Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 4556

PROJECT PERFORMANCE AUDIT REPORT

CAMEROON LIVESTOCK DEVELOPMENT PROJECT(LOAN 983-CM)

June 16, 1983

Operations Evaluation Department

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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WEIGHTS AND MEASURES

1 Hectare (ha) = 2.47 acres

1 Kilogram (kg) 2.2 lbs.

1 Metric Ton 2,204.6 lbs.

ABBREVIATIONS

FONADER - Fonds National de Developpement Rural

FRG - Federal Republic of Germany

MINEL - Ministere de l'Elevage

SODEPA - Societe de Developpement et d'Exploitationdes Productions Animales

FOR OFFICIAL USE ONLY

PROJECT PERFORMANCE AUDIT REPORT

CAMEROON LIVESTOCK DEVELOPMENT PROJECT(LOAN 983-CM)

TABLE OF CONTENTS

Page No.

Preface .. . * * * * * * * * * * * * ** * * * * * * * * * * * *

Basic Data Sheet .. . .0 . . . .0..........**** **** **** **** **** **** **** .. ii

Highlights .... ********* *************************************** iii

PROJECT PERFORMANCE AUDIT MEMORANDUM

I. SUIMMARY ... .... ** *** *** ** *** *** *** *** *** ** 1

II. MAIN ISSUES ................ *********************.. 3

A. General ............. 0............................ 3

B. Intensification of Livestock Production ......... 3

C. Tsetse Eradication .................. ..... .. *... 5

D. The Slaughterhouses ... .......................... 6

PROJECT COMPLETION REPORT

II. Project Formulation and Appraisal 13

II. Project Implementat ion .. .. .. .. .. .. .. . ... .. . ... . ...... 17

IV. Project Impact ... .. . .. .. . ... .. ... . .. . .......... ..... 32

V.* Rates of Return ................ . .*............... 33

VI. Institutional Performance .. o......... 0...........*** 35

VII. Consultants Performance . ... .. .. .. . ............ .36

VIII. Bank Performance * .- ............... .......... 37

BaCocgr on ............. ****************************.. 138

Annexes I-IV

Map

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

PROJECT PERFORMANCE AUDIT REPORT

CAMEROON LIVESTOCK DEVELOPMENT PROJECT(LOAN 983-CM)

PREFACE

This is a performance audit of the Livestock Development Projectin Cameroon, for which Loan 983-CM was approved in March 1974 in the sum ofUS$11.6 million. The final disbursement was made on June 2, 1981, and anundisbursed amount of US$66,000 was cancelled on May 31, 1981.

The audit report consists of an audit memorandum prepared by theOperations Evaluation Department and a Project Completion Report dated October16, 1981. The PCR was prepared by the Western Africa Regional Office on thebasis of a country visit in March 1981. The audit memorandum is based on areview of the Appraisal Report (No. 295-CM) dated March 6, 1974, the Presi-dent's Report (No. P-1367-CAM) of March 13, 1974, the Loan and Project Agree-ments dated May 14, 1974 and the PCR. Correspondence with the Borrower and

internal Bank memoranda on project issues as contained in Bank files havealso been consulted, and Bank staff associated with the project have beeninterviewed.

An OED mission visited Cameroon in November 1982. The mission held

discussions with officials of the Ministry of Livestock, the Rural DevelopmentFund (FONADER) and the Livestock Development Agency (SODEPA). A field trip to

the tsetse control area and ranches of participating cattle owners was under-

taken. The information obtained during that mission was used to test thevalidity of the conclusions of the PCR and permitted discussion of the ranchand slaughterhouse aspects.

A copy of the draft was sent to Government on March 15, 1983 forcomments but none were received.

The audit finds that the PCR covers adequately the project's salient

features, its accomplishments and shortcomings, and the PPAM generally agreeswith the conclusions. The issues discussed have been selected because oftheir importance for this as well as other Bank-assisted livestock projects.

The valuable assistance provided by the Government, the agenciesinvolved, and their staff, as well as the farmers met during the preparationof this report is gratefully acknowledged.

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PROJECT PERFORMANCE AUDIT REPORT

CAMEROON LIVESTOCK DEVELOPMENT PROJECT(LOAN 983-CM)

BASIC DATA SHEET

KEY PROJECT DATA

Appraisal Actual or Actual as Z ofItem Estimate Estimated Actual P;,raisal Estimate

Total Project Costs (US$ million) 14.6 19.6 134Loan Amount (US$ million) 11.6 11.54 *99.5Date Board Approval 03/19/74 03/26/74Date Effectiveness 08/16/74 09/16/74Date Physical Components Completed 12/79 not yet completed

Proportion then completed (2) 90Closing Date 06/30/80 05/31/81Economic Rate of Return (2) 13 4 31Financial Rate of Return (Z) - 6Agronomic Performance good to poor (parastatal ranches)Number of Direct Beneficiaries (year 82)

CUMULATIVE DISBURSEMENTS

FY75 FY76 FY77 FY78 FY79 FY80 FY81

Appraisal estimate (US$ million) 1.9 4.3 6.7 8.7 10.3 11.3 11.6Actual (US$ million) 0.2 1.5 4.2 7.0 10.2 11.0 11.5Actual as 2 of estimate 11 35 63 88 99 97 99Date of final disbursementPrincipal repaid to (mo./day/yr.) (US$ million)

MISSION DATA

Date No. of Mandays Specializat)ons Performace Types ofMission (mo./Yr.) Persons in Field RepresentedLl Trend Prble

Identification 08/71 2 80Preparation 10/72 3 25Appraisal 05/73 5 140Subtotal 245Supervision 1 11/74 1 T b 2 2 FSupervision 2 05/75 1 6 b 2 2 FSupervision 3 12/75 1 12 d 2 1 F,T,PSupervision 4 06/76 2 40 b.d 1 1 T,MSupervision 5 08/76 2 24 d,b 1 1 T,MSupervision 6 02/77 1 20 d 2 1 T,F,MSupervision 7 07/77 2 40 b,d 1 1 F,MSupervision 8 03/78 2 40 b,d 1 1 M,FSupervision 9 06/78 1 12 e no rating givenSupervision 10 12/78 3 40 b,c,d 1 2 F,MSupervision 11 03/79 5 35 2xb,c,d,e 2 2 F,M,TSupervision 12 11/79 2 70 b,d 2 2 F,M,T,0Supervision 13 03/80 3 40 d,e,f 2 2 F,M,T,0Supervision 14 05/80 1 6 d 2 2 F,M,T,OSupervision 15 11/80 2 24 d,c 2 2 F,M,T,0SubtotalCompletion 03/81 ITotal

OTHER PROJECT DATA

Borrower United Republic of CameroonExecuting Agency Societe de Developpement et d'Exploitation des Productions Animales

(SODEPA); Fonds National de Developpement Rural (FONADER)Fiscal Year July 1-June 30

Name of Currency (abbreviation) Franc de la Communaute Financiere Africaine (CFAF)Currency Exchange Rate:

Appraisal Year Average US$ 1.00 - 222.70Intervening Years Average US$ 1.00 - 227.21Completion Year Average US$ 1.00 - 211.30

Follow-on Project:Name Second Livestock Development ProjectLoan Number 1010-CMLoan Amount (US$ million) 16.0Date Board Approval 04/22/80

/a a - agriculturist; b - agricultural economist; c - financial analyst; d - livestock specialist;e - teetase specialist; f - slaughterhouse specialist.

/b 1 - problem-free or minor problems and 2 - moderate problems.Te 1 - improving and 2 - stationary.T_ F - financial; M - managerial; T - technical; P - political; and 0 - other.

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PROJECT PERFORMANCE AUDIT REPORT

CAMEROON LIVESTOCK DEVELOPMENT PROJECT(LOAN 983-CM)

HIGHLIGHTS

The project was to assist the Government of Cameroon in the imple-mentation of the first phase of its livestock development program. It wouldcomprise establishing and operating three 20,000 ha state ranches, two slaugh-ter plants, modernizing 12 butcher shops, developing livestock production on150 private ranches and farms, and eradicating tsetse-flies from 800,000 ha ofgood pasture land. Direct benefits from the project would be the incremental

annual production of about 4,300 t of meat, 2,000 breeding heifers, 1,500improved breeding bulls and 1,500 feeder steers.

The project accomplished most physical objectives, except for theslaughterhouses which are nearing completion in the follow-on project. Thethree Government ranches have been established but their financial viabilityis in doubt due to low production coefficients. About 800,000 ha grazinglands have been cleared from tsetse. Introduction of mixed farming and smallprivate ranches has been successful. The number of loans, especially forsmall farms, exceeded appraisal estimates by 70%. Overall project impact onnational meat production was less than expected. Incremental meat production

is likely to reach only about 2,000 t per annum at full development. The

economic rate of return has been recalculated at 4% compared with the apprai-

sal estimate of 13%.

Other points of interest are:

- parastatal ranching proved to be unsuccessful because of over-staffing and lack of proper management control (PPAM, para. 13; PCR,paras. 3.30-3.40);

- mixed farming and small private ranches were highly successful andcould serve as models for livestock development in other African

countries with similar ecology (PPAM, paras. 15-19; PCR, paras.3.02 and 4.06);

- the tsetse eradication program will be only partly successfulbecause the delayed preparation of a land use plan has led to

uncontrolled influx of herdsmen. Establishment of successful smallranches will be difficult if not impossible due to the immigrants-claims to the land (PPAM, paras. 20-21);

- considerable cost overruns and design deficiencies were encoun-tered in the implementation of the slaughterhouse component due

to poor appraisal and supervision (PPAM, paras. 23-32).

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Major lessons learned from project experience are:

- to firm up cost estimates of agro-industries, it would be advisable

to invite bids immediately after appraisal and prior to Loan/Credit

negotiations (PPAM, para. 33);

- specialized consultant supervision for agro-industry projects is

called for since there is a lack of "in-house" expertise (PPAM,

para. 34); and

- there is a need for careful prequalification of consultants involved

in the design of agro-industries (PPAM, para. 35).

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PROJECT PERFORMANCE AUDIT MEMORANDUM

CAMEROON LIVESTOCK DEVELOPMENT PROJECT(LOAN 983-CM)

I. SUMMARY!!

1. At the end of the 1960s, Cameroon was facing a meat deficit ofapproximately 10,000 t annually. The main reasons for this shortage were thelow F:Gductivity of the national herd and constraints in the marketing system.As a basis for a long-term strategy the Government prepared the "Plan Viande".The Bank evaluated this plan and, with certain modifications, accepted it asthe basis of a livestock project.

2. On the production side, project objectives were to assist livestockowners in intensifying their grazing methods and to safeguard grazing landsthrough tsetse fly eradication. On the marketing side the project was toraise meat hygiene and to minimize waste by improving slaughter and retailfacilities. The philosophy underlying the main project components, tsetseeradication and ranching, was to use experience gained in other Africancountries (in Nigeria for tsetse control program and in Kenya for ranching).The credit component was kept small because only limited experience wasavailable in this field at the time.

3. The project was appraised in 1973, and the loan (US$11.6 million)became effective in 1974. The project consisted of (i) providing creditfacilities to small, mixed farmers and settled graziers through the FondsNational de Developpement Rural (FONADER); (ii) exterminating tsetse flies onabout 800,000 ha in the Adamoua; (iii) establishing three parastatal ranchesand constructing two slaughterhouses which would be managed by the Societe deDeveloppement et d'Exploitation des Productions Animales (SODEPA); (iv)training personnel; and (v) preparing a second livestock project.

4. At appraisal it was acknowledged that the project would involve aconsiderable risk. The ranching component was therefore reduced from therequested seven to three ranches, the tsetse fly eradication campaign wassuperseded by a survey, and the credit component was kept small. Projectimplementation was entrusted to an experienced livestock consultant and wassupplemented through technical and financial bilateral assistance.

5. The credit scheme was the most successful project component. It waswell adapted to actual needs of livestock owners and provided, through landallocation and credit, the basis for a sedentarized and improved livestock

1/ Adapted from the PCR.

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production. Implementation of this component was, however, affected by

problems of lack of extension services, high credit administration costs and

repayment difficulties.

6. The tsetse extermination campaign achieved its objective and cleared

800,000 ha of Adamoua grazing lands. The use of insecticides was found to

have no lasting impact on the environment. The main problem of the tsetse

component was its high cost per ha, due to a more severe than expected degree

of infestation. The long-term success of the program, however, would depend

on the total area to be controlled in order to prevent reinfestation (which

could prove larger than expected) and on the capacity of the Government to

provide the necessary resources to the Tsetse Control Division.

7. The three SODEPA ranches were established but did not achieve their

objectives. Their financial viability has not yet been assured due to high

cattle mortalities, an extended fattening period, unavailability of female

stock and high administrative overheads. It has been agreed with Government

to review the future development of the ranches on the basis of objective

technical criteria.

8. Extreme difficulties were encountered during construction of the two

slaughterhouses. The first contractor declared bankruptcy before actual

works even began. Construction of the Yaounde plant was almost completed

(95%) while that of the Douala plant had reached only 60% when the second

contractor also declared himself financially unable to continue. Under the

follow-on project funds have been provided to complete both plants.

9. The overall impact of the project on the national meat production

was less than expected. The few technical innovations which became available

could only be implemented on a limited scale due to the lack of an effective

extension service. Within the project, the tsetse eradication campaign had

the strongest impact on the national meat production. Approximately 60,000

head of cattle have re-entered the tsetse freed area, and the resulting

incremental production is estimated at 1,500 t of meat annually.

10. The traditional sector credit scheme has demonstrated that land

allocation, access to credit and technical advice can have a significant

impact on the productivity of the traditional pastoralists. Given these

encouraging results, this component was expanded under the second project.

The economic rate of return for the project, recalculated at 4%, fell short of

the 13% appraisal estimate. This drop resulted mainly from the difficulties

encountered in the ranching and slaughterhouse components. In terms of

institutional development, the creation of a separate Tsetse Control Division

located at Ngaoundere represents a significant achievement. On the other

hand, as indicated above, the project has not succeeded in turning the three

ranches into financially viable enterprises.

11. The consultant's performance suffered from frequent changes in key

personnel, and the evaluation of the first project also proved deficient as it

failed to highlight the ranch problems, which remained undetected for some

time.

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II. MAIN ISSUES

A. General

12. The project was a mixed success. While the introduction of modestlysized private ranches should be considered as a model for future livestockdevelopment in Africa, especially in areas of nomadic or semi-nomadic pastur-ing of herds, performance of the parastatal ranches was disappointing. Asubstantial area of the Adamoua region was successfully cleared of tsetse flyinfestation, but proper land use is not safeguarded and insufficient controlof herd movements may lead to an early reinfestation. The least successfulproject component was the slaughterhouse construction which was and still isbeset with a host of problems. In the following these issues are discussed indetail.

B. Intensification of Livestock Production

13. The project was prepared and appraised when the Bank had only limi-ted experience in livestock development in Africa in general and the littlethat was available was mainly restricted to ranching in East Africa. Based onthe commercially successful ranches in Kenya and Tanzania with whom the Bankwas dealing and also encouraged by the performance of private ranches likethe Compagnie Pastorale in Cameroon and others in West Africa, the emphasisof livestock development was to be put on large-scale ranching. Since con-cessionary ranch development by private expatriate companies was no longeracceptable, the concept of parastatal ranch development gained in importance.The experience with parastatal ranching in this project proved to be dis-appointing, with the same negative results as encountered in East Africa../

14. The same reasons for the poor performance can be found for all theseprojects. Due to prevailing un- or under-employment in the countries con-cerned, political pressures led to considerable overstaffing of the ranches,thereby hampering their financial viability. The financial and economicviability of the enterprises is further curtailed by "unaccounted" calf andcattle losses. It is obvious that theft by staff occurs frequently whencomparing the reported excessively high losses due to predators or snake bitewith the much more favorable coefficients on neighboring private ranches.Introduction of stricter controls, for example surrender and condemnation ofcattle perished due to predators/snake bite would certainly reduce these"losses" rather rapidly. Equally important would be regular controls atrelatively short intervals to determine the number of cows in calf. Calflosses should also be verified by surrendering dead calves for inspection andcondemnation.

1/ See Tanzania Second Livestock Project, OED Report No. 4241, datedDecember 27, 1982 and Madagascar Beef Cattle Project, OED Report No.1559, dated April 11, 1977.

15. In contrast to the poor results obtained on SODEPA ranches (see also

PCR paras. 3.29 ff), development of the private small ranch subcomponent

succeeded beyond most optimistic expectations, thanks to the excellent work of

project managers supplied under German aid, assisted by motivated Cameroonian

staff.

16. The appraisal expected to fund 150 small-scale cattle fattening and

larger breeding/fattening operations. Smallholder fattening introduced the

concept of mixed agriculture:livestock farming systems to smallholders in the

arabica coffee-growing Northwest Province. The average farm size of 4 ha

would permit introduction of grass-legume fodder crops. A total of 35 farms

was expected to participate in this category. However, demand proved much

stronger, and 172 farmers participated (see PCR para. 3.04).

17. The strong demand for development loans can be easily explained by

the high profitability as shown by a 40% financial return on the investment.

Furthermore, farmers have recognized the beneficial effects of manure produced

by the animals. By substituting manure for costly fertilizers in their coffee

plantations, savings as well as higher coffee yields are obtained. The

scheme is similar to the operations introduced successfully in an East African

project, / and should be considered as a breakthrough in introducing modern

mixed farming systems to a society of traditional agriculturists without any

previous experience in animal husbandry.

18. Equally successful and impressive was the development of the private

ranches. Two different types (250 ha and 750 ha) were to be financed. Intro-

duction of permanent, fenced grazing in an area where previously nomadic or

semi-nomadic herdsmen dominated was at least as revolutionary as introducing

the agriculturists to mixed farming. The possibility of obtaining long-term

leases, which could serve as collaterals for obtaining loans, proved to be

an important innovation, contributing to the success of the scheme. Comple-

mentary feeding of cottonseed cake during the dry season and first efforts to

make hay also for improving cattle feeding during this period are important

steps in modernizing the traditional sector. As a result production coeffi-

cients2/ have reached levels unparalleled in most developing countries.

19. The relatively rapid spreading of the ranching idea is, to a certain

extent, also attributable to project management efforts to make best use of

the successful ranches- demonstration effect. However, ranch visits were

limited by transportation bottlenecks since only a few herdsmen could be

1/ Malawi, Lilongwe I-III, OED Report Nos. 751, 1597 and 3414.

2/ Calving rates between 55-65%, calf mortality 2% and less, adult mortality

negligible.

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brought to the ranches with the relatively small vehicles available to theproject. In the audit's view it would be appropriate to consider financingsmall buses in the framework of supporting extension activities in a givenregion. Since demand of a single Bank-assisted project might be insufficientto justify the purchase of a bus, efforts should be made to analyze demands ofother projects, not only agriculture but also for instance education, so thatone vehicle could serve a number of different schemes.

C. Tsetse Eradication

20. One of the project's subcomponents assisted a tsetse eradicationscheme which freed almost 800,000 ha from the fly, opening up a vast area ofgood grazing potential. The spraying campaign was successful but developmentof the area has been hampered by the late preparation and issuance of a soundland-use plan. The project provided for 30 man-months of consultant servicesto assist Government in preparing detailed plans for the effective use ofareas cleared of tsetse flies. This study got off to a late start and despitean agreement that disbursements against expenditures on tsetse fly extermina-tion would be made only if this land-use study was undertaken. However,such a detailed study did not become available until 1981 (PCR para. 3.18).

21. The audit questions the decision to go ahead with the eradicationcampaign without proper land-use plans. Since preparation of these planscannot be considered too time consuming - the appraisal had anticipated atotal manpower input of 30 months, i.e. completion of the report would befeasible in about one year - the question should be asked why this study wasnot undertaken during project preparation or at least immediately followingappraisal. The delay in preparing the study has already had negative conse-quences. There are problems with properly controlling the influx of tsetseinfested cattle, overstocking and overgrazing. In addition, possibilitiesof expanding the above-mentioned small-scale ranching systems, with higherproductivity, appear limited, and, even if they are further pursued, uncon-trolled land use will lead to litigations with traditional pastoralistsclaiming "traditional" rights to certain areas.

22. There is another aspect to the tsetse eradication campaign. The PCR(para 3.27) reproduces the results of a study which investigated the effectsof the insecticides applied on the environment. The conclusion of this studyis that "no significant adverse impact on the environment was detected".Cameroonian officials complained to the audit mission that, despite thefavorable findings of the study, the Bank had informed the authorities ofits refusal to continue financing the same insecticides in the follow-onproject.-! The recommended substitutes are not only much costlier, but during

1/ The Region states that during late 1981, the Bank received a new reportwhich concluded that: 'The application of Dieldrin has to be consideredthe last resort, to be used only in case all other alternatives areineffective, not only because it has a high immediate impact on non-target organisms, but also because the lasting impact on warm bloodedanimals is very strong.- These comments led the Bank to recommend toGovernment to discontinue the use of Dieldrin. In search for an en-vironmentally less harmful insecticide, the Bank repeated an earlierrecommendation that Government should begin trials with Decamethrin.

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the first applications severe damage to bird and fish life was noticed.l In

the audit's view, it would be worthwhile to investigate the implications

to the Bank of prohibiting application of insecticides instead of restricting

itself to recommending a different chemical. The question should be asked if

it were not more appropriate for the Bank to advise on the pros and cons of

available insecticides and leave the decision which one should be applied to

the'Government.

D. The Slaughterhouse Experience

23. The project provided for the construction of two slaughterhouses,

one in Yaounde and one in Douala. Total cost of these facilities was esti-

mated at appraisal to reach US$1.822 million. The lowest bid received under

ICB shortly after project start-up amounted to US$2.8 million and the second

lowest to US$3.1 million. However, both of these bidders were not fully

qualified, as events demonstrated, and the two plants were never completed

during project implementation. A salvage operation had to be started under

the Second Livestock project, and, by late 1982, only the Yaounde abattoir had

been completed, while the Douala slaughterhouse is only 50% completed. Total

construction costs are now estimated to exceed US$4 million, a cost overrun of

220%. In the audit's view, the Bank has to take substantial blame for the

disappointing outcome of this project component because mistakes were made

during appraisal and supervision.

24. The audit did not succeed in obtaining a copy of the consultant-s

preparation report and was, therefore, unable to determine how many changes,

if any, had been introduced during appraisal.

25. The appraisal was based on a rather general concept of municipal

slaughtering facilities, where SODEPA would slaughter its cattle from the

project-financed ranches and where local butchers would bring their slaughter

animals for the same purpose. Capacity was to be based on the likely growth

in population and consumption. For cattle the appraisal estimated a peak

slaughtering throughput of 25 heads per hour or 200/day. In addition sheep/

goats and pigs were to be slaughtered. Emphasis was put on utilizing by-

products such as sheep intestines for the production of casings destined for

export, as well as blood- and bone meal. Due to religious customs of a large

population segment, ritual slaughter was anticipated, and there was strict

separation of the hog slaughtering facilities.

26. The audit found the appraisal flawed in several aspects. First,

the anticipated peak capacity for cattle could never be reached if ritual

slaughter was to be observed. Under the religious laws slaughtered cattle

have to face in a certain direction and have to be completely bled until dead,

1/ The Region states that this resulted from the fact that the expert's

recommended dosage was well in excess of an environmentally safe appli-

cation and the Bank did not have the in-house capability of cross-

checking this recommendation in advance and that this experience shows

that such schemes are very risky.

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i.e. at least for five minutes. Since only one cattle race, one stunning areaand one bleeding pit were foreseen, actual peak capacity is only 12 head/hour.Second, although available statistics, reproduced in Annex 8, Tables 3 and4 of the SAR, indicate that the maximum small stock slaughter throughputper annum reached only 1,400 in Yaounde and 5,300 in Douala, designs wererequested to bring annual capacity to 30,000. What was completely overlookedis the fact that most small stock have been and still are slaughtered at homeor in the butchers' back yards. Third, the anticipated utilization of smallstock intestines was also treated inconsistently. While ;:he appraisal report,correctly, stated that traditionally all intestines are used for human con-sumption, it nevertheless provided for the purchase and installation ofmachinery to prepare the same intestines for export as casings. Irrespectiveof the traditional consumer habits, it was overlooked that local breeds are ofsuch small size that the intestines are unsuitable for casings.

27. Following the appraisal, consultants were to be employed by SODEPAto prepare detailed slaughterhouse designs, specifications and tender docu-ments. SODEPA evaluated the proposals of 5 firms and sought Bank approval forstarting negotiations with one firm. From documents on file it is evidentthat the cost factor was determining the choice. However, it can be statedthat the first consulting firm had a fine reputation and experience inslaughterhouse construction. A fee of US$110,000 was determined, but thennegotiations bogged down because SODEPA, on the Bank's advice, refused toagree on advance payments and/or issuing an irrevocable letter of credit tocover the consultant's risks. In the audit's view, the Bank not only gave thewrong advice to SODEPA but also got involved in an issue which was beyond itsresponsibilities. In discussions with other departments, it became apparentthat the position taken by the Region regarding advance payments or guaranteesto consultants is not shared by them. A common approach for all Bank depart-ments seems warranted.

28. The second choice for the consultant assignment was less qualifiedand experienced, and some of the problems arising during construction can betraced to his work. While some major shortcomings in his design could becorrected by the Bank during its review prior to tendering, others remainedundetected (for example, the slaughtering/processing hall which is at least1 m too high; insufficient roof overhang at loading ramp, etc.).

29. When bids were opened, the lowest was 56% above appraisal estimate(see para. 23 above). Confronted with this unexpected cost overrun, the Bankgot - in the audit's view - too much involved in making sure that the lowestbidder was also a "qualified" bidder. Learning about the bidder's financialdifficulties, a mission was dispatched to Sweden to investigate the firm'sbanking connections, plant facilities, etc. and concluded that everything wasall right. As things turned out, the qualification and the usefulness of thismission can be questioned because only a few months later the firm went bank-rupt. By undertaking this kind of investigation and checking the Bank assumeda responsibility which goes beyond its tasks and which could be wrongly inter-preted by borrowers and, in their eyes, render the Bank liable for resultinglosses.

30. Additional losses occurred in this case because the Bank, contraryto its own rules and regulations and contrary to the advice of the supervisingconsultant, approved an additional 10% advance to the same firm, although this

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amount was not covered by any bank guarantee. Eventually the US$280,000 of

this transaction were lost by the Borrower due to the firm's bankruptcy.

31. Further problems with the abattoirs went unnoticed when a new

contract was approved with the second lowest bidder. In his contract it is

stated that the building would be constructed by using his brand-name panels,

sandwiching a concrete filling. There is no indication that anybody ever

investigated the proposed technology. As it turned out the panels are based

on a wood shaving-cement mix and are now subject to termite infestation.

32. Other problems include the approval of blood drying equipment with

a 7000 1 capacity, although only 1600 1 could be obtained under the unrealis-

tically assumed peak capacity of 200 head of cattle/day. Overcapacities were

also tolerated for generators and chilling equipment, procurement of "luxury"

equipment, such as a cloth ironing machine or an electronic microscope or a

mechanical hoist for 15 kg small stock, to name only a few, were approved.

Unsuitable equipment for processing of intestines or dehairing of pigs was

accepted. Some of the shortcomings have been corrected by the plant manager -

at cost - but others cannot be rectified. Major problems can be expected with

the Douala plant, not yet completed, due to a change in site. The high

water table at this site will require costly installation of drainage and

provision of an affluent pumping system. In regard to the change of site the

only Bank reaction found by the audit was in a supervision report (see PCR

para. 3.49), and no action was ever taken to persuade SODEPA to use a more

appropriate site. The same mistakes made in Yaounde in regard to equipment

will be repeated in Douala since everything was ordered prior to the comple-

tion of construction.

33. There are several lessons to be learned from project experience.

First, more realistic cost estimates have to be introduced for agro-industrial

components. One way would be, and this is already practised by one of the

Bank's regions, to invite bids for an agro-industrial undertaking in the

months after appraisal but prior to negotiations. This procedure would

not only firm up cost estimates and avoid sizeable cost overruns for which

financing is not assured, but would also contribute to immediate startup of

construction, reduction of the disbursement period and elimination of likely

time overruns.

34. Second, there remains a weakness in Bank expertise on agro-indus-

tries. Involvement of specialized consultants in supervision is necessary and

must not be eliminated on grounds of "budgetary constraints".

35. Third, there is a need for careful prequalification of consultants

involved in slaughterhouse design. The remark found in the files when select-

ing the design consultant for this project that he "reputedly" had experience

with small abattoirs is not sufficient.

36. A postscript. The Yaounde abattoir has been ready since August 1982

but was not operating at the time of the audit mission's visit in November.

It was explained that religious leaders had reservations about the method to

stun cattle prior to slaughter and also that slaughter cattle would not face

-9-

in the prescribed direction. Section 3.06 of the Loan Agreement stipulates

that the Borrower shall close the existing municipal abattoirs "as soon as the

slaughterhouses become operational". It remains to be seen if the Bank will

succeed in enforcing this covenant.2 1

1/ The Bank has been notified that the abbatoir started operating in Decem-

ber 1982 but the old municipal facility also continues to function.

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PROJECT COMPLETION REPORT

CAMEROON LIVESTOCK DEVELOPMENT PROJECT(LOAN 983-CM)

October 16, 1981

Western Africa Regional Office

- 13 -

I. BACKGROUND

1.01 At the end of the 1960s, the Government of Cameroon became aware

that the country had insufficient meat to feed its own people. Theproductivity of local herds was low, the existing marketing system did notfunction properly and, as a result, the country had to import increasing

amounts of meat. Something had to be done.

1.02 The low productivity of the national herd was the main

constraint. Despite its size -- 2.3 million cattle and 2.9 million sheepand goats, compared to a human population of only 5.7 million people -- themeat supply remained low. The average per capita consumption was estimatedat 12.5 kg of meat in 1969. In order to reach this level, the country hadto import annually 10,000 t of carcasses or 13% of the total meat consumed.By 1985, the annual meat deficit was expected to reach 26,000 t.

1.03 Marketing was identified as the second important constraint.Cameroon's best grazing areas are in the Adamaoua, the North, and in theNorth West of the country. These are also the regions where the maincattle, sheep and goat populations are held. The main consumption centers,however, are the cities in the south and southwest, with a large urbanpopulation (29% of the total) and an annual growth rate of 7%.

1.04 To overcome this growing meat deficit, the Ministry of Livestock

prepared the "Plan Viande", consisting of proposed measures to increasemeat production and improve meat supply to the fast growing urbanconsumption centers. The main components of the Plan were:

- Rehabilitation of existing and creation of new researchfacilities to assist producers through applied research andtraining (using agro-industrial byproducts);

- establishment of feedlots;

- improvement of existing marketing infrastructure, (markets,cattle routes, holding grounds and abattoirs); and

- improvement of marketing practices.

II. PROJECT FORMULATION AND APPRAISAL

2.01 Between 1969 and early 1971, several Bank missionsvisited Cameroon to investigate the possibilities of Bank participation inthe development of the Livestock Sector. In February 1971, the Bankreviewed the "Plan Viande" and concluded, because four years out of thefive-year program were suggested to be used for studies and planning, thatthe proposals were too time consuming. Instead, the Bank recommended to

move into project operation more swiftly.

2.02 During September 1971, an identification mission visited thecountry. The mission found very favorable conditions for the development

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of animal production, and a Government with a strong interest to improve

the livestock sector. The mission reported Government's intention to

implement the "Plan Viande" and that the Government was already activelylooking for external aid financing to implement the proposals.

2.03 The mission confirmed the Bank's general interest in assisting

the livestock sector and reiterated the Bank's preference for more

operation-oriented project components. The mission therefore proposed:

(i) 7 State ranches of at least 50,000 ha each in the East;

(ii) 3 State Ranches of at least 20,000 ha each in the North West;

(iii) transport facilities for cattle and meat, and stock routes;

(iv) equipment for cattle markets and holding grounds;

(v) construction and renovation of slaughterhouses; and

(vi) pasture improvement trials and scholarships.

Total project cost was estimated at US$11.5 million and it was assumed

that, as a result of the project, an additional 10,000 t of meat could be

produced, which was equal to the national meat deficit at the time.

Government responded very favorably to the Bank's proposals.

2.04 In the following months, Government fully endorsed the

operation-oriented project objectives. It refused free bilateral

assistance for project preparation because the proposed terms of reference

favored a more research-oriented approach, preferring instead to hire the

best consultants available who were financed out of its own resources.

2.05 In the meantime, two follow-up missions from RMWA expressed

concern that the tsetse infestation in the Adamaoua might be more severe

than previously expected, thereby endangering the proposed ranch

development scheme. The Bank therefore proposed to modify the terms of

reference for project preparation, to include an assessment of the

incidence of tsetse flies, and in case it was found to be necessary, the

cost and methods of tsetse eradication.

2.06 The project was prepared by an experienced consulting firm in

the relatively short time of only six months. The final report, submitted

in April 1973, contained as major new elements, proposals for:

(i) a credit scheme to finance private ranches and butcher shops;

(ii) a tsetse eradication campaign; and

(iii) the creation of the Societe de Developpement et d'Exploitationdes Productions Animales (SODEPA) which would become responsible

for the operation of ranches and slaughterhouses.

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2.07 The Bank accepted the preparation report as a working basis andsent an appraisal mission to the field. The mission recommended a projectwhich included a credit scheme, a tsetse fly eradication and the SODEPAactivities. The philosophy underlying the main project components wasthat practical field experience which had been gained in other Africancountries could be used: the tsetse eradication campaign was partly basedon the ongoing efforts in Nigeria where, already for more than ten years,tsetse control measures were being implemented; and the ranching componenton the example of successful private ranches in East Africa and of the"Compagnie Pastorale" of Ngaoundere/Cameroon. It was therefore assumedthat these two components would not face any special risks. Only thecredit scheme was considered innovative since, at the time, no experiencewas available from other West African countries. To minimize its potentialrisks, the credit component was kept relatively small and flexible throughthe introduction of different types of subloans.

2.08 Negotiations were held in February 1974. The Camerooniandelegation agreed to the proposed project and accepted all conditions butone: the immediate elimination of meat price controls for the 12 butchershops to be financed under the credit scheme. The Bank agreed to drop thiscondition.

2.09 A Bank loan of US$11.6 million for 20 years, including a graceperiod of 5 years was approved in March 1974. Loan signature was in May1974 and the project became effective in September 1974.

The Project

2.10 The "Livestock Development Project" was considered as the firstphase of a Government program to modernize the livestock sector and was tobe implemented over a six-year period, 1974-79. It comprised:

(a) providing credit facilities and technical assistance to about 35mixed farmers to carry out steer fattening, and to 115 settledgraziers to develop breeding/fattening ranches;

(b) exterminating tsetse flies on about 800,000 ha in the Adamoua toprovide additional grazing areas and contain the southeastwardadvance of tsetse flies toward the fly-free grazing lands ofCentral Cameroon;

(c) establishing and operating three state-owned 20,000 ha ranches;

(d) constructing two slaughter plants, each with an annual capacityof 12,000 t and modernizing 12 butcher shops in Douala andYaounde;

(e) training ranch and slaughter plant managers, animal productionextension officers, credit officers, and tsetse flyextermination and survey teams; and

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(f) preparing a second livestock project that vould include measures

to ensure the effective use of areas cleared of tsetse flies, the

expansion of credit facilities to the traditional sector, and

the continuation of tsetse fly extermination.

Targets and Goals

2.11 The project's main objective was to help satisfy Cameroon's beef

requirements through increased domestic production. The project was to

assist livestock producers in two important ways: firstly by helping them

to intensify their grazing methods; and secondly by safeguarding grazing

lands for livestock through tsetse fly extermination. Recognizing that

changes in the production system would involve risks and that innovations

needed to be tested, the project was to involve both state and private

sector ranch development. As a secondary objective the project was to

raise meat hygiene and minimize waste by improving slaughter and retail

butcher shops in Yaounde and Douala.

2.12 The key role for the development of the livestock sector, was

assigned to the Societe de Developpement et d'Exploitation des Productions

Animales (SODEPA) which was established by decree of April 24, 1974. Its

main responsibilities were: (a) to develop and manage livestock

enterprises (ranches, slaughterhouses); (b) to provide technical

assistance to livestock owners and assist in the implementation of the

FONADER credit scheme; and (c) to sublease to private individuals

approximately 140,000 ha range lands for which SODEPA had received a 99-

year leasehold title from Government.

2.13 The credit scheme was designed to be implemented by the Fonds

National de Developpement Rural (FONADER) which was created in 1973 with

the dual role of (a) providing credit to farmers or groups of farmers; and

(b) appraising, financing, and supervising a wide variety of rural

development projects. Since FONADER had no qualified field staff, SODEPA

was to establish two livestock extension teams. These teams, based in

Ngaoundere and Bamenda, were to identify potential borrowers, carry out

technical evaluations of loan applications, and subsequently give

technical assistance and supervise the borrowers. These teams were to be

supported by field staff of the Ministries of Agriculture and Livestock.

Revisions

2.14 By 1978, an amendment of the Loan Agreement became necessary for

two reasons: (i) disbursements in categories I(a) Consultant Services;

I(b) Slaughterhouse Construction; and II(e) Ranch Equipment had already

exceeded the allocated amounts; and (ii) in view of the bilateral technical

assistance for tsetse eradication and FONADER credit components, it was

possible to reallocated Bank funds. In an exchange of letters (March 3,

1978), Schedule 1 to the Loan Agreement was amended (Annex II, Table 1).

The revised disbursement percentages remained unchanged until project

completion.

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III. PROJECT IMPLEMENTATION

A. Traditional Sector Development.

Objectives

3.01 Under the project, mixed farmers/settled graziers were to beprovided with credit facilities to be provided by FONADER and technicalassistance by SODEPA, with a view to developing small-scale cattlefattening and larger breeding/fattening operations. The credit programwas to be the first for cattle production and was to involve, besides on-farm and ranch investments, the introduction of improved grazing systemsand changes in the land tenure arrangements. Three different types ofcredit were conceived:

Model I: 35 mixed farms of about 4 ha each in the coffee-growingareas of the Northwest were to fatten 3 steers annually.Project-financed investments included materials for fencing,cattle shelter, equipment, seeds, fertilizer and feeder steers.

Model II: Private ranches of about 250 ha each in the Northwestand Adamaoua were to be developed. Project-financed investmentsincluded breeding stock, feeder steers, fencing, watering andstock handling facilities, dips, spray races, and smallequipment.

Model III: 25 private ranches of about 750 ha each were to bedeveloped. All credit arrangements were the same as for theModel II ranches.

Actual Implementation

3.02 The traditional sector credit scheme was the most successfulproject component. It was successful because (i) the possibility toreceive a 20-year leasehold title made the scheme attractive forparticipants; (ii) the need for credit as a constraint to develop livestockproduction was correctly identified; (iii) FONADER realised the importanceof small mixed farms and expanded the program for Model I loans; and (iv)farmers decided to invest mainly in cattle and fencing. However, itsimplementation was affected by: (i) lack of technical supervision; (ii)unavailability of farm inputs; (iii) slow repayment rate; and (iv) highcredit administration cost.

3.03 Out of 986 applications received, FONADER approved 317 loans, ofwhich only 255 loans were financed from project funds (Annex III, Table 1).To satisfy additional credit demands, FONADER financed another 96 loanswith approximately CFAF 250 million from Government funds. These loanshave been excluded from this evaluation.

3.04 In the first year of the credit program (PY 2), the number ofloans disbursed was lower than projected, but beginning with PY3, the

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number of loans annually disbursed exceeded appraisal estimates. At the

end of PY6 FONADER had disbursed 255 loans, or 70% more than the SAR had

planned. The strongest increase occurred in the Model I scheme for mixed

farms with 172 loans (i.e. 137 above the SAR estimate), (Annex III, Table

2), whereas the number of loans to larger ranches was reduced.

3.05 Emphasis on mixed farms: This was the result of three

developments:

(i) During project implementation an increasing number of disputes

arose between agriculturists and pastoralists. The usual causes

were that agriculturists claimed rights to land allocated to

ranches and had begun to plant crops inside ranches, which were

in turn damaged by the herds. Many disputes were referred to the

courts for decision. These difficulties discouraged the

authorities to make full use of the Credit funds earmarked for

private cattle ranches;

(ii) the area of Dibi in the Adamoua was over-populated by humans and

cattle to such an extent that it became impossible for the

authorities to allocate ranch lands to individuals as this would

have been at the expense of the community as a whole; and

(iii) it was discovered that the area of Tourningal was infested with

tsetse flies (para 3.23). Since it was technically not feasible

to eradicate the tsetse flies from this isolated area, FONADER

could not justify financing investments in cattle.

At the same time it was also noted that Model I loans were usually

implemented without difficulties and that the impact of introducing

livestock into crop farming was very positive. As a result of these

developments the Bank and FONADER agreed to increase the number of loans to

mixed farms (approximately 400%).

3.06 To finance the total number of 255 loans, FONADER disbursed CFAF

247 million. Out of this amount the Bank reimbursed CFAF 235 million

(US$1,017,356) or 92% of the reallocated amount of US$1.1 million (para

2.14). FONADER financed the difference of CFAF 12 million from Government

funds.

Loan Utilization

3.07 For Models I and II, the average amount disbursed per loan

exceeded the appraisal estimate by 65% and 50% respectively; and for Model

III it was 20% less than projected (Annex III, Table 3).

Average Loan Amount (in CFAF'000)

Actual as %Appraisal Actual of Appraisal

Model I 200 330 165

Model II 1,400 2,101 150

Model III 3,400 2,717 80

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3.08 The main reasons for these cost overruns were (i) that the numberof cattle purchased per farm was about 100% higher than projected (AnnexIII, Table 4); and (ii) that the average cost per head of animal was 20%higher than estimated in the SAR. While investing more in cattle, otherinvestments (mainly for buildings) were reduced from approximately 60% to35% of the total loan amount (Annex III, Tables 5).

Investments in % of total loan

Model I Models II and IIIAppraisal Actual Appraisal Appraisal Actual

Model II Model III Models II & III

Livestock 50.7 74.2 29.9 31.2 56.9Others 49.3 25.8 70.1 68.8 43.1

3.09 These three changes approved during project implementation --i.e. the increase in the number of Model I loans from 35 at appraisal to172 actual, the increase in the average loan amount from CFAF 200,000 toCFAF 330,000 and the emphasis on cattle purchases instead of physicalinvestments were proper adjustments to the borrowers' needs and provedcorrect in terms of the returns for the farmer.

Credit Supervision

3.10 The traditional sector credit scheme suffered from the lack oftechnical advice during credit implementation. It was foreseen atappraisal that SODEPA would set up field teams in Ngaoundere and Bamenda,to be responsible for these tasks (para 2.12). However due to SODEPA'stechnical problems in its own operations (ranches and slaughterhouses) anda shortage of qualified personnel, these teams were never established.SODEPA's actual participation in the credit scheme was therefore reducedto three functions:

(i) approval of final loan applications. This formality was droppedduring the second half of the project;

(ii) supply of land to farmers on the basis of a 20-year leaseholdtitle; and

(iii) sale of approximately 100 heifers to FONADER-financed ranchesduring 1979.

3.11 The FONADER field offices, realizing the need for technicaladvice tried unsuccessfully to obtain this assistance from the Ministry ofLivestock (MINEL). Since no other help was available, the FONADER fieldstaff assisted as much as possible in the implementation of the investmentproposals but concentrated mainly on the evaluation of loan applicationsand on credit recovery.

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Farm input supply

3.12 The implementation of the credit scheme also suffered from the

unavailability of farm inputs i.e. barbed wire, fence post, nails, hand

sprayers, supplementary feeds, seeds, veterinary drugs etc. To overcome

this shortage, the two FONADER field offices began to supply on their own

some of the needed farm inputs to the farmers. Although this a-civity was

in violation of FONADER's general policy, it enabled to meet an urgent need

and helped at least some of the loan recipients.

Credit Repayment

3.13 Payments for interest and principal were received in time only

as long as the two field offices were responsible for their collection. In

1979, the default rate was only 11%. However, later in the same year

FONADER decided to centralize the system which meant that credit recovery

was handled directly from headquarters. As a result of this change, the

repayment rate dropped considerably. Thus, for an example, the situation

for the Bamenda office as of June 30, 1980 was as follows:

AmountCFAF '000 %

Interest & principal due June 1980 24,604 100

Received by FONADER in time 16,051 65

Received by September 30, 1980 1,691 7

Received by December 31, 1980 836 3

Not received by March 15, 1981 6,026 25

This level of repayments not collected within nine months of the due date,

shows deficiencies in FONADER's credit administration (para 6.06) and

could lead to future cash flow problems. However, in comparison with

similar credit schemes elsewhere in West Africa, the level of late payments

is not exceptionally high.

Costs

3.14 The implementation of the credit scheme was expensive. A

comparison between the total loan administration costs of CFAF 268 million

and the value of all loans disbursed of CFAF 247 million, shows that for

each CFAF 1,000 of loans disbursed, the administrative costs were CFAF

1,085. Even excluding the cost of technical assistance, this ratio is

still CFAF 508 of expenses to each CFAF 1,000 of loans disbursed (Annex

III, Table 6). This high cost of loan administration can be justified only

when the benefits of institution building are taken into account (para

6.05).

3.15 Detailed analysis reveals that the largest cost overrun was for

vehicles and equipment with CFAF 40 million above appraisal estimates.

Whereas it was assumed at appraisal that the program could be implemented

with two vehicles, FONADER actually purchased 6 four-wheel drive vehicles,

2 light vehicles, 2 tractors, trailers and agricultural equipment, 16

motor cycles and 2 radio transmitters. The large vehicle park caused an

increase in vehicle operating expenses of CFAF 16 million above appraisal

estimates.

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B. Tsetse Fly Extermination

3.16 The objective of the tsetse fly extermination campaign was toeradicate flies from the Adamoua and to stop the southeastward advance offly infestation.

Basic Survey

3.17. During project preparation insufficient time was available todetermine the distribution and behavior of the tsetse fly in the Adamoua.It was therefore agreed that the actual extermination campaign would bepreceded by an in-depth survey. The survey was conducted by a specialistin tsetse fly eradication methods. During his field work, the consultantcomplained about lack of support and about a lack of surveyors to determinethe exact extent of tsetse infestation. He submitted his report in August1976 and made specific recommendations for the eradication program.During project execution continued fly discoveries showed that the surveyhad been inadequate. It had not correctly identified the extent ofinfestation nor had it determined the specific behavioral patterns of thefly population in the Adamoua (para 3.21). It is difficult to judgewhether the consultant would have been able to determine the actual extentof infestation had he been assisted by more surveyors.

3.18 The project documents specified that funds for the tsetseeradication would only be disbursed after approval of the Eradication Planand preparation of a Land-Use Plan (Schedule 1, 3(b)). While the firstcondition was met, the second condition was not enforced. Although theUpper Faro Valley Development Plan was ready in 1978, the detailed land-useplan became available only in February 1981. In the meantime, parts of thetsetse-freed area had already been reoccupied with cattle since 1977 on an

uncontrolled basis and in a manner not foreseen in the land-use plan.

Revisions.

3.19 A major amendment of the Loan Agreement was introduced when in1976 bilateral aid became available to finance equipment, helicopterflying hours, operating expenses, two tsetse specialists, consultants and

studies. This change was reflected in the Amendment of Schedule 1 to theLoan Agreement (para 2.14).

3.20. Another revision became necessary when project management foundthat no suitable contractor was available to construct the tsetsebarriers. It was therefore agreed that SODEPA would purchase equipment andconstruct barriers under force account (para 3.27).

Physical Progress

3.21 The extermination campaign began in 1976/77 and continued during

four dry seasons, one season longer than planned. A major unforeseen fact

was that instead of the expected 10% of the total area, 21% of the habitat

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was infested with flies (para 3.17). As a result, an area larger than

expected had to be sprayed. This was accomplished by using additionalhelicopter flying hours, which were actually 74% above appraisal

estimates. During the four campaigns, the project freed 794,500 ha of

tsetse flies, i.e. approximately what had been projected at appraisal(Annex III, Table 7).

Reclaimed Area in ha

1976/77 1977/78 1978/79 1979/80 TOTAL

90,300 203,700 277,600 222,900 794,500

3.22 One significant technical difference compared to the appraisal

estimates was that approximately three times more insecticide was consumed

per ha of reclaimed area than foreseen. The reasons for this increase

were:

(i) the helicopters applied 4.5 - 5.5 liters of insecticides per ha

instead of 4.0 liters;

(ii) instead of 10%, 21% of the total area had to be sprayed byhelicopters; and

(iii) approximately 13% of the area had to be resprayed instead of 10%.

Issues

3.23 Infested Area. In the initial study (para 3.17) the consultant

had been unable to determine the exact extent of tsetse infestation.

Successive surveys carried out between 1977 and 1980 found other infested

areas in the northwest, southeast, northeast and east of the area

originally thought to be infested. The tsetse infestation in the

northeast, covering most of the Dibi-Tourningal area, was the reason for a

partial stop of credit disbursements in that region (para 3.05). Due to

limited survey capacity the actual extent of the infestation discovered in

the east could not be determined. As a consequence and in order to

consolidate the sprayed area, the Bank and Government agreed in 1979 to

limit the extermination campaign to the Ngaoundere-Ngaoundal railway line.

In summary, information available at the end of 1980 indicated that the

actual infested area in the Adamoua was probably two to three times larger

than originally expected.

3.24 Barriers. Based on the knowledge available at the time, it was

assumed at appraisal that the tsetse-freed areas would be protected by

natural barriers, such as the mountain chain to the west of the project

area and through man-made tsetse barriers, such as 2.5 km wide deforested

strips of land. However reinfestation continued despite these barriers

which indicated that tsetse flies were able to pass mountain ranges of up

to 1,800 m elevation and to cross deforested strips of 2.5 km wide. In

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response to these discoveries, more effective barriers were established byapplying a heavy dosage of residual insecticide. In general, thediscovered ability of tsetse flies to cross previously believed to benatural barriers, will increase future annual maintenance costsconsiderably.

3.25 Survey Capability: A freed area can only be maintained free oftsetse flies as long as regular surveys are conducted and, in casereinfestation is discovered, an extermination team is despatchedimmediately. However, despite continuous requests by the Bank, Governmentdid not supply the Tsetse Division with sufficient funds to establish thenecessary number of survey teams. It may eventually be discovered thatreinfestation has already occurred but has remained undetected.

Costs

3.26 Given that the infested area was 21% rather than 10% of the totalarea, the cost overrun of 103% above the appraisal estimate is notsurprising. The highest cost overruns were recorded for vehicles andequipment expenditures, mainly because land clearing was carried out underforce account (para 3.20); and for surveys and consultant services,because two studies not foreseen at appraisal (Ecological Impact andSecond Land-Use Plan) were found necessary. The higher averageeradication costs of CFAF 2,177 per ha 199% of appraisal estimate reflectsmainly the higher than expected degree of infestation (Annex III, Table 8).

Ecology

3.27 The spraying over four years, of 800 t of Thiodan and Ensodilinsecticides which have been partially banned in the United States andEurope, raised strong objections from environmental groups. A studyfinanced by the bilateral cofinancier was therefore carried out todetermine the impact of insecticide application on non-target species andthe accumulation of residues in the human food chain but no significantadverse impact on the environment was detected. The study revealed that:

(i) One year after treatment there was still a significant reductionin the number of insects, spiders, scorpions, crabs;

(ii) no family of insects, spiders, crabs etc. was completelyeradicated;

(iii) unlike Thiodan, Dieldrin (Ensodil) had no influence on fish;

(iv) no harmful pesticide levels were found in human foods;

(v) in vertebrates no acute mortality could be found after spraying;and

(vi) spraying did not reveal any structural changes of the galleryforest eco-system as a whole.

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C. SODEPA

3.28 Objectives. Within the project framework, SODEPA's objectives

were: (i) to establish three ranches; (ii) to build and o- arate two

slaughterhouses; and (iii) to assist FONADER in the implementation of the

traditional sector credit scheme (para 3.12).

Ranch Development

3.29 Start up was relatively fast. During appraisal it had been

agreed that the Ndokayo ranch should only be developed in case the site was

found to be free of tsetse flies. In August 1974, a consultant confirmed

that a survey had been conducted at Ndokayo and that no tsetse flies had

been discovered. Therefore preparations began immediately on two sites,

Dumbo and Ndokayo. The expatriate ranch managers arrived in November 1974

(Dumbo) and February 1975 (Ndokayo). After some basic infrastructure

development, the first cattle was purchased in mid 1975. The Faro ranch

was opened later (June 1978), after the area had been freed of tsetse

flies.

Problems

3.30 During the first four years of the project, both Government and

the Bank considered the ranch component as relatively successful. At the

end of 1978, however, some difficulties were noted and in March 1979, major

problems became obvious:

(i) The technical assumptions, used as a basis for the ranch models,

had been too optimistic for Cameroonian conditions: the

fattening period was longer, the mortalities were higher, and

the calving rate was lower than projected;

(ii) the ranches were overstaffed, had high overheads, lacked

incentives to improve productivity, and paid high purchase

prices and received low sales prices for cattle; and

(iii) as the ranch sites had previously been used by private graziers,pastoralists' cattle kept trespassing into the ranch sites,

causing health problems to ranch herds.

Technical Assumptions

3.31 The fattening period for steers, expected to be between 18 and 24

months, actually proved to be 36 months (Annex III, Table 9). The reasons

for the extended fattening period were that only young, (18 months old) and

poor stock was available and could be purchased on local cattle markets.

The poor health condition of the purchased stock is evident in the high

tracking losses that occurred between the cattle market and their arrival

on the ranches:

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Tracking Losses of Purchased Stock

1975/76 1976/77 1977/78 1978/79

3.4% 13.0% 10.5% 9.3%

3.32 The actual mortalities in all stock classes were two to threetimes higher than projected (Annex III, Table 10). Whereas the appraisalmission had assumed an average mortality rate of 3.5% for the total herd,including calves, the actual averages were the following:

Average Herd Mortality Rates on SODEPA Ranches

1975 1976 1977 1978 1979 1980

Dumbo 8.5 3.1 6.6 6.7 6.2 6.7Ndokayo 3.9 5.2 8.4 9.7 5.5 1.7Faro - - - 13.2 4.1 3.1

The main reasons for these high mortilities were: (i) insufficient use ofdips and spray races; (ii) lack of prophylactic and curative drugs; and(iii) infections received from trespassing herds. In addition to theseactual death causes, it can be assumed that a number of animals were stolenbut erroneously recorded as mortalities.

3.33 The calving rate, estimated to reach 73% in PY4, actuallyremained as low as 47% in Dumbo, and 38% in Ndokayo. The main reasons forthis low calving rate were: (i) females available on cattle markets werenot very fertile (para 3.34); (ii) sanitary problems reduced theconception rate (brucellosis); and (iii) nutritional and mineraldeficiencies limited fertility. However, as the actual number of breedingcows kept on the ranches was much smaller than expected, the low calvingrate had only a minor impact on the overall ranch productivity.

3.34 The supply of breeding heifers was more difficult than expected.At appraisal, it had been assumed that Dumbo and Faro would become breedingranches, while Ndokayo would be a fattening operation. In 1977, projectmanagement found that feeder steers were in short supply. It was thereforeagreed between Government and the Bank that Ndokayo was also to become abreeding ranch, producing its own fattening stock. This meant that oversix years, 18,000 heifers would have to be purchased. Actually, however,the cattle markets did not regularly offer breeding females or heifers forsale. Experience showed that at the most 10% females could be purchasedtogether with a lot of feeder steers. But these females were usually old,in poor health and often sterile. Due to this unavailability of females,the ranches remained mixed operations with the emphasis on steerfattening.

3.35 This shortage of breeding females completely changed theexpected herd structure. Instead of showing a ratio of about 40% breedingfemales and 25 to 30% calves, the actual herds mostly comprised feedersteers.

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Herd Structure

(in percentage)

Cows Bulls Calves Heifers Steers Total

Appraisal 42.0 1.6 27.3 16.9 12.2 100.0

Actual 18.9 1.1 12.2 14.5 53.3 100.0

Due to this lack of breeding females, herd productivity on the ranches will

be low and herd growth will depend for some years on the number of animals

available for purchase.

Project Management

3.36 Personnel: The ranches employed more staff and had a higher

proportion of administrative staff than normally found in a private

enterprise. Staff numbers rose to a maximum of 403 persons in PY4 as

against an appraisal estimate of 108 persons (Annex III, Table 11). Upon

recommendation of the Bank, staff was reduced to 312 persons at the end of

PY6, which was still 86% higher than projected. Productivity of staff,

expressed in persons employed per 100 head of cattle, remained about 40%

lower than in other comparable ranches (Annex III, Table 11).

3.37 Similarly, the managerial staff was 108% above appraisal

estimates (Annex III, Table 12). For instance, instead of three

veterinarians as foreseen at appraisal, the ranches employed 14 veterinary

assistants. The large number of managerial staff also increased the

overhead expenses, mainly for motorized transport facilities improved

housing.

3.38 Productivity. Despite Bank recommendations, SODEPA management

gave no incentive to improve ranch productivity. As the herdsmen were paid

on a daily basis, there was no incentive for them to increase daily gains

or offtake. Instead of leaving for the grazing grounds at daybreak, as

private herdsmen do, SODEPA's herdsmen adhered to the official working

hours. As a result the actual available grazing time for the animals was

short and coincided with the hottest hours of the day when cattle prefer to

rest in the shade. It is also noteworthy that ranch management spent twice

as much money for personnel transport than for animal health purposes

(Annex III, Table 13).

3.39 Prices. As a result of inadequate supervision and lack of

personal incentives, SODEPA staff paid on average 15% to 20% higher prices

for purchased stock and received 15% to 20% lower prices for animals sold,

than comparable private enterprises.

Previous Land Utilization

3.40 At appraisal Government had confirmed that the proposed ranch

lands were not settled and that no traditonal pasture rights would be

violated. During implementation, however, and particularly when the

- 27 -

ranches were expanded beyond the originally planned size (30,000 hainstead of 20,000 ha), the Dumbo and Ndokayo ranches experienced problems.Traditional pastoralists claimed pasture rights inside the establishedranch boundaries or demanded compensation. In Dumbo, a financialcompensation was discussed for a while, but the issue was later dropped incourt. In Ndokayo a fence was built along parts of the eastern boundaryand guards were assigned to prohibit herds from entering into the ranch.However, in both cases, neighboring cattle continued to enter the ranchesand their poor sanitary status was one of the causes of general animalhealth problems and occasional outbreaks of foot and mouth disease. Theproblem needs to be redressed in the future.

Investment and Operating Costs

3.41 Total actual investment and operating costs were about 11% lowerthan the appraisal estimates (Annex III, Table 13). However, while totalexpenditures remained in line with projected costs, certain categoriesshowed significant differences from the appraisal estimates. Expendituresfor buildings were approximately 55% higher than projected, due to thehigher number of houses that had to be built for the increased staff. Theallocated amount for vehicles and equipment was overspent by 132% becauseapproximately twice as many vehicles and motorcycles were purchased.These larger number of vehicles caused an increase in vehicle operatingcosts of 31%, and in replacement costs of 56% above appraisal estimates.The actual expenditures for wages and salaries remained 9% below theappraisal estimate, despite the increase in staff size, mainly because theconsiderable hardship allowance proposed at appraisal to attract highlyqualified personnel to the remotely located ranches, was actually neverpaid. The low level of expenditures for animal health, which was only 15%of appraisal estimates, was certainly a major reason for the low herdproductivity and high mortality rates (para 3.32).

Income

3.42 The actual income was far below expectations. Instead of a totalincome of CFAF 1,167 million over the six-year period the actual income onthe three ranches was only CFAF 340 million, or 29% of the appraisalestimate. The reasons for this shortfall were:

(i) The actual fattening period was 50 to 100% longer than projected(para 3.31), which resulted in a slow turnover.

(ii) SODEPA's management purchased less animals than projected. Atthe end of PY6 only 26,288 cattle had been purchased instead ofthe projected 39,330 head.

(iii) High tracking losses (para 3.31) and high mortalities (para3.32) reduced the number of animals available for sale.

(iv) The actual purchase price was 13% higher while the sales pricewas 9% lower than projected. (Annex III, Table 14).

- 28 -

Net Benefits

3.43 Excluding investment costs and livestock purchases, the ranches

accumulated a net operating deficit of CFAF 228 million over six years of

operation, due mainly to SODEPA's high overheads and low productivity. For

both types of operation, fattening and breeding, SODEPA actually lost

money on the animals that were sold. This can be demonstrated by two

methods of calculations using SODEPA's actual operating cost and technical

coefficients. (Annex III, Tables 15 and 16):

(i) Fattening Operation for 1,000 Purchased Steers:

CFAF'000

Purchase Price 25,191

Maintenance Cost, (3 Years) 15,374

Sales Price 39,133

Loss 1,433

(ii) Breeding Operation for 1,000 cows

CFAF'000

Annual Maintenance Cost for 2,931 Head 17,087

Annual Sales of 293 Heads at 15,008

CFAF 51,222/HeadLoss 2,079.

Future

3.44 During 1979, the Bank informed Government and SODEPA that based

on available information, the ranches were not financially viable. The

Bank recommended that, as part of the second livestock project, the ranches

should be closed and the land subdivided to be made available for a credit

scheme. Buildings and infrastructure could be utilized for extension

purposes and SODEPA would assist in the implementation of this new credit

component. Government did not accept this proposal and sent its own team

to evaluate the ranch performance but the findings of their study did not

differ significantly from the Bank's findings. However, in November 1979,

MINEL concluded that it was politically unacceptable to Government to

close the ranches. As a compromise Government agreed that, as a condition

for continued Bank participation in the ranch scheme, certain achievable

performance criteria would have to be met (Annex III, Table 17). As a

first step and in order to cut operating costs SODEPA immediately reduced

the number of staff employed on the ranches (Annex III, Table 11). A

further joint Bank/SODEPA review of the latest ranch development is

scheduled for the end of 1981.

Slaughterhouses

3.45 Brief History of Events. During 1975 SODEPA hired a consultant

to prepare bidding documents and represent SODEPA's interest in dealing

- 29 -

with contractors. Following an international tender, SODEPA proposed thatthe lowest bidder, an European contractor, should construct the twoslaughterhouses in Yaounde and Douala. In August 1976, a combinedBank/SODEPA mission visited the contractor to verify the financial andtechnical capability of the company and found the company qualified tocarry out the works. In February 1977, the company requested and receiveda downpayment of 30%, whereas only 20% were covered under a Bank guaranteedperformance bond. In May 1977, the company declared bankruptcy and as aresult SODEPA lost US$300,000. In August 1977 SODEPA signed a newagreement with the second lowest bidder also from Europe. Again thecompany was found capable of carrying out the works, but in 1978 it alsoran into financial difficulties, requested an increase of approximately40% of the total contract sum and when this was not granted, stoppedconstruction work. In June 1980, SODEPA cancelled the contract. By thattime the Yaounde plant was 95% complete and the Douala plant approximately60% complete. SODEPA intends to complete the two slaughterhouses under itsown supervision and has for this purpose hired a slaughterhouse engineer.

Issues

3.46 First Contractor: When a Bank mission, together with SODEPArepresentatives, went to Europe to review the contractor's financialsituation, the mission learned that the company:

(i) had been bankrupt in 1970;

(ii) had been in another business until 1975 when it joined forceswith a slaughterhouse equipment company;

(iii) held three contracts in the slaughterhouse sector, worth onlyabout one-third of the the SODEPA contract;

(iv) mainly had experience in conveyors and slaughterhouses; and

(v) its financial situation had to be reevaluated by its bankersbefore they would assure the necessary financial support to thecompany.

3.47 Given the above, it appears in hindsight that it was doubtfulthat the contractor had either the technical expertise or the financialbacking required to carry out the works. Furthermore it also proved ill-advised to allow a second downpayment of 10% over and above thecontractually agreed downpayment of 20%.

Consultant

3.48 During negotiations between the second contractor andSODEPA's consultant, it was agreed that payments would be made according toan agreed schedule and upon receipt of three documents: (i) thecontractor's invoices; (ii) the consultant's certificate of works

- 30 -

accomplished; and (iii) a telex from SODEPA requesting payment of the

pertinent application. The arrangements worked satisfactorily until 1978,when the contractor began to experience financial problems. As a first

measure, the contractor issued payment requests for services not rendered

and for equipment not delivered. Instead of drawing immediate attention to

these facts, SODEPA's consultant continued to certify that works had been

completed and goods had been shipped or delivered. The discrepancies

became obvious at the end of 1978, by which time the contractor had

received 97% of all payments due, but the Yaounde plant was only 90%

complete while Douala had just reached the 50% mark. SODEPA realised that

it could no longer rely on its consultant and cancelled his contract.

Sites

3.49 The slaughterhouse in Yaounde was built on a site, which had been

accepted during appraisal. The Douala site was changed following

appraisal and the slaughterhouse was constructed approximately 20 km

outside the town center. In discussions held by supervision missions in

early 1980 butchers indicated that they would be reluctant to send their

animals to be slaughtered so far out of town. In the Bank documents, the

only reference to the Douala site appears to be the following from a

supervision report of September 22, 1976:

Douala: "The proposed plant site has been changed since

appraisal, however the new location is still in the same area.

SODEPA does not have a representative in Douala and I was unable

to find anyone familiar with the site to show it to me. SODEPA

and the consultant claim that the site is suitable and that the

butchers have apparently no objections".

Thus it seems that the Government and the early supervision missions had

not paid sufficient attention to this issue, until it was too late to

change the construction site. To overcome this deficiency in the future,

trucks will have to bring animals to the slaughterhouse and transport the

meat to the market.

Costs

3.50 Construction costs were considerably underestimated and the

total cost to complete both plants is still uncertain. During appraisal

the construction costs for the two slaughterhouses were estimated at

US$1.8 million (CFAF 448.2 million). The first contractor offered to build

the slaughterhouses for US$2.8 million (CFAF 665.6 million) which was

already 56% above the appraisal estimate. The second contract was for

US$3.1 million (CFAF 742 million). Up to the moment when the contract was

cancelled, the second contractor had received CFAF 683.2 million (US$2.9

million) or 97% of the contract sum, excluding the retention amount of CFAF

37.1 million. By June 1980, the slaughterhouse construction had cost in

total US$3.3 million, but the two plants were still not operational.

- 31 -

3.51 During the March 1980 supervision mission, the Bank employed aslaughterhouse consultant to evaluate the technical standards of the worksperformed by the second contractor and to estimate the additional fundsrequired to complete both plants. The consultant's main findings werethat:

(i) certain items were not built according to contractualspecifications;

(ii) some works did not meet basic hygienic standards;

(iii) equipment was missing; and

(iv) costs to complete both plants were estimated at CFAF 253 million(US$1.2 million).

3.52 After this second unsuccessful attempt to construct theslaughterhouses with a foreign company, Government and SODEPA proposed tocomplete the slaughterhouses under their own supervision. The Bankaccepted this proposal, under the condition that a qualifiedslaughterhouse engineer would be retained to supervise the work. Under thesecond project, CFAF 250 million (US$1.2 million) is therefore provided tocomplete the two slaughterhouses.

SODEPA Headquarters

3.53 The objective of the headquarters office was to coordinate andmanage activities of the ranches and slaughterhouses. However, twosignificant changes occurred during project implementation:

(i) The appraisal mission had assumed that the infrastructuredevelopment on the ranches would be carried out by contractors.However, as qualified contractors were not available, SODEPApurchased its own heavy equipment to carry out the constructionprogram. This expenditure was recorded under SODEPAheadquarters. Actual investment costs (CFAF 76 million) weretherefore 10 times higher than projected (Annex III, Table 18).

(ii) SODEPA found that the ranches could not be managed with thedegree of autonomy expected at appraisal. The ranches neededsupport in general administration, purchasing and selling, andhad to be supervised regularly. The headquarters staff of 9persons, as projected at appraisal, was not sufficient. By June1980, headquarters employed a total of 33 persons. Thisincrease in staff size and activities resulted in the increasein operating costs of 154% above appraisal estimates.

- 32 -

IV. PROJECT IMPACT

4.01 The overall impact of the project on the national meat

production was less than expected since the livestock production system

could not be improved as originally planned. Only a few technical

innovations became available, but their impact was limited due to the lack

of an effective extension service to disseminate the information.

Tsetse Fly Extermination

4.02 Among the project components, the tsetse extermination campaign

had the strongest impact on meat production. Out of an estimated 2 million

ha of tsetse infested pasture land, the extermination campaign freed about

800,000 ha and by June 1980, local administration had reopened 570,000 ha

of the freed area. About 60,000 head of cattle have re-entered the area in

the meantime. The re-entry was controlled and followed agreed

administration procedures, but it began too early to follow the

recommendations of the Land-Use Plan (para 3.18). As a result, some herds

have occupied lands which were planned to be used for other purposes.

4.03 During the time when the cattle herds had stayed outside the

tsetse-infested Adamoua in the over-populated southern parts, their

productivity had been reduced to a minimum. However with the return to the

traditional pasture grounds in the north, the productivity improved. As a

result of the project, the Adamoua will annually produce an incremental

9,000 head of cattle for sale which is equivalent to 1,500 t of carcass.

4.04 Another positive result of the project was the creation of the

Tsetse Division within the Ministry of Livestock. This institution was

established to implement tsetse eradication and control measures. During

the first years, when it was still known as the "Special Mission for the

Eradication of Tsetse Flies", it was less effective because of budgetary

constraints. Following Bank recommendations, it was finally given the

status of a full division, with its own specific budgetary allocations.

Traditional Sector Development

4.05 The traditional sector credit scheme did not have as strong an

impact on the national meat production as expected. At appraisal, it was

expected that cattle would be purchased with credit funds and be

distributed to new owners. The new owners would, with the help of

technical innovations, equipment and feed, improve the productivity of the

stock considerably beyond the previous production level. However, as

SODEPA was unable to establish a livestock extension service and FONADER

could only give very limited practical assistance (para 3.10) farmers and

ranchers were very much left on their own. The few new methods which they

used originated from FONADER's close contact with the farmers. The

incremental beef production of the 7,500 animals financed under the

project is estimated to be in the range of 100t carcass meat annually.

- 33 -

4.06 The most important benefit of the credit scheme was that itdemonstrated the positive impact that land allocation, together with

credit and some technical advice, could have on traditional pastoralists.

With the allocation of land, a number of pastoralists adopted basically newattitudes:

(i) fencing their property to avoid trespassing of neighboringcattle;

(ii) limiting transhumance;

(iii) improving their pastures by planting grass and alfalfa; and

(iv) offering supplementary feeding to their herds in the dry season.

This change of attitude in a traditionally conservative population group

willhave a significant long term impact on the sector. As a result ofthese encouraging developments, the credit scheme was therefore expandedunder the second project.

SODEPA

4.07 The creation of SODEPA and its operation of three ranches had nosignificant impact on the national meat production. The productivity of

cattle which were moved from the private sector into SODEPA ranches, didnot improve as expected.

4.08 One particular argument in favor of the creation of parastatalranches had been that the ranches would serve as development centers for

technical innovations. In fact, however, the ranches contributed little

in terms of improved technology, mainly because during the early years of

ranch development, the ranch managers were essentially occupied with thebuilding of infrastructure, purchasing cattle, and establishing a

management routine. By the time that general ranch management became wellestablished, the expatriate ranch directors had to leave and were replaced

by less experienced local counterparts. The technological packages which

were introduced, included basic animal health measures (such as routinevaccinations and prophylactic treatments) as well as simple animalhusbandry measures (e.g. small amounts of supplementary feeding during the

dry season and the supply of mineral supplements or salt).

V. RATES OF RETURN

Assumptions

5.01 The financial rate of return was recalculated, using thefollowing assumptions:

(a) all costs and prices were expressed in 1974 terms. (Deflators inAnnex 4, Table 1 and Exchange Rates in Table 2);

- 34 -

(b) in all projections, cattle purchase and sales prices taken are

average actual prices expressed in 1974 terms;

(c) the financial rate of return was recalculated for a project life

of 20 years, with the exception of the credit scheme, which was

recalculated for 15 years;

(d) for the tsetse fly extermination campaign, it was assumed that

herds entering the tsetse freed area would increase their

productivity from 2.5% to 10%, due to improved pasture

resources; and

(e) as the financial losses on the SODEPA Ranches would grow with an

increased cattle turnover, it was assumed that the ranches would

maintain the number of 18,000 head of cattle.

5.02 The economic rate of return was recalculated basically using the

same assumptions as in the SAR:

(a) all costs and prices are expressed in the same terms as for the

financial rate of return calculations;

(b) for the traditional sector credit scheme, credit administration,investment and operating costs have been included for the first

6 years of the project; and

(c) fifty per cent of SODEPA Headquarters costs have been included.

5.03 Based on these assumptions, the financial and economic rates of

return were re-estimated (see also Annex 4, Table 3) as follows:

Financial Rate of Return Economic Rate of Return

Appraisal Reestimated Appraisal Reestimated

Lraditional Sector Credit Scheme - 24 11 11

lodel I 23 40 - -

lodel II 16 19 - -

lodel III 17 18 - -

rsetse Extermination Campaign 14 13 14 13

30DEPA - Negative - Negative

Ranches 11 Negative - -

Slaughterhouses 15 Negative - -

Total Project - 6 13 4

1/ The appraisal report did not present separate economic rates of return for

individual credit scheme models or for SODEPA ranches and slaughterhouses, nor did it

estimate the financial rates of return for SODEPA or the traditional sector credit

scheme. Also it did not distinguish between the financial and economic rates of return

for the tsetse eradication program.

- 35 -

VI. INSTITUTIONAL PERFORMANCE

MINEL

6.01 It was assumed at appraisal that the Ministry of Livestock wouldhave overall responsibility for project implementation. Actually, due tothe administrative approach followed by all Government agencies, FONADERand SODEPA soon began to manage the day to day affairs of their respectivecomponents on their own. However, while FONADER enjoyed full autonomy inits work, SODEPA remained under the Ministry's administrative supervision.This led to serious deficiencies (para 6.03).

SODEPA

6.02 SODEPA was created with the intention to establish anorganization that would be responsible for the commercial development ofthe livestock industry in Cameroon. Although the institution would beorganized on a parastatal basis, it would benefit from administrativeflexibility and operate as a commercial enterprise. In the initial phase,SODEPA would establish and manage ranches, slaughterhouses and a livestockextension service. Other tasks were to be added later on. SODEPA was unableto live up to these expectations.

6.03 The Government chose as SODEPA's Director General one of themost experienced, senior Veterinarians in the Civil Service. A team ofexpatriate specialists was hired to assist him in implementing theprogram. However, despite this strong management team, SODEPA sufferedfrom a number of major problems:

(i) Cattle ranching is an extensive production process. However,instead of adopting an adequately decentralized managementapproach, SODEPA established an intensive and costlyadministration;

(ii) SODEPA was unable to generate profits in its commercialenterprises, because Government established the level ofsalaries and benefits to be paid to the employees; in addition,SODEPA was called to render public services such as research andextension services, which are not normally provided by acommercial enterprise;

(iii) SODEPA was not authorized to recruit its own personnel, and thisadversely affected the efficiency of its operation; and;

(iv) whereas SODEPA was responsible for construction of theslaughterhouses, all relevant decisions were taken byGovernment.

6.04 This continued intervention by Government in the day-to-daymanagement decisions were a major factor in SODEPA inability to play itsintended role. In particular, the company should have been given moreautonomy for the tasks of establishing the three ranches and constructingthe two slaughterhouses.

- 36 -

FONADER

6.05 The flexibility adopted by FONADER management contributed

significantly to the success of the credit scheme. When SODEPA proved

unable to assist in loan processing, FONADER improvised and evaluated

credit requests on its own and even provided some assistance in credit

implementation (para 4.05). On the other hand, FONADER experienced

serious problems in credit administration. Between 1973 and 1980,FONADER's overall disbursement volume increased by 546% and its personnel

grew from 67 to 267 employees. This rapid growth of credit

volume caused internal administrative problems FONADER, despite a 9-man

expatriate technical assistance team and the increase of local employees,was unable to solve. The main deficiencies were in the book-keeping

system. This led to a backlog at headquarters in sending out drafts and

payment requests in time, which encouraged farmers to ignore their

repayment dates and caused the low recovery rates (para 3.13). Despite

some recent improvements, FONADER's administration still requires further

strengthening. In preparation for this completion report, the Bank had

requested from FONADER a list of all loans disbursed, the amounts repaid,

the repayments delayed and a final balance. Up to date FONADER has not

been able to supply this information. As proper account-keeping is the

most essential requirement of any financial institution, this situation

needs to be redressed further under the follow-up second project.

Tsetse Division

6.06 As a result of the project, a Tsetse Division was established

within the Ministry of Livestock. The creation of this new division is a

significant achievement because, for the first time in Cameroon, all

activities related to tsetse fly survey, eradication and control measures

are coordinated by a single agency. It is also important that the Ministry

of Livestock agreed to establish this division in the field at Ngaoundere,

i.e. in the centre of all tsetse control activities.

VII. CONSULTANTS PERFORMANCE

7.01 The consultants chosen by Government to prepare the livestock

project were known as being fully qualified for this work. Since both

Government and the Bank were satisfied with the preparation report, the

Bank had no objections to Government's proposal to hire the same company

for the implementation of the project.

7.02 The main responsibility of the consultants was to supply

qualified personnel. The first Technical Director of SODEPA had excellent

qualifications but left due to personal reasons. As his replacement, the

consultants proposed one of the ranch managers. This was accepted by

SODEPA and the Bank but he left soon thereafter. Thereafter the

consultants proposed the last remaining ranch manager as the only

available candidate. SODEPA and the Bank reluctantly accepted this third

Technical Director. However, when he proved unable to meet Bank

expectations, he cancelled his contract and left the country. These

repeated changes made it difficult for SODEPA to overcome its technicalproblems with the ranches and slaughterhouses.

- 37 -

7.03 Up to 1978, SODEPA's accounts were not well maintained.

Although the accounts were audited annually, they did not permit anydetailed cost analysis. It was only after the departure of the first

expatriate financial controller and the arrival of his replacement thatSODEPA's account fully met adequate standards. The new financial

controller introduced cost accounting which now serves -s a usefulmanagement tool. At the same time, he established a tight control systemcovering all financial and administrative matters of the ranches. Thus,SODEPA had no difficulty in supplying all the financial and technical data

requested for the preparation of this project completion report.

7.04 The same consultants who had prepared and implemented the first

phase of the project was asked to evaluate the project and prepare a secondphase. It now appears that the consultant was possibly biased inevaluating his own work. In particular, his report on the progress of thefirst project proved deficient as it failed to highlight the ranch problems(para 8.03).

VIII. BANK PERFORMANCE

8.01 During preparation of the completion report, the Bank had askedthe different organizations responsible for project execution to evaluatethe performance of the Bank. Up to date, no comments have been received.

8.02 The Bank's limited in-house experience in tsetse eradication andat the time of appraisal also in parastatal ranching proved a handicap forproject implementation. In designing these two components, the Bank hadrelied on the successful experience with similar programs in Nigeria andKenya. Thus, no additional research preceded the beginning of fieldoperations. The only modifications were the reduction in the numbers ofranches from ten to three and the introduction of a preparatory phasebefore the tsetse eradication campaign could be implemented. Thesemeasures alleviated to some extent the risks associated with theimplementation of the two new project components.

8.03 In retaining for project implementation and evaluation the sameconsultant who had prepared the project, the Bank and Government possiblyfailed to realize the danger that the consultant could be biased inevaluating his own work. As a matter of fact the technical ranch problemswere discovered relatively late: the consulants' evaluation report of thefirst project did not mention any serious problems in the ranchingcomponent, and it was only during appraisal of the second phase that thefull extent of the difficulties became obvious.

8.04 In reviewing the supervision reports it appears that the Bankmissions mainly focussed on technical issues of project implementation andless on implications that high mortality rates, extended fatteningperiods, purchase and sales price differentials and high labour costs haveon the economic and financial viability of the ranches. It is also true,however, that a certain time lag is required to form definite views on the

- 38 -

technical coefficients. For example, it takes at least two years torealize if feeder steers need three years or only two years to finish.

8.05 A final issue relates to the Bank's direct involvement in thediscussions concerning the slaughterhouse construction. It can be arguedthat the Bank should have kept a low profile with its involvementconsisting only of technical advice to the Borrower as necessary. However,the Bank was led to play a more active role for two main reasons: theneed to complete the slaughterhouses on schedule and the Borrowers'inexperience in dealing with such a complex matter.

IX. CONCLUSION

9.01 In sum, the project did not quite achieve the anticipatedobjectives. The main shortfall was the failure to establish SODEPA as aviable commercial enterprise; the costs and efforts that went into thecreation of SODEPA have not yet yielded tangible results. While the tsetseeradication has successfully been carried out so far, there are risks thatfollowing the withdrawal of the expatriate team and phasing out of externalfunding, the tsetse division will be unable to prevent a reinvasion offlies. The most successful project component was the traditional sectorcredit scheme, despite high administrative overheads and the lack of anextension service.

9.02 Credit facilities were provided by FONADER to mixed farmers andsettled graziers to develop small-scale fattening and larger breedingfattening operations. The lessons to be learnt are:

(i) land allocation in combination with credit will encourage owners

to (a) fence their property to avoid trespassing, (b) stoptranshumance, (c) improve their pastures, and (d) offersupplementary feeding in the dry season;

(ii) loans for cattle in small farms have a good chance of successbecause animals are usually well attended and the mixed farmingsystem can supply valuable supplementary feeding;

(iii) credit funds should be used mainly for production-orientedcomponents. The necessary infrastructure can often be providedby the owners themselves; and

(iv) the credit recovery rate depends largely on the effectiveness ofthe credit agency.

9.03 The tsetse fly infestation was correctly identified as a majorconstraint to livestock development in the Adamoua. An eradicationcampaign was designed and successfully carried out, and a land use studyprepared under the project will be implemented under the second project.The lessons to be learnt are:

- 39 -

(i) tsetse eradication projects should be based on a land use plan.This study should clearly spell out the potential benefits interms of improved land utilization, and the risks and costs that

the tsetse eradication campaign would involve;

(ii) tsetse eradication should only be conducted when sufficienttechnical and financial resources would be made available inorder to ensure that the freed area can be adequately protectedagainst reinvasion of flies; and

(iii) in regions where trypanosomiasis is the limiting factor for

livestock development, the introduction and use of trypano-tolerant breeds should be considered as an alternative to tsetseeradication.

9.04 SODEPA was established as a parastatal organization to manageranches and slaughterhouses and to operate a livestock extension service.

The lessons to be learnt are:

(i) the activities of parastatal organizations should be clearlydifferentiated between commercial activities designed to

generate profits, and public services which should be financedby the Government;

(ii) parastatal ranching faces serious difficulties because:

- ranching is an extensive production method which cannot bear

high overhead costs; and

- the productivity of animal husbandry operations depends on a

strong personal incentive for the man taking care of theanimals.

9.05 Finally, the project has shown that the risk of failure is highwhen project implementation depends on several inter-related projectactivities. SODEPA was to supply land and implementation assistance to

FONADER but proved unable to perform as planned. FONADER's credit programin the East depended on the implementation of the tsetse eradication

campaign, but the campaign was unable to clear the flies from the Dibi-

Tourningal area. The ranches were to supply meat to the slaughterhouses,

but the production was less than anticipated. The private butchers were to

receive meat from the slaughterhouses, but the completion of the

slaughterhouses was delayed. FONADER was to finance private butchers, butprivate butchers were not established because the slaughterhouses had not

been completed. This situation underlines. the need for simpler projectdesign, with a limited number of inter-related project components.

- 41 - ANNEX 1Table 1

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Total Project Costs(CFAF million)

Actual as %Appraisal Actual of Appraisal

Private Sector Credit Scheme 433.8 571.9 151

SODEPA 1,898.9 2,441.4 129

Tsetse Fly Extermination 1,195.7 1,729.6 145

Training 57.3 7.4 13

Project Preparation 57.3 68.0 119

Total Project Costs 3,643.0 4,818.3 132

- 42- ANNEX 1Table 2

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Disbursement Schedule

(US$ 000)

Cumulative Actual as % Appraisal as Actual as

Appraisal Actual of Appraisal % of Total % of Total

1974/75 Sept. 200 - 0 2 0

Dec. 500 135 27 4 1

March 1,100 147 13 10 1

June 1,900 239 13 16 2

1975/76 Sept. 2,500 306 12 22 3

Dec. 3,100 663 21 27 6

March 3,700 1,041 28 32 9

June 4,300 1,472 34 37 13

1976/77 Sept. 4,900 1,842 37 42 16

Dec. 5,500 2,466 45 47 21

March 6,100 4,004 66 53 35

June 6,700 4,171 62 58 36

1977/78 Sept. 7,200 4,751 66 62 41

Dec. 7,700 5,376 70 66 46

March 8,200 6,201 76 71 53

June 8,700 6,987 80 75 60

1978/79 Sept. 9,100 8,348 92 78 72

Dec. 9,500 8,980 94 82 77

March 9,900 9,747 98 85 84

June 10,300 10,199 99 89 88

1979/80 Sept. 10,600 10,199 96 91 88

Dec. 10,900 10,857 100 94 94

March 11,100 10,934 99 96 94

June 11,300 10,972 97 97 95

1980/81 Sept. 11,500 11,090 96 99 96

Dec. 11,600 11,239 97 100 97

March - 11,469 99 - 99

June - 11,534 99 99

- 43 -ANNEX II

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Amendment of Schedule 1 of the Loan Agreement 1/(Expressed in Dollar Equivalent)

Loan Amount Allocated

Category Original Amendment

I. Ranch and Slaughterhouse developmentunder Parts A and B of the Project.

(a) Consultants' services 600,000 975,000

(b) Slaughterhouse construction & equipment 1,600,000 3,500,000

(c) Livestock 2,300,000 2,200,000

(d) Ranch infrastructure 600,000 350,000

(e) Ranch equipment, materials & vehicles 100,000 175,000

Sub-total 5,200,000 7,200,000

II. Tsetse-Fly Extermination underPart C of the Project.

(a) Land Clearing and Fencing 400,000 550,000

(b) Spraying 1,100,000 1,700,000

(c) Vehicles and equipment 800,000 450,000

(d) Consultants' services & training 100,000 200,000

Sub-total 2,400,000 2,900,000

III. Loans under the Agricultural CreditProgram under Part D of the Project.

(a) Loans 900,000 1,100,000

(b) Consultants' services, vehicles & equipment 300,000 -

Sub-total 1,200,000 1,100,000

IV. Training under Part E of the Project 200,000 100,000

V. Technical Assistance under Part F of the Project 200,000 300,000

VI. Unallocated 2,400,000 -

TOTAL 11,600,000 11,600,000

1/ In the letter dated March 3, 1978 the disbursement percentageremained unchanged.

ANNEX IIITable 1

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Traditional Sector Credit Scheme

Processing of Loan Application

Number %

Loan Applications submitted 986 100

Returned as incomplete 131 13

Submitted after completion (from 2) 22 2

Evaluated in Regional Office 877 89

Rejected by Regional Office 378 38

Approved by Regional Office & submitted to HQ 499 51

Rejected by HQ 182 19

Approved by HQ 317 32

Disbursed 255 26

Undisbursed 59 6

Rejected by loan applicants 3 -

-ANNEX III

Table 2

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Traditional Sector Credit Scheme

.Disbursements Schedule

No.of loans per year

Budget Year Project Year Appraisal Actual

1974/75 PYl -

1975/76 PY2 25 6

1976/77 PY3 36 43

1977/78 PY4 41 49

1978/79 PY5 48 51

1979/80 PY6 - 106

Total 150 255

ANNEX IIICAMEROON Table 3

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Traditional Sector Credit Scheme 1!Summary

Loan Numbers Average Loan Amounts Total Loan Amounts DisbursedActual as % Appraisal Actual Actual as % Appraisal Actual Actual as %

Appraisal Actual of Appraisal CFAF 000 CFAF 000 of Appraisal US$ 000 US$ 000 of Appraisal

Model I 35 172 491 200 245 123 28 182 650

Model II 90 57 63 1,400 1,559 111 504 384 76

Model III 25 26 104 3,400 2,016 59 340 227 67

Total 150 255 2/ 170 (1,100) (1,017) 8

1/ 12 Butcher loans, estimated at CFAF 5,520,000 or US$22,000 are not included.

2/ During the period July 1, 1975 to June 30, 1980 FONADER financed, in addition,96 loans at a value of approximately CFAF 250 million.

3/ According to the amendment of Schedule 1 of the Loan Agreement,US$1.1 million (CFAF 275 million) were allocated).

4/ Out of the total of CFAF 247,080 (US$1,069,000) in current prices, only CFAF 235,065,500 (US$1,017,356.77) werereimbursed from loan 983-CM. The difference of CFAF 12,015,000 (US$52,000) was financed by FONADER.

ANNEX III

CAMEROON Table 4

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Traditional Sector Credit Scheme

Herd Structure and Cattle Purchases

(Heads of cattle per ranch)

Model I Models II and III

Herd Structure Total animals purchased

Animals purchased Before Development Animals purchased under Credit Scheme

Appraisal Actual Appraisal Actual Appraisal Actual Appraisal Actual

Bulls - - 5 3 1 1

Cows - - 52 68 - -

Heifers 3 years - - - - 16 15

Heifers 2-3 years - - 8 16 - 3

Heifers 1-2 years - - 9 15 - 11

Males 4 years - - 5 - - -

Males 3-4 years - - 7 13 - 2

Males 2-3 years - - 8 24 - 11

Males 1-2 years 6 12 9 19 21 22

Calves - - 19 34 - -

Total No.per herd 6 12 122 192 38 65

Total No.of animalspurchased underCredit Scheme 210 2,064 3,154 5,395 3,364 7,459

1/ Weighed average of Model II and III.

ANNEX IIICAMEROON Table 5

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Traditional Sector Credit Scheme

Loan Utilisation

Comparison between Appraisal & Actual(in % of Total Loan)

1/Model I Models II and III -

Appraisal Appraisal ActualAppraisal Actual Model II Model III Models II/III

Livestock 50.7 74.2 29.9 31.2 56.9

Fencing/Firebrakes 17.0 - 39.6 23.0 21.2

Dips/Sprayers - - 0.9 22.0 9.5

Watering facilities - - 15.7 11.0 2.1

Cattle crush, holding facilities 8.5 - 3.1 2.2 2.4

Land survey - - 9.5 9.9 -

Equipment .8.5 - 1.3 0.7 0.6

Feeds/Minerals - - - 0.9

Pasture Improvement 15.3 - 0.4

Others - 25.8 - - 6.0

Total 100.0 100.0 100.0 100.0 100.0

1/ The loan Models II (250 ha) and III (750 ha) for ranch development have beengrouped together because it became difficult to distinguish them.

ANNEX IIICAMEROON Table 6

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Traditional Sector Credit Scheme

FONADER Administration Costs l/

(CFAF 000)

Total Actual as %Category Appraisal Actual of Appraisal

Investment Costs

Vehicles 3,200 19,067 596Equipment - 24,865 -Sub-Total 3,200 43,932 1,373

Operating Costs

Salaries -Livestock Development Officers / 67,600 125,009 185Technicians 12,000 22,905 191Other employees 10,000 15,600 156Sub-total 89,600 163,514 182

Housing Allowances -Livestock Development Officers 9,000 4,401 3/ 49Technicians 4,000 8,454 211Sub-total 13,000 12,855 99

Other expenses -Vehicle running costs 6,250 22,283 357Vehicle replacement 2,600 - 4/ -Office Expenses 1,000 12,364 1,237Transport and per diem 2,750 5,007 182Daily labourers - 8,246 -Sub-Total 12,600 47,900 380

Total Operating Costs 115,200 224,269 195Total FONADER Administration 118,400 268,201 227

1/ Sources: FONADER and GTZ2/ Expatriates (2) financed through FRG bilateral aid.3/ Housing costs for last 3 years included in expatriate salaries.4/ Not estimated as replacement vehicles are covered under investment costs.

ANNEX III

CAMEROON Table 7

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Tsetse Fly Eradication Program

Area Sprayed Railaimed and Costs

Actual Total Actual as 2

Category Units PY3 PY4 PY5 PY6 Appraisal Actual of Appraisal

Helicopter flying time h 407 912 828 1,000 1,800 3,147 174

Area sprayed per h flying time ha 53 56 53 53 60 54 90

Area actually sprayed ha 21,606 51,418 43.989 53,174 108,000 170,187 158

Area reclaimed ha 90,300 203,700 277,600 222,900 780,000 794,500 102

Reclaimed area actually sprayed % 24 25 16 24 10 21 -

Area Resprayed ha 1,000 15,300 55,400 1/ 31,000 2/ 80,000 102,800 129

Resprayed area as % ofreclaimed area % 1 8 17 12 10 13 -

Insecticide applied per hereclaimed area 1 2.7 2.1 1.2 2.7 0.6 2.0 333

Total cost per ha reclaimed CFAF 1,092 2,177 199

Total cost per he excludingT.A., survey & consultants CFAF 1,040 1,666 160

1/ Includes 1967 he barrier spray

2/ Includes 1532 ha barrier spray.

- 51 - ANNEX IIITable 8

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Tsetse Eradication Campaign

Total Costs

(CFAF 000)

Actual as %Appraisal Actual of Appraisal

Category

Land clearing and fencing 98,600 8,190 8

Spraying 308,600 449,366 146

Vehicles and Equipment 27,500 227,312 827

Insecticides 194,600 412,889 212

Aviation fuel 10,600 35,823 338

Personnel 104,100 174,026 167

Survey and Consultants 19,700 310,118 1,574

Training 10,300 15,249 148

Operating expenses 78,100 96,626 124

Total costs 852,100 1,729,599 203

Total cost excluding technicalassistance, surveys & consultants 811,580 1,323,694

CAMEROONA IIITable 9

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-C)

COMPLETION REPORT

SODEPA Ranches

Cattle Numbers - Summary

(in head of cattle)

AvR.held on 3 ranches Actual a Animals Purchased Actual as I Animals SoldActual asAppraisal Actual of Appraisal Appraisal Actual of Appraisal Appraisal Actual % of AppratsW

PYl 5,120 - - 10,240 - - - - -

PY2 11,960 3,700 31 8,150 7,832 96 3,864 59 2

PY3 14,840 8,899 60 5,040 4,509 89 5,636 639 11

PY4 18,260 8,251 45 6,560 5,201 79 6,880 2,317 34 L

PY5 22,000 14,242 65 5,320 4,374 82 8,926 3,306 37

PY6 23,500 17,139 73 4,020 4,372 109 9,036 1,995 22

Total 39,330 26,288 67 34,342 8,316 24

1/ For three SODEPA Ranches

2/ On 6.30.1980 the actual number of animals held was 18,867 or 57% of the appraisal estimate.

- 53 - ANNEX IIITable 10

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

SODEPA Ranches

Mortality & Calving Rate for different Stock Classes

(in %)

ActualAppraisal Dumbo Ndokayo Faro

Mortality 1/

Bulls 3.0 4.8 4.5 -

Bulls 2-4 years 3.0 - 4.4 19.6

Cows 3.0 6.9 5.6 9.0

Calves 5.0 6.3 23.5 44.0

Heifers 1-4 years 3.0 1.8 4.7 6.8

Steers 3-4 years 3.0 3.6 - 7.0

Purchased fattening stock 3.0 8.1 21.7 42.0

Mixed stock 3.0 10.4 8.8 12.6

Calving Rate

Cows 73.0 47.0 38.3 -3/

1/ For PY5

2/ For PY6

3/ Data unsuitable for analysis.

- 54 - ANNEX IIITable 11

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

SODEPA Ranches

Growth in Personnel Numbers 1/

Average per Year Persons perPersonnel Cattle 100 Cattle

PY2 253 3,700 6.8

PY3 393 8,899 4.4

PY4 403 8,251 4.9

PY5 338 14,242 2.4

PY6 312 17,139 1.8

For Comparison

Appraisal Estimate 168 32,928 0.5

ORD, Congo J 130 9,000 1.4

Van Lancker, Zaire 1/ 320 25,000 1.3

1/ Summary of 3 ranches.

2/ Bank Project.3/ Private Enterprise.

- 55 - ANNEX III

Table 12

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

SODEPA Ranches

Personnel Structure 1/

(Persons)

Persons Actual as %Appraisal Actual of Appraisal

Category

Management

Manager 3 3

Assistant Manager 3 -

Veterinary Assistant 3 14

Clerk, Secretary, Storekeeper 3 8

Sub-Total 12 25 208

Technical

Skilled Labor 36 66

Herdsmen, Laborers, Guards 120 221

Sub-Total 156 287 184

Total Personnel 168 312 186

1/ For 3 ranches as of June 30, 1980.

- 56 -ANNEX IIITable 13

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

SODEPA Ranches

Investment - Income & Operating Cost Summary(CFAF 000)

Actual as %Category Appraisal Actual of Appraisal

I. Investments

Buildings 70,700 109,470 155

Fencing 38,700 1,810 5

Stock handling 38,700 11,426 30

Roads, Firebrakes 20,300 19,393 96

Watering Facilities 15,400 10,279 67

Vehicles & equipment 31,500 73,044 232

Purchase of cattle 2/

Total Investment Costs 215,300 225,422 104

II. Income

Cattle sales 1,166,942 339,991 29

III. Operating Costs

Salaries and Wages 346,666 315,627 91

Maintenance 37,575 23,091 61

Running cost of vehiclesand equipment 59,250 78,045 131

Replacement costs 45,900 71,923 156

General administration 15,250 58,013 380

Animal Health 144,200 21,743 15

Sub-total operating costs 648,841 568,442 88

IV. Purchase of cattle 726,204 624,154 86

Total operating costs 1,375,045 1,192,596 87

Total Investment andOperating Costs 1,590,345 1,418,018 89

1/ Summary for Dumbo, Ndokayo and Faro

2/ Cattle purchased, covered under Operating Cost due to highproportion of feeder steers.

ANNEX IIITable 14

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOM 983-CM)

COMPLETION REPORT

SODEPA Ranches

Cattle Prices Al

Average Price Actual as Z

PY2 PY3 PY4 PY5 PY6 Appraisal Actual of Appraisal

Purchase price per head 22,954 22,486 24,061 24,625 25,192 21,160 23,864 113

Sales price per head 34,473 37,952 35,669 44,753 51,222 44,850 40,814 91

Price difference (Margin) 11,519 15,466 11,608 20,128 26,030 23,690 16,950 72

1/ 1974 prices.

2/ Purchased stock contains 90% steers and 10% heifers.

Animals sold are 90% steers and 10% culled cows.

- 58 -ANNEX III

CAMEROON Table 15

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Model Calculation

Steer Fattening

(CFAF 000)

RemainingCattle Cattle Expenses Receipts

Activity

Year 1

Purchase of 1000 steers 1,000 1,000 25,192

Tracking losses of 5% 2/ 50 950

Maintenance cost CFAF 5830/head 5,539

Annual mortality 8% 4 76 874

Year 2

Maintenance cost of CFAF 5830/head 5,095

Annual mortality 7% 61 813

Year 3

Maintenance cost of CFAF 5830/head 4,740

Annual mortality 6% 49 764

Sales price CFAF 51,222 39,133

Balance 40,566 39,133

Loss 5/ 1,433

1/ Prices used from PY6 in Table 24.

2/ Tracking losses of 5% assumed, see para

3/ Operating cost from PY6 in Table 19, CFAF 104,900,000 for

18,000 head of cattle.

4/ See Table 20

5/ Not included are investment cost, interest, depreciation.

CAMEROON ANNEX III

LIVESTOCK DEVELOPMENT PERJECT (LOAN 983-CM) Table 16

COMPLETION REPORT

Model Calculation

1000 Cow Breeding Herd

Opening Transfer Transfer End of YearStock - (Mortality + Sale + Out ) + (Purchase + in ) + Birth = Stock

BREEDING BULLS .... 6 + . ) + (....... + .. *17 60

1,000 40 131 171 1,000cowS ........ - ....... . .... ***** *+*.*.* ) A 182

HIES >3182 11 1 171 + ... + .82. 182

1 98 16- ... + 18 9HEIFERS 2-3 .... ... .6 8

220 - 22 + 198 + 22.~q 22.HEIFERS 1-2 .... ...... + 220220 0

171.....+ 17 + + ... + 11 171MALES > 4 ... 7 1 1. .

182..... + 171 + (......... 1A82 . 18MALES 3-4 .... 182 . 1.22

198 16 12 + 198 98MALES 2-3 ........ ...............+.......) 9

220 22 . . ..... . 198 + ... . 220. 220MALES 1-2 .. 220.. ....22 20 . 22

CALVES 0-1 500 - 6 440 ) + 500 .

2,931 207 293 1,559 1,559 500 2,931TOTAL ANIMALS ......... . ...( ...... + ...... **+* .****.***...****.****

2,422 145 325 1,067 1341 200 2,422A.U. ........ -. HE..... .... . ****** K = ****** *************

.. 0.% HERDGROWTH + .. ].Ae. % OFFTAKE = .3,.4 % HERDPRODUCTIVITY

ANNEX IIICAMEROON

Table 17

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

SODEPA Ranches

Proposed Herd Coefficients

Current Situation (11/78-10/79) Targets to be reached by all ranches

Dumbo Ndokayo Faro 1980 1981 1982 1983 1984

Mortality in %

Total Herd 6.3 5.5 8.9 5.5 5.0 4.5 4.2 4.0

Cows 8.2 3.5 3.1 4.0 3.5 3.0 3.0 3.0

Bulls 6.3 5.5 - 3/ 5.0 4.5 4.0 3.5 3.5

Heifers 1.5 1/ 6.5 2.2 1/ 5.0 4.5 4.0 3.5 3.0

Fattening Stock 5.5 6.5 7.0 6.0 5.5 5.0 5.0 5.0

Calves 10.7 6.3 2/ 8.6 8.0 7.0 6.5 6.0 6.0 c

Calving Rate in % 45 42 44 45 50 55 57 60

Steer Fatteningperiod in years 3 3 3 3 2.5 2.0 2.0 2.0

First calving agein years 3-5 3-5 - 3/ 3-5 3-5 3-4 3-4 3-4

1/ Unrealistic, probably wrong

2/ Probably low because calves are not recorded at birth

3/ No sufficient data available.

- 61 - ANNEX IIITable 18

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

SODEPA Headquarters

Investment - Income & Operating Cost

(CFAF 000)

Actual as %Category Appraisal Actual of Appraisal

I. Investments

Vehicles 4,600 59,724 1,299

Office furniture & equipment 1,800 8,099 449

Radio and telephone 600 696 116

Housing furniture & equipment 7,544 -

Others 397 -

Total Investments 7,000 76,460 1,092

II. Income

Subsidies 441,554

Others 14,337

Total Income 455,891 -

III. Operating Costs

Personnel related costs

& general administration 198,200 452,799 228

Vehicle running costs 7,950 29,054 367

Vehicle replacement 4,920 44,157 901

Animal health costs - 9,372 -

Total operating costs 211,070 533,382 254

-62- ANNEX IVTable 1

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

Implicit Price Deflators

RecordedInflation Deflator

1974/75 (PYl) 1.0009.1

1975/76 (PY2) 1.0911.4

1976/77 (PY3) 1.2151.5

1977/78 (PY4) 1.3559.2

1978/79 (PY5) 1.4808.0 *

1979/80 (PY6) 1.5989.0 *

1980/81 (PY7) 1.7429.0 *

1981/82 (PY8) 1.8999.0 *

* Estimate

-63 - ANNEX IVTable 2

CAMEROON

LIVESTOCK DEVELOPMENT PROJECT (LOAN 983-CM)

COMPLETION REPORT

1/Exchange Rates

(per US Dollar)

FF DM CFAF

1972 5.044 3.180 252.21

1973 4.454 2.673 222.70

1974 4.481 2.588 240.50

1975 4.286 2.460 214.32

1976 4.780 2.518 238.98

1977 4.913 2.322 245.67

1978 4.513 2.009 225.64

1979 4.255 1.833 212.72

1980 4.226 1.818 211.30

Average Exchange Rates 2

1 US Dollar was equivalent to 4.517 2.224 227.21

1 DM was equivalent to 102.16

1/ Source: IMF Supplement on Exchange Rates No.1, 1981

2/ July 1974 to June 1980.

1.MES10CK DEVEIPNET PRO.1BC (~PR MM 983-CK)

Rate. f Return

1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1982/83 19853/84 1984/85 1985/86 1986/87 1987/88 1988/89 1989/90 1990/91 1991/92 1992/93 1931g4

Traditional Sector Crdit Schmme (Financial Rate of Return 241 and Econoeic Rate of Return 111

Cr-dit Ad1.ni.trationInvstnt & Ope.ating Costa 21.54 41.80 51.20 52.80 51.10 49.80 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.80 0.00

ModelI 5~11 Mi-d ParS (Fi.nncal Rat. of Return 40%)-nve9tant & incrataloperating -ot. 1/ 0.00 0.00 4.77 4.33 16.03 39.11 15.23 29.58 29.58 29.58 29.58 29.58 29.58 29.58 29.58 29.58 29.38 27.00 24.96 17.f9

ncrntal benefite 1/ 0.00 0.00 0.00 3.42 6.85 16.75 42.34 47.13 47.13 47.13 47.13 47.13 47.13 47.13 47.13 47.13 47.13 43.02 39.73 26.50Model II dLm-tae ranches (Financial Rat, of Return 19%)Invstnt. & incr~ataloperating Costa 1/ 0.00 12.20 27.62 57.97 13.55 44.37 23.54 25.20 26.76 26.84 23.84 22.71 18.45 18.27 16.76 16.76 14.99 11.17 3.53 3.53

Incrntal benfit. 1/ 0.00 0.00 2.77 9.70 24.51 29.67 37.96 39.63 46.84 52.98 56.08 57.60 54.20 54.74 52.61 68.21 80.87 102.67 11.08 42.28

Model III Large rabnohe (Finencial Rate of Return 28)Inveant and fncremantalopeattng coet. 1/ 0.00 0.00 40.02 34.87 16.17 21.25 21.68 22.06 21.18 18.83 16.30 13.96 12.97 12.97 12.2.9 7 .97 12.97 5.49 0.00 0.80

Inrntal benefita1/ 0.00 0.00 1.80 16.32 28.85 31.84 33.52 37.96 45.97 51.25 53.28 46.68 41.29 41.29 41.29 41.29 30.29 46.07 0.00 0.00

Testse ExtereinAtion Caespetn (7inancial ate of Return 13%)InStement 4 peAting costa 22.00 80.00 430.00 377.00 412.00 408.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00 130.00Incremental cattle Dal.. 0.00 0.00 0.00 0.00 39.50 102.00 239.50 412.00 412.00 412.00 412.00 412.00 412.00 412.00 412.00 412.00 412.00 412.00 412.00 412.00Inc tal hard valu. - - - - - - - - - - - - - - - - - - - 2237.00

S0DEPA (FinanIal 6 Econoi. Rate of Return .gativ)

e.dquart.r.Invetne t Coate 45.00 0.00 6.00 23.00 1.00 0.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00Operattng co.t. 81.00 86.00 85.00 98.00 94.00 92.00 78.00 78.00 78.00 78.00 78.00 78.00 78.00 78.00 78.00 78.00 78.00 78.00 7A.00 78.00

Ranch..In-tn.t. 30.00 31.00 15.00 110.00 39.00 0.00 15.00 - 15.00 15.00 15.00 15.00 13.00 15.00 13.00 15.00 15.00 15.00 15.00 15.00 • 15.00Cattle purchaees 0.00 180.00 101.00 125.00 108.00 110.00 126.00 126.00 126.00 126.00 126.00 126.00 126.00 126.00 126.00 126.00 126.00 126.00 126.00 126.00Opeatitng cot, 33.00 78.00 112.00 120.00 120.00 105.00 - 105.00 105.00 105.00 105.00 105.00 103.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00 105.00Cattei Dales 0.00 2.00 0.00 83.00 153.00 102.00 247.00 247.00 247.00 247.00 247.00 247.00 247.00 247.00 247.00 247.00 247.00 547.00 247.00 247.00Incrøental herd value - - - - - - - - - - - - - - - - - - - 800.0

Slauhterh (Financial Rate of Return negative)De nt 0.00 7.00 244.00 190.00 955.00 0.00 0.00 146.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00 10.00

Operting cost. 0.00 0.00 0.00 0.00 10.00 10.00 11.00 45.00 130.00 121.00 121.00 121.00 121.00 121.00 121.00 121.00 121.00 121.00 121.00 121.00Inc- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 50.00 185.00 185.00 185.00 185.00 185.00 185.00 185.00 185.00 185.00 185.00 185.02 185.00

1/ Phad.

M A L J ' 5

N I G E R C H A D

SUDAN -UPPE R_ - - , sVOLTA r\( "

1 Z)

CENTRAL AFRICAN TREPUBLIC

N I G E i iic

- H A D

- ~ ~ -o . - ¯ ¯ ¯ ¯ ¯0 1

UNITED REPUBLIC OF CAMEROON

LIVESTOCK PROJECTLOCATION OF PROJECT ACTIVITIES

COmmERCI AL R ANCH SITES

TRADITIONAL LIVETCK ETOR DEVELOPMENT AREAS ¯ e

TSETSE FLY E TERMINATION

GRAVEL RAD

- -i t- EARTH ROADS

Li.RL- ~ADI,iL ...

INTERNATIONAL.I POYT

INTERNTI-N L B3CUNDCARIES. . .. . . . . . . .

N Gr

J,:

6° . .AL ZONE.5n - -QHE

- - .LDANIAN HIGHLANDS

- - UDANIAN-GUJINEAN

- -UDAN-GUINEAN TRANS] 1N

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