Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 5136

PROJECT COMPLETION REPORT

TA-ZANIA FISEERIES DEVELOPMENT PROJECT

(CREDIT 652-TA)

June 18, 1984

Eastern Africa Regional Office

This document h2s a restricted distribution and may be used by recipients only in the performance oftheir offidal duties. Its contents may not otherwise be disclosed without World Bank authorization.

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ABBREVIATIONS

CPS Central Projects Staff (now OPS)

DANIDA Danish International Development Agency

DCA Development Credit Agreement

DDC = District Development Corporation

ICB International Competitive Bidding

KILIMO Ministry of Agriculture

MNR = Ministry of Natural Resources

NCCO National Cold Chain Organisation

NORAD Norwegian Agency for International Development

OED = Operations Evaluation Department

ODA = Overseas Development Authority

PCR Project Completion Report

PCU = Project Coordination Unit

RIDEP Rural Integrated Development Project

RME& = Regional Mission in Eastern Africa

SAR = Staff Appraisal Report

TAFICO = Tanzania Fisheries Corporation

TRDB = Tanzania Rural Development Bank

FOR OFFICUIL USE ONLY

TANZANIA

FISHERIES DEVELOPMENT PROJECT

(Credit 652-TA)

PROJECT CC0IPLETION REPORT

TABLE OF CONTENTS

Page No.

Preface .................... i

Basic Data Sheet ................ .......... ii

Highlights .............. 06*000...** ... .... iii

1. Background ................. ,,........................... 1

II. Project Formlain u................... 4

III. The Project.....0 ..... **.. 8

IV. Iplmepato e........................ 10

V. Project Impac.......... 19

VI. Institutional Perfornancee................. ...... 20

VII. IDA Performzance ...... 9... o....-.... . ...... 22

VIII. Conclusions ....... 0*.. .......... **..** ....... *... 23

MAP 11795 - Tanzania Fisheries Development

I This document has a restricted distnbution and may be used by recipients only in the performance of |their official duties. Its contents may not otherwise be disclosed without World Bank authorization. |

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TANZANIA

FISHERIES DEVELOPMENT PROJECT

(Credit 652-TA)

PROJECT COMPLETION REPORT

PREFACE

This is the project completion report (PCR) for the FisheriesDevelopment Project, for which Credit 952-TA was approved in July 1976 forthe sum of US$9 million. IDA indicated its willingness in September 1981to extend the closing date of December 31, 1981 to June 30, 1984, subjectto several satisfactory steps in project implementation; but these were notachieved and the credit account was closed on September 13, 1983; USS4.82million was cancelled at that time.

This PCR was prepared by the Eastern Africa Projects Department,Southern Agriculture Division, in July 1983. The PCR was prepared on thebasis of information available in the EAP Department. The sources ofinformation for the PCR were: Appraisal Report No. 963a-TA dated March 8,1976; President's Report July 12, 1976; supervision reports, correspondencewith the Borrower and internal Bank memoranda as contained in relevant Bankfiles. The PCR was received by OED on October 18, 1983.

The Project was not selected for audit by OED and the PCR wassent to the Borrower for comment on April 13, 1984; however, no commentswere received.

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TANZANIA

FISHERIES DEVELOPMENT PROJECT

(Credit 652-TA)

PROJECT COMPLETION REPORT

HIGHLIGHTS

1. The Fisheries Development Project, approved by the Baord in 1976,was designed to support the establishment and development of commercialfisheries at selected centres, improve fishing techniques and marketingdata and provide the basis for fisheries development in the traditionalsector by supporting a Dilot fisheries program for Ujamaa villages on LakeTanganyika.

2. Except for partial initiation of commercial fisheries and theUjamaa pilot program and collection of some marketing data, none of theproject objectives have been achieved to date. Major problems (includingsome which should have been resolved during appraisal and negotiations)were encountered in implementing the project. Implementation of lakeFisheries component was frustrated by numerous complications, e.g.,difficulties encountered in the establishment and management of a jointventure company (paras 4.03 and 4.06), and the type and design of boats tobe provided under the project (paras 4.04 and 4.05). This component wasdropped in the fifth project year (para 4.06). Only two of three coastalcentres were established with some onshore facilities financed under theproject (para 4.08). Establishment of a third commercial centre (atMtwara) was not proceeded with because of uncertainty about fish resourcepotential. Delivery of 10 boats (30 were originally planned) ordered forthe coastal centres started close to the original Project Closing Date(December 1981); however, no significant fishing operations had commencedas of the last supervision mission in October 1982 (para 4.11). Investmentprograms for the 5 approved Ujamaa villages (20 villages were included inthe project) had not been completeA as of October 1982 (paras 4.13 and4.14). The Lake Transport program was not implemented because of adequacyof alternate facilities provided by the Government (para 4.15). TheMarketing Study was completed after the original Project Closing Date ofDecember 1981 (para 4.16) while the Pollution Study did not get off theground (para 4.17). Many changes to perceived technical assistance needswere made during implementation to fit project requirements (para 4.18,4.19 and 4.20).

3. Pending final accounting, total project costs are estimated atabout US$5.8 million compared to the SAR's estimate of US$12.4 million. Nofinancial results are available to make meaningful comparison with theprojections made at project appraisal or a re-evaluation of the rates ofreturn, though the latter have most probably been negative. Accounting andproject reporting were poor during most of the implementation period.

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4. The only apparent project success was the training provided bytechnical assistance personnel to the staff of coastal centres andfishermen in the villages. The principal weaknessess were the lack ofattention given to progress in physical implementation of the project, pooraccounting and project implementation reporting, and weak cooperation fromthe Tanzania Fisheries Corporation (TAFICO), one of the key institutionsinvolved in the project implementation. IDA performance in retrospect hasbeen weak (PCR Chapter VII). Four main lessons were learned:

(a) country capability (institutional, manpower, financial andphysical resources) is key to successful projectimplementation and in designing projects particularattention should be given to resource availability;

(b) the basic institutional framework required for projectimplementation should be present and not left to bedeveloped during implementation (e.g. creation of commercialfishing centres);

Cc) common understandings on important issues should beestablished prior to or during negotiations andappropriately reflected (e.g., type and design of boats,establishment of a new commercial centre at Kigoma, locationof marine fishing centres);

(d) pertinent data having significant impact on project scopeand design should be developed prior to projectimplementation (e.g., fish resource potential at Mtwara andmarket study).

TANZANIA

FISHERIES DEVELOPMENT PROJECT

(Credit 652-TA)

PROJECT COMPLETION REPORT

I. BACKGROUND

1.01 General. Agriculture is the dominant sector in the Tanzanianeconomy. It contributes 85Z to export earnings, accounts for 40% of GDPand supports 90% of the population. Since the early 1970s the agriculturalsector has experienced a severe decline and the agricultural surplus neededto support development in other sectors has fallen drastically. To whatextent this development is the result of drought and external factorsbeyond the control of the Government and to what extent these externalfactors have precipitated a crisis which stems from economic policies andother internal problems and shortcomings is a central and debatablequestion for both the Government and the donor community 1/.

1.02 In the 1960s and early 1970s Tanzania underwent a reassessment ofits development objectives and strategies. The Arusha Declaration of 1967and related policy statements reaffirmed Tanzania's commitment to asocialist society and identified the Ujamaa village as a means of effectingself-reliance and a community approach to development. To accomplish thesegoals, the Arusha Declaration emphasized that the state, with guidance fromthe Party, should play a leading role, especially in the creation ofappropriate institutions. The government emphasized an approach to ruraldevelopment which on one hand transformed the organization of peasantagriculture through village formation (Ujamaa) and, on the other hand,brought about an increasing degree of Government intervention in the sectorand in the supporting services for agriculture. These institutionalchanges altered the framework and organization within which agriculturalproduction would occur. Among the critical changes were the villagization(Ujauaa) schemes and the decentralization of Government whereby regionalauthories were given control over Government programs and the distributionof services within their regions.

1.03 Ujamaa Village. The Ujamaa village was seen as a vehicle forproviding economies of scale in delivering inputs and social services,which would improve the lives of rural people. The ultimate objective wasthat Ujamaa villages become multipurpose cooperative societies with powersto own land and borrow. Most villages have been formed by physicalresettlement. The precise pattern of development within each Ujamaavillage has been left to the villages themselves to decide, and Ujamaadevelopment has varied considerably among regions. The extent ofcollective activity also varies among villages, ranging from apredominantly communal or block farm approach to one which continuestraditional individual family farms with a small communal venture for

1/ Tanzania Agricultural Sector Report, August 19, 1983.

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cash. On the one hand, there has been some dissatisfaction and oppositionto Ujamaa, particularly by farmers in areas where proximity to plantingsand personal stewardship of assets were disrupted. On the other hand, theprocess has been accompanied by notable achievements in the broadening ofhealth and education services.

1.04 Decentralization. Under the reorganization of government carriedout in 1972, the regional and district administrations were made directlyresponsible for most aspects of rural development. The regions wereauthorized to prepare and implement their own development programs, andwere given a high degree of autonomy in regional administration. However,the Prime Minister's Office has continued to provide overall policydirection, assistance in preparing their development programs, andcoordination in regional plans and budgets. Significant developmentsresulting from the decentralization exercise have been: the transfer ofextension staff administration to the regional authorities (while Ministryof Agriculture (KILIMO) and Ministry of Natural Resources (MNR) maintaincontrol over the technical aspects of extension); and the scattering ofscarce skilled personnel throughout regional offices.

1.05 Parastatals. Official policy dictated an increased GovernmentIntervention in the means of production, marketing and distribution ofagricultural products. The specialized narketing boards were, thus,transformed into parastatal crop authorities with wider functions andresponsibilities. The Intended role for the parastatals was to function asa countervailing force to private middlemen, but after their establishmentthey were soon given monopoly control over major crops. The structure,organization and operations of parastatals vary, but generally the tendencyhas been to expand their role into production, extension services,financing, licencing, grading, processing, importing and exporting theprimary products. The rapid increase in the number of parastatals andtheir expanded role combined with the low level of skilled and experiencedmanpower available in the country has resulted In inadequate staffing ofkey posts and weak management and persistent financial weakness.

1.06 Manpower Constraints. Lack of experienced and skilled manpowerhas clearly been one of the major constraints in Tanzania's developmentprocess. Available manpower resourcefs have been grossly inadequate for theoverly ambitious and often redundant or overlapping roles assigned to theparastatals. Africanization of civil service has further increased thecompetition and demand for the limited number of skilled people within thecountry.

The Fisheries Sub-Sector

1.07 Tanzania has substantial fish resources in the territorial watersof Lakes Tanganyika and Victoria as -well as limited resources availablefrom the coastal inshore waters of the Indian Ocean. At the time ofproject development the need to exploit these resources was being felt.Government had formulated a long-term fisheries development plan and hadcharged the Fisheries Division of the Ministry of Natural Resources withIts implementation. As a part of this effort studies were carried outunder a UNDP/FAO project in the Kigoma region to assess the standing stocksand potential sustainable annual yield from the Tanzanian part of Lake

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Tanganyika and it was expected that similar investigations in other areasof the country would be undertaken with UNDP, FAD and bilateral support.

1.08 Fishing in Tanzania is carried out by two distinct groups;commercial operators using motorized vessels and traditional fishermen whoaccount for about 90% of the production. Commercial fisheries aregenerally organized in small companies, most of which are owned by regionaland district development corporations.2/ Traditional fishermen livingalong the coast and near the various inland lakes usually also cultivatesmall subsistance farm plots.

1.09 About 25% of total fish production comes from marine fishing, and75Z from inland lakes and other fresh water sources. The marine fish aregenerally sold fresh, while inland production Is sold both fresh anddried. Market expansion especially for lake fisheries is limited by thedistances from the landing points to the major consumer centres; access tocertain lake areas by road is almost totally lacking, and rail facilitieslikewise are inadequate. Between 5% and 10% of total production iscommercially marketed. Both the wholesale and retail trade are almostentirely in the hands of private traders, although some wholesaling offresh fish is carried out by the parastatal organizations, National ColdChain Organization (NCCO) and Tanzania Fisheries Corporation (TAFICO).

1.10 Government services to the fisheries sub-sector are theresponsibility of the Fisheries Division of the Ministry of NaturalResources. This Division administers an extension service organized on aregional and district level, with policy direction and technical supportprovided by the Ministry. The regional fisheries staff are headed by aRegional Fisheries Development Officer; he supervises District FisheriesOfficers who have under them Field Officers, Assistant Field Officers, andField Assistants. The extension service operates a few mobile fishingunits 3/ on the major lakes; these units are used to demonstrate improvedfishing techniques and to train local fishermen in their use.

1.11 Tanzania Fisheries Corporation was established in 1974 as aparastatal with responsibility for the support and development ofcommercial fishing. At the time of appraisal it was expected that TAFICOwould assume responsibility for Government boat building and net makingprograms; 4, TAFICO then operated four large and several smaller boatbuilding yards. The larger yards were considered to be capable ofconstructing boats of 10-15 meters, and there were plans to expand thesefacilities. Lack of wood-working machinery and workshop equipment and the

* small number of skilled craftsmen and mechanics available were identifiedat appraisal as the main factors inhibiting the expansion of boat buildingcapacity. It was expected that TAFICO would not undertake large scale

2/ The District Development Corporation (DDC) was introduced in themid-1960's as the local counterpart of the centrally organizedparastatals. A DDC is a limited liability company and is thecommercial wing of the District Development and Planning Committee.Its objectives are to stimulate commercial activity in the District byparticipation in business enterprises.

3/ Each unit consists of a net and gear specialist, an engine operatormechanic, two fishermen and a team leader.

4/ There are no significant privately owned boatyards.

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fishing operations on its own 5/ but would participate jointly withDistrict Development Corporations or other interested parties.

1.12 At the time of appraisal a number of research and trainingefforts under the auspices of the Fisheries Division were underway, some ofthem receiving considerable assistance from bilateral donors. A fisheriestraining program for Field Officers was being carried out at Kunduchi. Avocational training institute at Mbegani supported by NORAD was expected tobe operational shortly. Some on-the-job training was provided at TAFICOboatyards. The Fisheries Division had also initiated a number of researchprogiams and pilot studies. Research stations had been established at LakeVictoria (assisted by Netherlands Development Aid) and at Lake Tanganyika(assisted by UNDP/FAO).

1.13 The Tanzania Rural Development Bank (TRDB), created in 1971, hasresponsibility for agricultural credit. TRDB is intended to operate as areasonably independent institution and has been used as the credit channelfor a number of IDA credits. Under the project TRDB was assigned animportant role in the choice of villages under the Ujamaa village fisheriesprogram in addition to its role as a credit vehicle for other projectcomponents. Credit control within TRDB has been weak due to lack ofexperienced and qualified staff at all levels. However, at the time ofappraisal TRDB, with additional technical assistance and recruitment oflocal staff, was expected to develop adequate capacity to preparelarge-scale credit projects suitable for external financing.

II. PROJECT FORMULATION

Identification and Preparation

2.01 During an RHEA agricultural identification mission in December1972, a number of project possibilities were proposed and discussed.Included in these proposals was a possible fisheries development project.As proposed by the Fisheries Division the project would include: (i)development of Dar es Salaam, Mtwara and Tanga as deep water ports; (ii)expansion of the local boat building industry; and (iii) development ofinland fisheries, of which part of the Lake Tanganyika fisheries would beIncluded in the Kigoma Regional Development Project.

2.02 In September/October 1973, a Norwegian consulting firm completedits investigation, financed by NORAD, of prospects for a possible IDAfinanced fisheries project. The firm, which had been originally engaged byNORAD to investigate a range of possible NORAD financed projects, undertookan effort at identification of a project for IDA support at IDA's request.As a general conclusion, the consulting firm recommended against any IDAinvestment in any project preparation at that time as it did not find anysuitable investment opportunities. The consultants' recommendation wasbased on the following major findings:

5/ Because of its responsibility for the development of shrimp fishing onthe coast, TAFICO's involvement in fishing activities with bilaterallyprovided vessels was not completely ruled out.

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- a comprehensive boat-building program which was given toppriority by the Government, was likely to go ahead withoutIDA funds;

- except for Lake Victoris and partly Lake TangNnyika, theresource knowledge was highly limited to determine with anycertainty the eventual size of the needed new fleet and theassociated financial commitment; likewise, the size offuture investment in fish receiving stations, ice machinery,

e etc., could not be determined until extensive fishing trialswere undertaken.

The consultants, however, concluded that in about 2-3 years time, if thenatural resources base proves to be promising, there might well be a needfor IDA involvement in boat-building, processing and distributionfacilities.

2.03 Subsequent IDA missions questioned the consultants'recommendation on the basis that they had paid very little attention to theidentification of a possible project and suggested a second opinion beforedeciding on a posture. In response to continued Government lnterest in IDAinvestment in the fisheries sector, a IDA identification mission visitedTanzania in June 1974 and reached agreement on the broad outline of apossible fisheries project. The three sub-projects proposed for furtheridentification and preparation were: (i) the development of commercialshrimp industry primarily for export; (ii) the development of Lake Victoriafisheries primarily at village level through credit to assist inmechanization of small scale fisheries, better fish handling and processingmethods and provision of marketing inErastructure; and (iii) thedevelopment of small scale commercial fisheries on the northern part ofLake Tanganyika through credit for boat building equipment, motorizedvessels, fishing gear and improvements in fish handling and transportationfacilities.

2.04 The preparation report, prepared by staff of TAFICO and theFisheries Division assisted by two UNDP advisors, was received in the Bankin January 1975. It included the following major components:

(i) five coastal fishing centres with ten 10 m boats each tocatch table fish and prawns;

(ii) five fishing centres at Lake Victoria to catchhaplochromis 6/;

(iii) two fishing centres at Lake Tanganyika to catch dagaa 7/;and

(iv) provision of technical services.

Each request for fishing centres included a substantial element of roadconstruction costs. Overall cost of the project was estimated at USS 20million of which about USS 4.5 million was for roads.

6/ A small honey fish coamon to some of the larger lakes, particularlyLake Victoria, of Tanzania.

7/ Dagaa is the local name for a small sardine like fish found in LakeTanganyika.

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Appraisal, Negotiations and Board Approval

2.05 The appraisal mission visited Tanzania from June 9 to July 6,1975. Prior to its departure no major issues were raised by the mission.

2.06 In the Issues Paper dated July 31, 1975, the mission indicatedthat the MNR was weak and there was a lack of coordination between theMinistry and the regional offices on fisheries development plans, and thatTAFIC0 had not yet developed into a fully operational parastatal. For thesereasons the mission recommended what was considered to be a simple projectdesign though even it required technical assistance. The paper alsopointed out the apparent lack of coordination between the donor communityand the Government in the support to the fisheries sector. The DecisionMeeting was held on August 8, 1975, and it was agreed to go ahead with theappraisal report on the basis of the following major project components:

(i) Coastal Fisheries. The number of fishing centres to bereduced from 5 to 3;

'ii) Lake Tanganyika. Only one fishing centre to be included;

(iii) A Ujamaa Component. This component was not in thepreparation report but was identified by the mission 8/;

(iv) Research and Investigation. A marketing survey to assessmarket potential, prices and logistics for Lake Tanganyikaand Lake Victoria production.

gv) Lake Victoria. This component was dropped by theAppraisal Mission because at that time no effectiveresearch in the catch rates of haplochromis had beendone;

8/ The component would mainly comprise 100 8m-boats and fishing gear tocover about 10X of the Ujamaa fishermen operating on Lake Tanganyika.Marketing of the dried fish produced by village catches would be doneby lake transport, consisting of 2 tugs and 4 barges and would beoperated by the Kigoma Joint Venture Co. to be formed under theProject. The CPS representatives at the Decision Meeting cautionedthat a full-scale investment for the Ujamaa component might bepremature for the following reasons: (i) in the Kigoma RuralDevelopment Project approved in August 1974 a similar component had tobe substantially reduced; (ii) pilot tests with the new type of boatshould be conducted before a decision to go ahead with the component;(iii) further studies were needed to firm up marketing arrangements andthe impact of increased production on prices; (iv) lack of knowledgeeven on the part of government officials, about how villages actuallyfunction made it impossible to make detailed assumptions aboutvillage-level organization and operations; and (v) a full scaleinvestment project should not proceed until the results of the ongoingKigoma-based UNDP Project were available. The meeting, stating thatthe SAR adequately reflected a flexible and experimental approach,agreed that this component should proceed with a close review of itssize.

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(vi) Technical Assistance. A coordinating technical officereach for MNR and TAFICO and specific technical assistancefor each of the project components.

Project costs were estimated to be US$ 13.1 million (this estimate wassubsequently revised to US$ 12.4 million) of which US$ 9 million would befinanced by IDA.

2.07 The Loan Committee approved the project in January 1976 subjectto the following modifications: (i) the establishment of the ProjectCoordination Comittee to be a condition of effectiveness; and (ii) thedetailed implementation program to be agreed during negotiations ratherthan to be submitted to the Association within 3 months of crediteffectiveness as initially proposed in the SAR.

2.08 Negotiations took place from February 23 - 26, 1976. The mainpoints discussed and agreed were:

- coordinating functions of the project to be executed by theDirector of Fisheries in MWR rather than by the GeneralManager of TAFICO as provided in the draft DCA;

- recruitment of the four most critical technical experts toremain as conditions of disbursemeat for the respectiveparts of the project and the remaining five to be recruitedby December 31, 1976;

- the Tanzanian delegation expressed great concern overconsultation, 'every 12 months or more often-, with IDA onprices paid for dried dagaa by the Kigoma joint venturecompany to the Ujamaa producers. After considerablediscussion the Tanzania delegation accepted the clause butinsisted and obtained agreement on consultations to takeplace from time to time;-

- retroactive financing of up to US$ 75,000 for expenditure ontechnical services, housing and vehicles;

- establishment of Project Coordinating Committee to be acondition of effectiveness; also a detailed implementationschedule was agreed;

- possible combination of the two proposed coastal centres atPangani and Bagamoyo was mentioned by the Tanzaniadelegation and the IDA delegation indicated no problem inprinciple with such a proposal.

Government approval of the negotiated documents was received by IDA onMarch 27, 1976.

2.09 The Executive Directors approved the Project on July 1, 1976.The record of the Board discussions, which deal with three Tanzanianprojects presented to the Board that day, make no mention of specificissues being raised concerning the Fisheries Development Project. The

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legal documents were signed on July 12, 1976. The conditions ofeffectiveness having been met, the project was declared effective onOctober 12, 1976.

III. THE PROJECT

Project Description

3.01 The Project included the following components:

(a) Three Fishing Centres to be established along the coast.The exact location was left to be determined by the localDistrict Development Corporations and TAFICO (theshareholders in the joint venture). Each centre was to beprovided with ten 10 m fishing boats equipped with 45 h.p.engines and fishing gear. The type of boat recommended wasa standard FAO V-bottom design which appeared to be wellsuited for the conditions found along the coast and powerfulenough to bandle the recommended 16.8 m FAO designedtrawl 9/. Other investments included an ice store,vehicles, equip-ment, a workshop for routine maintenance andrepairs, and several pre-fabricated buildings. Proposedfixed investment was considered an absolute mininumspecifically designed to facilitate easy transfer of thecentres to other locations along the coast if fishingprospects were to prove better there.

(b) A Permanent Fishing Centre on Lake Tanganyika at Kigoma wasto be established and provided with ten commercial purseseining 101 units, each consistirg of one 12 mlocally-built wooden boat powered by a 80 h.p. dieselengine, five small light boats, fishing nets and othergear. Other investments included covered drying racks, coldstorage facilities, vehicles, equipment and buildings.

(c) A Ujamaa Pilot Fisheries Program was tc be first initiatedin a few villages near Kigoma and gradually expanded toother Ujamaa villages as experience was gained. Credit wasto be provided through TRDB to participating villageorganizations for the purchase of about five standardFAO-designed small boats powered by 10 h.p. inboard enginesand equipped with nets and other fishing gear. If lift netfishing techniques proved successful, then TRDB creditscould also be provided for this fishing method on the basisof satisfactory technical and financial projections. Thefish caught would be dried on shore on covered drying racksfinanced under the project, and then transported either bytruck or over the lake to Kigoma. Technical assistance wasincluded to teach the villagers how to operate and maintainthe boats, nets and other fishing gear required.

9/ A large conical net dragged along the sea bed or at pre-determinedmid-water depths to gather fish.

10/ A fishing method using a net which, when set to surround a fish shoal,hangs vertically in the water and is then 'pursed' by dra-wing thefootrope and bottom of the net together.

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Cd) Lake transport facilities to transport dagaa to Kigoma andbasic supplies to Ujamaa villages were to include two tugsand four barges (25 a long) made of steel. Provision wasmade to consider other types of lake transport if furtherstudy indicated that they would be more suitable.

(e) A two-year Market Study would be undertaken to assess themarket prospects for increased production of both fresh anddried fish from Lake Tanganyika and would also include asmall component to examine potential catch rates and marketprospects for haplochromis from Lake Victoria.

(f) A study to investigate the effects of increasing levels ofchemical pollution on the life cycle of fish in LakeTanganyika would be undertaken.

(g) Technical Assistance to be provided within both the Ministryof Natural Resources and TAFICO would consist of 9internationally recruited staff, and the incrementalstaffing as follows:

(1) Ministry of Natural Resources

Ci) a Manager to assist in the overall coordinationand planning of project activities, and tooversee project monitoring and evaluation;

(ii) one Fisheries Specialist to train extensionpersonnel on Lake Tanganyika and to supervisethe training of Ujamaa fishermen by thetraining staff. Funds were also provided forsalaries of extension staff, equipment andsupplies for three mobile fishing units toassist in this task;

(2) TAFICO

(i) a Manager to assist in the overall planning andexecution of the development of the variousfishing centres;

(ii) one Master Fisherman and one Marine Engineer toassist in developing plans for marine fishingand to give technical support to the threecoastal fishing centres;

(iii) one Master Fisherman, one Marine Engineer andone Refrigeration Engineer to provide technicalsupport for the fishing centre and the laketransport facilities to be established on LakeTanganyika;

(iv) one Assistant to the Manager of the Kigoma jointventure company to help with the overallplanning and coordination of the enterprise.

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Financing

3.02 The financing of Project costs was to be as follows:

US$ million Z

IDA 9.0 72Government 2.2 18Joint Venture and Ujamaa 1.2 10

Organization and Management

3.03 The Ministry of Natural Resources was to have overallresponsibility for all project activities; a Coordinating Committee(comprising the Director of Fisheries in MNR, the General Manager ofTAFICO, the two specialist managers to be provided under the project toTAFICO and the Ministry, the General Manager of TRDB, representatives fromthe Prime Minister's Office and from the External Finance Division of theTreasury and the relevant Regional Development Directors) was to beestablished to provide policy guidelines.

3.04 The Director of Fisheries was to serve as Project Coordinator.The fishing centres were each to be managed by a joint venture companyformed by TAFICO and the relevant District Development Corporation. TheUjamaa program was to be managed by TRDB in conjunction with the regionalfishing extension service and the lake transport facilities were to beowned and operated by the joint venture company to be established atICigoma. The market study was to be carried out under the direction of theMinistry of Natural Resources. Terms of reference for the pollution studywere to be prepared by the Ministry of Natural Resources; however; theresponsibility for the actual study was not specified.

Project Benefits

3.05 The major benefit from the Project was to be increased productionof both fresh and dried fish resulting in increased fish consumption inmany rural areas where nutritional levels were low, as well as the openingup of new urban markets for this low cost, high protein food. Anotherimportant benefit was to be the development and demonstration of moresophisticated fishing techniques at the village level, thus enablingfishermen to better exploit an existing but underutilized resource. Theprovision of transport facilities on Lake Tanganyika was expected to openup more remote areas of the lake shore to trade, allow better access toextension and other personnel and provide a convenient marketing channelfor village production.

IV. IMPLEMENTATION

4.01 Execution of the Project was disappointing. The Lake Tanganyikafishing component, after nearly 5 years of unsuccessful attempts to get itoff the ground, had to be dropped because it was concluded by IDA that thelocal management without continued external assistance would not be able tosustain it. Operations of marine fishing centres were also delayed by more

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than five years (none of the boats started operating prior to the originalProject Closing Date); only two of the proposed three centres were allowedto proceed as commercial ventures because there was considerableuncertainty about fish catch rates at the third location (Mtwara) and only10 of the 30 proposed boats were constructed. The Ujamaa village componentsuffered serious snags (see paras 4.13 and 4.14) and had to be reduced to 5villages (compared with 20 villages originally proposed). Because of thedevelopment of alternate facilities the Lake Transport component wasdropped. The market study, which was completed after the original ProjectClosing Date, did not contain any useful marketing proposals while thepollution study did not get off the ground. Implementation of TechnicalAssistance program proved to be a confusing exercise because of partlyoverlapping assistance provided by various donors and because extensivemodifications were required to original proposals to fit the project needs.

4.02 Effectiveness. There were two conditions of effectiveness, i.e.:

(a) execution of a subsidiary !can agreement between theGovernment and TRDB; and

(b) establishment of the Project Coordinating Committee.

Both these conditions were met within three months of signing. A conditionof credit disbursement for each component was that the principal technicalservice personnel for that component had been recruited on terms andconditions acceptable to IDA. This condition was met prior to disbursementagainst each respective component.

Lake Fisheries

4.03 Establishment of a fishing center at Kigoma proved extremelydifficult. Regional Authorities objected to the formation of a new jointventure company (there is no record of whether regional authoritiesagreement to the establishment of a new company was obtained at appraisaland if so why they subsequently changed their mind). This problem wasresolved by an agreement to use Uvuvi Kigoma (an existing fishingenterprise partially owned by the District Development Corporation) as thecommercial center under the project. Subsequently TAFICO acquired majorityshareholding as called for under the project in Uvuvi Kigoma; and someexisting shore facilities, which had been constructed by the regionalauthorities were transferred to the company. Later on, at IDA'ssuggestion, Uvuvi Kigoma's shareholding was restructured and TAFICO'sownership was reduced to 12.5% (this action was taken to reduce theperceived negative consequences of TAFICO interventions in the affairs ofthe local company, see para 6.02).

4.04 A serious disagreement on the type and design of boats for lakefisheries also arose. The Tanzanians argued that the wooden boatsrecommended in the SAR would not be appropriate and instead proposed steelboats which were considered more durable. This proposal was followed up bysubmission of design for steel boats. The proposed change represented amajor departure from the Project appraisal concept. However, IDA acceptedthe idea of steel boats, but expressed serious reservations on the designproposed because it was considered too sophisticated. Subsequently, withminor modifications, a new design prepared by the naval architect attachedto the Tanzania Railways Corporation was agreed to.

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4.05 Switching over to steel boats meant that the boats would have tobe procured internationally as there was no steel boat building capabilitywithin Tanzania. IDA suggested that designs, specifications and tenderdocuments should be prepared by a reputable firm of consultants, but TAFICOinsisted that these could be prepared locally without outside help. Thedrawings and draft documents which took TAFICO several months to preparerequired major revisions. A revised version took additional three monthsto prepare and three more months were required for IDA to review andcomment on the tender documents (a consultant was engaged by IDA for thispurpose). Invitation to bid was sent out in May 1979 (30 months aftereffectiveness). Evaluation of bids was completed in November 1979 byoutside consultants retained for this purpose. Since all the bids weremore than three times the appraisal estimate for comparable wooden boatsoriginally included in the project, the coordinating committee rejected allthe bids with IDA's concurrence and decided on international shopping. !DAapproved international shopping because it was felt that reasonable (lower)quotations could be obtained from a large number of suppliers for eithersteel or fibre glass hulls of the type which were normally constructed bythe suppliers matching the general requirements of the project. Theservices of consultants hired to evaluate bids were extended to assist ininternational shopping. This exercise was completed in August 1980. Thelowest responsive bidder-s quotation of US$205,000 per unit was 35% higherthan the estimated cost of comparable wooden boat unit. However, it wascalculated that these units even at this price level would be financiallyviable.

4.06 Before order for the construction of boats could be placed, otherproblems surfaced. In late 1980, it became evident that the management ofUvuvi Kigoma would have to be upgraded if the fishing centre were tooperate satisfactorily. At that time it was also felt that technicalassistance should be in place promptly and, therefore, IDA indicated thatunless the technical assistance agreement with the Crown Agents to providetechnical assistance personnel for Kigoma as well as coastal centres, whichhad been stalled for some time because of a dispute on withholding tax wasfinalised (see para 4.20), it would not agree to the procurement of steelboats for Kigoma centre. It was also proposed by IDA that a cancellationclause be included in the purchase agreement for boats (at a cost of 15% ofthe cancelled amount to be financed by IDA) as a hedge against the newmanagement of Uvuvi Kigoma not proving itself competent. Under theproposed arrangement based on the performance of the new management a firmdecision would be taken following delivery of first three boats in August1981 (some concern was expressed within the Bank on the feasibility of IDAfinancing the cancellation cost on the basis of a cancellation clausebetween the Borrower and supplier). In May 1981, the supervision mission(which also visited Kigoma) reported that the conditions imposed by IDA forgoing ahead with the procurement of boats had largely been met in as muchas the technical assistance agreement with the Crown Agents had been signedand a new General Manager of Uvuvi Kigoma was recently appointed. Themission also stated that although an evaluation of the new GeneralManager's performance at that time was not feasible because he had been inthe job only a few days; however, his qualifications and previousmanagement experience gave him a fair chance of doing reasonably well inhis new assignment. The mission also recommended financing under theProject an internationally recruited Chief Accountant at Kigoma (because it

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was considered unlikely that a suitable person for this position could befound locally) and development of a training program for the employees offishing centres to be financed under the Project. Subject to theseconditions being met and injection of reasonable equity capital in UvuviKigoma, it was recommended that the Closing Date should be extended toJune 30, 1984, and the contract for purchase of boats should be finalised.However, after considerable In-house deliberations, IDA decided not toextend the Closing Date for this component and this was communicated to theBorrower in September 1981. The main reasons against the extension of thiscomponent were: (i) poor track record of the project, (ii) generally poorparastatal performance in Tanzania, (iii) a realization that fishingrequired above average entrepreneurship, which parastatals were not capableof providing, to be commercially viable, and (iv) concern that once thetechnical assistance personnel to be provided under the Project werewithdrawn the management of the fishing centre would be unable to carry onthe business satisfactorily.

4.07 In early 1978 IDA agreed to finance out of the Project fundsrehabilitation of three old purse seine boats owned by Uvuvi Kigoma tospeed up Project operations pending the acquisition of boats provided underthe project. It was expected that the relatively straightforwardrehabilitation would be carried out without much problem and delay.However, only one boat was repaired satisfactorily and it has operatedintermittently since late 1979. The two remaining boats did not becomeoperational because the engines installed were of wrong size and the othercorrective work was not in line with the technical specifications.

Coastal Centers

4.08 Numerous difficulties were encountered in the establishment ofcoastal centres. Site identification, legal incorporation, recruitment ofstaff and finalization of investment plans took much longer thananticipated. Three sites (Bagamoyo, Nyamisati and Mtwara) were chosen forthe coastal centres. Compared to the development of the other twolocations, establishment of a centre at Bagamoyo was relatively problemfree. Lack of interest on the part of district authorities, shortage ofwater supply, absence of an all weather approach road, and difficulties inrecruitment of staff delayed the proper establishment of a centre atNyamisati until 1981 (at one point because of serious problems encounteredit was proposed to shift the centre to another location). Establishment ofa commercial centre at Mtwara was abandoned in 1980 because of uncertaintyabout fish resources and instead a research effort to determine resourcepotential. was agreed upon. This program was to be conducted under thesupervision of an ODA expert attached to Mtwara RIDEP.

4.09 Disagreements on the recommended design for coastal boats andTAFICO boatyard capacity to construct project boats were encountered in theearly phase of project implementation. A consultant was sent to Tanzaniain March 1978 by IDA to look Into these problems. This visit resulted inresolution of disagreement on boat design. However, the consultantconcluded that existing TAFICO boatyards would not be capable of meetingproject needs and orders for some of the boats would have to be placed onother boatyards. Following the approval of investment plans by TRDB forthe coastal centres orders for 6 boats were placed with Mikindani boatyard

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(owned by TAFICO) and 4 boats were ordered from Pangani boatyard (owned bythe district authorities) in 1978 and early 1979. The remaining 20 coastalboats to have been provided under the project were not ordered.

4.10 Periodically reported progress by the earlier supervisionmissions on the construction of boats is quite confusing. In June 1978, itwas reported that & boats would be ready by early 1979. In October 1978 itwas observed that while the boat building program was proceeding in atechnically acceptable way, the completion timetable was several monthsslower than expected due to delay in procurement of engines from outsidethe country. In February 1979 it was anticipated t-'at all, boats would becompleted within six months. In September 1979, 8 boats were reported tobe virtually complete and expected to be fitted with engines by year end.The engines were received in early 1980 and at that time 7 boats werereported to be ready while the remaining three were under construction. InMarch 1980, doubts were expressed regarding TAFICO's ability to install theengines. This problem was overcome by arranging for a NORAD expertattached to the Mbegani Fisheries Institute and a U.K. Marine Engineerattached to the Tanzania Harbors Authority to supervise installation. InOctober 1980, the position appeared to be that hulls for all the 10 boatswere nearly complete but the fittings were in various stages ofinstallation. At that time it was also observed that TAFICO had been veryslow in the construction of boats due to poor management and inadequaterelease of funds to the boatyards to permit them to procure the necessarymaterials 1I/. In May 1981, the supervision mission was informed thatlack of materials and power outages were preventing the boatyards fromcompleting the construction. The Permanent Secretary of Ministry ofNatural Resources promised to take personal interest in the matter and adelivery schedule for the boats was agreed upon. In accordance with thisschedule all the boats were to be delivered by April 1982. The mission wasalso informed that since the time of ordering boats the cost of materialshad gone up substantially and it would be unrealistic to expect theboatyards to absorb these costs. After reviewing a detailed proposal bythe Ministry, IDA agreed to an escalation of about 50X in the contractprice to be paid at the time of delivery. Two boats were delivered inOctober 1981, one of which had major structural and mechanical defects.Corrective work to make this boat seaworthy was carried out in early 1982(the cost of repairs was paid by the Ministry). By June 1982, as minimalprogress had been made in the delivery of boats (at that time only 3 boatshad been delivered), the supervision mission informed the Ministry thatunless substantial progress in the delivery of boats was made by September30, 1982 (at least 8 boats were to be delivered by that date) the ProjectClosing Date (which IDA had informally agreed in September 1981, to extendexcept for the lake fisheries component) would not be extended. As thiscondition was not satisfied by the agreed date (by early October 1982, only5 boats had been delivered), IDA informed the Government of its decisionnot to extend the Project Closing Date.

4.11 At the time of last supervision (October 1982) work had beencompleted at Bagauaoyo and Nyamisati on the rehabilitation of some existingshore facilities, e.g., offices, godowns, ice plant and cold storage. Fourhouses for expatriate staff and transport equipment provided under theProject had also been procured.

11/ It is worth noting that both boatyards had been paid almost 100% of theprice in advance.

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Ujamaa Village Program

4.12 Identification of the first four villages to participate in theUjamaa pilot scheme was not done until 1978. The first loan under thisprogram was approved in late 1978. In the meantime a master fisherman wasappointed to head the mobile fishing unit and the fishing villages toreceive craining had been selected in mid 1977. Fishing trials withimproved beach seine units 12/ were carried out in early 1978 and provedquite successful. The expatriate Master Fisherman successfullydemonstrated the effective use of the mobile fishing units 13/ in thevillages. In mid-1978, the outbreak of cholera led the local authoritiesto close all village fishing for a few months and this caused some delay inthe implementation of this component.

4.13 In February 1978, lack of coordination between the localauthorities, the Fisheries Division and TRDB was noticed by the supervisionmission as having led to some confusion with investment plans beingprepared for certain villages by TRDB which proved to be unacceptable tothe local authorities. To safeguard against repetition of this problem acoordinating committee was established in Kigoma (representing the regionaland district administrations and TRDB and to be chaired by the RegionalFisheries Officer) to identify villages for participation in the program.In August 1979, the supervision mission reported that the committee hadsignificant impact on speeding up the program as evidenced by TRDB'sapproval of financial plans of two more villages. This optimism about theeffectiveness of the committee was, however, shortlived; in March 1980, thesupervision mission observed that despite the establishment of a projectcoordinating committee in Kigoma to speed up identification, no furthervillages have been identified and 5 approved villages have not startedfishing operations. The lack of progress was partly attributed tooverlapping responsibilities for procurement of materials. Action wastaken to overcome this problem, and it was agreed that henceforth theProject Coordinating Unit (PCU) in consultation with the villages and TRDBwould prepare detailed lists of items to be procured and TRDB wouldrestrict itself to direct payment and monitoring the implementation of theinvestment plans and assuring that correct procurement procedures werebeing followed.

4.14 This component suffered a further setback when almost the entireshipment of netting and a few outboard engines was stolen. Despite thedifficulties encountered the earlier supervision missions repeatedlyexpressed optimism about the success of this component. In May 1981, thesupervision mission reported that disbursements in respect of 5 approvedvillages were only 30% of the investment plans and the investment plans for7 more villages were at various stages of preparation. At that time themain problems affecting this program were identified as:

(a) lack of proper management in the villages;

(b) lack of boat building and other materials; and

(c) insufficient technical assistance to the villages bydivisional fisheries and TRDB staff.

12/ Consist of a small boat and a net and two teams of fishermen who pullthe net on to the beach.

13/ Complete fishing units which traveled from village to village for thepurpose of training local fishermen.

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To speed up implementation it was agreed that by August 1981 TRDB wouldcomplete a survey of the needs of participating villages. The mission,however, was skeptical about the outcome of the survey and the prospect ofa significant improvement in the implementation of this program andrecommended that the component be reduced to 12 villages. A survey wasindeed completed by TRDB in August 1981, but no action was taken to assistthe villages in dealing with the problems identified. Because virtually noprogress had been made in the year following the survey, the supervisionmission in Hay 1982 recommended further reduction in the component to thealready five participating villages. At the time it was decided to closethe project (October 1982) none of the investment programs in respect ofthe 5 villages had been completed.

Lake Transport

4.15 This component did not get off the ground. At the time theProject was appraised, there was virtually no suitable transport facilityin Lake Tanganyika. However, an old steamer "Laemba- was being repairedslowly. Because of the uncertainty of this boat becoming operative and tofacilitate village fishermen to take their fish catch to the markets, alake transport component was included in the project. As -Laemba' startedoperations before any action in introducing transport facilities could betaken, this component was dropped.

Market Study

4.16 Difficulties were experienced in the recruitment of a suitableperson to conduct the study. A fish marketing expert who was expected tostart work on the marketing study, declined the offer in April 1978 and itwas not until early 1979 that an expatriate marketing economist wasrecruited through FAD. A contract was also signed in mid 1979 with theUniversity of Dar-es-Salaam to conduct a household survey of fishconsump-tion in the Dar-es-Salaam area. By early 1980, the Dar-es-Salaamhousehold survey was completed and data processing was commenced.Thereafter a similar exercise was undertaken for the Kigoma region. Theoverall study was completed in early 1982. While it contained some usefulrecent data on fish production, prices and consumption, it was consideredto be of limited value to the original project objective, because it didnot contain any useful proposal for marketing incremental fish catch underthe project. However, since the scope of the project had been sodrastically reduced, in particular the elimination of Kigoma as a majorproduction center which the study was intended to support, the studyshortcomings were not expected to have any serious bearing on thescaled-down Project.

Pollution Study

4.17 In October 1978, MNR reported that a suitable person had beenlocated in Mwanza to carry out the study. The pollution expert was tosupervise the study while analyses were to be conducted by the TropicalInstitute in London. In August 1979, the study was reported to beproceeding satisfactorily. Six months later, however, it was reported thatthe first supply of chemicals had evaporated due to inadequate storagefacilities and another shipment had been ordered. These chemicals weresubsequently reported to have been procured but the study was notcompleted.

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Technical Assistance

4.18 During the first year of project implementation it was noted thatTAFICO's non-IDA activities placed a heavy burden on its management whichprevented the institution from managing the technical assistance componenteffectively. To overcome this problem the responsibility for technicalassistance was shifted to the office of Director of Fisheries in theMinistry of Natural Resources. Further complications and the need foradjustments in the implementation of this component arose because of theoverlapping technical assistance provided under bilateral aid; at one timeseven of the planned nine technical assistance personnel under the projectwere reported to be financed by bilateral aid. This situation largelyresulted from lack of coordination with other providers particularly atproject appraisal. DANIDA, in December 1978, decided to withdraw technicalassistance. This action was dictated by DANIDA's concern that the KigomaCentre was not making any progress.

4.19 Significant changes were required in the planned technicalassistance to TAFICO and the fishing centres. The position of manager atTAFIC0 headquarters to assist in the overall planning and execution of thedevelopment of the fishing centres was abolished to reduce TAFICO'sparticipation in the establishment of the fishing companies. This actionwas considered necessary because of TAFICO's inability to play aconstructive role in project implementation (see para 6.02). To assistTAFICO to improve its financial management, IDA agreed in 1978 to therecruitment of an expatriate Financial Manager funded under the project.The incumbent, however, proved to be ineffective and IDA in January 1980stopped financing his salary out of the project funds. About half-waythrough project implementation it was realized that the choice of sites forcoastal centres made it impractical to effectively provide centralized(Dar-es-Salaam based) technical assistance as envisaged at appraisal. Forthis reason and because the long delay in the establishment of coastalcentres was considered to warrant full-time technical assistance for eachcoastal centre even under the most favourable circumstances, it was decidedto provide one Master Fisherman and a marine engineer for each of thecommercial centres. Eventually technical assistance personnel for only twocoastal centres (Bagamoyo and Nyamisati) were recruited; no technicalassistance personnel were recruited for the third centre at Mtwara becauseof the decision not to proceed with the development of a commercial centreat this location.

4.20 Finalization of technical assistance arrangements were undulydelayed. Proposals for technical assistance were not invited until 1979.Crown Agents (UK) were chosen in December 1979 in preference to 3 otherorganizations who had responded to the Government's invitation to provideone Master Fisherman and one marine engineer each for Kigoma, Bagamoyo andNyamisati; and a Management Adviser and Fish Processing Expert for theKigoma Centre. For Kigoma the position of Management Adviser was includedat the request of the Borrower. The Fish Processing Expert was intended toreplace the refrigeration engineer included in the project. Because of thedecision not to extend the closing date for the Kigoma component theintended technical assistance personnel for the centre were not recruited.The finalization of agreement with the Crown Agents was delayed by aboutanother year mainly due to the Government of Tanzania's insistance on

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subjecting the payments under the agreement to withholding tax. Ihisproblem was satisfactorily resolved and the four technical assistancepersonnel for Bagamoyo and Nyamisati coastal centres started arriving inTanzania In mid-1981.

Reporting

4.21 The Project Coordination Unit, when established, issued progressreports, although at irregular intervals. The contents of these reportswere not always accurate.

Accounts and Audit

4.22 The accounting and auditing covenant called for audited financialstatements of TAFICO and the fishing centers to be submitted yearly.During the course of project implementation, only TAFICO's audited accountsfor financial year 1977 were submitted. Project accounts were not properlymaintained by PCU in respect of technical assistance. Although TRDBmaintained separate accounts in respect of the fishing centers and Ujamaavillages, many discrepancies were noted therein.

Procurement

4.23 The prescribed procedures required boat engines, equipment andvehicles to be procured through ICB with a local preference margin of 15%or the existing rate of import duties whichever was lower. Civil works andboats were to be procured under Government's normal competitive biddingprocedures. Because of the likely lack of competitiveness in the boatbuilding industry, which is largely Government controlled, it was expectedthat contracts for construction of boats would be negotiated. Asanticipated, the contracts for construction of 10 wooden boats for coastalcenters were given to two public sector boatyards. Switching over to steelboats for Kigoma centre necessitated ICB (and subsequently internationalshopping) because there was no steel boat building capacity in thecountry. Preparation of bid documents for steel boats was delayed bynearly a year because TAFICO did not have the requisite expertise forpreparing detailed specifications and tender documents. Procurement ofcoastal boat engines, workship tools, and vehicles was handled through ICBwithout any major problem.

4.24 Technical assistance personnel (provided by the Crown Agents)were recruited after evaluation of 4 proposals. Some minor items (mostlyhousehold equipment for Technical Assistance personnel) which were notavailable locally were procured through the Crown Agents.

Costs

4.25 The project costs were originally estimated to be US$ 12.4million of which IDA was to contribute US$ 9 million and the balance was tobe provided by the Government, joint venture companies and Ujamaavillages. Because of many fluctuations in the scope of the project (mainly

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due to delay in implementation) costs were revised several times. Pendinga detailed final accounting, project costs as at end of June 1983 wereestimated at US$ 5.8 million. The IDA disbursements (planned and actual)are as follows:

Disbursements

Planned vs. Actual

Amount of the AmountsCategory Credit Allocated Disbursed

(USS) (USS)

(1) Sub-loans 5,000,000 1,115,796.20

(2) Technical Services:

Remuneration, housingand vehicles 3,000,000 3,061,896.42

(3) Unallocated 1_000_000_ -

Totals 9,000,000 4,177,692.62

Disbursement and Funding

4.26 Five entities were involved in disbursement of project funds,i.e., IDA, Government, IAFICO, Regional Authorities and Ujamaa villages.The Project had a very poor disbursement record. Cumulative disbursementsas of the original Closing Date (December 1981) were about a third of thecredit amount and the total amount disbursed was USS 4.2 million or about47% of the credit amount of USS 9 million. Some delays were experienced inthe receipt of Government contributions. TAFICO and Regional Authoritiesdid not fully contribute their respective shares towards the equity capitalof fishing centres.

Performance of Consultants

4.27 Except for the Financial Manager, TAFIC0, and the economistretained for the marketing study, performance of consultants wassatisfactory. Consultants employed initially to evaluate bids for steelboats and subsequently retained to assist ir international shoppingexercise did an excellent job. Similarly, technical assistance persornelprovided under the contract with the Crown Agents performed well. Theexpatriate Project Manager located within TAFICO initially and MHR laterand the master fishermen engaged to train Ujamaa villages also performedgenerally well.

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V. PROJECT IMPACT

5.01 Ihe project aimed at the development of commercial fisheries at 3selected sites along the coast and one on Lake Tangayika, to improvefishing techniques and marketing cata and provide the basis for fisheriesdevelopment in the traditional sector by supporting a pilot fisheriesprogram for Ujamaa villages on Lake Tanganyika. Any meaningful comparisonof actual performance vs aims is difficult because to date the projectimpact has been almost nil as the various project components are either notoperational or have only recently started operating.

5.02 Fishing Operations. For the coastal centres only 3 out of 30boats were delivered about two months prior to the original Credit ClosingDate and none of them was operational. At the time of last supervision(October 1982) some commercial fishing activity had started at Bagamoyo butthe records available were too sketchy to derive any meaningfulconclusions. As of September 1981, when the decision not to extend theKigoma fisheries component was communicated to GOT, no project relatedactivities h&d coumenced and out of the three old boats which were repairedwith the use of project funds only one boat had operated intermittently.The Ujamaa village program did not proceed beyond the five villagesapproved in 1978179. As of October 1982, fishing operations had notstarted in any of the villages.

5.03 Economic Rate of Return. At appraisal the overall projecteconomic rate of return was calculated at 27%; 22% for the coastal ceatres,28Z for the lake fisheries including transport facili.ies and 30% for theUjamaa villages. As none of the components have operated on a meaningfulscale, calculation of updated rates of retura is not possible. However,given the delays in execution, costs i.-curred to date, and lack ofdemonstrated production increases, it is probably safe to assume that therates of return have been negative.

VI. INSTITUTIONAL PERFORMANCE

6.01 The overall performance of the various agencies involved inproject implementation has been unsatisfactory. TAFICO, while not a directrecipient of funds under the project, was intended to play a major role inthe ownership and establishment of the ccmmercial fishing centers. TheProject proposals also called for participation by the relevant DistrictDevelopment Corporations in the ownership of joint venture companies andprovide necessary support and assistance in establishment of physicalinfrastructure. The Ujamaa villages program was to be managed by TRDB inconjunction with the regional fisheries extension service. The Ministry ofNatural Resources was to have the overall responsibility for zll projectactivities and in this role was to be assisted by a coordinatingcommittee. The Ministry was also charged with the responsibility forcarrying out the marketing study.

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6.02 TAFICO. At appraisal, TAFICO had not developed into a fullyoperational parastatal. As time passed it became evident that it was aweak organization, suffered from poor umnagement and was ill-equipped tohandle its assigned role. The other business related problems of TAFIC0progressively overwhelmed its nagement to the extent that it lost what-ever ability it had to start with to play a constructive role in theimplementation of the project. However, because of TAFICO's central rolein the fisheries sector, the separation of its problems from the projectproved to be a slow process. When a new General Manager of TAFICO wasappointed in 1977 it was hoped that this change would result in improvementin the management of the corporation. With this expectation and to supportTAFICO in improving its financial management IDA agreed to finance theappointment of a Financial Manager out of project funds. Ihese remedies,however, proved ineffective and eventually it was decided to restrictTAFICO's role within the project to its participation in Joint Venturecompanies and that only as a shareholder with no operationalresponsibilities.

6.03 MRDB were given an important role in project implementation.Firstly, they were designated to review and approve investment plans forthe commercial fishing centres to ensure their financial viability andprovide necessary financing for implementation of these plans. Secondly,they were charged with the responsibility for the selection of villages toparticipate in the Ujemaa villages' program. This function was to beundertaken by TRDB in cooperation with the regional authorities in generaland Regional Fisheries Officer in particular. In evaluating the investmentproposals for the fishing centres, 7RDB's performace was reasonabalysatisfactory; however, delays were experienced in releasing funds. IRDB'shandling of Ujamaa village program was marred by delays in identificationof villages, lack of cooperation/coordination with the Regional FisheriesOfficer and lack of assistance to participating villages in implementation-of investment programs. As a result, as of the original project closingdate, only five villages (compared with appraisal estimate of 20) wereparticipating in this program and none of the villages had actually startedfishing operations. Difficulties also arose as a result of TRDB'sinvolving themselves in procurement matters; this problem was resolvedduring regular project supervision.. IRDB did not maintain accurateaccounting records of project funds.

6.04 The Ministry of Natural Resources was given the overallresponsibility for all project activities with the Director of Fisheriesserving as project coordinator. The Ministry was to be assisted by acoordinating committee. It Is difficult to assess what positive impact, ifany, the committee had on project implementation. The lack of cooperationand coordination between involved organizations and agencies persistedthroughout the project period. The Committee and the Ministry demonstratedalmost complete helplessness in influencing and expediting the constructionof boats for the coastal centres. They were also ineffective in gettingthe Government to release funds on a timely basis and were unable to assuretimely funding of fishing centres by TAFICO, Regional Authorities andTRDB. Frequent changes in the position of manager of Project CoordinationUnit created discontinuity; altogether 4 different persons (2 expatriatesand 2 locally recruited persons) filled this position.

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VII. IDA PERFOkiAŽICL

Project Concapt and Design

7.01 The Project, or at least its timing, is (in retrospect) extremelydifficult to justify. At the time of appraisal there were only twopositive factors underlying the project: the availability of relativelylarge unexploited fish stocks in the lakes and unsatisfied demand for bothfresh and dried fish. On the other hand there were many identifiedweaknesses and unknowns which were likely to seriously inhibit projectimplementation. Firstly, the two institutions (TAFICO and TRDB) which wereto play pivotal role in setting up project entities and facilities werethemselves not yet strong organizations with strong managements. Secondly,the management of major project components was to be entrusted to eitherinstitutions yet to be created (fishing centres) or institutions aboutwhich there was little knowledge available (Ujamaa villages). 7hirdly, themagnitude of resource constraints (lack of manpower, materials andfacilities) was not fully appreciated. Fourthly, the marketing study,which should have preceded the project and its conclusions incorporated inproject design, was made a part of the project. Lastly, the Ministryitself (as identified at appraisal) was weak and unabLe to establish acoordinated approach with regional authorities on fishery developmentplans.

7.02 It appears from the events that occurred during implemetationthat a common understanding on many basic issues was not established priorto or during negotiations. Soon after effectiveness, the Tanzaniansobjected to: (i) the use of wooden boats for Lake Tanganyika and insteadsuggested steel boats which were considered better equipped to meet lakeconditions; (ii) the design of boats for lake as well as marine fisheries,and (iii) the establishment of a new company at Lake Tanganyika.Resolution of these problems (on the basis of proposals made by theTanzanians) proved in the end to be costly and time consuming. Inretrospect, IDA should have better assured itself that these matters hadbeen fully and thoroughly resolved prior to project approval.

Supervision

7.03 The IDA supervision of the project appears to have beenintensive though weak. Altogether 16 missions involving 256 man days inthe field were mounted. From the earlier supervision reports the mainmessage appears to be that while there was some delay in projectimplementation there were no basic problems which would inhibit itssuccess. This undue optimisim can possibly be attributed, in part, to theinaccurate (and often contradictory) progress reports given by theTanzanians, but may also have reflected the need for more profound analysisand probing by the missions and the management. The earlier supervisionmissions laid great emphasis on having the marketing arrangements finalizedto handle project fish production. While finalisation of marketingproposals was required to fill a critical gap left at project appraisal,equal emphasis, if not more, was needed to achieve the project's basicobjective of Increased fish supplies through establishment of fishproduction facilities. One effort to speed up fish production by providing

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funds for rehabilitation of 3 existing boats at Kigoma was frustrated bylack of technical input in the rehabilitation work. Earlier attention toand closer follow-up on the establishment of fishing centres and completionof boats and infrastructure could conceivably have resulted in more successin achieving project objectives. However, the main problems in checompletion of facilities and lack of institutional framework inhibitingprogress were not Fully appreciated until quite late. Some of the criticalproblems might have been identified earlier and, to the extent thedifficult overall economic conditions In Tanzania would have permitted, atleast partly resolved had the missions placed less reliance on the reportedstatus of implementation and carried out closer supervision by frequentlyvisiting project areas and boatyards. The failure of missions toadequately flag serious and persistent delays in project implementationearlier and the management's omission to read between the lines werepartially responsible for the project's disappointing performance(it was not until May 1981 or one month before the scheduled completiondate that the project performance rating was changed to 3 and the projectwas identified as a 'problem project').

VIII. CONCLUSIONS

8.01 Main lessons to be learned from the Project are that:

vi) Greater attention needs to be given to the country'simplementing capability (1nstitutional, manpower, financialand physical resources);

(ii) Project scope and design should be consistent with availableresources and existing institutional framework;

(iii) Agreement on major issues (e.g., type and design of boats,project implementation arrangements) should have beenbeen reached prior to project approval and appropriatelyreflected to avoid misundertanding subsequently; and

(iv) Studies and collection of data significantly affectingproject scope and design should be developed prior toproject implementation and the pertinent results reflectedin the design of the project.

[IRD 11795

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