Morocco - Second Agricultural Sector Investment Loan

 ICRR 10476 Report Number : ICRR10476 ICR Review Operations Evaluation Department 1. Project Data : OEDID : OEDID: L3765 Project ID : P005493 Project Name : Second Agricultural Sector Investment Loan Country : Morocco Sector : Other Agriculture L/C Number : L3765 Partners involved : Prepared by : Anthony J. Blackwood, OEDST Reviewed by : Ridley Nelson Group Manager : Gregory Ingram Date Posted : 08/12/1999 2. Project Objectives, Financing, Costs and Components : Objectives : Building on ASIL I, to support well conceived public investments in the agriculture sector and the deepening of complementary reforms . Financing : The loan of US$121.0 million was approved in June 1994, but was halved to US$60.0 million in January 1996 when the country portfolio was restructured and US$ 61.0 million of the loan was canceled. The loan closed on June 1998 (a year ahead of schedule at government request ) when a further unused balance of US$ 6.0 million was canceled. Components : Planned investments were split equally at 45% each between irrigated and non -irrigated agriculture (livestock, rainfed land dev and crop production, plant protection and forestry ), with the 10% balance mainly for agric. education, research, land policy and planning . The reform program included trade liberalization, reform of the budget execution process, reform of the agriculture grant fund and subsector reforms corresponding to the investment subsectors. 3. Achievement of Relevant Objectives : Investments were made according to the reduced plans, with some adjustments across subsectors (irrigation's share increased a little). The domestic cereal marketing system was deregulated (a condition of effectiveness ), while other subsector reforms are described by the ICR as first steps, or further intermediary steps in (deepening) reforms initiated in the 1980s. 4. Significant Achievements : Although substantial unfinished business remains (e.g. irrigation cost recovery, output pricing and public sector expenditure priorities), the project was able to support further sector investments and underpin continued sector reforms. The good progress on reforms which, by promoting growth and liberalizing the environment for private sector investment, should have a substantial positive impact on rural sector development . However, attribution of some reforms to the project is tenuous because they were steps in an on -going reform process or were in any case required by GATT. 5. Significant Shortcomings : Poor quality at entry (unclear and unrealistic objectives, insufficient stakeholder participation in project preparation resulting in lack of full agreement on objectives, and hence lack of commitment by borrower agencies); the ICR reports that Bank funds were not additional to the budget, but merely substituted for government allocations, and hence there was little incentive for MOA staff to implement the project; lack of incentive for implementation was exacerbated by (a) a more cumbersome new disbursement system (in response to slow disbursements under the first ASIL), (b) the inability to reconcile Bank and GOM procurement and audit procedures , and (c) sub-project selection and analysis procedures not being well understood by MOA staff; the ICR notes that the investment program was not subject to Bank influence through the loan, such that Bank funds cannot be claimed to have ensured "well conceived" investments; there were significant cuts in proposed expenditure on agric . education, rainfed development and forestry - the last two being subsectors where the Bank's strategy supported increased investment; despite good monitoring of physical and financial aspects, development indicators were not monitored; and, in addition to poor quality at entry, poor Bank performance contributed to the project's shortcomings through failure to revise unrealistic objectives, too many changes in team leadership (causing a disjointed dialogue on sector strategy), and irregular and understaffed supervision at times . 6. Ratings : ICR OED Review Reason for Disagreement /Comments Outcome : Unsatisfactory Marginally Unrealistic goals must be a factor in Unsatisfactory assessing achievements . Institutional Dev .: Partial Modest Sustainability : Likely Likely Bank Performance : Deficient Unsatisfactory Borrower Perf .: Satisfactory Unsatisfactory (ICR rating is marginally satisfactory - not available on this form). Borrower is jointly responsible for unrealistic goals and thus only partial implementation. Quality of ICR : Satisfactory 7. Lessons of Broad Applicability : (a) Stakeholder participation in project design, including prior agreement to realistic objectives and development indicators, is critical to ensuring full commitment to a broad reform program; (b) resolution of differences between Borrower and Bank systems and procedures (such as for procurement and auditing ) need to be explicitly agreed before implementation begins; (c) frequent changes of Bank task leaders reduces the effectiveness of policy dialogues (such that stakeholders lose interest ), and (d) agreed supervision plans should be adequately funded and followed. 8. Audit Recommended? Yes No 9. Comments on Quality of ICR : The ICR is of good quality.