Uganda - Agricultural Rehabilitation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 12634 PROJECT COMPLETION REPORT UGANDA AGRICULTURAL REHABILITATION PROJECT (CREDIT 1328-UG) DECEMBER 30, 1993 Agriculture and Environment Operations Division Eastern Africa Department Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of I their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS US$1 = Ush 100.0 (First Window) US$1 = Uslh 240.0 (Second Window) WEIGHTS AND MEASURES 1 hectare (ha) = 2.47 acres 1 kilometer (km) = 0.62 miles 1 meter (m) = 3.28 feet 1 metric ton (ton) = 2,205 pounds 1 liter (1) = 1,057 U.S. quart ABBREVIATIONS ADB = African Development Bank AEL = Agricultural Enterprises Limited APC = Agricultural Policy Committee ARP = Agricultural Rehabilitation Project AS = Agricultural Secretariat BOU = Bank of Uganda CMBL = Coffee Marketing Board Limited ETR = Emergency Tea Rehabilitation MAF = Ministry of Agriculture and Forestry MCM = Ministry of Cooperatives and Marketing ODA Overseas Development Administration OECD = Organization for Economic Cooperation & Development SAR = Staff Appraisal Report TA = Technical Assistance UCB = Uganda Commercial Bank UDB = Uganda Development Bank UGTC = Uganda Tea Growers' Corporation FISCAL YEAR Uganda Commercial Bank: October 1 - September 30 Government: July 1 to June 30  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation December 30, 1993 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT Subject: Project Completion Report on Uganda - Agricultural Rehabilitation Project (Credit 1328-UG) Attached is the Project Completion Report on the Uganda Agricultural Rehabilitation Project prepared by the Africa Regional Office. There is no Part II. This project took place (1983-1988) under unfortunate circumstances: dysfunctional public production, hyperinflation, and general breakdown of law and order. These made it impossible to achieve its fundamental objective of increasing Uganda's agricultural exports by increasing their processing capacity. In fact, the project's benefits thus far have come not from increasing processing capacity but from supporting adjustment. Most project expenditure consisted of on-lending to processing enterprises to finance construction and equipment. The PCR notes that the project was successful in creating new capacity, but also states that in 1992 capacity utilization in coffee-hulling, cotton-ginning, and tea-making were still only 35, 12, and 18 percent respectively. The PCR also notes that although the project "did not seek...to boost vital institutional development," it facilitated an early policy discussion, financed studies and helped set up an agricultural coordinating committee, all of which supported the ongoing process of policy adjustment in agriculture. The project was overwhelmed by events. Inefficient parastatal marketing with very low output prices, nationalized factories and mills where management had been driven out without adequate replacement, breakdown in transport, very low output prices and failure to pay farmers for their product were all reasons why export production failed to increase. Moreover, security of life and property - and that of supervision missions -were circumscribed: during the first year of implementation the military forces which later defeated the government that negotiated the credit were already fighting in areas where the project was to have pronounced effect. One alternative would have been to stop disbursement and recast the project after the new government had entered into structural adjustment. The PCR does not consider this alternative although it does suggest that a mid-term review was in order. The project is rated unsatisfactory. It is of uncertain sustainability: if most of the additional processing capacity has been maintained it could be brought into production in the future. The impact on institutional development was partial. A field audit is planned. Attachment < This document has a restricted distnbution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   FOR OFFICIAL USE ONLY PROJECr COMPLETION REPORT UGANDA AGRICULTURAL REHABILITATION PROJECT (CREDIT 1328-UG) TABLE OF CONTENTS Page PREFACE ............................... i EVALUATION SUMMARY ................................ iii PART 1: PROJECT REVIEW FROM BANK'S PERSPECTIVE Project Identity ......................... 1 Background ......................... 1 Project Objectives and Description . ......................... 2 Project Design and Organization ............ ............. 3 Project Implementation ......................... 4 Project Results ......................... 8 Project Sustainability ......................... 12 IDA Performance ......................... 13 Borrower's Performance ......................... 15 Consulting Services ......................... 16 Project Documentation and Data ............... .......... 16 PART 2: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE Bank's Performance during Project Implementation Government's Performance during Implementation Project Relationships Consultants' Performance PART 3: STATISTICAL INFORMATION Related IDA/Bank Loans & Credits ......................... 19 Project Timetable ......................... 20 Credit Disbursements .......................... 20 Project Implementation .......................... 21 Project Costs & Financing ........ ................. 22 Project Results ......................... 23 Status of Covenants ......................... 25 Use of IDA/Bank Resources .......... ............... 26 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   PROJECT COMPLETION REPORT UGANDA AGRICULTURAL REHABILITATION PROJECT (CREDIT 1328-UG) PREFACE This is the Project Completion Report (PCR) for the Agricultural Rehabilitation Project in Uganda for which Credit 1328-UG, in the amount equivalent to SDR 63.5 million (US$ 70 million), was approved on February 24, 1983; the Development Credit Agreement was signed on March 11, 1983. A total of Ush equivalent to SDR 60 million (US$ 73.5 million) or 94.5 percent of the Credit was disbursed; the undisbursed balance of SDR 3.5 million was cancelled. The Credit was closed on June 30, 1992, some three years behind schedule. The last disbursement was made on October 22, 1992. The Preface, Evaluation Summary and Parts 1 and 3 of the PCR were prepared by the Agriculture and Environment Operations Division, Eastern Africa Department, Africa Region. Part 2 is to be provided by the Borrower. This report is based inter alia on the Staff Appraisal Report, the Development Credit Agreement, supervision reports, internal Bank memoranda, and correspondence between Bank and the Borrower.   iii PROJECT COMPLETION REPORT UGANDA AGRICULTURAL REHABILITATION PROJECT (CREDIT 1328-UG) EVALUATION SUMMARY 1. Objectives: The project's conceptual basis was consistent with Government's overall priorities and strategy for reviving the economy (devastated by years of civil war and mismanagement), through agricultural rehabilitation. The Agricultural Rehabilitation Project (ARP) aimed to increase Uganda's agricultural exports, by: (a) rehabilitating export crop processing; (b) financing recurrent inputs; and (c) supporting policy and institutional reforms. 2. Implementation Experience: ARP became effective on July 20, 1983. It was originally scheduled to be completed by December 31, 1988. However, the project was implemented against a backdrop of major structural, institutional and financial problems. In addition to the fiscal and monetary indiscipline and economic mis-management, administrative institutions had broken down and the general economic climate was damaged by repeated civil wars. The instability prevailing in Uganda resulted in unavoidable implementation delays; furthermore, appraisal targets related to physical rehabilitation of processing facilities had to be revised several times to respond to changes in the project's environment and focus, and Credit proceeds were reallocated thrice in view of changing sub- sectoral priorities. The closing date was therefore extended four times to June 30, 1992. 3. Given the institutional void in Uganda in the early 1980s, implementation responsibility for rehabilitation and sector imports components was assigned to Uganda Commercial Bank (UCB), while the Agricultural Policy Committee (APC) was assigned the task of promoting closer cooperation between the agencies in the agricultural sector, and facilitating the necessary policy and institutional reforms. Further, APC was responsible for coordinating planning, resource allocation, and execution of activities to assist agricultural recovery; as the Steering Committee for the project, it was also in charge of project monitoring and evaluation. The Agricultural Secretariat (AS) was established to provide technical and analytical support to APC. The Secretariat reported to APC, but was under the direct administrative authority of Bank of Uganda (BOU). AS was not placed under an agricultural line ministry due to lack of requisite capacity in the latter, and also because the agricultural sector was then managed by various ministries and parastatals with conflicting interests and lack of coordination. The establishment of APC, however, helped initiate intra-sectoral coordination arrangements to address constraints related to inadequate cooperation between various line ministries, parastatals, cooperatives and implementing agencies. Project performance was also affected to some extent by both Government of Uganda and the top management of UCB changing thrice over ARP's life, on the one hand, and a lack of continuity in IDA's supervision missions, on the other. Implementation performance of the executing agencies was mixed, with some areas such as procurement and contract management being handled inadequately, while others such as overall physical rehabilitation of factories and TA, were completed in a relatively satisfactory manner.  iv 4. ARP's flexibility was tested repeatedly, and appraisal estimates had to be modified several times in response to changing sub-sectoral priorities. Thus, the planned investment target of ten cotton ginneries was reduced by 30 percent, to seven ginneries; additionally, US$ 7 million was reallocated from the coffee subcomponent for rehabilitation of 7 tea factories, and another US$ 3.6 million was reallocated from the agricultural imports category for refurbishment of a sugar mill. Altogether 12 coffee hulleries were rehabilitated (some 40 percent below the appraisal target). Of the US$ 40 million of Credit proceeds earmarked for recurrent imports (equipment, spares, chemicals, packing materials), about US$ 25 million was actually spent on this category, due to reallocations to other components and inadequate management. In addition to the IDA credit, Italian co-financing of US$ 10 million was provided in 1985, for sector imports. Overall, the project experienced difficulties in supervision of contractors and consultants retained, and procurement of inputs was not entirely smooth, particularly in the initial phase. The Technical Assistance component was characterized by recruitment delays and mobilization problems. While training of staff from various ministries and agencies was provided, its full impact can not be assessed, in the absence of a well defined training program. The DCA stipulated submission of a comprehensive training program to IDA, but no such plan is available in project files. Five of the seven studies planned at appraisal were undertaken, the exceptions being a study of the cotton subsector (commissioned concurrently by the Overseas De- velopment Administration), and a coffee study which was converted into TA to Coffee Marketing Board. However, two additional studies (Sugar Rehabilitation and Tea Rehabilitation Project feasibility studies) were also undertaken and completed under ARP. 5. Results: In order to objectively assess ARP's achievements, it is important to briefly revisit the primary structural and institutional constraints affecting project performance (in addition to the unfavorable external markets for Uganda's key agricultural exports and overwhelming security problems in the country), which included: shortages of foreign exchange; high, unpredictable inflation (especially prior to 1988/89 - resulting from the large-scale monetization of the deficit), which eroded producer incentives; generally low producer prices and poor processing margins, which translated into inadequate incentives for improving the quality and quantity of output and resulted in raw material shortages; inadequate and untimely crop financing and severe working capital shortages affecting the cooperatives and parastatals; and inadequate credit delivery systems, along with poor access to com- mercial debt by entities such as UTGC. 6. On the positive side, ARP was relatively successful in advancing its primary objectives of providing funds for urgently needed sectoral imports and physical rehabilitation of agro-processing facilitie. However, the expected benefits from these components could not be realized promptly as a result of a poor macroeconomic environment, non-supportive agricultural marketing policies and wrong price signals. The tradable goods sector neither expanded nor diversified in the latter half of the 1980s, and was in fact severely damaged by the civil strife and macro-economic distortions; there is thus presently a situation of serious idle processing capacity in Uganda; coffee hullery and cotton ginnery average capacity utilization rates are estimated at some 35 percent and 10 percent, respec- tively, while average capacity exploitation at the tea factories operated by the two parastatals (AEL and UTGC) is some 12 percent and 20 percent, respectively. However, recognizing this, GOU has introduced radical policy reforms starting with the coffee industry, under the Agricultural Sector Adjustment Credit (ASAC). ASAC was designed in 1990 to address salient issues in adjustment of agriculture and their macroeconomic ramifications. The system of marketing, pricing and taxing coffee has been overhauled and efforts to introduce appropriate structural adjustment policies for other cash  v crops (tea, cotton) are also underway. In view of the macro-economic and sectoral policy reforms which have been underway since late 1989 in conjunction with measures to address the systemic weaknesses, improved capacity utilization and generation of benefits from the rehabilitated processing facilities can be expected to develop over the medium to long-term period. 7. A negative ramification of the rehabilitation effort has been the imposition of a financial burden on the cotton subsector cooperative system and UCB, in the form of non-performing investments. GOU on-lent the proceeds of the Credit allocated to Part A of the project to UCB at 6.5 percent per annum; UCB in turn on-lent to the unions at market rates of interest (reviewed periodically), plus 1 percent foreign exchange risk fee. Section 3.01 (d) of the DCA stipulated that the Borrower would bear the foreign exchange risk; however, the Back-to-Office Report of the Pre-Appraisal Mission and the Consultants' Preparation Report for the proposed Cotton Subsector Development Project suggest respectively, that the foreign exchange risk was actually passed on to the unions / assumed by UCB. The foreign exchange risk, the market rates of interest applied to the union loans (recently greater than 40 percent), combined with responsibility for ginneries not completed under turn-key contracts has multiplied their debt burden. Many cooperatives are virtually bankrupt and are unable to re- structure or privatize, because their assets are locked in as collateral under these loans. Government is exploring the possibility of relieving these institutions of the financial liabilities incurred under the ARP, in the context of the Cotton Subsector Project and the financial sector reforms envisaged under the proposed Financial Sector Adjustment Credit (FINSAC). The Cotton Project proposes to liberalize the subsector, thereby creating a competitive environment conducive to the development of a dynamic private sector; it further seeks to alleviate the debt burden of the unions through various measures including determination of appropriate values of debt outstanding per union and providing relief for the same, in conjunction with the preparation of financially viable Business Plans. This would result in a level playing field, as non-compliance with such a plan would mean non- eligibility, and eventual liquidation in the case of most insolvent unions. 8. Again, other positive project impacts include moderate but durable achievements from ARP's institutional strengthening, support of a policy framework, deepening of sector knowledge through studies and capacity building measures; it should however be kept in view that, the project design did not seek to galvanize major macro-economic and sectoral reform or boost vital institutional development. A significant contribution of the project was its support to APC and its executive arm, the AS. These two bodies were instrumental in initiating several institutional strengthening measures. The AS played a particularly useful role in the analysis of appropriate prices for export crops and improvement of producer incentives, within the context of ARP conditionality. The AS was also an invaluable forum for establishing dialogue with GOU concerning the Agricultural Sector Adjustment Credit, and acted as a catalyst in activating this project which is being successfully implemented; AS has continued to play a central role under the ASAC. Another important contribution of ARP was its role in project pipeline development. With the exception of the study on tobacco, the findings of other studies undertaken provided input to the foundations for subsequent operations including, ASAC, Agricultural Development iroject (ADP), Sugar Rehabilitation and Livestock Services Project. ARP's impact in the area of managerial and technical training can not be clearly assessed, and it was not possible to determine how the training provided, fitted into the overall strategy for sustainable capacity development. No rate of return was calculated at appraisal since the project was designed as part Program Credit and part Development Finance Credit type operation. On balance project performance may be deemed satisfactory.  vi 9. Sustainability: In addition to a shaky fiscal and monetary discipline in the economy, the major externalities affecting the sustainability of the project were: the precipitous fall in international coffee prices; depressed world markets for commodities such as cotton, tea and tobacco; and the OECD economies slipping into a protracted recession. The negative impact of these events was exacerbated by weak implementation capacity and reluctance by Government to take unpopular corrective action such as expenditure cuts, in a timely manner. Additionally, perhaps the most pressing structural issue continues to be that of inadequate and untimely crop financing and severe working capital shortages in the agro-processing industry; the problem stems from a combination of two factors: (a) the inability of unprofitable cooperatives and parastatals to raise the requisite working capital from banks, as the former are already saddled with debt-servicing costs on donor financed rehabilitation programs; and (b) deterioration of Uganda's overall financial system (including the decline in the level of rural finan- cial intermediation); economic and political instability, poor performance of key productive sectors and the highly inflationary environment prior to 1989, have all contributed to decimating the loan portfolios of banks. Furthermore, the entities involved in ARP components generally lacked the requisite technical, operational, managerial, or financial capacity. 10. While the above threats to project sustainability are cogent, the structural and institutional weaknesses are being addressed through ongoing or proposed IDA operations and other Government actions; a measure of discipline in public services, economic policy reforms, re-establishment of political institutions and restoration of security were introduced subsequently in late 1989. These alongside prudent subsectoral policies are expected to ameliorate longer-term prospects of some agricultural products supported by ARP. In this context, subsequent Bank support for structural change in the sector is principally channeled through the ASAC which targets liberalization of the coffee subsector, controlled expansion of rural credit, enhanced policy formulation, and strengthening of agricultural research and extension capacity. Liberalization of the cotton (through the Cotton Subsector Project), and tea (with EEC participation) subsectors are also being seriously pursued. The prospects for improved impact of the rehabilitation component through increased capacity utilization are thus likely to be enhanced in the medium to longer term. Although ARP was not designed to play a pivotal role in major macro-economic and sectoral reform or vital institutional development, it initiated certain valuable institutional coordination arrangements, which are expected to be sustainable. 11. Findings and Lessons Learned: The implementation experience indicates that financing of a rehabilitation project can entail many unavoidable risks. Thus, when seen in isolation many of its components may appear not to have been successful. However, as discussed above, they may ultimately turn out to be important building blocks of a longer term, successful, sector and country adjustment strategy. The key findings and lcssons of ARP are as follows: * The financial vulnerability and managerial weaknesses of cooperatives and parastatals have significantly constrained project impact. The lack of crop finance and inaccessibility to working capital has translated into serious under-utilization of rehabilitated processing capacity. In hindsight, project design did not fully examine and provide for these issues. However, implications of the highly unfavorable developments in international markets for Uganda's agro-exports, which undermined the financial viability of these entities, would have been almost impossible to predict at the time of appraisal in the early 1980s.  vii * The project design underestimated the pervasiveness of the macro-economic, sectoral and institutional constraints. With the benefit of hindsight, it may be suggested that too much emphasis was placed on the physical rehabilitation component, perhaps to the detriment of sufficient policy dialogue. The delay in generation of benefits from the rehabilitation and imported input components stems from the lack of a supportive policy framework to facilitate growth following the structural changes; holding a Mid-Term Review might have helped trigger improvements; * Project implementation experience reveals that IDA should have been more resolute in confronting the Borrower on deficiencies in execution. Prompt and bold actions such as making credit extensions subject to timely resolution of outstanding issues, might have resulted in better project performance. Despite inadequacies in financial and operational management that surfaced rather early on in execution, there were four subsequent extensions of the closing date, and no concrete measures were introduced to address these weaknesses; * In retrospect, administration of inputs procurement by a commercial bank (UCB), albeit with the assistance of procurement agents, and subsequent distribution of the same via five parastatals, a cooperative union and a line ministry, does not appear efficient. However, at time of project preparation this was considered the only viable option, as UCB could provide the requisite implementational resources. Nevertheless, inputs were not always procured in a prompt and efficient manner (particularly in the initial phase of the project). Procurement of assistance for rehabilitation works, and administration of related contracts proved to be cumbersome and may have resulted in additional financial costs. Procurement arrangements should have been more carefully formulated to ensure transparency, and speedy review and improved distribution procedures; i Task Management responsibilities changed hands five times during ARP's implementation, and there were no full supervision missions in the final three years. Consistent, appropriately timed and regular missions would have contributed to a greater understanding and a coherent approach to the problems prevailing in the field; and * A major contribution of ARP was its role in project pipeline development. Funding arrange- ments for follow-on operations proved to be particularly useful, as for the successful Sugar Rehabilitation Project. Studies provided input to the foundations for subsequent operations including, ASAC, ADP, Sugar Rehabilitation and Livestock Services Project.   PROJECT COMPLETION REPORT UGANDA AGRICULTURAL REHABILITATION PROJECr (CREDIT 1328-UG) PART 1: PROJECr REVIEW FROM BANK'S PERSPECIIVE 1. PROJECT IDENTITY Project Name Agricultural Rehabilitation Project Credit No. 1328-UG RVP Unit Eastern Africa Department Country : Uganda Sector : Agriculture Subsector Agricultural Exports 2. BACKGROUND 2.1 Sector Development Obiectives: Agriculture has dominated the Ugandan economy, providing livelihood to up to 90 percent of the population and supplying almost all of Uganda's exports in recent years. A combination of expedient conditions, including natural advantages in terms of fertile soils and a favorable climate, combined with competent economic management, resulted in a steady 2 percent per year growth in per capita GDP in the 1963-70 years. However, the economy declined drastically under the military regime of the 1970s; in the aftermath of the protracted civil strife, deterioration occurred in almost every sector. A Commonwealth team of experts that reviewed the Ugandan economy in 1979, recommended a rehabilitation program of administrative and policy reform supported by the infusion of foreign exchange. The failure to undertake policy reform, coupled with continuing political instability, drought, the 1979 oil shock and world recession led to even greater declines in output and incomes from 1979 to 1981. Export volumes fell drastically at the end of the decade, and terms of trade deteriorated by 55 percent from 1978 to 1981. According to the Staff Appraisal Report (SAR), the central constraints to recovery were felt to be the severe shortage of foreign exchange and the incentive system; the rehabilitation of agriculture was thus a top priority, as it was viewed as the engine for economic recovery. Economic revival would depend on increasing export crop production and restoration of processing facilities damaged by war. Coffee, cotton, tea and tobacco exports were to be boosted, in addition to non-traditional agricultural exports. Thc premise for the foregoing was Uganda's historical reliance on certain cash crops, viz., coffee, cotton, tobacco and tea, which together with cacao account for 90 to 98 percent of the country's overall cxports. 2.2 Polic Context: In view of the preceding, GOU's first priority was to restore law and order. This was followed by the Recovery Program, released in April 1982; the Program (endorsed by the Bank Group), focussed on revitalization of the directly productive sectors, and was supported by 2 stand-by arrangements with IMF (SDR 225 million total, for the 1981/82 and 1982/83 fiscal years), as wrell as by release of the balance (US$ 75 million) from the First IDA Reconstruction Credit (Cr. 983-UG). The Program aimed to stabilize the economy and eventually revive investment and production through restoring a measure of confidence in the currency, reducing price distortions and improving fiscal and monetary discipline. Appropriate pricing and marketing policies, improved input  2 supplies and processing facility rehabilitation, were the key instruments to stimulate production of cxportable surpluses. Over the medium to long term, institutional and policy reforms in addition to agricultural services strengthening (including research and extension), were to be given more attention. 3. PROJECT OBJECIIVES & DESCRIPEION 3.1 Proiect Obiectives: The Agricultural Rehabilitation Project (ARP) sought to increase foreign exchange earnings from agricultural exports, in order to support the program for reviving the economy; the focus would be on promoting exports through: (i) rehabilitating export crop processing; (ii) financing recurrent inputs; and (iii) policy and institutional reforms. 3.2 Project Components: The main project components at appraisal were: (a) Part A Rehabilitation of Crop Processing Facilities: Rehabilitation of about 20 coffee factories or 15,000 tons of coffee hulling capacity and 12 cotton ginneries or 18,500 tons of lint ginning capacity (revised later to 10 ginneries); development of tea leaf collection capability of UTGC to 2,400 tons; assistance in refurbishing 1,376 tobacco curing barns, and investments in nontraditional exports; also, reduction in livestock mortality rates (resulting in incremental livestock population of 200,000); and strengthening of project preparation, appraisal and supervision capabilities of UCB. (b) Part B Agricultural Recurrent Imports for provision of inputs required to sustain and increase the production of agricultural exports and livestock, including chemicals, equipment, spare parts and packing materials. (c) Part C Studies of institutional framework and policy prerequisites, to assist Government to implement price and marketing reforms, formulate sector development strategies and identify subsector projects. (d) Part D Technical Assistance (TA) through: (i) strengthening of accounting supervision and engineering training capabilities of Ministry of Cooperatives and Marketing (MCM); (ii) strengthening economic and statistical capabilities of Ministry of Agriculture and Forestry (MAF)'; (iii) strengthening Borrower's capacity to evaluate agricultural policies; and (iv) provision of vehicles, office equipment and supplies. (c) Part E Training of MAF, MCM, and Agricultural Secretariat staff in, inter alia: pricing methodologies and exchange rate policies; regulation and incentive systems for marketing institutions; budget and financial systems of parastatals; project appraisal; and allocation and monitoring of foreign exchange. Now: Ministry of Commerce, Industry and Cooperatives (MCIC) & Ministry of Agriculture, Animal Industry and Forestry (MAAIF), respectively.  3 4. PROJECT DESIGN & ORGANIZATION 4.1 Conceptual Foundation: The project's conceptual basis was consistent with Government's overall priorities and strategy for reviving the economy through agricultural rehabilitation. GOU recognized the need to address the problems of the agricultural sector in 1979; however, the serious internal conflicts of 1979 and 1980 inhibited progress and not much could be done until the wide ranging economic reforms implemented in June 1981, together with improved prospects for political stability opened up the possibility for economic recovery. The acute shortage of foreign exchange and the lack of adequate processing capacity for export crops, combined with a variety of poor and inconsistent agricultural policies, were viewed as the most prominent obstacles to a speedy rehabilitation of the agricultural exports subsector. The project was therefore designed to contribute to this rehabilitation by financing most urgently needed imported capital goods and inputs for the export crop subsector and by providing assistance in the initiation of a process of institutional reform, agricultural policy formulation and coordination. Moreover, the project supported studies that could lead to subsequent agricultural projects; this was to be a platform for the resumption of more project specific lending in the sector and would help strengthen the ongoing dialogue on agriculture between the Government on the one hand and the Bank and other donors on the other. The support under the project of the recently-established Agricultural Policy Committee (APC) and Agricultural Secretariat (AS), was aimed at promoting closer coordination and cooperation between the Ministries directly concerned with formulating agricultural policies and objectives (para. 4.3). 4.2 Scope and Scale: The project's scope and scale addressed the sectoral priorities and objective of rehabilitating key subsectors through a three pronged approach: (a) rehabilitation works valued at US$ 28.3 million for restoring export crops processing facilities; (b) provision of US$ 39.2 million worth of essential capital and intermediate goods to boost agricultural production, thereby ensuring adequate capacity utilization; and (c) support for an enabling macro-economic and sectoral policy environment, through its technical assistance, studies and training components2; ARP's support for institutional strengthening and policy reforms covered four parastatals and five ministries. 4.3 Roles and Responsibilities of Implementing Agencies: Organizational arrangements for the project were clearly defined. Given the institutional void in Uganda in the early 1980s, implementation responsibility for rehabilitation (Part A) and sector imports (Part B) components was assigned to Uganda Commercial Bank (UCB), while the APC3 established in October 1982, was designed to be a top level policy making body consisting of six Permanent Secretaries from Ministries of Agriculture, Finance, Planning and Economnic Development, Cooperatives & Marketing and Finance, the Governor of BOU and the Managing Director of UCB. Chaired by the Permanent Secretary to Ministry of Planning and Economic Development, APC was assigned the task of promoting closer cooperation between the agencies in the agricultural sector, and facilitating the necessary policy and institutional reforms. Further, the APC was responsible for coordinating 2 USS 2.5 million plus an additional USS 1.3 million from the IDA Technical Assistance Credit (see para. 5.12), was provided for the TA component. 3 In its Recovery Program and agreement with IDA under the Second Reconstruction Credit, GOU undertook establishment of APC. The formation of APC and AS were conditions of negotiations of ARP.  4 planning, resource allocation, and execution of activities to assist agricultural recovery; as the Steering Committee for the project, it was also in charge of project monitoring and evaluation. However, UCB's operations under the project were not under the direct purview of APC, and it reported directly to IDA on project implementation. The AS was established to provide technical and analytical support to APC. The Secretariat reported to APC, but was under the direct administrative authority of Bank of Uganda (BOU). AS was not placed under an agricultural line ministry due to lack of requisite capacity in the latter, and also because the agricultural sector was then managed by various ministries and parastatals with conflicting interests and lack of coordination. To increase the likelihood of Government pricing decisions, priorities in resource allocation and sectoral policies being consistent with the priorities of farmers, processors and even marketing boards, analytic functions relating to these areas were centralized in the AS. Additionally, the responsibility for training lay with AS and included, assessment of specific staff training needs of agricultural sector ministries and AS itself, identification of suitable training opportunities and preparation of detailed training proposals. AS also supervised sector studies undertaken. 5. PROJECT IMPLEMENTATION 5.1 Credit Effectiveness & Implementation Schedule: The Credit was approved on February 24, 1983, and the Development Credit Agreement (DCA) was signed on March 11, 1983. It became effective on July 20, 1983. The project was originally scheduled to be completed by December 31, 1988; the credit closing date was established as June 30, 1989. However, the instability prevailing in Uganda resulted in unavoidable implementational delays; furthermore, the project design had to be modified several times in response to changing sub-sectoral priorities. The closing date was therefore extended four times to June 30, 1992. A first extension of one year was granted to allow the completion of construction works which had been delayed (paras. 5.4 & 5.5). The second extension of one year was accorded to allow the rehabilitation of four additional coffee hulleries; subsequently, another 6 months were given for completion of these works. A final 6 months extension was granted by IDA for selected disbursements4 - primarily for preparation of a Cotton Subsector Development Project, bringing the cumulative extensions to three years. Proceeds of the Credit were reallocated three times: in March 1985, March 1987 and November 1988 (para. 5.6). The DCA was amended a corresponding number of times. 5.2 Implementation Experience: ARP was implemented against a backdrop of major structural, institutional and financial problems. In addition to fiscal and monetary indiscipline and economic mismanagement (which led to rampant inflation and foreign exchange and supply shortages), administrative institutions had broken down and the general economic climate was damaged by repeated civil wars. 5.3 Parts A & B Rehabilitation of Crop Processing Facilities & Recurrent Imports: In order to execute Parts A and B of the project, UCB recruited the following long-term technical assistance: (a) Project Manager; (b) Engineering Surveyors and Supervisors for rehabilitation of processing facilities; and (c) Procurement Agent for agricultural input imports. Other consultants and contractors 4 Categories 3, 5 and 7 (imports, consultants and vehicles, office equipment).  5 were engaged to assist in the rehabilitation of factories, TA and Studies. The project experienced a number of difficulties in supervision of contractors and consultants retained. Much effort had to be invested by both the implementing agencies and IDA, in trying to identify workable solutions to problems related to contractual obligations, claims for incremental compensation and, extent and quality of retainees' performance. Other administrative issues constraining implementation related to tardy payments to some contractors, belated delivery of two construction sites, and surveys and tender processing lagging behind schedule as a result of unsatisfactory performance by some consultants/contractors. Overall, project procurement was not entirely smooth and there were serious delays (particularly in the initial phase of project implementation), due to inappropriate processing of tenders and confusion regarding the Procurement Agent's contract. 5.4 ARP's flexibility was tested repeatedly, as appraisai targets related to physical rehabilitation of processing facilities had to be revised several times to respond to changes in the project's cnvironment, focus and priorities. In October 1984, in concordance with project implementation authorities and consultants, the proposed investment in cotton ginneries was reduced by 20 percent in foreign exchange and 9 percent in local costs. Moreover, as the cotton ginneries to be rehabilitated wcre in disturbed areas, civil works could not be commenced by contractors in a timely fashion. Despite these problems, 7 of the 10 originally planned ginneries were completed. The ginnery at Namasale was cancelled and two contracts at Arapai and Bugondo had to be terminated as well, due to continuing security problems. The ginnery at Pakwach was completed behind schedule due to disappearance of electrical equipment from site; the equipment was subsequently replaced (at a cost of US$ 250,000), and the ginnery was brought back into working order. 5.5 Altogether 12 coffee hulleries were rehabilitated. The original appraisal target aimed at rchabilitating 20 hulleries5. With the exception of one privately owned factory in Mukono District, seven of the cight hulleries initially rehabilitated were cooperatives. Progress on hullery sites was somewhat slow as one of the contractors lacked adequate managerial capabilities. In January 1989, the Bank agrccd to a proposal by Sebei Elgon Cooperative (operating the hullery at Kapchorwa), to include a maize and wheat mill in the free space available in the complex at an approximate cost of US$ 300,000. Later in 1989, IDA also agreed to the rehabilitation of 4 additional coffee hulleries. T'he proposed hullerics were to replace and rationalize processing capacity in the war-ravaged Luwero Triangle at an estimated additional cost of US$ 1.7 million. The actual number rehabilitated was some 40 percent below the appraisal target; this shortfall in coffee rehabilitation demand was attributable to security reasons, over-estimation of up-take of coffee rehabilitation funds, availability of spares from other sources, failure of many cligiblc coffee hulleries to meet the criteria for borrowing agreed with UCBIIDA in the Project Agreement, low farmgate prices in real terms, and soft world markets For robusta', due to consumcr prefcrences shifting in favor of arabica coffee. 5.6 The tea subcomponent was excluded from ARP at the time of appraisal, as major factory rehabilitation requircmcnts were expected to be met by a number of alternate operations financed Tlc ;appraisal tatrget was initially revised to 8 hulleries during implementation; in 1989, IDA agreed to the rehabilitation of 4 additional hullries. Since the mid-1960s. rohusta has accounted for between 88 to 97 percent of Uganda's total coffee exports.  6 by various multi-lateral agencies including the European Development Fund (EDF) and the Commonwealth Development Corporation (CDC). However, in early 1984 GOU requested financial assistance for the subsector, due to significant delays in funding from other sources, combined with an urgent need for restoration of tea processing capability. Some US$ 7 million was reallocated from coffee to finance the rehabilitation of 7 tea factories. All factories were completed by year-end 1987, and were out of their maintenance periods one year later. However, the machinery at the factories could not be tested adequately due to severe shortage of green leaf. The lack of working capital at both UTGC and AEL combined with an inadequate transport and roads infrastructure and power outages resulting in unscheduled factory closures, severely constrained operations. At AEL tea estates, labor and input shortages exacerbated the problem, while at UTGC delayed payments and low farmgate prices for tea resulted in scarcity of raw materials. In 1987, IDA agreed to the reallocation of US$ 3.6 million from the recurrent inputs component to finance refurbishment and delivery of urgently needed sugar processing equipment for Kakira Sugar Works; this initiative provided financing under the first phase of rehabilitation of operations at Kakira, and laid the basis for further development under the subsequent sugar industry project, which is being successfully implemented. 5.7 Nearly US$ 40 million of the proceeds of the IDA credit were earmarked for the recurrent imports component at the time of appraisal. As a result of reallocations to other components and inadequate management, about US$ 25 million was actually spent on this category. To sustain the efforts initiated under the project, UCB requested (November 1987), a further Bank credit of US$ 20 million to cover the imports of agricultural inputs for the next two years. This supplemental credit was not approved by IDA. In addition to the IDA credit, Italian co-financing of US$ 10 million was provided in 1985 (about US$ 6 million represented items to be sold to the private sector), for imports of sector inputs. 5.8 Part C Studies: Five of the seven studies planned at appraisal were undertaken (Table 6), the exceptions being a study of the cotton subsector, which was dropped as it overlapped with a study commissioned concurrently by the British Overseas Development Administration (ODA), and a coffee subsector study, which was converted into TA to Coffee Marketing Board for coffee liquoring and quality control. However, two additional studies (Sugar Rehabilitation and Tea Rehabilitation Project feasibility studies) were undertaken and completed under ARP. 5.9 Part D Technical Assistance: Implementation of the TA component did not proceed smoothly. The ARP had envisioned strengthening MCM's accounting and engineering capabilities, as well as MAF's planning, data collection and monitoring departments. GOU had requested assistance from an international agency for the recruitment of TA for AS and MAF, but the component cncountered recruitment delays and mobilization problems. While training of staff from various ministries and agencies was provided, its full impact can not be assessed in the absence of rcquisite information (para. 5.10). Institutional support, including development of managerial and operational capabilities of personnel, at the tea parastatals was also provided through the Managcment Assistance and Training Services (MATS) subcomponent. With respect to the vehicles subcomponent, there wcre repeated solicitations for procurement of additional vehicles during project implemcntation. Maintenance of project financed transport facilities was poor, and there was evidence of vehicles being lost or cannibalized. Despitc absence of records providing running totals of number  7 and type of vehicles by destination, approval for additional procurement was constantly sought and generally granted over the life of the project. 5.10 Part E Training: The DCA stipulated submission of a comprehensive training program to IDA by year end 1983; in 1985, following the visit of a Bank Senior Agricultural Training Specialist to Uganda, copies of completed training plans for both UCB and AS were requested by IDA, but no such plan is available in project files. AS, which was responsible for coordinating training for all implementing agencies under ARP, had little idea of training carried out by UCB's project staff, and the Specialist's report suggests that although, analyses of training needs were conducted to produce proposals for individual staff, these exercises were not carried out in a thorough or systematic manner. The report further called for an independent agricultural training project to coordinate, organize and strengthen manpower development in the agricultural sector. In addition to training of MCM, MAF, UCB and AS personnel, in areas such as statistics, accounting and financial management, marketing, project formulation and implementation, a Ginnery Training Program (estimated cost US$ 170,000) was implemented; it included an overseas study tour for the chief ginnery inspector and in-house training for some 44 participants in plant operations and maintenance. 5.11 Disbursements: The estimated and actual disbursement of the Credit is given in Table 3, Part III. A total of some SDR 60.0 million (US$ 73.5 million) was disbursed. Although the project disbursement profile was designed to reflect the risk of delays in procurement, not surprisingly, ARP implementation and disbursements slowed down considerably during the civil disturbances in 1985 and 1986. A final six month credit extension was granted so that US$ 3.1 million in undisbursed monies could be used to prepare a Cotton Subsector Development Project and purchase vital spares for ginneries, but this initiative could not be implemented due to delays (particularly in the selection of consultants to prepare the project). The last disbursement was made on October 22, 1992. The undisbursed balance of SDR 3.5 million was cancelled. 5.12 Project Costs & Financing: Total project cost over the five-year investment period was estimated at US$ 88.9 million at time of appraisal (US$ 82.1 million net of taxes and duties), with a foreign exchange component of US$ 71.3 million or 80 percent. No allowances for physical or price contingencies were needed in the cost estimates, according to the SAR, due to the divisibility of project components into financing of incremental operating costs (recurrent inputs imports component), and a line of credit to a bank for on-lending. ARP was to be financed through an IDA credit of US$ 70 million (SDR 63.5 million) and counter-part funds totalling nearly US$ 17.6 million (US$ 10.8 million net of taxes and duties) from GOU, UCB, BOU and beneficiaries of recurrent imports. An additional US$ 1.3 million of the TA component was financed from the IDA Technical Assistance Credit (Cr. 1077-UG; approved in FY81). The actual total cost was about US$ 81.8 million (Table 5, Part III). 5.13 Project Risks: The primary project risks identified at appraisal were: (a) The unstable security situation in Uganda; although it was expected to improve over time, especially as the economy recovered, the security situation was unpredictable over much of the project's life and contributed significantly to implementation delays; (b) The second risk was the possibility of delays in delivery of project items, and a delay in the implementation of the project. The disbursement profile was designed to reflect this contingency. Despite various safeguards, procurement and disbursement did not proceed as planned, partially as a result of some inadequacies in project  8 administration and supervision, and partly due to an uncertain security situation; and (c) Thirdly, UCB would be taking major financial risks in its on-lending to numerous rural based hulleries, barns and ginneries (most ginneries were in financial trouble) and to the tea parastatals, which were technically bankrupt and had very weak managements. To ensure that its financial performance did not deteriorate, UCB would be ensured a spread of at least 7.5 percent (with reference to ARP's rehabilitation portion of the Credit). Nevertheless, at project completion, UCB was carrying a portfolio of non-pcrforming loans acquired undcr ARP. 6. PROJECT RESULTh 6.1 Project Obiectives: In order to objectively assess ARP's achievements, it is important to briefly revisit the primary structural and institutional constraints undermining project performance (in addition to the overwhelming security problems): (a) shortages of foreign exchange; high, unpredictable inflation (especially prior to 1988/89 - resulting from the large-scale monetization of the deficit), which eroded producer incentives7; (b) generally low producer prices and poor processing margins, which translated into inadequate incentives for improving quality and quantity of output and resulted in raw material shortages; (c) inadequate, untimely crop financing and severe working capital shortages in cooperatives and parastatals; inadequate credit delivery systems and poor access to commercial debt by entities such as UTGC; (d) weak agricultural budgetary support; (e) excess processing capacity, combined with insufficient supply of electric power, requisite fuels, spares and consumables; inefficient marketing systems; and (I) inadequate transportation infrastructure and shortage of vehicles. Additionally, institutional shortcomings which affected project outcome include: ineffcctive agricultural research and extension services; segmented, inefficient markets for capital, labor and inputs. 6.2 On the positive side, ARP was relatively successful in advancing its primary objectives of providing funds for urgently needed sectoral imports and physical rehabilitation of agro-processing facilities. However, the expected bcnefits from these components could not be realized promptly as a result of a poor macroeconomic environment, non-supportive agricultural marketing policies and wrong price signals. The tradable goods sector neither expanded nor diversified in the latter half of the 1980s, and was in fact severely damaged by civil strife and macro-economic distortions; there is thus presently a situation of serious idle processing capacity in Uganda. Recognizing this, GOU has introduced radical policy reforms, starting with the coffee industry; the system of marketing, pricing and taxing coffee has been overhauled and efforts to introduce appropriate structural adjustment policies for other cash crops (tea, cotton) are also underway (paras. 6.3-6.4). A negative bequest of the rehabilitation component has been the imposition of a financial burden on the cotton subsector cooperative system and UCB, in the form of non-performing investments. GOU is examining the possibility of addressing this issue in the context of the proposed Cotton Subsector Project and the proposed Financial Sector Adjustment Credit (para 6.5). In view of the macro-economic and sectoral policy reforms which have been underway since late 1989 in conjunction with measures to address Since 1990, GOU embarked upon a concerted stabilization program, which helped reduce the average inflation rate from over 200 percent in 1986/87 to about 42 percent in 1991/92. The average monthly rate between July 1992 and February 1993 was (0.2) percent.  9 the systemic weaknesses, improved capacity utilization and generation of benefits from the rehabilitated processing facilities can be expected to develop over the medium to long-term period. Again on the positive side, expedient project impacts include, moderate but durable achievenments from ARP's institutional strengthening, support of a policy framework, deepening of sector knowledge through studies and capacity building measures; it should however be kept in view that, the project design did not seek to galvanize major macro-economic and sectoral reform or boost vital institutional development. Nevertheless, the institutional coordination arrangements initiated under ARP have proved quite valuable. No rate of return was calculated at appraisal since the project was designed as part Program Credit and part Development Finance Credit type operation. On balance project performance may be deemed satisfactory. 6.3 Part A Rehabilitation of Crop Processing Facilities: Delays in generating benefits from this component have resulted due to a deterioration in Uganda's terms of trade (declining beverage, cotton and tobacco prices), as well as due to the absence of a supportive sectoral and macro- economic policy framework. While rehabilitation of crop processing facilities was adequate, there is presently a situation of serious idle capacity in Uganda. Raw material shortages, inadequate producer incentives and crop finance limitations of cooperatives and parastatals are at the core of this issue. Other problems rampant in the agro-processing industry are financial insolvency, and managerial and technical constraints. Project impact was also curtailed due to absence of provisions for supporting operational reforms to ensure profitable use of facilities, and lack of effective controls on the financial intermediary, UCB. There are reportedly more than 300 hulleries and nearly 600 huller machines (1988/89 crop year) in Uganda. The primary coffee processing capacity and its utilization are currently estimated at 450,000 tons and 35 percent, respectively8. Coffee exports (which dominate Uganda's narrow export base) have declined in value from over US$ 394 million in 1986 to US$ 141 million in 1990 (as a result of decline in international prices, changing consumer preferences and a drop in quality of both Ugandan robusta and arabica). Since 1981, coffee export tonnage has however stayed at or above 50 percent of the 1970 peak volumes. A series of radical reforms introduced over the last couple of years in the structure of domestic coffee processing and export business, aimed at liberalizing coffee marketing and opening the industry to competition, reducing governmental control and taxation, rationalization of producer pricing mechanisms, appear to have readied the subsector for take-ot'f. 6.4 As with coffee, ARP contributed to a refurbishing of nominal cotton ginning capacity, which far exceeds current output; the ginneries are reportedly operating at only about 10 percent of their combined capacity at this time. Furthermore, ginnery malfunctions are a serious problem, with a lack of spares and qualified mechanics contributing to long delays, inflated processing costs and reduced cotton quality. However, this situation is expected to reverse following the substantial reforms being proposed under a Cotton Subsector Project; with increased competition, significant export expansion could be achieved fairly quickly. Tea production and exports dropped enormously in 1979, following the war with Tanzania; made tea output is presently some 9,000 tons, almost half of early 1970 levels. The unfavorable developments in international pricing environment have eroded incentives at project completion; this combined with working capital shortages in the parastatals have meant low levels of 8 Uganda Agricultural Sector Memorandum, March 1993.  10 green leaf supplies. Average capacity utilization (in 1990) at AEL was just 12 percent, while it was 20 percent at UTGC. Some of the issues affecting the tea subsector are also being addressed through ASAC. An initiative in the right direction has been set in motion, with Government eliminating the export monopoly of the Uganda Tea Authority. Given the short gestation period in tea - about 3 months, production from existing tea estates could be increased very quickly. 6.5 A negative ramification of the rehabilitation effort has been the imposition of a financial burden on the cotton subsector cooperative system and UCB, in the form of non-performing investments. GOU on-lent the proceeds of the Credit allocated to Part A of the project to UCB at 6.5 percent per annum; UCB in turn on-lent to the unions at market rates of interest (reviewed periodically), plus 1 percent foreign exchange risk fee. Section 3.01 (d) of the DCA stipulated that the Borrower would bear the foreign exchange risk; however, the Back-to-Office Report of the Pre- Appraisal Mission and the Consultants' Preparation Report for the proposed Cotton Subsector Development Project suggest respectively, that the foreign exchange risk was actually passed on to the unions assumed by UCB. The foreign exchange risk, the market rates of interest applied to the unions' loans (recently greater than 40 percent), combined with responsibility for ginneries not completed under turn-key contracts has multiplied their debt burden9. Many cooperatives are virtually bankrupt and are unable to restructure or privatize, because their assets are locked in as collateral under these loans. Government is exploring the possibility of relieving these institutions of the financial liabilities incurred under the ARP, in the context of the Cotton Subsector Project and the financial sector reforms envisaged under the proposed Financial Sector Adjustment Credit (FINSAC). The Cotton Project proposes to liberalize the subsector, thereby creating a competitive environment conducive to the development of a dynamic private sector; it further seeks to alleviate the debt burden of the unions through various measures including determination of appropriate values of debt outstanding per union and providing relief for the same, in conjunction with the preparation of financially viable Business Plans. This would result in a level playing field, as non-compliance with such a plan would mean non-eligibility, and eventual liquidation in the case of most insolvent unions. 6.6 Part B Agricultural Recurrent Imports: The project made quite an important contribution through the financing of recurrent imports (essential tools, packaging materials, veterinary supplies, equipment and spares) - thereby assisting somewhat in the alleviation of the near chronic short supply of agricultural inputs. Due to reasons noted in para. 5.7 however, only about 60 percent of the US$ 40 million earmarked originally was expended to this end. In view of the intermittent turmoil in Uganda, the benefits from this component could not be maximized. Lack of inputs continued to be a serious constraint on agriculture, and the shortage was noted by various missions. In this context, the Agricultural Development Project (ADP) approved in January 1985, sought to continue the supply of inputs initiated under ARP, through the provision of about US$ 18 million worth of agricultural, livestock and fisheries inputs. 9 Overall the unions are currently indebted to the Cooperative Bank and UCB for ADB and IDA ginnery rehabilitation loans estimated at Ush 52.1 billion (around US$ 42.6 million). The ADB loans constitute the bulk of union indebtedness, as the IDA portion totals Ush 3.1 billion (about USS 2.5 million). Approximately USS 1.6 million or about 65 percent of total amount outstanding (IDA loans) represents accumulated interest. Appendix 3, Final Report, April 1993, Cotton 9Subsector Development Project Preparation, BCGA, U.K & self-estimates.  11 6.7 Part C Studies: Project documentation suggests that the five subsector studies completed were of uneven quality; for instance, the Livestock Marketing Study, was deemed satisfactory only after extensive review by IDA. Project files also indicate that the Costs of Production Study (major traditional export crops) and the Non-Traditional Exports study, required much revision. Specific comments on the other studies undertaken were unavailable. As participated in study reviews at every stage, but the Secretariat's comments were reportedly not addressed in the final version of the studies. An important element missing from the whole exercise was a plan of action for reviewing and implementing the findings of these studies. This was addressed through the implementing agencies undertaking this operation upon the recommendation of APC. Based on these studies, three task forces were set up for cotton, livestock and agricultural services (food crops), in 1984. Due to various constraints however, there was a delay in the finalization of the reports, which were submitted eventually in 1987. On the basis of the recommendations of these Task Forces, nine study groups were established in 1987; the study groups completed their work including development of the Action Programme in 1989, which led to the formation of Action Plans for Agricultural Policy Agenda and investment projects. A major contribution of this component was its role in project pipeline development. With the exception of the one on tobacco, the findings of the other studies provided input to the foundations for subsequent operations including, ASAC, ADP, Sugar Rehabilitation and Livestock Services Project. 6.8 Part D Technical Assistance: The residual impact of the TA component is the hardest to gauge, since project documentation does not elaborate on the performance of APC or AS, in areas of institutional development and policy formulation. Nonetheless, the project made important contribution to policy reform and institution development through its support to APC and its executive arm, the AS. It was via this mechanism, that GOU gleaned vital information on production and incentive problems confronting farmers and processing industries; GOU was also assisted by AS in implementing ARP conditionality (during the early 1980s), which required that farmgate prices, and agro-processing margins be adjusted upwards with a view to improving production and export incentives, within an administered pricing system'". A consequent positive response in coffee, tea, cotton, and tobacco sectors, was subsequently dampened by security problems in the mid-1980s, the collapse of international coffee markets and decline in real farmgate prices. The AS was also an invaluable forum for establishing dialogue with GOU concerning the Agricultural Sector Adjustment Credit (ASAC), and acted as a catalyst in activating this project which is being successfully implemented. AS has continued to play a vital role under the ASAC, which was designed in 1990 to address salient issues in adjustment of agriculture and their macroeconomic ramifications"1. AS's role, however, has shifted from administration of export prices and margins toward monitoring of product and inputs markets and prices, and providing analytical support for further adjustment and regulatory initiatives of Government. 6.9 Part E Training: Durable capacity building through managerial and technical training could not be assessed clearly, since it was not possible to determine how the training provided fitted into The DCA stipulated that AS would regularly consult with IDA on prices of export crops to producers and processors; howccr, no forrnal records of such consultations are available on file. An OED Report of June 1990, which reviewed the TA provided under other projects in Uganda, including the Technical Assistance I Project (Cr. 1077-UG), underlined the lasting impact of AS in institutional capacity development.  12 the overall strategy (para. 5.10). Identification of eligible candidates and selection of fields of study, appear to have been handled in an ad hoc and at times arbitrary manner, although overall, the fields of study sclected were pertinent. 7. PROJECIT SUSTAINABILITY 7.1 Sustainability: In addition to a shaky fiscal and monetary discipline in the economy, the major external shock affecting the sustainability of the project was the collapse of the International Coffee Agreement in 1989 and the subsequent precipitous fall in international coffee prices. Consequently, foreign exchange earnings and government tax revenues relative to targets declined dramatically'2. The situation was worsened due to depressed world markets for other commodities such as cotton, tea and tobacco and the OECD economies slipping into a protracted recession. The negative impact of these events was exacerbated by weak implementation capacity and reluctance by Government to take unpopular corrective action (for example, expenditure cuts or exchange rate adjustment) in a timely manner. Of the structural weakness indicatcd in para. 6.1, perhaps the most pressing issue is that of inadequate and untimely crop financing and severe working capital shortages in the agro- processing industry; the problem stems from a combination of two factors: (a) the inability of unprolitable coopcratives and parastatals to raise the requisite working capital from banks, as the former are already saddled with debt-servicing costs on donor financed rehabilitation programs; and (b) deterioration of Uganda's overall financial system (including the decline in the level of rural financial intermediation); cconomic and political instability, poor performance of key productive sectors and the highly inflationary environment prior to 1989, have all contributed to decimating the loan portfolios of banks. Another key issue is the capacity and willingness of parastatal and co- opcrative union personnel to maintain and operate project assets. Lack of motivation and commitment of the often underpaid staff would positively detract sustainability; the entities involved in various project components, gcnerally lacked the requisite technical, managerial, or economic Capacity. 7.2 While the above threats to project sustainability are cogent, the structural and institutional weaknesses are bcing addressed through ongoing or proposed IDA operations and other Government actions; a mcasure of discipline in public scrvices, economic policy reforms, re-establishment of political institutions and rcstoration of security were introduced subsequently in late 1989. These alongsiel prudent subsectoral policies are expected to ameliorate longer-term prospects of some agricultural products supported by ARP. In this context, subsequent Bank support for structural change is principally channeled through the ASAC which targets liberalization of the coffee subsector, controlled expansion of rural credit, enhanced policy formulation, and strengthening of agricultural research and cxtcnsion capacity. Liberalization of the cotton (through the Coffee Subsector Project), and dcvelopment of tea (with EEC participation) subsectors are also being seriously pursued. The prospccts for improved impact of the rehabilitation component through increased capacity utilization are thus likclv to hc enhanced in the mcdium to longer term (paras. 6.3-6.5). Although the project was not diesigned to play a pivotal role in major macro-economic and sectoral reform or boost vital nstMiutiollid development, the institutional coordination arrangements initiated under ARP have I l-ocr, concciled action hy (ievernnint (parlicularly since 1990), has helped maintain real producer pnces of coffee.  13 proved quite valuable and are expected to be sustainable. In view of the advances made in capacity building in the agricultural ministries, the ov,"rall roles, specific functions and intra-sectoral relationships of AS and other entities should be revisited; a review and subsequent rationalization/redistribution of the roles and functions of these entities may be called for at this juncture. 8. IDA PERFORMANCE 8.1 Supervision Performance: IDA mounted seven full supervision missions between October 1983 and February 1989; additionally, a number of missions dealing with specific project subcomponents and issues such as, emergency tea rehabilitation, procurement matters and producer incentives were carried out. Task Management responsibilities changed hands five times during the project's implementation, primarily as a result of staff turnover. In the period 1984 through late 1987, project supervision was transferred to the Nairobi office of the Bank, partially to effect more intensive supervision. Nonetheless, at times, IDA staff expounded different directives and policies (often justifiable in view of the changing situation), which contradicted each other and may have caused confusion in implementation. For instance, in December 1985, all procurement was suspended due to the instability in the country; thereafter, in August 1986, a Bank initiative, subsequently agreed by GOU, sought to expedite procurement under the project through innovative procedures. However, by October 1986, the position with regard to procurement under ARP had changed dramatically, so that most new procurement was put on hold; any new commitments were to be tested for robustness to macro-economic problems and IDA was to proceed very selectively - only with those new commitments that made sense in view of the macroeconomic distortions prevailing in Uganda. In January 1987, however, it was decided that funds from ongoing IDA Credits (Cr. 1328-UG and Cr. 1248-UG) were to be utilized for emergency rehabilitation of Kakira Sugar Works, and suspension of other procurement would also be reviewed afresh. 8.2 Although there was no official supervision for over three years (the last full supervision mission was in Fcbruary 1989'3), a dialogue was maintained with UCB and AS (subsequent communication with AS focused primarily on the ASAC). Review of project progress and assessment of related problems suffered at times in the absence of consistent communication. The audit covenants of the DCA were complied with after considerable delays. Repeated reminders had to be issued by the Bank, to induce submission of Audit reports. In fact, no audit reports on status of project accounts were submitted for six years (1983-1989). Thereafter, all overdue reports were submitted en masse. No clarifications for a discrepancy in the Special Account (pending since 1986), were provided until 1990, although IDA raised the issue several times (especially in the latter part of the project), with BOU. IDA received financial data on UCB's operations fairly regularly. Compliance with internationally accepted accounting principles was not always observed in the various reports received. In retrospect, this project experience suggests that IDA should have been more resolute and prompt in confronting the Borrower on such deficiencies in implementation. 13 Subsequent missions were mounted primarily in connection with the Cotton PPF.  14 8.3 Findings and Lessons Learned: The implementation experience indicates that financing of a rehabilitation project can entail many unavoidable risks. Thus, when seen in isolation many of its components may appear not to have been successful. However, as discussed above, they may ultimately turn out to be important building blocks of a longer term, successful, sector and country adjustment strategy. The key findings and lessons of ARP are as follows: (a) The financial vulnerability and managerial weaknesses of cooperatives and parastatals have significantly constrained project impact. The lack of crop finance and inaccessibility to working capital has translated into serious under-utilization of rehabilitated processing capacity. In hindsight, project design did not fully examine and provide for these constraints. However, implications of the highly unfavorable developments in international markets for Uganda's agro-exports, which undermined the financial viability of these entities, would have been almost impossible to predict at the time of appraisal in the early 1980s. (b) The project design underestimated the pervasiveness of the macro-economic, sectoral and institutional constraints. With the benefit of hindsight, it may be suggested that too much emphasis was placed on the physical rehabilitation component, perhaps to the detriment of sufficient policy dialogue. Given the absence of an enabling policy environment and rather limited infrastructural capacity, some of the rehabilitation investments, such as cotton ginneries, may have been premature. The delay in generation of benefits from the rehabilitation and input import components stems from the lack of a supportive policy framework to facilitate growth following the structural changes; holding a Mid-Term Review might have helped trigger improvements; (c) Project implementation experience reveals that IDA should have been more resolute in confronting the Borrower on deficiencies in execution, such as non-compliance with the Audit Covenants of the DCA. Prompt and bold actions such as with-holding disbursements and making credit extensions subject to timely resolution of outstanding issues, might have resulted in better project performance. Despite inadequacies in financial and operational management that surfaced rather early on in execution, there were four subsequent extensions of the closing date, and no concrete measures were introduced to address these weaknesses; (d) Administration of inputs procurement by a commercial bank (UCB), albeit with the assistance of procurement agents, and subsequent distribution of the same via five parastatals, a cooperative union and the Ministry of Animal Industry and Fisheries, does not emerge as an efficient arrangement, in retrospect. However, at time of project preparation this was considered the only viable option, as UCB could provide the requisite implementational resourcest4; the ministries lacked the requisite capacity and furthermore, the Uganda Central Tender Board was already over- burdened by supervision of nearly all procurement in the country, resulting in 14 The same basis determined the selection of UCB as the implementing agency for the rehabilitation component.  15 unacceptably long delays. Nevertheless, inputs were not always procured in a prompt and efficient manner (particularly in the initial phase of the project). Three Quote Bid System, Prudent Shopping, Direct Contracting and Limited International Bidding procurement procedures were employed; procurement of assistance for rehabilitation works, and administration of related contracts proved to be cumbersome and may have resulted in additional financial costs. Procurement arrangements should have been more carefully formulated to ensure transparency, and speedy review and improved distribution procedures; (e) Task Management responsibilities changed hands five times during ARP's implementation, and there were no full supervision missions in the final three years. Consistent, appropriately timed and regular missions would have contributed to a greater understanding and a coherent approach to the problems prevailing in the field. Additionally, more careful monitoring of the project's progress vis-a-vis overall objectives would have been more useful than focusing primarily on implementation problems; and (f) A major contribution of ARP was its role in project pipeline development. Funding arrangements for follow-on operations proved to be particularly useful, as for the successful Sugar Rehabilitation Project. Studies provided input to the foundations for subsequent operations including, ASAC, ADP, Sugar Rehabilitation and Livestock Services Project. 9. BORROWER'S PERFORMANCE 9.1 ARP was initiated with a favorable reception from Ugandan Government, and there was no change in the authorities' stance, when the present Government of Uganda assumed power in January 1987. Project implementation by the Borrower was somewhat hampered (particularly in the initial stages) by inadequate coordination and cooperation between various line ministries (Ministry of Agriculture, Ministry of Animal Industries & Fisheries and Ministry of Cooperatives & Marketing), parastatals, cooperatives and other entities, including UCB, UTGC, AEL and AS. The preceding should be seen in the light of the political uncertainties prevailing over much of ARP's life 15; the establishment of APC however, helped promote intra-sectoral coordination, thereby ameliorating the situation. 9.2 The Borrower's support to institutional development in the context of ARP, despite serious socio-political and economic impediments, has paved the way for initiating changes in the right direction in sectoral policy framework. Implementation performance of the executing agencies was mixed, with some areas such as procurement and contract management being handled inadequately, while others such as overall physical rehabilitation of factories and TA, were completed reasonably well. In conclusion, considering the emergency situation under which the project was launched and 15 Both the Government of Uganda, and the top management of UCB changed thrice over ARP's life.  16 the unstable political and security environment under which it was implemented, the achievements of the executing agencies were adequate. 10. CONSULTING SERVICES 10.1 The consultants attached to AS and UCB performed at varying levels of competence, and their performance was not uniformly satisfactory. Although the quality of the studies produced was deemed uneven, their overall contribution was quite significant as these studies sought to recommend solutions to specific subsector issues and provided input for follow-on operations (para. 6.7). The assistance provided in other fields, such as project management, engineering supervision and training, was also not consistently adequate; but insecurity in project areas affected the performance of consultants associated with the rehabilitation component. 11. PROJECT DOCUMENTATION & DATA 11.1 The Staff Appraisal Report, Supervision reports and Project Progress Reports supplied the bulk of the information for this report. The implementation volumes' coverage of the physical rehabilitation and recurrent inputs components of the project was adequate, but it provided limited information with respect to the progress of the Studies, TA and Training components.  17 PROJECT COMPLETION REPORT UGANDA AGRICULTURAL REHABILITATION PROJECT (CREDIT 1328-UG) PART 2: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE BANK'S PERFORMANCE DURING PROJECT IMPLEMENTATION 1.1 Bank's Performance: 1.2 Lessons Learned: 2. GOVERNMENT'S PERFORMANCE DURING PROJECT IMPLEMENTATION 2.1 Government's Performance: 2.2 Achievements and Lessons Learned: 3. PROJECT RELATIONSHIPS 3.1 4. CONSULTANTS' PERFORMANCE 4.1   19 PROJECT COMPLETION REPORT UGANDA AGRICULTURAL REHABILITATION PROJECT (CREDIT 1328-UG) PART 3. STATISTICAL INFORMATION Table 1. Related Bank Loans and/or Credits Credit Title Purpose Year of Status Approval First Reconstruction Cr.983-UG The agricultural component 1980 Completed was aimed at sectoral in 1985. (US$ 19 million of a total credit rehabilitation through of US$ 95 million, was earmarked provision of imported for agriculture). inputs and spares. Second Reconstruction Cr.1252- The agricultural component 1982 Completed UG was aimed at sectoral in 1990. rehabilitation through (US$ 17 million of a total credit provision of imported of US$ 70 million, was earmarked inputs and spares. for agriculture). Agricultural Development Project Increase food production 1985 Ongoing Cr. 1539-UG and family income in project area through (US$ 10 million) provision of inputs; strengthening of extension services; support for research and surveys. Sugar Rehabilitation Restore efficient 1988 Ongoing Cr.1893-UG agricultural and processing operations at the Kakira (US$ 24.9 million) Sugar Works. l Agricultural Sector Adjustment Facilitate financial 1990 Ongoing Credit stabilization; promote Cr.2190-UG agricultural growth and diversification. (US$ 100 million) l Livestock Services Reverse the decline in 1990 Ongoing Cr.2176-UG livestock numbers by dealing with the alarming (US$ 21 million) animal epidemic disease situation; bring about improvements in the Ministry of Animal Industry and Fisheries.  20 Table 2. Project Timetable Time Date Planned Date Revised Date Actual Identification 41R0 Preparation 7/81 Pre-appraisal 2/82 Appraisal Mission 5/82 Post-Appraisal Mission 8/82 Credit Negotiation 1/83 Board Approval 02/24/1983 Credit Signature 03/11/1983 Credit Effectiveness 07/20/1983 Project Completion 12/31188 Credit Closing 06130/1989 12/31/1991' 06/30/92 Table 3. Credit Disbursement (USS Million) IDA Fiscal Year Appraisal Estimates Actual Actual as % of Annual Cumulative Annual Cumulative Appraisal Estimate 1983 0.2 0.2 0.0 0.0 0 1984 8.7 8.9 1.7 1.7 19 1985 30.8 39.7 8.1 9.8 25 1986 24.0 63.7 8.3 18.1 29 1987 3.2 66.9 22-8 40.9 61 1988 2.0 68.9 15.6 56.5 82 1989 1.1 70.0 8.4 64.9 93 1990 3.4 68.3 98 1991 2.1 70.4 100 1992 2.7 73.1 104 1993 0.4 73.52 105 Credit closing date was revised a total of four times. 2 The US Dollar amounts exceed the appraisal estimates due to the appreciation of the SDR.  21 Table 4. Project Implementation Indicators Appraisal Estimate Actual Rehabilitation of Processing Facilities Coffee Hulleries 20 12 Tea Factories 7 Cotton Ginneries 10 7 Tobacco Barns 1,200 Sugar Mills I Recurrent Imports C(JSS million)3 Chemicals na. 8.00 Agricultural Equipment na. 11.25 Spares na. 5.75 Total 40.0 25.00 Smudies 7 74 Technical Assistance Project Manager I 1 Engineering Surveyors & Supervisors 1 1 Procurement Agents 1 1 Agricultural Economist 1 2 Economist/SLatistician 3 2 Financial Analyst 1 1 Agriculturalist 1 1 Engineer 2 Accountant 2 Equipment na. see5 Vehicles 16 31 No. of Persons Trained Local Training n.a. 75 Overseas Training n.a. 48 Ministry of Agriculture & Forestry n.a. 15 Ministry of Cooperatives & Marketing na. 8 UCB na. 52 AS 7 28 Other n.a. 20 3 Classification of agricultural input imports into chemicaLs, equipment and spares is based on AS estimates. 4 Out of the seven originally pLanned studies, only 5 were undertaken; however, two additional studies relating to Sugar Rehabilitation and Tea Rehabilitation Projecs were also undertaken under the ARP. 5 6 Computers; 6 Typewriters; I Dtplicator, 5 FLling Cabinets; 2 Photocopiers 8 Electric Fans; 22 Calculators. Additionally, assorted spares for ofrice equipment and vehicles were also procured.  22 Table 5. Project Costs and Financing A. Proiect Costs (USS Million) Project Component Appraisal Fstimate Actual s Local Foreign TIotal Local Foreign Total Coffee Subsector 5.4 22.0 27.4 2.03 18.25 20.28 Cotton Subsector 4.9 22.2 27.1 1.31 24.80 26.11 Tea Subsector 2.0 7.7 9.7 0.96 12.42 13.38 Tobacco Subsector 2.0 4.8 6.8 0.79 3.18 3.97 Livestock 1.0 6.3 7.3 0.92 4.90 5.82 Non-TraditiGnal Exports 1.2 4.4 5.6 1.38 8.31 9.69 Tech. Asst. 1.1 3.9 5.0 0.87 1.64 2.51 Total Costs 17.6 71.3 88.9 8.26 73.50 81.76 B. Project Financing (USS Million) l Sources Planned Actual 7 l IDA Credit 70.0 73.5 UCB 4.6 0.29 GOU 0.3 0.15 Beneficiaries of Imported Agr. Inputs 12.2 7.12 Bank of Uganda 0.5 0.70 Total 88.9 81.76 6 Total expenditure by subsector includes capital expenditure, consultancy services, imports of agricultural inputs and studies. The division of agricultural inputs by beneficiary subsectors is based on AS estimates. 7 Actual figures for counterpart financing from GOU, UCB, BOU and beneficiaries of recurrent itnports are based on AS estimates.  23 Table 6. Project Results A. Direct Benefits' Indicators Appraisal Estimate Actual Rehabilitation of Processing Facilities Coffee Hulleries 20 12 Tea Factories 7 Cotton Ginneries 10 7 Tobacco Barns 1,200 Sugar Mills 1 Recurrent Imports (US$ million) Chemicals n.a. 8.00 Agricultural Equipment n.a. 11.25 Spares n.a. 5.75 Total 40.00 25.00 Technical Assistance(USS million) Equipment n.a. 0.07 Vehicles n.a. 0.48 3 Since the project was designed as part program credit and part DFC-type operation, no overall rate of return calculation was made for the project.  24 B. Studies Studies Completed Purpose Status Coffee Study Preparation of detailed proposals for the improvement of coffee Not under- marketing, including recommendations for changes in payment systems taken and the role and ownership of the Coffee Marketing Board. Cotton Study Study to determine the appropriate future role of cotton in Uganda, Not under- including if necessary, preparation of a strategy to increase production taken and of an organizational and financial structure for the industry. Tea Study Study to determine the comparative advantage for Uganda in tea Completed production and the preparation of a strategy for the industry including its optimal size and future organizational and financial structure. Tobacco Study Study to determine the comparative advantage for Uganda in tobacco Completed production and the preparation of a strategy for the industry including its optimal sir,e and future organizational and financial structure. Cost Study Study of the costs of production, processing and marketing of major Completed export crops and of competing crops in order to improve Borrower's information base required for decision making in the agricultural sector. Livestock Study Study of investment priorities, marketing strategies and product export Completed potential in the livestock subsector. Nontraditional Exports Feasibility study to determine the potential of non-traditional Completed agricultural exports and the identification of policy and institutional measures for their promotion. Sugar Study Study to determine potential and viability of refurbished processing Completed facilities in the sugar subsector through a Rehabilitation Project. Tea Feasibility Studv Feasibility study focusing on both the UTGC complex (including Completed outgrowers) and the AEL complex, including analysis of the implications of project proposals on incentives to outgrowers for continued rehabilitation of abandoned tea gardens, and evaluation of availability of labor and fuelwood supply to factories.  25 Table 7. Status of Covenants Section/Covenant Status of Compliance 3.01(a)(b) The Borrower shall support the project by providing promptly Complied funds, facilities, services and other resources. 3.01(c) The Borrower shall relend the proceeds of the credit to UCB Complied under a subsidiary loan agreement. 3.02(a) Maintain the Agricultural Policy Committee. Complied 3.02(b) Maintain an Agricultural Secretariat. Complied 3.03 The Borrower shall take actions to ensure requisite imports Complied under the project. 3.05 Employment of consultants and experts. Complied 3.07 Submit a comprehensive training program by 12/31/1983. Not Complied 3.08 Submit annual Work Plan by 6/30 for 1983, and 3/31 for each Complied with delays succeeding year. 3.1 0(a) Provision of import insurance. Complied 3.11 Submit plans, reports, contracts and other project documents. Complied with delays 4.01 APC to submit project M&E system to IDA by June 30, 1983. Complied 4.02 Phase out by 12/31/1984 the role of Veterinary Department in Complied with some exceptions, e.g. dangerous drugs the importation and sale of veterinary drugs and chemicals. 4.03(a) Review annually the level of producer and processor prices of Complied export crops based on recommendations made by the Agricultural Secretariat. 4.08 GOLJ to allow UCB a minimum spread of 7.5% on Complied rehabilitation loans under ARP.  Table 8. Use of Bank Resources A. Staff Inppts Stage of '80 '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 93 Project Cvcle Pre-appraisal 34.2 0.4 30.5 Appraisal 46.4 28.2 Negotiation 9.0 Supervision8 2.2 22.1 24.9 8.8 23.7 19.5 7.1 Other9 10.6 3.7 2.0 50 Total 34.2 0.4 76.9 39.4 22.1 24.9 8.8 23.7 19.5 7.1 10.6 3.7 2.0 5.0 Preparation vs. Supervision Ratio: 148.9/108.3 = 1.37 In addition to the full supervision missions, a number of missions dealing with specific project components and related issues such as, procurement matters, producer incentives, training and emergency tea rehabilitation components were carried out. 9 The last full project supervision mission went to Uganda in February 1989; subsequent missions related primarily to the preparation of a cotton subsector development project.  27 B. Missions Stage of Project Month/Year No. of Specialization Performance Twpes of Cycle Persons Representedl0 Rating"l Problems12 Identification 4/80 2 LVS, ECN Preparation 7/81 1 LVS Pre-Appraisal 2/82 4 ECN, LVS Appraisal 5/82 8 ECN, MSP, LVS, OTH Post-appraisal 8/82 2 ECN Negotiation 1/83 3 ECN, OTH Supervision13 1 10/83 1 ECN 2 P, F 2 12/84 1 FA 2 P, 0 3 10/86 2 ECN, OTH 2 I, S 4 2/87 1 ECN, PRS 2 S, P 5 11/87 2 ECN 2 M, S, 0 6 6/88 2 ECN, PRS 2 M, 0 7 2/89 2 ECN, FA 2 M 10 ECN=Economist; FA=Financial Analyst; LVS=Livestock Specialist; MSP=Management Specialist; PRS= Procurement Specialist; OTHI=Other. 1 = Minor Problems; 2 = Moderate Problems; 3 = Major Problems. 12 F= Financial; M= Managerial; P= Procurement; 1= InstitutionallPolicy; S= Security; O= Other. 13 In addition to the ful! supervision missions listed above, a number of missions dealing with specific project components and related issues such as, procurement matters, producer incentives, training and emergency tea rehabilitation components, were carried out. For instance, between October 1983 and December 1984, no full supervision mission was carried out; however, four missions visited Uganda in this period to deal with specific project matters.  28 Sources Planned Actual IDA Credit 1. Goods & Civil Works Part A 24.7 27.8 2. Consultants' Service Part A 0.7 3.8 3. Imports Part B 32.5 26.7 4. Tea Sector Goods & Imports 7.5 6.8 5. Consultants' Service Part C 1.5 2.3 6. Tech. Asst. & Training 1.1 1.4 7. Veh. & Office Equip. 0.4 0.6 8. Refur/Ship Equip. PTB. 4.0 9. Special Account 1.5 0.1 Subtotal 70.0 73.5 UCB 4.6 GOU 0.3 Beneficiaries of Imported Agr. Inputs 12.2 Bank of Uganda 0.5 Total 88.9