Tanzania - Agricultural Sector Adjustment Credit

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 13741 PROJECT COMPLETION REPORT TANZANIA AGRICULTURAL SECTOR ADJUSTMENT CREDIT (CREDIT 2116-TA AND CREDIT 2116-ITA, 2116-2TA(SUPPLEMENTAL)) DECEMBER 1, 1994 Agriculture and Environment Division Eastern Africa Department Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  TANZANIA AGRICULTURAL SECTOR ADJUSTMENT CREDIT (CREDIT 2116-TA & CR. 21 16-1TA, 21 16-2TA (SUPPLEMENTAL)) CURRENCY EQUIVALENTS Currency Unit = Tanzanian Shilling (TSh) Exchange Rate at Appraisal = US$ 1.00 = TSh 145.0 Exchange Rate at Credit Effectiveness = US$ 1.00 = TSh 190.0 Exchange Rate at Completion = US$ 1.00 = TSh 500.0 FISCAL YEAR Government of Tanzania = 1 July to 30 June World Bank = 1 July to 30 June ACRONYMS BOT The Bank of Tanzania CP FAO/World Bank Cooperative Programme DAFCO Tanzanian Dairy Farming Company ERP Economic Recovery Programme ESAP Economic and Social Action Plan FAO Food and Agriculture Organization of the United Nations FSD Food Security Department GDP Gross Dormestic Product GOT Government of Tanzania IC Industrial Companies IDA International Development Association IMF International Monetary Fund IRTA Industrial Rehabilitation and Trade Adjustment Credit MALDC Ministry of Agriculture, Livestock Development and Cooperatives MDB Marketing Development Bureau MRC Multi-sector Rehabilitation Credit NAFCO National Agricultural and Food Corporation NMC National Milling Corporation NAPOCO National Poultry Company NARCO National Ranching Company OGL Open General License Facility PPMB Project Preparation and Monitoring Bureau PSRC Public Sector Reform Commission SGR Strategic Grain Reserve TA Technical Assistance TANAA Agricultural Sector Adjustment Credit (CR 2116-TA) TFC Tanzania Fertilizer Corporation  FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation December 1,1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Tanzania Agricultural Sector Adjustment Credit (Credit 2116-TA and Credit 2116-1TA. 2116-2TA (Supplemental)) Attached is the Project Completion Report on Tanzania-Agricultural Sector Adjustment Credit (Credit 2116-TA and Credit 2116-ITA,2116-2TA (Supplemental)) prepared by the Africa Regional Office. Parts I and Im were prepared by FAO/CP and World Bank staff and have been reviewed by the Agriculture and Environment Division of the Eastern Africa Department. Part II was prepared by the Borrower. These comments have been reflected in Parts I and HI. The PCR reports that significant progress was made in market liberalization, a reduced (regulatory) role for Marketing Boards and good Government commitment to the reform program. Despite this there were some delays due to institutional problems, such as disputed land ownership as production parastatals tried to hand over to the private sector. The project was cofinanced by the Netherlands, Norway and United Kingdom, and parallel financing was provided by Germany and Sweden. The project was one of a series of adjustment credits tracing back to the Export Rehabilitation Credit (Credit 1133-TA) approved in 1981, which have supported the Govemment's Economic Reform and Economic and Social Action Programs which in total have achieved major reforms throughout the economy and society. The project was basically successful in converting the National Milling Company from a parastatal to being simply one milling company in a competitive food grains sector; introducing competitive marketing for coffee, cotton and cashews with dominant private sector participation; starting the withdrawal of parastatals from agricultural production; introducing competition in the supply of seeds and fertilizer; rationalizing and substantially reducing the number of agricultural projects; and providing continuing support for agricultural policy analysis and project management. The project outcome is rated as satisfactory, its institutional development impact as substantial, and sustainability of results achieved is likely. Major contributions to this gratifying result were a well established policy dialogue, based in part on long run support for the well respected Market Development Bureau of the Ministry of Agriculture, and credibility of Bank advice gained from earlier adjustment credits. The PCR is of satisfactory quality. An audit is planned. Attachment This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization,   FOR OFFICIAL USE ONLY PROJECT CONfPLETION REPORT TANZANiA AGRICULTURAL SECTOR ADJUSTIMENT CREDIT (CREDIT 2116-TA & CR. 2116-ITA, 2116-2TA (SUPPLEMENTAL)) TABLE OF CONTENTS PREFACE ................................................. i EVALUATION SUMMARY ..................................... ii PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE ......... 1 1. Project Identity . ........................................... 1 2. Background .. 3. Objectives and Description .......................... 2 4. Credit Design .......................... 4 5. Irnplementation ..........................5 6. Results and Impact .......................... 9 7. Sustainability .......................... 13 8. Bank Performance .......................... 13 9. Borrower's Performance ............................... 14 10. Lessons Learned .......................... 14 11. Project Relationship .......................... 15 12. Consulting Services and Studies ........................... 15 13. Project Documentation and Data .......................... 15 PART II: PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE 17 PART mf: STATISTICAL INFORMATION 19 A