needed complete redesign or were located in insecure areas (see Table 1, Annex 1). Due to continuing uncertainties about the Bank's activities in Chad and the political situation there, a final decision about cancellation of the project was delayed until the next Bank field mission in December 1983 when final agreement was reached between all parties that this was the best course of action. III. BENEFITS AND JUSTIFICATION 3.01 At the time of appraisal, the rates of return were calculated for only three subprojects (bottomland development, vegetable production and open well repairs) which constituted 21 percent of the project base costs and the weighted average rate of return was 21 percent. However, no rate of return was calculated at the time of preparing the project completion report as these subprojects were not implemented 1/. Benefits from the vaccination campaign and drugs subproject, which was by far the largest subproject (with 27 percent of total base cost), were expected to accrue to about 250,000 families. This was originally to be a one-year operation during 1977/78. The only activity in 1977/78 was provision of CFAF 33.6 million in vaccines using existing vehicules and equipment. This was substantially less than the original allocation for the subproject and the February 1980 supervision mission agreed that some of the resources would be used to buy drugs for the 1979 campaign. Disbursements information shows that only 19% of the Credit allocation was expended and there is no readily available information concerning the number of livestock and families who benefitted. In suimmary, the vaccination campaign was the only subproject for which activities were to some extent 1/ US$97,000 was expended under the open well repair subproject, but no information is included in the February 1980 supervision report as to whether any repairs were completed. -5- successfully undertaken. Although expenses were incurred for the vaccine production, open well repair, bottomlands and tubewell operation subprojects, no activities were completed. (See Tables I and 2, Annex 1). IV. INSTITUTIONAL PBRFORKANCE 4.01 No new institutions were created under the project. The appraisal mission considered CWANC to be an effective agency for coordinating the activities of the eight agencies responsible for implementing the subprojectBs. ive of the in-line executing agencies were already involved in execution of IDA projects and had performed satisfactorily. All eight had been involved in the project preparation and were represented on the CWANC. Unfortunately, for reasons which are not clear, the leadership of the CWANC began to lose interest in the project and supervision missions repeatedly expressed concern about its declining effectiveness. Apart from two meetings in 1978, CWAIC did not meet and eventually collapsed. Several measures were proposed to alleviate this problem (see para 2.04). 4.02 These developments and the earlier failure of such a committee under the first drought relief project (see PPAR No. 2807, January 1980) raise questions about the effectiveness of a high-level committee as a coordinating agency for smal'l subprojects. In retrospect, it appears that a project coordinator in the Planning Department might have been a better choice considering the uncertainties of that time. However, it should be noted that any organizational form had a high probability of eventually breaking down u-nder the strain of the civil war conditions and the general collapse of the civil service in 1979. V. BANK PERFORMANCE 5.01 The overall performance of IDA was fully satisfactory particularly in view of the circumstances in which it had to operate. IDA's prompt response to the urgent request by Government to process the SZP was commendable and the project was well formulated considering the urgency with which it was prepared. The CWANC's good performance in project preparation gave the appraisal mission strong reason to believe it would perform well as a coordinating agency. Supervision missions were responsive to the problems created by delays in initial implementation and by the constantly changing political circumstances which prevented regular supervision. Potential security risks had been taken into account at the time of appraisal and even after the civil war disturbances of 1979 it was believed that certain subprojects could be implemented (see para 2.04). Perhaps the IDA recommendation for project cancellation could have been made prior to December 1982 since the project was only a two-year non-renewable operation and the political and economic turmoil continued well beyond expectations. However, IDA adopted a wait-and-see attitude which seems appropriate given the degree of uncertainty. VI. COPINANCING 6.01 IDA was originally planning to fully finance SRZP. However, prior to appraisal, reservations were expressed about providing 100% finaning for the project. Around the time of appraisal, CIDA expressed an interest in participating in the SZP and this was agreed upon after appraisal. This resulted in serious delays in project effectiveness and early implementation (see pars 2.01 and 2.03). Considerable time and energies were spent by IDA staff trying to resolve the problems arising out of the cofinancing arrangement. It is possible to speculate that if there had not been such a long delay in making the revolving fund operational, several of the subprojects would have been substantially completed prior to the now outbreak of civil war in 1979. IDA should have considered more carefully the risk of including a bilateral aid agency in a cofinancing arrangement for a project which was for a small amount, short time period and for which the processing was well advanced. -7 Annex 1 PROJECT COMPLETION REPORT CHAD - SAiELIAN ZORE PROJECT (Credit 739-CD) Table 1 Total Disbursements by Category and Subproject Statas t 6i Subproject Status and *000 US$ New Flnancing Sources Category Credit Actual As of End April 1983 A. ONDR A-. Bottomlands 180 2 Fifth FED A-2 Village Warehouses 120 0 Fifth FED A-3 Vegetable Production 120 0 (Needs Redesign) A-4 Lake Fitri Rural Development Center 50 0 (Postponed) B. Dept. of Livestock B-1 Vaccine Campaign & Drugs 420 79 FED/FAC 3-2 Vaccine Prod. Equipment 70 14 FAC C. SERARRY ' C-1 Open Well Repairs 110 13 (Needs Some Redefinition) C-2 Tubewell Operation First Project Year 50 0 (Needs Redefinition) Second Project Year 25 0 C-3 Groundwater Level Survey 25 0 (Postponed) D. Dept. of Forestry D-1 Forestry Managememt 60 0 FAO D-2 Forestry Nurseries 80 0 FAO D-3 Construction Wood Supplies Proj. Prep. 25 0 (Postponed) E. CWANC: Garage Construction and Equipment 220 0 PNUD F. ASECNA: Airstrip Rehab. 45 0 (Overtaken by Events) Unallocated 160 0 Initial Advance Revolving Fuad a/ 125 125 Total 1900 233 a/ 30 million CFAF of this amount (approximately US$137,237 at original value) transferred out of revolving fund and utilized for credit 664. -8- Annex 1 PROJECT COBPLETION REPORT CHAD - SAEELIA ZONE PROJ3E (Credit 739-CD) Table 2 Consolidated Project Account as of February 1980 '000 CFAF Receipts IDA (USS125,000) 27,788 CIDA 26,867 Total 54,654 Expenditures B-2 Vaccine Production 12,767 C-1 Open Well Repairs 5,364 C-2 Tubewell Operation 6,519 Exceptional Transfer to 664-CD 30,000 Outstanding Balance in Revolving Fund 4 - 9 - Annex 2 Translation Canadian International Development Agency (CIDA) May 4, 1984 Hr. Shiv S. Kapur L Acting Director General, Operations Evaluation The World Bank Washington, D.C. Re: Project Completion Report on Chad Sahelian Zone Proiect (Credit 739-CD) Dear Hr. Kapur: This letter is in response to your letter of April 4, 1984 pertaining to the project in question. I have read the Project Completion Report you sent us with a great deal of interest and I am in general agreement with the content of the report. It is, however, very difficult to elaborate on the report's conclusions in view of the fact that the project had to be terminated shortly after start-up (summer of 1979) owing to circumstances beyond our control. Nonetheless we hope that new avenues for cooperation can be studied between CIDA and the World Bank for other French-speaking countries in Africa under more favorable conditions. To this end, we are interested in exploring with you ways in which we could strengthen and extend cooperation between our two institutions, while ensuring that our respective agencies are involved in the project planning process from the outset. Yours, etc. Isl Francois Pouliot Vice President for D French-speaking Africa