Somalia - Central Rangelands Research and Development Project : Phase II

Document of The World Bank FOR OIFICIAL USE ONLY Cg4 /q$&7- SD Repout No. P-4B34-SO MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF US$19.0 MILLION TO SOMALIA FOR A CENTRAL RANGELANDS RESEARCH AND DEVELOPMENT PROJFCT - PHASE II September 15, 1988 This document has a restricted distribution and may be used by reciplents only In the perfonnace of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS Official Excha.age Rate 1/: US$ 1.00 - 100 Somalia Shillings (SoSh) s SoSh 1.00 - 0.01 US $ Shadow Exchange Rate 2/s US$ 1.00 - 203 SoSh s SoSh 1.00 - 0.004 US 1, In effect March 1988, during appraisal. 2/ Estimated for March 1988. WEIGHTS AND MEASURES Metric System CALENDAR Fiscal Year: January 1 - December 31 Cropping Year: April - June (Gu Season) October - December (Dayr Season) ABBREVIATIONS ADF - African Development Fund FUA - Unit of Account of the African Development Fund GTZ - Deutsche Gesellschaft fur Technische Zusammenarbeit IDA - International Development Association IFAD - International Flnd for Agricultural Development NRA - National Range Agency SDR - Special Drawing Rights USAID - United States Agency for International Development WDA - Water Development Authority VFP - World Food Program  FOR OMCLAL USE ONLY SOKALIA CENTRAL RANGELANDS RESEARCH AND DEVELOPMENT PROJECT - PRASE II CREDIT AND PROJECT SUMMARY Borrowers Government of Somalia Amount: SDR 14.7 million (US$ 19.0 million equivalent) Terms: Standard, vith 40 years maturity US$ million Financing Plan: IDA 19. 0 African Development Fund 11.0 Government of Somalia 3.3 Total 33. Economic Rate of Return s 10 percent Staff Appraisal Report : No. 7270 - SO This document has a restdlted distnbution and may be used by iscipents only in tbe perfo, nance of their official duties Its contents may not otherwise be diclosed without World Bank authizationj  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO SOMALIA FOR A CENTRAL RANGELANDS RESEARCH AND DEVELOPMENT PROJECT - PHASE It 1. The following report on a proposed credit to Somalia for SDR 14.7 million (US$19.0 million equivalent) is submitted for approval. The credit would be on standard IDA terms with 40 years repayment. It would help finance a Central Rangelands Research and Development Project - Phase II. The project would be cofinanced with the African Development Fund (ADP), which would provide a loan of FUA 8.6 million (USS 11.0 million equivalent), and Government which would contribute US$ 3.3 million equivalent. 2. Background. Livestock products account for 35 percent of GDP and 80 percent of exports in Somalia. About 70 percent of the country -- 51 million hectares of land -- is given over to pastoralist, nomadic livestock grazing. This is the traditional occupation of half of the Somali population, and the dominant activity in the sector and the economy. The national herd is estimated to include 16 million goats, 12 million sheep, 6 million camels and 4 million cattle. Exports of 1 to 1.5 million animals a year are dominated by goats and sheep. Livestock exports were US$62 million in 1986. In recent years exports have been mainly to the Saudi Arabian market. The country is too dependant on the Saudi market. The Government is seeking to increase exports and eiversify into new markets and products, with assistance from USAID's Livestock Marketing Project. The Government will also maintain and increase livestock production through improved range mnagement and anim.l health services with the support of this project. 3. The Central Rangelands occupy 149,000 km northeast of the Shebelli River, between the coast and the Ethiopian border. Rainfall of 150-300 mm sustains dense woodland in the southwest and low herb/grasslands in the north and east. Some 800,000 people live there, with 11 million head of livestock -- over AS percent sheep and goats, and the remainder camels and cattle. The region provides about 401 of goat exports, and 20-252 of exports of other animals. Vithin the Central Rangelands, total forage production appears to be in reasonable balance with livestock feed requirements in the average year. Rangeland condition is fair, although a downward trend has been noted in specific high-use areas. Also, enclosure and cultivation in the areas where rainfall and soils permit is increasing. 4. A credit of US$8 million to support a US$46.3 million first-phase project for the Central Rangelands was approved by IDA in 1979 (Credit 906- SO). Cofinanciers included IFAD (US$9 million), USAID (US$15 million), WP and GTZ. The project was designed to consolidate and improve range and livestock production, increase pastoralist income, and foster gradual concentration of pastoral communities. The project got off to a slow start. Activities funded by the different financiers started at different times, and delays caused inefficiency and frustration. GTZ replaced ODA in funding the animal health component. Severe shortages of fuel and local funding reduced the effectiveness of staff and scaled down accomplishments in the field. The original design was overly optimistic in what would be accomplished and in estimating the returns from range and water management.  However, the project has been successful on several counts. It has helped to establish an organization capable of gathering and analyzing range and livestock related information, and to identify and Intervene successfully in areas of key interest to pastoralistso animal health services, water point construction, and sand dune stabilization. Community level organizations have been put in place, and management techniques that will help to sustain rangeland productivity have been tested. Adjustments to the Institutional aspects of the original project were consolidated at the multi-donor Mid Term Review of March 1984. At this review, the project entity was given increaaed autonomy from the National Range Agency (NRA), and supervision of field activities strengthened. Phase II will take advantage of the institutional base to further the investigative work and to put in place and disseminate worthwhile interventions developed during Phase I. 5. Rationale for IDA Involvement: The Central Rangelands are vital to the maintenance and increase of livestock exports which form the backbone of the Somali economy. Important advances in understanding range use and in maintaining and increasing productivity have been made in the first phase of the project. A second phase is considered justified because of: (i) the importance of rangelands for the economy; (ii) the need to minimize the negative e&fects ef increased population pressure and cultivation; (iii) the need to take advantage of productivity increasing techniques; and (iv) the opportunity to use an increasingly effective range agency. This project will serve an important testing and pilot function. Findings in this project are potentially applicable in much of Somalia. IDA's involvement in this project, in collaboration with ADF, GTZ and other donors, provides the opportunity to bring together a successful effort in rangeland development. 6. Proiect Obiectivess The second phase of the project is designed to maintain and improve the long term productivity of the Central Rangelands and the living standards of pastoralists. This objective will be pursued by minimizing the degradation of vegetation, improving on the understanding of rangeland production systems, and increasing the productive efficiency of livestock in the region. 7. Proiect Description: Constraints encountered in tradit