project completion report south kordofan agricultural development

AFRICAN DEVELOPMENT FUND

PROJECT COMPLETION REPORT

SOUTH KORDOFAN AGRICULTURAL DEVELOPMENT PROJECT

REPUBLIC OF SUDAN

COUNTRY DEPARTMENT OCTOBER 2000NORTH REGION (OCDN)

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TABLE OF CONTENTSPage

CURRENCY EQUIVALENTS, WEIGHTS AND MEASURES, ABBREVIATIONS,LIST OF ANNEXES, PROJECT MATRIX, EXECUTIVE SUMMARY,BASIC PROJECT DATA ............................................................................................................ i-xii

1. INTRODUCTION ...................................................................................................................1

2. PROJECT OBJECTIVES AND FORMULATION ................................................................1A. PROJECT OBJECTIVES...................................................................................................1B. PROJECT FORMULATION..............................................................................................2

3. PROJECT EXECUTION ........................................................................................................3A. MODIFICATIONS.............................................................................................................3B. IMPLEMENTATION SCHEDULE ...................................................................................3C. REPORTS...........................................................................................................................4D. PROCUREMENT...............................................................................................................4E. FINANCIAL SOURCES AND DISBURSEMENT ...........................................................4

4. PROJECT PERFORMANCE AND RESULTS......................................................................4A. OVERALL ASSESSMENT ...............................................................................................4B. OPERATING PERFORMANCE .......................................................................................5C. INSTITUTIONAL PERFORMANCE................................................................................7D. LOAN COVENANTS AND CONDITIONS .....................................................................8E. FINANCIAL AND ECONOMIC PERFORMANCE.........................................................8

5. SOCIAL AND ENVIRONMENTAL IMPACT .....................................................................9A. IMPACT OF THE PROJECT ON HUMAN AND SOCIAL ACTIVITIES......................9

6. PROJECT SUSTAINABILITY.............................................................................................10

7. BANK AND BORROWER PERFORMANCES..................................................................10A. BANK PERFORMANCE ................................................................................................10B. BORROWER PERFORMANCE .....................................................................................11

8. OVERALL PERFORMANCE AND RATING ....................................................................11

9. CONCLUSION, LESSONS LEARNT AND RECOMMENDATIONS ..............................12A. CONCLUSION.................................................................................................................12B. LESSONS .........................................................................................................................12C. RECOMMENDATIONS..................................................................................................14

This report was prepared following a mission in the Sudan undertaken for the Bank Group by anFAO/TCIR team comprising Mr. L.L. Nsimpasi, Economist and mission leader, Mrs. W. Gichigi,Agronomist, Dr. N.R. Bhasin, Agricultural Specialist and Mr. Wlsimaih Elsiddig, NationalConsultant. Further enquiries should be addressed to Mr. J. Rushemeza, Acting DivisionManager, OCDN.2 (ext. 4199).

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Currency Equivalents 1

At Appraisal (August 1987) UA 1.00 = LSd 2.81656UA 1.00 = US$ 0.35504

At PCR (April 2000) DSd 1.00 = LSd 10.00UA 1.00 = LSd 877.95

US $ 1.00 = UA 1.4434US $ 1.00 = LSd 2.570

Weights and Measures

1 kilogramme (kg) = 2.2 pounds (lbs)

1 metric ton (mt) = 1,000 kg

1 hectare (ha) = 2,47 acres1 square kilometre (km) = 100 ha

1 hectare (ha = 2.38 feddans1 feddan (fd) = 1.04 acres

Fiscal Year of Borrower

At Appraisal: 1 July - 30 JuneAt PCR: 1 July - 30 June

1 The official currencies of Sudan are the Pound (LSd) and the Dinar (DSd).

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ABBREVIATIONS

ABS Agricultural Bank of SudanADB African Development BankADF African Development FundARC Agricultural Research CorporationCP Cooperation ProgrammeFAO Food and Agriculture Organization of the United NationsGDP Gross Domestic ProductGOS Government of SudanIAs Implementing AgenciesIC Investment CentreIDA International Development AssociationIMF International Monetary FundMOAF Ministry of Agriculture and ForestryMOAR Ministry of Animal ResourcesMOFNE Ministry of Finance and National EconomyNWC National Water CorporationPMU Project Management UnitPCR Project Completion ReportSAR Staff Appraisal ReportSDR Special Drawing RightsSKADP South Kordofan Agricultural Development Project

LIST OF ANNEXES

1. Financial and Physical Performance

2. Performance and Evaluation RatingRecommendations and Follow-upMatrix

3. List of References and Source of Information

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SOUTH KORDOFAN AGRICULTURAL DEVELOPMENT PROJECTPROJECT COMPLETION REPORT

M.P.D.E MATRIX

1.1 Narrative Summary ObjectivelyVerifiable Indicators (OVI)

Means of Verification Important Assumptions

SectorGoal:

To contribute to improving food security andincreasing rural inomes.

Food security improved through supply ofincreased agric. Production and per capita incomeincreased by the end of the project.

National Statistics

Not provided

Project Objective:

To increase agricultural production and revenue offarmers in South Kordofan Province

At appraisal (000 tons)

Millet: 46Sorghum: 91Groundnut: 13Sesame: 14Cotton: 4Cattle: 35Sheep: 31Goats: 21

At completion

Not estimated

Project Statistics

Supervision reports

Not provided

Project Outputs:

1. Rural Water Supply provided;

2. Agricultural Machinery services provided;

3. Agricultural Extension Services provided;

4. Agricultural Inputs supplied;

5. Livestock Input services supplied;

6. Roads and Tracks improved; support for roadmaintenance supplied;

7. Project management strengthened;institutional support provided.

At appraisal (000 tons)

1. Hafirs: 25Water Yards: 57Boreholes: 120

2. Staff houses: 147Input storage: 18Vehicles: 13Motorcycles: 14Bicycles: 117

3. Seminars: 6Study Tours: 12Farmers trained:3,200

4. Improved seeds:2,200 t.Vegetables seeds:650 t.

5. Livestock Inputs:9,500 units

6. Road improv.:300 km

N.A.

At completion

1. Hafirs: 4Water yards: 33Boreholes: 0

2. Staff Houses: 0Input storage: 0Vehicles: 13Motorcycles: 0Bicycles: 90

3. Seminars: 0Study Tours: 0Farmers trained:800

4. Improved seeds:460 t.Vegetable seeds:712 t.

5. Livestock \Inputs:840 units

6. Road improv.:n.available

N.A.

Project Data;

Supervision reports

Not provided

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Project Activities

1. Water Supplies2. Agricultural Machinery3. Agricultural Services4. Agricultural Inputs5. Livestock Inputs and Services6. Road and Track Improvement7. Project Management8. Inst. Support & Management Training

At appraisal(FUA million)

1. 11.152. 4.603. 3.184. 1.965. 3.606. 3.947. 3.818. 1.33Cont: 10.60Total: 44.17

Project Accounts

Supervision mission reports;

ADF statistics

Not provided

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EXECUTIVE SUMMARY

Introduction

1. The South Kordofan Agricultural Development Project (SKADP) was the firstproject to be financed in rain-fed agriculture sub-sector in Sudan, following the Government ofSudan's (GOS) request in 1986 to the Bank Group to finance an agricultural development projectwithin the rain-fed agriculture sub-sector. The project was approved on 15 September 1987,signed on 24 May 1988 and declared effective on 28 February 1989.

2. The overall objective of the project was to support the government’s strategy for thedevelopment of rain-fed agriculture in order to improve the income and living standards of smallfarmers and livestock owners in the South Kordofan province and to contribute to the achievementof household food self-sufficiency. The components of the original project were: (i) WaterSupplies for domestic and livestock use, and Strengthening of the capacity of Rural NationalWater Corporation (NWC); (ii) Agricultural Machinery Services for use in smallholder farmers,including a line of credit to the Agricultural Bank of Sudan (ABS); (iii) Agricultural ExtensionServices; (iv) Plant Protection Services; (v) Agricultural Inputs, including Improved Seeds andHorticulture Seedlings; (vi) Livestock Inputs and Services, including veterinary drugs; (vii) Roadand Track Improvement; (viii) Project Management Unit (PMU); and (ix) Institutional Support,including Management Training.

3. The project was co-financed by the International Development Association (IDA) ofthe World Bank (WB) group. The total cost of the project was estimated at UA 440.68 million atappraisal with a financing arrangement of UA 15.52 million from the African Development Fund(ADF), UA 18.55 million from IDA and UA 6.61 million from GOS. The original project wasplanned to be completed over a six-year period starting in 1988. IDA credit was closed on14 February 1994, due to sanctions imposed on Sudan and following the breakdown of dialoguebetween the GOS and the International Monetary Fund (IMF) in 1994, resulting in thecancellation of Special Drawing Rights (SDR) 6.26 million of the IDA credit. The activities of theoriginal SKADP were adversely affected by IDA credit cancellation, which caused seriousshortfalls on project financing. Given the financing gap created by this cancellation and as someproject components were closely inter-related and integrated, the activities of SKADP could notsatisfactorily be carried out with ADF components only. The project was thus reformulated and itsscope was reduced. The undisbursed balance of ADF loan (UA 13.05 million) was reallocated tofinance six components, which included three original ADF components (i.e. Water Supplies,Agriculture Extension and Plant Protection) and three other components (i.e. Farm Inputs, AnimalHealth and Project Management Unit - PMU), which were originally financed by IDA. Thereformulated project was to be implemented over a period of three years from July 1995 to June1998.

Implementation Experience and Results

4. Implementation record. The overall implementation of the project activities hadbeen slow. Although the ADF loan was signed on 24 May 1988, it became effective on 28February 1989 and actual implementation of components funded by ADF started in March 1989.

The achievements during the 1988 -1994 period were not satisfactory compared to targets set atappraisal. Only 16% of the ADF loan was disbursed, as of May 1995. The poor performance inproject implementation is attributed mainly to insufficient counterpart funds and the prolongedand repeated sanctions imposed on the country stemming from the accumulated arrears on ADBGroup loans to Sudan. In addition, the implementation of the project was hampered by widespreadinsecurity that prevailed in the project area. Although the security situation improved considerablyfrom project reformulation in 1995, its implementation continued to lag behind schedule,primarily due to lack of GOS commitment to provide funds.

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5. The Bank's performance during preparation and appraisal was not satisfactory andclearly insufficient during implementation, as only two missions were able to visit the project areabecause of security reasons. GOS performance had also not been up to required levels.Counterpart funds were insufficient and a full complement of staff was not provided. Furthermore,the diversion of project vehicles by State Governments had undermined project implementation.

6. Project results. The overall achievement of the project in terms of quantity of outputwas unsatisfactory. Its benefits and impacts were much below appraisal targets. Mostcomponents, except extension services and rehabilitation of water yards, were poorlyimplemented. Project implementation suffered from various factors, which were both internal andexternal to the project. Internally, low efficiency of management due to unfilled key posts, poorcost recovery mechanisms and insufficient monitoring and evaluation of project activities,contributed to the overall low performance of the project. The situation was exacerbated byconstraints caused by external factors such as the shortage of funds from the GOS, the widespreadinsecurity in the project area, and the prolonged sanctions on the country.

7. The sustainability of the limited project achievements cannot be guaranteed in view ofthe lack of cost recovery mechanisms to ensure the maintenance of infrastructure and the supplyof inputs and services as well as the lack of spare parts. Project activities ceased immediately afterthe project was closed. The project vehicles and offices continue to provide support to the twonewly created States.

8. Key factors affecting project achievements. The most important factors, whichaffected the project implementation and which had a significant negative impact on itseffectiveness were insecurity, lack of funds due to prolonged African Development Bank (ADB)group sanctions, GOS insufficient counterpart funds and extended delays in the Bank’s responseto project applications for procurement.

9. Overall Project Outcome. The project outcome assessment is rated“Unsatisfactory”.

10. Key lessons learned. The key lessons learned are: (i) an integrated approach todevelopment to be successful requires a coherent and explicit strategy, and the selection of onlycrucial components rather than a proliferation of components as was the case under this project;(ii) project design should be simple and realistic and not overly ambitious, and should haveincluded a provision for collection of benchmark data and sample studies to assess the project’simpact; (iii) at the time of reformulation, the Bank should have weighed carefully the risks ofsanctions in disrupting the implementation of the project and should have provided an emergencyplan; (iv) GOS was not committed to project implementation and failed to provide sufficientfunds; (v) Although full cost recovery mechanism may have been a good idea to ensuresustainability, however, it appeared hardly achievable given the low resources of most farmers inthe project area and cheaper alternatives should have been considered: (vi) The Bank’s decision toset-up a revolving fund in the Citibank, Sudan of equivalent UA 5.6 million was an error ofjudgement given the precarious GOS financial situation at that time; (vii) delays in Bank’sresponse resulted in non procurement of goods; and (viii) Bank supervision was not sufficient.

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BASIC PROJECT DATA

1. COUNTRY Sudan

2. PROJECT South Kordofan Agricultural Development Project

3. LOAN NUMBER F/SD/AGR/87/10

4. EXECUTING AGENCY Ministry of Agriculture and Natural Resources

5. BENEFICIARY Ministry of Agriculture and Natural Resources

6. BORROWER The Government of the Republic of Sudan

7. PLANNED IMPLEMENTINGPERIOD 1988 – 1994

8. ACTUAL IMPLEMENTINGPERIOD 1989 - 1998

A. LOANAppraisal ActualEstimate

1. Loan Amount UA 15.52 million UA 15.52 million2. Interest Rate 0.75% per annum 0.75% per annum

(Service Charge)3. Repayment Period 40 years 40 years4. Grace Period 10 years 10 years5. Loan Negotiation Date 3/8/1987 3/8/19876. Loan Approval Date September 1987 15/9/19877. Loan Signature Date n.a. 24/5/19888. Date of entry into force February 1988 28/2/1989

B. PROJECT DATAAppraisal Estimate Actual

(UA million) (UA million)

1. Total Cost 40.68 40.682. Original Financing Plan

Source F.E L.C Total F.E L.C Total

ADF 9.33 6.19 15.52 9.33 6.19 15.52

IDA 13.68 4.87 18.55 n.a n.a 11.8

GOS 0.00 6.61 6.61 n.a. n.a. n.a.

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At Appraisal Actual

3. Date of FirstDisbursement February 1989 28/08/1989

4. Date of LastDisbursement December 1995 30/06/1998

5. Commencement of ProjectImplementation Activities February 1988 March 1989

6. Date of Completion of ProjectImplementation Activities 30/6/1994 30/6/1998

C. PERFORMANCE INDICATORS

1. Total Cost underrun : n.a.

2. Actual Project Cost underrun : n.a.

3. Time overrun- Slippage on Effectiveness : one year- Slippage on Completion Date : 4 years- Slippage on Last Disbursement : 2 and half years- Number of extensions of last : one extension

disbursement :

4. Project Implementation Status : closed w/o completion

5. Institutional PerformanceUnsatisfactory Fair Satisfactory

- ADF X- GOS X

6. Contractor Performance X

7. Consultant Performance X

8. List of Verifiable Indicators (Expressed as % of planned level)

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Indicator Achievement as% Planned

Rehabilitation of wateryards 52.6Construction of Hafirs 7.8Drilling of Borehole 3.9Establishment of Main Extension Units 100.0Establishment of Extension Sub-Units 0.0Farmers reached by Extension services 56.7Farmers Trained 24.0Female Extensionists trained 72.2Improved Seed Supply - Sorghum 27.5

- Millet 0.0- Cotton 68.7- Others 0.0

Fertilizer supplied 0.0Small Tractors supplied 21.7Surface Water Pumps 3.7Chemicals for Plant Protection Supplied 0.0Animal Health - Drugs Supplied 12.0

- Vaccines Supplied 14.3

At Appraisal At completion

9. IER (%) 40.1 not calculated

10. IFR (%) n.a n.a

D. MISSIONSNo of Persons Composition Man/days

- Identification n.a. n.a. n.a.- Preparation By an Australian

Consulting Firm- Appraisal 3 Agronomist, Civil Engineer 60

Agr. Economist- Follow-up Nil

- Supervision including Reformulation

Supervision (Nov. 1989) 2 n.a. n.a.Supervision (20-30 January 1993) 2 Agronomist, Agr. Economist 22Reformulation (16 – 30 Sept. 1994) 1 Economist 14Reformulation (15 – 30 May 1995) 1 Economist 14Supervision (2 – 17 Oct. 1997) 2 Economist, Agriculturist 32Supervision (12 – 27 Feb. 1998) 1 Economist 16

(Task Managers)PCR (20 March – 4 April 2000) 3 Economist, Agronomist and 42

Agriculturist

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E. DISBURSEMENT

Appraisal Actual %Estimate (as per ADF Ledger) Disbursed

Total disbursed

. as per ADF Ledger 15.52 8.971 57.8

. as per Project Record 15.52 4.26 27.4

- Amount cancelled - 6.55 42.2

- Unused balance - - -

Yearly Disbursement

1988 0.98 - 01989 2.74 137 4.61990 3.24 1,209 34.31991 3.00 404 12.41992 2.84 13 0.41993 2.74 531 1.81994 - 177 -

SUB-TOTAL 15.52 2,473 15.9

After ReformulationAppraisal Actual %Estimate Disbursed

1995-962/ 6,5011996-97 - -1997-98 - -

SUB-TOTAL 6,501

Total Disbursements 15.52 8.97 58%

1 Discrepancies between ADF records and project records are due to the fact that although UA 5.6 million wasdisbursed by ADF through a revolving fund in Citibank, New York, only UA 0.95 million out of U.A. 5.6million deposited in Citibank, Khartoum, was actually made available to the project.

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F. CONTRACTOR(S)/SUPPLIER(S)

Contract Number Contractor Responsibility Allocated DisbursedAmount Amount

('000 UA) ('000 UA)

F87-10-1 Nissho Iwai Corporation Vehicle 26,677 24,677

F87-10-2 Mitsui and Company Ltd Vehicle 35,087 --

F87-10-3 Kenematsu Gosho Ltd Vehicle 4,250 4,250

F87-10-4 Automotive Parts Ltd Vehicle parts 14 14

AFDB 3/89-90 Automobiles Peugeots Supply of Earth Movers 36 36

Tyres

SKADP/AFDB Lister Petter Ltd Diesel Lister Engines 118 118

1/93/588/SUD MASCOTT Ltd Management Services 469 453

F/SDN/1993/0087 NRWC Drilling of boreholes 14,286 14,286

F/SDN/1995/0245 Nissho Iwai Corporation 2 Unit tankers and spares 18,460 18,460

F/SDN/1995/0246 Schoeller-Bleckmann 10 sets diesel pumping system 5,682 5,682

F/SDN/1995/0561 Schoeller-Bleckmann Repair kits and Water Pumps 3,862 3,862

F/SDN/1995/0585 Toyoto Tsusho Corporation 18 Toyota Land Cruizer pick-up 48,915 48,915

G. CONSULTANT

- Name MASCOTT Ltd- Contract Description To provide technical assistance for Rural Water Supply

component. The Service of a field operation engineer wasprovided

- Date of contract commencement April 1993- Date of contract termination April 1994- Contract duration One year- Allocated amount (UA million) 0.469- Disbursed amount (UA million) 0.453

1. INTRODUCTION

1.1 Rain-fed agriculture dominates the agriculture sector of Sudan. About two-thirdsof the total population are dependent on rain-fed production of crops, livestock and forestryproducts for their livelihood. The economic importance of the sub-sector is enormous; itmakes up two-thirds of total agricultural GDP, produces about 80% of the main food crop,sorghum, and makes a major contribution to exports. In addition, the sub-sector provides100% of total earnings from gum arabic, sesame, karkade and melonseed, and over 70% ofearnings from livestock and oilseed products. Given its size and importance, the sub-sectorhad been relatively neglected in the past.

1.2 In order to define the constraints to increasing agricultural production in Sudanand to propose ways in which these constraints could be overcome, the Government of Sudan(GOS), with IDA support, produced a “Strategy for Agricultural Development” in 1986.

1.3 The ADB Group started its lending operations in Sudan in 1971 and has so fargranted nine loans for agricultural projects totalling UA 105.4 millions (see Annex 2). Theseloans were utilised to establish three Quarantine Stations, a feed mill, dairy and satellite FarmUnit in the North Gezira, supply of agricultural machinery, rehabilitation of Blue Nile Pumps,seed production and multiplication, and a line of credit to the Agricultural Bank of Sudan.Major implementation problems observed were: (i) initial delays in fulfilment of loanconditions; (ii) weaknesses in project staffing and management; and (iii) delays in recruitmentof consultants and evaluating and awarding of contracts. Furthermore, GOS had defaulted in-debt servicing as a result of which the Bank Group effected, from time to time, suspension ofdisbursement.

1.4 The South Kordofan Agricultural Development Project (SKADP) area is situatedin the former Kordofan Region, which had two provinces, North Kordofan and SouthKordofan. The South Kordofan province constituted the project area, which covered an areaof about 138 000 km2 and an estimated 1987 population of 1.4 million (see Map 1, Annex 1).The central and eastern parts of the Province are occupied by the Nuba Mountains. Theaverage rainfall varies from 500 mm in the north to 800 mm in the south. Afterdecentralization, the project area consisted of the South Kordofan State and three districts inWest Kordofan State.

1.5 Project Completion Report (PCR) was prepared on behalf of the AfricanDevelopment Bank (ADB) by a mission from the FAO/ADB Cooperative Programme. Thereport is based on materials in the project files and on the PCR prepared by GOS as well as onfindings of the mission which visited Sudan from 22 March to 4 April 2000.

2. PROJECT OBJECTIVES AND FORMULATION

A. PROJECT OBJECTIVES

2.1 The overall objective of the project was to support the government’s strategy forthe development of rain-fed agriculture in order to improve the income and living standards ofsmall farmers and livestock owners in the South Kordofan area and contribute to theachievement of household food self-sufficiency.

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2.2 Outputs be achieved were the following:

(i) Water Supplies: to provide rural water for domestic and livestock use andto strengthen the capacity of Rural National Water Corporation (NWC);

(ii) Agricultural Machinery Services for use in smallholder farms, including aline of credit to the Agricultural Bank of Sudan (ABS);

(iii) Agricultural Extension: to provide agricultural extension services;

(iv) Plant Protection: to provide plant protection services;

(v) Agricultural Inputs: to supply agricultural inputs, including ImprovedSeeds and Horticulture Seedlings;

(vi) Livestock Inputs: to supply Livestock Services, including veterinary drugs;

(vii) Road and Track Improvement;

(viii) Project Management Unit (PMU); and

(ix) Institutional Support, including Management Training.

B. PROJECT FORMULATION

2.3 Following the drought of 1984/85, the GOS, with IDA support, developed a“Strategy for Development of Rain-fed Agriculture” published in March 1986. The strategycalls for increased production and higher incomes in the rain-fed areas to be achieved throughstrengthened agricultural services, technological improvements, improved rural infrastructureand increased private sector investment. The strategy would be implemented through a seriesof projects. During the same year, the GOS identified several areas for the development ofrain-fed agriculture, one of which was South Kordofan lying in the South West of Sudan. AnAustralian consulting firm1 was engaged to carry out feasibility studies which could lead tothe development of rain-fed agriculture in South Kordofan. Following favourable results fromthe studies and the visit to Sudan by a Bank Group review mission in 1986, the GOSrequested the Bank Group to finance an agricultural development project within the rain-fedagriculture sub-sector.

2.4 The project was appraised by the Bank Group in May 1987. The loan wasapproved by the Bank Board in September 1987; it was signed in May 1988 and declaredeffective in February 1989. The project was co-financed by IDA; with ADF financing theWater Supplies, Agricultural Extension and Plant Protection components, while IDA financedthe remaining components.

2.5 The project financing sources are given in Table 1 of Annex 5. The GOS and thetwo States (South and West Kordofan) were to finance staff salaries of ImplementationAgencies (IAs)2 and the operational costs of most of the project’s activities other than those ofPMU. One of the conditions prescribed by the Bank before making the first disbursement,

1 Australian Agricultural Consulting and Management Company PTY, LTD. and Newtech Industrial andEngineering Group LTD.

2 IA comprise government departments and parastatals operating in the project area.

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required GOS to give an undertaking to make regularly adequate allocations in its annualbudget to finance its share of the cost of the project as set out in the financing plan.

3. PROJECT EXECUTION

3.1 The original project was planned to be completed over a six-year period starting in1988. The implementation of the individual components was to be realised by IAs. The watersupply component was to be implemented by the National Water Corporation (NWC); agriculturalextension, farm inputs and plant protection by Agriculture Services Division of Ministry ofAgriculture and Natural Resources (MANR); and animal health by Animal ResourcesAdministration. The overall coordination of implementation of the project was the responsibilityof the PMU. In addition, the PMU was responsible for training, studies and recruitment oftechnical staff.

A. MODIFICATIONS

3.2 IDA credit was closed on 14 February 1994 following the suspension ofdisbursements effective 14 September 1993, due to sanctions imposed on Sudan, and thebreakdown of dialogue between the GOS and IMF, which resulted in the cancellation ofSpecial Drawing Rights (SDR) 6.26 million of the IDA credit. The activities of the originalSKADP were adversely affected by IDA credit cancellation, causing serious shortfalls onproject financing. Given the financing gap created by this cancellation and as some projectcomponents were closely inter-related and integrated, the activities of SKADP could not besatisfactorily carried out with ADF components only. The project was thus reformulated andits scope was reduced. The undisbursed balance of the ADF loan (UA 13.04 million) wasreallocated to finance six components, which included three original ADF components (i.e.Water Supplies, Agriculture Extension and Plant Protection), and three other components (i.e.Farm Inputs, Animal Health and PMU), previously to be financed by IDA. The reformulatedproject was to be implemented over a period of three years from July 1995 to June 1998.

B. IMPLEMENTATION SCHEDULE

3.3 The overall implementation of the project activities had been slow. Although theADF loan was signed on 24 May 1988, it became effective on 28 February 1989 and actualimplementation of components funded by ADF started in March 1989. The achievementsduring the 1988 -1994 period were not satisfactory compared to targets set at appraisal. Only16% of the ADF loan was disbursed, as of May 1995.

The poor performance in project implementation is attributed mainly to insufficientcounterpart funds and the prolonged and repeated sanctions imposed on the country due tofailure to repay arrears.

In addition, the implementation of the project was hampered by widespread insecurity thatprevailed in the project areas. Although the security situation improved considerably in theproject area since reformulation in 1995, the implementation of the project continued to lagbehind schedule, due primarily to lack of GOS commitment to provide funds.

3.4 With hind-sight, the implementation schedule of the original project set atappraisal was too ambitious; it overestimated the financial and human capacity of theborrower. Given GOS’s precarious financial situation at the time of project reformulation in1995 and taking into account the experience gained during the implementation of the original

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project, a more realistic implementation schedule should have been put in place for thereformulated project.

C. REPORTS

3.5 The project required the borrower to send to the Bank annual progress reports andaudited accounts. Progress reports had been sent regularly to the Bank, which provided ageneral overview of the activities but lacked analytical assessment of performance. Auditedaccounts were not sent according to agreed schedule; these were subsequently sent to theBank after the closure of the project.

D. PROCUREMENT

3.6 The progress of procurement was not satisfactory. The Loan Agreement stipulatedthat all materials in the original project were to be procured under International CompetitiveBidding. In the reformulated project, to expedite procurement, the Bank approved in 1995 aspecial waiver of procurement procedures. This was meant to enable all equipment, vehicles,materials, and agricultural inputs to be procured locally. Local contractors were also allowedto be used for civil works. However, in spite of the special waiver and simplification ofprocedures, the procurement process encountered many difficulties. For instance, out of 25applications submitted to the Bank for procurement of project materials in October 1995, nonewas executed, mainly due to the following reasons: (i) prolonged ADB group sanctions (para.3.3); (ii) extended delays in the Bank’s response to project requests for procurement (para.7.4); and (iii) inaccessibility to local funds (para. 3.9).

E. FINANCIAL SOURCES AND DISBURSEMENT

3.7 At appraisal, the project total cost was estimated at UA 40.68 million with afinancing arrangement of UA 15.52 million from ADF, UA 18.55 million from IDA and UA6.61 million from GOS. Project financing at appraisal and actual expenditure are given inTables 1 to 4 of Annex 1. Total disbursements from the ADF loan amounted to UA 8.97 (58%of the loan). An amount of UA 6.55 was cancelled on August 21, 1998.

3.8 It should be noted that all amounts disbursed from the ADF loan were not used forproject activities. In May 1995, an amount of 8.9 millions US$ (equivalent to 5.66 millionUA) was disbursed to the project into an account in Citibank New York. These funds weresupposed to be matched by the Sudanese Government and used for project activities. Itappears from the information provided by the project that only 0.95 million UA was used foractual project activities, which leaves an amount of 4.71 million UA unaccounted for.

4. PROJECT PERFORMANCE AND RESULTS

A. OVERALL ASSESSMENT

4.1 The overall achievement of the project in terms of quantity of output wasunsatisfactory. Its benefits and impacts were much below appraisal targets. Most components,except extension services and rehabilitation of wateryards, were poorly implemented. Projectimplementation suffered from various factors: low efficiency of management due to unfilledkey posts; poor cost recovery mechanisms; insufficient monitoring and evaluation of projectactivities; shortfall of funds, widespread insecurity in the project area, and the country’sprolonged and repeated sanctions.

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B. OPERATING PERFORMANCE

4.2 Physical achievements are presented below by component; details are found inTable 5 of Annex 1.

Rural Water Supplies

4.3 The original project proposed to rehabilitate 133 wateryards, drill 32 boreholes,and rehabilitate a total of 90 hafirs. Under the original setting, 67 wateryards wererehabilitated, six boreholes drilled and five small hafirs rehabilitated, representing between 5and 50% of target objectives. The performance remained poor during implementation of thereformulated project, except for the rehabilitation of wateryards. In fact, 33 wateryards wererehabilitated compared to a target of 57, four hafirs constructed against a target of 25, and noboreholes drilled against a target of 120. Although the wateryards provided drinking watermainly to rural population, they were also used to provide water to livestock.

Agricultural Extension

4.4 In the original project, extension component focused on supplying physicalfacilities. Four main extension units were established and some transport facilities and trainingprovided. In the reformulated project, the extension package was redefined to includedistribution of agricultural inputs and extension of improved practices such as the use ofimproved varieties and seed dressing. There was some collaboration with AgriculturalResearch Centers (ARCs), whereby researchers were consulted by senior extension staff priorto the preparation of annual extension messages, thereby improving links with the extensionservice.

4.5 Results of on-farm trials of the reformulated project showed that three sorghum,one cotton and one groundnut varieties initiated through contract farmers were reported to besuitable for seed multiplication. Of 50 farmers contracted, 34 succeeded to produce certifiedseed material. However, the seed multiplication activities ceased after the closure of theproject, due to lack of funds to cover operation costs. Furthermore, field demonstrations (i.e.improved cultural practices, crop density and spacing, use of improved seeds and seeddressing) and field visits were conducted by extension staff, which also ended when theproject was closed.

4.6 Of the 60,000 targeted households, the extension network was able to reach about34,000 households or 57%. The project was to train 36 female extensionists and supply 72sewing machines, 18 Oil processing machines, 18 soap making machines with the aim toincrease women access to productive resources, thereby expanding their participation in ruraldevelopment. Twenty-six female extensionists were trained; 20 sewing machines, two oilprocessing machines, and four grain mills were supplied.

Farm Inputs

4.7 The project was to finance the purchase of foundation seeds which would then beused by contract farmers to produce improved seed of sorghum, millet, sesame, groundnutsand cowpea vegetables, fruits and forest seedlings. Some 200 feddans (80 hectares) were usedfor seed production; 350 tons of sorghum (against a target 1,300 tons), 100 tons of cotton(target 150 tons), and 5 tons of maize (target of 70 tons) certified seeds were distributed tofarmers. However, no seeds of millet (target 600 tons), sesame (target 40 tons), groundnuts

6

(target 50 tons) and cowpea (target 15 tons) were distributed. Similarly, no vegetable seedswere distributed but 600 kg of potato and 112 kg of onion seeds were made available. Thedistribution of fruit and forest seedlings was also not implemented.

4.8 With respect to animal drawn implements (carts, hoes, ridges, lifter, and seeders),the achievement was about 10%. Thirteen small tractors against a target of 60 and 22 dieselpump sets against a target of 600 were supplied. No fertiliser was supplied (target 600 tons).The supply of farm inputs was hampered by lack of funds.

Plant Protection

4.9 The original project was to provide finance to rehabilitate three stores, purchasetwo 4WD trucks, various equipment and plant protection chemicals. It supplied two trucksand two 4WD pickups. The equipment and plant protection chemicals were not supplied.

In the reformulated project, support remained weak. Plant protection equipment i.e. Radio(target seven sets), Hard Sprayer (target 100) and camping equipment (target seven sets), andvarious pesticides and chemicals were not supplied, thereby resulting in very little impact.

Animal Health

4.10 The project was to strengthen the capacity of veterinary services in the two Statesto control major livestock epidemics. Drugs and vaccines were supplied to the Department ofAnimal Resources. The capacity of veterinary diagnostic laboratory at El Obeid wasupgraded. Animal health services supplemented the coverage of vaccination and treatments.About 12% and 14% of targets for drugs and vaccines were achieved, respectively.

4.11 The project trained 40 paravets selected from nomadic pastoralists to assist theDepartment in the identification and diagnosis of livestock diseases and expand coverage ofvaccination and treatment amongst the pastoralist herds beyond the reach of the conventionalservices.

Cost Recovery Mechanism

4.12 At appraisal, in order to ensure the long term sustainability of the projectactivities, it was envisaged that full cost recovery should be instituted for appropriate goodsand services created by the project. These included: water provided by National WaterCorporation (NWC) water yards; veterinary drugs and vaccines; and improved seeds. Underthe project, priority was to be given in establishing systems which would review and adjustcharges regularly and accurately. Proceeds for the sale of these goods and services would bekept in special accounts administered by IAs and the PMU as revolving funds. These fundscould be used to cover the maintenance and operating costs of these goods and services at theend of the project. However, the cost recovery mechanism was not put in place until 1993 –i.e. four years after the beginning of the project -, due to a small number of wateryardsrehabilitated or constructed and low water charges.

4.13 NWC was liquidated in 1994. Under the new federal system, some of the formerNWC activities in the provinces had passed on to the newly created States, and planning andsupervision were ensured by the Rural Water Department of the Ministry of EngineeringAffairs. Water charge rates have been fixed by the Rural Councils on an ad hoc basis. Thecurrent rate is SD 50 for a barrel of 44 gallon capacity in South Kordofan State and SD 600

7

for the same barrel in West Kordofan State, much higher than in the former State, mainly dueto a more water scarcity situation in this State.

4.14 Wateryards rehabilitated by the project are not sustainable without Governmentsupport, due to the inability to raise enough funds through water charges. The present rate ofwater charges is too low to cover the maintenance and operating costs; actual revenuesderived from water charges are only sufficient to cover staff salaries and the cost of fuel. Infact, it was reported that, in South Kordofan State, most of the water structure (wateryards,hand pumps, and boreholes) have already gone out of use, although in West Kordofan State,the situation was said to be relatively better, probably due to a relatively higher rate of watercharges in this State. No studies have been conducted to workout a breakeven rate to pay forfull cost recovery.

C. INSTITUTIONAL PERFORMANCE

Management and Organisational Effectiveness

4.15 Steering committee. At appraisal, two coordination bodies were set up, a SteeringCommittee at national level and an Advisory Committee at regional level. In April 1996, thesecommittees were reorganized into one Steering Committee at federal level and a Sub-SteeringCommittee and a Technical Committee for each State.

4.16 The Steering Committee was to meet quarterly. It met four times during 1995, butonly once in 1996. After reformulation, the federal level Steering Committee met only onceduring 1997. The Steering Committee was to ensure efficient coordination and planning; itsinability to meet regularly meant that guidance to project implementation was inadequate. TheSub-Steering Committees, made up of IAs representative, were ineffective because IAsreported directly to their respective line ministry and were not accountable to Sub-SteeringCommittees. Moreover, these sub-committees did not meet regularly.

4.17 Project Management Unit. As planned at appraisal, a PMU was established withheadquarters at Kadugli. The PMU had overall responsibility over project administration andfinancial management, particularly with regards to disbursement of funds and procurement.The PMU had little control on IAs, although it had responsibility for coordinating theiractivities through the annual work plans and budgets. The distinction between PMUresponsibilities over those of IAs was not clear. The PMU did not recruit the Head ofMonitoring and Evaluation Unit and the Financial Controller. Failure to recruit these two keystaff negatively affected financial management, and monitoring and evaluation of projectactivities.

Implementing Agencies

4.18 The actual execution of the project components was the responsibility of IAs; theprincipal IAs being the State Ministries of Agriculture and Engineering Affairs, the PlantProtection Department, the Agriculture Research Corporation (ARC) and the Farmers' Union.

4.19 In the reformulated project, IAs had to sign a service agreement with the PMU inorder to articulate the responsibilities and obligations of each party. It soon became clear thatIAs were weak and lacked the capacity, logistics, and other essential support services.Furthermore, the PMU did not honour its obligations, largely due to financial difficulties. IAscould not recruit qualified staff nor strengthen their capacities.

8

Performance of Suppliers

4.20 Due to insufficient funds, the number of suppliers involved was small. Theperformance of the suppliers was relatively good as there was no major cost overrun.

Performance of Consultants

4.21 A private firm was engaged as technical consultant for the Water Supplycomponent. The firm provided the service of a field operation engineer for a period of 12months, which ended in April 1994. The field operating engineer was to strengthen theorganisation and management of field operations related to wateryards rehabilitation and toinstitute a sustainable maintenance programme. His performance was reported to beunsatisfactory. He contributed little to the project.

D. LOAN COVENANTS AND CONDITIONS

4.22 The position of fulfilment of Covenants and other conditions of the “LoanAgreement” is given below:

GOS failed to honour its financial undertaking to make regular and adequateallocations in its annual budgets to finance its share of the project cost as setout in the financing plan;

while the PMU was set up, the key posts of Financial Controller andMonitoring and Evaluation were not filled after project reformulation;

GOS (NWC) failed to fulfil its undertaking to raise water charges gradually toa level adequate to ensure full cost recovery with effect from final year of theproject implementation. Water charges remained quite low by the end of theproject, enough to cover only staff salaries and the cost of fuel.

E. FINANCIAL AND ECONOMIC PERFORMANCE

Financial Results

4.23 Total disbursement on the ADF loan was very small. As at May 1995, only UA2.47 million was disbursed and the undisbursed balance of loan amounted to UA 13.05million, which represented 84% of the total loan. The rate of disbursement did not improveafter reformulation. Total disbursement at the date of the closure of the project in June 1998was UA 8.97 million, which represented 57.8% of the total loan.

Economic Performance

4.24 Overall, the project’s economic impact in terms of raising on-farm and nationalincomes as well as raising export earnings was negligible. Improved cultural practices,especially improved seeds and seed dressing, and the use of agricultural implements couldhave improved productivity. It is difficult to quantify its effects as some of the supplied farminputs hardly served the purpose for which they were intended as they reached the farmers toolate for productive use. The project had no impact on production of groundnuts, sesame andcowpea, as no improved seeds of these crops were distributed.

9

4.25 The total incremental production of livestock resulting from the animal healthcomponent was expected to be 12,820 heads of cattle, 6,555 heads of sheep and 4,505 headsof goat. In the absence of a baseline survey on livestock population before and after theproject, it is difficult to quantify incremental benefits. Nevertheless, the supply of drugs andvaccines was reported to have reduced the incidence of epidemic diseases, especiallyrinderpest, thus reducing the mortality rate.

4.26 The Internal Rate of Return (IRR) at appraisal was estimated at 40.1%. As theachievements in term of physical and financial terms were insignificant, and due to lack ofconsistent hard-core data on appropriate indicators, no attempt has been made to estimate thefinancial and economic rates of return of the project. However, actual IRRs are likely to bemuch lower than the estimate at appraisal due to poor achievements, especially of thecomponents having direct impacts on rain-fed agricultural production.

5. SOCIAL AND ENVIRONMENTAL IMPACT

A. IMPACT OF THE PROJECT ON HUMAN AND SOCIALACTIVITIES

5.1 The training of paravets in first-aid, primary health and vaccination improved theircapacities and helped in the expansion of animal health services, especially amongstpastoralists in West Kordofan State.

5.2 The rural water supply had a great impact on the life of people by providingdrinking water to human beings and livestock. It provided safe and hygienic water, therebyreducing the chances of water borne diseases. The activity also generated employmentthrough transport and the sale of drinking water from wateryards to remote villages.

Impact of the Project on Women

5.3 Twenty-six rural women participated in training on economic activities (i.e.sewing, oil pressing and grain milling) conducted by the project, thereby improving theirskills. However, only a few equipment (sewing and oil pressing machines, grain mills) wereprovided, not sufficient to generate a significant off-farm income activity.

5.4 Wateryards mitigated the water carrying drudgery of women living in thecatchment areas as they no longer had to draw water from the wells, thus releasing labour forother productive activities. It also improved their health as a result of availability of cleanpotable water.

Environmental Impact

5.5 The project was expected to have a positive environmental impact by introducingappropriate land husbandry and farming systems, both for crops and livestock production.Better land husbandry practices, multi-purpose tree-planting for fruit trees and waterconservation measures, such as construction of hafirs, were expected to have a positive impacton the environment. However, the impact on environment was limited as most of the activitieswere not implemented, except agricultural extension (i.e. land husbandry, farming systems)and rehabilitation of wateryards.

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6. PROJECT SUSTAINABILITY

6.1 The project is not sustainable as the mechanism of cost recovery to ensure themaintenance of infrastructures and the supply of inputs and services was not established. Projectactivities ceased immediately after the end of the project. The project vehicles and officescontinue to provide support to the two newly created States.

6.2 Wateryards rehabilitated by the project are not sustainable due to the inability toraise enough funds through water charges. The present rate of water charges is not sufficientto cover the maintenance and the operation cost; it is only sufficient enough to cover staffsalaries and the cost of fuel. In the South Kordofan State, most of the rehabilitated waterstructures are already out of use. The situation was reported to be relatively better in the WestKordofan State.

6.3 Under current decentralized government, State Governments are left with veryweak line agencies. The national policy for water supply is to entrust responsibility to ruralcouncils for the operation, maintenance and management of wateryards, including thecollection of water revenue. Furthermore, the provision of water is perceived by rural councilsas a national responsibility and therefore, they look to Federal Government for budgetaryassistance. Given the low income level of beneficiaries, raising water charges at full costrecovery appears difficult and under current situation, the wateryards are not likely to bemaintained unless funds are provided through budgetary support. Due to the inability to raisewater charges to full cost recovery, the capacity of rural councils to ensure the maintenance ofwateryards is seriously questionable.

6.4 The agricultural benefits generated by the seed multiplication activities, thoughmodest, could have been sustained or even increased, as the mechanism was put in place andrequired limited Government funding. However, the multiplication and distribution ofimproved seeds has been discontinued due to lack of funds. The animal drawn implement sub-component, sale of small tractors and pumps could be made sustainable and further beexpanded if the private sector is involved.

6.5 The paravets training programme (i.e., in first-aid, vaccines and primary health)and the use of paravet services in expanding animal health coverage has been discontinued. Inspite of adequate training received, their services are not sustainable on account of no accessto vaccines and lack of funds to acquire drugs.

7. BANK AND BORROWER PERFORMANCES

A. BANK PERFORMANCE

7.1 The performance of the Bank was not satisfactory. Preparation was insufficient.The lack of a clear strategy led to the multiplication of components with no explicitrelationship between them. Although rural water supply was very important and needed in theproject area, it had no clear direct linkage with rain-fed agricultural production. Theperformance of the Bank at appraisal was also not satisfactory. The assumptions on theavailability of new technologies and the capacity of implementing agencies to play theirexpected role were over optimistic. The project design was too complex requiring a highdegree of coordination skills.

11

7.2 The security in the project area seriously affected the implementation of theproject. During project reformulation, security aspects should have been taken intoconsideration. A flexible project implementation mechanism could have provided immediaterelief to the farmers in the security affected project area. It is also questionable whether it wasprudent, in 1994, to have reformulated the project instead of closing it given the unfavourablemacro-economic and external factors (i.e. the sanctions against the country).

7.3 The performance of the Bank at implementation was also below expectations.Project supervision was inadequate with long intervals between missions. Before 1994, therewere eight supervision missions from the World Bank but these did not visit the project areas,due to security considerations. The first ADB mission that visited project headquarters was inSeptember 1994. After reformulation, there were only two supervision missions, one byFAO/ADB CP in October 1997 and another by the Task Manager in 1998. Regular visits bysupervision missions could have allowed the Bank to attend to various difficultiesencountered by the project ahead of time.

7.4 The project during the intervening period between two sanctions in October 1995,through international shopping, evaluated and submitted to the Bank applications forprocurement of various goods costing more than UA 4.2 million. There was inordinate delayby the Bank in approving these applications, which were approved only after the visit madeby the Director-General of the project to the Bank in April 1996. Unfortunately, they werethen caught up by the sanctions. The response of the Bank to the project applicationsconcerning approval of procurement of goods was slow. Expeditious responses of the Bankwould have significantly facilitated smoother project progress.

B. BORROWER PERFORMANCE

7.5 GOS performance was unsatisfactory. The project received insufficientcounterpart funds. Although an equivalent of UA 5.6 million was deposited by GOS in July1995 into a revolving fund at Citibank of Sudan to cover ADF financed local costs, only UA0.95 million was made available to the project. This single factor was largely responsible forslow progress and poor achievement of project targets. In addition to constant and severeunder-funding, the Government did not fulfil its other obligations, including the properstaffing of PMU, appropriate mechanisms for cost recovery and providing staff incentives.Furthermore, the diversion of project equipment by State Governments operations underminedthe physical implementation of the project.

8. OVERALL PERFORMANCE AND RATING

8.1 The overall assessment of implementation performance was unsatisfactory (US).Project implementation lagged behind schedule and was closed in June 1998. The projectachieved very little. GOS did not comply with Covenants with respect to the provision ofcounterpart funds and appointment of key PMU staff.

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Adequate project monitoring and evaluation was not ensured. The overall average score of theproject is 1, on a score scale of 1 to 41.

Component Indicators Score(1 to 4)

Remarks

1. Adherence to Time Schedule 1 Slippage by four years2. Adherence to Cost Schedule 1 Significant cost underrun3. Compliance with Covenants 1 Not complied satisfactorily4. Adequacy of Monitoring and

Evaluation and Reporting1 Inadequate

5. Satisfactory Operations 1

AVERAGE 1

Overall Assessment of ImplementationPerformance Unsatisfactory

8.2 The performance and evaluation rating for the Bank is given in Annex 2 … Theperformance at preparation and at appraisal was not satisfactory. Bank supervision was alsoinadequate.

8.3 The project had insignificant impact on the macro-economic policy of Sudan andon poverty alleviation. However, the project did initiate a strategy for rain-fed agriculturethrough extension and transfer of technologies of improved seeds and seed treatment. Theintended impact on the environment was not achieved.

9. CONCLUSION, LESSONS LEARNT AND RECOMMENDATIONS

A. CONCLUSION

9.1 The overall achievement of the project in terms of quantity of output wasunsatisfactory. Its benefits and impacts were much below appraisal targets. Mostcomponents, except extension services and rehabilitation of wateryards were poorlyimplemented. Project implementation suffered from various factors which were both internaland external to the project. Internally, low efficiency of management due to unfilled keyposts, poor cost recovery mechanisms and insufficient monitoring and evaluation of projectactivities, contributed to the overall low performance of the project. The situation wasexacerbated by constraints caused by external factors such as the shortage of funds from theGOS, the widespread insecurity in the project area, and the prolonged sanctions on thecountry. The sustainability of the limited achievements cannot be guaranteed in view of thelack of cost recovery mechanisms to ensure the maintenance of infrastructure and the supplyof inputs and services as well as the lack of spare parts.

1 Less than 1 = Highly unsatisfactory; between 1-2 = Unsatisfactory; between 2-3 = Satisfactory; more than 3 =Highly satisfactory.

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B. LESSONS

9.2 The key lessons to be learned from the project are the following:

An integrated approach to development to be successful requires a coherentand explicit strategy and the selection of only crucial components. The lack ofa clear strategy led to the multiplication of components with no explicitrelationship among them. Although rural water supply was very importantand needed in the project area, it had no clear direct linkage with rain-fedagricultural production and accounted for 26% and 57% of the investmentbefore and after reformulation, respectively. At reformulation, this shouldhave been taken into consideration.

The project design did not provide for sufficient emphasis on capacity buildingof existing weak IAs and was too ambitious to expect these agencies tofunction efficiently and be effectively coordinated by the PMU. Given themagnitude of funding involved in the project, the design should have includeda provision for the collection of bench-mark data and sample studies to assessthe project’s impact.

At the time of reformulation, the Bank should have weighed carefully the risksof sanctions in disrupting the implementation of the project and should haveprovided a contingency plan.

Poor compliance with conditions implies lack of GOS commitment and hence,likelihood of failure. The Bank’s strict enforcement of loan conditions, whichwere critical for the setting up of SKADP would have induced GOS to bemore committed and responsive to the project’s needs.

Although full cost recovery may have been a good idea to ensure sustainability,it appeared, however, hardly achievable given the low resources of mostfarmers in the project area and cheaper alternatives should have beenconsidered.

The Bank’s decision to set up in 1995 a revolving fund in the Citibank,Khartoum of equivalent UA 5.6 million was an error of judgement given theprecarious GOS financial situation at that time.

Accelerated responses from the Bank, consistent with the need for financialprudence and caution, and procedure rationalisation, would have considerablyfacilitated smoother disbursements and reduced the risk of cost and timeoverrun in procurement, thereby improving project output.

Supervision missions by the Bank were indispensable. Not only should theybe regular but they also must have focused terms of reference and be aimed atproblem solving in the field. More adequate supervision from 1994 to 1998,which was a critical period for the project, could have enhanced the project’ssuccess.

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The PCR should be prepared within six months of project completion to permitproper data gathering.

C. RECOMMENDATIONS

For the Government

9.3 The infrastructure created under the project should be sustained by introducingmechanism of cost recovery. Since full cost recovered appeared too heavy for the resources ofmost farmers in the project area, funds should be provided through budget support.

9.4 Decentralization has left State Governments with inadequately staffed weak lineagencies. Many seniors are reported to have moved to the central government. The capacityof agricultural and related departments in the newly created States should be strengthened byrecruiting qualified staff and improving the technical capacity of existing staff throughtraining.

For the Bank

9.5 The Bank supervision missions should be carried out at least once every sixmonths. In case project is encountering problems, more adequate and frequent supervisionsshould be undertaken.

9.6 The Bank should have, during Project reformulation, taken duly account of themacro-economic and security environment. Activities should have been drastically scaleddown up to the essential to allow greater efficiency of the proposed interventions.

ANNEX 1Page 1 of 5

SUDANSOUTH KORDOFAN AGRICULTURAL DEVELOPMENT PROJECT


FINANCIAL AND PHYSICAL PERFORMANCE

Table 1. Source of Finance and Expenditure

SourceAppraisal Estimate

(UA million)Actual Expenditure

(UA '000)Foreign

ExchangeLocal

CurrencyTotal Foreign

ExchangeLocal

CurrencyTotal

Original ProjectADF 9.33 6.19 15.52 2,205 0.268 2,473GOS1 - 6.61 6.61 n.a. n.a. n.a.TOTAL 9.33 12.80 22.13 2,205 0.268 2,473

Reformulated ProjectADF 7.39 5.66 13.05 0.827 0.951 1,778GOS2 - 2.08 2.08 - 0.002 0.002TOTAL 7.39 7.74 15.13 0.827 0.953 1,780

Table 2. ADF Annual Disbursement(UA '000)

Year AppraisalEstimates

As per ADFLedger

ActualExpenditure

Original Project1988 0.98 - -1989 2.74 137 1371990 3.24 1,209 1,2091991 3.00 405 4051992 2.84 14 141993 2.74 531 5311994 - 177 177Sub-total 15.52 2,473 2,473

Reformulated Project -1995-96 6,501 1,1771996-97 - 3371997-98 - 264Unallocated - -Sub-total 6,501 1,778

TOTAL 8,974 4,251

1 The liquidation of Agricultural Machinery Services (AMS) and lack of book keeping system made it impossible forthe mission to estimate GOS actual contribution.

2 Represents GOS contribution in the form of PMU building, Rural Water Supply salaries, Plant ProtectionDepartment salaries, Animal Health salaries, and recurrent costs (Mission’s estimate).

ANNEX 1Page 2 of 5



Table 3. Expenditure by Project Component(UA ' 000)

Component ApprovedLoan

Expenditure1988-94

ReformulationAllocation

1995-98

Expenditure1995-98

TotalExpenditure

(3+5)

Contribution byComponent

(%)1 2 3 4 5 6 7

Water Supply 10,270 1,741 7,461 936 2,677 63.0Agriculture Extension 2,270 463 1,070 297 760 17.9Farm Inputs - - 1,927 114 144 2.7Plant Protection 660 269 310 77 346 8.1Animal Health - - 400 59 54 1.3PMU - - 1,588 300 300 7.0Contingencies 2,320 - 291 - - -TOTAL 15,520 2,473 13,047 1,775 4,251 100.0

Table 4. Expenditure by Project Category(UA '000)

Category 1988 – 1994 1995 – 1998 TotalInvestment CostsConstruction 66.5 342.0 408.5Vehicles 1,073.1 486.8 1,559.9Equipment 822.3 638.3 1,460.6Training - 40.0 40.0Technical Assistance 309.4 - 309.4Sub-total 2,271.3 1,507.1 3,778.4Recurrent CostsStaff cost - 140.9 140.9Operation cost 201.4 130.1 331.5Sub-total 201.4 271.0 472.4TOTAL 2,472.7 1,778.1 4,250.8

ANNEX 1Page 3 of 5



Table 5. Physical Target and Achievements (Page 1)

Project Component Unit

1988 – 1994 1995 – 1998Target Achieve-

mentAchievement

as % ofTargets

Target Achieve-ment

Achievementas % ofTargets

1. Rural Water Supply

Construction of hafirs No 90 5 6 25 4Rehabilitation of wateryards

No 133 67 51 57 33

Drilling of bore holes No 32 6 19 120 0

2. Agricultural Extension

Main extension units No 4 4 100 - -Extension sub-units No 14 - 0 - -Extension staff basichouses

No 147 0 0

Construction of traininghall

No 4 2 50.0

Storage for inputs No 18 0 0Vehicles procurement No 10 10 100 13 13 100.0Motorcycle procurement No 6 6 100 14 0Bicycle procurement No 117 90 76.9Equines procurement No 36 0 0Equipment for Agric.ExtensionFurniture for office No. of offices 4 4 100.0Furniture for houses No. of houses 147 90 61.2Furniture for training hall No. of halls 4 2 50.0Radio No 5 0 0Nursery equipment No. of sets 2 0 0Type writer No 4 4 100.0Oven for research No 1 1 100.0Scientific calculator No 4 4 100.0Lenses for research unit No 20 - 0TrainingSeminars No 6 - 0Study tours & visits No 12 - 0Village level extensiontraining

No 3 - 0

Farmers training No. of farmers 3,200 800 25.0VEW’s training No - 55 -VEW upgrading course No - 50 -Female extensionist No 36 26 72.2Training of parvets No - 47Training VEW inhorticulture

No - 17

ANNEX 1Page 4 of 5



Table 5. Physical Target and Achievements (cont’d)


1988 – 1994 1995 – 1998Target Achieve-

mentAchievement

as % ofTargets

Target Achieve-ment

Achievement as% of Targets

3. Farm InputsImproved SeedsSorghum Tons 1,300 357 27.5Millet Tons 600 - 0Sesame Tons 40 - 0Groundnut Tons 50 - 0Maize Tons 70 5 7.1Cotton Tons 150 103 68.7Cowpea Tons 15 - 0

Vegetable seedsTomato Lbs. 150 0 0Okra Lbs. 450 0 0Water melon Lbs. 50 0 0Potato Kg. - 600 -Onion Kg. - 112 -Fruit and Forest SeedlingFruit trees 000’No. 105 0 0Forest seedling 000’No. 210 0 0Forest tree seed 000’No. 24 0 0Foundation SeedsSorghum Tons 20 5 25.0Millet Tons 17 - 0Groundnuts Tons 12 - 0Sesame Tons 4 - 0Cotton Tons 37 21 56.8

Animal Drawn ImplementCarts No 2,000 280 14.0Nuba Hoe No 1,500 446 41.9Ridger No 1,500 - 0Lifter No 1,500 - 0Seeder No 3,000 100 3.3Small tractor No 60 13 21.7Fertilizer Tons 500 - 0Small IrrigationSurface water pump No 600 22 3.7Women ActivitiesSewing Machine No 72 20 27.8Oil processing machines No 18 2 11.1Soap making machine No 18 0 0Grain mills No 36 4 11.1

ANNEX 1Page 5 of 5



Table 5. Physical Target and Achievements (cont’d)


1988 – 1994 1995 – 1998Target Achieve-

mentAchievement

as % ofTargets

Target Achieve-ment

Achievementas % ofTargets

4. Plant Protection

EquipmentRadio No 7 - 0Hand sprayer No 100 - 0Camping equipment No 7 - 0Vehicles 4 WD No 2 2 100 2 2 100.0Trucks No 2 2 100 - -Chemicals

Malathion 5% Litres 1,000 0 0Furnisan 2% Litres 3 0 0Khorate EC Litres 6,500 0 0Durshan 48EC Litres 6,000 0 0Propoxur 2% dust Tons 22 0 0Sevin 85% WP Tons 3 0 0

5. Animal Health (LumpSum)

Supply of drugs 000 UA 183.45 22.0 12.0Supply vaccine 000 UA 125.86 18.0 14.3Equipment 000 UA 72.43 - 0Training 000 UA 18.42 14.0 76.0

ANNEX 2SUDAN

SOUTH KORDOFAN AGRICULTURAL DEVELOPMENT PROJECTPROJECT COMPLETION REPORT

PERFORMANCE AND EVALUATION RATING

Component Indicators Score(1 to 4)

Remarks

1. At Identification 22. At Preparation 2 Too many components not having direct

impact on project objectives3. At Appraisal 2 Relative importance of components in project

matrix not analysed4. At Supervision 1 InadequateOverall assessment of bank performance US

Project Outcome

No. Component Indicators Score(1 to 4)

Remarks

1. Relevance and Achievement of Objectivesi) Macro-economic policy 1 No impact

ii) Sector policy 2 Limited impact on rain-fed agricultureiii) Physical (Production) 1 Insignificant impactiv) Financial 1 No impactv) Poverty alleviation & social & gender 1 Very little impact

vi) Environment 1 No impactvii) Private sector development 1 No impact

viii) Other

2. Institutional Development (ID)i) Institutional framework incl. Restructuring 2 Did provide institutional framework

ii) Financial and management informationsystems including audit systems

2 MIS and audit system insignificantlydeveloped

iii) Transfer of technology 2 Transfer of technology made throughextension network

iv) Staffing by qualified persons (incl. Turnover)training & counterpart staff

2 Trained some counterpart-staff

3. Sustainabilityi) Continued borrower commitment 1 Showed no commitment

ii) Environment policy 1 No clear impactiii) Institutional framework 1 Not sustainableiv) Technical viability and staffing 1 Not sustainablev) Financial viability include recovery systems 1 Not sustainable

vi) Economic viability 1 Non viablevii) Environmental viability 1 Non viable

viii) O & M facilitation availability of recurrentfunding, foreign exchange, spare parts,workshop facilitation etc.

1 Non viable

4. Economic Internal rate of reform Not calculated

TOTAL 24 AV.1.26Overall assessment of outcome US

ANNEX 3SOUTH KORDOFAN AGRICULTURAL DEVELOPMENT PROJECT


RECOMMENDATIONS AND FOLLOW-UP MATRIX

indings & Conclusions Lessons Learned/Recommendations Follow-up Action Responsibility1. Formulation & Project Rationale1.1 In the project, components like water supply although important, nothaving direct bearing on project objective accounted for a major proportion ofinvestment.

To be successful a project requires a coherent and explicit strategyand selection of only crucial components.

In future, integrated agricultural development project should beprepared with caution keeping in view clear and concise projectgoals and objectives.

ADB and GOS

1.2 The project design was too ambitious. The project design should be simple, goals should be kept realistic. In future, these points should be kept in view at preparation andappraisal.

ADB

2. Project Implementation2.1 The implementation schedule seems to have been over ambitious andoverestimated the financial and manpower capacity of the borrower.

The implementation schedule should be realistic and flexible. This should be kept in view while implementing any developmentproject in Sudan.

GOS and ADB

2.2 It was unrealistic to expect a large number of weak implementingagencies to function efficiently and be effectively coordinated by the PMU.

Few crucial components should be selected. In future, development project involvement of stakeholders(private sector, beneficiaries, beneficiary organisations and NGOs)is sought to ensure sustainability.

GOS and ADB

2.3 The Steering Committees were not effective; these did not meet regularlyand underwent frequent changes as a result of public sector decentralisation.

The project structure/organisation should allow adjustments to dealwith changes of administrative structure in the country.

This should be kept in view in future project design. GOS and ADB

2.4 Bank decision to set up a revolving fund in the Citibank Khartoumequivalent of UA 5.6 million was an error of judgement given the precariousGOS financial situation at that time.

The amount of such a mechanism should be determined in view of country financial situation. Prudence and close supervision required for future similarmechanisms.

ADB

2.5 The Bank Supervision was not adequate. Only a few supervision missionswith long intervals were realized.

Bank should ensure supervision of project at least once every sixmonths.

Applicable to all ADF funded project. ADB

3. Compliance with Loan Conditions Covenants3.1 GOS failed to provide adequate funds to the project. Where borrower fails to honour its commitments, quick remedial

measure should be taken.The covenants should spell out responsibility of borrower clearly. ADB

3.2 Crucial posts in PMU were not filled. To attract competent staff for key-posts, remuneration needs to behighly competitive.

The borrower must ensure the fulfilment of crucial posts. GOS and ADB

3.3 GOS did not raise water charges gradually to a level to ensure full costrecovery from the final year of project implementation.

Although full recovery may have been a good idea to ensuresustainability, however, it appeared hardly achievable given the lowresources of most rural people in the project area. Alternatively, lowoperating cost technologies options should be used instead .

This should be kept in view while formulating future projects. ADB

4. Performance Evaluation Project Outcome4.1 In the absence of periodic surveys and consistent series of data onproduction, it was not possible to quantify the impact of the project onincomes of farmers and pasturalists.

Periodic surveys should be built in the project Monitoring andEvaluation system.

Future projects should give due consideration to Monitoring andEvaluation system.

ADB and GOS

5. Sustainability5.1 The project was not sustainable. The mechanism of cost recovery toensure the maintenance of infrastructure and the supply of inputs and serviceswas not established. Project activities ceased immediately after the projectwas closed.

A realistic mechanism of cost recovery should be established at anearlier stage of project implementation and closely monitoredthrough supervision missions.

Future Bank funded projects need to give special attention to theissue of project sustainability.

ADB

ANNEX 4



LIST OF REFERENCES AND SOURCES OF INFORMATION

1. African Development Fund (1987). Appraisal Report – Republic of Sudan: South KordofanAgricultural Development Project, SUD/D/AAA/87/01, August 1987.

2. The World Bank (1987). Appraisal Report – South Kordofan Agricultural DevelopmentProject – Report no. 6939-SU, November 1987.

3. FAO/WB Cooperative Programme (1994). Implementation Report SKADP, prepared byInvestment Centre, FAO/WB Cooperative Programme – Report no. 134/94/CP-SUD 48 ICR,21 November 1994.

4. African Development Fund (1995). A Proposal for the Reallocation of ADF Loan, preparedby NARD I, 14 June 1995.

5. Republic of Sudan, Ministry of Agriculture & Forestry (1997). SKADP, Second SeasonReview – July 1995-December 1996, Kadugli, March 1997.

6. FAO/ADB Cooperative Programme (1997). SKADP Supervision Report, prepared byInvestment Centre. FAO/ADB Cooperative Programme No. 97/088 ADB-SUD,26 November 1997.

7. Republic of Sudan, Ministry of Agriculture & Forestry (1998). SKADP, Progress Report Jan-Dec. 1997, Kadugli, February 1998.

8. Republic of Sudan, Ministry of Agriculture & Forestry (1998). SKADP, Project CompletionReport, August 1998.

9. Republic of Sudan, General Auditing Chamber. Comprehensive Audit Report of the Accountsof SKADP for the Financial year 1994-95, Transitional Period (July 1995-December 1995),Financial year ending 31 December 1997 and for the period 1.1.1998 to 30.6.1998, preparedby Public Corporations Department, Khartoum.

10. African Development Bank (2000). Account NL PRS 506 dated 16.2.2000. Summary Ledgerof Sudan: Ministry of Finance & Economy, SKADP F/SD/AGR/87/10.

project completion report south kordofan agricultural development

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