Zambia - Fisheries Development Project

Document Of The World Bank FOR OMCIAL USE ONLY Repot No. 12563 PROJECT COMPLETION REPORT ZAMBIA FISHERIES DEVELOPMENT PROJECT (CREDIT 1529-0-ZA) NOVEMBER 30. 1993 MICROGRAPHICS Report No: 12563 Type: PCR Agriculture and Environment Division South Africa Department Africa Regional Office Tbis document has a restiicted distribution and may be used by recipients only in toe performance of their official duties. Its contents may not otherwise be disclosed without World Ban;k authorization.  ZAMBIA FISHERIES DEVELOPMENT PROJECT (Cr 1529-0-ZA) CURRENCY EQUIVALENTS 1984 (Aug.) US$ 1.0 ZK 0.63 1985 US$ 1.0 ZK 0.1754 1986 US$ 1.0 ZK 0.0787 1987 US$ 1.0 ZK 0.1250 1988 US$ 1.0 ZK O.1000 1989 US$ 1.0 ZK 0.0462 1990 US$ 1.0 ZK 0.0234 1991 US$ 1.0 ZK0.0112 1992 US$ 1.0 ZK 0.0042 1993 (Feb.) US$ 1.0 ZK 0.0028 WEIGHTS AND MEASURES Metric System GOVERNMENT FISCAL YEAR January 1- December 31 ABBREVIATIONS AFC Agricultural Finance Company BOZ Bank of Zambia DCA Development Credit Agreement DOF Department of Fisheries FAO/CP FAO/World Bank Cooperative Programme FRR Financial Rate of Return GDP Gross Domestic Product GRZ Government of the Republic of Zambia LB Lima Bank MAFF Ministry of Agriculture, Food and Fisheries MOF Ministry of Finance PCU Project Coordination Unit PrA Preferential Trade Area ZADB Zambia Agricultural Development Bank  FOR OFFCICUL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.SA. Oflbs of DOiretar4mror opw_Ua EvwuaUu November 30, 1993 MEMORANDUM TO THE 2EXCUTIVE DIRECTORS AND THE PRESIDENT Subject: Project Completion Report on Zambia FLsheries Development Project (Credit 1529-ZA) Attached is the Project Completion Report on Zambia - Fisheries Development Project (Credit 1529-ZA) prepared by the FAO/CP for the Africa Regional Office, with Part II contnrbuted by the Borrower. The report highlights numerous implementation difficulties. Implementation was hampered by two periods when disbursement to the Borrower was suspended on country grounds, for a total of over four yeas The Bank closed the project after a one-year extension and canceled 75 percent of project fiuns The credit component for arianal fishermen reached about 24 percent of target population, but the bacldog in delivery on approved loans and a repayment rate below 50 percent put its sustainability in doubt The rehabilitation of the Department of Fisheries programs was partially achieved. Achievement of other components (fish collection and marketing, import of raw material and spare parts for manufacturing fishing nets, monitoring and evaluation) was nil or minimia Accordingly, the project outcome is rated as unsatisfactory, sustainability as unlikely and institutional development as partiaL. The project objectives were in line with country and Bank priorities However, project design misjudged the institutional and managerial capabilities of the implementing agencies, and underestimated the financial problems of the credit institution. The marketing component focussed on large-scale operators, who did not apply, ignoring a strong demand by smaller entrepreneurs The report describes some improvement in fishing techniques, but data on production and income changes are not available. The PCR is satisfactory and no audit is planned at this time. Attachment This documnt has a restricted dstribution and may be used by rcipients only in the perfoama of tir offleli duties. Its contents may not otherwise be disclosed witout World BSank authorzation.  FOR OmCIAL USE ONLY PROJECT COMPLETION REPORT ZAMBUA ISHERS DEVELOPMENT PROJECT TABLE OF CONTENTS PREFACE ............................................ i EVALUAION SUMMARY .............................................. PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE . .1.......... 1. Project Identity ............................................. 1 2. Background ..................................................1 Introduction ............................................ 1 3. Projec Objectives and Description ...................................... 2 ProjectObjectives .......... 2 Project Description .......... 2 ProjectCostandF nFncing ........................................ 3 4. Projea Design and Oranaon ....................................... 3 5. Projecta ............................................ 3 Credit Effecdveness and Project Start-Up .......... ..................... 3 Fisheries CreditLima Bank . ....................................... 4 Improved Management of Fish Resources ............ ................... 5 Foreign Excange Assistance to Net Manfacurer (Nlkwazi) ...... ............. 6 Project Coordit ........................................... 6 Project Costs and Disburse t . .................................... 6 6. Project Results and Inpact ........................................... 7 Genea ................................... 7 Financla and Economic Returns ........................ 8 7. Sustaimbility ................... 8 8. BankPerftmance ..................... 9 9. Borrower's Perfrmace ....... ................................... 10 10. Project Retonship ................... 11 This document has a restricted distribution and may be used by recipients only In the performance or thdir offcial dutbs. Its contents may nnt nthnwwb.e be ,fuicleso withrnit Wott4d Rank anhudion,ai  11. Co nsultancySServices .....ei..... .................. 11 12. Proea Dom tond Dat. . .. . ..a . . . 11 PART 11: PROJECT REVIEW FROM THE BORROWER'S PERSPECETVE. 12 PART II: STATISTICAL INFORMATION . 18 TABLES 1. Related Bank Loans and/or Credits . 18 2. Proottble.tT.ble. 19 3. CreditDisbursement .20 4. Project.plementat.on 21 5. Project Cost and Financing ............... I ........................ 23 6. Project Results .25 7. StatusofCovenants .26 8. Use of Bank Resources ........................... 29 ANNEX .. 30 1. Lima Ban Limited (Tables 1 to 3) .30 PROJECT DATASHEET ..33  PROJECT COMPLETION REPORT ZAMBIA FIShERIES DEVELOPMENT PROJECT (Cr 1529-0-ZA) PREFACE This is the Project Completion Report (PCR) for the Zambia Fisheries Development Project, for which Credit 15294-CZA in the amount of SDR 7.1 million (US$ 7.1 million) was approved by IDA on 27 October 1984. The credit became effective on 16 August 1985. Originally expected to be implemented over a five-year period, the credit was actually closed, after a one year delay, on 31 December 1991. However, because of suspension of withdrawal rights for reasons which cannot be attributed to the project, actual project implementation lasted only 2 years. Actual disbursement totalled SDR 1.5 million (US$ 1.8 million), or approximately 21% of the originally approved credit amount. The last disbursement was made on 13 March 1991. Parts I and m of the PCR were prepared by the FAO/World Bank Cooperative Programme (FAO/CP) for the Southern Africa Department (AF6AF) of the World Bank. Part II has been prepared by the Borrower. Preparation of the PCR was started during a visit to Zambia by a team from FAO/CP in January 1993, and is based, inter alia, on information gathered in Zambia, discussions with project staff and officials of the Ministry of Agriculture, Food and Fisheries (MAFF), the Ministry of Finance (MOF), the Department of Fisheries (DOF) and the Lima Bank (LB). The report also takes into account information and data gathered from the Staff Appraisal Report, the Development Credit Agreement, Project Agreement, Supervision Reports, correspondence between IDA and the Borrower and internal IDA memoranda. i  ZAMBIA FSHERIES DEVELOPMENT PROJECT (Cr 1529-0-ZA) EVALUATION SUMMARY Objectives The project was the Bank Group's first lending operation associated with the Zambian fisheries sector. The project, approved in October 1984, was to support the Gove:nment's efforts in expanding fish production, marketing ari distribution systems through extension of credit to private fish producers and marketing entities. Further support to these objectives was to be secured through the provision of foreign exchange for importing raw materials and machinery spares required to manture fishing nets; technical assistance to the Zambia Agricultural Development Bank (ZADB) and to the Department of Fisheries (DOF), and monitoring and evaluation. Inplementation Experience The project was originadly scheduled to be completed by 31 December 1989 after an implementation period of five years. However, due to some initial delays and to the suspension of withdrawal rights for a cumulative period of about 4.5 years (para 5.10), actual project implementation lastd for only 2 years. The credit component of the project was originaly designed to be implemented by ZADB. However, based on the recommendaions of a study carried out by the Government, ZADB was merged with the Agricultural Finance Company (AFC) to form LB in 1986. Overall, the progress on the credit component was less than satisfactory. Only arfisanal fishermen have been able to utilize credit facilities under the project. About the equivalent of US$ 0.6 million, or 60% of the SAR lending target, has been achieved. Of the total amount allocated for importation of raw material and spare parts for machinery, only a minimum amount has been utilized because of a misunderstanding between MAF? and the Nlcwazi Net Manuf r Company on the methodology related to acquiring the necessary foreign exchge. Ihe funds provided for establishing fish processing and marketing facilities around Lakes Mweru Luapula and Mweru Wantipa, and for transport boats on Lake Kariba, were never utilized. DOF's rehabilitation programme has been ca!ried out satisfactorily and included the rehabilitation of boats, engines, vehices, workshops, training centers and procurement of new boats, engines, vehicles, generators and radio communication equipment. In almost all cases SAR targets have been achieved or exceeded, resulting in increased mobility of DOF staff and better conta between DOF field staff, fishermen communities and the LB. Of the 11.5 person-years of foreign training provided under the project, 8.3 man-years have been used. All trainees have returned to the country and have taken over various responsibilities within iii  DOF. The balance of 3.2 man-years could not be utilized due to the suspension of IDA disbursement. 'Te project had financed 58 group training courses and workshops involving around 1,200 fishermen and fish scouts. A number of fishermen on Lake Tanganyika, as well as DOF extension staff, have been trained in lift net fishing, a technique successfully introduced to this lake by the master fisherman recruited under the project. Results of this training have been very positive, and a number of fishermen have switched from beach seining to lift net fishing. This initiative has a sustaLiable impact on the subsector. Hiring of consultants to carry out the fish stock assessment programme did not take place as contracts could not be negotiated and concluded before 1 May 1987, the day the withdrawal rights were suspended. The present structure of the Project Coordination Unit (PCU) is as agreed at appraisal. However, some of the organizational weaknesses that are apparent at present arise from the fact that the PCU works directly under DOF, which is one of the beneficiaries, and not direcdy under MAFF as designed at appraisal and considered as a covenant within the Development Credit Agreement. Project Results and Impact It is difficult to evaluate the real impact made by the project on fish production and fishermen's incomes due to absence of any records. According to Government statistics, the fish production in Lake Tanganyika, which received the most number of boats, engines and nets under the project, increased from around 12,900 tons in 1986 to 15,400 tons in 1990. This increase can be said to be partly due to the project. An important achievement of the project was the successful introduction of lift net fishing to Lake Tanganyika. Results of this TA have been encouraging since a umuber of fishermen have upgraded their operations by venturing into off-shore lift net fishing and achieving higher productivity, and many more can be expected to gradually adopt that technology. The mission was not able to carry out the ex-post economic re-evaluation of the project because of lack of data. The establishment of a monitoring system, responsible to evaluate the impact of the project on fish production and on fishermen's income, never materialized. Sustainability There is no uniform answer to the question of project sustainability. The lift net fishing technology , which was introduced under the project is clearly sustainable. However, some of the project activities were not completed (credit) and some others never materialized (fish stock assessment programme and assistance to Nkwazi Net Manufacturing Company). With regard to credit, LB's financial r bsources remain inadequate to service the considerable mber of fisheries loan applications received so far but not yet approved. The Iadequacy of LB financial resources is further aggravated by the low loan recovery rate which, in the case of fisheries loans, has not yet exceeded 50%, a recovery rMe which cannot support a suswinable credit operation. However, the new government plans to refonn the financial sector institutions, including the LB, and this will Improve sustainability of credit operations. As far as DOF is concerned, its rehabilitation programme was carried out satisfictorily and this permitted increased mobility of DOF staff during the project life. However, it is doubtful whether the rehabilitated facilities will be put to optimum use in the future because Government budget allocation is still insufficient to cover the operating expenses of DOF's regular activities. Some of its work programmes have been curtailed or cancelled for want of operaing finds. iv  Lessons Learned The main lessons to be derived from the implementation of the project are the following: (i) Appraisal should have taken into consideration the institutional weakness of aU the participating agencies. LB, which was organizationally weak and called upon to play a new role, was without any institutional support, other than provision for a credit specialist, who proved to be very unsatisfactory; (ii) Lack of understanding of the roles and responsibilities of the participating agencies, which led to delays in project implementation, in procurement, and rational use of external finance. A workshop, widt the participation of agencies and Bank staff, soon after the project became effective, would undoubtedly have provided an adequate solution; (iii) The Bank should have been more forcefil in convincing the Government to locate the PCU (as foreseen in the DCA) in MAFF and not in DOF, which was a beneficiary under the project; (iv) More flexibility should have been allowed in the proiect design to enable LB to lend also to small-scale enterprises or individuals willing to invest in various marketing activities instead of considering only large-scale operations, as envisaged at appraisal; and (v) The need to have a strong central project coordinating unit with clearly stated responsibilities and authority, particularly when several ministries and agencies are involved in project implementation. v  PROJECT COMPLEIMON REPORT ZAMBIA FISHERIES DEVELOPMENT PROJECT (Cr 1529-0-ZA) PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE 1. Project Identity Project Name Fisheries Development Project Credit No. Cr 1529-0-ZA RVP Unit AF6AG Country Republic of Zambia Sector Fisheries 2. Background Introduction 2.1 Zambia has substantial fish resources in its lakes, swamps, rivers and flood plains scattered throughout the country. Major fishing areas include Lakes Tanganyika, Mweru Luapula, Mweru Wantipa, Bangwoulu and Kariba. Fish production averaged 53,000 tons p.a. during 1975/81. Nearly all fish producing areas are at a considerable distance from the main markets of Lusaka and the Copperbelt. Fish represents an important source of protein for a large segment of Zambia's population and is consumed mostly in dried form. National consumption peaked at about 73,000 tons in 1971, of which 21,000 tons were imported. The development of fishing in Zambia was severely constrained by factors which included insufficient financial resources, uneconomic Government-controlled prices, ineffective marketing arrangements, deficient transport and inadequate storage facilities. 2.2 Zambia's economy has been traditionally dependent on the mining industr3 which in the 1980s accounted for about 30% of GDP and over 90% of the country's foreign exchange earnings. With the drastic fall in export earnings as a result of declining world copper prices and decreased production, the Government consequently adopted a policy of diversifying the economic base, with increased emphasis on agriculture and agro-based industrial development. It is against this background that IDA responded 1  to a request from the Government of Zambia for assistance in financing a project to improve the fisheries sub-sector productivity. 2.3 The project originated from Bank reconnaissance survey of Zambia's agro-industries in June 1978. Project identification and preparation were carried out by FAO/CP in 1979 and in 1983 respectively. Most of the initial preparatory work, including site investigations, detailed plans, Including Xn engineering designs and fish marketing study, was carried out by consultants financed from a technical assistance credit to the Government. Project appraisal was carried out by the World Bank in January/February 1984. The IDA credit was successfully negotiated and the Credit Agreement signed on 9 January 1985, becoming effectivL on 16 August 1985 (Para. S. 1 and Part III, Table 2). 3. Project Objectives and Description Project Objectives 3.1 Goverment interest in a fisheries development programme was a reflection of the new concern fbr smallholder production as a means to achieve self-sufficiency. The objectives of the project were to support the Government's efforts in better managing the fish resources and in expanding fish production, marketing and distribution systems through extension of credit to private fish producers and marketing entities and through technology transfer. Further support to these objectives was to be secured through the provision of foreign exchange for importing raw materials and machinery spares required to manufacture fishing nets and technical assistance to ZADB and to DOF. Project Description 3.2 Specifically, the project was to provide for: (a) a progmme of short and medium-term credit for the procurement and distribution of boats, engines and nets, and the setting up or improvement of collection and marketing facilities, to be administered by ZADB, which was to receive management and technical assistance; (I)) foreign exchange assistance to the net manufacturing company to procure raw materials for nets and essential spare parts for machinery; (c) fadlities and technical assistance to DOF to strengthen its role in providing training and extension services to artisanal fishermen and in carrying out research and studies to determine fish biomass and maximum sustainable yields of fishing areas covered by the project; and (d) coordination, monitoring and evaluation of the project. 2  Project Cost and Financing 3.3 The project was scheduled to extend over a period of five years, starting from 1984185. Project cost was estimated at US$ 10.6 million and financing included an IDA credit of SDR 7.1 million ((JS$ 7.1 million) and a Government and sub-borrower contribution of SDR 3.5 million (US$ 3.5 million). 4. Project Design and Organization 4.1 The project was conceived as the first stage of a long-term programme to develop the fisFeries sub-sector in Zambia, and was designed to introduce some innovative features to support Government efforts to improve the exploitation of existing fisheries resources within the limits of maximum sustainable yield and promote the development of inland fisheries. On the evidence that very minuscule amounts of institutional credit were made available in the past to the fisheries sub-sector, the program, including short aad medium-term credit, was particularly designed to support the fishermen and private companies involved in fish production and marketing activities. 4.2 Overall responsibility for management and implementation of the project was given to MAFF. Responsibility for implementing the credit programme was envisaged to rest with ZADB, under the supervision of MAFF. To assist ZADB's management for successful implementation of the credit component, the project provided for an internationally-recruited fisheries credit specialist. The Bank of Zambia (BOZ) was entitled to administer the foreign exchange financing of materials and machinery spares required for the net manufacturing company. DOF was to procure and utilize the facilities and technical assistance to improve its role in the management of fish resources. Finally, a PCU, headed by a project coordinator, was to be established in MAPF, directly reporting to the Permanent Secretary of MAPF, to coordinate all project activities and carry out monitoring and evaluation of the project. S. Project Implementation Credit Effectiveness and Project Start-Up 5.1 The credit was signed in January 1985, but only became effective in August 1985. The gap of eight months was due to delays by Government in appointing the Project Coordinator and the Credit Specialist, which were conditions for credit effectiveness, and to the late execution of a financing arrangement between the Govermnent and ZADB to provide sufficient equity capital to make ZADB operational. The Government eventually provided an amount considerablyless than ZADB's capital requirements. The country's overall budgetary squeeze, caused by falling revenues and rising debt repayments, was given as the reason for the delay, as well as for the short-fall in the agreed equity contribution. The initial delays in the start up of project implementation were also due to misunderstandings between the institutions and agencies involved in project implementation as to their respective roles and responsibilities. The ielationship between DOF and ZADB was not in the best interests of the project, and the Government decision to locate the PCU in the DOF and not in MAFF as agreed at appraisal and loan negotiations (para 5.9) did not prove to be the best arrangement for project implementation. A Government decision to merge ZADB with AFC to form the new LB generated institutional and organizational issues, which caused uncertainties among ZADB staff directly involved in the project thus bringing the activities virtually to a halt. Other factors that contributed to delays were 3  the lack of land and water transport to enable LB loan officers to visit fish landing sites, and the difficulties encountered in establishing the sub-zonal offices in the project area, due to lack of accommodaion, transport facilities and operating funds. The project was originally scheduled to be completed by 31 December 1989 after an implementation period of five years. However, due to the above-mentioned initial delays and to the suspension of withdrawal rights (para 5.10), actual project implementation lasted ordy 2 years, indicating an overall project implementation rate well below SAR estimates. There were, as a consequence, a number of variations between planned and actual implementation, the most important of which are reviewed in this section. These changes are schematically presented in Part M1, Table 4, where a comparison with SAR targets Is made. However, for the purpose of this PCR, project implementation by component is described below. Fisheries Credit/Lima Bank 5.2 During project preparation in 1983 it was proposed that AFC be the lending institution under the project. This recommendation was mainly influenced by the fact that AFC had a branch network to handle credit in remote fishing areas and that other commercial banks were unwilling to expand lending to artisanal fisherme... On the other hand, the appraisal mission's evaluation of AFC in 1983 confirmed that this institution was beyond redemption and could not be entrusted to administer the credit under the project. Instead, it proposed the newly established ZADB. At the same time, the Government had confirmed that ZADB was intended to gra&kally replace AFC and would eventually be the primary institution for lending to the agricultural sector. The Bank, after seeking furher clarification from the Government on the funding of ZADB to make it fully operational, decided that the credit under the project would be channelled through ZADB. Accordingly, ZADB became a party to the Development Credit Agreement. At the same time, Government undertook a study, through consultants, for the phasing out of AFC. Based on the recommendations of this study, ZADB was merged with AFC to form LB in September 1986. LB started operations in June 1987. 5.3 Credit was made available to artisanal fishermen for the purchase of nets, boats and engines, to commercial fishermen for the purchase of transport boats, and to individuals or companies to set up integrated fish processing and distribution facilities. Overall, the progress on the credit component was less than satisfactory. Only artisanal fishermen have been able to utilize credit facilities under the project. About the equivalent of US$ 0.6 million, or 60% of the SAR lending target, has been achieved (Annex 1, Table 1). In spite of the fact that IDA disbursement totalled only about US$ 0.2 million becaure of the Bank suspension of disbursement to Zambia in 1987, LB continued to provide credit financing to artisanal fisheries using its own resources, to the equivalent of US$ 0.4 million. During the period 1986/87- 1991/92 LB disbursed a total of 764 loans, of which 492 were short-term, for the purchase of nets, and 272 medium-term for boats and engines (Annex 1, Table 2). The response for credit from the artisanal fishing community has been very encouraging. By mid-1991, another 477 loan applications had been approved bjt LB, but were not disbursed because of liquidity problems. A large number of loan applications, from the project area totalling some ZK 290 million (m 1991 terms), were pending awaiting processing (Annex 1, Table 3). About 300 of these applications were received by LB for lift net fishing, a technique successfully introduced through technical assistance provided under the project. 5.4 The funds provided for establishing fish processing and marketing facilities around Lakes Mweru Luapula and Mweru Wantipa, and for transport boats on Lake Kariba, were never utilized. The proposed processing facilities were originally designed to handle a quarter of the fish landed at the two lakes in the North. The funds provided for these facilities were never utilized, however, because the project design was for large and integrated facilities, whereas the demand was for small to medium-size 4  facilities at landing sites and at the points of sale. In spite of repeated publicity given to this scheme, there has been only one proposal, which, on further evaluation, was found to be unviable because of very high investment required (imported equipment and machinery), high interest rates and short repayment period. At an early stage in project implementation, a decision should have been taken to keep this component flexible to finance the real needs of the marketing system. Specific demand appeared to be separate for small ice plants, chill stores, insulated and refrigerated trucks and cold cabinets, etc. Funds for fish transport vessels for Lake Kariba commercial flshermen were also unutilized. At appraisal the demand was seen as only for 5 transport boats for those commercial fishermen or companies operating a number of fishing rigs from the distant islands in the lake. By the time the project became operational, the rig owners who needed the boats had purchased these through other sources of funding. Improved Management of Fish Resources 5.5 This component was designed to strengthen DOF by the provision of facilities, operating funds, management and technical assistance, to better assess and manage the country's fish resources. With the exception of the fish stock assessment program, good progress has been made in the implementation of this component. DOF's rehabilitation program has been carried out satisfactorily and included the rehabilitation of boats, engines, vehicles, workshops, training centers and procurement of new boats, engines, vehicles, generators and radio communication equipment. In almost all cases SAR targets have been achieved or exceeded ('able 4), resulting in increased mobility of DOF staff and better contact between DOF field staff, fishermen communities and the LB. Work of the field staff can now be closely monitored from the headquarters because of improved communication. Because the project provided operating funds, the budgetary constraints which had been a major deterrent for DOF's planned activities, as reflected in the credit agreement, were to some extent lessened. 5.6 Of the 11.5 years of foreign training provided under the project, 8.3 man-years have been used so far as against 6.5 man-years at the time of suspension. Two candidates have completed a fisheries management course leading to a first degree, while one received training in fish stock assessment, leading to a post-graduate degree. Twelve senior and middle-level managers have undertaken short-term courses in fishing technology and ia management. All trainees have returned to the country and have taken over various responsibilities within DOF. The balance of 3.2 man-years could not be utilized due to the suspension of IDA disbursement. On group training of flshermen, up to the end of 1989 the project had financed 58 training courses and workshops involving around 1,200 fishermen and fish scouts. Some 3,600 man-weeks still remain unutilized due to lack of funds. A number of fishermen on Lake Tanganyika, as well as DOF extension staff, have been trained in lift net fishing, a technique successfully introduced to this lake by the master fisherman recruited under the project. Results of this training have been very positive, and a number of fishermen have switched from beach seining to lift net fishing. Lift net fishing in Lake Tanganyika has been demonstrated to be a viable fishing activity and also poses less risk to the environment than beach seining (para 6.2). 5.7 The project was to finance a fish stock assessment specialist and a limnologist each for 36 months to assist the DOF in assessing fish biomass and establishing safe yields for selected lakes in the country. It was envisaged that these specialists would also set up a mechanism for a continuous fish stock assessment program for better management of the fish resources in the country's lakes. The PCU received over 100 applications from individuals and firms for these two positions, but certain deficiencies observed in the evaluation of these applications led IDA to request the Government for a re-evaluation and to select a firm rather than separate individuals so as to avoid problems of coordination and management. Hiring of the selected firm, however, did not take place as contracts could not be negotiated and concluded 5  before 1 May 1987, the day the withdrawal rights were suspended. Perhaps an experienced firm could have been selected in the first round if DOF had been provided with adequate guidance in the evaluations and a contract signed before withdrawal rights were suspended, in which case this assessment work could have been completed. While assistance for stock assessment in some of the lakes has now been provided by other donors, it is difficult to say whether the objectives and results envisaged under the project will be achieved under these ongoing donor-funded activities. Foreign Exchange Assistance to Net Manufacturer (Nkwazi) 5.8 To safeguard against the fishing industry finding itself with a grossly inadequate supply of fishing gear, provision was made under the project to provide the local manafacturer of nets with foreign exchange to meet some of its raw material and spare part needs. Of the US$ 1 million allocated for importation of raw material and spare parts for machinery, only US$ 60,000 have been utilized because of a misunderstanding between MAFF and the Nkwazi Net Manufacturing Company on the methodology related to acquiring the necessary foreign exchange. However, even if adequate raw material had been made available, the company would still have been faced with serious difficulties in coping with the planned production targets because of its old and outdated machinery. In fact, the rehabilitation program of the company, to be financed out of its own funds, and aiming at replacing the existing obsolete machinery, was never implemented because of lack of foreign exchange. As a result, frequent breakdowns of the machinery have been experienced during the past few years. It was for this reason that the WB- FAO/CP review mission in 1991 (para. 5.10) strongly recommended supporting the new rehabilitation program of the company, since a major breakdowns in the factory would have adversely affected the entire fishing industry in Zambia. Project Coordination 5.9 The present structure of the project coordination unit is as agreed at appraisal. Some of the organizational weaknesses that are apparent at present arise from the fact that the PCU works directly under DOF, which is one of the beneficiaries, and not directly under MAFF as designed at appraisal and considered as a covenant within the Development Credit Agreement. The expatriate project coordinator's contract ended in mid-1988 as extension of his contract was not possible because of the suspension of IDA disbursements. The limited activities carried out since then were under the supervision of the co-project coordinator and senior accountant. From January 1991 the senior accountant assumed full responsibility for project coordination and accounting as the co-project coordinator left to join the Preferential Trade Area (PTA). The project also provided for 9 man-months of consultancy services for setting up and implementing a project monitoring and evaluation system. These consultancy services were never utilized, for reasons given in para 5.7. Project Costs and Disbursement 5.10 The final cost of the project is estimated at US$ 3.4 million, or 32.3% of SAR estimates (Part m, Table 5). Credit disbursement lagged considerably behind SAR estimates, averaging throughout the project life about 15% of the amount expected to be disbursed. The last disbursement was made in March 1991, when the total amount had reached only US$ 1.8 million (SDR 1.5 million), representing 25.5% (if expressed in US$) or 20.6% (if expressed in SDR) of SAR's esfimates (Part m, Table 3). In May 1987, the project faced a finding constraint because of the suspension of withdrawal rights under 6  all IDA Credits, for reasons external to the project. This suspension was lifted in March 1991, and re- imposed in September 1991, lasting until January 1992 for a period of about 4.5 years. Project Completion 5.11 After the lifting of disbursement suspension, a review of the project was canried out in October 1991 jointly by a World Bank and FAOICP mission. As a result, the review mission recommended a 2-year extension of the project on a year by year basis. However, that recommendation was further reviewed by the World Bank following the elections and the change in government. Consultation with the Bank Office in Lusaka and the Govermnent made it apparent that the overall performance of LB, the key implementing agency, had deteriorated and that the agency's unsustainably low loan recoveries and its non-compliance with audit covenants made it impossible to continue using it as a viable implementing agency. It was therefore decided not to extend the closing date of the project beyond 31 December 1991 and to cancel the remaining undisbursed balance of SDR 5.6 million. 6. Project Results and Impact General 6.1 It is difficult to evaluate the real impact made by the project on fish production and fishermen's incomes due to absence of appropriate records. The project was to set up a monitoring and evaluation unit, assisted by an expatriate specialist, primarily to assess the impact of the project on fish production, fishermen's income and on the national institutions. As mentioned in para 5.9, the consultancy services to set up the monitoring system were not used and no further work was done by the PCU after suspension of IDA disbursements. According to Government statistics, the fish production in Lake Tanganyika, which received the most number of boats, engines and nets under the project, increased from around 12,900 tons in 1986 to 15,400 tons in 1990. This increase can be said to be partly due to the project, which supplied a large number of nets to this fishery during the period. The production in this lake dropped to around 14,200 tons in 1991, which could possibly be due to the inability of LB to provide for the replacements of old nets, because of liquidity constraints. 6.2 An important achievement of the project was the successful introduction of lift net fishing to Lake Tanganyika. Results of this TA have been encouraging and a number of fishermen have upgraded their operations by venturing into off-shore lift net fishing and achieving higher productivity. This technique is gradually replacing beach seine fishing, a method which causes damage to nursery grounds and juvenile stocks (para 5.6). 6.3 A number of DOF staff received training abroad on management and fish stock assessment. They have returned to the country and assumed responsible positions in the department. Up to 1989, the project also trained around 1,200 fishermen and extension staff. Ovorall, the institutional strengthening component has provided DOF with better equipment, and has brought about improved communication between headquarters and district offices and mobility of field staff. 7  E1luandal and Economic Returns 6.4 The financial analysis carried out at appraisal included the Financial Rates of Return (PRR) for various activity models, including plank and GRP boats, engines, gill nets, as well as for a typical center to engage in collection and marketing operations. Relative FRR's were estimated to range from 40% (collection and marketing facilities) to over 100% (gill nets). As described in para 5.3, and according to data provided by LB on short and medium-term loan disbursement, funds provided under the project were only used to procure 48 plank boats, 224 outboard engines and some 13,400 units of gill nets (Annex 1, Table 2). However, it was not possible to carry out, ex-post, the financial analysis for these activities because of lack of data. The establishment of a monitoring system, which as envisaged under the project would have also included the colleion of data on fish production and operating costs, was never implemented (para 6.1). It can only be reported that both DOF and PCU have verbally emphasized that the introduction of boats for off-shore lift net operations in Lake Tanganyika has been very satisfactory. 6.5 The SAR estimated the Economic Rate of Return (ERR) for the project as a whole at 26%. As repeatedly mentioned in this PCR, project implementation has been negatively affected by the suspension of withdrawal rights for reasons which cannot be attributed to the project. Under these circumstances, an ex-post economic analysis with the objective of re-evaluating the ERR of the project would have produced a misleading judgement on overall project performance. However, the mission was not in a position to make any attempt to work out an economic re-evaluation of the project because of lack of data (para 6.4). 7. Sustainability 7.1 As indicated, some of the project activities were not completed (credit) and some others never materialized (fish stock assessment program and assistance to Nkwazi Net Manufacturing Company). The lift net fishing technology, which was introduced under the project (para. 5.6) is clearly sustainable. With regard to credit, LB's financial resources remain inadequate to service the considerable number of fisheries loan applications received so far but not yet approved (Annex 1, Table 3). The credibility of LB in the eyes of the rural fishing community has therefore somewhat damaged. The inadequacy of LB financial resources is further aggravated by the low loan recovery rate which, in the case of fisheries loans, has not yet exceeded 50% (the data does not permit separation between short- and medium-term loan recoveries). These are indications that LB's credit operations are unsustainable. However, improving the delivery of credit was not a project objective. The investments financed were profitable and resulted in sustainable increase in production. 7.2 As far as DOF is concerned, its rehabilitation program was carried out satisfactorily and this permitted increased mobility of DOF staff and improve coordination of DOF activities during the project life. However, it is doubtful whether the rehabilitated facilities will be put to optimum use in the future because Government budget allocation is still insufficient to cover the operating expenses of DOF's regular activities. Some of its work programs have been curtailed or cancelled for want of operating funds. 8  8. Bank Performance 8.1 This was the first World Bank-supported project in the fisheries sector in the country. The project was prepared by consultants and by FAO/CP under a WB technical assistance credit to GRZ. Adequate resources were provided by the Bank during the various stages of project preparation, and Banks performance during project appraisal and post appraisal was generally satisfactory. However, it had some shortcomings, mainly related to institutional arrangements during project implementation, and the inflexibility in the proposed credit financing. On the institutional aspects, appraisal did not take into consideration adequate support to ZADB for the new role it was called upon to play. It was over- optimistic to expect that ZADB, which later merged with AFC to form LB (para 5.2) already with severe organizational and financial weakness at the time of appraisal, would increase its level of activities without additional staff training, land and water transport, accommodation and initial operating expenses for the new sub-zonal offices to be established to service the fishermen. Appraisal expectations that credit could be disbursed to the private sector to set up a large fish marketing complex never came to fruition as the actual demand was for small facilities. The project design in this respect was not flexible enough to make the changes during the early stages of implementation. Changes proposed later could not be implemented because of IDA suspension of disbursement. 8.2 The project was supervised on 9 occasions during the period February 1985 to July 1992. Of this, 4 supervisions were carried out prior to suspension of withdrawal rights imposed on all IDA credits in May 1987. In the interval between the suspension from May 1987 to July 1992 there were 5 supervision missions, the last two being mainly to review the status of the project in the context of the financing impasse created by the continued suspension by World Bank of the disbursement, and on formulation of an accelerated implementation program following anticipated lifting of the suspension of disbursements. During the initial stages the Bank supervisions were regular, the first two devoted mostly to follow-up on outstanding issues raised during negotiations and on conditions for project effectiveness. Bank performance in the early stages of the project was very satisfactory. In fact, it helped the various inplementing agencies to resolve their misunderstandings on project coordination, financing, etc., provided guidelines and advice on the roles and responsibilities of each agency, and on procurement, and assisted in initiating start-up of project implementation. However, during the period of suspension, the missions had little or no impact because the Government was unable to implement any recommendations without IDA and Government funds. 8.3 Concerted efforts were made by the missions to expedite both the overseas training aspects and local training, which had positive results on DOF's regutar activities, resource management and on the introduction of viable fishing methods (para 5.6). There were, however, some deficiencies. Given the wealness of DOF and the PCU, the Bank should have provided some assistance in the evaluations for the TA positions for stock assessment and monitoring and evaluation. The first evaluation done by DOF/PCU had some shortcomings (para 5.7). This delayed the recruitment process and contracts could not be concluded in time to be eligible for financing prior to suspension of disbursements in May 1987. Efforts made by the Bank to have the PCU located in MAFF and under the responsibility of the Permanent Secretary, as provided in the DCA, never materialized: instead it was, defacto, placed under DOF. ITis covenant continued to be in default and project coordination was to some extent influenced by DOF. 8.4 From the Bank's point of view the lessons which can be learned include the following: (1) Appraisal should have taken into consideration the institutional weakness of all the participating agencies. While appraisal provided for the strengthening of DOF, the Lima Bank, which was organizationally weak and called upon to play a new role, 9  was without any institutional support, other than provision for a credit specialist, who proved to be very unsatisfactory (para 8.1). (ii) Lack of understanding of the roles and responsibilities of the participating agencies, which led to delays in project implementation, in procurement, and rational use of external finance. A workshop, with the participation of agencies and Bank staff, soon after the project became effective, would undoubtedly have provided an adequate solution. (iii) The Bank should have been more forceful in convincing the Government to locate the PCU (as foreseen in the DCA) in MAFF and not in DOF, which was a beneficiary under the project (para 5.9). This would have made project coordination stronger and more effective. (iv) More flexibility should have been allowed in the project design to enable LB to lend also to small-scale enterprises or individuals willing to invest in various marketing activities instead of considering only large-scale operations, as envisaged at appraisal. This is evidenced by the fact that only one loan application was received by LB to finance such a large-scale marketing operation (para 5.4). 9. Borrower's Performance 9.1 It is very difficult to make a sound judgement of the borrower's performance because the project was, in effect, implemented over a period of less than two years. The Government had a strong commitment to the project, as evidenced by the fac that in spite of severe budgetary constraints, some Government fimds were provided for limited activities in order to keep the project alive during the period of suspension. Being the first World Bank-funded operation executed by DOF and LB, the staff were initially unfamiliar with Bank procedures related to recruitment of consudants, contract negotiations and procurement. There were also delays in the procurement of equipment and engines because of time- consuming bureaucratic procedures for approval of contracts. Further delays were experienced in the staffing of the PCU, the LB fisheries credit unit, and the sub-zonal offices, which led to poor record- keeping and accounting, and delayed auditing. Apart from the audit covenant, no other covenants were in default. The closing date of the project was not extended because the performance of the LB, one of the key implementing agencies, had begun to deteriorate and it continued to be in non-compliance with the audit covenant. Progress reporting was regular, also during the period of suspension, and the borrower established a project coordinating committee which regularly met and monitored project progress. Ihe main lessons of experience other than those outlined under Bank performance are: (i) The need to have a strong central project coordinating unit with clearly stated responsibilities and authority, particularly when several ministries and agencies are Involved in project implementation. (ii) As technical assistance to LB was crucial to initiate and operate the fisheries credit scheme, special care should have been taken in hiring an expert with appropriate qualifications and experience. (iii) The GRZ should have reacted more promptly to the WB request for timely submission of audit reports, which was one of the main reasons for the unexpected 10  decision not to extend the closing date of the credit beyond 31 December 1991. Once again this was a reflection of the weakness of LB's implementation capacity. 10. Project Relationship 10.1 In spite of the problems faced by the project and notwithstanding the exchange of several notes concerning the recruitment of technical assistance staff, the working relationship between the Borrower and the Bank was generally good. However, the LB and DOF feel that there was insufficient communication between the governmental agencies after the Association had communicated its decision not to extend the project beyond the closing date as suggested by the supervision/review mission in 1991. Therefore, to some agencies the project closing came as a surprise in early December 1992. 11. Consultancy Services 11.1 Implementation of the project was to be assisted by employment of consultants for project coordination, monitoring and evaluation, credit administration, fish stock assessment, technique development and for short-term consultancies for technical support to DOF. The 72 man-months of technical assistance for stock assessment and the 9 man-months of consultancy services for setting up and implementing a project monitoring and evaluation system were never utilized. General satisfaction over the performance of the project coordinator was expressed by MAFF and other agencies. However, the credit specialist recruited under the project to assist LB in credit administration proved to be very unsatisfactory. Apart from the fact that he could not express himself or communicate well with others due to his limited knowledge of English, his knowledge of credit administration was reported to be poor. In spite of this, he maintained his post for three years. The performance of the consultant fisherman engaged to develop and introduce a more viable fishing technique into Lake Tanganyika was found to be very satisfactory (para 5.6). Two other short-term consultancies, one for setting up the accounting and information systems for the project, and the other to assist DOF in preparing a detailed report for its rehabilitation program, proved to be very useful. 12. Project Documentation and Data 12.1 The main documents guiding the project implementation were the SAR and the Development Credit Agreement. They were both adequate and provided a useful framework for the staff involved. Supervision reports were the most valuable source of information for the PCR, and particularly usefiul was the supervision/review mission's report, where a good deal of information on project physical implementation was given. However, the absence of a proper Monitoring and Evaluation System (para 6.1) resulted in a lack of some of the data necessary to carry out the financial and economic re-evaluation of the project. In the early years, there was a deficiency in accounting procedures, inaccuracies in withdrawal applications and delays in reporting of the project progress. Auditing of accounts was consistently delayed. The latter was one of the reasons for not extending the project beyond its expected closing date, as suggested by the supervision/review mission in 1991. 11  PART I: PROJECr REVIEW FROM THE BORROWER'S PERPEC TIVE 1. Project Name Fisheries Development Project Credit NO. Cr. 1529-0-ZA Location and address P.O. BOX 350100,Chilanga Tel NO. 278728 FAX NO. 278418 Geographical Coverage Lakes Tanganyika, Kariba, Mweru Luapula, Mweru- Wantipa, Cafe River system; and Flood plains. Starting Date 16th August, 1985 Original duration 5 years Termination date June 30, 1990 or such later date as the World Bank shall establish. 2. Background lINTROlQIN 2.1 In October 1979, a project identification report was prepared by FAOICP Investment Centre and with GRZ'S agreement a project preparation contract was executed in April 1, 1981 between GRZ and Italian Consultants. Ihe Interim Preparation report was submitted by the Consultants in January, 1982. 2.2 The Project Preparation Report was prepared by FAO/CP Investment Centre in April, 1983, and the final Staff Appraisal report (No. 5012-ZA) was prepared by the World Bank dated October 31, 1984. 2.3 The Development Credit Agreement between GRZ and IDA was signed on January 9, 1985. 3. Project Objectives and Description 3.1 The main objective was to support GRZS strategy for agricultural development by increasing fish supplies. The project would have over a five year period, supported GRZ'S efforts in the expansion of fish production, marketing and distribution systems. 3.2 It was expected that implementation of the project should increase fish production by about 10% and raise incomes of about 3500 artisanal fishermen families from an average of about US$ 875 to US$ 1750 (or to double the income) per fsmily per year. Main Project Components 12  3.3 *(a) Institutionalized credit services, to.be implemented by ZADB (now Lima Bank). Tbis was to provide credit to artisanal fishermen families for the purchase of boats, outboard engines and nets and credit to individuals and commercial enterprises for the purchase of fish collection boats, freezing and ice plants, cold stores and fish marketing facilities; (b) Fisheries institutional strengthening and improved management of fisheries resources, to be implement by the Department of Fisheries (DOE) The activities were to cover fisheries research, extension and training and specifically to rehabilitate boats, vehicles, researck and training facilities, improve workshops,transport and communication facilities, and provide technical assistance and fellowships for fish stock assessment limnology and improved fishing gear technology for artisanal fishermen. (c) Foreign exchange assistance to Nkwazi Manufacturing Company Limited for the assured supply of fishing nets to fishermen. (d) Project Coordination, monitoring and evaluation. Project Cost and Financing 3.4 The total project cost and its financing arrangement were as follows: () Credit Services US$ 3,860,000 (1i) Fisheries Institutional strengthening and improved 2,830,000 management of fish resources .iii) Foreign exchange assistance 1,010,000 for net manufacturing (iv) Project Coordination, monitoring 419.00 and evaluation Baseline cost 8,190,000 Physical contingencies 120,000 price contingencies 2.230.000 Total 10,640,000 IDA/World Bankl Ooan) 7,100,000 Government (GRZ) 2,400,000 Sub-borrowers contribution 1.100.00 Total 10,600,000 13  4. Project Design and Organization 4.1 The project was the first stage of a long-term program to develop the fisheries sub-sector In the country and was designed to introduce modern inland fishing features to support Government's plan to improve the exploitation of existing fisheries resources within the limit of maximum sustainable yield and promote the development of fisheries in the country. On the realization that very litfle was done by the Government in the past to assist the fishing community to enable them to increase their catches and thereby increase their annual income, the project was designed to include short and medium term credits to support the fishermen and private individuals and companies involved in fish production and marketing activities. 4.2 Overall responsibility for management and implementation of the project was given to the Ministry of Agriculture, Food and Fisheries (MAFF). Responsibility for implementing the credit program was designed to rest with ZADB under the supervision of MAFF. To assist ZADB management for successful implementation of the credit component, the Project provided for an internationally recruited flsheries credit specialist. The Bank of Zambia was given the responsibility to administer the foreign exchange financing of materials and machinery spares required for the net manufacturing company. DOF was to procure and utilize the facilities and technical assistance to improve its role in the management of fish resources. Finally, a PCU, headed by a project coordinator was to be established in MAFF, directly reporting to the Permanent Secretary to coordinate all project activities and carry out monitoring and evaluation of the Project. The Project provided for an internationally recruited project coordinator to head the PCU and an internationally recruited monitoring and evaluation specialist consultant to assist the project coordinator, the DOF economist and the ZADB fisheries credit specialist for the necessary questionnaires, survey design and analysis format, and monitoring and evaluation system. 5. Project Implementation Credit Effectiveness and Project Start-up 5.1 The credit was signed in January 1985, but become effective only in August 1985 due to delays in appointing the Project Coordinator and the credit specialist which were conditions for credit effectiveness and other problems which were not sorted out before starting the implementation of the Project. The project was scheduled to be completed by 30 June, 1990 after an implementation period of five years. However, due to the above-mentioned initial delays and to the suspension of withdrawal rights, actual project implementation lasted only two years and therefore could not achieve the SAR targets. Fisheries Credit/Lima Bank 5.2 Under the credit component only artisanal fishermen have been able to utilize credit facilities under the Project, that too a very small number. The suspension of withdrawal rights by the Bank adversely affected the operations of the Lima Bank very much as the fimding to the Bank from GRZ could not bridge the gap created by the suspension of withdrawal rights by the World Bank due to the country's overal budgetary squeeze caused by falling revenued from copper export and rising debt repayments. In spite of 14  all the finanial constraints experienced by lima Bank all these years, the Bank was very much committed to the Project and managed to provide credit funancing to artisanal fishermen under the project to the tune of 20.55 million kwacha as at 31st December, 1992 using its own resources. 5.3 In the early stages of the project Lima Bank made some earnest efforts to identify some prospective clients such as commercW fishermen for purchase of transport boats and individuals and companies to set up integrated fish processing and distribution facilities, but could not go fiurher due to the suspension of disbursement by the World Bank in May 1987. 5.4 The credit specialist recruited under the project to assist Lima Bank in credit administration proved to be a total failure. Apart from the fact that he could not express himself or communicate well in English with others due to his limited knowledge of the language,his knowledge of credit administration proved to be very poor which ultimately resulted in poor record keeping, accounting,delayed auditing and subsequent operational problems at Lima Bank,wben the credit specialist left the Bank at the end of his contract. Improved Management of Fish Resources 5.5 Ihis component was designed under the project to strengthen the infrastructure of the Department of Fisheries by the provision of facilities, operating funds, management and technical assistance to enable the DOF to manage and make use of the fish resources of the country to the fullest extent possible Except in the field of fish stock assessment program DOE made good progress in the implementation of this component. Rehabilitation programs of DOE have been carried out prudently and to the satisfaction of the supervision mission of the Bank. In almost all areas SAR targets have been achieved except in the case of foreign fellow ships to DOE staff. Of the 11.5 years of foreign training provided under the Project,8.3 man years have been utilized and the trainees have taken over various responsibilities within the DOE. The balance of 3.2 man years could not be utilized by DOF due to the suspension of IDA disbursements. In spite of IDA suspension of disbursement of funds all the achievements were made possible due to GRZ's commitment and continued fimding to the project in spite of its financial constraints even after suspension of disbursement by the World Bank. 5.6 The project was to finance a fish stock asessment specialist and a limnologist each for 3 years to assist the DOP in assessing flsh biomass and establishing maximum sustainable yields of fishing areas covered by the Project. It was also envisaged that these specialists would also set up a mechanism for a continuous fish stock assessment program for better management of fish resources in the country's lakes. Unfortunately this did not take place, though candidates for the posts were short listed and selections were made, contracts could not be negotiated and concluded before 1st May 1987, the day withdrawal rights were suspended Foreign Exchange Assistance to Net Manufacturing Company (Nkwazi). 5.7 There was a provisions of US$ 1 million under the project to provide the local manufacturing company of nets in the country (Nkwazi) to meet some of its raw material and spare parts needs. Of the 1 million US$ Dollar allocated for importation of raw 15  material and spare parts for machinery the company could utilize ondy US$50,000 before the date of suspension of disbursement as the company was not able to raise sufficient kwacha cover to buy the forex from the Bank of Zambia as per the arrangements made in this regard. Project Coordination 5.8 The Project Coordination Unit (PCU) as per the project documents was strctured as agreed at appraisal. The only deviation was that the PCU was housed within the Department of Fisheries at Chilanga instead of at MAFF as designed at appraisal. This was due to the acute shortage of accommodation at MAFF to house PCU. In spite of this arrangement PCU has along been working directly under MAFF as designed at appraisal. Project Cost and Distribution 5.9 The final cost of the project as at 31st December 1992 works out at US$ 3.4 million (this does not include the amount of US$ 140,000 due to the Senior Accountant of the Project for the services be rendered to the to the Project since November 1987, but which could not be paid to him due to the continued supervision of disbursement 16 and the sudden decision of the bank not to extend the closing date of this credit beyond 31st December, 1991 and cancel the remaining undisbursed balance of SDR 5.6 million) The breakdown of the total Project cost is as indicated below: IDA Contribution US$ 1.81 million Lima Bank Contribution US$ 0.50 million GRZ Contribution US$ 1.12 million TOTAL LSS!!43IW2L 6. Project Results and Impact General 6.1 Implementation of the Project was behind schedule from the early stage due to problems with procurement and staffing. The World Bank suspension of disbursement in May 1987, has particularly affected forex expenditures eg in the procurement of equipment and TA staff recruitment and has made it impossible for Lima Bank to implement this project to the extent envisaged in the Project document. Bureaucratic procedures both within GRZ and the World Bank have also to a great degree affected expeditious implementation. 6.2 Due to the non completion of the project as a result of the decision of the Bank not to extend theproject beyond 31st December 1991, it will be unjudicious to assess the impact of the Project especially on the target group - artisanal fishermen. However the Project is considered to have been well conceived and viable is terms of its costs and institutional, social and economic consideration. It is considered that a lot has been achieved from 16  the point of view of the DOF and that DOF activities are now being carried out more effectively than before. The main lessons of experience learned from this project are (i) The appraisal of the project should have been done in close contact and consultation with the implementing agencies of the project, here in this case the DOF and the Lima Bank who will be able to throw more light and valuable information regarding operational and logistical problems that might be encountered during the execution of the project and the steps those are to be considered and provided in the appraisal to overcome those problems. (ii) With the existing Bureaucratic procedures, both within GRZ and the World Bank it will be difficult to Implement the projects expeditiously. (iii) More flexibility should have been allowed In the project design to suit the local condition and changing circumstances. (iv) Procurement procedure should have been simplified. The Bank should have even considered the possibility of eliminating the roll of the Tender Board Authority and vesting this authority with the Permanent Secretary of the implementing Ministry or the Permanent Secretary of the Ministry of Finance to avoid delay. 17  PART m: SrATISTICAL INFORMATION Table 1. Related Bank Loans and/or Credits Thib was the fist Bank financed project in the fisheries sub-sect in Zambia. 18  Table 2. Project Timetable Activity Date Planned Revised Date Actual Date - Identification" June 1979 June 1979 - Preparation (Phase i)2' Mid-1981 Mid-1981 - Preparation (Final)" February 1983 February 1983 - Appraisal April 1984 April/May 1983 - Post-AppraisalP Jan./Feb. 1984 Jan./Feb. 1984 - Board Approval 27 October 1984 - Credit Signature October 1984 9 January 1985 - Credit Effectiveness 8 April 1985 30 June 1985 16 August 1985 - Credit Closing 30 June 1990 30 June 1990 31 December 1991 - Credit Completion 31 December 1989 31 December 1989 U By FAO/CP. By Con8utant " SAR issue on 31 October 1984. 19  Table 3. Credit Disbursement Disbursement In US$'000 .. Buank Fcal Yen SAR Esdimates AcualU Actual as % and Quarter of SAR Quarterly T Cumulative Quarterly Cumulatve Estimates 1984-85 December 100 100 - - March 100 200 - - June 200 400 1985-86 September 200 600 -- December 200 800 83.9 83.9 10 March 200 1,000 48.0 131.9 13 June 200 1,200 33.0 164.9 14 1986-87 September 300 1,500 33.0 197.9 13 December 600 2,100 32.8 230.7 11 March 700 2,800 93.0 323.7 12 June 700 3,500 117.0 440.7 13 1987-88 September 600 4,100 198.3 639.0 16 December 600 4,700 70.6 709.6 15 March 500 5,200 17.9 727.5 14 June 500 5,700 229.6 957.1 17 1988-89 September 300 6,000 84.9 1,042.0 17 December 300 6,300 - 1,042.0 16 March 200 6,500 43.1 1,085.1 17 June 200 6,700 - 1,085.1 16 1989-90 September 200 6,900 1.9 1,087.0 16 December 100 7,000 - 1,087.0 16 March 100 7,100 - 1,087.0 16 June - 7,100 - 1,087.0 16 1990-91 September - 7,100 135.1 1,222.1 17 December - 7,100 3.4 1,225.5 17 March - 7,100 585.8 1,811.3" 25.5 Source: WB Monthly Disbursemets (August 1991). Dte of firt dib nt 24 Sctcw 198I. Dat of final d_:bursnat 13 March 1991. v Equivala to SDR 1,459,200. 20  Table 4. Project Implementadon (Page 1) Component Unit SAR Estimate Actual Actual as % I I I ~~~~~~~of SAR Estimate A. Credit (a) Artisanal Fishermnxe - Plank Boats No. 160 48 30 -GRP Boats No. 70 - - - Outboard Engines No. 350 224 64 - GMl Nets Pieces 9,400 13,421 143 (b Commercial| -Collection & Mark Facilities" Unit 2 - Ice Plants (Kafue) No. 2 - General Line of Credit USS 250,000 - - - Transport Boats No. 5 - - (c) Net Manufacturin - For. Exch. for Race Material US$ 1,000,000 50,000 - B. DOF Istit. Strengthening - Plank Boats No. 6 4 67 - GRP Boats No. 12 12 100 - Outboard Engines No. 20 22 110 - Lift Net Boats No. 2 2 100 - Boat Renovation No. 4 - - 4WD Vehicles No. 12 12 100 - Workshop Rehabilitation No. 6 5 83 -Inboard Engines No.. 2 5 250 - Research Equipment Set 9 - -Generator No. 1 - -Radio Set 21 23 110 -Spare Parts Set 6 6 100 -Tranin Centre Rehabilitation No. 4 2 + 'l 75 u Each unit (on in Lake Mwwu Wantips and ow in Lale Lapu) indude: old toawge, bla frer, We plait, coUaion boaft, eldeity and wat supy, handing equipt, .c. Tw To compkled (i Mpung ad in Kasak), e third Ci Nchen is 60% compkt. 21  Table 4. Project Inplementation (tage 2) Component Unit SAR Estimate Actual Actual as % of SAR Estimate C. Training - Local (for existing staff) Trainees Weeks 6,000 1,200 20 - Fellowships: .6 months m/y 2.5 1.3 52 .I year m/y 3.0 1.0 33 .2-3 years m/y 6.0 6.0 100 D. Technical Assistance - Stock Assessment mlm 36 - - Limologyst m/m 36 - - Expeaienced Fisherman mrm 24 6 25 - Fisheries Credit Specialist m/m 36 36 100 - Other Consultants m/m 12 3 25 E. Project Coordination Unit - Project Coordination m/m 36 36 100 - M & E Consultant m/m 9 - - Senior Accountant m/y - 4.9 22  Table 5. Project Cost and Financing (Page 1) A. Project Cost Components SAR Estimates | Actual" | Actual as % of SAR Estimates (US$00) A. Instutional Credit Services - Artisanal Fishermen 1,034.6 620.9 60.0 - Commercial Fishermen 91.3 - - Collection/Marketing Facilities 3,207.4 - General Line of Credit 250.0 - - Management & Tech. Assist. 401.7 99.6 24.8 Sub-total 4,985.0 720.5 14.5 B. Management of Fish Resources - Facilities 2,152.7 1,830.4 85.0 - Management & Tech. Assist. 1,160.3 396.7 34.2 - Training 456.8 186.0 40.7 Sub-total 3,769.8 2,413.1 64.0 C. Net Manufacturing Facilities 1,287.4 50.0 3.9 D. Coordiaon, Monitoring & 605.S 250.4 41.4 Evaluation Total Project Cost 10,647.7 3,434.0 323 Sourc. PCU-FD LuakL 2I  Table 5. Project Cost and Financing (Page 2) B. Project Financing Credit Agreement" | Actual | Actual as % of I Planed .... (US$ . .. ... . A. IMA (By Category) 1. Equipment and Material (Part A) 890.0 811.1 91.1 2. Material and Spare Parts (Part C) 990.0 50.0 5.1 3. Consultant's Services (Parts A & 1,190.0 349.7 29.4 B) . Consultant's Services (Part D) 300.0 250.4 83.5 5. Training (Part A) 300.0 132.7 44.2 6. Provision of Credit (Part D.2) 2,570.0 217.4 8.5 . Special Account A 200.0 .. v n.a. 8. Special Account B 200.0 ... n.a. 9. Unallocated 460.0 Sub-total 7,100.0 1,811. 25.S B. Government 1,347.? 1,219.2 90.5 C. Borrower's Contribution 1,100.05' 103.r 9.4 D. Taxes and Duties 1,100.05' - E. LDA BANK (Provision of 300.0'.. Credit)_______________ ___ TOTAL 10,647.7 3,434.0 32.3 Ei v rate tdang at the ti o negotiation of the acd I SDR = I USS. v' USS 214,900 to fSnanc t under agoies 1, 3 and S. " USS 214.900 to fina kams wdx catqpoies 4 ad 6. 4' Eqyvat to SDR 1,459,200. " SAR estate. zIm BiaP's own finds 24  Table 6. Proj4ct Resulbs A. Direct Benefits SAR Eshae Actal Prodoed .. ........ ... (tow.s) Incrantal producdon (Year 6) 7,000 n.a Inrcmental production (long-tenn) 6,000 n.e flenefldauiesr Owner filhermen 1,150 272" Helpers 2,300 550 No. of families 3,540 n D. hIanial Deiel Jinanclad Rates of Return: Plank boats > S0% n.a ORP > 50% Engins plus nes > 100% n.a Gil aets > 100% n.a Collection and makeg facilities > 40% Average income incfamily ZK 1,400 n. |Come.LI A total of 48 plank boats and 224 outboard engines wer procured end ditbuted under th project. However, data to carry out ex-post the financial analysis including FRR's for these activities were not available. C. Econmi Impact Economic Rate of Return 26% nOa Comet: Projec implementation has been negatively affct by the auspension of withdrwal rgh in May19S7 till Marcb 1991. Suspension was imposed again in September 1991 till January IM. Under these circumsanCes, an ex-post economic analysis with the objective to re-evahlate the ERR of the project would have produced a mideading judgement on project petformance. However, data were not even available to quantify the limited benefis which have dedved from the project. " Mission's estimates based on the number of medium4erm loans disbursed by Lime Bank, eg. 48 loans for boats and 224 loans for outboard engines. 25  Table?. SatIr fCovaat ~ao) Cred -itSctIa 2.02 Qb) Opening and maintaining two speial accousm ict the Coslie With. Beak or Zambia. 3.02 (a) Esdibb PCU winM AWD. Compled ihY 3.02 (b) Appoin t of poject codintr. Compied wth. 3.03 EmVploymen of a act asesmen specialist, _inotogit and monitoing and Not conipid whb. evaluaion specilist. 3.03 (a) Funish IDA elevt pleas, eports, conUct documents, etc. as requeted. Complied wilh. 3. (b) Maintunig reorb to monitor prges and subit 6 mont pogess reports. Complied with. o' 3.06 (a) Furnih to DA for view each year. WoMd prgramm and opetg bud of Work pgrmm Nd budget usay prpared. Not sbmod DOF. to IDA duiing hae yeavt. 3.06 (u) Govaenmt to provide mara! budgeta aocatio to DOF to canry out ts work Complied Wh. pmrogrmm. 3.07 Borow submit a plan for l;W itA development of DOf. Complied wit. vLoed in Dqpatmet of fobeties and r MAWD as in ag=ana.  r~~~~~~ 12~.1 X t:: Q X~ ii I~~~2  Table 7. Status of Covenants (Pagp 3) Projiet Agrnnt Secion D j Conet _Statu' 2.02 Appointment of a qualified and experienced fiseries credit Complied with. 2.04 (a) ZADB to =ue imported goods to be financed under the project. Complied with. 2.05 (a) Fumnish IDA with plans, eports, procurment and contract Not complied aftr Lima Bank was created. document. and other relevant information. 2.08 (a) Submit antually to IDA for review a lending progmme for loaws Not complied after lima Bank was to urtsanal fishermen. established. 2.08 (c) Open sub-zona offices whee s orowers ame located. Initially conmlied with. The latter discounted by Limna Dank because of finacia problems. 2.10 (a) Care sub-borrewes, interest raws, commitment and processing Comptied with. foes as agreed. 2.10 (b) Sub-borows to contribute not less than 20% of goods to be Complied with. financed. 3.02 ZADR to keep positions of directors, admin. and personnel, fwne Complied with. and planing and operations filled with qualified persons until completion of the project. 4.01 ZADB to maintain _ t and accounting records to fully Pastly complied with. reRect the project activities. 4.02 Accounts to be audited and submitted to IDA each year. Accounts audited and subzmitted muh later .han the agreed time period. Octwee IDA and ZADB.  Table 8. Use of flank Resources A. Staff Inputs (staff weeks) v Stage of Project Cycle Planned Revised Actual Through appraisal n.a Appraisal .through Board approval , n.a Board approval through effective supervision n.a B. Missions Slate of l'roject Cyclc Month/Year No. of Days lI Specializatiou4 1'erfornaice Tlype of lProblemns I Persons Field . alig Identification June 1979 3 20 FS, IF, E - - Preparation Phase I Mid-1981 contracted to consulting company Final Preparation reb. 1983 6 21 EN, rs, E, CS, NA, FS Appraisal April-May 1983) 6 n.a FA, E, FS. FS, F S. EN Jan-Feb. 1984 ) r..' Supervision I February 1985 1 8 FA I Financial, delay credit effectiveness. Supervision 2 September 1985 1 n.0 rA I Merger of AFC and ZADB, staffing of PCU. Supervision 3 November 1985 2 14 PA, FS 2 PCO, recruitment of TA. merge of AFC and ZADD. Supervision 4 June-July 1986 2 15 FA, BS 1-2 Project coordination and monitoring. Supervision S May 1987 2 10 FA, FS 2 Financial, suspension of disbursement. Supervision 6 January 1988 2 10 FA, rS 3 Project coordination, poor loan recovcry by LO. procurement, TA. Supervision 7 August 1990 1 n.a ,*FA 3 Financial, procurement, TA, training, availability of funds. Supervision 8 (Review) Sept-Oct. 1991 2 IS FA, FS n.a Suspernsion of disbursement, overdue audited statements. Supervision 9 July-Aug. 1992 I 9 FS i 3 LB performance on credit recovery, extension of closing date. PCR Mission January 1993 2 12 E, BS To bc Ftd by Wodtd Banc 2 fS. fSishetiesSpcScialst; F* IlandFVslic,iesSpcalisl: E Econonisl:EN * Enoinccr; CS . Credil Speclalsi: NA -Naval ArChitect.  ZAMBIA F,dies Devedapt Pto (Cr 1S29.ZA) - Pr*t Comedm Rqepo PART m: Ann 1: Uma ank Umlted istered Cmmewcial lak) Table 1. Zambia World Bank Fisheries Devlopmnent Project - Summary Report as at 31 Decber 1992 Short-term Medium-tem Exchange Interest Total Loan Recoveris Year/Season Loans Disbursed LoAns Disbursed Rate Ttl Loans Disbursed Rate (ZK) (Value ZK) (Value ZK) (ZK to US$) (ZK) | Intere Vpalue | ! . l _ ~~~~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~Value Value 1986187 609,596 528,195 8.0:1 1,137,791 142 20 187.970 751,880 1987/88 348,218 319,292 8.5:1 667,510 79 20 163,523 654,094 1988189 1,101,577 66,434 14.0:1 1,168,011 83 22 344,058 1,219,842 1989190 55,830 76,400 25.0:1 132,230 S 39 53,519 83,710 1990191 2,725,842 9,446,519 50.0:1 12,182,361 243 43 4,153,843 5,506,257 1991/92 194,177 5,073,000 95.0:1 5,267,177 55 46 1,717,5S7 2,016,263 Total: 5,035,240 15,509,840 20,545,080 607 6,620,470 10,313,034 Notms: C1) Total funds utilized: US$ 607,000; ZK 20,545,080. 00i) Total funds from IDA: US$ 217,400. (iii) Tota funds from Linma Bank own funds: US$ 389.6 (reimburseable). (iv) Average rate of loan recovery: 50%. (v) Outstanding amount (principal): ZK 10,313,034. (vi) Short-term loans: for fishing gear only - repaid in 12-18 months. (vii) Medium-term loans: for boats and engines - repaid in 24-48 months. (viii) Principal repaid: ZK 10,313,034. Source: Lima Bank.  - l XI ejg i 1; ; X *- X - ~~~~~~~~~~~~~~~ I I~~~ 31  AA3L' "Ms D.wdopmst pni (Cc 15294Z0- - Pmj.tp Como Rs9t PARW 1m1: Anex 1: Limn Bank Lmited _gitfted Conand an Tabe 3. Zmbia Wotld Bak ihris DeVepuet Po,jedt - Loa APPlcation Pending Due to Lack of FUnds as at 31 Dwmber L992 LAe Tangayik fhjd Area Lake Mwer-Lnapua P.jet Other Fihy Areas l(ama) Area (Non Prect Are) (--.--'- j (Valu E ZK (No.) (Value (No.) I' (VauZK) Fish Nets 500 115,000,000 2,000 5,000,000 5,000 12,500,000 Boat 20 4,800,000 50 12,000,000 50 12,000,000 a" Engines 120 54,000,000 110 49,000,000 80 36,000,000 Tmnsport Marketing and Distribuion 1 (1991) 20,000,000 1 (1991) 30,000,000 2(1991) 80,000,000 Fumeeg Faciliies Totd: 193,M,O00 WH,I00M 60 ,0 Notes: (a) Gtand ota value of pending lan applications in the whole country: ZK 350,300,000", (subject to changes in prices of items due to inflatn). (b) GOud value of pendn loan applications in te project areas: ZK 289,800,000. (c) NB: Out of the ttal value of peding loan applications of ZK 289,800,000 in the projet area, appicatis valued at ZK 59,000,000 were approved and awaitiog disbur_ment as at 31 October 1991. v Based on 1991 tems.  PROJECT DATA SHEET Inoue * Date: - Name: Repot No: Count,yIFAO Code: Financing lnstltutlons: Cost US$ 10.6 mion l ~~~~~~FE: US$ 8.0miMon1 40193 CP-ZAM 34 PCR ZAM1455! IDA TITLE: ZAMBIA' FISHERIES DEVELOPMENT PROJECT Date: 19 February 1993 Sub-Sector Fisherles | Type: PCR SystCode: Lanusage: Engish MISSION MEMBERS: R. SUPPA, H. GUNAWARDENA Dae of Fled Visit JanuarylFebnaay 1993 Objectves: Expanding fIh production. marketing and distrbuton system. Reduce the gap between supply and demand of fsh, and thereby lessen the countys dependence on Input. Components: - Instltudonabed Credit Servie - Not Manufactuuing FacIsc - Management of Fish Reoumes - Coordintion, Monio&ng and Evluation BAR Actual * Duration: 6 6 - Cost: (tota million 10.6 3.4 -No. Beneficbarles: Fishermen 1,.10 272 Helpe 2,300 550 - Project Area: Lakes Tanganylka, Mweru, Karb - Main beneft: inrenwn. Fish Production (tons) 6,000 2.000 (estimated) - Ec. Rats of Return: 26 n. Lessons Leamed: ad Pace No 1. At appraisa more emphais soul had been given to the institutinal weakness of aii the particpati agenes. 2. Lack of underabndin between partiipating agencies. 3. WS to be more foroeful In convbcin GRZ to lao PCU as Indicated at appraisal 4. GRZ should have reacWd more promptl to the WS rquest for timely submlsson of audi repot. _ KEYWORDS: pendkV FISHERIES 33