implementation of the community environment …...implementation of the community environment...

Implementation of the Community Environment Conservation Fund (CECF) to enhance Forest

Landscape Restoration in Uganda.

Emerging lessons and recommendations for scaling up.

IUCN Uganda Country Office

Implementation of the Community Environment Conservation Fund (CECF) to enhance Forest

Landscape Restoration in Uganda

Emerging lessons and recommendations for scaling up.

Consultancy undertaken by

Dr. Willy Kakuru & Mr. Moses Masiga

On behalf of:

IUCN Uganda Country Office

February, 2016

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ACRONYMS

BDR Building Drought Resilience

CbIWRM Catchment Based Integrated Water Resources Management

CBO Community Based Organisation

CEAP Community Environment Action Plan

CECF Community Environmental Conservation Fund

CMC Catchment Management Committees

CO Country Office

CSO Civil Society Organization

DLG District local Government

DWRM Directorate of Water Resources Management

EBA Ecosystem Based Adaptation

FGD Focused Group Discussion

FLR Forest Landscape Restoration

GoU Government of Uganda

IUCN International Union for Conservation of Nature

IWRM Integrated Water Resources Management

LLS Landscape and Livelihoods Strategy

M & E Monitoring and Evaluation

MAAIF Ministry of Agriculture Animal Industry and Fisheries

MECDP Mount Elgon Conservation and Development Programme

MERECP Mount Elgon Regional Ecosystem Conservation Programme

MoLG Ministry of Local Government

MTIC Ministry of Trade, Industry and Cooperatives

MWE Ministry of Water and Environment

NDP National Development Plan

NGO Non-Government Organization

PMU Project Management Unit

SACCO Savings and Credit Cooperative Organisation

TORs Terms of Reference

VSLA Village Savings and Loan Associations

WMD Wetland Management Department

WMZ Water Management Zones

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CONTENTS

ACRONYMS .......................................................................................................................................... i

CONTENTS .......................................................................................................................................... ii

LIST OF FIGURES .............................................................................................................................. v

EXECUTIVE SUMMARY ................................................................................................................... vi

INTRODUCTION AND METHODOLOGY ....................................................................................... 1

Introduction ....................................................................................................................................... 1

About the CECF Model ............................................................................................................... 1

Purpose and Objectives .............................................................................................................. 1

Scope of Study ............................................................................................................................. 2

Methodology ..................................................................................................................................... 3

Study Design ................................................................................................................................ 3

Assessment Area ......................................................................................................................... 3

Sampling Design .......................................................................................................................... 4

Document Review and building information base .................................................................. 4

Review of the performance of CECF ........................................................................................ 4

Preparation of Assessment Tools and Data Collection ......................................................... 5

PERFORMANCE OF CECF AS A FINANCING MECHANISM AND ROLE WITHIN FINANCIAL INSTITUTIONAL ARRANGEMENTS ......................................................................... 6

Introduction ....................................................................................................................................... 6

Financial Operations of the CECF Model .................................................................................... 6

Iinstitutional and operational structure ...................................................................................... 6

Financial operations of CECF Groups ...................................................................................... 6

Performance of CECF model as a micro-credit approach ......................................................... 8

Grants received ............................................................................................................................ 8

Performance of micro-credit in Upper Aswa Sub-Catchment ............................................... 9

Performance of micro-credit in the Mt. Elgon Ecosystem ................................................... 12

Performance of micro-credit in the Rwizi Catchment ........................................................... 15

Lessons on the performance of micro-credit ......................................................................... 16

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CECF Support to livelihoods and business enterprises: Case studies of CECF as a vehicle for livelihoods transformation ...................................................................................... 17

Case study 1: Shea butter tree: charcoal or Shea butter nuts............................................ 17

Case Study 2: Tree Nursery entrepreneur in Orum sub-county, Otuke District .............. 18

Case Study 3: Income gains from improved banana management in the Rwizi catchment .................................................................................................................. 18

Case study: Successful application of CECF interventions in Kapchorwa District .......... 19

Lesson learnt from the case studies reviewed ...................................................................... 20

PERFORMANCE OF CECF AND ITS CONTRIBUTION TO FOREST LANDSCAPE RESTORATION AND CATCHMENT MANAGEMENT ................................................................ 21

Linking the CECF model to environment management ........................................................... 21

Contribution of CECF to FLR Principles ..................................................................................... 21

Environmental conservation interventions implemented using the CECF model ................ 22

Wetland buffer zone demarcation and protection ................................................................. 23

Promoting good agricultural practices such as soil and water conservation .................... 24

Water source protection ............................................................................................................ 25

Policy impacts of CECF interventions through bye law development and i mplementation ............................................................................................................................ 26

Protection of the Shea Nut Tree (Vitellaria paradoxa) ......................................................... 26

Tree planting ............................................................................................................................... 27

Bee-keeping and its indirect conservation benefits to FLR ................................................. 28

Use of the CECF platform to discuss other off-site conservation issues such as community participation in Mt. Elgon National Park management .................................... 28

Leveraging other conservation and private interventions into the CECF Model .............. 31

Joint monitoring and implementation of environmental conservation ................................ 31

CECF experiences in the context of catchment based water resource management .... 32

Empowering CECF Groups to sustain environment conservation initiatives ................... 32

Integration of CECF interventions in district planning frameworks and budgets ............. 33

Training, awareness and exchange visits .............................................................................. 33

LONG TERM VIABILITY OF CECF ................................................................................................ 34

Achievements of CECF ................................................................................................................. 34

A microfinance model extending support to beneficiaries ................................................... 34

Enhancing landscape restoration efforts and building resilience through livelihoods ..... 34

Strategic areas for improvement ................................................................................................. 34

Linkages between CECF and Village Savings and Loans Association (VSLA) .............. 34

Funding Mechanisms and Institutional Arrangements for CECF ....................................... 35

Using modern banking services to manage CECF funds ................................................... 35

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LESSONS LEARNT, CONCLUSIONS AND RECOMMENDATIONS ....................................... 36

Lessons from CECF for FLR and catchment-based IWRM .................................................... 36

Empowered local communities can put in place measures to manage natural resources and demand accountability from their leadership ................................................................. 36

The citizenry created by CECF groups provides an opportunity for political mobilization and gaining support to natural resource management and conservation... 36

Outstanding protected area conflicts in Uganda can be managed better by bringing together stakeholders to appreciate the broader context of natural resource benefits and beneficiaries ......................................................................................................... 36

CECF as a potential mechanism for promoting and enabling conservation action ......... 37

Conclusions .................................................................................................................................... 37

Fund Management of CECF Initiatives .................................................................................. 37

Providing incentives for conservation ..................................................................................... 38

Linkages of CECF to Conservation of Natural Resources .................................................. 38

Recommendations ......................................................................................................................... 39

CECF Fund Management ........................................................................................................ 39

Monitoring and Evaluation ........................................................................................................ 39

Strengthening policy and legislation implementation at local community level ................ 39

Legally registering CECF groups as natural resource user associations ......................... 39

Use of economic instruments to demonstrate conservation benefits of CECF ................ 40

Capacity Building for CECF Groups ....................................................................................... 40

Exploring and strengthening emerging new ppartnerships ................................................. 40

Strengthening linkage between CECF fund borrowing and environmental conservation40

Mobilising support from political leadership ........................................................................... 40

REFERENCES ................................................................................................................................... 41

APPENDICES .................................................................................................................................... 42

Appendix 1: Arwotngo Parish Natural Resource Management By-Law 2014 Outline ........ 42

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LIST OF TABLES

Table 1: CECF planning and management, Northern Uganda-Aswa river catchment ................. 3

Table 2: CECF planning and management, Eastern Uganda- Mt. Elgon catchment ................... 3

Table 3: CECF planning and management, South-Western Uganda, River Rwizi catchment...... 4

Table 4: Sampling plan in the 3 catchments ................................................................................ 4

Table 5: Structure of micro-credit repayments for a Shs100,000/= loan in Rwizi Catchment ....... 7

Table 6: Summary of IUCN/BDR CECF Resource allocation for the Upper Aswa sub-catchment ................................................................................................................................................... 8

Table 7: Summary of IUCN/EBA CECF Resource allocation for the Mt. Elgon Ecosystem ......... 8

Table 8: Summary of CECF Resource allocation for Rwizi catchment ........................................ 9

Table 9: Flow of disbursement of loans and repayments for Angwalo-Ode village, Ating Parish10

Table 10: Flow of disbursement of loans and repayments for Adur village, Ating Parish ........... 10

Table 11: Flow of disbursement of loans and repayments for Te-Cwano village, Ating Parish .. 11

Table 12: Flow of disbursements and repayments for Kween village, Ngenge sub-county ........ 12

Table 13: Flow of disbursements and repayments for Taragon village, Ngenge sub-county ..... 14

Table 14: Flow of disbursements and repayments for Sukut village, Ngenge sub-county ......... 15

Table 15: Summarised ledger record for Bukiro Environmental Conservation Group ................ 16

Table 16: Comparing market price based monetary flows for shear tree nuts versus charcoal . 17

Table 17: Revenues of tree seedling nursery operator with injections of CECF, Upper Aswa catchment ............................................................................................. 18

Table 18: Partial budget analysis for a banana farmer using CECF model in Rwizi Catchment 19

Table 19: Environment Conservation Interventions promoted by CECF Beneficiaries .............. 22

Table 20: Targets and achievements in 3 selected villages in the Kapchesombe sub-catchment29

Table 21: Targets and achievements in 3 selected villages in Benet sub-catchment ................ 30

Table 22: Profiles of CECF Groups in the Rwizi Catchment ...................................................... 33

LIST OF FIGURES

Figure 1: Operational model of the CECF ................................................................................... 2

Figure 2: Illustration of the institutional structure for CECF at catchment level ............................ 7

Figure 3: Banana field mulched with wetland grass .................................................................. 18

Figure 4: Wetland boundaries demarcated and planted with fig trees and sisal plants .............. 23

Figure 5: Protected Water source in the Aswa Catchment ........................................................ 25

Figure 6: Restored landscape in Benet sub-county Mt. Elgon Catchment ................................. 27

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EXECUTIVE SUMMARY

This descriptive and exploratory evaluation of the Community Environment Conservation Fund (CECF) model was undertaken by IUCN Uganda Country Office to assess the performance of the model based on three general aspects: (i) where CECF fits as a financing mechanism at community and landscape level; (ii) CECF in terms of its contribution to Forest Landscape Restoration (FLR), Catchment based water resources management (CbWRM), and other environmental management contributions; and (iii) the long-term viability of CECF institutionally and the legal alignment, including whether the fund can be aligned alongside micro-finance institutions within landscapes where it is being implemented.

The evaluation of CECF was conducted in the Upper Aswa sub-catchment in the Northern Ugandan Districts of Lira and Otuke; in the Mt. Elgon catchment (Eastern Uganda) in Kween and Kapchorwa Districts; and in the River Rwizi catchment (South-Western Uganda) Districts of Mbarara, Sheema and Ntungamo. Assessment was conducted through field appraisal of CECF groups and local communities. Data collection comprised Focus Group Discussions (FGDs); review of group and community records; and discussions with sub-county and District staff and community leaders. Key informant interviews were conducted with development partners including the Austrian Development Cooperation and GIZ, and the Directorate Environmental Affairs (DEA) and the Directorate of Water Resources Management (DWRM) in the Ministry of Water and Environment (MWE). Additional discussions were held with current and former IUCN staff.

Findings from the assessment showed that the CECF model provides a strong entry point for Forest Landscape Restoration (FLR) and Catchment based Water Resources Management (CbWRM). The pilot investments by IUCN and its partners into communities have created beneficiaries whose appreciation for environmental management is growing along with an increase in ecosystem services from the natural systems. The scope of CECF impacts was diverse due to varying flagship interventions in the three catchments. The interventions included reducing deforestation associated with charcoal production and protecting the Shea Nut tree in the Upper Aswa sub-catchment, landscape restoration in Mt. Elgon and wetland restoration in Rwizi catchment. There was indication that the ecosystems were beginning to improve as evidenced by increased benefits in terms of water quantity available and wetland products, such as grass and papyrus that are now available for harvesting. Nonetheless, progressive CECF members were already showing increasing income from tree nursery and coffee production investments. The aggregative landscape contributions of CECF are expected to benefit the entire community and to create natural resource based income streams in form of pastures, mulch and papyrus products; among others.

The CECF model empowers local communities to hold their leaders accountable on their level of participation for supporting natural resource management. The political and administrative leadership in the three Districts and target sub-counties actively participate in environment and natural resource management components and technical backstopping for CECF. In the Rwizi catchment area, the engagement of political leaders was through Catchment Management Organisation (CMOs), which cover all Rwizi catchment Districts, while in the Mt. Elgon ecosystem, in the Upper Aswa catchment, the Districts and sub-county leaders were part of the CECF group formulation processes consisting of signing MOUs between communities and CECF groups and approval of natural resource bye laws, among others.

Pilot experiences collated from communities, District Local Governments, the Ministry of Water and Environment and development partners showed that the CECF model is evolving into a best practice and a feasible policy instrument for engaging communities in the environment and natural resource management and social development activities with a livelihood orientation. The review found out that CECF innovatively used the entry point of addressing livelihoods, to reach out to communities that may not have been previously prioritizing environmental management. Given the landscape scale of CECF the study proposes the model be positioned for national and/or landscape scale programmes such as REDD+ (Reduced Emissions from Deforestation and forest

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Degradation), Integrated Water Resources (IWRM) Management in Uganda that is based on catchment, and agricultural enhancement in marginal lands or ecosystems. Nonetheless, the CECF model is likely to be most effective where supporting legislation (bylaws, ordinances and laws) and regulations exist or can be established. Furthermore, the investments of CECF members must be protected through strong governance and community institutions at landscape level.

The assessment found that the micro-finance model under CECF is still evolving and not fully formed. At the village and parish levels, CECF has strong inclusiveness that supersedes existing SACCOs and VSLAs. However, members of CECF still reach out to SACCOs and VSLAs when they seek expedited loans of a larger size while large loans have been proven to be detrimental to the group cohesion for villages and where income disparities exist as was the case in most communities studied. The risks of elite capture on the one hand and/or stifling the progress of the more active groups suggest that CECF is still evolving towards a sustainable niche position. It is therefore proposed that as CECF grows, its members will need to increase their investments and shareholding in SACCOs and VSLA, and open up commercial bank accounts; to enhance their livelihoods and to sustain their investments in enhancing performance of ecosystems. It was also apparent that the financing component of CECF will require further refinement through engagement with financial service providers, to ease transmission of funds, calculation of interest rates and other services, such as commodity markets, sources of larger credit facilities and more information to members. In the medium term the CECF model will be able to provide a leading platform for increasing efficiency and establishing governance arrangements that link communities with government and other actors; including financial institutions.

The key recommendations proposed from this review were:

To design and implement a monitoring system for the success of both performance of the fund activities and the biophysical environmental factors that are attributed to the intervention of CECF.

The CECF Fund Management structure is still in an evolution stage and should therefore be open to changes. It is recommended that the current structure is maintained and allowed to evolve slowly to match the requirements of the fund.

The legal and policy status of the fund is fundamental to the success of CECF. IUCN should therefore scale-up engagement with public institutions that can protect investments and decisions taken, including the Directorate of Water Resources Management (DWRM); National Environment Management Authority (NEMA) and the National Forestry Authority (NFA).

The long-term sustainability of CECF can be ensured by having the initiated interventions to fit within the framework of local natural resource management and conservation, which are already implemented with deliberate linkages to national targets of forest landscape restoration and wetland management.

Continuous capacity development is proposed for communities, CECF leaders, sub-county, and District staff.

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INTRODUCTION AND METHODOLOGY

Introduction

About the CECF Model The Community Environment Conservation Fund (CECF) framework was introduced by the International Union for Conservation of Nature (IUCN) in its programming in 2012 to enhance access to micro-credit for poor rural communities. Money from CECF was designed to contribute towards improving livelihoods in the short term, as well as restoring and enhancing environmental services and natural resources management in the long-term (IUCN 2013).

Since its pilot stages in 2012, in the Upper Aswa sub-catchment in Northern Uganda, implementation of the CECF model has progressed from an innovative framework for accessing microfinance to community-wide initiatives for management of ecosystems and water resources in sub-catchments in the Mt. Elgon catchment in Eastern Uganda, River Rwizi catchment in South Western Uganda and Karamoja region in North Eastern Uganda.

Given the growing importance of the CECF model in its own programming and recognition of its contribution towards catchment management and livelihoods enhancement by partners such as the Ministry of Water and Environment, Development Partners and the private sector, IUCN carried out this consultancy to assess the model as a microfinance mechanism and to document lessons and best practices to enhance Forest Landscape Restoration (FLR) and other natural resources conservation interventions. The consultancy also assessed the financial robustness of CECF.

The operational model of the CECF has 4 principal components (Figure 1):

(i) Governance arrangements for implementing CECF;

(ii) Eligibility for households;

(iii) IUCN and partner conditional contributions; and

(iv) Sustainability framework for CECF.

Whereas the first three components of the framework are generally set with modest revisions expected in the long-term, the sustainability framework set in the fourth component is generally based on whether the appropriate strategies are in place early enough and whether adequate buy-in is achievable among partners and stakeholders.

Purpose and Objectives The purpose of this consultancy was to review CECF against standard micro-financial principles and document lessons and experiences from the implementation of the CECF. The findings of the study show the financial robustness of the programme and demonstrate the contribution of CECF to forest landscape restoration efforts; including the ongoing national restoration opportunities assessment. The specific objectives were to:

i) Review the financial operations and the model and make recommendations for improvement;

ii) Assess the importance of linkages between CECF and Village Savings and Loans Association (VSLA) and the necessity or mode of operating the two models in the same locality;

iii) Assess how CECF contributes to small business and income generation at the household level and at the same time promotes implementation of environmental plans at the community level;

iv) Assess the long-term financial viability of CECF and mechanism for its scale-up; v) Conduct an analysis of the model, and its link to environmental management including forest

landscape restoration; vi) Assess and document practical evidence of the CECF environmental management and

contribution to forest landscape restoration in the Aswa Catchment, R. Rwizi and Mt. Elgon;

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vii) Identify and highlight the main gaps in the financial, social and ecological implementation of the CECF, including cross-cutting issues affecting its implementation;

viii) Highlight strategic areas of improvement to enhance the CECF contribution to natural resource management, and forest landscape restoration in specific terms;

ix) Develop detailed financial, social and ecological recommendations for strengthening and large scale application of the CECF model as a forest landscape restoration approach in Uganda and achieve in the region.

Figure 1: Operational model of the CECF

Scope of Study The CECF programme has been implemented in the Aswa catchment in Northern Uganda; Mt. Elgon catchment in Eastern Uganda; River Rwizi catchment in South-Western Uganda and Karamoja region in North-Eastern Uganda. For the purpose of this consultancy, the study area comprised of the Aswa catchment, Mt. Elgon Catchment and the R. Rwizi catchment. The areas were selected based on the level of experience and observed performance of the CECF model. The study involved document reviews; key stakeholder consultations; key informant discussions and field observations, based on field visits and engagement with programme implementation and community beneficiaries. The results provide a platform for engaging with the government on development strategies or mechanisms for generating multiple benefits from restored forests across landscapes.

CECF Governance arrangements

Revolving microcredit fund

Elected committee for managing

funds and village commitments

Monthly community meetings

Selection of eligible households

Regulation; constitutions, bylaws

Clear Environment Action Plans

Direct involvement of Local

Government

IUCN and Partners conditional contributions

Disbursed in 3 installments

Check for village

commitments

Check for household

commitments

Eligible households

Have shown commitments to the

environment

Can borrow money for any purpose

with repayments at low interest rate

Membership or responsibility to

community conservation objectives

Salient community priorities,

compatible with CECF

Sustainability framework

Solid community self -

management as a base

Results based financing

Entry point for national, sub-

national and community

support

Buy-in for non-government,

private sector and

international partners

CECF

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Methodology

Study Design The assessment was based on a descriptive evaluation design. This involved analysis of existing information and focus group data, relating to programme implementation of the CECF model. Concise, but explicit, evaluation of financial records was undertaken to establish the robustness of the CECF model. The standard of micro-financial principles of the CECF model was subjected to a limited exploratory evaluation, and an assessment of the contribution to forest landscape restoration efforts was undertaken.

The main tasks of the assignment included: (i) Review of key and relevant documents and materials; (ii) Undertaking field visits to assess the effectiveness of financial operations and impact of the

CECF on restoration activities in the River Aswa catchment, Mt Elgon and River Rwizi catchment;

(iii) Assessing the financial aspects of the CECF, including repayment rate, financial structuring, and effectiveness of loans to small business/ Income Generating Activities (IGAs);

(iv) Conducting community consultations to seek stakeholders’ views on the approach, and its financial management and relevance to restoration activities and their livelihoods;

(v) Compiling and packaging the information on key lessons learnt, best practices and recommendations for financial improvements and operation in the context of Forest Landscape Restoration;

(vi) Presenting the findings in a meeting for validation and further input; (vii) Submitting the draft document and all relevant materials for review and input, and then

submitting the final outputs, incorporating IUCN’s input/comments.

Assessment Area The study was conducted in three landscapes where the IUCN CECF model is implemented in the districts of Lira, Alebtong and Otuke in the Aswa catchment within Northern Uganda; in Kapchorwa and Kween districts within Mt. Elgon catchment and in Sheema, Mbarara and Ntungamo districts within the Rwizi catchment. Table 1, 2 and 3 give a summary of districts, sub-counties and the parishes in the 3 landscapes where CECF was implemented.

Table 1: CECF planning and management, Northern Uganda-Aswa river catchment

Target catchment District Sub-county Parishes Villages

Aswa River Upstream Alebtong Omoro 1 63

Aswa River Midstream Otuke Oruom, Olilime, Okweng 4 14

Aswa River Downstream

Lira Afweng 1 23

TOTAL 3 5 6 100

Table 2: CECF planning and management, Eastern Uganda- Mt. Elgon catchment

Target catchment District s/county Parishes Villages

Ngenge River(Upstream) Kween Benet 8(2) 38

Sipi River (Midstream) Kapchorwa Kapsinda 4(1) 26

Kaptokwoi (Downstream) Kapchorwa Kapchesombe 5(1) 25

TOTAL 17 89

Number of sub-counties sampled out of those with CECF groups

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Table 3: CECF planning and management, South-Western Uganda, River Rwizi catchment

Target catchment District S/county Parishes

Villages

Nyakambu wetland River Rwizi (Upstream) Mbarara Bukiro 1 3

Katwe Wetland River Rwizi (Midstream) Sheema Masheruka

1 3

Itojo-Rweishumba Wetland, R. Rwizi (Downstream)

Ntungamo Itojo 1 2

TOTAL 3 8

Sampling Design The sampling design for field data collection was based on the areas where implementation of CECF model is taking place. Tables 1, 2 and 3 were used as a sampling frame for the three districts, from which five sub-counties, six parishes and 100 villages were sampled in the Aswa catchment, Northern Uganda. In Eastern Uganda the sampling frame covered three districts, three sub-counties, 17 parishes and 89 villages. The sampling design was based on parishes, because the groups/ CBOs are expected to be stronger at the parish level. Three (3) parishes in northern Uganda and three parishes in the Mt. Elgon catchment were sampled. Focus groups were held with representative communities or village from the sampled parishes (Table 4). In the Rwizi catchment the CECF activities are spread in three Districts, three sub-counties with one sub-county in each of the three Districts, and a single parish in each of the sub-counties. All areas where CECF is implemented in the Rwizi catchment were sampled.

Table 4: Sampling plan in the 3 catchments

Catchment District District Parishes Number of Focused group discussions

Size of each focused group discussion

Aswa River Upstream Alebtong 1 2 30 people

Aswa River Midstream Otuke 1 2 30 people

Aswa River Downstream Lira 1 2 30 people

Ngenge River Upstream Kween 1 2 30 people

Sipi River Midstream Kapchorwa 1 2 30 people

Kaptokwoi (downstream)

Kapchorwa 1 2 30 people

Rwizi River Upstream Mbarara 2 2 44 people

Rwizi River Midstream Sheema 1 1 25 people

Rwizi River Downstream Ntungamo 1 1 116 people

Document Review and building information base The consultants reviewed relevant documentation on Community Environment Conservation Fund (CECF) and related programmes. The document review included a synthesis of reports from the Ministry of Water and Environment (MWE), IUCN and other partners on interventions relevant to CECF and FLR. Information was also reviewed on Forest Landscape restoration interventions and approaches used in Uganda and other countries.

Review of the performance of CECF In addition to IUCN, MWE and partner reports, a review was carried out for other published and unpublished documents, recommended by the stakeholders. Internet based research was also conducted to review similar projects implemented by development partners, NGOs and other stakeholders to have an assessment of the results produced and lessons learnt from CECF and FLR related projects. The review provided a basis for the analysis and enabled establishing further information requirements. The review of documents was necessary to establish linkages of CECF and FLR interventions with the umbrella planning frameworks and programs of government, such as

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Vision 2040 and National Development Plan 1 and 2. A review of Government of Uganda (GoU) plans, policies and strategies was also made to review linkages between the project results at the national and local levels, and to determine the contribution of the CECF model. Local government plans such as District Development Plans (DDPs) and State of Environment Reports (SOERs) for areas where the CECF model was implemented were reviewed to assess the achievement of goals as stipulated in the plans and policies.

Preparation of Assessment Tools and Data Collection A structured interview schedule was developed to document implementation modalities and impacts of the CECF model. Separate sets of questionnaires were developed for each group of stakeholders [GoU Officials, District Officials, project partners, communities and Civil Society Organizations]. The purpose of the interview schedule was to record different parameters that can be used to measure impact and capture lessons learnt. Particular questions were posed to record the progress achieved against each outcome by measuring the progress against the indicators mentioned in the CECF plans.

The consultants conducted field work in the three CECF intervention sites of Aswa, Mt. Elgon and Rwizi; to collect primary data. This involved community meetings with Local Government officials, local communities and other partners such as non-Government Organisations (NGOs) and Community Based Organisations (CBOs). Focused Group Discussions (FGDs) were organized at field sites with the community stakeholders, project beneficiaries and local leaders and their responses were recorded. All the data was recorded in the form of a matrix; giving the question / criteria, information and data collected from different sources and with different methods.

In addition to the field data collection, the consultants collected data from central government officials in relevant ministries and agencies. IUCN staff and former staff who have been involved in the implementation of the CECF programme were also interviewed to record their impressions, bottlenecks in project implementation, measures taken to remove barriers, lessons learnt, and best and worst practices.

Particular effort was made to record evidence-based impacts of the CECF model on project interventions, in terms of the progress towards articulated global environmental benefits of the project, with a focus on forest landscape restoration.

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PERFORMANCE OF CECF AS A FINANCING MECHANISM AND ROLE WITHIN FINANCIAL INSTITUTIONAL ARRANGEMENTS

Introduction

The CECF model as implemented by IUCN is centered around a revolving fund where a village operates a fixed grant in the form of monetary capital to which all members of the community have access through a micro-credit arrangement. Access to the micro-credit under the fund is conditional on the community and its members’ commitment and/or effort towards sustainable management of natural resources within the sub-catchment. The CECF micro-financing operates in the different landscapes alongside other financing mechanisms and institutions such as Savings and Credit Cooperative Organizations (SACCOs), Village Savings and Loans Associations (VSLAs), Micro-Finance Institutions (MFIs), and Commercial Banks. Meanwhile, as the CECF model grows, private and non-governmental organizations, such as Telecommunication companies and Grameen Bank, are also developing solutions or platforms for enhancing financial solutions that may in a near future support and ease implementation of CECF.

Financial Operations of the CECF Model

Iinstitutional and operational structure Community Environment Conservation Fund groups at the community level operate with four basic pillars: (i) General Assembly, which includes all beneficiaries of the fund; (ii) Executive committee; (iii) Loans and/or audit committee, and (iv) Environment committee. The executive committee provides overall leadership to the group. In the Aswa catchment the executive committee is composed of seven people, while in the Mt. Elgon ecosystem the executive had five members. On the other hand, the membership of executive committees in the Rwizi River catchment had up to 10 persons. The overall governance and technical support structures at the sub-national level extend up to the District Local Government in the Aswa sub-catchment. The structures in the Mt. Elgon ecosystem and in south western Uganda are intended to extend to an entire catchment of two or more Districts; i.e. two in the Mt. Elgon ecosystem and up to eight Districts in southwestern Uganda, although currently it covers only two Districts in both areas.

The CECF design is aligned to national and sub-national government institutional structures of Districts and Lower Local Governments, the sub-counties and the local structures at parish and village level (Figure 2). Every single CECF group at the village level has semi-autonomous capacity for self-organization and leaders are elected by the CECF group members and their positions and decisions are made based on the group’s constitution and the General Assembly.

Financial operations of CECF Groups Operationally, one of the central functions of the CECF fund is to provide to its members low interest loans to enable them undertake livelihood enhancing activities. In all three catchments, members receive microcredit based on their own requests. Members make written requests that are read out to the General Assembly and the members decide whether or not to offer a loan to the applicant. The Loans Committee and Environmental Committees regularly develop a profile on community members to access loans. At the general assembly the environmental committees provide information on the suitability of an applicant to get the loan. Suitability is primarily based on two criteria; whether a member participates in environmental conservation activities within the community and whether that member is undertaking livelihoods activities from which they would be able to repay the loan.

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**At catchment level the structure brings together several Districts to jointly manage a catchment or landscape

Figure 2: Illustration of the institutional structure for CECF at catchment level

Disbursing and recovering loans is the responsibility of the executive committee, while the, operation of the fund also include taking records of disbursements and loan recoveries and ensuring equitable distribution of the fund to members. Several approaches are used to support the streamlining of the functions of the executive, to enhance accountability. In the Aswa catchment, each one of the three key keepers, who are non-executive members, keep one key of a set of three for the group safe or cash box. The safe is used for keeping records and occasionally for keeping undisbursed balances, although the practice is that it is better for the money to be loaned out to members. The key keepers provide oversight over group records and ensure that the records once entered are safe from alteration. The records are entered during meetings of the general assembly and/or when meetings are convened by the executive and include the loans committee and the three keepers. In the Mt. Elgon ecosystem and Rwizi catchment, the safe is kept by the group’s executive treasurer or chairperson, while the keys to the safe are kept by the secretary, treasurer and chairperson.

The executive, general assembly and loans and environment committees regularly receive technical support from IUCN and the District and sub-county local governments. The support includes trainings on book keeping, monitoring of their performance and support in ensuring compliance with the group’s constitution and the wider action plans and/or bylaws or MOUs. Currently, loans acquired under the CECF model are repaid within three months. Members can choose to pay in one lump sum or gradually in installments until they have completed the principal and interest (Table 5). Whereas an interest rate of 5% is used in the Aswa catchment and the Mt. Elgon ecosystem, a decreasing monthly interest rate in six installments is used in the Rwizi catchment resulting into an interest rate of 10.5% over six months.

Table 5: Structure of micro-credit repayments for a Shs100,000/= loan in Rwizi Catchment

No. PRINCIPAL + INTEREST + SAVINGS = INDIVIDUAL BALANCE

1 17,000 + 3,000 + 2,000 = 22,000

2 16,600 + 2,500 + 2,000 = 21,100

3 16,600 + 2,000 + 2,000 = 20,600

4 16,600 + 1,500 + 2,000 = 20,100

5 16,600 + 1,000 + 2,000 = 19,600

6 16,600 + 500 + 2,000 = 19,100

100,000 + 10,500 + 12,000 = 122,500

CECF operates a revolving fund and therefore the money returned as repayments every month is then loaned out to other members, who have made applications for it. All groups received their

Parish CECF Group

meetings; including

villages, District/sub-

county representatives,

IUCN representatives

Village 1 CECF

Group

Villages 3

CECF

Group _, _

etc Village 2 CECF

Group

District Leadership, LCV Chairperson, Chief

Administrative Officer and Natural Resources

Officer**

Sub-county Leadership, Sub-

county Administrative Officer,

Technical Officer in charge

IUCN and other

Partners (GoU -

Ministry of Water and

Environment), Private

sector – Coca Cola;

Donors –Austria Aid,

GIZ,

8

grants finance from IUCN, with deposits made on existing Bank Accounts, where the money was kept until such a time when the groups withdrew it.

Performance of CECF model as a micro-credit approach

Grants received

The grants given to CECF groups in Upper Aswa sub-catchment are shown in Table 6. The amounts allocated to at least 100 villages, composed of 4,942 households was UGX 198 million; averaging UGX 1.98 million per village or approximately Shs 40,000 per household in the Upper Aswa sub catchment. If a single allocation covering every household was made, each household would have been able to borrow approximately Shs 40,000. However, the conventional practice is that only a fraction of the farmers borrow at a time; in which case the beneficiaries are able to borrow reasonable amounts, often ranging from Shs 20,000 to 100,000.

Table 6: Summary of IUCN/BDR CECF Resource allocation for the Upper Aswa sub-

catchment

Targeted Catchment

District Sub County

No. of intervention Parishes in catchment

No. of Villages in catchment

No. of Households

Allocation (million UGX) in 2 equal installments

Aswa River (Upstream)

Alebtong

Omoro 1 23 1,276 46,000,000

Aswa River (Midstream)

Otuke Orum, Olilim, Okwang, Olilim

4 63 2,762 124,000,000

Aswa River (Downstream)

Lira Agweng 1 14 904 28,000,000

TOTAL 3 5 6 100 4,942 198,000,000

In the Mt. Elgon ecosystem, Shs 200 million was allocated to 89 villages, averaging UGX 2.24 million per village or Shs 48,065 per household (Table 7). This was the highest allocation under the CECF fund releases across all three landscapes. If the money had been allocated to all the target members in one round, each household would have been able to borrow about Shs 48,000.

Table 7: Summary of IUCN/EBA CECF Resource allocation for the Mt. Elgon Ecosystem

Targeted Catchment

District Sub county No. of Parishes in catchment


No. of Households

Allocation (UGX) installments of 30%, 30% & 40%

Ngenge River (Upstream)

Kween Benet 8 38 1,794 70,000,000

Sipi River (Midstream)

Kapchorwa

Kapsinda 4 26 1,194 65,000,000

Kaptokwoi River (Upstream)

Kapchorwa

Kapchesombe

5 25 1,173 65,000,000

TOTAL 2 3 17 89 4,161 200,000,000

In the Rwizi catchment the allocation were lowest, overall Shs 9.14 million was allocated to 185 households (Table 8). The allocation was equivalent to Shs 1.14 million per village. However, given the fewer target households, the allocation was equivalent to about UGX 49,000 in micro-credit; if the funds were given out to all group members in one go.

9

Table 8: Summary of CECF Resource allocation for Rwizi catchment Targeted Catchment

District Sub County

No. of intervention Parishes in catchment


No. of Households

Amount allocated

Nyakambu wetland River Rwizi (Upstream)

Mbarara Bukiro 1 3 44 2,270,000

Katwe Wetland River Rwizi (Midstream)

Sheema Masheruka

1 2 25 2,270,000

Itojo-Rweishumba Wetland, Lower Rwizi Catchment)

Ntungamo Itojo 1 3 116 4,600,000

TOTAL 3 3 3 8 185 9,140,000

The financing for implementing CECF in the three sub-catchments was from three different financing sources. Upper Aswa-Agago sub-catchment management was financed by the Austrian Development Cooperation, as part of the Building Drought Resistance (BDR) project. Financial support for the Mt. Elgon landscape interventions was from the Ecosystem Based Adaptation (EBA) project; funded by the German Federal Government Ministry of Environment, Conservation, Building and Nuclear Safety (BMUB). The restoration of hot spot wetlands in the Rwizi catchment was through pooled funds from the Ministry of Water and Environment; GIZ; private sector support from Coca cola and an international development agency of the Germany Government.

The resources allocated in the Upper Aswa-Agago sub-catchment provided incentives for low income communities with similar agricultural livelihoods, across a wide landscape, with small villages which were cumulatively a large target community. Funds were allocated based on the community size, household numbers and ensuring access for all community members. Similar to Upper Aswa-Agago sub-catchment, CECF in the Mt. Elgon landscape targeted whole communities with small but densely populated communities even though the livelihood activities were stronger than those in the Upper Aswa catchment. The CECF model in the Rwizi catchment, which led to catchment restoration activities focused on only a few hotspot wetlands in Sheema, Ntungamo and Mbarara Districts. CECF in the Rwizi catchment was aimed at supporting regulated landscape restoration through pilot catalytic investments. Therefore, unlike in Upper Aswa and Mt. Elgon, the funds targeted few stakeholders, who were members of a wetland management CBOs. Moreover, the local communities in the Rwizi catchment were relatively more developed with stable livelihoods and income.

Performance of micro-credit in Upper Aswa Sub-Catchment The records for Upper Aswa-Agago sub-catchment were obtained from group cash flow statements. The cash flow statements showed the grants allocated, the loans disbursed for the members of the CECF beneficiary villages and the repayments. The financial analysis was derived on sampled financial records for CECF groups in Angwalo-Ode, Odur and Te-cwano villages; in Ating parish, Orum sub-county in Otuke District.

The records for Angwalo-Ode village over a one-year period (Table 9) show that the loans given out can be clustered into four rounds, even though the loans and recoveries are generally given out every month. The average loan per member ranged between Shs 59,000 to 105,000. In the third round, loans were given out to only 10 members of the village. The fund grew from a principal loan size of Shs 1,000,000 to 1,521,000 between the first and fourth rounds although this was largely from the second CECF grant under the BDR project. The fund charges an interest of 5% per loan but as Table 9 shows the repayments are often recovered beyond the three month stipulated period, at no additional charge. In the first round of payments for instance the largest proportion of the loan was recovered in the final month. This could have dampened the performance of the revolving fund, since little money was available to lend out to other members. The higher early loan recovery in the second and third rounds led to increased loan access in the fourth round. When the average loan size was increased, only a small number of members accessed the loans.

10

Table 9: Flow of disbursement of loans and repayments for Angwalo-Ode village, Ating Parish Description First Loan Second Loan Third Loan Fourth Loan

Date 19/02/2013 19.06.2013 19.10.2013 19.01.2014

No. of loan recipients 12 18 10 23

Range (/??Shs/member) 50,000 – 100,000

25,000 – 100,000

50,000 – 150,000

50,000 – 150,000

Average loan (Shs/member)

83,333 59,444 105,000 66,130

Interest (Shs) 50,000 53,500 52,500 76,500

Principal (Shs) 1,000,000 1,070,000 1,050,000 1,521,000

Ave. repayment (Shs/member)

87,708 62,417 110,250 69,437

Repayment received 1,050,000 1,123,500 1,102,500 1,597,050

Repayment 1 date 19.03.2013 19.7.2013 19.11.2013

Repayment 1 Amount (Shs)* 265,000 845,250 879,000

Repayment 1 % 25% 75% 81%

Repayment 2 date 19.04.2013 19.08.2013 19.12.2013

Repayment 2 Amount (Shs) 152,500 - 10,500

Repayment 2 % 14% - 10%

Repayment 3 date 19.05.2013 19.09.2013 19.01.2014

Repayment 3 Amount (Shs) 635,000 278,250 10,000

Repayment 3 % 61% 25% 9% *19.10.2013, received a second installment of UGX 1,000,000, therefore balance that could be loaned out was UGX 2,050,000

In Adur village of Ating Parish, the records did not indicate how and when the repayments were made. But the records indicated a trend of loan disbursed, implying ongoing repayments did occur. The loan recoveries made were enough for lending out to members. By the fourth installment, the principal had grown to Shs 2,450,000, which is 22.5% of the grant obtained from IUCN/BDR (Table 10). As in the case of Angwalo-Ode, there was fluctuation in the number of members who accessed the loans from one disbursement to another. The size of the loans peaked at Shs 350,000/ member in the fourth round of loans; when only seven members accessed the loans from a low of 20,800 in the first round when all 48 households benefited from the micro-credit. A few of the CECF members accessed loans more frequently than others. Indeed, by the second round, the leadership had decided to increase the interest rate to 10% to raise capital at a faster rate for the group. The higher interest rate was noticed by the sub-county community development officer after the fourth round of disbursements and the group was advised and duly revised the rate downwards after the fifth round of loans. Members who paid a higher interest were refunded and this was noted in the group records books.

Table 10: Flow of disbursement of loans and repayments for Adur village, Ating Parish Description First Loan

Disbursement Second Loan Disbursement

Third Loan Disbursement

Fourth Loan Disbursement

Fifth Loan Disbursement

Date 26.03.2013 19.10.2013 05.4.2014 20.09.2014 07.03.2015

No. of loan recipients

48 31 7 7 14

Range (Shs/member)

20,800 2,500 – 300,000

100,00 – 500,000

200,000 - 500,000

2,000 - 400,000


20,800 65,306 264,286 350,000 112,143

Interest (Shs) 52,800 202,450 185,000 245,000 157,000

Principal (Shs) 998,400 2,024,500 1,850,000 2,450,000 1,570,000

Repayment (Shs/member)

21,900 71,837 290,714 385,000 ***1,727,000

Repayment received

1,051,200 2,225,250 2,035,000 2,695,000 123,357

Repayment 1 date 10.10.2013 05.4.2014 20.09.2014 7.03.2015

Repayment 1 1,051,200 2,225,250 2,035,000 1,100,000

11

(Shs)* *10.10.2013, repayment of 1,051,000 received added to 1,600 which was kept in the Group Box, amount stored Shs 1,052,800; 3rd disbursement balance not borrowed Shs 405,250, balance in box after repayment Shs 2,440,250/=; 4th disbursement only Shs 1.1 m was repaid, but the box had Shs 475,250 from previous loans. *** No payment made yet

In Te-cwano village, six rounds of loans were made, and whereas the village has received Shs two million for the fund from IUCN/BDR. However, records showed that the principal stayed at just over or under the grant over the six rounds of loan disbursement. The records on how loans were recovered did not clearly show whether the funds and interest were fully recovered. Moreover, the repayments were often spread over three to six months. The loans received ranged from Shs 41,667 to 78,000, and show a gradual increase over the life of the fund while the recipients of loans also stayed in the same range. The records imply that the performance of the CECF group may have been better than that indicated in the records. The Te-cwano CECF group showed a high commitment to provide loans to as many members of the community as possible (Table 11).

Table 11: Flow of disbursement of loans and repayments for Te-Cwano village, Ating Parish Description First Loan

Disbursement

Second Loan Disbursement

Third Loan Disbursement

Fourth Loan Disbursement

Fifth Loan Disbursement

Sixth Disbursement

Date 25.2.2013 20.5.2013 09.09.2013 21.10.2013 21.01.2014 21.7.2014

No. loan recipients

24 22 18 27 26 27

Range (UGX/member)

10,000 – 80,000

5,000 – 100,000

10,00 – 70,000

30,000 – 120,000

30,000 – 130,000

40,l000 – 120,000


41,667 45,409 37,387 77,407 76,923 78,000

Interest (Shs) 50,000 49,950 33,650 104,500 100,000 97,500

Principal (Shs)

1,000,000 999,000 673,000 2,090,000 2,000,000 1,950,000

Ave. repayment (Shs/member)

43,750 47,680 39,546 2,194,500 76,923 81,611

Repayment received

1,050,000 1,048,950 706,500 ***** 2,100,000 *****

Repayment 1 date

25.5.2013 27.06.2013 23.9.2013 23.6.2014

Repayment 1 Amount (Shs)

572,000 283,500 553,650 1,163,500

Repayment 1 %

55% 27% 78% 55%

Repayment 2 date

29.7.2013 20.07.2013 29.10.2013 21.7.2014


76,000 146,050 126,000 798,750

Repayment 2 %

7% 14% 18% 38%

Repayment 3 date

27.9.2013 29.11.2013 18.08.2014


399,500 27,000 142,000

Repayment 3 %

38 4% 7%

***** No records on repayment made, or repayment not yet received.

12

In the Upper Aswa catchment the groups made strong attempts to ensure access of credit to as many community members as possible. From time to time, elements of elite capture cause the groups to make adjustments in the average size of the loans to members and interest rate. In Odur village, the intervention of the Community Development Officer (CDO) was needed to convince the group to restore the 5% interest rate and refund the members who had paid a higher interest rate.

On many occasions the records were not of sufficient quality for evaluation but could have also led to poor decision making on the part of the CECF leadership. The calculation of interest and repayments was often inaccurate. The group leaders themselves indicated a need for training in record keeping and improvement of skills for the management of the fund. The repayment period was often extended beyond the stipulated three month period. Indeed, monthly repayments ensure that there are always funds to loan out. However, the need to acknowledge that some of the members require longer loan durations will help the groups to streamline the interest rate administered to allow for equity among the beneficiaries.

Performance of micro-credit in the Mt. Elgon Ecosystem Performance of the CECF fund in the Mt. Elgon ecosystem was assessed based on records for Kween, Taragon and Sukut villages in Ngenge sub-county, Kween District. Tables 12, 13 & 14 show the recorded rounds of loans and repayments made by the beneficiaries of the CECF. In Kween village, the average amount borrowed increased from Shs 82,500 to 148,500 from the first to the fourth round of loans while the actual principal balance declined to about Shs 740,000. Even though the records are reasonably inconsistent, decline in the principal and the interest received suggests that the group is performing sub-optimally. It was also common to find misplaced figures by row, which could confuse auditors or the loanees. The number of beneficiaries from each round of borrowing declined from 18 in the first and second rounds to seven and five in the last two rounds.

The observed performance may partly be due to unclear records. However, it could also be a trend of moving away from the larger group of farmers in the village to a smaller concentrated group. Similarly, the poor recoveries also indicate that the fund is not growing and is unlikely to have enough funds to include all the intended beneficiaries.

Table 12: Flow of disbursements and repayments for Kween village, Ngenge sub-county

Loan Rounds

Description

Amount borrowed (Shs)

Interest (Shs)

Expected pay back (Shs)

Repayment (Shs)

Round 1 14.2.2014

Total 1,485,000 222,750 1,707,750 898,500

Amount Recorded 1,485,000 212,750 1,697,750

Average 82,500 12,375 94,875 49,917

Percent

0.53

Beneficiaries 18

Round 2 8.5.2014

Total 831,000 124,500 955,500 955,650

total recorded 841,000 126150 964,650 Average 55,400 8,300 63,700 63,710

Percent

100%

Beneficiaries 18

Round 3 18/8/2014

Total 1,010,000 50,500 1,060,500

Average 91,818 4,591 96,409

Beneficiaries 7

Round 4 14/4/2015

Total 740,000 37,000 Due: 14/4/2015

Average 148,000 7,400

Beneficiaries 5

In Taragon village, the principal grew gradually from the first round to the fifth round from Shs 585,000 to 1,245,000 (Table 15). Even though the increase was partly due to a doubling of the

13

grant received from CECF/EBA, there was a significant recovery of loans from the beneficiaries. Additionally, the number of beneficiaries increased from six people in the first round to 18 people by the fifth round; an indication that the patronization of the fund had grown. Nonetheless, the average loan declined from the initial Shs 100,000 to 69,167 and this covered more people from the village in the subsequent loans.

14

Table 13: Flow of disbursements and repayments for Taragon village, Ngenge sub-county

Loan Rounds

Description

Amount borrowed (Shs)

Interest (Shs)

Expected pay back (Shs)

Repayment (Shs)

Round 1 18/05/2014

Total 585,000 29,250 614,250 614,250

Average 97,500 4,875 102,375 102,375

Beneficiaries 6

Round 2 28/08/2014

Total 600,000 30,000 630,000 630,000

Average 100,000 5,000 105,000 105,000

Beneficiaries 6

Round 3 19/08/2014

Total 560,000 28,000 588,000 588,000

Average 93,333 4,667 98,000 98,000

Beneficiaries 6

Round 4 08/12/2014

Total 1,225,000 70,000 1,295,000 Due date: 8/3/2015

Average 111,364 6,364 117,727 Expected 1,225,000 61,250 1,286,250 Beneficiaries 11

Round 5 16/03/2015

Total 1,245,000 93,000 1,338,000 Due date: 16/06/2015

Average 69,167 5,167 74,333 Expected 1,245,000 62,250 1,307,250 Beneficiaries 18

In Sukut village, the number of beneficiaries fluctuated between seven and 13 people in a village of about 35 households. Therefore, the penetration of CECF had covered only one-third of the households in the village. The size of loans ranged between Shs 79,500 and 141,600 and the loan size was Shs 100,000 or over in five of the eight rounds. The larger size of the loan might have excluded some of the members of the community as collateral and/or likelihood of repayment are important considerations in the running of the Sukut village fund. The principal grew from an initial UGX 700,000 and was estimated to reach Shs 1,575,000 when the eighth round of repayments return even though a lot of this growth is associated with the IUCN/EBA grant and the interest is only a modest amount.

15

Table 14: Flow of disbursements and repayments for Sukut village, Ngenge sub-county

Loan Disbursement Rounds

Description

Loan amount (Shs)

Interest Shs

Expected Amount (Shs)

Repayment 1 (Shs)

Repayment 2 Shs

Round 1 14/02/2014

Total 700,000 35,000 735,000 735,000 Average 100,000 5,000 105,000 105,000 Amount

recorded 700,000 35,000 805,000 805,000 7 beneficiaries

Round 2 23/05/2014

Total 775,000 38,750 813,750 813,750 Average 96,875 4,844 101,719 101,719 8 beneficiaries

Round 3 19/08/2014

Total 795,000 39,750 834,750 834,750 Average 79,500 3,975 83,475 83,475 10

beneficiaries

Round 4 19/11/2014

Total 700,000 35,000 735,000 295,000 440,000

Average 100,000 5,000 105,000 73,750 62,857

7 beneficiaries

Round 5 20/12/2014

Total 1,240,000 62,000 1,302,000 280,000 782,000

Average 95,385 4,769 100,154 46,667 78,200

13 beneficiaries

Round 6 22/03/2015

Total 1,100,000 55,000 1,155,000 1,010,000 129,500

Average 91,667 4,583 96,250 84,167 12,950

12 beneficiaries

Round 7 09/05/2015

Total 424,800 39,980 464,780 Average 141,600 13,327 154,927 5 beneficiaries

Round 8 23/06/2015

Total 1,500,000 75,000 1,575,000 Average 136,364 6,818 143,182

11 beneficiaries

Performance of micro-credit in the Rwizi Catchment Table 15 shows the ledger of records for the Bukiro Environmental Conservation group, used to represent the loan cycles and revenue growth for the CECF groups in the Rwizi catchment. On the 20th August 2014, the group received a grant of Shs 2,276,784 and withdrew Shs 2,270,000 for loaning out to members, while the balance was left behind to maintain the commercial bank account. By the beginning of 2015, the group had a capital of Shs 3,031,200 for lending out to its members. The capital accumulation is high because the groups use a higher interest rate of 10.5% repaid in six installments over a six month period. In addition, the group collects monthly members’ savings of UGX 2,000 from the members, as well as fines for late arrival to meetings and non-attendance. Unlike the CECF in the Mt. Elgon ecosystem and Upper Aswa catchment, CECF funds in the River Rwizi catchment is managed under formal Community Based Organizations (CBOs), who are self interest groups. Such peer groups are likely to have people who have a similar orientation of thinking and therefore it is easier for them to sit and agree on modifications to the CECF that allows them to accumulate capital at a faster rate.

The standard of record keeping by the Bukiro Environmental Conservation group was relatively higher compared to the groups in Aswa-Agago and Mt. Elgon catchments. The treasurers and members keep exercise book records that explain each member’s payments based on the loan they have acquired. Additionally, the Treasurer keeps a ledger, where the aggregate activity of the group is recorded.

16

Table 15: Summarised ledger record for Bukiro Environmental Conservation Group

Date Particulars L/F Debit Credit Balance

12/05/2014 Membership

250,000

Constitution

40,000

Aggregation of group expenses (photos, register, transport, airtime etc)

206,000

Total

246,000

20/08/2014 CECF donation

2,276,784

Withdrawal

2,270,000

02/09/2014 Balance b/f

2,270,000

Disbursement

2,000,00

Balance C/f

270,000

02/10/2014 Members Savings

24,000

Loan Interest

26400

Fines

2,000

Forms

10,000

Loan Payment

180,000

Total Income

242,400

Total Expenses

510,500 1,900

02/11/2014 Total Income

79,100

Loan Granted

80,000 1,000


347,200

Loan interest

35,200

Loan payment

290,000

Expenses 17,000

Loan Granted

3,000,000 31,200


143,600

Loan Granted

143,000 600


102,200

Loan Granted

102,200 200


184,200 02/04/2015 Total Income

251,900


169,900 02/06/2015 Total Income

125,800

Loan Granted

50,000 753,800


365,800

Balance

753,800

Lessons on the performance of micro-credit The CECF model has allowed more community members to access financing for livelihoods benefits and conservation in the three landscapes. Particularly, in the Upper Aswa-Agago sub-catchment, a lot of community members that would have been ignored by VSLAs and SACCOs were able to access credit. The strong social bonds built through CECF meant that even where some members were unable to provide collateral, other community members were able to support them. The communities were open to learn and make adjustments, despite the risk of elite capture and the wish to match the local VSLAs. The engagement with District and Sub-county local governments provided a regular opportunity for learning and adapting CECF to local conditions.

The performance of CECF was not uniform across the three landscapes, with a relatively higher standard of performance found in the R. Rwizi catchment, followed by the Mt. Elgon ecosystem and the Upper Aswa-Agago sub-catchment considered least. The disparities in performance could be explained by exposure to financial institutions such as commercial banks, SACCOs and VSLAs. It seems that in the case of the Rwizi catchment, the higher exposure to operations by SACCOs and VSLAs has allowed the community to achieve a higher level of consistency in record keeping and

17

performance. The record keeping standard in the Mt. Elgon ecosystem is consistent, in terms of effort of the Treasurers and group executives ensuring interests and payments are made. However, the group leaders struggled to explain their results; which may be an indication of the limited experience in financial record keeping and reporting. Similarly, the low penetration of financial institutions in the Upper Aswa-Agago catchment and elite-capture trends, seen with VSLAs and SACCOs, may have contributed to the relatively lower standard of record keeping.

Whereas there were differences in financial recording keeping and reporting which affected group performance, there was even stronger indication of sustainability and community benefits from CECF funding. Moreover, even in the Rwizi catchment, where the financial reporting was better, leaders acknowledged a need for further capacity building and engagement with IUCN, local government and other partners. The fact that CECF was implemented successfully across the different landscapes provides an opportunity for transferring lessons from one site to another.

CECF Support to livelihoods and business enterprises: Case studies of CECF as a vehicle for livelihoods transformation

Case study 1: Shea butter tree: charcoal or Shea butter nuts Shea trees are a common feature in the rural areas of Upper Aswa-Agago sub-catchment in Otuke, Lira and Alebtong Districts. In the 2000s, the Shea tree was targeted by communities for charcoal production as a quick source of revenue. A simple gross margin analysis is conducted which compared the discounted gross income from the shear nut seeds with the gross income from charcoal production. Based on focus group discussions with communities in the CECF areas, a mature tree of shear can produce up to 8 sacks of charcoal. The price of a bag of charcoal within the markets ranges between Shs 10,000 and 15,000. Therefore, the revenue generated from cutting the tree and converting it to charcoal for a community member would be Shs 120,000.

Table 16: Comparing market price based monetary flows for shear tree nuts versus charcoal

Shea Tree Products Quantity per Tree Local price per unit (Shs/bag)

Accrued gross value based on market price (Shs)

Charcoal (70 kg bag) 8 15,000 120,000

Shea Nuts (120kg bag/year)

1 72,000 720,000

Accrued gross margin value

600,000

Additional benefits and non-monetized values contributed by Shea butter:

Wood fuel from dried tree branches Ecosystem services such as shelter, climate moderation, soil erosion control

The same mature tree of shear can produce one 120kg bag of shear, which would be sold in the local market at Shs 72,000 (Table 16). The Shear tree is capable of producing shear nuts at a steady rate for over 50 years (Nature Uganda 20111); but a cap of 50 years is created for discounting purposes. The revenue from the Shea nuts discounted over the 50 year period was estimated to Shs 720,000. The discounted gross margin of changing from charcoal to maintaining the shear for nuts alone would be UGX 600,000. In addition, the shear would also still be able to provide ecosystem services that are not reflected in the margin computation; such as firewood, shade, contribution to hydrological and ecosystem functioning. A farmer has to choose between earning the equivalent of Shs72,000 every year and all the ecosystem services mentioned for at least 50 years compared to earning Shs 120,000 from charcoal once.

1 NatureUganda (2011). The Economic Valuation of the proposed degazettement of Mabira Central Forest Reserve.

NatureUganda Kampala

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Case Study 2: Tree Nursery entrepreneur in Orum sub-county, Otuke District Jimmy Onyaa is a Nursery operator based in Ado village, Ating Parish, Orum sub-county, Otuke District. In 2013, Mr. Onyaa borrowed Shs 100,000. He used the money to buy Grivellia spp. seeds. Given the long gestation period for investing in a tree nursery, Jimmy could not pay back within the stipulated three months. He sold his chicken and paid back the CECF loan. However, with the loan from CECF he was able to raise and sell 3,000 Grivellia seedlings at a price of UGX 300 each. His gross income was Shs 900,000. Mr. Onyaa already had a plot of land with an area set with a nursery shed. The gross margins for producing the seedlings are shown in the Table 17.

Table 17: Revenues of tree seedling nursery operator with injections of CECF, Upper Aswa catchment

Costs incurred Revenues Net profit

Labour for potting polythene, 3kg – Shs24,000

Organic soil 1 bag bought at Shs 5,000

Charcoal remains obtained without charge

Mixed maize corms where he bought a sack at Shs 10,000

Labour costs for soil packed from own nursery for tree seedlings was UGX 3/=, equivalent to Shs 9,000

Labour for watering per day Shs 1000 and for one month Shs 30,000

Mr. Onyaa estimates his full costs incurred in investment including his own labour was approximately Shs 500,000

Sold each seedling at Shs 300

Gross revenue was Shs 900,000

Additional cost of 105,000 repayment to CECF

Shs 295,000

Investment multiplier:

Mr. Onyaa used the money from the Grevillea seedlings to raise citrus (oranges) seedlings

He is raising 2,000 seedlings

He intends to sell seedlings at Shs 2,500 each, although the prices fluctuate considerable and the actual price realized could be as low as UGX 800 per seedling.

Given the high promise of citrus Jimmy uses own labour costed at Shs 300,000

Total initial investment estimated as Shs 400,000 plus Shs 300,000 estimated own labour cost, equivalent to Shs 700,000

He estimates an income of Shs 5,000,000, which could fluctuate downwards to Shs 1,600,000

The estimated net profits for Mr. Onyaa are Shs 800,000

Case Study 3: Income gains from

improved banana management in

the Rwizi catchment

An average CECF farmer in Bukiro sub-county Mbarara District with 4 acres uses the entire area for producing the East African Highland cooking bananas. To achieve high productivity, the farmer uses mulch from the wetland and cow dung as manure for her field (Figure 3.). The estimated costs and income for the farmer was compared with their neighbor who does not mulch his field and uses manure intermittently.

Table 18 shows the gross margins for a farmer who adapts use of mulch and manure over a farmer who neither uses manure or mulch. Whereas the gross margins are

Figure 3: Banana field mulched with wetland grass

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large and significant, the real gains for the farmer are associated with the CECF related conservation activities. The commitment to undertake catchment management means the farmer can obtain mulch for the field and pasture for livestock that provides the manure on a regular basis. Thereby ensuring high returns on the banana field. When the farmers understand the integrated benefits of CECF towards livelihoods sustainability and the conservation benefits they are more easily convinced about the participation.

Table 18: Partial budget analysis for a banana farmer using CECF model in Rwizi Catchment

Inputs per acre for a CECF farmer

Inputs per acre for non-CECF farmer

Gross margin of CECF farmer

Gross margin of non-CECF farmer

Difference in gross margin between CECF farmer and non-CECF farmer

Lorry Truck of mulch grass from wetlands costs Shs 60,000/= An acre of bananas requires two Lorry Trucks at Shs 120,000/=/acre/year Farmer also adds Manure, the 2 pickup trucks of manure needed per acre would cost Shs 120,000/=/acre/year The labour employed for 4 acres is 100,000/month for all activities including mulching manuring, harvesting, field cleaning and placing supports for the bananas, among others. The total added cost for the CECF farmer is Shs 340,000

The added cost for the non-CECF farmer is zero

CECF farmer harvests 25 bunches of bananas/3week/acre The average size of the bunch for the farmer =bunches with a price range of Shs 8,000 – 18,000 with an average price of Shs 13,000/=, the farmer can achieve this level of production for six out of 12 month for a specific acre equivalent to gross revenue of Shs 325,000/ three weeks Equivalent gross income of Shs 2,816,667

Without manure and mulch the banana farmer would get 25 bunches of banana of a small size averaging Shs 4,000/=/bunch/3 weeks/ acre the farmer can achieve this level of production for six out of 12 month for a specific acre Shs 100,000/ three weeks The gross revenue for non-CECF farmer is UGX 866,667

The gross margins added are: Shs 1,950,000

Case study: Successful application of CECF interventions in Kapchorwa District Mr. Michael Silke practices mixed farming in Kapchorwa District. Michael is one of the CECF beneficiaries from Rorok Village in Kapchesombe Sub-county, Kapchorwa District. He was trained by IUCN, along with other CECF supported communities in tree nursery development and tree planting. Mr. Silke has since set up a tree nursery in Rorok village. He sells seedlings of Eucalyptus species, Calliandra and Syzigium spp., mainly to other farmers.

In 2014 alone, Michael raised about 50,000 seedlings; and sold 30,000 to IUCN and 20,000 to UWA at an average price of Shs 300; earning a gross income of about Shs 15 million in a year. He also implements Soil and Water Conservation (SWC) interventions, which has improved his crop production. Before application of the SWC interventions, he used to harvests about 25 bags of Irish potatoes per acre. After the CECF training and applying SWC measures, he harvests about 40 bags per acre. Some of the livelihood improvement measures he learnt from the EBA project CECF training include tree nursery management and tree planting, digging trenches, marking and protection of river buffer zones and how to manage the revolving fund.

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Lesson learnt from the case studies reviewed The reviewed case studies point out the fact that a large number of livelihood investments can benefit from CECF funding. The communities, through repeated trial and diverse investments were able to identify investment opportunities, where they realized improvements in their livelihoods and income. As the CECF model foundations grow, the selection of suitable enterprises will equally improve.

In the Rwizi catchment, CECF was deliberately focused on investments where targeted communities were able to benefit from improved farm management practices that are compatible with wetland management. It was reported that wetland restoration increased availability of a number of products and services such as grass for mulch and water levels in the local wetlands. In the Mt. Elgon landscape, the communities had multiple livelihood enterprises and therefore a wide range of responsiveness and benefit from the fund. Nonetheless, the level of patronage shown by farmers engaged in coffee, banana, dairy cattle enterprises, high value vegetables and small businesses indicated a greater compatibility of CECF with these enterprises and a consistent mix of enterprises was emerging among CECF beneficiaries.

In the Upper Aswa-Agago sub-catchment, CECF funds were used to enable communities’ access available markets for landscape restoration and government development programmes for northern Uganda, such as the Peace Recovery and Development Plan (PRDP), improve market supply for food items, domestic household items in the region and social investments in school fees and health care.

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PERFORMANCE OF CECF AND ITS CONTRIBUTION TO FOREST LANDSCAPE RESTORATION AND CATCHMENT MANAGEMENT

Linking the CECF model to environment management

For the three catchment areas surveyed, the CECF money was disbursed in three tranches, only after the beneficiary villages or groups prepared environment action plans, which provided a direct linkage of the funding to environment management. The environment action plans were based on good environment stewardship; with actions such as improving provision of clean water, cleaning and protecting watering points, wetland demarcation and buffer zone protection, tree planting, soil and water conservation and other natural resource conservation interventions. The first disbursement was given based on approval of the environment action plan. The second and third disbursements were also given out after assessing successful implementation of the action plan, with transparency.

The phased approach of giving out the funds provided lessons that contributed to formulation of CECF guidelines. It is hoped that more of the lessons captured with continued implementation of the CECF model will be used to update the guidelines. Some of the lessons learnt include:

1. Learning and adoption does not take place at the same pace for different community members, given that there are early and late adopters;

2. Local leadership contributes a lot to the level of buy in, which can also help to strengthen the sustainability of initiatives, after project closure;

3. Local community commitment has a strong bearing on the capacity of making the funding to grow in future.

Contribution of CECF to FLR Principles

According to Newton and Tejedor (2011), Forest Landscape Restoration (FLR) is “a planned process that aims to regain ecological integrity and enhance human well-being in deforested or degraded forest landscapes.” The four key features of FLR, used during this review include consideration that: (1) FLR is a process, which embodies three key principles: (i) It is participatory; (ii) It is based on adaptive management and is therefore responsive to social, economic and environmental change; and (iii) It requires a clear and consistent evaluation and learning framework; (2) FLR seeks to restore ecological integrity; simply replacing one or two attributes of forest functionality across entire landscapes and tends to be inequitable and unsustainable; (3) FLR seeks to enhance human well-being, based on the principle that the joint objectives of enhanced ecological integrity and human well-being cannot be traded off against each other at a landscape scale; and (4) FLR implementation is at a landscape scale; in other words, site-level decisions need to be made within a landscape context.

Findings from implementation of the CECF model showed FLR performance as follows:

The process of planning and implementation of CECF was participatory with the local communities and other stakeholders identifying priorities of activities that can restore the ecological integrity across their landscapes. This led to identification of priority interventions such as addressing charcoal production and wetland demarcation in the Aswa catchment; Soil and Water Conservation in the Mt. Elgon catchment and wetland restoration in the Rwizi catchment. The interventions were compiled together and presented in form of an environment action plan, which was a pre-condition for CECF support.

In the process of implementing the different interventions, an element of adaptive management was given due consideration. This review validated that targets for achievement from the implementation the CECF model indeed had social, economic and

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environmental change goals as indicated in the tools used to guide disbursement and assessment of the funds; which included the community environment action plan and some aspects of follow up on the use of the borrowed money. The expected social, economic and environmental change was further confirmed by most respondents who were able to articulate the linkages between CECF funding and ecosystem services (benefits provided by ecosystems to humans), which are expected from interventions implemented under the CECF model and how they are linked to livelihood improvement.

During the CECF review, consistent evaluation and learning was found to be more systematically planned and implemented in the Mt. Elgon catchment, probably due to the history of the beneficiaries having previously participated in a number of conservation projects. It was found out that with support from CECF, there is an on-going process of developing a Mt. Elgon catchment Database, which will provide an opportunity of guiding collection of focused data sets that can be used to assess the contribution of CECF to FLR and catchment management and the process should be extended to the other catchments. In the Aswa and Rwizi catchments, data exist on different aspects of implementation of the CECF model. However, the data has not been well stored and analysed to guide consistent evaluation and learning, which is one of the CECF principles that should be strengthened.

Environmental conservation interventions implemented using the CECF model

In all the three catchments, implementation of different conservation interventions was based on the priorities identified by local communities during the development of environment action plans. The local communities also clearly demonstrated that they appreciate the linkages between natural resource interventions and how they contribute to livelihood improvement.

Table 19 provides a summary of the key environmental conservation interventions implemented in the three catchments, based on the CECF model. The review team got enough evidence to show that Local Government technical officers worked with the project team, to build the capacity of local communities on how to implement appropriate interventions for promoting environmental conservation; including records keeping and tree planting.

Table 19: Environment Conservation Interventions promoted by CECF Beneficiaries

Environment Conservation Intervention

CECF Catchment

R. Aswa Mt. Elgon

R. Rwizi

Cleaning and protection of water points including wells and boreholes X

River Bank buffer zone protection X X X

Planting trees and other boundary markers along wetland edge boundary

X X

Tree planting X X X

Soil and Water Conservation

Mulching X

Digging of contour trenches X

Digging and stabilizing of contours and planting of grass X

Wise use of wetland edges and limiting drainage for crop farming X X

Planting trees within homesteads X X X

Planting trees and other boundary markers along wetland edge boundary

X X

Community sensitisation on benefits of trees and reasons for avoiding indiscriminate tree cutting (deforestation)

X X X

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Wetland buffer zone demarcation and protection Responses from local communities implementing environmental conservation related interventions initiated under the CECF model and observations made in the field, indicated that most wetlands in the Aswa and Rwizi Catchments had been degraded, mainly by drainage for crop farming. This led to frequent flooding in most of the areas, during the rainy season. The water quality had also declined; partly due to siltation and inflow of effluent from the catchment areas, which were not filtered and purified, due to the degraded wetlands and river banks.

As part of CECF model implementation, the local communities demarcated and restored wetlands and river bank boundaries in the Aswa catchment, leaving at least 30 meters from the flood zone reserved from crop farming and any other activities that involve draining of wetlands. Activities that do not involve drainage, such as livestock grazing were permitted in the buffer zone. Wetland and river bank demarcation was one of the activities that had been prioritized in the local community environment action plans of the Aswa catchment, as a pre-condition for borrowing CECF funds. A total of about 8 km along the wetlands and river bank boundaries were demarcated in the 5 sampled villages.

The boundaries were demarcated and planted with fig trees and sisal plants (Figure 4) under the CECF implementation arrangements. Labor for collecting materials to be used and planting the boundary demarcation was provided by the local communities, as part of their contribution to the implementation of the CECF model. The local community CECF executive committee and the whole community had a responsibility of monitoring that the boundaries are still intact and there is no resurgence, where the wetland and river bank zone areas were previously drained.

The communities considered that planting of the boundary markers will not only demarcate the boundary, but will also generate some financial returns in future and therefore used plants that can give marketable products such as sisal. The local communities proposed that the person with land adjacent to the demarcated boundary should carry out maintenance of the planted sisal, through spot weeding and can in future be the one to control harvesting of sisal products and be given at least 20% of the income from sale of the products from the harvested boundary markers.

In the Rwizi catchment, one of the key wetland interventions was restoration of degraded wetlands. This involved blocking of the wetland drainage channels and stopping crop farming in the wetland areas. The exercise was coordinated by the District Environment Offices of Mbarara, Sheema and Ntungamo; with support from the Local Councils and CECF executive Committee. The exercise of wetland boundary demarcation is planned to take place in 2016, with financial support from the Districts.

The CECF groups, with technical support from the Local governments, put in place measures to promote wise use of wetlands, using a basis of the multiple uses from wetlands and the multiple users. The CECF group members reported that they have been active in passing out messages on

Figure 4: Wetland boundaries demarcated

and planted with fig trees and sisal plants

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the need to promote wise use of wetlands at different local community gatherings. The messages included:

a. Sensitizing people against wetland drainage, b. Discouraging planting of some species of trees considered to affect water levels such

as Eucalyptus in wetlands, c. Sensitizing people against constructing in or near wetland areas;

The local communities indicated that they would do better if they are facilitated with awareness materials such as posters, calendars and brochures; with messages on the importance of sustainable management and conservation of natural resources.

Reports from the local communities and local government officials indicated that some benefits of the CECF model supported interventions have been realised. For example, the water quality of the areas where the wetland and river bank boundary demarcation and restoration was carried out has improved and this was confirmed by water quality studies carried out by the Department of Water Resource Management of the Ministry of Water and Environment in the wetland and riverbank restored areas. The communities also reported that incidences of flooding have also been reduced in the demarcated and restored areas. According to the respondents in the field, the impacts of wetland and riverbank restoration have also been evidenced by the observed reduced siltation and having clearer water. The local governments indicated willingness to put in place mechanisms to collect systematic data to give technical back up for validating the reported changes in water quality and quantity, which should be considered as a priority in future implementation arrangements for CECF.

When asked about the contribution of CECF, the communities explained this by using a comparative analysis of the beneficiaries before and after CECF interventions, as indicated in Tables 20 and 21. With reference to use of wetland resources, it was reported that after drainage of the wetland and converting it into a dairy farm, the area was fenced off and some resources harvested from the intact wetlands such as grass and Papyrus were eliminated by clearing their raw materials, while other resources such as fish reduced due to the changed conditions. The local communities also reported that the most unfair part of the resource use was for instances where they were denied access to some of the traditionally communal public resources such as water, after fencing off. One of the members reported that they were humiliated by some dairy farmers who would tell the local communities that they cannot be allowed to access water from a stream in the farm, because they may infect the cows with ticks.

Promoting good agricultural practices such as soil and water conservation The CECF groups reported that they have worked with the local council members to promote good agricultural practices, as a good way of improving management of their landscapes. The promoted interventions included promoting soil and water conservation practices such as digging of trenches and mulching. One important multiplier effect they reported to have come from wetland restoration that benefited promotion of good agricultural practices was availability of wetland grass, which is the most common mulching raw material.

Respondents from Rwizi catchment interviewed during this study reported that one of the good practices that the CECF groups promoted for of enhancing banana production is use of mulch to control erosion, hold moisture and increase fertility (figure 3). Estimates made by local communities, which are in agreement with the case study on increased banana production from mulching, indicated that appropriate use of mulch can increase banana production to at least three fold. The respondents indicated that after drainage of most of the wetlands, wetland grass had to be bought from as far as Kasese at a cost about ten times more that when bought from the restored wetlands. Restoration of wetlands therefore contributed a lot to increased banana production in the area, due to the readily available wetland grass for mulching. Harvesting and sale of wetland grass also contributes to employment for some community members.

In the Mt. Elgon catchment, it was reported that soil fertility has declined due to poor agricultural practices. The challenge at hand is how to use the little land properly, which calls for promoting

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good agricultural practices. Given the steep slopes in the Mt. Elgon catchment, the other key challenge to farming is soil erosion, which exacerbates the problem of soil fertility loss. During the process of developing environmental action plans under CECF, Soil and Water Conservation (SWC) interventions were therefore prioritized as important; given that most of the population depends on crop farming. Some of the SWC interventions promoted as part of CECF implementation include: (i) Mulching and management of crop residues; (ii) Use of organic fertilizers, such as cow dung and compost; (iii) Improved Rainwater and runoff management; (iv) Erosion control and water storage and conservation structures, such as contour trenches and contour bunds; and (iv) Tree planting. Studies carried out by the Buginyanya Zonal Agricultural Research and Development Institute (BUGIZARDI) a centre for National Agricultural Research Organization in Eastern Uganda indicated that intensification of SWC interventions can contribute to increased crop production. The studies show that farms where SWC interventions were applied in the Mt. Elgon area, achieved increased crop production from 0.5tonnes per acre to 3-4 tonnes per acre. Local communities reported that they had an opportunity of having an active NARO institute at Buginyanya (BUGIZARDI), which provided improved varieties of Napier grass to the communities supported by CECF interventions in the Mt. Elgon region. Reports from the focused group discussions indicated that application of the soil and water conservation measures has significantly increased crop production in the area. It is expected that intensification of the SWC interventions using the CECF model can contribute a lot to crop production and enhance increased income and food and nutrition security in the Mt. Elgon region.

Reports from the focused group discussions and key informant interviews during this study also indicated that, in addition to improving crop production, use of SWC interventions and improved farming methods have demonstrated reduced soil erosion, at farm level. This, if scaled out over a bigger area can lead to control and reduced risks and incidences of landslide, which have posed a big challenge in the Mt. Elgon area. More focus should therefore be made to demonstrating the practical impacts of SWC interventions and scaling them to a bigger area, using the CECF platform. The CECF groups can easily do this by agreeing on some farmers amongst them, whom they can use for demonstration of the SWC impacts.

Water source protection

One of the activities that communities committed themselves to implement, as part of CECF implementation in the Aswa catchment, was protection and cleaning of water sources. This included mobilisation of materials and fencing off water source points, which were periodically maintained (Figure 5). The water source maintenance was carried out on designated days for issuing and recovery of loans given out as part of CECF funds and would be carried out prior to the loan meeting.

Non-participation in water source protection was one of the conditions that would deny a member rights to be loaned out money. A total of 7 water points were cleaning in the 5 sampled villages of Orit Parish (Table 20). It was reported that communities have been turning up in big numbers for the water source protection and this has greatly improved hygiene that will ultimately translate into improved livelihoods.

Figure 5: Protected Water source in the Aswa Catchment

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Policy impacts of CECF interventions through bye law development and implementation Implementation of the formulated community environment action plans necessitated simple guidelines on the dos and don’ts to the natural resource capital, which the communities appreciated as a big bearing on their livelihoods. This provided an opportunity for local communities to generate ideas that can be consolidated into bye laws for natural resource management. Bye law development was effectively implemented under CECF in the Aswa-Agago sub-catchment. Draft bye laws, which were partly facilitated through the CECF implementation, were presented and approved by sub-county councils and are strongly recognized. Appendix 2 gives a sample bye-law for natural resource management by Arwotngo Parish, Okwang Sub-county, Otuke District. The process of bye law development for Sustainable Land Management (SLM) in the Mt. Elgon area had already been initiated and CECF support worked with district partners to use the opportunity to implement provisions related to good agricultural farming practices.

During this survey, communities reported that the bye laws have contributed a lot to the conservation of natural resources. Special reference was made to the reduction of charcoal production, which had been so rampant in the Aswa-Agago catchment and had led to indiscriminate clearing of trees, especially the Shea Nut and other fruit trees. The bye laws provided local communities powers of arresting the offenders and handing them over to the local councils and sub-county for prosecution. The local communities expressed need for support to disseminate the bye laws in neighboring parishes, since environment and natural resource issues are not limited to administrative boundaries.

Before implementation of the Building Disaster Resilience (BDR) project, which operationalised the CECF model, there was rampant cutting down of trees for charcoal production. The charcoal production was mainly targeted at tree species with high calorific value such as the Shea Nut and other fruit trees. The short term gains from sale of charcoal would make the local community loose benefits from fruits contributing to food security and nutrition and the ecosystem services provided by the trees, as indicated in the Shea nut case study. Participation in charcoal production was also included as one of the bad practices that would deny an applicant to borrow CECF funds.

Using the bye laws, local communities stepped up implementation of one of the provisions in the bye laws, which declared charcoal burning as an offence. It was reported that by the time of implementation of the bye laws, an average of at least 100 bags of charcoal would be produced in each parish per week. By June 2015, the charcoal production was almost completely controlled.

Protection of the Shea Nut Tree (Vitellaria paradoxa) Implementation of CECF interventions in the Aswa-Agago sub-catchment was reported to have significantly contributed to the conservation of one of the economically valuable trees in Uganda (the Shea Nut tree/ Vitellaria paradoxa), which is restricted to the dry savannah and grassed woodlands in Africa. The IUCN Red list (2012) classifies the Shea nut tree among the vulnerable species, which deserve particular attention. Throughout Africa, the Shea tree is prized for having

many uses for food, oils and cosmetics Katende et al. (1995). During this study, local

communities reported that in northern Uganda, the Shea Nut tree is equally extensively used for food; and is a major source of dietary cooking oil and medicine. The shea nut tree is used both for home consumption and generates income to households and has potential to improve nutrition, boost food supply, foster rural development, and support sustainable land care.

According to Byakagaba et al. (2011) and Katende et al. (1995), the Shea Nut is one of the trees that has faced great pressure due to harvest for charcoal and other products and is under conservation threat. Among the measures proposed by Byakagaba et al. (2011) was formulation of bye laws, though they did not propose feasible implementation mechanism.

Implementation of measures discouraging charcoal production, using the bye laws formulated as part of the CECF model had a special focus on discouraging use of the Shea Nut tree and other fruit trees. Reports from the Focus Group discussions during this study indicated that implementation of the bye laws against charcoal production have reduced charcoal production and in effect conserved

https://en.wikipedia.org/wiki/Africa

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the shea nut tree. The CECF model therefore deserves strong credit and focus and has potential for use in the conservation of other tree species and ecosystems in Uganda and in other countries as part of the Forest Landscape Restoration efforts.

Tree planting Tree planting was one of the interventions that CECF groups in the three catchments included in their environment action plans. The local communities planted trees on their farms, as boundary markers and on their compounds, as part of the Forest Landscape Restoration (FLR) under CECF. It should be noted that the trees planted provide alternative products such as fuel wood, fruits, beekeeping forage and timber, in addition to provision of environmental services; and therefore save clearing of the natural forests. Tree planting was also one of the key interventions that would entitle a community member to borrow money from CECF funding arrangements and demonstrated conservation benefits of implementation of the CECF model and linkages to FLR. One challenge reported by local communities that hinders tree planting efforts was the high cost of tree seedlings. They expressed willingness to work together, if supported to set up a group nursery, at least at parish level.

The District Natural Resources Officers interviewed reported that they are exploring options for addressing the scarcity of seedlings, which are expected to benefit members from the CECF supported teams. For example, Lira District reported that the district has started a programme to train private tree nursery operators and has set up a demonstration nursery and training center for capacity development. The capacity development is in Lira District and they hope to work with neighbouring districts to train their teams. Local ccommunity members proposed that the training should cover aspects of pest and disease control during tree planting; including termite control.

The local communities in Benet sub-county expressed optimism that the goal of Forest Landscape Restoration (FLR) can be easily achieved using the CECF approach, if a number of community

members came in to jointly promote tree planting. One notable landscape that the communities identified that gives them a strong motivation for the future success of FLR was in Taragon Lower; where there is a forested area planted seven year ago under the IUCN supported LLS interventions (Figure 6).

Figure 6: Restored landscape in Benet sub-county Mt. Elgon

Catchment

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Bee-keeping and its indirect conservation benefits to FLR With experiences from previous projects and programmes, CECF groups indicated that they appreciate bee keeping as one of the profitable enterprises they can engage in, especially in Mt. Elgon catchment. This was demonstrated by the local communities from Tulwo village setting up 200 local hives using CECF support (Table 20).

Among the incentives and opportunities that the local communities neighbouring Mt. Elgon National Park (MENP) have is being permitted to cite their bee hives in the National Park, as part of the Participatory Forest Management (PFM) arrangements. One of the conditions given to the community groups who cite bee hives in the MENP is to contribute to conservation efforts, such as protection of the park against forest fires, in effect strengthening FLR efforts. The local communities appreciated that promoting the bee keeping enterprise can benefit a lot from CECF arrangements, where the local communities have already been organised to work together. This is a big opportunity that can be used to increase the capacity of high quality honey production and explore bulk marketing and processing.

Use of the CECF platform to discuss other off-site conservation issues such as community participation in Mt. Elgon National Park management Findings from this study indicated that the CECF model provided bigger conservation opportunities, beyond what had earlier been planned in the community environment action plans; in effect backing up the principles of FLR. For example, whereas the participation of local community groups in the MENP conservation interventions had not been included in the environment action plans, contribution to MENP conservation indirectly came in as an output. The CECF group members have increased their commitment to work with the National Park authorities, due to their interest in bee keeping and the opportunity offered to them for citing their bee hives in the park, with an attendant obligation of participation in park conservation.

The local communities appreciated that having come together as well organised CECF groups has provided them an opportunity to discuss issues of conservation concern such as the long standing MENP impasse. They reported that they have now gained official recognition and are frequently addressed and consulted by the park authorities to come and work with them to handle MENP conservation issues. The local communities also reported that they have extended an invitation to the UWA/ MENP authorities to come and advise them on how they can access funds from the benefit sharing programme of UWA. The observation of the local communities is that currently, the benefit sharing funds are directly given to the districts and they end up servicing allowances of officials, with limited access by the local communities

Provision of opportunities for income generation by CECF indirectly makes local communities desist from engaging in risky illegal activities in the MENP; in a way contributing to FLR. Reports from the focused group discussions indicated that CECF has contributed to improvement of livelihoods of a number of local communities by providing financial capital; to enable them explore more income opportunities, as elaborated by implemented interventions. The local communities reported that by being involved in genuine income generating opportunities, they cannot risk engaging in illegal activities in the MENP.

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Table 20: Targets and achievements in 3 selected villages in the Kapchesombe sub-catchment

Activity as agreed in the village Environment Action Plan

Targets Achievements

Rorok Tulwo Kapteka Total Rorok Tulwo Kapteka Total

Marking off buffer lines along major rivers and streams (households)

10 20 15 45 10 20 15 45

Planting of trees, shrubs and grass along river and stream banks (seedlings)

5,000 254 1,260 6,514 5,000 254 600 5,854

Planting of trees, shrubs and grass in homesteads and gardens

500 23 0 523 180 23 0 203

Fencing and managements of protected water sources (springs)

1 3 0 4 1 3 0 4

Woodlot establishment for firewood and poles (number of trees)

1,000 1,727 0 2,727 280 1727 0 2,007

Digging of contour trenches to reduce soil erosion (meters)

1,500 968 1,200 3,668 65 968 700 1,733

Construction of contour bunds ** 35hh 50 1200 35hhs 50meters

700meters

0

Construction of energy saving stoves (number of stoves)

35 3 0 38 1 3 0 4

Latrine construction at every household (households)

35 20 42 97 25 20 42 62

Agro-forestry/ trees and food crops planted together (households)

35 15 0 8 15 0

Bee keeping and rearing of improved animals

35hhs 200 local bee hives

0 05 200 local beehives

** Data collection units not harmonised

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Table 21: Targets and achievements in 3 selected villages in Benet sub-catchment

Activity as agreed in the village Environment Action Plan

Targets

Achievements

Taragon Lower

Chemwonbei Sukut Total Taragon Lower

Chemwonbei Sukut Total

Marking off buffer lines along major rivers and streams (Households)

41 15 4 60 41 15 4 60

Planting of trees, shrubs and grass along river and stream banks (Households)

5 28 25 58 5 28 25 58

Planting of trees, shrubs and grass in homesteads and gardens

10 28 30 68 10 28 30 68

Fencing and managements of protected water sources (points)

2 1 8 11 2 1 8 11

Woodlot establishment for firewood and poles (households)

50hhs Planted but no figures

Done but no figures

** 50hhs Done but no figures

5hhs

Digging of contour trenches to reduce soil erosion

15hhs Done but no figures

Done but no figure


Done but no figures

Construction of contour bunds 20hhs Done but no figures

Done but no figures


Done but no figures

Construction of energy saving stoves 35hhs Done but no figures

0 35hhs Done but no figures

0

Latrine construction at every household 41hhs Done but no figures

Done but no figures


Done but no figures

Agro-forestry (trees and food crops planted together)

21hhs Done no figures Done but no figure

21 Done but no figures

Done but no figures

Mulching and other soil and water conservation measures

5hhs Done no figures 0 5 Done but no figures

Done but no figures

** Data collection units not harmonised

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Leveraging other conservation and private interventions into the CECF Model In the three catchments where the CECF model was implemented, there are a number of actors, who were interviewed during this study and expressed interest to work closely with IUCN and its partners to promote the CECF environmental initiatives. For example in the Mt. Elgon area has previously attracted different conservation and investment opportunities, for some historical reasons such as conservation importance, being an important trans-boundary ecosystem, and having fertile soils and markets for produce. This presented an opportunity for implementation of a number of conservation projects and programmes such as MECDP, LLS, MERECP and AHI; which initiated some interventions similar to CECF environmental action priorities. This has provided an opportunity for leveraging CECF support and should be used to ensure continuity of the initiated livelihood interventions. During this study, respondents indicated that there are some Private Sector initiatives that can strengthen CECF interventions. An example of a private sector company that was interviewed and has potential for private sector involvement was KAWACOM, a coffee industry company that has initiatives for supporting local community activities related to natural resource conservation such as SWC and tree planting.

Joint monitoring and implementation of environmental conservation Under CECF implementation, local communities put in place systems that can easily ensure that community members work together to implement and jointly monitor environmental conservation interventions. The environmental activities would be carried out before disbursements of funds and compliance to commitments made in the environment action plans would be considered as pre-conditions for members to be entitled to borrowing CECF funds. Some environmental conservation activities such as cleaning water sources were scheduled on the day when communities meet to collect and give out CECF loan funds. Members who miss participation in the environmental conservation activities are disqualified during the process of approval of beneficiaries for loans. During the joint sessions, the environment committee would present their field verification reports identifying community members who do not comply with environment bye-laws and regulations and these would have sanctions of not accessing loans under the CECF.

Box 3: Need for Private Sector and other stakeholder involvement in CECF as demonstrated by KAWACOM

Started in 2014, KAWACOM buys coffee from local communities, using model/ promoter farmers in some districts in West Nile, Central and South-Western Uganda and the Mt. Elgon region. KAWACOM has conducted studies to find out the effects of different cropping systems and farming practices and has used results to improve crop productivity through interventions, such as SWC and tree planting. Their primary goal is to have most of their farmers contribute to nature conservation efforts using incentives such as encouraging planting selected agroforestry trees on-farm to increase production from shade coffee and using soil and water conservation and other good farming practices. They have three buying centers in the Kapchorwa and neighbouring districts, which serve as local training, sensitisation and information dissemination centres. They have extension workers at parish level and offer trainings in group formation and conflict resolution and encourage use of compost manure from cow dung and coffee pulps, which they distribute free to their contact farmers. KAWACOM believes that their approach has worked, but still face a challenge of having willing government and non-government partners, as elaborated by an incidence where they offered free seedling to districts and had no response and about 6,000 overgrown seedlings found at their private nursery at the time of this study. On the contrary most local communities reported that they had no tree seedlings to plant. This probably sets a challenge on effective partnerships and how they can be built to improve CECF.

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The joint monitoring and implementation of interventions provided an opportunity for the community to give support to vulnerable households and individuals and to pool their efforts for labor intensive activities. For example, communities pool labor for construction of soil and water conservation structures such as trenches. Having the local communities working together provides an opportunity for sustainable monitoring and evaluation, and can be strengthened by having the local communities provided to prepare a participatory monitoring plan with simple monitoring and evaluation tools.

CECF experiences in the context of catchment based water resource management Implementation of the CECF model in the three catchments was considered handy as an opportunity to consolidate experiences that IUCN and partners had gathered from the Aswa catchment; with a perspective of looking at a bigger catchment that had been characterized by natural resource degradation, including wetland encroachment. The Directorate of Water Resources management (DWRM) and its partners reported that they consider CECF as one of the models or tools that was successfully implemented and can be used to operationalise catchment based water resource management in the Rwizi and other catchments.

Through the catchment approach, which was used under CECF, everybody had a role to play and decisions to be made to restore the degraded landscapes put into consideration the power of the people on the ground (local communities). This had been considered while identifying actions that are needed during the development of the Rwizi Catchment Management Plan (CMP). The CECF was therefore recognized as an entry point for having the local communities directly access some of the resources for implementation of the CMP. Moreover, access to the financial resources by local communities can provide an opportunity for using the funds to address their priority development needs, which at times are the key drivers of natural resource degradation.

Empowering CECF Groups to sustain environment conservation initiatives All CECF supported groups expressed satisfaction that outputs from their activities have not only benefited members of their group, but they have also greatly contributed more to the livelihoods of the wider society, for example, by increasing access to wetland resources such as clean water and other products and services. The local communities reported that they have been advised to register as land resource user associations. According to the Land Act (1997), registration of organized community members as land resource use associations is permitted to legally guide natural resource use and this also empowers them to legally collect resource user fees, which can be used to facilitate management of relevant natural resources. In that case, commercial resource users, such as grass harvesters and fishers will be requested to pay a small fee to be kept by the CECF groups for conservation purposes. The Director of Environmental Affairs in the Ministry of Water and Environment (Mr. Paul Mafabi) suggested that the CECF groups can borrow experiences from Jinja Women Wetland Association in Jinja District and Bigodi Wetland Association in Kamwenge; who are formally registered community groups that have been successful in guiding wetland wise use in their areas.

Among the CECF groups, experienced can also be drawn from the Rwizi catchment groups, which are composed of CECF champions along the Rwizi catchment (profiled in Table 22). The registered associations expressed a lot of confidence in terms of their sustainability beyond donor support, which was demonstrated by the continued operations of the groups after the donor supported projects, with supervision and technical support from the district teams. This was evidenced by expressing of cohesion as a group and having kept the evicted encroachers from resurgence into the wetland, which they reported is at times apparent.

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Table 22: Profiles of CECF Groups in the Rwizi Catchment

CECF Group/ CBO Sub-county District No. of Members

Bukiro Environmental Conservation Association (BECA)

Bukiro Mbarara 44

Katwe Environment Conservation Association Masheruka Sheema 25

Nyakambu Wetland Association Masheruka Sheema 24

Itojo-Rweishumba Natural Resource Conservation Association

Itojo Ntungamo 116

Integration of CECF interventions in district planning frameworks and budgets Reports from the 3 catchments indicated that interventions implemented under the CECF model have been integrated in the district planning frameworks. For example, Lira included about UG 7,600,000 in the district budget for 2015/2016 for implementation of interventions initiated using the CECF model. At the sub-county level, the sub-county Senior Administrative Secretaries (Sub-county chiefs), who were working as CECF focal points, reported that local community and environmental plans were used to capture priorities during the planning and budgeting process. They therefore appreciated that participation in the CECF implementation has made them strengthen environment and natural resource planning and budgeting in their areas.

Training, awareness and exchange visits During implementation of the CECF model, a number of awareness and training workshops, facilitated by district and sub-county staff, were conducted. The local communities received training on different aspects of record keeping, financial management, group dynamics, implementation of different environmental conservation activities such as tree planting, wetland buffer and river bank demarcation and restoration. The communities also reported that they had exchange visits to different areas, which exposed them to different environmental conservation approaches. They appreciated that the exchange visits added a lot to their knowledge and skills and should be considered as activities that could be prioritized by the sub-county and district plans.

The local communities reported that the knowledge and skills acquired during the training have been helpful during management of the CECF funds and promoting environment conservation interventions. They also appreciated that the training and sensitization are continuous activities that should be sustained by the sub-county and district authorities and can be planned to be conducted regularly during the scheduled monthly meetings when the CECF groups meet to handle loan disbursement and recovery.

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LONG TERM VIABILITY OF CECF

Achievements of CECF

A microfinance model extending support to beneficiaries Whereas CECF has good microfinance incentives, results from this study consider that the element of micro-financing cannot be considered to be its strongest achievement although as CECF evolves further a more clearly defined specific niche is envisaged to emerge. CECF operates in the landscape alongside micro-financing schemes and out of the three catchments only in the Upper Aswa catchment was it considered a major micro-financing approach.

On the other hand, government officers and development partners indicated that they already considered CECF as a feasible alternative instrument for innovatively addressing livelihood priorities, as an entry point to reach out to communities, who may not necessarily prioritize environmental management. This review found out that CECF was used to successfully reach out to communities that were settled in areas rich in natural resources and at risk of heavy degradation.

Enhancing landscape restoration efforts and building resilience through livelihoods CECF can be easily linked with national government programmes such as the National Agricultural Advisory Services (NAADS); currently running under the Operation Wealth Creation, and the wetland restoration programmes proposed under the Wetlands Department in the MWE. In the Mt. Elgon ecosystem and the Rwizi catchment there is evidence that the CECF is contributing to forest landscape restoration and building resilience of communities in the Upper Aswa catchment.

Whereas CECF has registered good success in three catchments, the scale of implementation was been quite limited and should be scaled out in any upcoming opportunities. Additional empirical testing of the conservation benefits and their attribution to CECF interventions is needed to support further scaling. Given the limited scale at which CECF has been implemented thus far, there may be an initial consideration for scaling out programmes scoped on the interventions where success has been attained. Piloting scaling up especially into new areas should start at a smaller scale in the same way the initial phases for CECF were implemented in the three catchments.

Strategic areas for improvement

Linkages between CECF and Village Savings and Loans Association (VSLA) To have an all-inclusive approach to conservation, considerations should be made to have the CECF have a bigger geographical coverage; as long as mechanisms for managing the funds are put in place. Situation where transaction costs are minimised should be maintained to reach most of the rural populace. In addition, mechanisms should also be put in place for performance monitoring.

CECF has demonstrated that microfinance incentives can be extended to the local communities in an all-inclusive manner. Efforts to have it replicated in other areas of Uganda will go a long way in proving its robustness.

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Funding Mechanisms and Institutional Arrangements for CECF

Plans for implementation of CECF have an arrangement for putting in place mechanisms that ensure that after phasing out of the initial donor support the initiatives will be sustained by some government institution’s programmes and projects, such as the MWE Catchment Protection. However, there is a challenge that government conditions do not permit adopting of CECF as a formally accepted funding mechanism; given that it does not have adequate safeguard mechanisms, in case of some mismanagement, misappropriation and fraud.

One possible recognized funding mechanism to support CECF that was proposed during this study was disbursing the funds as government conditional grants, which has clear government guidelines and conditions for reporting and accountability. The funds will then be transferred through a government agency such as the Catchment Management Organization. Lessons can be borrowed from experiences of the Lake George Basin Management Organization (LAGBIMO) and the Lake Kyoga Basin Management Organization (LAKBIMO).

Consideration can also be given to using the model of Savings and Cooperatives Credit Organizations (SACCOs), which access government funds and have some time tested control mechanisms.

Using modern banking services to manage CECF funds Management of CECF funds can also be customized to suit the emerging trends of linking local VSLAS to modern banking services. An example is the approach used by Barclays Bank and a number of partners to provide modern banking services to VSLAs using mobile money linkages.

The Barclays Bank is working with the Grameen Foundation, PLAN International, CARE and Common Interest Groups to link VSLAs to formal banking services. This is achieved using a new approach code named “Banking on Change.” In Uganda, the Banking on Change is implemented with a mobile money service operator (Airtel) using three transaction signatories.

Under the Banking on Change initiative, members of the VSLAs are trained as Trainers and are provided with Smart Phones, where bank transaction applications for ledgers, balance sheets and other tools are installed. Instead of keeping the un-loaned funds in a metallic box, the money is banked with Airtel and transmitted to Barclays Bank. Transactions on the airtel account are authorized after the 3 signatories key in different PIN codes. The three signatories who are normally VSLA’s permitted executive committee members, using the principle of keeping three keys for the metallic cash box.

The Grameen Foundation provides services of training Community Knowledge Workers (CKWs), who are the technical personnel promoting support to VSLAs, collection and dissemination of data. The Grameen Foundation has provided services for CKWs networks in Kapchorwa and Lira, which can be linked with CECF. Grameen has also promoted knowledge products and implemented activities for strengthening financial literacy in collaboration with Post Bank, Pride Micro Finance, Centenary Bank, MTN, Barclays and Airtel.

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LESSONS LEARNT, CONCLUSIONS AND RECOMMENDATIONS

Lessons from CECF for FLR and catchment-based IWRM

Empowered local communities can put in place measures to manage natural resources and demand accountability from their leadership Through close interaction during implementation of the CECF model, the local communities were more empowered to control the management and use of natural resources in their respective areas. The CECF served as an incentive that galvanizes them together and creates a sense of ownership of the natural resources; leading to a commitment to jealously guard against any form of degradation. Regular interactions by the local communities acted as a forum to bring them together to address development issues in their area, including those pertaining to natural resource use and sharing roles and responsibilities to contribute to the management and conservation of the resources.

The citizenry created by CECF groups provides an opportunity for political mobilization and gaining support to natural resource management and conservation

The CECF model provided an important approach that helped empower the local communities to come together and hold their leaders accountable to supporting natural resource management. This was mainly through innovatively having the political leaders, starting with the LCI Chairpersons, actively participating in the environment and natural resource management components of CECF; through:

Empowerment to monitor the fund management;

Role in monitoring fulfillment of environment and natural resource management pre-conditions of borrowing CECF funds;

Participating in audit on compliance and addressing the risk associated with management of the fund and demanding for proper environment and natural resource management stewardship.

This review found out that implementation of CECF initiatives benefited from strong political will and support, which should be consolidated. Including political and administrative leaders in the governance structures for CECF provided an opportunity to have them involved in environment programmes and being held accountable for sustainable management and conservation of the natural resources. The stakeholders felt that involvement of leadership should always be considered as an asset to increase efforts to address natural resources management challenges.

Outstanding protected area conflicts in Uganda can be managed better by bringing together stakeholders to appreciate the broader context of natural resource benefits and beneficiaries The CECF presents an opportunity for use of catchment based natural resource management in addressing long standing management issues in and around Protected Areas in Uganda. Particular approaches of bringing a number of stakeholders from local governments and other actors that are linked to the relevant PA as a catchment seem to provide an approach that could be useful. Reference was made to forum that was centered on bringing together stakeholders along the River Awoja sub-catchment, involving upstream and downstream districts, which was attended by a number of Upper Middle and Lower Mt. Elgon Catchments. The forum formulated strategies to contribute to management of the Mt. Elgon area by having on-site and off-site beneficiaries from the National Park work together. The policy makers and implementers met during this study expressed high hopes of solving the Mt. Elgon.

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CECF as a potential mechanism for promoting and enabling conservation action The CECF model registered success as an effective mechanism for promoting conservation action in the 3 catchments. This is exemplified by stopping charcoal production in the Aswa catchment; soil and water conservation interventions in the Mt. Elgon area and halting wetland drainage and restoring some drained wetlands in the Rwizi catchment. The district technical teams and local communities reported that interventions for stopping charcoal production and wetland restoration in the 2 catchments were successfully implemented and had optimum participation of communities and other stakeholders in areas where CECF model is practiced, despite previous failed attempts to execute similar actions. The respondents reported that attempts to implement similar actions in areas where CECF is not implemented have registered some level of resistance. The motivation created by CECF model of support can therefore be considered as a potential mechanism for incentivizing conservation actions.

Conclusions

Fund Management of CECF Initiatives The CECF model is a best practice option or instrument for engaging communities with livelihoods priorities; as incentives to enhance management of public goods such as wetlands, forests, watersheds and/or catchment. Even though CECF has strong micro-finance credentials, the institutional structure is still evolving and a technical support structure from IUCN and/or District and Sub-county Local Governments, and partners will be needed in the short to medium term.

The CECF model seems to work best in implementing landscape and ecosystem restoration activities and in building resilience for livelihoods stressed communities. The livelihoods stressors CECF was particularly effective in were for people seeking to identify alternative enterprises to stabilize their income streams; as well as communities where environmental stressors were affecting livelihoods.

The CECF model still has to identify thresholds of financing for different categories of people to be more engaged. The majority of members of the community with higher income streams are more likely to engage in more degrading activity, while also requiring larger amounts of micro-credit. However, if these active members of the community are few, their participation can be outweighed by the community members with fewer income streams. On the other hand, as the number of the active persons grows then the articulation of the incentive needs to change to ensure they stay motivated. For example whereas community conservation activities appeal to communities in the Upper Aswa sub-catchment, in Rwizi catchment it is the income multiplier of participating in CECF that is the major driver. Gradually, a small proportion of the CECF beneficiaries in the Upper Aswa catchment are also realizing that a lot more benefits can be attained with CECF model beyond the limits imposed with a community wide approach.

If CECF is therefore to be implemented as best suited in restoration of landscapes; for example in the implementation of REDD+ (Reduced Emissions from Deforestation and forest Degradation); catchment management and agricultural enhancement programmes in marginal or stressed ecosystems, then thresholds of intervention may have to be considered. Moreover, all the thresholds need to be catered for, whether it is through increasing the financing available to groups or through differentiated interest rates based on the level of borrowing.

CECF is effective where supporting legislation (bylaws, ordinances and regulations) are available, to ensure that the investments of members are protected from potential abuse by those who have a differing inclination. The presence of strong community institutional and social systems also helped in ensuring success for CECF where the regulation environment was relatively weaker. Additionally, it was recognized that strong technical backstopping for

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example from Environment, Commercial, Agriculture and Community Development Officers and Auditors is needed.

Providing incentives for conservation As described in Section 3.4, the CECF model provided incentives for conservation in the Upper Aswa sub-catchment, the Mt. Elgon ecosystem and the Rwizi catchment. In the areas where livelihoods demands are higher, such as the Upper Aswa catchment, the livelihoods demands were a major driver. The community members undertook wetlands management, water source protection and reduced deforestation for wood fuel because they had the opportunity of investing in an alternative livelihood. The biggest achievement for the CECF programme in the Aswa catchment was the number of people who had access to financing for livelihoods improvement. Even though some incidents of regressive behaviour in encroachment on the buffer and elite capture were reported among the CECF groups the community has a strong commitment to the CECF, despite the strong appeal of alternative forms such as Village Savings and Loans Association (VSLA) and other revolving fund schemes.

The understanding of incentives for conservation from CECF was most clear in the Rwizi catchment, where the major problem confronted was catchment wide, with land use practices in upstream and midstream areas leading to reducing water quantity available downstream and midstream. The midstream and downstream areas are important urban areas with large residential and industrial areas. The incentive attained with CECF had an influence on communities in the upstream areas improving their management of wetlands. This is appreciated to have enhanced the provision of ecosystem services and goods from the restored wetlands that are able to provide more fish catches and grass for mulch that is used to improve agricultural productivity. Alongside the small incentive from CECF, the communities have developed understanding linking their land use actions to the productivity on their farms and other investments. The challenge for the CECF programme is then to translate the benefits accrued at a limited scale to a wider scale beyond the pilot communities.

The incentive for conservation with CECF in the Mt. Elgon ecosystem is also heavily based on livelihood challenges. The commodities with clear value chains such as coffee, tree nurseries and dairy production showed strong promise for beneficiaries. On the other hand investments in grains and pulses such as maize and beans were not as rewarding. Additionally, the CECF members in the Mt. Elgon ecosystem have very small holding, and breaking even with land use investments is often difficult. The successful CECF members either had larger land pieces, multiple investments and/or strong value chains such as coffee farmers, tree nursery producers or mixed farms of dairy production and crop production. Moreover, investments in soil and water conservation are expensive to maintain compared to wetlands management, reduced deforestation and water source protection occurring elsewhere.

Linkages of CECF to Conservation of Natural Resources This survey confirmed that CECF support greatly enhanced the commitment and feeling by people living around natural resources that it is in their interest to participate in managing the resources due to the benefits they derive from the different landscape goods and services. The CECF also brought together the local communities with their leadership and making them recognize the importance of natural resources to the people so that they can support interests in conservation and sustainable management.

The CECF programme also provided a forum for raising awareness about natural resource management, through meetings and trainings. In addition to CECF increasing conservation efforts, continued interactions during CECF implementation provided a forum for communities to share lessons and experiences on different development and social programmes. Through training and sensitisation by local government teams and their

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partners, CECF was also reported to have increased knowledge and skills by the local communities, which are important for their livelihood improvement, in turn addressing the drivers that normally force people to degrade natural resources.

Recommendations

CECF Fund Management As the CECF model grows, increased interlinkage with financial institutions in the landscape is envisaged. For CECF groups to be sustainable it is proposed that they should explore strengthening the operations by working with and investing in intermediary micro-finance institutions, such as VSLAs and SACCOs. The CECF groups should also be made to appreciate that investing in micro-finance institutions will reduce the cost of making withdrawals and saving with the entity. Moreover, since the micro-finance institutions such as SACCOs work based on the savings of members, with a CECF group the farmers will have a stronger influence than as individual farmers.

Monitoring and Evaluation This review found out that despite reports that CECF has contributed to natural resource management, the monitoring mechanism for both bio-physical and socio-economic impacts of CECF is not strong enough to demonstrate impacts of the interventions. Simple data collection mechanisms, which can be easily implemented by local community teams, were not put in place.

The CECF groups should be trained on how to collect simple data that can be used to provide evidence of impacts. Data collection methods and formats should be harmonized for the different areas. The Mt. Elgon catchment Database, under construction, should provide lessons for data collection, storage and analysis; for the different CECF interventions.

In addition to the ecological monitoring, there is need for monitoring socio-economic related parameters; to link CECF impacts to both biodiversity and economics. The ecological and socio-economic monitoring system should be simple and participatory; to make the local communities participate in data collection and to appreciate how they can demonstrate the impacts of CECF to other stakeholders. Proposed actions to operationalise this recommendation include:

o Capturing the baseline data for selected sites in the 3 catchments; o Developing data collection protocols outlining well-articulated and simple

parameters to be monitored; o Monitoring different parameters at regular periodic intervals; o Analysis and reporting for different levels of stakeholders.

Strengthening policy and legislation implementation at local community level Successful implementation of CECF interventions in the 3 catchments confirmed that there is reasonable policy and legislative framework to support natural resource management and conservation at local community level in Uganda. The CECF groups reported that they can achieve much more impact if the local communities are aware of the existing policies and legislation and expressed need for support to disseminate existing bye laws in neighboring parishes. This recommendation involves the following actions: (i) preparing simple messages about existing natural resource management policies and legislation in Uganda for local level implementation; and (ii) finalizing the process of enacting the Rwizi area local ordinance, earlier initiated by Mbarara District.

Legally registering CECF groups as natural resource user associations In the 3 catchments, CECF groups demonstrated that they can guide natural resource management and conservation in their areas and can influence other community members. However, they lack the legal mandate to enforce existing policy and legislative mechanisms;

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such as guiding wise use of wetland resource use. The legal mandate of CECF groups can be strengthened by having them registered as resource user association, which is provided for under the Land Act (1997). The formal registration will enable them to be mandated to guide natural resource use and gives them the authority to formally collect user fees for management of natural resources. The collected user fees can facilitate implementation of different interventions that benefit the community at large. Proposed actions for this recommendation include:

With guidance form districts, review requirements for registration of CECF groups as resource use associations;

Facilitate the CECF groups to register;

Prepare guidelines on how the community resource use associations can operate to benefit the larger community.

Use of economic instruments to demonstrate conservation benefits of CECF Continued funding should put a stronger emphasis on strengthening the link between the funding and conservation impacts. This should be articulated more in the context of the incentives created by addressing immediate livelihood demands, which motivates the local communities to actively address conservation challenges.

Capacity Building for CECF Groups This study observed that there is need for strengthening the skills of CECF groups and their sub-county and district support teams; including technical and political leaders. The capacity building is needed to strengthen aspects of fund management and implementation of different interventions and varies from site to site. It is therefore proposed that a capacity and skills needs assessment be conducted to identify specific capacity development needed in the CECF sites.

Exploring and strengthening emerging new ppartnerships This study found out that increasingly, implementation of the CECF benefited from non-traditional conservation institutions. Examples include funding from Coca Cola for Rwizi CECF; interest from KAWACOM in Mt. Elgon; and experiences of the Ministry of Water and Environment working with Kigezi Diocese and Buganda Kingdom to implement Integrated Water Resource Management in the Kigezi Highlands. It is proposed that a deliberate effort should be put in exploring and strengthening new emerging partnership.

Strengthening linkage between CECF fund borrowing and environmental conservation Implementation of the CECF model drew its innovative component from the fact that the borrowing of CECF funds was meant to achieve a natural resource management and conservation goal; developed and presented in the participatory environmental plan. If well implemented, this should address some of the challenges that local communities have in line with natural resource management challenges and drivers of degradation. This may include: (i) More involvement of local elected leaders; (ii) Having more publicity through local FM radio station messages; (iii) Linking the CECF funding to district financial and auditing systems; and (iv) Linking the CECF support to new conservation approaches such as the proposed Catchment Management arrangements by the Ministry of Water and Environment.

Mobilising support from political leadership Implementation of CECF proved that political leaders can be good allies for promoting sustainable management and conservation of natural resources. CECF groups and technical teams should package information for political leaders on how they can talk to people more on issues that affect their livelihoods and how they can work together for development.

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REFERENCES

Byakagaba, P.; Eilu, G.; Okullo, J. B. L.; Tumwebaze, S. B. and Mwavu, E. N (2011).

Population Structure and regeneration status of Vitellaria paradoxa (C.F.Gaertn.) under different land management regimes in Uganda. Agricultural Journal, 6: 1 (14–22).

Katende, A.B.; Birnie, A.; and Tengnas, B. (1995). Useful Trees and Shrubs for Uganda.

Identification and Management for Agricultural and Pasto ral Communities. Regional Soil Conservation Unit (RSCU), Swedish International Development Cooperation Agency (Sida).

NatureUganda (2011). The Economic Valuation of the Proposed Degazettement of Mabira Central Forest Reserve. NatureUganda Kampala

Newton, A.C. and Tejedor, N. (Eds.). (2011). Principles and Practice of Forest Landscape Restoration: Case studies from the drylands of Latin America. Gland, Switzerland: IUCN. xxvi + 383 pp.

UBOS (2014a). National Population and Housing Census 2014: Provisional Results, Revised Edition, Uganda Bureau of Statistics, Kampala. Also available at http://www.ubos.org

UBOS (2014b). Uganda National Statistical Abstract 2014, Uganda Bureau of Statistics, Kampala. Also available at http://www.ubos.org

http://www.ubos.org/

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APPENDICES

Appendix 1: Arwotngo Parish Natural Resource Management By-Law 2014 Outline

Arrangement of Clauses Clause

PART 1-PRELIMINARY

1. Citation 2. Purpose 3. Commencement 4. Interpretation

5. Objectives

PART II: PRINCIPLES OF SUSTAINABLE NATURAL RESOURCE MANAGEMENT

6. Use conservation and Sustainability

7. Right to a Decent Environment

PART III: INSTITUTIONAL ARRANGEMENTS FOR COMMUNITY ENVIRONMENT CONSERVATION FUND (CECF) AND SUSTAINABLE NATURAL RESOURCE

MANAGEMENT 8. District Council 9. Sub-county council 10. Sub-county Environment Committee 11. Lower local councils 12. Water Source Committees 13. Community Environment Conservation Fund Management Committee 14. Community Environment Conservation Fund audit committee

PART IV: SUSTAINABLE NATURAL RESOURCE MANAGEMENT

15. Ecosystem restoration 16. Water resource management 17. Wetland management 18. Land use management

implementation of the community environment …...implementation of the community environment...

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