Madagascar - Forest Management and Protection Project

 Forest management and protection project Report No: ; Type: Report/Evaluation Memorandum ; Country: Madagascar; Region: Africa; Sector: Forestry; Major Sector: Agriculture; ProjectID: P001518 Madagascar: Forest Management and Protection Project (Credit 1878-MAG) The Madagascar Forest Management and Protection project, supported by Credit 1878-MAG for SDR 5.1 million (US$6.3 million equivalent), was approved in FY88. Cofinancing equivalent to US$7.3 million was provided by the Governments of Switzerland and Norway. Following a mid-term review in FY93, the project was restructured and SDR 1.3 million (US$1.6 million equivalent) was canceled when the forest development component was transferred to the Madagascar Environment project (Credit 2125-MAG) along with US$5.3 million of cofinancing. The project closed in FY96, and an undisbursed balance of SDR 0.25 million (US$0.3 million equivalent ) was canceled. The Implementation Completion Report (ICR) was prepared by the Africa Regional Office. A separate review of implementation prepared by the borrower is included as Part II, and borrower comments on the ICR are included as Appendix C. Comments were invited from the cofinanciers but none were received. The project's objectives were to strengthen the Directorate of Water and Forests (DEF), the government agency responsible for forest management; stimulate reforestation by the private sector; arrest the degradation of natural forests; and assist FANALAMANGA, the parastatal agency responsible for plantation development, to become profitable. Three major components were designed to meet these objectives: (i) institutional strengthening of the DEF through improvements in sector planning, program monitoring and information systems, and financial management; (ii) the introduction or extension of forest protection measures in four forest reserves; and (iii) continued support for FANALAMANGA begun under the First and Second Mangoro Forestry projects (Loan 1065-MAG and Credit 525- MAG, and Credit 1161-MAG, respectively) for fire protection, road maintenance, forest inventories, pasture improvements, and silvicultural research. The project, which was poorly designed and implemented, failed to meet most of its objectives. The capacity of the responsible implementing agencies was overestimated at appraisal, and both experienced difficulty in implementing their respective components. FANALAMANGA achieved a higher proportion of its targets than the DEF, but the activities it undertook were not economically viable. FANALAMANGA has been supported by the Bank for 20 years, but the parastatal has been unable to develop plantation forestry profitably for pulpwood, charcoal, or sawn timber production. Plantation growth rates have been too slow. The DEF lacked a sound sector strategy, and management of its operations was overly centralized. It suffered from deficiencies in management, staffing, training, and equipment, which needed correcting before field work was expanded. The DEF was unable to handle procurement diligently, delaying the purchase of equipment and recruitment of consultants. The mid-term review reorganized the project and a new director was appointed at DEF. As a result of these changes, most of the activities initiated following the mid-term review are performing satisfactorily under Credit 2125-MAG. The economic rate of return on the plantation component, estimated in the SAR at 55 percent, was reestimated by the ICR at 3 percent. The Operations Evaluation Department (OED) agrees with the ICR in rating project outcome as unsatisfactory, sustainability as unlikely, and institutional development as modest. Both the ICR and OED rate Bank performance as unsatisfactory because of deficiencies in preparation and supervision. The lessons drawn from this project suggest that sound sector work and institutional strengthening are necessary before sectoral agencies can manage project implementation effectively; that monitoring and evaluation systems and procurement should be initiated during project preparation if performance indicators are to be tracked, and disbursements made, as scheduled from the start of implementation; and that support from in-country Bank staff is helpful in implementing institutional development components and integrating technical assistance into implementation. The quality of the ICR is highly satisfactory. The text and tables are thorough and present a candid record of implementation of a project with serious shortcomings. No audit is planned.