Niger - Natural Resource Management Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-6557-NIR MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 18.0 MILLION TO THE REPUBLIC OF NIGER FOR A NATURAL RESOURCES MANAGEMENT PROJECT NOVEMBER 7, 1995 This document has a restricted distribution and may be used bv recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENT EOUIVALENTS Currency Unit = CFA franc (CFAF) US$1 = CFAF 585 (as of April 24, 1994) WEIGHTS AND MEASURES Metric and Anglo-Saxon Systems l" = 2.54 cm GOVERNMENT FISCAL YEAR January I - December 31 ABBREVIATIONS AND ACRONYMS CBNRM Community-Based Natural Resources Management CECI Canadian Center for Intemational Studies and Cooperation (Centre Canadien d'etudes et de cooperation internationale) CESP Country Environmental Strategy Paper CFD French Development Agency (Caisse FranVaise de developpement) CIDA Canadian Intemational Development Agency CILSS Inter-State Committee to Combat Desertification (Comite inter-etats de lutte contre la secheresse au Sahel) COTEAR District Technical Committee (Comite technique d'arrondissement) COTEDEP Regional Technical Committee (Comite technique de departement) CST Community Support Teams FAO/CP Food and Agriculture Organization/Cooperative Program GDP Gross Domestic Product GTZ Germnan Cooperation Agency IFAD Intemational Fund for Agricultural Development LA Liaison Agent LCNRM Local Council for Natural Resources Management MAL Ministry of Agriculture and Livestock MFP Ministry of Finance and Planning MWE Ministry for Water and Environment NEAP National Environment Action Plan NGO Non-Governmental Organization NRIN Natural Resources Information Netwvork NRM Natural Resources Management NRMU NRM Unit NRMSC Natural Resources Management Steering Committee P-C.NEDD National Masterplan for Environment and Sustainable Development (Programme Cadre National pour I 'Environnement et le Developpement Durable) PNLCD National Plan to Combat Desertification (Plan national de lutte contre la desertification) PPF Project Preparation Facility RDPF Rural Development Policy Framework RDSC Rural Development Sub-Committee UNCED United Nations Conference on Environment and Development USAID United States Agency for Intemational Development UNSO United Nations Sahelian Office UTA Technical Support Unit (Unite technique d 'appui)  FOR OFFICIAL USE ONLY REPUBLIC OF NIGER NATURAL RESOURCES MANAGEMENT PROJECT Credit and Project Summary Borrower Republic of Niger Guarantor NA Implementing Agency Ministry of Agriculture and Livestock Beneficiaries The Borrower and Rural communities Poverty Program of Targeted Interventions Credit Amount SDR 18.0 million (US$26.7 million equivalent) Terms Standard, with 40 years maturity Commitment Fee 0.50% on undisbursed credit balances, beginning 60 days after signing, less any waiver Onlending Terms NA Financing Plan See schedule A Net Present Value Cost minimization criteria has been applied. Samples of activities having quantifiable benefits show positive Net Present Values. Staff Appraisal Report No. 14009 NIR Map IBRDNo. 26861 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 wiLhout World Bank authorization.   MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF NIGER FOR A NATURAL RESOURCES MANAGEMENT PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed credit to Niger for SDR 18 million, the equivalent of (US$26.7 million), on standard IDA terms, with a maturity of 40 years, to help finance the first phase of a long-term program aimed at reversing the current process of natural resource and environmental degradation, in order to secure sustainable agricultural production and growth, alleviate poverty, and improve the living conditions of Niger's rural communities. Country/Sector Background 2. Niger is a country of about 8 million inhabitants with a per capita GDP that was estimated at US$300 in 1993. Per capita income has stagnated since 1980, and Niger's fast growing population (3.3 percent annual growth rate) is one of the poorest of the world. At present, 80 percent of the population lives in rural areas, where food security and nutritional status are dependent on unreliable rainfall. There is a mounting environmental threat because of deforestation and pressure on land. The social effects of Niger's economic problems are visible in the urban areas, where population growth and a shrinking modern sector have led to rising unemployment and social instability. In 1994, the formal sector accounted for 22.7 percent of GDP. It is comprised of a relatively inefficient public sector and a small private sector that is losing competitiveness. Half of the informal sector, which accounts for 77.3 percent of GDP, is rural. Until the end of the 1980s, uranium exports amounted to 80 percent of merchandise exports. Between 1990- 1993, they accounted for 71.5 percent of exports and in 1994, 64.8 percent. In 1994, about 40 percent of GDP came from agriculture; industry and construction contributed 9 percent; and the share of services stood at 42 percent, of which 10 percent represented Govenmment services. 3. Niger recently emerged from a protracted period of political turbulence due to the breakdown of the political coalition goveming the country. The new Government is giving priority to economic and social reforms that bode well for a revitalization of the reform program, albeit in an atmosphere of fiscal crisis. Past government adjustment efforts have had variable results, and there have been problems implementing the post-devaluation program that was agreed upon with the Bank and the IMF'. The country has made some progress in trade liberalization and in reforming agricultural and educational policies. Less success, however, has been achieved with the stabilization program (poor revenue mobilization, ballooning wage bill) and with public enterprise and labor market reforms. 4. In 1994, the agriculture sector in Niger contributed about 85% of employment, 16% of total export eamings and 100% of non-uranium export receipts. With the projected continuing decline of the uranium sector, the agricultural sector is expected to become a major source of foreign exchange. Unfortunately, however, because Nigerien agriculture is mainly rainfed, its performance has been as erratic as the climate. The use of inputs such as fertilizers to boost production is too costly and economically risky for the farmer, 1 The government, in close consultation with its CFA franc partners, decided on January 12, 1994, to realign the parity of the CFA franc from 50 CFA franc per French franc to 100 CFA franc per French franc.  - 2 - limiting the scope for increasing productivity. Throughout the 1970s and 1980s, the vagaries of the weather affected agricultural performance, and available evidence suggests that the prospects for further production increases from the present low-input-low-output rainfed agriculture are limited. 5. As a result of the adjustment program (supported by the 1987 Structural Adjustment Credit and USAID's Agricultural Sector Development Grant), agricultural markets have been liberalized. The cereals marketing parastatal, OPVN, is no longer involved in commodity stabilization operations, and has become an emergency, food security, stock management agency. Similarly, subsidies on fertilizers and other agricultural inputs have been substantially curtailed; prices have been liberalized, and quantitative and administrative restrictions on trade have been removed. More recently, with the devaluation of the CFA franc, the Government began to strive to further improve the incentive environment for agriculture by adopting measures to: (a) pass through the benefits of the devaluation to farmers, and (b) accelerate the structural reforms necessary to support a supply response. 6. The natural resources - water, soil and vegetation - that constitute the foundation for all agricultural production, are rather limited in Niger. A large part of the country (77 percent) is unsuitable for rainfed agriculture. Natural pastures are being depleted. Fuelwood, which represents the main source of energy for rural (100 percent) and urban (90 percent) households, is scarce. 7. Some farmers have reacted to the cyclical droughts by shifting from rainfed fanning of traditional food crops to irrigated farming of high-value off-season crops. Most farmers have tried to maintain or increase production by cultivating marginal land or reducing fallow periods; this has caused soil depletion, loss of fertility, lower yields, and environmental degradation. Lower productivity and declining per capita incomes are increasing rural poverty and hardship. Caught in this dangerous spiral, rural communities need to find ways to better manage their land and natural resources or abandon their land and move to urban centers in which few jobs are available. The proposed Credit will directly support the formulation and implementation of a long-term National Natural Resources Management Program (NNRMP) for sustainable agriculture. 8. In its current development strategy, Niger's principal objective is to achieve equitable sustainable per capita growth in income. As part of this strategy, in 1992, the Government adopted a Rural Development Policy Framework (RDPF) that addresses four main areas: (i) natural resource management (NRM), (ii) food security, (iii) intensification and diversification of production, and (iv) decentralization and empowerment of rural communities. Land degradation is regarded as the most serious threat to Niger's development efforts under this strategy. The RDPF advocates an integrated and holistic approach and puts the community at the center of the decision-making process. One of the objectives of the project is to assist the Government in further developing its NRM policy and implementing its NNRMP. The Project 9. Project Rationale. Poverty, migration and environmental degradation are closely interlinked in Niger. Rainfall is extremely variable in the country, and it has been declining since 1968; extreme droughts in 1973-75 and 1984-85 caused mass rural exodus. Surface water resources are scarce, soils are relatively infertile, and wind and sheet erosion pose additional challenges to agriculture. Only 11% of land resources can be used for rainfed agriculture. Current fallow periods, reduced to 2.9 years from 7.6 years in 1960, have become too short to ensure restoration of soil fertility under the traditional, still prevailing, cropping system. Deforestation leads to permanent loss of about 90,000 ha per year, 3% of the nation's already degraded forest cover. Once the protection of the tree cover is removed, the fertile top soil is rapidly eroded away by wind and water. Unorganized use of pastures by increasingly large herds, responding more to  - 3 - traditional signs of wealth than to a modem production and marketing logic, threatens the land with further degradation leading to irreversible desertification. 10. The key to the survival of land as an asset capable of providing sustainable production, a reserve of agriculture lands for future generations and a shelter for wildlife, is in careful management of the fragile resource base. The action and investments required for sustainable management are too site-specific, vast and diffuse to be centralized, organized, implemented, funded and maintained by the Government. Past centralized efforts to improve environmental management and community development generally failed because they were sectorally focused, top-down and production-oriented. Today over 80 initiatives in the West African Region supported by 18 different donors for a total investment of about US$450 million are demonstrating that the management requirements of a fragile natural resource base can only be met through the design of local-level resources management and community development plans, and participatory partnerships with local groups to finance and manage local initiatives. A community-based natural resources management approach known as gestion terroir is being used. Though it is early to measure the broad impact of these initiatives, successes can be observed in many countries, especially Burkina Faso and Mali. The approach has also been tested in Niger where many pilot community-based initiatives have been implemented with promising results over the last 10 years. Il. The design of the proposed project was based upon an extensive examination of alternatives to ensure that the chosen approach and technologies would succeed with the lowest cost and level of external support. The project builds on existing experience, and recently approved national policies and strategies to facilitate the implementation of local development plans that are conceived, co-financed and managed by the beneficiaries themselves. 111 natural resources management initiatives were examined and assessed during project preparation. Socio-economic considerations, technologies, institutional issues and management options were compared. The project will provide the support necessary to catalyze informed local decision-making, and responsible management of environmental assets and rural development initiatives. It will also mobilize and enhance the effectiveness of existing specialized technical services in rural areas, and build cooperative linkages among the many NRM activities underway in Niger. Finally, the project will help coordinate donor support in the field of rural development. It will be financed by IDA, and Norway and Denmark through IDA-administered funds. 12. Project Obiectives. The long-term goal of the NNRMP is to reverse natural resource degradation in order to achieve sustainable agricultural production and growth, alleviate poverty and improve the living conditions of Niger's rural communities. The proposed Project constitutes an initial five-year time-slice of a long-term program, which will last 20-25 years and ultimately reach most of Niger's rural communities. The Project has two specific objectives: (i) to assist about 380 rural communities in different agro- ecological zones to design and implement community-based natural resources management plans by providing them with the necessary skills, information, and technical and financial resources, as well as the proper institutional and legal framework; and (ii) to improve the Government's capacity to promote, assist and coordinate current and future NRM initiatives in Niger, and design comprehensive policies and strategies, within the framework of the NNRMP. 13. Project Description. The project's principal components are: (a) direct technical and financial assistance to communities (US$28. 7m) for the design and implementation of Community-Based Natural Resources Management (CBNRM) Plans in about 280 communities in five districts, and assistance through on-going NRM projects in 100 communities;  - 4 - (b) provision of services (US$8. Om) to help achieve the Project's objectives, including: human resource development, national assessment of the state of natural resources, natural resource information networking, and research and studies; and (c) implementation, management and monitoring support (US$4.5m), including institutional strengthening, monitoring, and assistance to decision-makers in devising national NRM policies and strategies. 14. Under component (a), 280 communities will be supported in five of Niger's 31 districts, namely Boboye, Dogondoutchi, Goure, Say and Tessaoua. These districts cover seven of Niger's thirteen ecological zones, namely Plateaux, River Valley, Dallols, Goulbis, Eastern Plains, Pastoral, Dunes and Basins. The seven ecological zones were selected on the basis of their importance as contributors to total national food production and their relatively large populations. Direct intervention in the zones where there are other on- going NRM initiatives is not envisaged, as the intent of the program is to create a network of projects covering most of Niger' and its full range of ecological zones. Assistance, however, will be provided upon request to selected NRM efforts outside the five districts covered by the project, in order to increase the number of communities reached and accelerate the implementation of CBNRM program at the national level. Such support will be in the form of services (information, data, maps, training, surveys and studies) and investments identified in CBNRM plans, but for which no other financial resources are available. The Project will provide assistance to another 100 additional communities in this way. 15. Under Component (b), support will be provided for the following: (i) Human Resource Development and Public Awareness: To support the implementation of the CBNRM approach, a solid training program is essential. Local communities, NNRMP staff, technical staff from government agencies, district officials and NGOs will benefit from training to facilitate project activities. (ii) Assessment of Natural Resources: Assessment will determine the real extent of natural resource degradation nationwide, examine its causes, dynamics and trends, and measure its effects on agricultural production, sustainability, growth, settlement, migration and on the overall rural economy. This assessment will enable decision-makers and donors to better define future strategies, and plan and target appropriate interventions. (iii) Research and Studies: Research and studies will identify implementation problems and develop, adapt, test and disseminate technologies to solve those problems. 16. Under component (c), support will be provided to national NRM policy-making. The information gathered by the Project staff during implementation, particularly through monitoring, evaluation and studies, will be used to assist the Government, and, in particular, the national Rural Development Sub- Committee (RDSC), to improve the national NRM policy that was adopted in 1992. Special studies, issue papers and reports, will be produced. Assistance will be used to provide support in the drafting of strategy or policy documents, and the organization of special meetings and workshops. 17. Project Implementation. This project deals with the broad agriculture sector (crops, livestock, forestry, wildlife and related activities) and addresses issues such as land tenure security, decentralization and environmental management. It is therefore more complex than traditional sub-sector projects. To facilitate smooth implementation, a comprehensive Implementation Manual is being prepared. A draft of this Manual was reviewed during negotiations. The project will be implemented largely through national  - 5 - institutions, committees and village organizations that already exist. The creation of new management structures will be minimized, and only undertaken to improve the consultation process and coordination among existing bodies. 18. The project will be implemented by the concemed communities, NGOs and govemment agencies. The Ministry of Agriculture and Livestock (MAL) will be responsible for overall project implementation through its Natural Resources Management Unit (NRMU), which includes staff from the Ministry of Finance and Planning (MFP) and the Ministry of Water and Environment (MWE). Other key agencies include the Niger National Geographic Institute (IGNN), and the Niger National Research Institute (INRAN). A Natural Resource Management Steering Cor ,mittee (NRMSC), which will include representatives of key ministries and communities, will oversee implementation. An advisory group composed of NRMSC members and donor representatives, will be set-up to facilitate consistency of approach nationally. 19. In each of the selected districts, a NRM District Team (DT) will help communities acquire skills, organize, prepare NRM plans, obtain financial and technical support, and implement local development plans. The NRM District Committee (NRMDC), comprised of govemment representatives and community representatives, will review and approve the plans. 20. Communities will establish a Local Council for Natural Resource Management (LCNRM) that will be supported by the District Team as well as by the agriculture extension service and other district- based technical support services. Communities will prepare NRM plans and submit them to the NRM District Committee for technical and financial support. If approved, the plans will be executed by the communities. Prior community approval will be required before the project implementing agency will be able to make local-level procurement or disbursement operations. 21. Human Resource Development and Public Awareness Campaigns will be contracted to local private firms or NGOs. Assessment of Natural Resource will be carried out by the Technical Support Unit (UTA) of the environment department in the MWE and in cooperation with IGNN. The Natural -Resource Information Network will be coordinated by the NRMU with the participation of INRAN, IGNN and UTA. Research will be carried out by INRAN within the framework of the on-going IDA-funded Agricultural Research Project. Research activities not related to agriculture and studies will be contracted to competent institutions or firms. 22. The NRMU staff, assisted by short-term consultants, will prepare studies and reports and present the RDSC with the recommendations related to NRM policies and strategy. 23. Lessons Learned from Previous IDA and Other Donors Involvement. IDA has a rich history of experience with the rural sector in Niger. The Maradi Area Development Project (Cr. 1026 - FY80) and the Dosso Area Development Project (Cr. 967 - FY80) showed that increased inputs such as chemical fertilizers do not necessarily result in increased outputs, even under favorable climatic conditions; sound agricultural practices are essential for sustainable agricultural development and growth. Sustainable practices include soil and water conservation, production and use of organic fertilizers, agroforestry, and crop diversification. These will all be promoted under the proposed project. The Second Forestry Project (Cr. 1226 - FY82) demonstrated that, under prevailing conditions, free standing forestry projects were not economically viable and that integration with agricultural and pastoral activities was necessary. Similarly, the major lessons drawn from the Niger Livestock Project (Cr. 885 - FY79) were that strong links between pastoral, agricultural and forestry activities are essential under Sahelian conditions.  24. The domestic energy component of the Energy Project (Cr. 1880 - FY88) has successfully promoted improved use of existing natural resources (trees for fuel) and increased rural incomes. The recommended next step is to move towards a more comprehensive approach that would deal with all the natural resources available to local communities. The Irrigation Rehabilitation Project (Cr. 1618 - FY85) generated substantial incremental food crop production and rural income. The increases could not however be sustained after project completion because the top-down approach adopted by the government's implementing agency failed to empower farmer cooperatives. A community-based approach that gives communities the authority to make decisions over the management and use of natural resources will be fundamental in the follow-on Pilot Private Irrigation Project (Cr. 2707 - FY95). The Small Rural Operations Project (Cr. 1890 - FY88) laid a foundation for multidisciplinary teamwork and beneficiary participation at local level. It did not, however, deal with the entire community and its natural resource endowment; rather, it promoted independent, income-generating operations for selected target groups. 25. In general, the lack of successful monitoring and evaluation tools has prevented past projects from timely detection of possible shortcomings and the introduction of necessary changes in the course of implementation. This makes assessment of impact difficult. Top-down approaches prevailed in most project, and even projects located in the same zone had difficulties communicating and cooperating. Limited efforts were made to involve women except when their labor was required, little attention was given to land tenure issues, and inconsistent relations were maintained with traditional community leaders. In designing the present project, careful consideration was given to all these issues. 26. Rationale for IDA Involvement. The proposed project is consistent with the Country Assistance Strategy (CAS) discussed by the Board on May 31, 1994. The CAS states that IDA's strategy is based upon four major building blocks: (i) addressing long-term human capital (including poverty alleviation) and natural resource issues; (ii) building public and private sector institutions to promote private sector based growth; (iii) increasing the efficiency of public resource management; and (iv) supporting actions to facilitate a supply response in the wake of the devaluation of the CFA franc. More specifically, the CAS calls for an integrated sectoral strategy in environment, agriculture and natural resource management. It supports the Government's strategy to ensure the efficient and sustainable use of natural resources in Niger and to promote agricultural growth. The project's participatory approach also corresponds to IDA's strategy of enhancing local governance. 27. The proposed project will: (i) build upon natural resource management experience gained through recent projects that were funded by IDA and other donors; (ii) complement IDA's key role in the provision of agricultural services supported by the on-going Agricultural Services and Agricultural Research Projects; (iii) operationalize IDA's support and commitment to environmental protection; and (iv) improve donor coordination. The proposed project will lay the foundation for development of the National Natural Resources Management Program which constitutes the main framework for addressing issues to be identified in the National Plan for Sustainable Development. Through the on-going Small Rural Operations project, IDA is financing small infrastructure in rural areas and supporting export promotion. Institutional changes will further improve government services (research and extension) and cooperative development. The NNRMP will complement on-going and planned efforts by helping to minimize the impact of the agro- ecological constraints hindering agricultural supply response. It will support policy reforms in the agricultural sector by giving local communities increased autonomy and capacity to manage natural resources, and by improving land tenure security. 28. There are presently some 100 initiatives in Niger in NRM, land management, forestry, fisheries, wildlife, livestock, agriculture, water resources and rural development, with a total investment of about US$450-500 million. The key donors involved in NRM-related activities are: Canada, Denmark, France,  - 7 - Germany, Netherlands, Switzerland, the United States, as well as FAO, IFAD, UNDP/UNSO. The NNRMP will be the main instrument for communication, exchange of information, coordination and harmonization of all the NRM-related activities and projects in the country. There are converging views among all agencies of the opportunities created by the CBNRM approach; a genuine interest is expressed by several rural communities, and a growing number of NGOs are present in Niger that have solid field experience with rural community development. 29. Agreed Actions. The IDA Credit will become effective once the following actions have been completed: (i) UTA has been staffed in accordance with the Implementation Manual and has prepared a work program satisfactory to IDA; (ii) the Borrower has adopted an Implementation Manual, satisfactory to IDA; (iii) in addition to the NNRMP Coordinator, at least six technical experts, the procurement expert and the financial expert have been recruited with terms of reference and qualifications satisfactory to IDA; (iv) an accounting and financial management system, satisfactory to IDA, has been set-up for the Project; (v) the Borrower has opened a Project Account in a commercial bank and has made a first deposit of US$400,000 equivalent in the Project Account, representing the first payment on its financial contribution to the Project; (vi) the Borrower has opened five District Accounts; (vii) the Borrower has appointed an auditing firm acceptable to the IDA; and (viii) the Danish and Norwegian grants have become effective. 30. Pover-v Categorv. The great majority of Niger's poor are concentrated in rural areas. The actions financed under this Project will strengthen the capacity of smallholder farmers to expand the production of food crops. The support to rural microenterprises and the actions designed to facilitate small-farmer access to financial services and enhance land security will improve income levels and alleviate rural poverty. The project is part of the Program of Targeted Interventions. 31. Environmental Impact. The broad objective of the program (para. 10) is to reverse current land and natural resources degradation in order to achieve sustainable agricultural production and growth, and improve the living conditions of Niger's rural communities. As a result, the project will have a positive impact on the environment. It will improve soil, water and vegetative conditions, and promote biodiversity development. CBNRM plans will anticipate any potential negative impacts and make provision for their mitigation. Adequate provision has been made under the natural resource assessment, and the monitoring and evaluation components of the Project to evaluate the state of natural resources, assess the broader impact of the Project's intervention, and decide on corrective measures. The project is classified as Category C. 32. Program Objective Categories. The project is in line with the Bank's environmentally sustainable development strategy. The project is also consistent with the Bank's poverty reduction and women in development strategies. Its field activities will concentrate in rural areas and will primarily benefit the poorest segments of the rural population. By strengthening their capacity to increase food production, the project will help enhance food security. The strategic focus on smallholder intensification of production using low-cost low-risk techniques, will perrnit the efficient and sustainable use of water and land resources, and help conserve the environment. 33. Participatorv Approach. The project promotes stakeholder participation. It will use the Community-Based Natural Resource Management (CBNRM) Approach, a participatory process that promotes communication and partnership between the community and CBNRM program staff. The approach will lead to implementation of a plan for sustainable use of natural resources. Stakeholder participation in planning, implementing and co-financing project initiatives will foster local sense of ownership and responsibility for managing the assets created with project support.  -8- 34. Project preparation was carried out over a period of several years during which field initiatives were tested in several villages with the direct involvement of beneficiaries. Pre-appraisal included several workshops that involved all concerned Nigerien agencies, donors and representatives of the target population. A team building technique --the ZOPP or Objective Oriented Planning Method-- was used at the pre-appraisal stage to help clarify needs, objectives and related project activities. Staff from the NRM national programs in Mali and Burkina Faso contributed to the preparation and appraisal process by sharing their experiences and assisting in program design. A working group on gender issues, led by two women, was set-up to ensure that gender considerations were taken into account in designing the project. Benefits 35. The project will have a broad range of quantifiable and non-quantifiable benefits. It will substantially improve the quality of life of about 200,000 people in five districts of Niger and another 70,000 people in other parts of the country. It is estimated that at least 80 percent of the beneficiaries will be rural poor. The project will improve the socio-economic and environmental conditions of rural dwellers by empowering local communities, improving their management skills, and enabling them to make medium and long-term investments in natural resources management and production infrastructure. The project will enhance the role of women in NRM, increase land tenure security and facilitate the adoption of more sustainable land use and production systems which will help restore ecological stability, and increase agriculture, forestry and livestock production. The environment and resource management experiences acquired through this endeavor will be disseminated to other parts of Niger, in order to benefit additional communities. The Government and the people of Niger will benefit from strengthened institutional capacity to manage and monitor the natural environment. The availability and quality of data on natural resource use will be significantly improved, and trend analysis will provide critical information to policy makers for use in preparing and implementing the National Plan for Sustainable Development. 36. No overall rate of return was estimated for the project as a whole because (i) the scope of the project includes a considerable institution strengthening component for which a stream of benefits is difficult to quantify; and (ii) the participatory nature of the project renders it impossible to determine the precise mix of activities farmers will adopt and the overall rate of adoption. In order to assess the attractiveness of individual investments and packages of investments a financial analysis of the packages of the investments promoted by the project was undertaken in three sample locations in districts with varying agroecological characteristics2. The results indicate that the proposed packages had financial rates of return between 16% and 35%. Since environmental benefits were not accounted for and shadow pricing of labor would lower the economic cost of the main input, it can be assumed that the economic rates of return will actually be higher. When other non-quantifiable benefits such as those related to the building of institutional capacity in the Government and private sector are added, the project can be expected to have a high economic return. 37. The project will be monitored using four primary performance indicators: (i) number of NRM plans approved by NRM District Committees; (ii) proportion of village land placed under the sustainable management systems promoted by the project in selected villages; (iii) the number of fully operational community-based natural resources management plans; and (iv) the level of co-financing by local communities. 38. Project Sustainabilitv. The project promotes sustainable agricultural development by focusing comprehensively on production, the impact of production on the natural resource base, and the natural 2 An illustration of the results of analysis from one of the three locations, Say-Plateau, is presented in Schedule B.  - 9 - resource base's capacity to sustain production in the long-term. The most critical factors for project sustainability are found at the community and national Government levels. 39. Community ownership will be the first guarantee of sustainability. CBNRM plans will be prepared with external technical and financial assistance, but decisions on the content of these plans will rest ultimately with communities, which will be responsible for co-financing and managing implementation. Long-term sustainability at the community level will become possible as improved land use, production systems and technologies are promoted in communities possessing the necessary know-how, and legal, technical and financial tools to properly design and implement plans. Despite the promising results already achieved in implementing community-based natural resources management plans in Niger, Mali and Burkina Faso, there exists the risk that some communities will not fully conmmit to the project's objectives and make long-term investments because the effects of environmental degradation are not always well- comprehended and perceived. 40. On the national level, sustainability will depend upon the Govemment's continued promotion of the approaches and activities of the project after project termination. This is likely to happen because the project supports a national program, the NNRM, that is one of the comerstones of Niger's rural development strategy. In fact, this project represents the first time slice of a long-term program for which the Government of Niger is seeking long-term partnerships with donor agencies. The Government envisages that the program will continue for at least twenty years in order to reach most of Niger's rural communities. A change in Government policies and programs is possible, but this does not appear likely at this time. 41. The project has minimum recurrent-cost implications. The amount of counterpart funds required from the Govenmment is very limited, with a substantial proportion (36%) to be provided before effectiveness. Support for field implementation will be provided by local contractual staff, who will assist local communities to design and implement management plans. Assistance will terminate once targeted communities have been organized and trained, their management plans designed and approved, and the main investments completed. Communities will maintain investments using mostly their own labor and local materials and will need only limited additional technical support from the national technical support services available at the local level. Risks 42. The principal project risks relate to (i) the willingness and ability of communities to commit to the project objectives and engage in participatory planning and long-term investments, and (ii) the capacity of the Govermment to implement the program. 43. Communities may not be fully aware of the seriousness of the threat of environmental degradation, especially if occasionally favorable climatic conditions (such as repeated good years of rainfall) give a false sense of security and hinder effective mobilization. This risk is addressed using periodic awareness-raising and information campaigns, and exchanges of experience among villages facing varied degrees of land degradation. Communities may also be reluctant to accept the planning methods, technological packages and the shared financing arrangements proposed by the project. Often farmers are risk adverse and resistant to change. This risk is addressed by: focusing on technological packages that are part of or consistent with those adopted by the national agriculture extension services, working only with interested groups, involving farmers in the planning and selection of activities, and limiting local contributions to the provision of labor and local materials.  -10- 44. The Government may not diligently implement programs and laws that may be crucial to success. These include the program on decentralization which will help fully empower local communities, and the new land tenure law. In both cases, fear of possible social and political repercussions may delay Government action. While implementation of these programs and laws may be essential to ensure sustainability in the longer term, it is not likely to have a significant impact on project implementation. The Government may also face difficulties ensuring cooperation among the various agencies, and operation of the institutional arrangements required for efficient implementation. These risks are considerable and cannot be totally mitigated. They will be detected in a timely manner through a monitoring and evaluation system that will alert project managers to emerging problems and changing conditions, and enable them to address difficulties. Annual reviews will concentrate on these emerging problems and work closely with the Government to identify corrective action. 45. The project involves a significant level of risk but is worthy of implementation because it will have high environmental and economic returns, help channel resources where they are most needed, and leverage additional resources from local communities for rural development and environmental conservation. Recommendation 46. I am satisfied that the proposed credit would comply with the Articles of Agreement of IDA and recommend that the Executive Directors approve the proposed credit. J.ames D. Wolfensohn President Washington, D.C. Date: November 7, 1995 Attachments  SCHEDULE A ESTIMATED PROJECT COSTS Nier NATIONAL NATURAL RESOURCE MANAGEMENT PROGRAM Componts P no9ec Cot Sui.-naiy _FCFA '0001 LUSt 00 %r % TOW % TO Fgn Be" F_ SBa Local Foreign Tol Ezchng Cots Loed Feign Tdol E4d_ C A. AiPLEMENTATION OF NRM PLANS BoboVe Oistnc