Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 4858

PROJECT PERFORMANCE AUDIT REPORT

TANZANIA KIGO14A RURAL DEVELOP?4ENT PROJECT(CREDIT 508-TA)

December 28, 1983

Operations Evaluation Department

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

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ABBREVIATIONS

ATTC - Agricultural Trials and Training CenterCAT - Coffee Authority of TanzaniaDCA - Development Credit AgreementDDD - District Development DirectorIDA - International Development AssociationKCU - Kigoma Cooperative UnionKRA - Kigoma Regional AdministrationKRDP - Klgoma Rural Development ProjectNMC - National Milling CorporationMATI - Ministry of Agriculture Training InstituteOED - Operations Evaluation DepartmentPCR - Project Completion ReportPME - Project Management ExectitivePMO - Prilme lMinister's OfficePPAM - Project Performance Audit HemorandumPPAR - Project Performance Audit ReportPPT - Project Preparation TeamRADO - Regional Agricultural Development OfficerRDD - Regional Development DirectorRHC - Rural Health CenterRIDEP - Regional Integrated Development ProjectRMEA - World Bank Regional Mission in East AfricaTANU - Tanganyika African National Union - later CCM (Chama Cha

Mapinduzi) - The PartyTCA - Tanzania Cotton AuthorityTRDB - Tanzania Rural Development BankUNCDF - United Nations Capital Development Fund

FOR OFFICIAL USE ONLY

PROJECT PERFORMANCE AUDIT REPORT

TAJZANIA KIGOMA RURAL DEVELOPMENT PROJECT(CREDIT 508-TA)

TABLE O' CONTENTS

Page No.

Preface ..... * * * lBasi e Data Sheet iiiHig -'l.ghts .................... ............. iv

PROJECT PERFORMANCE AUDIT MEb%RANDUM

1. NAIR ISSUES. S ..... *.... .. . . * .. .. 1......* 5

A. Project Organization * * . . a . 5B. AgricuLlttral Inmpact ............... *.... * * *..... * 7C. Long-Terma Support for Ruxral Development .............. 10

PROJECT COMPLETION RE1PORT

I. Background 13II. Fortutlatlon and Design 15TII. Implemeaitation 21

IVt . lIrgpac t a 29V. Economic Analysis * ................. ....... * 34VI. Bank Performance ..................... , 35

VII. ConcLusions: Lessons for Rural Developaent ............. 37

Tables

Charts

Map

rhis docuntent has a restticted distribution and rnay be used by recipients only in tthe performance oftheir official duUes. Its contents inay not otherwise be disclosed without Vorld Bank authorization,

PROJECT PERFORMANCE AUDIT REPORT

TANZANIA KIGOMA RURAL DEVELOPMENT PROJECT(CREDIT 508-TA)

PREFACE

This is a project performance audit report oa Kigoma Rural Develop-ment Project, for which Credit 508-TA in the amount of US$10.0 million wasapproved in August 1974. The Credit was fully disbursed in September 1982,before the closing date in December 1983. The closlag date was originallyscheduled for December 1980.

The audit report consists of a Project Performance Audit Memorandum(PPA1, prepared by the Operations Evaluation Department (CED) and a ProjectCompletion Report (PCR) prepared by the Eastern Africa Regional Office. ThePPAM is based on a review of the Appraisal Report (453a-TA) dated July 15,1974, the President's Report (P-1453-TA) of July 23, 1974 and the CreditAgreement dated August 21, 1974. Correspondence with the Borrower and inter-nal Bank memoranda on project issues, as contained in relevant Bank files,have been consulted. The audit has also been able to study a report on anevaluation of Kigoma Rural Development Project undertaken by the EconomicResearch Bureau of the University of Dar es Salaam.l/ The audit missiontravelled to Tanzania in December 1982. Discussions were held with officialsfrom the Prime Minister's Office, the Cotton Authority and the Tanzania RuralDevelopment Bank in Dar es Salaam. The mission travelled to Kigoma Regionand visited a number of project facilities in Kigoma and Kasulu Districts.Discussions were held with the RegionaL Development Director, the RegionalPlanning Officer, the Project Coordinator, the Financial Controller and otherregional staff.

The audit generally supports the conclusions in the PCR. The pro-ject was directed primarily at Increasing farm incomes and improving educa-tional, health and drinking water facilities in newly established villages.At the time of appraisal, improvements of this type were desperately needed,for Kigoma was one of the poorest regions in Tanzania. The project has not,in general, succeeded in achieving these development goals, primarily becauseproject implementation capacity has been weak and certain aspects of theimproved agricultural technology provided under the project were unattractiveto farmers. This situation has been seriously aggravated by the country-wideeconomic problems which have affected Tanzania. Even in areas where theproject has succeeded, Government has had difficulty maintaining theseactivities now that external financial support is no longer availablefollowing completion of the project. Tbese issues are discussed in the PPAM.

1/ "An Evaluation of the Kigoma Ruxal Development Project", Michael Loft,Ellen Hanak, and Ahmed Ndyeshobola, Economic Research Bureau, PaperNumber 821 (1982).

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A copy of the draft report was sent to the Borrower in October 1983for comments; however, none has been received.

The audit mission wishes to thank the Government officials, both inDar es Salaam and in Kigoma Region, and the staff of the Cotton Authority andthe Tanzania Rural Development Bank for the valuable assistance proziided dur-ing Its visit to Tanzania.

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PFtRWgCT PERFORNANCY AUDI? RtPORT

TANZANIA KICOHA 711gAL DEVELOPKElfT PRtOJCT(C_REntT 508-TA)

HASIC DATA sHEET

tLY FU0J UCT _DATA

Appraloal Act ucl or Actual as 2 ofItem Est!stte Stistted Actual Appraisal Ettitete

Total ProiJE Coste (US$ mtillion) 13.3 158 1S1Credit Amount (UDS m illoun) 10.0 1OO 100UNCIF Grant 1.5 1.5 I00Date Hoard Approval 08/06/74Date Vffectivonees 11/20/74Date Physical Components Completed 12t79 12/82/a 155/bProportion then completed (X) Apprximately 822 of re-ised targets

or 501 of appratosl taroete.Cloaing Date 12/80 12/83/c

tranoirc Rate tf Return (I) 22 negoativeInsf tat iconal Performadsca Poor, With some impraocvent laterAgrono-lc P-rfornance Very poorNumber of Diroct donefiliarica (1982) Approximately 250,000 Approximatcly 340,000 in 130

to 135 villages by vl.Isse by 1982./d1979.

CUMVIUATA VE DISBURSEMENTS

FY75 PY76 Yf77 F78 FY79 PY80 F101 FY82

Appralsal estia4te (US$ million) 0 3 2.6 4.6 6.6 9.0 16.0 10.0 10.0Actual (US1$ rllton) 0.6 1.5 3.1 3.9 5.6 9.0 10.0Actual as t of etitate - 23 32 47 43 56 90 100Date of final disburoeeent; September 1982

HISSIION DATA

Date lo. of Hfaod4ys Specializattons Pe rforgonce T

ype. ofmission (mo./Yr.) Persons tn Field gepresented RatinDIf Trrttd/s Problema/h

IdeotIficcaton/L 8-9/71 6 7 a,f - - -Preparatlonjl 5/72-6173 12 113 a,f.dAppraiml 10-1173

63/74 7 258 a.d,f,h,1 - - -Subtotal 378

Suryrvision I 10/74 3 30 f -Supervision 2 1/75 2 24 f 2 2Supervision 3 7-8/75 5 90 a,d,e.f 2 2 esupertleson i 12/75-1/76 4 56 a,f 2 2 NSupervision 5 5-6/76 3 42 d,f'j 2 I HSupervision 7 6/77 3 42 * f.d 2 2 H,TSupervision 8 11/77 3 30 s f 2 2 H1TSupervision 9 6/78 2 tO a,f 3 2 H,TSupervtsion I0 1O-/llt7 6 91 a,c .4,f 3 1 H,T

+ DUd-tera EvalesttonSupervision 11 3/"' 3 42 a,d.f.g 3 2 H,SSupervision 12 7-6/79 3 42 a,d,f 3 I K,TSupervision 13 3/80 2 36 s.d 3 1 H,TSupervision 14 11-12/80 1 18 d 2 1 H,TSupsriliaton 15 3-4/81 3 40 a,d,f 2 1 M,TSupervision 16 11/d1 2 24 d.e 2 I H,TSubtotal 659

Total 1,037/k

o8HER PROJECT DATA

Sorrover Government of Tanzaniatsxecuting AgSency Kigolon Regional Adsitdstrrti*n

Fiscal Year July I to June 30

sMee of Currency (abbreviation) Taeos-lan Shilling (Tah)Currency E=change Rates

Appraisal Year Average (1973) US$ 1.00 - 7.14tntexveaing Years Avera-e (1974-81) US$ 1.00 - 7.90Caspletfon Year AveroSe (1902) US$ 13.00 - 8.2

Follov-on Projects None

1a Slow ,implesentatien. late forailly extended to 12V82 Dose structures out completed when project fundseoxhausted.

/b Calculated frees Hard epproval date7Le Date extended to 12/83. the final disbuteseot wase nde in Septe8bet 1982./4 Population in project villagos based on 1978 censce figures. enetfits vary asose villages depeodtig on

servtces provided./ a -a3riclcorc b * 08t econoticl c - financial at0l070i1 d - engioeerfeo; e -o gciogy/anthropology;

a grconouica 8 * hesithl h0 - figheri@5a I - eduatioonl j * land use plannint h tourtag I housingend urhan develepnent.

/f I - probile free or minor .e al 2 - moderate problems; 3 - eajor problems.I - Ieprovmng; 2 - tatioenry; *nd 3 doterlorttng. a

tE - financittll N - masnagerial; T - technical; 7 - politi.all and 0 - other,7f Port of an ecsnosic nsisaioo.

P Sleues separate utesioaL during the period 5/72 to 6W73.6 About 152 to 202 spent on in-country travel.

BEST COPY AVAILABLE

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PROJECT PERFORMANCE AUDIT REPORT

TANZANIA KIGOMA RURAL DEVELOPMENT PROJECT(CREDIT 508-TA)

HIGHLIGlITS

This project was the first integrated rural development project tobe supported by IDA in Tanzania. It was also one of the first "new style"rural development projects to be supported anywhere by the Bank Group, fol-lowing the new lending guidelines announced at the 1973 annual meeting inNairobi. The project aimed to develop agriculture and village Infrastructurein 135 villages in Kigoma Region, one of the poorest regions in Tanzania.The project Included components for agricultural extension, training andresearch, farm credit and input supplies, rural access roads, hcalth and edu-cation. Cotton was to be grown as the principal cash crop, while maize,beans and groundnuts were to be the main food crops. It was expected thatthis project would be the first phase of a longer-term development programfor Kigoma region.

Actual achievements under the project fell far short of thoseexpected at appraisal. During the project period agricultural production hasincreased in Kigoma Region, but most of this increase was obtained throughfarmers increasing the area cultivated using traditional methods. The pro-ject aimed to help farmers to increase yields through using improved cultiva-tion techniques, fertilizers and better seeds. This approach has beenlargely unsuccessful, mainly because the technology being offered was unat-tractive to farmers, while implementation capacity was very weak. Develop-ment of village infrastructure was also poorly implemented. The project coi-cpleted about half of the school buildings which were planned, but less than10 of the project villages had a functioning water supply system as plannedat appraisal. The PCR estimates that the project shows a negative rate ofreturn and this project must be regarded as a failure.

Some other lessons learned and points of interest are as follows:

~ - at the beginning of the project period the countryside was in astate of upheaval because of the massive villagization programbeing implemented at the time. At appraisal it was expected thatvillagization would proceed much more slowly and the project wouldcontribute to successful village development through improving pro-cedures used for village site selection and planning. This provedimpossible, for the pace of viLlagization was increased substan-tially after appraisal and it had been essentially completed by thetime the project started.

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project implementation capacity was weak in Kigoma Region and thissituation was aggravated by the complicated project design withmany participacing agencies. When the project started, the decen-tralized system of Government administration was not well estab-lished, for it had been introduced only a short while. One keyagency, The Kigoma Co-operative Union (KCU), which was to haveplayed a key role in the project, was disbanded by Government rightat the start of the project. The functlons which KCUT should havefulfilled were assumed by the regional authorities and severalparastatal organizations, but these agencies were unable to performthese tasks effectively.

The Tanzanian Rural Development Bank, which was expected to play amajor role in supplying farm inputs on credit, ceased doing so partway through the project period.

from the outset it was accepted that this was a risky project, inpart because the agricultural technology to be used under the pro-ject had not been tested effectively in Kigoma Region. For thisreason, high priority was given in the project design to establish-ment of a crop trials program under the project. Unfortunately,during project implementation this was not given the priority itdeserved and by the end of the project period an effective trialsprogram had still not been established in Rigoma.

PROJECT PERFORMANCE AUDIT MEMORANDUM

TANZANIA KIGOMA RURAL DEVELOPMENT PROJECT(CREDIT 508-TA)

I. SUMMARY

1. This was the first rural development project in Tanzania .o be sup-ported by IDA. It was also one of the first "new style" rural developmentprojects to be supported anywhere by the Bank Group, following Mr. McNamara'sspeech at the 1973 Nairobi annual meeting. Detailed project proposals werecompleted by Government in 1973, with assistance from the Bank's ResidentMission in Eastern Africa. The project was appraised in October/November1973, and the Credit became effective in November 1974.

2. Within the context of Tanzania's policy of villagization, the pro-ject aimed to help develop Kigoma Region, one of the most remote and poorestregions in Tanzania, although it was a region with relatively highagricultural potential. The project was to contribute to regionaldevelopment through a broad range of measures with an annually increasingnumber of selected project villages. Principal project activities includedvillage site feasibility studies, for the proper location of new villages,and provision of vital village infrastructure, including drinking watersupplies, access roads, health, education and crop storage facilities. Farmincomes were to be increased through intensification of production. Theproject aimed at strengthening agricultural research, training and extension,farm credit, input supply and marketing services. The project was toencourage production of cotton as the main cash crop and maize, beans andgroundnuts, primarily as food crops. The project also involved strengtheningthe regional administration, while it included a component for preparingfurther rural development projects in other parts of the country.

3. The Kigoma project was expected to be the first of three successivephases of this project, for, from the outset, it was acknowledged that ruraldevelopment was a long-term process and not much could be achieved in onephase of five years. The project was also considered to be an experimentwhich would provide valuable lessons for the design of poverty-oriented ruraldevelopment projects in Tanzania and elsewhere. On this basis, the Bank waswilling to accept the higher than usual project risks posed by the project'sscanty data base and by untested new country policies.

4. Total project costs were estimated at appraisal to be T.Shs 94.6million (US$13.3 million). This was to be financed tiith an IDA Credit ofUS$10.0 million, and with a grant of US$1.5 million from the United NationsCapital Development Fund (UNCDF) for the drinking water and health com-ponents. the balance of project cost was to be financed by Government.Actual project costs amounted to T.Shs 125.0 million (US$15.8 million), equi-valent to an overrun of 19% when expressed in US dol.l.ars and 32% in TanzanianShillings. The cost overrun was funded by Government.

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5. Great difficulty has been experienced in implementing this project,and it took eight years to disburse the Credit compared with five yearsexpected at appraisal. The project had many different components with arelatively large number of agencies responsible for implementation. Thiswould have made project implementation more difficult even in "normal" cir-cumstances. In practice, conditions were far from normal. The decentralizedsystem of government administration had been introduced in 1972 and had notbeen firmly established when the project started. The countryside was in astate of upheaval during the early part of the project period as a result ofthe massive villagization campaign, which involved resettling most of theregion's farmers in new villages. Project implementation thus proceeded veryslowly during the first few years. Although the pace of development pickedup later on, project implementation became increasingly difficult during thelast few years of the project as a result of the deteriorating country-wideeconomic situation. This was characterized by increasing financial strin-gency and serious shortages of essential project inputs, such as buildingmaterials, fuel and spare parts for vehicles and equipment.

6. Project implementation was also influenced by two key events whichtook place soon after the project became effective. Firstly, the KigomaCooperative Union (KCU) was disbanded. The original plan for the projectexpected that KCU would play a central role in proJect implementation, pri-marily through supplying farm inputs on credit and marketing crops from vil-lage cooperatives. Although the functions which KCU should have fulfilledwere transferred to several parastatal organizations and to a new ProjectManagement Executive (PME), established in the office of the RegionalDevelopment Director (RDD), these tasks were never fulfilled adequately.Secondly, Government implemented the villagization program much faster thanexpected at appraisal. At the time of appraisal, about 25% of the ruralpopulation in Kigoma Region had been established in about 76 villages. Itwas expected that villagization would be completed by 1980 and that the pro-ject would play a major role in improving procedures used for selecting sitesfor and establishing new villages. This proved impossible in practice, forGovernment decided to accelerate the pace of villagization, and this had beenessentially completed throughout Kigoma Region by the time the projectstarted.

7. The procedures which had been designed under the project to assistwith improved site selection and better procedures for development of newvillages were thus never used for that purpose. Instead, they were used fordeciding whether villages which had been established should be provided withassistance under the project. The result of this was that ths project tendedto concentrate assistance on the best endowed villages, while neglecting thepoorer villages, at least until the later stages of the project period.

8. Primarily because of the problems encountered in implementation, amid-term evaluation of the project was undertaken in 1978 and many of theoriginal targets for the project were scaled down. The mid-term evaluationconcluded that "the estimates or targets set out at appraisal were beyond anyreasonable probability of realization within the time frames set. One con-sequence is that the real achievements of the project are overshadowed by its

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very evident shortfalls in relatiou to the appraisal targets.l/ Thisremains largely true today, especially in the areas of education, villagestorage and feeder roads. Ilowever, in the case of agriculture end drinkingwater, two of the principal project components, progress under the projecthas been clearly unsatisfactory.

9. The available statistics relating to agriculture are scanty and anaccurate assessment of the project's impact oii agriculture cannot be made.During the course of the project period it appears that there has been a sub-stantial increase in agricultural production in Kigoma Region, especially forfood crops. The audit believes that this increase has taken place for twomain reasons. Firstly, now that the initial upheaval of villagization haspassed, farmers liave been able to devote more effort to cultivation, ratherthan constructing new buildings or clearing land. Secondly, over the courseof the project period, prices, especially for foodcrops and coffee, haverisen significantly on unofficial markets, and this has provided a majorstimulus to production. However, it appears that most of the increase inproduction has been achieved through farmers ex-anding the area cultivated,using traditional cultivation techniques, and ;he project can claim littleresponsibility for this increase. The proJict aimed to increase yields ofcotton and foodcrops through promoting the use of fertilizers, improved seedsand pesticides. This has been largely unsuccessful. Production of cotton,which was to have been the principal cash crop under the project, hasincreased very little. The total quantities of fertilizer used have been farbelow the appraisal projections and increased foodcrop production cannot beattributed to much higher input useage, as expected at appraisal.

10. At the time of appraisal, there was considerable uncertainty aboutthe suitability of the technical packages being offered to farmers. For thisreason, the appraisal report proposed that a crop trials program, designed totest alternative crop development strategies, should be started early in theproject period. The need for this crop trials program was again emphasizedduring the mid-terni evaluation. Unfortunately, a trials program of this typehas not been successfully implemented in the region, and at the time of theaudit mission's visit no trials were being conducted.2/ Even in instanceswhere appropriate improved technology was available, it was felt that theextension staff did not make sufficient effort to promote this during thecourse of the project.

11. The appraisal report expected that 110 villages would be providedwith drinking water supplies under the project, including 55 villages withpiped water systems and 55 villages with water supplied from shallow wells.As progress with development of water supplies was very slow during the firstfew years of the project, the targets were reduced during the mid-term evalu-ation mission to 24 piped water systems and only two based on shallow

L/ Mid-term evaluation mission Back to Office Report of December 7, 1978.

2/ Even if the trials program had been implemented as planned at appraisalit would have been difficult to have obtained significant trial resultsand have used them througni the extensiorn service within the originaltime frame of the project.

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wells, for the latter proved to be less suitable than expected. By t:hc endof the project, nineteen piped systeims and two shallow well systems had beencompleted find this was very close to the revised project targets. Howe,er,only about onci-third of these water systeins were funct~.oning properly. Rostof the piped systems were operated by ptimps, and operation of these proved tobe a major problem. Spare parts and fuel were frequently not available,while some engines were stoLen. Construction costs for piped systems alsoproved to be very high. Some of the water schemes also failed to functionproperly -due to poor design. Overall, performance of the water supply corn-ponent of the project was unsatisfactory.

12. Progress under the project with improvement of educaticnal facili-ties has been relatively good. Two hundred and twenty one classrooms wereconstructed and this was equivalent to 96% of the revised project targets, or58% of the appraisal targets. Roughly comparable p.rgress was made with con-struction of teachers' houses, offices and scAiool workshops. However, theproject did not succeed in supplying all of the furniture and equipment whichwas needed for use in these buildings.

13. For the health component, five new dispensaries were constructed,and this was 50% of the target set at appraiqal (and retained following themid-term evaluation). Three rural health centers were upgraded under theproject, as planned at appraisal. Seventeen dispensaries were improved,although those were not included in the original project proposals. Whileprogress with physical construction of health facilities was relatively suc-cessful under the project, most of these do not have adequate equipment, andthere has been a serious shortage of drugs. This, combined with theinadequate water supplies in most villages, means that the health servicesavailable to people are still generally very poor.

14. For feeder roads, the project was able to exceed the appraisaltargets; 619 km were upgraded compared with the appraisal estimates cf 380ku. However, for some of these roads only very minor improvements werecarried out. These roads were simple tracks which fulfilled the importantfunction of linking project villages with the main roads in the area. Theproject also completed construction of 22 village stores. Although this wassubstantially less than the appraisal target of 95 stores, this was the sameas the revised target established following the mid-term evaluation. Theproject was also able to train 180 village bookkeepers compared with theappraisal tavget of 100.

15. In addition to the project comuonents which were specifically aimedat development of Kigoma Region, the project included support for a team ofpeople who were responsible for preparing proposals for rural developmentprojects in other regions. Three regional projects were prepared by thisteam, for Mwanza/Shinyanga, Mara and Kagera ]Regions. The project inMwanza/Shinyanga was appraised by the Bank and became effective in March1979. This project is itself now experiencing many problems similar to thoseencountered in Kigoma, although these are to a considerable extent due tocountry-wide economic problems. The project in Mara Region was appraised bythe Bank but it was decided not to process this any further. The project forXagera Region has not been appraised.

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16. During the course of Kigoma Rural Development Project, more than50% of all development expenditures in the region were derived from theproject. Now that the project has been completed, a very difficult situationhas been created. The major source of financial support for new developmentin the region has been terminatea and the regional authorities have had greatdifficulty maintai.aing activities which were started under the project, orcompleting certain work which was incomplete at the end of the project. Thislack of continuity in support for the project, combined with the manyproblems experienced during implementation, particularly the failure toachieve the expected economic benefits from agriculture, means that theproject must, in general, be regarded as having been unsuccessful. Although,it has not been possible to re-estimate a precise economic rate of return,the PCR suggests that this would be negative (PCR, para. 5.05).

II. MAIN ISSUES

A. Project Organization

17. The project involved a range of different components, all of whichwere to be implemented through the existing administration in Kigoma Region.The regional administration, under the Regional Development Director (RDD),was responsible for overall project coordination and implementation ofcomponents such as health, education, water, agriculture and construction offeeder roads. At the village level, each village formed a cooperativesociety responsible for marketing farm produce and providing farm inputs,while the Kigoma Cooperative Union (KCU) was to have been responsible forthese functions at the regional level. The Tanzania Rural Development Bank(TRDB) administered credit through cooperatives, while the Tanzania CottonAuthority (TCA) promoted production of cotton. The National MillingCorporation (NMC) was responsible for purchasing foodcrops produced in theregion.

18. The project required a substantial increase in the volume of workto be performed by all of these agencies and all of the components were to beimplemented simultaneously. Yet, most of these agencies had been establishedin Kigoma for only a short while and/or were not firmly established3/. Thedecentralized system of Government administration was set up in July 1972 andhad not had a chance to become well established when the project started,especially in view of the scarc'oty of experienced staff to fill the increasednumber of positions created for the new decentralized system. The regionaladministration also faced an unprecedented workload during tl.e early part ofthe project period because of the very rapid pace of villagization beingimplemented under "Operation Kigoma". This was carried out far faster thanexpected at appraisal. TRDB had established an office in Kigoma Region in

3/ At the outset of the project there was very little activity by TRDB, TCAor NMC in Kigoma Region.

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1972 and had only a handful of staff when the project started, while KCU wasfinancially weak and poorly managed.

19. The risks created by the weak administration in Kigoma Region wereclearly recognized at appraisal, as the following extract from the IssuesPaper indicates - "the project has a greater than normal degree of risk dueto the unproven and revolutionary nature of ujamaa settlements and itsorganization of agricultural production, the scarcity of administrative andtechnical skills in the region, the extreme weakness of regional agriculturalinput and credit delivery systems and marketing, and the logistics needscreated by the region's moving from a subsistence to a cash economy".4/ Inorder to try to compensate for some of these risks, the appraisal reportproposed that project implementation capacity should be strengthened in theregion, primarily through providing key additional staff and other supportfor KCU. In retrospect, these measures seem to have been very modest inrelation to the need for a substancial strengthening of regionaladministration. But during the period when the project was appraised, theBank adopted an optimistic stance towards Tanzania's untried andrevolutionary policies.

20. The measures designed to strengthen KCU never became effective, forGovernment decided to disband KCU at the beginning of the project. Thefunctions which KCU should have performed were transferred to a speciallyestablished Project Management Executive (PME) in the RDD's office and toTRDB, TCA and NMC. The Project Management Executive was a small unit headedby a project coordinator and included an expatriate financial controller.Although this unit performed useful planning and coordinating furctions, itwas not sufficiently well integrated into the regional administration, and itwas not in a position to strengthen the implementation capac'ty of theagencies which had direct responsibility for project implementation. Theparastatal organizations, TRDB, TCA and NMC, which had assumed responsibilityfor some functions given up by the defunct KCU, were weak or were subjectedto substantial political interference. The "extreme weakness of regionalagricultural input and credit delivery systems" referred to in the IssuesPaper was something which was to plague the project throughout its life.TRDB was not able to implement an effective credit program for farm inputsand, at times, there was confusion about the respective roles of TRDB andTCA. During the initial stages of the project, TRDB and TCA both distributedsignificant quantities of fertilizer and other farm inputs to villages, aspart of the Government's program for supporting newly established villages.However, these inputs were distributed in a haphazard manner, the quantitiesprovided were not based on a realistic assessment of the amounts whichfarmers could use effectively, and, in many cases they were "dumped" on thevillagers. Farmers did not understand from the start that these iTLputs werebeing distributed under a credit scheme, and there had been a previoushistory of free distribution of farm inputs in Tanzania. TRDB also had veryfew staff available to administer credit for villagers. As a result,recovery of credit proved very unsatisfactory, and TRDB stopped providingcredit for farm inputs in 1979. This was a vital weakness in the project,

4/ Para. 1.06 of the Issues Paper of December 11, 1973.

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for one of the principal aims of the project was to increase crop yieldsthrough the use of fertilizers and other inputs. TCA continued to supplysome farm inputs in Kigoma, for it was able to withstand the poor repaymentposition better than TRDB because of its income from cotton marketing.

21. The complicated project design and the problems experienced withimplementation also made it more difficult for the Bank to supervis-4 thisproject. For Kigoma Rural Development Project the Bank has used an averageof 59 weeks of staff time per year for supervision. This is almost 5 timesthe average for Tanzania as a whole (12 weeks) over the same period and is inmarked contrast with the requirements of a simple single product/singleagency project, such as Sao Hill Forestry Project, which required only anannual average of 8 weeks oL supervision time. Even with this substantialsupervision input, it has not neen possible to supervise each individualcomponent adequately. For example, a specialist in health has vSsited theproject only once, while no education specialist has ever visited Kigoma on asupervision mission. An engineer with experience in water visited Kigoma ononly one or two occasions, and a financial analyst has visited only once,despite the fact that there have been continual problems with the projectaccounts. Thus, members of supervision missions have been expected to dealwith specialized fields in which they have little expertise. This seemsinevitable where the Bank supports projects like Kligoma with so manydifferent components. The audit feels that supervision would be both easierand more effective if project desigr. were simplified.5/

22. In concluding this section, the audit would like to emphasize whatit feels is the most important lesson to be drawn from the experience withthe Kigoma Project. This is that complicated project designs should beavoided and the scale of development proposed must be consistent with thecapacity to implement. Where these conditions dn not hold, as was the casein Kigoma, less ambitious development plans s ould be proposed, and theproject should concentrate attention on developing the implementationcapacity of local institutions. This conclusion is supported by experiencewith many other projects apart from Kigoma Project. For example, the PPAR(OED Report Number 4617) for the Integrated Rural Development Project inMexico (PIDER I) mentions that this project experienced serious problemsbecause "large scale diffusion was initiated before either the technologicalpackages or the institutional mechanism to implement them were perfected."6/This is precisely the same experience as in Tanzania.

B. Agricultural Impact

23. Statistics on agricultural production for Kigouia Region are scantyand some are difficult to interpret, unreliable or even misleading. One ofthe reasons for this is that a large proportion of trade, especially in

5/ Problems with supervision of Kigoma Rural Development Project arediscussed more thoroughly in OED Report No. 2858, Operational PolicyReview, The Supervision of Bank Projects.

6/ PPAR, para. 114.

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foodcrops, takes place through unofficial channels. For this reason, ananalysis of changes in agricultural production which have taken place inKigoma Region over the past few years must be to some extentimpressionistic. The audit believes that over the last few years there hasbeen a significant increase in agricultural production in Kigoma Region,especially for foodcropcs The official statistics for crop marketing showthat the volume of crops marketed through official channels increasedsubstantially from the beginning of the project period in 1974(75 to 1980/81(see Table 2.b in the PCR). Dtiring this same period, crop marketing throughunofficial channels has probably increased even more, as prices in unofficialmarkets have recently been as much as three or four times the level ofofficial prices.7/ The audit supports the view expressed in the PCR thatthis increase in production has occurred primarily through farmers expandingthe area cultivated using traditional methods of husbandry, not through usingmodern farm inputs to increase yields in the way intended under the project.This increase in production has occurred for two main reasons. Firstly, theprocess of villagization seriously disrupted agricultural production duringthe early part of the project period when farmers were moved to new villagesand had to concentrate on construction of houses and buildings and clearingland. Although farmers have since been able to concentrate more on farmingand increasing production, this is not to suggest that all is now well inthese villages. There is considerable evidence suggesting that this is notthe case. Many villages were poorly sited and it was unfortunate that theproject was not abla to help prevent this in the way expected, asvillagization was completed so rapidly in the period between appraisal andthe time the project started. Villages are now experiencinig increasingproblems due to the inadequacy of the available land within their immediateneighborhood. Some land near to the villages is also now getting exhausted,and it is becoming increasingly necessary to apply more fertilizer toexisting land or to cultivate new land a long way from the village.8 /

24. The second factor which has encouraged production has been theexistence of a thriving unofficial market for many crops, especiallyfoodcrops. Although this type of market is probably significant all overTanzania, it is particularly important in Kigoma, which is on Tanzania'sinternational border with Zaire and Burundi. In some cases crops can be soldat relatively high prices in international markets or they can be barteredfor other comodities which are not available in Tanzania. These same factorshave probably been very important in discouraging production of cotton inKigoma Region. Unlike foodcrops, cotton can be sold only to TCA at theofficial price, and this makes cotton production unattractive. This has beena major problem for the project, for cotton was expected to be the principalcash crop under the project.

7/ See chapter II, Section F of the Tanzanian Agricultural Sector Report,August 1983, for a discussion of this subject.

8/ See the Tanzania Agricultural Sector Report, pp. 144-149, for adiscussion of this.

25. The project was intended to increase crop yields through the use ofbetter methods of husbandry and purchased inputs. Large increases in yieldswere expected, as the following data indicate:9 /

Traditional AdvancedHusbandry Husbandry Increase(kg/ha) (kg/ha) (%)

Maize 600 1900 217Beans 280 670 139Cotton 390 1120 187Groundnuts 390 790 103

In the case of maize and beans, intermediate stages of development weresuggested between the traditional and advanced levels.

26. The evidence available from Kigoma indicates fairly conclusivelythat the project has not been able to achieve these targets. In the case ofcotton, total production statistics are available and, as there is no othermarket for cotton apart from purchase by TCA, the statistics can beconsidered reliable. These indicate that, while there has been some increasein cotton production in Kigoma over the last few years, the total quantity ofproduction is way below the amount expected in the appraisal report. Totalseed cotton production in 1980/81 was only 2,365 tons compared with theappraisal targets of 10,700 tons in 'Year 5 and 13,900 tons in Year 8 (PCR,Table 4.b). Even this level of production couLd be maintained only through aconsiderable amount of official encouragement or coercion, for all farmers incotton growing areas were expected to grow a minimum acreage of cotton. Asmentioned above, the principal reason why farmers were unwilling to increasecotton production was that production was unattractive compared with othercrops which could be sold for high prices on unofficial markets. Cotton isalso a labor demanding crop and was unattractive for this reason also.However, even if cotton prices had been higher, it is unlikely that farmerswould have been able to achieve the high cotton yields forecast atappraisal.

27. For maize and other foodcrops, the audit feels that none of theavailable statistics is reliable, and it is therefore difficult to beconfident about how production has changed in recent years. However, thequantities of fertilizer and other inputs being used in Kigoma Region arewell below the amounts expected at appraisal, and this confirms that yieldscannot have increased in the way expected at appraisal. In 1982, forexample, the total quantity of fertiLizer supplied to the region was of theorder of 400 tons, whereas the appraisal report fore.-ast that incrementalfertilizer use would be more than 4,000 tons by Year 8. TRDB, which wasexpected to be the principal supplier of fertilizer under the project, hassuspended credit sales of fertilizer since 1979, due to its very poorrepayment experience. and only minimal quantities of fertilizers have beensold on a cash basis by the regional agricultural staff since then. This isparticularly unfortunate because the need for fertilizer is increasing In the

9/ Data from the appraisal report, Annex 3, pp. 13-16.

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area, now that cropland near to villages has been under cultivation forseveral years.

28. It was clearly recognized at appraisal that crop improvementpackages being offered to farmers were based primarily on expjrience outsideKigoma Region, and there was considerable uncertainty about how appropriatethese packages would prove to be in Kigoma. For this reason, the DevelopmentCredit Agreement (DCA) required that the Borrower should completeconstruction of an agricultural trials and training center (ATTC) within 18months of project effe(tiveness (DCA, Section 3.05). In practice, this ATTCwas not constructed wi. hin the time expected, and the buildings at the siteselected in Kasulu had not been 100% completed at the end of the projectperiod. More important than progress with physical construction is thestatus of the agricultural trials program for Kigoma Region. This has beenvery disappointing. Although a few trials have been conducted at severallocations during the project period, the results of these seem to have beeninconclusive. During the audit mission, none of the agricultural staff ateither the ATTC (now renamed a Ministry of Agriculture Training Institute, orMATI) or from the Kigoma Regional Office were able to indicate the nature ofthe results obtained from these trials. During the current crop season, noprogram of crop trials is being carried out. It seems clear that theoriginal aim of developing a crop trials program in Kigoma, so that the mostappropriate advice based on a local experience could be offered to farmers,has not succeeded.

29. The failure of the project to achieve its agricultural developmentgoals is a major shortcoming of the project, for agriculture was expected tobe the source of economic benefits from the project. The PCR has notattempted to recalculate a precise economic rate of return from the project,due to lack of adequate data. However, the PCR suggests, and the auditagrees, that this would probably be negative.

C. Long-Term Support for Rural Development

30. Kigoma Rural Development Project was originally expected to be thefirst phase of a long-term project, probably involving three phases totalling15 years. Experience from this and other projects supports the idea thatassistance is needed over a relatively long period of time if worthwhileachievements are to be made. Typically, during one phase of about 5 years,most of the project infrastructure can be completed, but developmentactivities become fully operational either towards the end of the first phaseor during later stages of the project. It is not generally realistic toexpect that a process of self-sustaining rural development can be initiatedwithout support stretching over a period of at least a decade or more.

31. Unfortunately, the experience with Kigoma Project has been thereverse of what was needed for sustained rural development over thelong-term. Too much was attempted during the initial stages, and this couldnot be implemented properly. The technical basis for the recommendedagricultural packages was weak, and an agricultural trials program to correctthis deficiency was not carried out. Now that IDA support for the projecthas terminated, Government is having difficulty completing some of the work

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which was unfinished at the end of the project and provlding adequaterecurrent financing to maintain activities started under the project in anoperational status. The audit feels that it would have been better if theoriginal project design had been simpler, iv high priority had been given toagricultural trials, and if uajor emphasis had been given to strengtheningthe implementation capacity of the region through development of staff andinstitutions. The audit acknowledges that, even if project design andimplementation had been improved in this way, and donor support had beenavailable to continue the project beyond the end of the first phase, theincreasingly unfavorable country economic situation would have made projectimplementation very difficult.

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TANZANIA

KIGOKA RURAL DEVELOPMENT PROJECT

PROJECT COMPLETION REPORT

August 16, 1983

Eastern Africa Projects DepartmentSouthern Agriculture Division

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TANZANIA

KIGOMA RURAL DEVELOPMENT PROJECT, CR. 508-TA

PROJECT COMPLETION REPORT

I. BACKGROUND

A. The National Economic and Policy Context

1.01 Tanzania had roughly 90% of its 16 million inhabitants living inthe rural areas at project identification in 1971, and derived 40% of itsGDP and 80-85% of its export earnings from agriculture. In 1967 theTanzanian Government and the sole political party (TANU, later CCI)embarked on a policy known as Ujamaa (broadly tran:latable as AfricanSocialis-), which was to transform the economy and society according to theprinciples of equity and self-reliance.

1.02 At the time of project formulation in the early 1970s, Tanzaniawas in the midst of some major institutional reorganizations with respectto its rural policy. First, since the Arusha Declaration the leadershiphad been encouraging the resettlement of the scattered agriculturalpopulation into villages, where it would provide basic socialinfrastructure and encourage them to practice communal farming. Beginningin 1971, the Party and Government began to take a more active role inpushing what had been a lukewarm initial response to this policy amongrural dwellers, by undertaking area-specific resettlement operations, withthe effect that over 2 million people were living in villages by the end of1973. Second, with the aim to facilitate local planning and implementationof rural development programs, the Government decentralized admdnistrationin mid 1972, placing all functional ministry officials (agriculture, works,health, education, water, cooperatives, etc.) under the responsibility oftop administrators in each of the 17 regions, with a similar structure inthe smaller district units the regions were composed of.

B. The Project Area

1.03 Kigoma, one of Tanv!ania's poorest and most undeveloped regions,did not have a viable cash economy in agriculture because of its remotenessfrom national marketing links, and had traditionally been one of thecountry's major labor exporters, both to the East Coast sisal estates andmore recently to individual tobacco farming in neighboring Tabora region.Estimated per capita income was U'$20 per year, compared to a nationalrural average of US$85. Educatioral facilities were also sub-standard,leaving over 80% of the adult poptlation illiterate and only 32% of theschool age population in primary school in 1972. Health status, thought torepresent national standards, was a debilitating force for the ruralpopulation, many of whom were chronically affected by malaria,tuberculosis, and other parasitic and infectious diseases. Beginning inmid-1972, the leadership chose Kigona as one of the areas for acceleratedvillagization under "Operation Kigoma" and began moving people from theovercrowded highlands to the intermediate and lowland miombo zones,previously unsettled because of dense tsetse infestation.

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C. The Project

Rationale

1.04 The Kigoma Rural Development Project (KRDP) estimated to costUS$13.3 million, was approved in August 1974, and became effective onNovember 20, 1974. It consisted of an IDA Credit of US$10.0 million and aparalLel UNCDF grant of US$1.5 million for water and health facilities,with the remainder to be met by the Government. Though it followed anestablished Bank Group involvement in Tanzania's agricultural sector,'/ itrepresented a significant break from past lending strategies, in that itwas one of the Bank's early experiments in implementing a multi-sectoral,"integrated" approach to rural development, itself an outgrowth ofdiscouraging experience with the earlier more narrowly defined ruralprojects which failed to lift the multiple production constraints faced bythe rural poor.

1.05 The choice of Kigomna for the experiment was based on severalfavorable conjunctions. First, the Government's stated objectives offocusing of the rural poor in development efforts coincided completely withthe Bank's new directions in lending, as expressed in Mr. McNamara's speechof 1973. Second, the Bank considered the recent decentralization of theTanzanian administration as conducive to an integrated project. It wouldallow area-specific integration of the various administrative sectors, andfunds could be channeled directly to the region rather than through eachindividual central ministry. Finally, the choice of Tanzania, as one ofthe world's poorest, primarily agricultural countries, and Kigoma, as oneof the most remote and deprived regions within Tanzania, was well in linewith the Bank's intentions to focus its lending on the "lowest 40% of thepopulation in developing countries."2/

1.06 The project's main objective was to double rural incomes througha range of economic and social infrastructural support to newly establishedvillages in Kigoma Region in conjunction with Operation Kigoma. Theimplementation experience suggests that the project's risks, consideredhigher-than-normal at appraisal, were inordinate, and that the project hassignificantly overspent and underachieved in relation to its originalobjectives. It failed to generate most of its intended impacts, itsstrongest legacy being unintended impacts, both positive and negative innature.

I/ Six IDA credits, totalling US$62.1 mill.on (one each in agriculturalcredit, tea, tobacco, cotton and two in livestock), a loan of US$21million for a cashewnut project, and US$3.3 million earmarked foragricultural training in a larger educational credit had also beenappraised for Tanzania. The performance record in these projects hadbeen mixed (Appraisal Report, p. iii). An Agricultural and RuralDevelopment Sector Report was being prepared at the same time as thepreparation of the Kigoma Project.

2/ As expressed in IDA press release No. 74154, August 8, 1974.

BEST COPY AVAILABLE

Follow-up and Completion

1.07 In November 1980, a Bank team in the region requested regionalofficials to prepare components for a possible Phase II funding. Over thecourse of 1981, the Bank's views changed because it was felt that nationaleconomic priorities were no longer consistent with a second IDA-financedphase of the Kigoma Project. Regional officials understandably lost theirenthusiasm with the Bank over this experience. No completion mission tookplace.

1.07 In the absence of a completion mission, this completion report isbased on:

a. a working draft prepared by the Agriculture and RuralDevelopment Department which had supervision responsibilityfor the project;

b. an independent evaluation conducted in the last year of theproject by Michael Loft, Ellen Hianak and Ahmed Ndyeshobola,Economic Research Bureau, University of Dar-es-Salaam, AnEvaluation of the Kigoma Rural Development Project (IDA-508),E.R.B. Restricted paper No. 821, March 1982 (herein referredto as Project Evaluation Report);

c. the report of the project's farm management survey Sy MichaelLoft and Joris Oldevelt, Economic Research Bureau, Universityof Dar-es-Salaam, Developments in Peasant Agriculture inKigoma Region during the Post-Villagization Years, 1981;

d. Supervision reports and other documents in the project files,including Report No. 453a-TA, Appraisal of Kigoma RuralDevelopment Project, Agriculture and Rural DevelopmentDepartment, July 15, 1974; and "Agriculture and RuralDevelopment Department, Rural Development Division, Tanzania:Rural Development Project - Kigoma, Mid-Term EvaluatioiaReport", July 1979.

II. FORMULATION AND DESIGN

A. Introduction

2.01 Many of the problems experienced under the KRDP were indeliblystamped on the project during the formulation and design phase. While theBank and the Government agreed in principle on the advantages of theGovernment's rural policy, discrepancies in intent emerged on a number ofpractical points of implementation, and the compromises which ensuedundermined the possibilities of effective implementation of a number ofcomponents.

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B. Preparation and Appraisal Process

1. Identification

2.02 Following a short visit to Kigoma, a Bank Economic Mission toTanzania in August/September 1971 identified the region as an area withconsiderable untapped agricultural potential, suitable for a low-cost,integrated regional rural development scheme in line with the Governmentpriority of assisting the more backward areas of the country. It isreportedly on the basis of a draft version of the mission's report 3/ thatPresident Nyerere decided to request Bank assistance for such a program.

2.03 Meetings between the Government and RMEA began in late May 1972,and included discussions with the President himself quite early in theprocess. The President and and his aides articulated the leadership's viewof the rural development policy: the first objective was to bring peopletogether into villages, whereupon basic social services -- health, waterand primary education -- could be provided economically and whereby acommon sense of purpose and motivation could be generated among them.Productive investments would then follow in a subsequent stage. Villageswould be carefully planned so that they could evolve into viableself-reliant units. Bank and Government officials therefore agreed thatthe proposed Bank-assisted project should be related to the regionalauthorities' (KRA) village development program, as this was to form thecore of Government activity in the region for some time to come.

2. Preparation

2.04 After these preliminary agreements, another eight RMEA missionsvisited Tanzania between July 1972 and June 1973 to assist in preparing theGovernment's project proposal to the Bank. The Government proved less ableto assist in the technical aspects of this process than the Bank hadinitially envisaged.

2.05 RMEA prepared a draft Regional Development Program outlinelargely reflecting its own concerns of establishing villages and promotingagricultural production at minimum costs. As this was the first proposalfrom the Bank's side with some degree of elaboration, its character isworth noting in relation to subsequent changes made in project design.

2.06 The program provided for essential village social and economicinfrastructure, crop and livestock production, improvements in the region'smarketing network, a credit unit to handle short and medium-term loans tofarmers, and a programming and evaluation unit which would assist in thepreparation of village land use plans, give advice on procurements andforward planning and evaluate implementation progress. In order to providevillage services economically, a satellite village structure was proposed,within which large scale services would be shared. The proposed approachwas cautious and modest, spanning a development period of 12 years,financed over three 4-year phases.

3/ "The Economic Development and Prospects of Tanzania", Volume II,June 22, 1972.

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2.07 The regional authorities' reactions indicate that they feltconsiderable pressure to move faster than this. They wanted a much largerproject, providing full services to all of the region's villages withinfive years, thereby rejecting the concept of shared services amongsatellite villages. In retrospect, it seems that if there was a turningpoint anywhere this was where the project got onto che wrong track. Anactive debate ensued between the Government and the Bank teamA. Thecompromise reached was, in effect, that both sides would do what theywanted -- the KRA would proceed with villagization at its own pace, and theproject would come in its wake, providing essentially the above-mentionedprogram, but only to selected villages considered to have a soundagricultural potential. The Bank fully supported the idea of moving peopleinto villAges, which it considered a prerequisite to rapid increases Inagricultural productivity (through technological improvements).4 / TheVillage Site Feasibility Studies which were to have helped locate goodsites for villages thus became simply criteria for selecting already sitedvillages for the project because villagisation had gone too fast.

2.08 RN$A drafted a working paper containing this compromise. Itdiffered substantively from the initial RMEA proposal; the first phase (now5 years) would cost twice as much (US$9.8 million) and would cover morethan twice as many farming villages (150), in addition to 14 fishingvillages on the lakeshore.

2.09 A number of 'substantive disagreements remained between theGovernment and the Bank, and to a lesser extent within the Government. Themost important of these were:

a. the KRA had only conceded to the inclusion of the satellitevillage concept (paras 3.83-3.84 of proposal) under pressurefrom the central Government;

b. regional authorities did not agrez to the 300-350 familyvillage size which the RMEA team had considered a maximum;

c. the ntmber of project villages was a compromise between amuch larger number that the KRA had wanted (216), and asmaller amount that RMEA felt was feasible; and

d. agreed criteria had not been established for the selection ofproject villages.

2.10 These points of difference gave indications of friction in thefuture.

J Appraisal

2.11 A seven person appraisal team visited the region inOctober/November 1973 with a smallur follow-up visit in March 1974.Following the creation of a Rural Development Division in the

4/ Letter from RMEA to HQ of June 18 and memorandum from Preparation Teamto RMEA Div. Chief of Jtne 19, 1973.

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CPS/Agriculture Department in 1973, responsibility for the Kigoma projectchanged from RMEA to AGR/RD. Kigoma was to become the first and for awhile the only agriculture project in Tanzania to be supervised directlyout of Washington* The project was approved by the Board on August 6,1974.

C. Project Design

2.12 In its final post-appraisal version, the project's scale wasagain altered, the level of costs increased to over $13 million, and thenumber of project villages sliglhtly reduced to 135. The Bank hadacquiesced to the Region by dropping the satellite village concept and the350 family limit to village size, meanwhile introducing criteria (includedin the credit agreement) to screen village eligibility in projectparticipation.

2.13 The project would consist of:

a. investments in eligible villages for public water supplies,education and health facilities, tsetse clearing and feederroads;

b. loans to eligible and creditworthy villages for: (i)production - infrastructure including godowns, maize mills,fish catching and processing equipment, and (ii) seasonalproduction inputs;

c. loans to the regional cooperative union for facilities suchas godowns, offices, and transport equipment;

d. investments in regional supporting services, including: (i)construction and rehabilitation of rural training centers;(ii) a small regional radio-telephone system; (iii) alivestock pilot project; (iv) aerial photography of areas tobe developed; and (v) a regional agricultural trials andtraining center.

e. technical assistance to include: (i) a financial controller,an operations manager and a training supervisor for theregional cooperative union, a land-use planner and trials andtraining officers for the agricultural trials and trainingcenter together with training; (ii) back-up support such ashousing and transport; and (iii) a project special fund foruse by project management for specific problem-solving;

f. monitoring and evaluation; and

g. project preparation for rural development projects in otherregions.

2.14 The principal objective was to double annual per capita income(from US$20 to USS40) for the roughly one half (250,000) of the region'srural population resident in the project villages. Income increases,mostly in cash fort, were expected to arise from greatly increasedagricultural productivity, most directly from the widespread adoption of

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technical packages for cotton, maize, beans and gioundnuts extended tovillagers on seasonal credit. These loans were only to account for 11% ofbase costs, however (Table la). Far more significant were village levelsupport components at 55%, and regional support for both the administrationand the cooperative union at 25% of base costs. The "piggyback" projectpreparation component, introduced during appraisal, was allocated theremaining 9% of base costs. This change also meant the abandonment of theinitial RMEA proposal to have a project evaluation team (lead by aninternationally recruited staff member) resident in the project area. Thesupervision, technical assistance, and design of monitoring and evaluationwas now loosely delegated among the responsibilities of a "ProjectPreparation Team" (PPT) which would be situated somewhere else in thecountry.

2.15 As anticipated from identification, the project would be carriedout under the existing organizational structures of the decentralizedregional administration. The Kigoma Cooperative Union's (KCU) role wascentral to the project's economic viability as it would be responsible forthe entire range of crop production and marketing activities.

2.16 Implementation was to extend over five years, with full benefitsaccruing by the 12th year after project inception, as exemplified by theattainment of the principal objective of doubling total incomes. Incomefrom agriculture alone, principally through cotton sales, was projected todouble after eight years. The role of cotton in the marketed output mixhad been doubled during appraisal, despite its consistently decliningregional production trend since 1967 (from a low 1,000 tons to a meager 390tons). Though this was never made explicit, the change was probably inacquiesence to growing Government pressure to increase foreign exchangeearnings.5 / On the basis or this projected agricaltural growth, theproject's economic rate of return was set at 22%, exclusive of the costs ofsocial infrastructure, or between 12 and 18% including varying degrees ofthese costs.

2.17 A master plan or schema of the inter-relationships of theprojects many components was not explicitly provided. But an understandingof the logic of this schema is essential, both to evaluate the project'sdesign, and to assess project impact. An outline of a schema deduced fromthe appraisal report is found in Chart 1. The numbers in circles indicatethe offices responsible for implementation.

2.18 Schematically, the project's support package was to streamlinethe adv.ancement of villages through three distinct stages:

a. identification of suitable village sites;

b. provision of social and economic infrastructure; and

c. provision of technological packages.

5/ This would explain the way the regional authorities pushed cottonproduction on the villagers so vigorously in the first year of theproject (see Ch. I1I, Sec. C.1).

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2.19 The project was considered to have greater than usual risks,stemming from "the unproven nature of ujamaa villages and the need tocreate a completely new marketing and distribution network". These riskswere not considered prohibitive, however, both because of the project'sprovision for te::hnical assistance, but more importantly because of its"potential for improving markedly the incomes of large numbers of ruralpoor in a disadvantaged region at a relatively low cost". In retrospect,the appraisal seems to have underestimated the risks and not taken adequateaccount of the following flaws in the logic of the design:

a. Villagization. After all the indications the Government hadgiven that it intended to push on with and even acceleratethe resettlement program, the final design was still gearedto influence Operation Kigoma by inserting technically moresound methods of site selection. The quantity and level oflocal skilled manpower to do this were simply not availableeven if the timing had been appropriate.

b. Inputs. The widespread adoption of input packages was acornerstone of the project (from the Bank's point of view).Yet the technical recommendaf:' 7IiS were based on little hardevidence, as there were no reliable data on agronomicresponse for the crops in question. Cotton productionincrements were based on recommendations for the WesternCotton Growing Area, about 150 miles away. However, even inthat area the recommendations were starting to be questionedat the time of appraisal. In the 1973/74 Ukiriguru ResearchStation report the soil scientist noted that "at all sitescotton yields were depressed by nitrogen", and in 1975 henoted that "failure of ammonium sulphate in the recent pasthas been one of the most marked features ... yielddepressions have been more common than increases". Also, therelationship between the provision of input credit and theproject's research, trials, and extension training componentswas not executed in a logical sequence. With such levels ofuncertainty in the technical packages a pilot program withcrop trials, followed by credit for inputs would have beenbetter.

c. Overall timing of impact. Most components directed at thevillage level were sequenced in the correct chronologicalorder. However, the plan assumptions to have the Stage 2elements (extension officer, trained bookkeeper, godown andaccess road) in place and working smoothly within 2 seasonswere unrealistic, as was the intention to fine tune theinput recommendations early in the project when the IAgricultural Trials and Training Center could not possiblyhave been operative in less than 2 - 3 years.

d. The Project Area's Overall Implementation Capacity. Ingeneral the assumptions the appraisal made about theimplementing capacity in Kigoma were optimistic in relation

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to what Bank teams had experienced during preparation. Forexample, without any technical assistance, the regional wateroffice was expected to double its annual implementingcapacity, and introduce methods to ensure the installation ofleast cost systems. This was a general weakness of theproject. Relatively insignificant strengthening of staffing,either local or expatriate, took place alongside verysubstantial transfer of funds.

e. Monitoring and Evaluation. A major design inconsistency wasthe loose treatment given to monitoring and evaluation.Considering how innovative and untried the project's approachand target area were, i1. seems in retrospect to have been amistake not to insist on an operational 14 & E system withinthe region from the outset. It could have been estabLishedduring an early adaptive research phase.

III. IMPLEMENTATION

A. Immediate Design Changes

3.01 Before the project even got underway, two changes took place inKigoma which undermined the basis for a number of design premises. First,Operation Kigoma was superseded by the countrywide villagization programwhich began late in 1973. While the regional program had been relativelygradual the latter was a crash operation. By the end of 1974,villagizatlon was essentially completed in Kigoma, with 95% of theinhabitants accommodated in 193 villages. The authorities did not givemuch regard to the Bank's concern about size - village settlements oftenconsisted of the legal limit of 500 households, and soue even largersettlements were divided nominally into two separate villages foradministrative purposes. The Bank adjusted by turning the Village SiteFeasibility Report system into an ex post screening device -- setting theavailability of 8 arable acres per household as the principle criteria forproject villages.

3.02 The second event was the dissolution of the KCU by Governmentorder late in 1974. The Bank had a warning this would happen about a monthprior to the scheduled date of project effectiveness, though theGovernment's formal announcement was not issued until over a weekafterwards. The Bank and the Government agreed to somewhat makeshiftarrangements for parceling out the KCU's project responsibilities. Cropmarketing was taken over by the National Killing Corporation (food crops)and an expanded branch of the Tanzania Cotton Authority. The TanzaniaRural Development Bank became directly involved in the village creditprogram. To fulfill the KCU's general supervisory and coordinating role inthe project's economic components, a "Project Management Executive" (PME)was created, under the RDD's office, with a core consisting of thetechnical assistance positions originally intended for the KCU (some ofwhich had already been filled).

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B. Overall Implementation Experience 6/

3.03 The Project got off to a very slow start, with hardly anyspending in the first two years. Expenditures did pick up in the followingthree years, but at a slower pace than had been anticipated at projectappraisal. Consequently, extensions were made twice in the creditagreement, and 1982/83 was projected as the last project year. Thenspending took off so rapidly that by the beginning of 1981/82 less moneywas left than was needed to complete a whole range of investments which hadalready been started in the various sectors (see Table la for expected andactual expenditures).

3.04 The stark contrast between anticipated and actual rates ofexpenditure in the first five years is explained by several basicconstraints inhibiting the regional authorities' implementing capacity.The most immediate constraint, which accounted for the negligible activityin the first two years, was organizational. The KCU's dissolution had leftthe project in an institutional void, and the role and capacity of the PMEwas neither well defined nor well understood. In retrospect, it isapparent that the Bank and the region had unrealistic expectations of thePHE because despite its title, it had no executive powers, even within theregional administration it was attached to, and certainly not vis-a-vis theautonomous crop parastatals. As a result, implementation took on adistinctly uncoordinated, disintegrated character, whereby even agenciesdirectly concerned with the same components (like input credit) were notcommunicating.

3.05 As implementation proceeded the PKE's sole active role was in thesphere of project finances, where it worked to ensure that project fundswere used for project purposes.

3.06 A second constraint, registered in almost every sector, wasmanpower, a widespread national constraint. Manpower shortages meant thatinvestments took longer to develop, set up, and organise, and implementthan project design had envisaged.

3.07 A third constraint was the procurement of materials. The projectsuffered chronically from an inability to procure sufficient basicconstruction materials (such as cement, corrugated iron sheets, and roofingnails) on which so many of the components depended. Other more specializedequipment, such as pipes and fittings for water systems, or desks forclassrooms, were similarly difficult to obtain. To some extent,procurement problems reflected national economic conditions, and thereforewere not easy to forecast at appraisal, but Kigoma 's great distance fromthe country's industrial centres and main port was also a factor, andpredictable.

3.08 While these constraints impeded the overall progress of theproject, they did not affect each component equally. Some components, suchas water and health, lagged far behind others in percentage achieved ofimplementation targets. The education component, or at least those partswhich were regional priorities, and bookkeeper training were faring

6/ See Table 2a for Key Indicators.

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comparatively well. The more complex and specialized a component was, themore likely it would run into implementation difficulties, given theregion's overall constraints. Water systems, which involve a whole seriesof complex and sensitive operations, would fall at the one extreme, whilebush clearing, which involves only a bit of organization and a group ofwilling peasants, would fall at the other. Construction of classrooms,which could be readily modified to suit the available materials, was afairly simple, and hence fairly successful operation. Construction ofhealth facilities, which required a considerable amount of planning and towhich stringent building codes were applied, did not fare well. Fieldresearch trials hardly materialized, which was a major failure, limitingthe technology that could be disseminated to farmers. Classroom trainingof bookkeepers, requiring only a couple of instructors, went smoothly;field supervision, requiring a large field staff and vehicles, did not.Because of the different "success" rates, the project desIgn's sequencedguidelines for village investment acted as a drag on overallimplementation.

3.09 By the second half of Project Year 4, it was evident that theproject was in serious trouble. Not only did overall implementation lagwell behind targets but the input credit program, a focal point in projectdesign and the direct link to the production objective, was doing poorly;and it began to look as though the region would never be able to absorb thefunds which had been set aside for its rural development program. This ledto the classification of the KRDP as a problem project in August 1978.Through this year and the following one, the Bank took a number ofdecisions about how to resolve these problems.

3.10 Three types of policy changes resulted from this process; eachaltered the character of the project in some way. First was the attempt tolift some of the major constraints to implementation, including increasedpurchase of vehicles and resolution of procurement problems; second, wasthe setting up of means to better facilitate financial flows; and third,was the decision to provide funds into some major regional and nationalinfrastructure which had not originally been part of the project.

3.11 Towards the end of 1978, steps were also taken to alleviate theprocurement problems the region had been experiencing. A Dar-es-Salaai-based procurement office was established. However, eventually, after somesuccess, confusion arose in the PME over what was being ordered and howmuch was being spent, and regional authorities reduced use of theDar-es-Salaam office.

3.12 To facilitate financial flows, the original concept of "projectvillage" was dissolved, and the land availability requirements for villageselection were disposed of, on grounds of irrelevancy - many villages withless than eight acres of arable land per household were in viable economiccondition, and there was no reason to disqualify them from projectassistance. A special programme in coffee rehabilitation was introducedfor those villages in the previously disqualified highland areas. Ihesemeasures worked to dramatically increase the number of villages receivingproject assistance.

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3.1.3 As another measure to help the regional authorities acceLerateexpenditure an agreement was reached between the Government and the Bank onthe use of a "one-line vote". This would allow the KRA to make adjustmentsin the specific items to be funded under the project's annual budget once ageneral agreement had been made on the nature of expenditures in that year.

3.14 The most significant change in the project's character resultedfrom the decision to fund some major regional and national infrastructuralinstallations. For the region, the most notable of these were theassortment of heavy road equipment and a number of large buildingsincluding the extension of the regional office building (Regional Block).

3.15 Institutional probLems of the project-financed AgriculturalTrials and Training Center 7/ (AlTC) led the KRA to negotiate itsconversion into a full Ministry of Agriculture Training Institute (MATI) in1978. Following these discussions, a sharp increase in project funds wentto expand what would now be a larger, national institution. The school'smanagement tried to acquire as much physical plant and educationalequipment as possible while project funding was available. It remainsuncertain whether the MATI will ever be completed sufficiently to functionas a proper MATI and whether the Kigoma Region will get anything specialout of it (they have been promised a special allocation of places).

3.16 The effect of these large investments on the project's overallcharacter was by no means confined to financial considerations. As highlyvisible, centralised investments which had a high priority for theofficials who would be using them, they became strong competitors withvillage infrastructural investments for scarce regional resources. Thuswhen the project experienced a severe shortage of cement in 1980/81, morethan half of the total amount went to the regional administration buildingsand the ATTC, while the need for cement to finish project buildings in thevillage was far from satisfied.8/

C. Special Issues in Implementation

3.17 Input Supply. With the dissolution of the KCU, inputs weredistributed to the village4 directly by TRDB, using NMC and TCA as deliveryagents. The supply of fertilizers got off to a flying start, over-shootingthe target for the first year by over 13 times, and then ground to acomplete halt after the third year because of non-repayment of loans.9/rhe abrupt halt was directly related to the flying start. The failure ofthis component of the project may be ascribed to low demand in conjunctionwith badly organized and compulsory supply.'0/

3.18 The Low demand for fertilizers during the early project years hadits root partly in the prevailing crop price relations and partly in thetechnology scarcity and the particular stage of development of therecipient farming system.

7/ Further documentation of individual impacts found in ProjectEvaluation Report, Section 5.5.2.

8/ Project Evaluat'on Report, Appendix H.

9/ Table 4.11 of Project Evaluation Report.

10/ This is treated at greater length in Loft and Oldewelt, "Developmentsin Peasant Agriculture in Kigoma Region During the Post VillagisationYears", op. cit.

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3.19 During preparation it was assumed, erroneously as it turned out,that the land preparation peak was absolute and constituted a constraintfor the expansion of acreage; the project was therefore designed to fosterproduction increases exclusively through an improvement of yields, and notthrough an expansion of area. Of the four crops which the intensificationeffort was to be centered on, two, maize and beans, together already formedthe pivotal enterprise of the doiznant farming system, and two, cotton andgroundnuts, while not alien to the region, were not central in the systemand were to be given greatly increased importance under the project. Theproject's inability to procure groundnut seeds1 l/ left only cotton, tohave received nearly 80% of the total resources under the seasonal inputprogram, and maize and maize/beans mixtures, to receive the remainder.

3.20 Generally speaking, cotton is a crop which is quite suited to anintensification strategy, particularly wkaere pests are a problem, -- eitherit is worth growing with substantial labor and capital inputs, or it is notworth growing at all. The failure of the input program for cotton is thusintimately linked with the failure of the crop itself to win a preferrredplace in the production patteTn. Initial assumptions both underestimatedthe labor inputs required for satisfactory cotton yields and overestimatedthe ecological scope for cotton cultivation in the region. 12,

3.21 Price changes for the 1974/75 season then invalidated the crop'scommercial competitiveness even before the project became effective. Giventhe official prices (usually an underestimation of the value of food crops)and the Appraisal Report's production coefficients for cotton, maize, andbeans, the returns to cotton have consistently been less than the return tothe competing maize-beans mixture throughout the entire eight years of theproject 13/, a fact not highlighted in the supervision reports. Beans,because of the high price and input complementarity with maize provedparticularly profitable.

3.22 The mistake in project design of building the intensificationstrategy primarily around cotton, could have been of less concern ifflexibly handled, as the appraisal mission no doubt hoped, but it wasexacerbated by the efforts of the Government to use compulsion (rather thanprice incentives) to elicit cotton production.

3.23 The lack of denand for inputs for maize-beans did not stem fromthe undesirability of the crops themselves (which grow comparatively wellunder Kigoma's relatively fertile soil and stable rainfaLl regime), butrather from the inappropriateness of inputs to the resources and prioritiesof Kigoma's maize-beans farmers, and the fact that they did have surpluslabour, once initial villagisation tasks were completed, to expandcultivated area on previously uncultivated and therefore productive land.

3.24 It was against the background of this initial low level ofpotential fetilizer demand that large quantities of project-financedfertilizers were transported without farmer's requests to the first lot of21 unsuspecting project villages in 1975/76. According to the project

11/ Project Evaluation Report, Section 4.1.3.1.

12/ Reasons elaborated in Projected Evaluation Report, Section 6.2.1.13/ Project Evaluation Report, Appendix U.

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project design14/ the villages should have decided on the amount of inputsthey would apply for. In fact this did not happen. To complicate matters,it was not effectively comunicated to the villages that the inputs were oncredit.

3.25 Satisfactory loan recovery became nearly impossible. TRDB'sattempts to sanction non-payment of loans by withholding further seasonalinput credit from debtor villages were overruled by the prevailingGovernment thinking which favored an increase in cotton production atany cost. Project involvement in the program was finally halted, to theconsiderable consternation of the regional authorities, in project yearfive (1978/79). The repayment controversy has haunted the program eversince, and a solution was only agreed upon between TCA and TRDB In late1981. Moreover in the process of reconciliation, it appears that thevillages may have been short-changed by about Tsh 1 million which they havealready paid, but are still held responsible for.15/

3.26 The input credit supply program seems not only to have failedto have a positive effect on production, it has had some serious negativeconsequences. First, those people who did later want fertilizers orinsecticide, or maize millsl / were prevented from getting them. Second,the bitter associations whicih many farmers now have with fertiliser use maywell colour their willingness to experiment with it again.

3.27 Monitoring and Evaluation. Monitoring and Evaluation, underthe initiation and supervision of the PPT, was supposed to be an importantinput, both into the -Kigoma Project and other rural development projectsyet to be.formulated. In practice, PPT involvement was minimal, and on thewhole the monitoring and evaluation _ystem which evolved made littlecontribution to the Kigoma Project.

3.28 Monitoring was left to the project coordinator of the PHE tosort out. At the insistence of the Bank, he instituted a system ofquarterly reporting on project activities, compiled from progress reportssubmitted by the regional functional managers and the DDDs. Although someimprovements were registered in the quality of these reports over the lifeof the project, the system itself never really worked well.

3.29 The deficiencies in the monitoring system are attributable toseveral factors. Most significant was the absence of any tradition ofmonitoring in the Tanzanian bureaucracy. Transportation and communicationproblems exacerbated the situation, since the regional and district-officials would in many cases be stuck in the towns while their work crewsin the villages had no system for sending back progress reports.

3.30 This K and E problem began to surface very early in theproject, and in 1977 the Bank asked that the post of evaluation officer becreated. The post has remained difficult to fill with persons with thehigh level training and years of experience which the job really required.

14/ Appraisal Report, para 5.07.

15/ Details in Project Evaluation Report, Section 4.1.3.1, and Appendix E.

16/ There were at least 17 official rejections for maize mill loans and anuntold number of other villages were discouraged from even applying.

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3.31 In retrospect, what would have been far more useful to theproject itself, and to the region's longer term development oradministrative capacity, would have been to hire a managementconsultant/advisor under the project, who c-uld have helpedinstitutionalize monitoring capacity within the various regional anddistrict offices. The PPT's principal mandate to design new projectstended to preclude the level of attention needed for Kigoma's M & E.

3.32 Two surveys were conducted in the course of the project, bothwith initial consultation from PPT. In mid-1976, a single visit baselinesurvey aimed to measure production parameters at the household level, andcovered 30 households in each of 10 villages. This survey was contractedout to the Economic Research Bureau at the University of Dar-es-Salaam inan attempt to involve a local institution. The data from the baseline I7were used to make comparisons over time with data collected in a continuous16-month farm management survey 18/ covering the tail of the 1976/77 andthe whole of the 1977/78 agricultural seasons for 132 households in 9villages taken from the earlier sanple.

3.33 The lack of demand for answers to specific questions among theregional authorities, symptomatic of the more general problems noted above,was a main hindrance to supplying any feedback from the survey during thecourse of the project.

3.34 The November 1978 "Mid-term Evaluation" exercise referred toearlier, called in response to the serious implementation difficulties theproject faced, sparked a major generation of data, experiences andperceptions and prompted the significant changes in implementing strategynoted above (Ch. III, B). A final evaluation exercise by ERB, conducted inlate 1981, issued a report in early 1982 which is drawn on heavilythroughout this PCR.

3.35 Project Preparation Team. Activities of the ProjectPreparation Team (PPT) were funded under the project. Tne objective of thePPT was to assist in the preparation of two or more regional developm