Chad - Livestock Development Project

RESTRICTED Report No. PA- 5 This report is for official use only by the Bank Group and specificafly authorized organizations or pesonL It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION APPRAISAL OF LIVESTOCK DEVELOPMENT PROJECT CHAD FILE COPY January 24, 1972 Agriculture Projects Department  CURRENCY EQUIVALENTS US$1 a CFA francs (CFAF) 255.8- CFAF 1 - US$0.0039 CFAF 1,000,000 - US$3.909 WEIGHTS AND MEASURES (Metric System) 1 kilogram (kg) - 2.20 pounds 1,000 kg - 1 metric ton - 0.98 long ton 1 meter (n) - 1.09 yards 1 kilometer (km) - 0.62 mile 1 hectare (ha) = 10,000 m2 - 2.47 acres 1 square kilometer - 100 ha - 0.39 square mile 1 liter = 0.26 gallon 1 centimeter - 0.39 inch PRINCIPAL ABBREVIATIONS AND ACRONYMS USED CAR Central African Republic FAC - Fonds d'Aide et de Cooperation FAO = Food and Agricultural Organization FED Fonds Europeen de Developpement UDEAC - Union Douaniere des Etats de l'Afrique Centrale BRGM - Bureau des Recherches Geologiques et Minieres FISCAL YEAR January 1 - December 31 1/ No par value-for the currency of Chad has been established with the International Monetary Fund. The unit of currency is the CFA Franc, which is officially maintained at the rate of CFAF 1 - 0.02 French Franc giving the relationship CFAF 255.8 - US$1. The CFA Franc circulating in Chad is issued by the Banque Centrale des Etats de l'Afrique Equatoriale et du Cameroun (BCEAEC) and is legal tender also in Cameroon, the Central African Republic, the People's Republic of the Congo (Congo B), and Gabon. Exchange rates for other currencies are based on the rate for the French franc and the Paris exchange market rate for the currency concerned.  CHAD LIVESTOCK DEVELOPMENT PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS . .................. .... . . . i-ii I. INTRODUCTION ....... ................................. 1 II. BACKGROUND ........ q ................. 2 A. General ......... ............................... 2 B. The Livestock Industry .. ........ .......... .. 4 III. THE PROJECT .......................................... 7 A. General Description ..... ....................... 7 B. Project Areas ...... ............................ 7 C. Detailed Features ......... ... .................. 8 D. Cost Estimates ..... ................................ 11 E. Financing ..................................... 13 F. Procurement .............. ......... ........................... 14 G. Disbursement .. .............. .. ................ 14 H. Auditing ......... ...... .... ... *............................ 15 IV. ORGANIZATION AND MANAGEMENT . ........................ 15 V. MARKETS, MARKETING AND PRICES ....................... 15 VI. BENEFITS AND JUSTIFICATION ..... ..................... 16 VII. AGREEMENTS REACHED AND RECOMMENDATIONS .. ............ 17 This appraisal report is based on the findings of (1) a mission in September/ October 1968 to Chad composed of Messrs. P.G. Nelson, M. Palein, C.R. Wilkinson (-DA), W. Barber (Consultant Hydrogeologist), and D.E. Tribe (Livestock Consultant), (2) a review mission in October 1969, composed of Messrs. P.G. Nelson, R. Khouri (IDA), and D.E. Tribe (Livestock Consultant), and (3) an updating appraisal mission in September 1971 composed of Messrs. S. Silbiger and G.M. de Wit (IDA).  -2- ANNEXES 1. Government Revenue and Expenditure 2. Livestock Production in Chad with particular reference to Batha prefecture Table 1 Estimates of Livestock Numbers in 1970 3. Cattle Marketing Table 1 Estimated Utilization of the Offtake from the National Herd in 1970 Table 2 Estimated Exports of Live Animals by Destination in 1970 and Totals since 1965 Table 3 Destination of Exports of Meat by Air - 1961-1970 Table 4 Producer Prices for Live Cattle Table 5 Meat Prices Table 6 Breakdown of Costs of Marketing Cattle in 1966 Table 7 Cattle Slaughter Statistics at Fort Lamy and Fort Archambault Abattoirs Appendix 3 Demand for Beef in Selected West African Countries 4. Hydrogeology, Well Construction, Repair and Renovation Diagram 1 Sketch Plan of Stock Well with Baziadoly Filter 5. Well Construction Cost Estimates 6. Well Repair and Renovation Cost Estimates 7. Well Maintenance Cost Estimates for 821 Wells 8. Livestock Development Unit - Terms of Reference 9. Livestock Development Unit Cost Estimates 10. Computation of the Foreign Exchange Component and the Tax Element of the Bid for Construction and Repair of Wells 11. Disbursement of IDA Credit Table 1 Disbursement of IDA Credit Table 2 Estimated Schedule of Disbursement 12. Rate of Return to the Economy and Explanatory Notes MAP Livestock Development Project CHART 1 Organization of the Ministry of Livestock, Marketing, Water, Forestry, Fishing and Hunting CHART 2 Organization of the Ministry of Rural Development  CHAD APPRAISAL OF A LIVESTOCK DEVELOPMENT PROJECT SUMMARY AND CONCLUSIONS i. This report appraises a Project to assist the development of the livestock industry through construction of 38 wells and repair and renovation of 102 wells in the Batha district; maintenance of 821 wells in the main cattle producing areas; and support of an expanded Livestock Development Unit (LDU) to plan integrated development of the industry and prepare further projects. The Project, which would be the first Bank/IDA agricul- ltural project in Chad (previously IDA financed a road maintenance project and two education projects), would meet a priority need for more stock watering facilities, thus increasing effective grazing area. It would be a first step in the development of the livestock industry, although Government does not as yet have a comprehensive livestock program. ii. The Project was first appraised in 1968 but, due to political problems and tribal unrest in livestock raising areas, IDA decided to hold it in abeyance until the security situation improved. At the time of appraisal, IDA suggested the establishment of the LDU and it was subsequently set up in 1970 by UNDP, with FAO as the executing agency. It, however, has only one expatriate professional staff member, provided by FAO, who serves as a general planning advisor to the Government. Under the proposed Project, the unit would be oriented to the purposes originally envisaged and provided with technical support to enable it to prepare a broad and coordinated plan for the industry and at least one priority project within two years. iii. In consultation with IDA, the construction of new wells and the repair and renovation of existing wells have been put to international tender and work can start as soon as financing is secured. Genie Rural, the depart- ment in the Ministry of Rural Development responsible for rural water supplies, would supervise construction and repair works, assisted by French technical personnel or a consulting engineer. Small quantities of vehicles and equip- ment for the Well Maintenance and Livestock Development Units would be pur- chased through regular Government tender procedures, since most international vehicle manufacturers have local agents who would bid for Government orders. iv. The Project would enable livestock production to be increased on some 600,000 ha of natural pastures and would prevent a decline in production, through lack of water, on over 2 million additional ha. Over a period of about 10 years, it would lead to an increase in the national cattle herd, now estimated at 4.5 million, of about 190,000 head, and an increase of about 160,000 in the number of sheep and goats. Furthermore, it would prevent a decline in well capacity, which, if not checked, might cause stock reduction of the order of 270,000 cattle and 230,000 sheep and goats. It J X would bring about additional annual offtake of about 50,000 cattle and 100,000 sheep and goats (about 10% of present offtake for both), worth about A-'  - ii - US$2.3 million at 1970 prices. It would also provide subsistence for some 15,000 to 20,000 persons and improve foreign exchange earnings. v. The estimated total cost of the Project is about CFAF 876 million (US$3.4 million), of which about CFAF 523 million (US$2.1 million), or 60%, would be in foreign exchange. Of the foreign exchange, IDA would finance US$1.6 million for well construction, renovation and maintenance and UNDP would provide about US$0.5 million for LDU. On country grounds, IDA would finance, in addition to the foreign exchange expenditures, about US$0.5 million of local currency cost. Government's contribution would be about US$0.8 million, approximately half of local currency expenditures or about 22% of total cost. Part of this would be recouped by taxes paid by the contractor and those paid for import of equipment and construction materials required for the Project. Net of taxes, Government's share would be about 11% of Project cost. The annual return to the economy, discounted over 30 years, would be about 11%, and benefits would be widely spread through the livestock raising population. vi. The Project is suitable for an IDA credit of US$2.2 million (rounded to nearest 0.1 million) equivalent, to be disbursed over three years. The borrower would be the Republic of Chad.  CHAD LIVESTOCK DEVELOPMENT PROJECT I. INTRODUCTION 1.01 The Government of Chad has requested an IDA credit to help finance development of the livestock industry, primarily by the provision of addi- tional watering facilities. The Project was p aXed by an FAO/IBRD Cooperative Program mission that visited Chad in November 1966 following an FAO/IBRD identification mission in May 1966. A further A7O/IBRD preparation mission visited Chad in June 1967 to reassess alternative methods of providing water. 1.02 The identification mission recognized the potential of the Chad livestock industry and suggested comprehensive development. The November 1966 preparation mission found, however, that the Government did not have a wide-ranging livestock development program at its disposal and suggested that, while IDA might usefully finance the extension of stock watering facilities, such efforts should be regarded as a first stage during which a broad and coordinated plan would be prepared. The proposed Project, there- fore, provides not only for additional and improved stock watering facili- ties through repair of existing wells and construction of new ones and two well maintenance units, but also for a development unit to prepare a second more comprehensive stage of development for the livestock sub-sector. 1.03 An appraisal mission, composed of Messrs. P.G. Nelson, M. Palein, and C.R. Wilkinson (IDA); W. Barber (FAO consultant hydrogeologist); and D.E. Tribe (livestock consultant), visited Chad in September/October 1968 and prepared an appraisal report that formed the basis of negotiations for an IDA credit in 1969. However, at that time, detailed surveys had not been made to determine the extent of necessary well repairs or the number and siting of new wells, so that cost estimates were tentative. Additionally, because of political problems and tribal unrest in livestock raising areas, it was felt that the security situation precluded Project implementation and IDA, therefore, decided to hold the Project in abeyance. In the interim period, however, IDA assisted the Government in carrying out a detailed well survey and well siting studies. These studies were done by SAUTI of Rome. A mission, composed of Messrs. P. G. Nelson and R. Khouri (IDA) and D.E. Tribe (livestock consultant), visited Chad in October 1969 to determine the possibilities of proceeding with the project. 1.04 While the security situation in the Project area has improved in the last two years, Government and IDA agreed, early in 1971 to proceed to tendering for construction of 38 new wells and repair of 102, based on the surveys performed by SAUTI to ascertain the interest of contractors in work in areas subject to strife. Three firms 1/ submitted bids and the Chadian firm, Dyckmans, offering the lowest price, won the contract. The bidding 1/ SATOM (French), SOLETANCHE (French) and DYCKMANS (Chadian).  - 2 -- procedure was consistent with the Guidelines for Procurement under World Bank Loans and IDA Credits. At all stages IDA was afforded an opportunity to review and comment on the bidding documents, the evaluation of bids and the proposal for award. Howeve:r, Government was informed that IDA could not accept previous obligations with regard to procurement prior to Board approval, and award of contract is, therefore, still pending. 1.05 The appraisal was updated in September 1971 by a mission consisting of Messrs. S. Silbiger and G.M. de Wit (IDA). The present report is based on the findings of the 1968 appraisal, the 1969 review, and the 1971 updating missions. II. BACKGROUND A. General Geography and Climate 2.01 Chad, with an area of 1.3 million km (500,000 sq miles), about the size of Mali or Niger, is bordered on the north by Libya, on the south by Central African Republic (CAR), on the west by Niger and on the east by Sudan. It is a land-locked country, more than 1,000 km from any seaport, with poor roads and no railway. Freight costs are consequently high and imports expensive. Producer prices of exports to competitive markets, after deduction of freight costs, are low. Northern Chad is in the Sahara desert. Rainfall increases southward from about 300 m (12 inches) in the Sahelian (sub-Sahara) belt, the main cattle raising area, to 1,200 mm (48 inches) in the extreme south, the main cotton growing area. Most rain falls during June to September when large areas are flooded, especially in the south. Ponds form in the Sahelian region and vehicle movement becomes virtually impossible in all except the desert areas. Day temperatures vary from an average maximum of 42C (107