Mauritania - SONADER Technical Assistance Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3995 PROJECT PERFORMANCE AUDIT REPORT MAURITANIA SONADER TECHNICAL ASSISTANCE PROJECT (CREDIT 694-MAU) June 23, 1982 FILE COPY Operations Evaluation Department This document has a restrleted 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.  FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT MAURITANIA - SONADER TECHNICAL ASSISTANCE PROJECT (CREDIT 694-MAU) TABLE OF CONTENTS Page No. Preface ................................................................. i Basic Data Sheet ........................................................ ii Highlights ......................................................... iii PROJECT COMPLETION REPORT I. Introduction ............................. ............. 3 II. Project Formulation .................................... 3 III. Implementation .... ....................... 4 IV. Institutional Performance and Development ................ 7 V. Financial Performance .......................... 9 VI. Project Impact and Bank Performance ...................... 11 Annex 1: Project Organization and Objectives ...................... 13 Maps: IBRD 16466 (PPA) IBRD 13753 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 PERFORMANCE AUDIT REPORT MAURITANIA - SONADER TECHNICAL ASSISTANCE PROJECT (CREDIT 694-MAU) PREFACE This is a performance audit of the Sonader Technical Assistance Project, for which Credit 694-MAU in the amount of US$3.5 million was approved in March 1977. The credit was closed fully disbursed in August 1981. The audit report consists of Highlights prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) prepared by the Western Africa Regional Office, dated April 14, 1982. The audit is based on a review of the President's Report (No. P-2000a-MAU) dated March 17, 1977, the Credit Agreement of April 8, 1977, and the PCR. Correspondence with the Borrower and internal Bank memoranda on files have also been consulted. Bank staff associated with the project have been interviewed. A copy of the draft report was sent to the Borrower on May 7, 1982 for comments. None were received. Under OED's abbreviated procedures, the audit finds the PCR compre- hensive and has no reason to question its conclusions.  - it - MAURITANIA PROJECT COMPLETION REPORT SONADER TECHNICAL ASSISTANCE PROJECT (Cr. 694 - MAU) BASIC DATA SHEET KEY PROJECT DATA Appraisal Actual as Z of Estimate Actual Appraisal Estimate Project Costs (USS million) 4.4 4.4 100 Credit Amount (USS million) 3.5 3.5 100 Date Board Approval March 1977 03-31-77 Date Effectiveness June 1977 08-24-77 Date This Phase Completed Dec. 1980 Dec. 1980 Proportion then Completed 100 100 Closing Date June 1981 June 1981 Economic Rate of Return not applicable CUMULATIVE DISBURSEMENTS FY 77 FY 78 FY 79 FY80 FY 8L Appraisal Estimate (US$ million) 0.2 1,4 2.4 3.2 3.5 Actual (US$ million) - 1.0 2.1 3.1 3.5 Actual as Z of Estimate 0 71 88 100 100 Date of Final Disbursement August 05. 1981 MISSION DATA Date No. of Man/Days Specializationj Performance Types of Mission (Mo./Yr.) Persons in Field Represented 1 Rating Trends 31 Problems A/ :repZratioz/Appoisal Aug. 1976 2 20 I/F - - Follow-Up Oct. 1976 1 5 1 - - Follow-Up Feb. 1977 1 5 I - - Sub-Total 30 Supervision I May 1977 1 7 I 2 1 R Supervision 2 Nov. 1977 1 5 I 1 1 - Supervision 3 April 1978 2 2 1 1 1 - Supervision 4 Oct. 1978 1 8 I 1 2 - Supervision 5 March 1979 1 2 1 1 2 - Supervision 6 Sept. 1979 3 25 I/F/T 1 2 - Supervision 7 Aug. 1980 1 5 I 1 2 - Supervision 8 (i) Feb. 1981 2 12 I/F 1 1 F Supervision 9 (1) June 1981 2 20 I/A 1 2 - Supervision 10 (1) Oct. 1981 1 7 F 2 2 F Sub-Total 93 Total 123 OTHER PROJECT DATA Borrower: Islamic Republic of Mauritania Executing Agency: SONADER - Societe Uationale pour le Developpement Rural Fiscal Year: January I - December 31 Name of Currency (abbreviation) Ouguiya (UM) Currency Exchange Rate Appraisal Year Average US$ 1- DM45 Intervening Years Average U I- [M45 End 1980 US$ I- UM47 Follow-On Projects a) Name: EEC Special Action Credit (1981). administered by IDA Credit Number: EEC 47 MAl Credit Amount: US$ 1.5 million IDA Signing Date: 04/02/1980 b) Name: Technical Assistance to the Rural Sector Appraised: November 1981 Amount Foreseen for Credit: US$ 9 million (IDA) Board Presentation: Scheduled for July 1982 1/ 1= Irrigation Engineer F- Financial Analvse A- Agricrlturalist T- Training Expert (Consultant 5 Mn/days) 2/ 1- Problem-free or minor problei; 2- Miderate problem 3/ I- Improvlig; 2- Stationary 4/ F- Financial; R- Recruitment (i) Supervistn of Cr. 694 and EEC 47 Special Action Credit  - iii - PROJECT PERFORMANCE AUDIT REPORT MAURITANIA - SONADER TECHNICAL ASSISTANCE PROJECT (CREDIT 694-MAU) HIGHLIGHTS The Government's policy in the first decade after independence focused on the development of urban and transport infrastructure. Public investments in agriculture remained insignificant because of the limited capacity of Government services to prepare and execute agricultural projects. To overcome this problem, the Government in 1975 established at the Bank's recommendation a new public entity, SONADER, to identify, execute, supervise and manage rural development projects, particularly those involving irriga- tion. SONADER was placed under the supervision of the Ministry of Rural Development (MRD), but was given a substantial amount of administrative and financial autonomy. The project, which was the first phase of a concept of making SONADER into a strong agency capable of preparing and executing projects in the rural sector, provided finance for a three-year technical assistance program, including (i) salaries for seven expatriate experts (three senior advisers and four technical specialists) and seven Mauritanian professionals to be trained by the advisers, (ii) consultant services for special topics (mostly organization and training) and for the preparation of the Gorgol irrigation project, and (iii) vehicles, topographic materials and office equipment. The total project cost was estimated at US$4.4 million. The Credit, approved in March 1977 in the sum of US$3.5 million, was expected to be closed in June 1981. Project implementation progressed satisfactorily. Expatriate advisers and specialists were promptly recruited, assisted the SONADER General Manager in the preparation and implementation of irrigation projects, and trained Mauritanian professionals. A consulting firm was hired to carry out the preparation of the Gorgol irrigation project.l/ Studies aimed at improv- ing SONADER's accounting system and training organization were carried out by consultants. Vehicles and equipment were purchased according to plans. Total project cost remained within appraisal projections and the Credit was fully disbursed in August 1981. SONADER's activities and budget grew substantially during the project period. The number of projects managed by SONADER increased from 9 in 1977 to 33 in 1981 and its staff grew from 88 to 557. Because of SONADER's 1/ Credit 1068-MAU of US$15 million, approved by the Bank in September 1980. - iv - improved efficiency, the Government was able to attract an increasing amount of external financing and to expand its investment program in agriculture. However, SONADER became increasingly involved in the agricultural sector, including policy and planning activities, credit and inputs distribution and crop marketing, and now risks being overwhelmed with tasks which go beyond its responsibility and capability. It became apparent during project implementation, that (i) the Ministry of Rural Development should remain responsible for formulating sectoral policies and planning activities while SONADER would concentrate on project preparation and implementation; (ii) the training component of the project was insufficient to face SONADER's growing needs for qualified local staff; and (iii) SONADER would require more external technical assistance for the coming years. Therefore, a second phase tech- nical assistance project was appraised by the Bank in November 1981, to strengthen MRD's planning capability and to continue managerial and technical assistance to SONADER until 1985. In conclusion, the project had a positive impact on institution building and largely contributed to reinforce SONADER's efficiency and ability to prepare and execute irrigation and rural development projects. However, SONADER's financial management still needs to be improved and further efforts are needed to complete training of local staff. The main points emerging from project experience are that (i) tech- nical assistance projects have a valuable role to play in institution build- ing; (ii) a successful institution faces the risk to be overburdened with tasks which are not within its primary objectives and responsibilities; (iii) training is essential and tends to be underestimated; and (iv) coordina- tion and specific allocation of responsibilities between several government agencies involved in the same sector are essential. -1- MAURITANIA SONADER TECHNICAL ASSISTANCE PROJECT CREDIT 694-MAU PROJECT COMPLETION REPORT April 14, 1982  -3- 1. INTRODUCTION 1.01 This three-year TA project, supplemented by a one-year EEC Special Action fund, represented the Bank Group's third involvement in agriculture in Mauritania, (US$4.2 million for livestock development in FY72; US$2.5 million for a Drought Relief Fund Project in FY73; and US$1.1 million for the Gorgol Irrigation Engineering Project in FY74) and its second in technical assistance (US$2.7 million T.A. operation to the Ministry of Planning in FY77). 1.02 Mauritania has very little rural development potential. Most of the country lies in the Sahara desert and the bulk of the rural population, is scattered throughout the Sahelian Zone. In 1976, after years of severe drought Government decided to embark on a major effort to develop the rural sector with focus on its most important resource, the irrigation potential. The Project was designed to (i) assist Government to carry out its investment program in the irrigation subsector, (ii) provide sane of the additional key personnel needed to identify, appraise and supervise irrigation and rural development projects, and (iii) strengthen the management capability of SONADER, Government-s recently established Rural Development Agency. 1.03 In 1975, at Bank's recommendation Government created SONADER to ensure effective preparation and implementation of irrigation projects. SONADER's Charter, prepared by a consultant financed out of the Drought Relief Fund Project, gives it a substantial amount of administrative and financial autonamy which frees it from the constraints that burden the majority of public institutions in Mauritania. It has authority to obtain loans froin public and private sources, recruit personnel and control its own budget. SONADER is under the supervision of the Ministry of Rural Development (MRD) (see Chapter IV). II. FORMULATION 2.01 The project was prepared by the General Management of SONADER with the assistance of a Bank mission which visited Mauritania in August 1976. The project was later finalized during discussions held in Paris in October 1976 and in Mauritania in February 1977. Negotiations were held in Nouakchott March 11, 1977. Approved March 31, 1977 for US$3.5 million, the project raised no specific concerns during Board discussions. The Credit Agreement was signed on April 8, 1977 and became effective on August 24, 1977. 2.02 The project was to be carried out over three years and was proposed as a first step of. a plan designed to build SONADER into a strong agency capable of preparing and implementing agricultural projects along the Senegal River Valley. As described in the PresideAt-s/Appraisal Report, the project consisted of: (i) strengthening the organizational structure of SONADER with a technical assistance team of seven expatriate staff and seven Mauritanian experts; (ii) providing short-term consultant services to carry out specific studies on technical, organizational and training topics. These services included specialists to carry out new studies for the preparation of the Gorgol Irrigation Project; (See Chapter III, Section A, Studies; Para 3.02); (iii) providing the necessary office, drawing and topographic materials and equipment as well as vehicles to permit SONADER to operate efficiently Lmder the project. 2.03 The key project objective was to initiate the development of SONADER's management capability and the project components described above were the means to achieve it during a three-year period (See Annex I-Project Organization and Objectives). 2.04 As approved by the Board, the US$3.5 million Credit was to finance 80% of project costs as follows: US$(000) IDA Government Total Salaries and allowances of expatriate staff 1980 - 1980 Salaries and allowances of Mauritanian professionals - 500 - Consultant services 920 200 1120 Equipment, vehicles and operating costs 150 50 200 Contingencies 450 110 560 Total 3,500 860 4,360 The credit was to be disbursed against 100% of expatriate staff services including recruitment costs, 100% of foreign expenditures for consultant services and 75% of the cost of equipment, vehicles and operating expenses. III. IMPLEMENTATION 3.01 In spite of the country's difficult political, financial, and economic situation, which has delayed implementation of most development projects including those financed by IDA, the SONADER Technical Assistance Project has progressed smoothly, although SONADER activities developed more rapidly than anticipated at appraisal. The project, effective August 24, 1977, that is five months after approval, was practically completed for this phase by December 30, 1980, as initially expected. The EEC Special Action Credit 47-MAU ($1.5 million) extended it to December 1981 pending the preparation by IDA of the follow-up project (Technical Assistance to the Rural Sector). The team of expatriates has been on duty since the end of 1977, and have carried out on-the-job training of seven Mauritanian professionals. A. Studies 3.02 An Italian consulting firm was selected and hired to carry out studies necessary for the preparation of the Gorgol irrigation project. These studies, included pedology and agro-economy/engineering fieldwork, aerial photos, topographic maps of irrigable land, design aspects of the irrigation canals, final design and tender documents for the irrigation and drainage networks, geotechnical surveys, and design of the Foum-E1-Gleita dam. The performance of the consultants was rated satisfactory. B. Management, Organization and Training 3.03 The project provided a management team of three senior advisers for the main operational departments of SONADER: a financial expert, an irrigation engineer, and an agricultural economist. This team has assisted SONADER's General Manager in rural projects preparation, investment plan- ning and programming, budgeting and financial reporting, staffing, project implementation and monitoring, training counterparts, and preparing the second phase of the Technical Assistance Project. Each member of the team was given clearly defined responsibilities and has been on duty since the end of 1977, together with the four junior expatriates assigned to field work and to training at the execution level. 3.04 SONADER in a .short period and with a competent Mauritanian General Manager has become a stronger institution in terms of structure, personnel, number of projects under its responsibility and budget. As a result, Govern- ment has transferred the preparation, supervision and management of some ongoing agricultural projects from its Ministry of Rural Development to SONADER. Bilateral and multilateral aid agencies have stepped up investment in the rural sector and have sought out SONADER to implement their projects. These projects include development of approximately 1,000 ha of small irriga- tion schemes, 600 ha of which are part of an IDA-financed Urban and Rural Development Fund Project (Credit 888-MAU for US$8.0 million signed April 4, 1979). However, the short period of project implementation and the need for three well-trained counterpart staff for field jobs did not permit Mauritanian staff to take over top managerial positions in SONADER Headquarters. Thus, after about twelve months of project implementation it became clear to the Bank and to Government that SONADER would require more than three years of external technical assistance envisaged and that an extension of at least four years was justified (See also Chapter IV, Section C - Local Staff and Train- ing). 6 C. - Procurement 3.05 SONADER followed the Bank's guidelines on procurement, and the procurement progress of the project was constantly rated 1. SONADER received Government authorization until end 1980 to follow only Bank guidelines for procurement, escaping the cumbersome bidding procedures usually enforced in the country. Since 1981 Government insists on SONADER following local proce- dures, and long delays in procurement are foreseeable in the future. This will have to be closely monitored during coming missions. 3.06 Consultant Services Contracts were subject to prior approval by IDA, except those under US$10,000. Four out of the seven expatriate staff were provided by foreign consulting firms to the satisfaction of the Borrower and the Bank, and the other three were hired through individual contracts with SONADER after Bank approval. A local accounting firm was initially hired to audit SONADER's accounts but was found unsatisfactory and the contract was called off by SONADER. A French firm, which is training a Mauritanian auditor in Paris, was selected in 1980 to replace the local firm and requested immediately to audit the 1977, 1978 and 1979 SONADER accounts. The 1980 accounts were audited in 1981. The performance of the audit firm is satisfac- tory (See also Chapter V, Section D-Accounting and Auditing). 3.07 Vehicles, topographic, office and drawing materials and equipment were procured by competitive bidding for contracts exceeding US$10,000. For contracts under US$10,000 local shopping was used, on condition that the aggregate amount of such contracts did not exceed US$50,000, and it did not. The acquisition of equipment had been limited to what was considered by the Bank necessary to permit the technical and administrative staff of SONADER to operate efficiently in the first phase of activities. D. Relations with Mauritanian Authorities 3.08 The commitment of SONADER-s General Manager to develop Mauritania's limited planning, project identification, and implementation capacity has facilitated the relationship between the expatriate team, and Mauritanian officials as well as SONADER-s local staff. The additional inputs of high- level consultants on short-term assignments, and the frequency of Bank's supervision missions helped in solving tensions due to increasing work and responsibilities, hardship conditions for expatriate living in Mauritania, and salary discrepancies between expatriate and local staff. (See Chapter IV Section C-Local Staff and Training para. 4.04). No major problem emerged during project implementation. Working relations in general were good and helped to achieve project objectives. 3.09 It became obvious during project implementation that the Ministry of Rural Development (MRD) and not SONADER should remain responsible for formulating a viable sector policy. Any attempt to bypass the existing ministerial structures could (a) exacerbate the future relationship between SONADER and MRD, and (b) contribute to distortions in project execution. To overcome this risk, and at the request of Government, the second phase of the - 7 - project will include a MRD component aiming at establishing a planning unit directly attached to the Minister's office. Staffed with three expatriates, this unit will alleviate MRD's present shortcomings in defining priorities, formulating sectoral policies, and planning and monitoring rural sector development. SONADER will focus on strengthening its management capability to implement projects, in order to consolidate the results obtained during the first phase. E. Compliance with Covenants 3.10 The requirement that "the Borrower shall provide funds, facilities, services and other resources to enable SONADER to perform its obligations" was not fulfilled by Government, which interpreted this provision too restrictively with regard to the minimum amount (US$800,000) of counterpart funds needed, and to the timing of their allocation to SONADER. The Bank wrote a letter to the Prime Minister on this issue in March 1981 and a Bank mission met with the Minister of Finance end October 1981. By end-1981 only 11% of the counterpart funds were paid. The Bank sent a letter to Government December 4, 1981 requesting that it fulfill its obligations and fully pay the balance due. The difficult financial situation prevailing in Mauritania partly explains the non-fulfillment of this covenant. 1/ (See chapter V - financial performance, Section B - counterpart funds for further details, and consequences of the non-fulfillment of this financial covenant). IV. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT A. SONADER 4.01 Given the circumstances, the performance of SONADER has been satisfactory. SONADER was established in July 1975 with a capital of UM 27 million (about $600,000). At the time of appraisal (August 1976) SONADER consisted essentially of an experienced General Manager and a small adminis- trative staff. The project's initial objective therefore focused on building SONADER into a working entity through provision of both expertise and neces- sary equipment. The increase in SONADER's activity, staff and budget is outlined in the table below: Year No. of Projects Staff Annual Budget (US$ million) 1977 9 88 2.3 1978 9 157 6.4 1979 21 366 16.3 1980 30 447 23.3 1981 33 557 46.3 1/ OPS staff points out that the shortage of Government's financial resources should have been more clearly recognized at appraisal and suggests that a more precise covenant could have been introduced in the credit agreement. -8- SONADER's budget is growing more rapidly than the personnel employed to execute projects, giving a favorable productivity ratio. However, the increase in the number of staff and the need for a diversity of professional qualifications has emphasized training needs. 4.02 SONADER's role is expected to expand further. A new General Manager was appointed in January 1982. First indications are that this change should not have any impact on SONADER's performance. Through a proposed second TA project, the Bank should continue to help the strengthening of SONADER's management in the coming year. B. Ministry of Rural Development (MRD) 4.03 On the time of its creation in 1975, SONADER was under the supervi- sion of the Ministry of Water Resources which became, after the November .1975 reorganization, the new Ministry of Rural Development, in charge of irrigation and rural water supply projects as well as livestock, agricultural production and marketing activities. During the life of the SONADER Project the need for improving the planning capability of the MRD became clearly apparent. The Ministry is ill-equipped and inadequately staffed. Through SONADER, however, the Government has been able to attract increasing amounts of foreign assis- tance and to develop its investment program in the rural sector. Due to this expanded program and to SONADER's success, SONADER has become overburdened with a broad spectrum of tasks including rural sector policies, credit, agricultural inputs distribution and crops marketing. These tasks are not performed well and it is not SONADER's responsibility to define the rural sector policy of the country. If there is a need to continue supporting SONADER, there is also a need to improve MRD's ability to identify objectives, define priorities, plan and monitor the rural sector development. As pointed out in para 3.09 the follow-up project will include a technical assistance component aiming at strengthening the planning capacity of MRD. C. Local Staff and Training 4.04 In September 1979 a training specialist participated in a Bank supervision mission and made a study of the training needs of SONADER local staff and recommended that: (i) Expatriate staff should work more closely with their national counterparts for training purposes; (ii) SONADER should prepare an annual training program; and (iii) SONADER should set up a training unit reporting directly to the General Manager and comprising a high level expatriate and a Mauritanian expert whose term would be two years. The third recommendation of the study was only implemented during a short period because SONADER management insisted many times that expatriate staff were already playing their role as training advisors. In order to meet the growing training requirements of SONADER's staff, its General Manager finally -9- agreed that the follow-up project might include an expatriate specialist in personnel management and training. In the meantime four scholarships have been financed under the EEC interim credit. In particular under this program the Project Manager of the Gorgol Irrigation Project was trained on time to take up his assignment. Further efforts are needed to train Mauritanian counterpart staff who should be carefully selected by SONADER and by the MRD. V. FINANCIAL PERFORMANCE A. Costs and Disbursements 5.01 Total costs of the project were estimated at $4.4 million, of which 65% were expected to be foreign exchange. The Credit of US$3.5 million (80% of total project costs) was fully disbursed in August 1981. Additional funding from the EEC Special Action Credit was provided to SONADER (the equivalent of $1.5 million in European currencies) to cover the project cost for a one-year extension (1981) of the technical assistance program, consultant services, scholarships, and office equipment. The closing date for the supplementary EEC credit is June 30, 1982, but the $1.5 million were fully committed as of November 1, 1981 due to an exchange loss of $0.4 on payments made in European currencies for contracts in US$. The link between the ongoing project and the follow-up project is ensured through a PPF advance of US$0.75 million, for which a Government request was sent to the Bank in February 1982, and Bank approval given March 4, 1982. B. Counterpart Funds 5.02 The appraisal/President's reports lists Government-s contribution to the project as UM 38,700,000 or US$860,000 equivalent but Government subsequently understood it to be US$800,000 equivalent. Only 11% of the initial amount has been paid so far. SONADER prefinanced Government's contribution by using overdraft facilities available through local banks which endangers SONADER-5 financial soundness. The unacceptable situation was later tackled in a Bank letter (March 1981) to the Prime Minister. The Minister of Finance's letter of October 30, 1981 recognized that the balance due to the project by Government amounted to US$766,000 equivalent and would be paid in 1982 and 1983. This question should be discussed during negotiations of the follow-up project scheduled for April/May 1982. C. SONADER Financial Performance 5.03 SONADER-s financial management and internal control still need to be improved. The existing control was extended to all commitments on project expenditures and was very tight concerning payments to suppliers. However, SONADER's liquidity situation worsened during project implementation, in particular because of the lack of counterpart funds, thus hampering the implementation of some of its projects by lack of immediate cash to finance - 10 - MAURITANIA SONADER TECHNICAL ASSISTANCE PROJECT Cr. 694-MAU Disbursement of Credit Proceeds in US$ (b) (c) (a) Allocation under Actual (c) Category Credit Agreement Disbursement Ratio (b) 1. Experts' services 1,980,000 1,881,041.13 0.95 2. Consultants' services 920,000 1,388,634.51 1.51 3. Equipment/vehicles 156,215.42 150,000 1.54 3A. Operating costs 74,108.94 4. Unallocated 450,000 - - Total 3,500,000 3,500,000.00 1.00 Closing date 6/20/81. daily operating expenses. At the end of 1979, SONADER's working capital amounted to UM 24.4 million (US$0.5 million) but the working capital require- ments amounted to more than the double (UM 57 million or US$1.2 million). A supervision mission together with the audit firm in charge of auditing SONADER's accounts required in January 1981 that SONADER rebuild its financial capacity through a special Government subsidy of UMA 32,6 million (US$0.7 million). In December 1981, SONADER had still not yet received this subsidy and made a request to the Ministry of Finance to obtain it in 1982. D. Accounting and Auditing 5.04 A French accounting firm carried out a study end 1981 on SONADER's accounting system and made recommendations to set up a new system, which will be implemented under the follow-up project. This study was co-financed with the French Technical Cooperation Agency (FAC) and the report was submitted to the Bank in March 1982. The main focus of the report is, as recommended by the Bank, on the decentralization of SONADER's accounting system and on management accounting.- This will allow both co-donors and SONADER to have a better idea of the direct cost of each project managed by SONADER, as well as SONADER's structural cost. The IDA-financed Gorgol Project will immediately benefit from this new accounting system through separate accounts, which will be consolidated each year into SONADER accounts. - 11 - 5.05 In 1980, the same firm audited SONADER's 1977, 1978, and 1979 accounts. The 1980 accounts were audited in October 1981 and the independent auditor certified that SONADER's financial statements portray the financial position and progress of the entity fairly and in accordance with generally accepted accounting principles. No misuse of IDA funds have been reported on the Technical Assistance Project. However, the lack of a well-trained local chief accountant at SONADER on a permanent basis has caused some delays in the bookkeeping entries and in the preparation of the financial statements. The follow-up project will tackle this shortcoming and train Mauritanian staff in accounting, along the lines of the auditor recommendations. E. Rates of Return 5.06 No rate of return was calculated for this project, and its justi- fication was based on recognition that pre-investment activities such as institution building are necessary for the preparation of future rural and irrigation development projects in Mauritania. Experience elsewhere shows that future returns from such investment can be satisfactory. VI. PROJECT IMPACT AND BANK PERFORMANCE A. Project Justification and Major Impact 6.01 This project was justified as a pre-investment activity to assist Government in carrying out its investment programs in the rural sector, through strengthening SONADER's capability to prepare and implement projects. The Gorgol irrigation project was appraised as a result of studies carried out under this T.A. project. Mauritania is heavily dependent on food imports, and income to farmers is precarious, and the only possibility of improving this situation is the development of irrigation. Apart from a scarcity of funds the major obstacle to more rapid irrigation development has been the lack of a strong institution with capable staff to plan, identify, prepare and supervise irrigation construction, and to subsequently manage specific projects. Through the Technical Assistance project SONADER is now more capable of implementing projects although it has not yet demonstrated it can skillfully prepare projects. One of the major impacts of the project is that external aid agencies have -decided to support SONADER and through it to invest in the rural sector in Mauritania. In addition to the Gorgol Irrigation Project (Cr. 1068-iAU of US$15 million) cofinanced with eight agencies, IDA is also financing through its Urban and Rural Development Fund Project (Cr. No. 888-MAU of US$8 million) 600 ha of small irrigation perimeters which is progressing well as demonstrated by an average rice yield of 4.5 t per ha. B. Bank Performance 6.02 The working relationship between IDA and the responsible Govern- ment representatives as well as SONADER's General Manager was very good and close. For SONADER and for the Ministry of Rural Development this Technical - 12 - Assistance Project was an excellent vehicle to create a good understanding among Mauritanian officials of how the Bank Group functions, and the recogni- tion of the Bank's interest in the Development of Mauritania's Rural Sector. 6.03 The productive dialogue between Mauritania and the Bank Group, and SONADER's increasing role in managing projects and attracting external funds led, in liaison with co-donors, to the definition of a follow-up project (1982-85) with emphasis on rural sector policies and planning activities for the Ministry of Rural Development, and on the consolidation of the improved implementation capacity of SONADER. IDA supervision of the TA project were adequately spaced and the timing of the missions were generally very appro- priate, usually coinciding with key decisions or emerging problems: counter- part funds; recruitment problems; transition between ongoing project, EEC follow-up action and IDA follow-up project; audit and consultant studies. 6.04 At appraisal the Bank's assessment of SONADER's implementation capacity was correct, but the time required to build SONADER's capability to prepare projects was underestimated. Further, the consequences of an inade- quate involvement of MRD in SONADER's activities, which presently include policy and planning activities normally assigned to the MRD, were perhaps overlooked. The follow-up project will focus more intensively on rural sector policies, on the institutional reorganization of the Ministry of Rural Development, and will also keep on strengthening SONADER's organizational structure and financial capacity, taking into account the need for better defined working relations between SONADER and the Ministry of Rural Develop- ment while assuming the necessary autonomy of SONADER for implementing projects as well as the need to coordinate the efforts of co-donors financing irrigation in Mauritania. 13- ANNEX I Page 1 MAURITANIA PROJECT COMPLETION REPORT SONADER TECHNICAL ASSISTANCE PROJECT (Cr. 694-MAU) Project Organization and Objectives Appraisal Actual 1. Project Objective or Focus -Institution Building see 3 below 2. -SONADER( Government Rural new not yet fully Development Agency) adequate 3. Institution Building and Wider Sector efforts -Building SONADER capability to: -Prepare projects key objective not yet achieved -Implement projects key objective achieved .-Means: -SONADER Organizational structure strengthening in progress -Technical Assistance Team 7 expatriates still on duty -Mauritanian Staff Training on the job on the job and scholarships 1/ -Consultant services see 4 below -Equipment (US$ million) 0.2 0.2 -Wider sector efforts none follow-on project 2/ 4. Consultants use and performance -Rural engineering consulting firm irrigation studies satisfactory -Training specialist training study 5 man/days; too short -Audit firm audit good 1/ Further efforts required. 2/ An MRD component is included in the Technical Assistance.Project to the Rural Sector appraised in November 1981.  1BRD 16466(PPA) ISLAMIC REPUBLIC OF MAURITANA, SONADER TECHNICHAL ASSISTANCE PROJECT Gorgo Project Area 0 Paved Roeds - Paved Roads under construction - Gravel Roads Tracks Railroads A,rfields0 An ual Ramrifal in Millieerers International Boundaries ---- --- indiates the Territory of the former Soanish - - - - - - - - - --- - ----- - .. Sahara(Western Sahara) u Copper AL G E R I A Fe lron Date Palos $ Fishng A Wharf AGRICULTURALZONES Saharan Desert Saharan Sub Desert \ MgrEt Sehel. al I . . ~. 4 KIL3METERS 24° THISPPA MAP IS BASEDON IBRD 1373R JUNE 1980, ONLY TITLE HAS BEEN CHANGED. £ZZ * ou° MAaL (P Denrk Nouadhibou -20° 20° FeN dP GOA T idj k ja, NOUAKCHOTT C Ný Moud i -Aueg dP edeEr Ls- oun el Atrouss GUM 0he GUMCr 1ý1 KifaNeap . 20 R ~~~aed GEREAL Rossoi Gmbedr 16 -l° St. Louis t 300 Matam\N < ' seIbaby C0°0 DAKAR*O awM A L | S E N E G A L. 16°12° 8° l MAY 1982  ]BRD13ア53R 一