Niger - Second Forestry Project

Document of The World Bank r FOR OFFICIAL USE ONLY Report No. 3632a-NIR NIGER SECOND FORESTRY PROJECT STAFF APPRAISAL REPORT March 17, 1982 Projects Department Vestern Africa Regional Office Agriculture III Division This document has a restricted distribution and may be used by recipients only in the performance of their officiai duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit CFA Franc (CFAF) US$1 = CFAF 270 CFAF l million US$3,704 WEIGHTS AND MEASURES 4 i stere = i m3 of stacked wood 1 m3 (natural forest wood) = 1.875 steres 450 kg 1 m3 Eucalyptus/neem wood = 1.6 steres 720 kg 24 Eucalyptus/neem poles = 1 m3 ABBREVIATIONS CCCE - Caisse Centrale de Cooperation Economique (France) CILSS - Comite Permanent Inter-etats de Lutte contre la Secheresse au Sahel CP - Cooperative Program/Programme de la Cooperation CTFT - Centre Technique Forestier Tropical (France) ESA - Ecole Superieure d'Agronomie (Niger) FAC - Fonds d'Aide et de Cooperation (France) FAO - Food and Agricultural Organization of the United Nations FNI - Fonds National d'Investissement (Niger) IDA - International Development Association/Association Internationale de Developpement IEF - Ingenieur des Eaux et Forets INRAN - Institut National de la Recherche Agronomique du Niger IPDR - Institut Pratique de Developpement Rural (Kolo) IUCN - International Union for Conservation of Nature and Natural Resources MDR - Ministere du Developpement Rural NGO/ONG - Non Governmental Organization/Organisation non Gouvernementale NLC - Northern Limit of Cultivation ONAHA - Office National des Amenagements Hydro-Agricoles PPAR - Project Performance Audit Report PPF - Project Preparation Facility UNESCO - United Nations Educational, Scientific and Cultural Organization USAID - United States Agency for International Development FISCAL YEAR October 1 - September 31 .  FOR OFFICIAL USE ONLY NIGER SECOND FORESTRY PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I. BACKGROUND .............................................. 1 A. Project Background ......... ................. ........ 1 B. The Rural Sector ...... ........................... l C. The Forestry Subsector ............ ................... 2 Natural Forest Cover .............................. 2 National Forest Estates and Tree Plantations ...... 3 Role of Forestry in the Economy ................... 3 Demand for Forest Products and Environmental Disruption ........................ 4 Exploitation of Forest Products ................... 4 The Task Ahead .................................... S Substitutes and Better Uses of Wood .... ........... i Substitutes ..................................... 5 Woodstoves ...................................... 6 Forestry Institutions . ........................... . 7 Organization ...................... 7 Resources ....................... 7 Training ................. ....................... 7 Research ....... ............. .................... 8 Sector Objectives and Strategies ....... .. ......... 8 Rural Participation in Forestry Programs .......... 8 Bank' s Role in Forestry .................. 9 II. THE PILOT FORESTRY PROJECT .............................. Lu A. Objectives and Design ........ ................... . 10 Project Description .................. ...u.......... l Project Costs .... ................................. lu Organization and Management ..* .................... ll B. Experience of the First Two Years ................ ... il C. Transition between the First and Second Projects .... 1i III. THE PROJECT AREA ........................................ 13 Introduction ................... ......................... 13 Physical Environment .... ................................ 13 Human and Economic Environment ..... ..................... 14 | 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.  - ii - Table of Contents (Continued) Page No. IV. THE PROJECT ................... .............. ou ............ 14 A. Objectives and Brief Description ................... a#*..*.... 14 B. Detailed Project Description.......................... 16 Rural Tree Plantations *,*,***,,,*********,**,****** 16 State-Managed Rainfed Tree Plantations ............. 17 Gum Arabic ... ........ 18.... .. .... 18 "Industrial" Irrigated Tree Plantations ............ 18 Tree Plantations in Agricultural Irrigated Perimeters ... ............ . . . . . . . . . . . .. . . . . 19 Watershed Management/Erosion Control ...... ...... .. 19 Natural Forest Management .......................... 20 Bushfire Control ........ ... ........................ 20 Training ................ ........ 09-4........ ........... 21 Research ...........*.....*.***....*.***.....***.*.*...... .... 21 Planning, Monitoring and Economic Studies .......... 21 C. Project Implementation .... .... . ...... . .. . . . . . . . . . . . . . . 22 D. Project Cost Estimates .... ............... .......... .. 23 E. Proposed Financing .. ........... ........ .. .. * ...... 25 Project Preparation Facility ....................... 26 Project Working Fund .... ........................... 26 F. Procurement and Disbursement ......................... 27 Procurement ....... ........................................... 27 Disbursement .*...................... ........... .......... 28 G. Accounts, Audits and Reports ...................... ... 29 V. ORGANIZATION AND MANAGEMENT .................... ... 29 A. Project Management ... ....... .. .. . ............................. 29 B. Staffing ............. ....... .. . ................. ........... 30 Nigerien Professional Staff ................... ..... 31 Expatriates ......... . .0..... ......... 0*0.......... . 9.... 31 Consultants et***** ........................ **o....... 31 C. Monitoring and Evaluation ................. . .......... 31 VI. PRODUCTION, MARKETING AND FINANCIAL RESULTS .............. 32 A. Production ........................................... 32 B* Marketing .......... o ........ .. ........ . ........ . 34 iMarkets ........ **......o.......................o.... 34 Prices ............ ..... 00..... 000...................... 34. C. Government Cash Flow .......................................... 36  - iii - Table of Contents (Continued) Page No. VII. BENEFITS, JUSTIFICATION AND RISKS ........................ 36 A. Benefits .... ......................................... 36 Direct Benefits s ...... . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Indirect Benefits ... ............................... 37 B. Economic Analysis and Rates of Return ................ 37 C. Risks and Sensitivity Analysis ....................... 39 VIII. AGREEMENTS REACHED AND RECOMMENDATIONS ................... 39 Annex l Responsibilities of Project Management Annex 2 (Tables) I. Total Costs per Year and per Component II. Total Costs per Year and per Category of Expenditure III. Total Costs per Component and per Category of Expenditure IV. Total Costs per Year and per Component 1. Rural Forestry 2. Old State-Managed Rainfed Tree Plantations 3. New State-Managed Rainfed Tree Plantations 4. Gum Arabic Plantations and Stands 5. Industrial Irrigated Tree Plantations 6. Tree Plantations in Irrigated Agricultural Perimeters 7. Watershed Management/Erosion Control 8. Natural Forest Management 9. Bushfire Control 10. Training 11. Research 12. Planning and Monitoring 13. Project Management Unit 14. Unit Costs and Seasonal Labor Requirements V. Total Wood and Gum Arabic Production VI. Government Cash Flow VII. Schedule of Disbursement Annex 3 (Tables) Table 1: Economic Analysis - Rural Forestry Table 2: Economic Analysis - State-Managed Rainfed Tree Plantations Table 3: Economic Analysis - Plantations in Irrigated Agricultural Perimeters Table 4: Economic Analysis - Gum-Arabic Plantations Table 5: Sensitivity Analyses MAP: Situation Map IBRD No. 15903  - iv - Table of Contents (Continued) Documents in Project File 1. Working Papers a. Technical aspects of the Project (including unit cost tables) b. Training c. Economic and Financial Analysis 2. Various Documents on Rural Forestry in Niger 3. Terms of Reference  NIGER SECOND FORESTRY PROJECT I. BACKGROUND A. Project Background 1.01 In early 1980, the Government of Niger requested IDA to continue financing of the ongoing Pilot and Technical Assistance Forestry project (Cr. 800-NIR) scheduled to close in December 1981. This first project had been appraised in October 1977 and had become effective at the beginning of 1979. It aimed at supporting a three year program of pilot activities to produce fuelwood and building poles, prevent further environmental degradation around towns due to the progressive destruction of the natural forest cover, and strengthen the Forestry Department through the provision of technical assistance and equipment. A progress report on the First Project is at Chapter II. 1.02 Government submitted the terns of reference for the preparation of the second phase project to IDA in July 1980 and the project was prepared by consultants and staff of the Bank/FAO cooperative program, and in collabora- tion with staff of the First Project, during a mission to Niger in November/ December 1980. The final preparation report was submitted to Government and IDA in February 1981 and Government, after review, requested that the project be appraised. 1.03 This appraisal report is based on the preparation report and the findings of an IDA/CCCE/FAC appraisal mission consisting of Messrs. J Baah-Dwomoh, J. Gorse and S. Khenissi (IDA), J. Bailliez and Robin (CCCE), Freud (FAC) 1/, A. El Krief (UNESCO/BANK CP), C. Bailly and T. Wood (IDA consultants) that visited Niger in May/June 1981. The mission was assisted throughout by the management and staff of the First Forestry Project. B. The Rural Sector 1.04 Niger has a population of about 5.2 million and a total land area of 1.3 million km2, of which 75% is desert, 15% semi-arid and less than 10% suitable for crop cultivation. About 75% of the population are concentrated on less than 8% of the land area that forms the southern rainfall belt where annual rainfall is between 500 mm and 800 mm. In this area of about 100,000 km2 population density averages about 20/km2 but exceeds 100 per km2 in the more favorable locations in the valleys. The population is essentially rural (87%) but the urban population is increasing rapidly at 7.0% per year against 2.2% in the rural areas and an average population growth rate of 2.8% for the country. 1.05 Despite a harsh climate and poor soils, which present formidable constraints to agricultural development in Niger, the rural sector still 1/ Mr. Freud was with the mission for only part of its stay in Niger.  - 2 - remains critical to the country's economy. In 1970 the sector accounted for about 60% of GDP and close to 80% of exports. This share fell to about 44% of GDP and 25% of exports in 1979 because of the rapid rise in uranium production and exports but also the slow development of the rural sector. Of the 44% contribution to GDP in 1979 by the rural sector, crops accounted for 54%, livestock 36%, fishing 2% and forestry 8%. The sector however employs about 90% of the labor force and the main crops grown are millet, sorghum, groundnuts, cowpeas and rice. Livestock production constitutes a major rural sector activity, but the droughts of the early 1970s disrupted livestock production. However herd reconstitution has begun in earnest and in recent years the livestock sector has made up about 18% of GDP. 1.06 Food self-sufficiency and the raising of the standard of living of the rural population constitute the main objectives of Government's develop- ment policy. But the effects of increasing population, leading to the dis- appearance of fallow lands and cultivation of marginal areas, have led to significant falls in average crop yields. This process of decreasing produc- tivity has accelerated migration from rural areas to urban centres and to neighboring countries. The main issues currently in the rural sector are: (i) the limited scope for further productivity increases especially in rain- fed agriculture; (ii) the high cost per hectare of irrigation development; (iii) inadequate official input and output pricing; (iv) the competition between agriculture, forestry and livestock; and (v) how to get the rural population to participate in reafforestation schemes to improve their fuelwood supplies and reduce the effects of soil deterioration. 1.07 Government responses to these issues include measures: (i) to exploit the potential of existing rainfed agriculture through setting up regional productivity projects whereby improved extension, input supply, credit and marketing services would be made available to farmers; (iij to develop as economically as possible, the irrigation potential of the country as a complement to rainfed agriculture and, using the experience already gained from existing perimeters, to improve their efficiency and reduce the! costs of new perimeters; (iii) to make improvements in output prices by moving them closer to economic prices and reduce subsidies where politically feasible; (iv) to encourage the rural population to plant trees to serve as windbreaks, shelter belts, and in some cases to reserve areas for pasture and; (v) to improve the quality of services provided by the rural development insti- tutions through education and increases in their staff and working funds. C. The Forestry Subsector Natural Forest Cover (see Map ) 1.08 The distribution of the natural forest cover (estimated at about 14 million ha including the wooded "sylvopastoral" and "sylvo-agricultural" formations) is heavily dependent on rainfall. The forest cover increases in density from north to south, and vegetation zones in Niger include: a) the  - 3 - Saharian Zone (annual rainfall 25-200mm, 55% of the country's area); b) the Sahelian Zone made up of; (i) the Sahelo-Saharian Sector (annual rainfall 200-400mm, 20% of the country's area), and (ii) the Sahelo-Sudanian Sector (annual rainfall 400-600mm 15% of the country's area); and (c) the Sudanian Zone (annual rainfall 600-800mm, 10% of the country's area). 1.09 Forests in Niger are not dense compact areas of trees but are rather made up of dispersed tree formations with an avera