Ghana - Irrigation subsector review

Report No. 6173-GH Ghana Irrigation Subsector Review December 15, 1986 Western Africa Projects Department Agriculture Division B FOR OFFICIAL USE ONLY 044 , ',.f.k ' ' ' A' 'f," ,.4 E, ,, '0 , t4-4N-') 4, ay, . 4 a r,4 44'' f4j4 . -. '# +Ww .o~~~~~~ffi.ctia duie5*s c-onteintsftnay not otherwise ,be>lov r*l:u+rd ayth9fiztion" 4, ~ A t,,,  CURRENCY EQUIVALENTS Cedi 1.00 - US$ 0.01 US$ 1.00 - Cedi 90.00 WEIGHTS AND MEASURES 1 metric ton - 0.98 long ton 1 long ton - 2,240 lb = 1.016 metric ton 1 hectare (ha) - 2.47 acres 1 acre - 0.405 ha 1 kilometer (km) - 0.62 mile 1 mile - 1.609 1 liter 0.26 gallons (US) - 0.22 (Impsrial) 1 acre foot - 43,560 ft3 - 1,233.6 mn 2 271,815 imp gallons - 325,829 US gallons ABBREVIATIONS EEC - European Economic Community FAO - Food and Agriculture Organization of the United Nations GIDA - Ghana Irrigation Development Authority GOG - Government of Ghana ICOUR - Irrigation Conpany of the Upper Region O&M - Operation avd Maintenance EPD - W.B. Economic Analysis and Projections Dept.  GHANA FOR OFIAL USE ONLY IRRIGATION SUBSECTOR REVIEW TABLE OF CONTENTS Page SUMMARY AND CONCLUSIONS ..................... , I* INTRODUCTION **ooo*................................ , 1 II. THE DEVELOPMENT OF IRRIGATION ..................... ......... 2 A. The Physical ................. ....................... 2 * ~~~~~Land .................................,................. 2 Topography ...........................,.................... 2 Climate ................................................. 2 Soils .................................................. 3 Water Resources - Surface Water ...................................... 4 - Ground Water .,.................................... 6 B. Effects of Climate on Crops ........................................ 6 Cropping Pten.............. ............... ...... ......... .... 6 Crop Water Blne................................... ............ 6 Potential for Rainfed Crops ....................................... 1 C.* The Need for Iriain................... ................... .......... 7 Potential Evapotranspiration ....................................... 7 C.ropping Bss....... ......................... ............... 7 D. National Strategy for Irrigation Development ................................ 9 Irrigation Targets ............................................ 9 Food Security and Employment ....................................... 9 Irrigated Crop Priorities .. 0O~ . *............................. 9 Implementing Aece ...................... ........................ 10 Types and Scale of Irrigation ...................................... 10 E. Constraints to Irrigation Development ................................... 11 ~~~~~~~ 1~~~~~~~~~~2 F. Ovrieyfsrigatio Projects.................................. 12 Influence Sofia ............................................... 12 Peftmincsraie ............................................... 12 Enirnmential ........................ ... ................... 13 G. CapritaeCst of Irrigation ProJects .................................... 14 # ~~~~~Influec fDnr ...................... .......................... 14 Per Rost rface...................,, 14 Environmenta E f f e c t s 13 B. Effectal Coft Cliat oniainPr j c s1 Crpinania Cots 1 Reasons for High Co s t s 14 H. Operation and Maintenance of Projevt meut 1...........e. 17 0Oo Scosts.and.Employment.......................... 17 Problems Affecting O &I .o N......................... 17 This document has a restricted distdibution and may be used by recipients only in the performance of their osicial duties lt content may not otherwise be disclosed without World lank authoriaion.  Costs of Adequate O & M.............................. 18 Irrigation Company of Upper Region (ICOUR) ........... 18 Page III. THE ECONOMICS OF IRRIGATION ............ ........... 18 A. Economic Viability of Irrigation ..... .................00 18 The Problem and Methodology.... o................... 18 Assumptions and Calculations........................ 19 The Findings and Sensitivity Analysiso............. 22 B. Cost Benefit Analysis of Ongoing Projects............... 24 Methodology and Assumptions...........,............. 24 The Findings.......................................... 24 IV. RECOMMENDATIONS FOR FUTURE STRATEGY ON IRRIGATION. o ........ 25 ANNEXES Annex I - Background Information - Overview of the Economy and the Agricultural Sector Annex II - Brief Description of Nine Irrigation Projects, Highlighting Features, Problems and Deficiencies Annex III - Ghana Irrigation Development Authority and Institutional Issues Annex IV - Methodology and Detailed Calculations of Capital Costs of Eight Irrigation Projects Annex V - Operational and Maintenance Costs Annex VI - Cost Recovery Performance Annex VII - Economic Viability of Investments in Irrigation TABLES IN TEXT Table II.1 - Assessment of Water Resources of Ghana....... 5 Table II.2 - Thirty-year Mean Monthly Temperature, Rainfall, and ETP for Akuse, ADA in the Southern Savannah, and Tamale in the Northern Savannah............................o 8 Table II.3 - Capital Costs of Irrigation Projects......... 15 Table III.1 - Rice - Economic Analysis.................o.... 21 Table III.2 - Thresholds for Capital Investment in 23  Table III.3 - Projected Capital Expenditures, 1986-1988 and Incremental Economic Rates of Return..... 26 MAPS IBRD 15116R2 Rainfall and Ecological Zone IBRD 18469R1 Vegetation Zones IBRD 18470R1 Geology IBRD 18471R1 Agricultural Products IBRD 18475R1 River Basin and Climatic Zones IBRD 18393R1 Great Soil Groups IBRD 18395R Soil Suitability for Crop Production IBRD 18473R Irrigation Projects  GHANA IRRIGATION SUBSECTOR REVIEW SUMMARY AND CONCLUSIONS 1. Ghana is moderately endowed with potentially cultivable land in proportion to its population (0.96 ha per capita which is a little over half the average for Africa,) but it has low and uncertain rainfall. About one-half of the country's area faces an uncertain and short rainfall season and all parts of the country are periodically subject to droughts, of which that in 1983/84 was the most widespread and severe for many years. It is against this background that policy makers in Ghana have been giving high priority to irrigation development to enhance food security and to improve the economic well-being of the rural population, particularly in the less well endowed northern areas. 2. In the Fall of 1985 a World Bank mission joined with a task force from the Ghana Irrigation Development Authority (GIDA) to review how successful the country had been in tapping its irrigation potential and to recommend steps that should be taken to make the best use of the country's irrigation potential at a cost which could be economically justified. In the Fall of 1986 the Green Cover Report was reviewed with officials of the Ghana Government and the findings and recommendations were accepted. Steps have already been taken towards implementing the principal recommendations. 3. Ghana's experience with irrigation is relatively limited. With six schemes completed and with a furth.er twelve under construction, the total irrigated area at the end of 198'6 was only about 7,000 ha. When the schemes under construction are completed, the total irrigated area will be about 13,000 ha. The schemes are small and the types of irrigation are varied. Only one project commands 2,500 ha while the remaining twelve will command less than 500 ha each. They are either based on water storage or on the run of the river and water distribution is based on gravity flow, sprinklers, pumping or a combination of the above. 4. While the effectiveness of the schemes varies, on the whole their performance has been disappointing as a result of inappropriate ch,ice of * location, design, construction procedures and management systems. The small size of the schemes partly reflects physical constraints. While, overall, the country is well endowed with water, the areas which suffer most from drought are not well served by perennial rivers or lakes and the lay of the land is generally not well suited for constructing reservoirs. Moreover, groundwater is low-yielding and cannot be relied upon for exten- sive irrigation. Because of these natural constraints, the country's total irrigation potential is estimated to be only 120,000 ha 1/, a little over 1% of total cultivable land. Thus, while irrigation has the potential to make an important difference to the lives of some of the disadvantaged 1/ FAO Technical Paper Number 5 (1986).  - ii - rural population, its potential to make significant impact on the national economy is inescapably limited. 51 During the past decade, Ghana has spent about US$200 million (1985 prices) oan irrgation, an amount equal to about 5% of total public Investments over the period. Due to the above mentionod Inappropriate design and location choices these outlays translate into high unit costs per ha. For example, the costs of the Tono and Bontanga projects, located in the Upper and Northern Regions, are about US$50,000 per ha (1985 prices), primarily because of a difficult and inappropriate location. The cost of the Weija project is estimated at US$39,000 per ha, mainly beeause of the choice of expensive technology. These three projects will cover about 5,040 ha, when completed. Costs of the re?aining fifteen projects on completion are estimated to range from US$10,lOO - US$15,000 per ha, 6. While the disadvantages of physical terrain and low ground water availability are important contributors to these high capital cost, there are additional manmade reasons such as: (t) choice of poor location; (fi) inappropriate contracting arrangements combined with poor monitoring of expenditures; (iii) weak data base for and thus wrong designs; (iv) cash flow problems resulting in extended construction delays; (v) disruptions In public services, and (vi) the small site of projects relative to the level of infrastructure provided, (this,of course, is a cost allocation problem). In addition, the operation and maintenance of the schemes has not been satisfactory, and some of the recently completed ones are already showing signs of deterioration due to deferred maintenance, GIDA is aware of this and is giving increased emphasis to farmers' participation in 0 and M activities and cost sharing. 7. Returns from presently grown crops, rice accounting for over 80% of the irrigated cropped area, do not justify economically the level of investments or the type of irrigation projects already constructed. Until recently, due to foreign exchange shortage leading to lower rice imports, farmgate prices for rice were several times higher than international prices, thus providing strong financial incentives to farmers. While the differential between international and domestic prices has since narrowed, rice is still the dominant crop, with vegetables taking a secondary role. Thus, the economic viability of irrigation could be tied to the viability of irrigated rice. Present yields are low on most projects, at less than 2.5 tons/ha with cropping intensities yet to reach 150%. While crop yields should increase as farmers increase use of modern inputs and improve their cultural practices; but even under optimistic assumptions about yields, the maximum capital investment that would be economically justified would be about US $6,250 per ha and thus much lower than the present per ha cost of current projects. Assuming that yields could be increased to 5 ton/ha with double cropping and with reduced production costs, the economically Justified level of capital investment (taking the opportunity cost of capital at 10%) would be about 50% of the minimum for current projects. While this cost threshold provides an approximate rule of thumb to evaluate future investments, it does not eliminate the need to make a  - iii - specific economic analysis for each proposed investment in new or on-going projects. 8. The practical implications of this threshold is that, so long as the present agronomic and economic parameters persist, future investments in irrigation should be limited to small scale, low-cost schemes, for example, small scale pumping from existing water resources, minor diversion schemes and small earth dams, principally to provide supplementary water. Such schemes should avoid capital tntensive construction methods end, to the maximum extent, should involve farmers themselves in the management. 9. The report shows that while past investments have been costly, there are a number of steps which, if seriously pursued now, would enable Ghana to maximize the returns from its past investments and to increase its irrigated area at an acceptable cost. Considerable potential exists to improve the productivity of the existing irrigated areas by improving water management, 0 and M cost reduction and, where feasible, by increasing the area under command. This should be accorded the highest priority. Investment in new schemes should have lower priority, and as noted above, should focus on small scale opportunities which are economically justified. Their selection should be based on carefully drawn-up criteria, and Government should insist that any future aid assistance for irrigation fully complies with such criteria. 10. The next decade should be a period of consolidation and learning for both farmers and GIDA during which a sound base can be established for the further development of the irrigation sector. Farmers should be actively involved in the planning process so that they may become aware of the opportunities and difficulties involved in irrigated farming. GIDA will have to play an important role in improving irrigation efficiency but its organization and staffing first needs review and its capabilities need strengthening. One way to achieve this would be to establish a twinning relationship with a similar organization with a sound track record in another country. Such arrangements are becoming increasingly common and can help foster training and other support through exchange schemes. It will also be necessary to strengthen supporting institutions such as the meteorological and hydrological services. 11. For systematic development of irrigation subsector in Ghana, an action plan should be drawn up to include: (a) review of completed irrigation projects and take steps to reduce costs, consolidate and optimize benefits; GIDA has started to examine alternative policies for undertaking 0 & M to reduce costs and to establish a more efficient mechanism for improving cost recovery; (b) review of the ongoing irrigation projects and, where necessary, alter scope and plans to achieve better returns from investments;  - iv - (c) development of a National Water Masterplan including criteria for the selection of new irrigation projects and establish priorities in use of water resources, taking into account the important role of water management in maintaining land productivity; (d) accelerating research activities for development of high value irrigation crops and appropriate irrigation technology in the context of Ghana where lack of irrigation tradition is a major constraint; provision is being made in the Ghana Agricultural Services Rehabilitation Project for assistance to do this; (e) strengthening the capabilities of GIDA in identification, design, construction, operation and maintenance of Irrigation projects, and capture the full benefits from a proposed twinning arrange- ment between GIDA and an appropriate irrigation institution in a country with good track record; and (f) strengthening the important support institutions for physical data, particularly the meteorological and hydrological services, to bring them to desired level of effectiveness. 12. Since the review of the draft Report with the Government of Ghana, the management of GIDA has started to direct attention to consolidation of the completed schemes and increasing benefits from them. It is also holding in abeyance work on most of the ongoing schemes until reviews have been undertaken to determine hew best to proceed and to establieh priorities. Provision is being made in the Ghana Agricultural Services Rehabilitation project for technical assistance to GIDA to strengthen its capacity, and to a--port initiation of essential research operations in irrigated crops and to establish pilot small scale irrigation systems. GIDA is in the process of communicating with suitable irrigation s4thorities with the view to arranging a twinning operation.  GHANA IRRIGATION SUBSECTOR REVIEW I, INTRODUCTION 1.01 Irrigation in Ghana was developed mainly during the last ten years to increase food availability. In a period of special economic hardship, the Government of Ghana (GOG) spent about US$200 million (1985 prices) in this subsector. This represents about 5% of total public investments for the period. The results have not been encouraging; construction costs have been high and the increases in agricultural production have not been significant. In spite of these results, the GOG, like many other African govertments haunted by the memory of recent droughts, views irrigation as a possible way of providing food security, 1.02 This report presents the findings of a World Bank mission which visited Ghana during September 1985 and which was joined by a counterpart task force from the Ghana Irrigation Development Authority (GIDA) 1/ to review the subsector. The main findings are that the conditions under which thp 'rrigation schemes have been constructed, operated and maintained were hie unfavorable, due primarily to economic, social and political circums' ;es in the country and that the resulting high costs cannot be justifie6 by the present estimated benefits. Until it is able to take tecognized measures to reduce costs significantly, and there is considerable scope to do so, GOG should postpone plans for any major new irrigation development and concentrate on improving the efficiency of those schemes which are already completed, and complete or rehabilitate those whose benefits can justify the additional expenditures and construct pilot small scale schemes, in particular for supplementary irrigation. 1.03 Chapter II of this review describes the physical factors which bear on developing and managing irrigation, and examines the operational aspects of the subsector during the last 15 years. Chapter III concentrates on the economics of irrigation. It examines the economic returns on past and future irrigation expenditures and gives guidelines on what should be done with existing projects including the incomplete ones. Economic threshold costs are calculated for guidance in future policies and decisions for developing irrigation. In chapter IV an outline of a 1/ The mission comprised L. Campbell (Agronomist and Mission Leader), D.D. Taneja (Irrigation Engineer), R. Lamdany (Economist) and R. Janakiram (Consultant). The counterpart GIDA task force comprised K. Wiafe (Dep. Chief Executive - Engineering), M.K. Afram (Dep. Chief Executive - Agronomy), D.A. Uhemeng (Sr. Agronomist), H. Torbor (Sr. Engineer), and F. Hughes (Head - Accounting).  2- strategy is suggested to deal with the weaknesses of irrigation in the short to medium term. Background and supporting Information are expanded in annexes, starting with a general overview of the economy and the agricultural sector in Annex I. II. THE DEVELOPMENT OF IRRIGATION A. The Physical Environment 2.01 Land. Agricultural land is not scarce in Ghana. The total area is 23825 thousand km (23.8 million ha), with a population density of 50 per km . About 10 million ha are regarded as cultivable. Presently only about 3.0 million ha are under cultivation, of which about 7,000 ha (0.07% total cultivable area) are irrigated. Details are given in Annex II-A (of irrigation projects completed as well as ongoing). 2.02 Topography. Although the topography presents no serious impediment to rainfed agriculture, much of the land area is not sufficiently flat or uniform for extensive low cost irrigation, except in the valley bottoms served with perennial rivers and streams. Where energy is available, use of sprinkler systems could be an acceptable option on sloping and more irregular land without the need for major surtace smoothing or grading. 2.03 Climate. The climate is favorable for rainfed agriculture in only some parts of the country (see pars 2.04). It is characterized by distinct wet and dry seasons which are governed by the fluctuating position of the Inter-Tropical Convergence Zone. The mean annual temperature ranges from 26