Benin - Second Feeder Roads Project

Document of The World Bank FILE ' "- FOR OFFICIAL USE ONLY Report No. 3050-BEN PEOPLE'S REPUBLIC OF BENIN SECOND FEEDER ROADS PROJECT STAFF APPRAISAL REPORT December 1, 1980 Western Africa Project Department Feeder Road Section, RMWA 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.  CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1.00 = CFAF 210 CFAF 1 million = US$4,762 FISCAL YEAR January 1 - December 31 SYSTEMS OF WEIGHTS AND MEASURES: Metric Metrie British/US Equivalents 1 meter (m) 3.28 feet (ft) 1 kilometer (km) 0.62 mile (mi) 1 square kilometer (km2) 0.386 square mile (sq. mi) 1 metrie ton (m ton) 2,204 pounds (lb) 1 hectare (ha) 2.47 acres 1 cubic meter (m3) 1.308 cubic yards LIST OF ABBREVIATIONS CARDER Centre d'Action Regionale pour le Developpement Economique Rural DER Division de l'Entretien Routier DRDR Division des Routes de Desserte Rurale DRP Direction des Routes et Ponts FAO Food and Agriculture Organization FED (EDF) European Development Fund GNP Gross national product GRVC Groupement revolutionnaire a vocation cooperative GV Groupement villageois GVC Groupement a vocation cooperative INSAE Institut National de Statistiques et de l'Analyse Economique ITC Inter-ministerial Technical Committee MDRAC Ministere de Developpement Rural et de l'Action Cooperative MITPCH Ministere des Travaux Publics, de la Construction et de l'Habitat RIA Road influence area SWKP Scott Wilson Kirkpatrick & Partners, U.K. UNCDF United Nations Capital Development Fund UNDP United Nations Development Program SOBEPALH Societe Beninoise de Palmier a Huile SODERA Societe de Developpement de Ressources Animales SONACO Societe Nationale pour le Coton SONAFEL Societe Nationale des Fruits et Legumes SONAGRI Societe Nationale pour la Production Agricole SONAPECHE Societe Nationale d'Armement et de Peche  PEOPLE'S REPUBLIC OF BENIN FOR OFFICIAL USE ONLY SECOND FEEDER ROADS PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I. BACKGROUND ................................................ 1 A. Geographic and Economic Setting ................... 1 B. Demography ........................................... 2 C. Agriculture .......................................... 2 D. Transport ....................................... 5 II. ROADS AND ROAD TRANSPORT ............................ 6 A. The Network ..................................... . 6 B. Road Administration ..... . ............................ 6 C. Road Maintenance ...................................... 6 D. Road Planning ............................... 7 E. Road Engineering and Construction ... ................. 7 F. Feeder Road Construction ........ ..................... 7 G. Financing of Road Construction and Maintenance ................................... 9 R. Road Transport and Road Transport Industry .......................................... 10 III. THE PROJECT .......... 15 A. Objectives and Project Content .. .15 B. Improvement Program . . .16 C. Road Maintenance . .16 D. Technical Assistance... ......17 E. Monitoring of Road Impact . . .17 F. Execution ..... 17 G. Procurement . . .18 H. Cost Estimates.. 19 I. Financing and Disbursement . . .20 J. Project Control-Financial Auditing and Progress Reporting . . 21 IV. ECONOMIC EVALUATION .30 A. Benefit Estimation .30 B. Costs .... 31 C. Rates of Return and Risks .32 V. RECO1JMMENDATIONS ..34 This report has been prepared by Mrs. Brigitta Mitchell (Economist) and Mr. Snorri Hallgrimsson (Sr. Engineer) following Appraisal and Post-Appraisal Missions in April/Mfay, 1980. 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.  Table of Contents (Continued) Annexes 1. Population Data for Project Evaluation. 2. Economic Evaluation. 3. Technical Assistance. 4. Selected Documents in Data File. Map IBRD 15160  I. BACKGROUND A. Geographic and Economic Setting 1.01 The People's Republic of Benin covers 112,600 km2 between Nigeria in the east, Togo in the west, and Upper Volta and Niger in the north; it has a southern seaboard of some 150 km and a north-south exten- sion of about 700 km. The terrain is mostly flat or rolling except in the north-west, where the Atacora mountains are located. The country's river systems are important; they comprise those of the northern part of the country (Pendjari, Mekrou, Alibori and Niger) which define most of the borders with Upper Volta and Niger, and those of the centre and south (Oueme, Zou, Okpara, Kouffo and Mono), the fertile floodplains of which are areas of considerable agricultural potential but present obstacles to east-west transport. Five natural regions can be distinguished in Benin: (a) a narrow coastal belt of flat sandy soil lying between the ocean and the lagoons, typical of the West African coast; (b) an intermediate zone consisting of fertile plateaux of ferruginous silty clay, intersected by river valleys and marshy depressions; (c) a central zone (200-300 m above sea level) consisting of plateaux of ferruginous sandy clays, requiring controlled agricultural practices if the continuing fertility of the land is to be retained; (d) the basement complex of the Atacora Mountains (600-800 m above sea-level) forming the watershed of the river systems and where the Oueme, Pendjari, Mekrou and Alibori rivers rise; (e) the Niger plains (100-150 m above sea-level) consisting of fertile clay soils supporting a savannah type of vegetation. 1.02 Climatically, Benin can be divided into two zones: the south where two rainy seasons (May-July and September-October) provide average annual precipitation of 1,300 mm, and the north, where a single rainy season (July-September) averages 1,000 mm p.a. 1.03 Benin's economy has grown on the average about 4% p.a. in the 1970s, and the country remains among the poorer nations in Africa with an estimated GNP per capita of US$230 in 1979. Natural resource endow- ment is limited, although recent off-shore exploration for oil has discovered a small field near Seme which, with Norwegian assistance, will shortly enter production at an expected rate of 8,000 barrels daily. There is also active prospecting for gold and phosphate in the north, but none of the deposits found are as yet being commercially exploited. The mainstay of Benin's economy remains agriculture. Since rainfall is insufficient for high-value tree crops like coffee and cocoa,  -2- only less remunerative crops such as palm products, cotton and groundnuts are grown for export. Agricultural production has fluctuated in recent years without any steady trend. 1.04 On balance, the primary sector has stagnated over the past decade. The basic strengths of the Beninese economy are an industrious, although insufficiently trained, workforce, skilled traders, and a reasonably ade- quate main transport network that offers competitive transit links for Niger and Nigeria. Between 1972 and 1976, in response to buoyant Nigerian demand, the secondary sector showed a temporary growth of 10% and the tertiary, over 5% p.a. Both have since returned to a status lacking growth and similar to that of the primarv sector. B. Demography 1.05 Preliminary results of the population census carried out in 1979 indicate a total population for Benin of 3.3 million inhabitants. The majo- rity (1.8 million) are concentrated in the three coastal provinces of Atlantique, Oueme and Mono, where population density reaches 154/km2. These provinces also have the highest proportion of urban dwellers 42.5%. 1/ The corresponding figures for the centre province of Zou are population densities of 30 persons/km2 of which 13.5% are urban, for the northern provinces of Borgou and Atacora 12 persons/km2 of which 11% are urban. The annual rate of population growth since 1961, the year of the last complete census, averaged 2.6% overall, with over 8% in the urban and 1.3% in rural areas. The population decrease between 1977 2/ and 1979 in the Zou and Mono provinces is attributable to emigration to econom- ically more attractive neighbouring countries such as Nigeria. C. Agriculture 1.06 Over 70% of the total population of Benin depend on agriculture for their livelihood. Most work on small family farms of 1.75 to 3 ha. Maize, sorghum, yams and cassava are the staple foods, and increasingly, these crops (particularly maize) are being produced for sale in city and neighbouring country markets. Traditional export crops have been palm products, groundnuts and cotton. 1.07 Although Benin maintained a positive food balance throughout the 1970s, the official statistics suggest that foodcrop production was stagnant. This confusing situation largely reflects the major element of unofficial international trading in foodstuffs. Industrial crops showed a declining trend for cotton, but increasing output of groundnut and palm products. Irrigated crop production has been introduced recently, and can be expectd to have an increasing effect on improving the bottomlands rice produc- tion and the modern irrigated sugar plantation, and on the refinery being established at Save in the Zou province. In 1979, the country imported 72,000 tons of grain, mainly wheat and rice. 1/ See Annex 1. 2/ Ministry of Planning, Central Census Bureau, Cartographic Census, 1977.  TABLE 1 Production of Main Crops, 1971 - 1978 ('000 tons) CroR 1971/2 1972/3 1973/4 1974/5 1975/6 1976/7 1978/9 Manioc 689 615 599 548 461 624 534 Yams 527 535 500 428 445 590 624 Maize 175 207 238 229 217 182 232 Sorghum 48 50 78 79 52 72 59 Millet 8 6 16 16 15 4 5 Rice 5 5 8 9 13 18 15 Beans 31 22 19 14 NA 23 30 Groundnuts 42 42 60 42 35 61 59 Cotton 48 50 44 31 23 22 25 Palm Oil 20 15 16 28 39 NA NA Palm Kernels 81 85 82 82 83 NA NA Source: Ministry of Rural Development (1971/1977) and mission estimates based mainly on CARDER data (1978/1979). 1.08 Livestock rearing is traditionally important in the north of the country and a small net increase in cattle numbers is estimated to have occurred during the past decade. 1.09 Fisheries outputs, traditionally a very important food item in the south of the country, have declined in recent years, mainly due to over-fishing in many lakes and lagoons and deterioration of the facilities for industrial (ocean) fishing. To reverse this trend, the construction of fish-ponds is being promoted in many rural communities; no production statistics on this effort are available as yet. 1.10 A total of 2.1 million hectares are classified as forest, of which the majority are in the north, with Borgou containing 64% and Atacora 29% of the total. Some of the forest areas in the south have only recently been formally gazetted and for most afforestation is only at a planning stage. The main species planted is fast-growing teak for for local consump- tion and fire'ood. 1.11 The Government has been increasingly concerned about the poor performance of the primary sector where agriculture accounts for 70% of employment but contributes only about one third of GNP 1/. This reflects the fact that only 10% of agricultural land is cultivated and emphasizes the scope for increased labor productivity throughout the sector. The Government's objective of emphasizing investment in rural development and infrastructure should contribute significantly to reversing this situation. l/ 1976 figures.  -4- 1.12 The current Three-Year National Plan (1978-1980) stresses the attain- ment of self-sufficiency in food and to achieve this priority is being given to agriculture and rural development investments. The principles of current development policies are: (a) import substitution and the attainment of self-sufficiency in foodstuffs, concomitant with improvement in standards of nutrition; (b) to stimulate the domestic market by increasing the purchasing power of the rural population; and (c) to develop a dependable exportable agricultural surplus to finance the import of manufactured goods and equipment. Implementation of this policy for accelerating rural development requires considerable investment in inputs, extension services and rural infrastructure. The proposed project would make an essential contribution to this objective. 1.13 IDA has financed four projects in the rural sector. The first, Hinvi Agricultural Project (Cr. 144-DA, US$5.2 million, 1969), consisted of planting 6,000 ha of oil palm, preparing 6,000 ha for annual crop production, and constructing an oil mill. The project has been completed and although project output has been lower than appraisal estimates, planta- tion maintenance has been good, and strong Beninese project management is a positive aspect. 1.14 The second project, Zou-Borgou Cotton Project (Cr. 307-BEN, US$6.1 million, 1972) performed disappointingly. During the project period, cotton output declined drastically mainly because of Government's policy switch, specifically to discourage cotton production and, to a lesser extent, due to bad weather and low producer prices. However, fooderop production in the area increased in compensation, and this trend has continued under the stimulus of higher free market food prices relative to controlled producer prices for cotton. 1.15 The third project, Technical Assistance (Cr. 716-BEN, US$1.7 million, 1977) has the objectives to institutionally strengthen SONAGRI and the CARDER and to prepare proposals for future agricultural investment projects. This project has achieved little in its institution-building objective but has been instrumental in preparing studies for rural development projects in the Borgou and Zou provinces. 1.16 The fourth project is a Rural Roads Project (Cr. 717-BEN, US$5.5 million, 1977), ongoing. Its purpose is to establish a feeder road planning and construction capability in the then Ministry of Equipment, now Ministry of Public Works), to improve some 845 km of rural roads and to maintain another 425 km of roads improved under the Zou-Borgou project. Performance under the project is summarized in paras. 2.05 ff.  - 5 - 1.17 The Bank is currently appraising the Government's proposal for the Borgou Province Rural Development Project, for which roads are included under the proposed project. The main objectives of the Borgou project are the expansion of foodcrop and cotton production, and raising farmers' incomes and living standards, through provision of assistance and support services, improvement and better utilization of cotton infrastructure, mainly ginneries and transport. The expected cost is about US$41 million, excluding feeder road costs included in this proposed project, the rate of return is estimated at 15-20% including feeder road costs. Preparation of a similar project for Zou province will be completed by March 1981, but appraisal is unlikely before 1982. D. Transport 1.18 Transport plays a significant role in Benin's economy and conti- nues to be an important source of foreign exchange and employment. To remain competitive as a provider of transit facilities for Niger and Nigeria, the country's primary transport system has been well developed and reason- ably maintained. 1.19 The country's only international airport in Cotonou handles some 2,000 commercial flights and a similar number of other aircraft movements annually. The yearly number of passengers (excluding transit) has fallen from 44,000 in 1973 to 39,800 in 1978. Freight handled, on the other hand, has increased from 2,400 tons to 3,900 tons over the same time. Air Benin has 2 Fokker Friendship planes to provide connections to five very summarily- equipped provincial airfields as well as to Togo, Nigeria, Niger and Upper Volta. Benin is a member of Air Afrique, which serves as the country's international flag carrier. 1.20 The country has a modern deep-water port built in 1965 that handles an important share of the mainly bulk imports destined for Niger (235,000 tons in 1978 and growing) and Nigeria (263,000 tons in 1978 and declining). Originally equipped with four general cargo berths, a jetty for bulk cargo, a transit area with storage sheds and a fishing port with one berth and deep-freeze storage facilities, it almost reached its estimated annual capacity of about 500,000 tons of general cargo and the same amount of bulk cargo in 1976. To accommodate the increasing volume of transit traffic which, in 1979 accounted for almost 60% of a total volume of 1.5 million tons handled, a port extension project involving construction of an additional 610 m of general cargo berths with transit sheds, hardstandings, roadway, railway and services, and the construction of a new cut-off breakwater is currently in progress. Its total cost is estimated at US$50 million; the project is jointly fi- nanced by IDA (Cr. 826-BEN, US$11 million, 1978) and seven other multi- lateral and bilateral agencies. A worrisome decline in port operation efficiency in Cotonou, only partly imputable to the construction works, and combined with increased capacity at Lome and Lagos, has in the past two years resulted in considerable diversion of general cargo traffic to these last two ports. 1.21 Road services are by far the dominant form of transport. They are estimated to account for about 70% of domestic freight, as well as for the bulk of domestic passenger traffic. The road sector is dealt with in Chapter II.  - 6 - II. ROADS AND ROAD TRANSPORT A. The Network 2.01 Benin has a road network of reasonably adequate extent. It consists of about 7,270 km, of which 3,500 km or just under half are rural roads. Of the 3,770 km of interstate, national and secondary roads, some 900 km are paved, 2,700 km are laterite-surfaced and the remainder are earthroads. Average road density for the country is 65 m/km2 but there is considerable variance between provinces ranging from 44 m/km2 in Borgou to 139 m/km2 in Atlantique. It is estimated that roughly half of the rural roads are unimproved earth-tracks which are impassable to four-wheel traffic during most of the rainy season. A further 4,000 km of local roads are hardly more than footpaths and are not considered part of the network. A detailed breakdown of the distribution of roads by province and by surface-type is given in Table 1. B. Road Administration 2.02 The Directorate of Roads and Bridges (Direction des Routes et Ponts, DRP) of the Ministry of Public Works, Construction and Habitat (Mini- stere des Travaux Publics, de la Construction et de l'Habitat, MTPCH) is responsible for road construction and the maintenance of the 3,770 km of interstate, national and secondary roads, and some 1,200 km of feeder roads. While the responsibility for maintaining the remainder of the (mostly unclas- sified) network nominally lies with the Ministry of Interior and local author- ities, this will gradually be assumed by DRP. The Ministry, under the First Feeder Roads Project, has created a Feeder Roads Division (Division de Routes de Desserte Rurale, DRDR), which is now well established and has become the focus for the hitherto uncoordinated rural roads activities. Further, the Ministry intends to establish an Administrative Division to improve and accelerate processing of purchases, payments, analytical ac- counting and of other routine matters. However, staffing is a severe constraint; this is expected to be overcome gradually as trainees under the Third Highway and First Feeder Road Projects become fully operational, and more are trained under the proposed Second Feeder and Fourth Highway Projects. C. Road Maintenance 2.03 Maintenance of the interstate, national and secondary road net- works is the responsibility of the Maintenance Division (Division de l' Entretien Routier, DER) in DRP. Main road maintenance has improved over the years as a result of the Association's three highway projects, but is still hampered by shortage of equipment, poor equipment maintenance and insuf- ficient local funds. The proposed Fourth Highway Project currently under preparation will address these shortcomings. Rural road maintenance will have to be reorganized under the DRP since underfunded local authority efforts have rarely been able to assure all-weather utilization of feeder roads, and the rural road network has deteriorated to the point where less than half of the rural communities are accessible by vehicle transport throughout the year. The proposed project will, inter alia, provide DRP with  - 7 - the slhort-term capacity to give financial support and supervision to labor- intensive maintenance work carried out by workers to be drawn from the local communities, while a new organization of road maintenance activities is being established in conjunction with the proposed Fourth Highway Project. To ensure continued maintenance of the improved rural road network, the Govern- ment is currently examining possible means of raising funds for this purpose, e.g. by including a small levy for road maintenance in the official pricing schedules (baremes) of cash crops. D. Road Planning 2.04 The Directorate of Studies and Planning in the Ministry of Transport, assisted by previous Bank projects, is responsible for data collection and analyses of transport problems, investment plans and policies. The Ministry of Plan makes the final decision on the investment plan to be pursued. 2.05 The First Feeder Road Project included financing for establishing a comprehensive data base for rural road planning and for developing a metho- dology for establishing road improvement priorities. DRDR has established a system to collect province-level data on population, agricultural production and social infrastructure relevant for rural road evaluation. The regional development authorities (CARDERs) will, in the future, provide indicative road improvement priorities to DRDR for its economic evaluation and establishment of annual construction programs to be presented for approval to an Inter-minister-