Uganda - Forestry Rehabilitation Project

 Forestry rehabilitation project Report No: ; Type: Report/Evaluation Memorandum ; Country: Uganda; Region: Africa; Sector: Forestry; Major Sector: Agriculture; ProjectID: P002937 Uganda: Forestry Rehabilitation Project (Cr. 1824-UG) The Uganda Forestry Rehabilitation project, supported by Credit 1824-UG for SDR 10 million (US$13.78 million equivalent), was approved in FY88. Cofinancing equivalent to US$18.47 was provided by five agencies: the European Union (EU), the Governments of Denmark and Norway, UNDP, and CARE (an NGO). The credit was fully disbursed and closed on schedule in FY94, although the Danish grant was canceled in 1991 and the EU grant was suspended during 1993-94. The Implementation Completion Report (ICR) was prepared by the FAO/World Bank Cooperative Programme for the Africa Regional Office. The borrower contributed to the ICR mission's aidememoire (included in the ICR as Appendix A) and prepared its own written assessment of project performance (available in project files). Borrower comments are reflected in the ICR. No comments on the ICR were received from the project's cofinanciers. The project's objectives were to improve the management of Uganda's forests in order to meet domestic demands for timber, fuelwood, and other wood products; to decrease exploitation of the natural forest by increasing the output of timber from plantations; and to protect unique ecological systems by increasing the area and improving the management of conservation forests. To achieve these objectives, the project contained components for (a) the development of fuelwood plantations close to urban areas; (b) the establishment of nurseries to supply seedlings for forestry on farms; (c) the rehabilitation of natural forests by demarcating forest boundaries, planting fast-growing species to enrich forest stands, and expanding forest nature reserves; (d) the rehabilitation of softwood plantations by felling and replanting old stands; and (e) the strengthening the Forestry Department by providing logistical support and technical assistance for forestry operations, planning, management, research, and training. The project failed to meet most of its objectives. Tree planting close to urban areas was extensive, but production grew slowly and capital investments were higher than planned, undermining economic viability. Farm forestry fell short of its objectives, because the species used was not well suited to the growing conditions and the cofinancier for this component withdrew its support. Rehabilitation of natural forest was partly successful. In particular the demarcation of forest boundaries to redefine the area of the public forest substantially exceeded its target and enrichment planting in intact forest areas reached 80 percent of its target. Rehabilitation of softwood plantations was unsuccessful because private sawmills did not have the capacity to process all the wood available, and a large volume of over-mature wood remained unutilized. The component to strengthen the Forestry Department performed below expectations mainly because technical assistance to improve management and accounting systems, and monitoring and evaluation was ineffective. The training component provided only 12 percent of the training envisaged at appraisal, and the research component's achievements were negligible. The economic rate of return for the project as a whole was reestimated at 9 percent in the ICR, below the 15 percent rate estimated at appraisal and marginally less than the Bank's guideline rate. The Operations Evaluation Department (OED) disagrees with the ratings provided by the ICR. The ICR rates project outcome as satisfactory, institutional development as substantial, sustainability as likely, and Bank performance as satisfactory. OED rates project outcome as unsatisfactory because four of the project's five components fell far short of expectations. Institutional development is rated as modest because efforts to strengthen the Forestry Department and provide training fell well below their targets. Sustainability is rated as uncertain because future operations are highly dependent on provision of government and donor funds, both of which are uncertain. Lastly, Bank performance is rated as unsatisfactory because of the project's low quality at entry: the project was overly complex and proved too demanding for a Forest Department recovering from two decades of neglect. The lessons that can be drawn from this project suggest that the borrower must participate fully in the identification and preparation of projects; that sound sector work and institutional development should precede large-scale field operations involving natural resource management agencies; that cost-recovery and private sector involvement enhance the sustainability of forestry projects; and that monitoring and evaluation systems are indispensable to effective project implementation and should be initiated during project preparation. While OED disagrees with the ratings contained in the ICR, it finds that the ICR does provide sufficient information to determine project performance ratings. Cofinanciers' comments on the ICR were invited, but none were forthcoming. This is regrettable because cofinanciers provided substantial support to the project and played key roles in implementation. An audit is planned.