Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 4863

PROJECT COMPLETION REPORT

ZAIRE

FIRST LIVESTOCK DEVELOPMENT PROJECT(CREL T 398-ZR)

December 30, 1. 13

Eastern Africa ProjectsCentral Agricultural Division

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

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CURRENCY EQUIVALENTS l/

Currency ULJit - Zaire

As of February 22, 1980 As from December 1981

Z 1.00 US$0.34 Z 1.00 US$0.19US$1.00 = Z 2.90 US$1.00 = 2 5.35

As of June 19, 1981

v 1.00 US$0.17US$1.00 = z 5.80

WELGHTS AND MEASURES

Decimal Metric System

Metric British/U.S. Equivalents

1 meter (m) 3.3 feet1 cubic meter (m3) 35.31 cubic feet1 hectare (ha) = LOO ares 2.47 acres1 kilometer (km) 0.624 mile1 kilogram (kg) 2.20 pounds (lb)I metric ton (mton) 2,204 pounds (lb)

ABBREVIATIONS

AIDR - Association International de Developpement Rural OutremerCP - FAO/IBRD Cooperative ProgramDED - Development Economics Department of LBRD (now DRD and ERS)ECF - East Coast FeverFAO - Food and Agriculture Organization of the United NationsGECAMINES - La Generale des Carrieres et des MinesMARD - Ministry of Agriculture and Rural DevelopmentONDE - Office National de Developpement de L'ElevageSOFIDE - Societe de Financement du D6veloppement

1/ The conversion rate between the Zalre and US dollar varied betweenUS$1.00 = Z 0.50 (at appraisal) and US$1.00 = Z 5.35 (completion)during the Project period.

FOR OFFICIAL USE ONLY

ZAIRE

FIRST LIVESTOCK DEVELor4ENT PROJECr (Cr. 398-ZR)

PROJECT COMPLETION REPORT

Table of Contents

Page No.

Preface ...... *.. . .... * ** *.* ***** ***i

Basic Data Sheet .,0 40 9 , eve.... ,~ O.......... ,.,,, ,,,..,,.i

Highlights ..... s............ O ... . - iv

I. INTRODUCTION .. . ... , ,, , 1

II, THE LIVESTOCK SUBSECTOR ....... ., * , ., , .1

III. PROJECT FORMULATION ISD DESCRIPTION .......................

A. Identification, Preparation and Appraisal , 6B. Project Descript,ion 9C. Technical Backgrouad and Objectives ..................... 14D. Ranch Status ........... ... , . 15

IV. PROJECT IMPLEMENVTAION ......................................

A* General Environment 17.. *** SC9*S.... , , , , 17B. Project IHistory ..... ......... .... , , .. 18C. The Situation at Project Completion .................... 25D. Project Preparation and Trainting Components 2. ............ Z6

V. ONDE - INSTITUTIONAL DEVELOPMENT 7........................ 27

VI. PROJECT PERFORMANCE ................9 ........................

A. Policy Environrment ...... ................... 34B. OrganizationaL Issues ... * ............... 35C. Technical Issues .. 38 *.........@.. * , *.,, .9 ,,. 38D. Financial Issues . .. 40E. Issues of Pricing Policy ** * *, ........ . 44

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

VII. FINANCIAL AND ECONOMIC RESULTS ..... .......................... 47

VII,. GOVERNMENT ANDI BANK PERFORMANCE, .,......................,, . 48

IX, FOLLOW-ON PROJECIS .................. * 52

X. SPECIAL ISSUES ........ ... , , , 53

XI, CONCLUSIONS .......... . 54

LIST OF ANNEKES

ANNEX 1 Total Project Cost: Appraisal and Completion Data

ANNEX 2 Prljec; Cost: Comparison by Categories

ANNEX 3 Physical Targets: Appraisal and Acttual

ANNEX 4 Financial Rate of Return

ANNEX 5 OJ1)E Finances

ANNEX 6 Econonic Prices

ANNEX 7 Comments received from ONDE

CHARTS ONDEMinistry of Agricultural & Rural Development

MAP IBRD 10076R (PCR)

ZAIRE

FIRST LIVESTOCK DEVELOPMENT PROJECT - Cr. 398-ZR

Project Completion Report

Preface

This is a completion report on the First Livestock Devel-opment Projectin Zaire, for which Credit 398 ZR, for US$ 8.5 million, was approved in June1973. The credit closing date was December 31 1981, two years later thanoriginally planned. The final closing was further delayed because some minorpayments were pending for goods held up at Zairian customs; the lastdisbursement was made in May 1983.

The Project Completion Report (PCR) was prepared by staff of theEastern Africa Regional Office, on the basis of a thorough review of projectfiles and interviews with Bank staff associated with the Project and Borrowerrepresentatives. The final supervision mission gathered the requiredinformat-.on to prepare the PCR; the Office National pour le DMveloppement dei'Elevage (ONDE) provided some data to support the exercise, but did not preparea full compLetion report.

The PCR was submitted to OED on June 29, 1983. The project was notselected for audit by OED and the PCR was sent to the Borrower on October 3,1983 for comments. Comments received from ONDE are attached as Annex 7.

The valuable assistance provided during the preparation of this reportby Borrower representatives and Bank staff interviewed is gratefullyacknowledged.

-ii. -

FtRSS LIVESTOCK D)VeXLPMaENT 0'OJL'T - Cr. J98--R

PKUJECT COMPLETION KPFol;T

IASIC DATA SHEET

Actual or Actual as ofAvpratgLs^ _itii7uid r oQt 4g,nr=liil

Kay Project a eitiaL duc.10 4ea .spc a

Total corts (US$ rmilLion) 1b t 12.91 86Credit amunt (USI mLILion) 8.5 8.3 100Date physical components complated 12/79 t2/81 130 4Ptoportion then completed (2) 100 50/60 50/60Economic rate of return (2) L7 6.0 35PinanciaL rate of return (C) Li 9.0 82Institutional performance - miedTechnical perforines - fairNumber of direct bensfici&dire 400 600 150 3/

Proiece Dat-e 9ri2en^ Actual orPr&-ft !Ivisolls estimcate actual

Pirst wencionrnd hL Bank file. 1969N aotiationo 4/1973Date board approval - - 6/07173Date credit agreemnt - - 6/21/73Date effectiveness 10122/73 2/14/74Closing date 12/31/79 12/31/81

CINUHUTIVE DISBURSEHENTS

IDA CRODIT 398-21 rn 74 75 76 77 78 79 80 81 82 83

Appraisal. -teimata (U$ million) 1.6 3.4 5.4 6.8 7.7 8.5 - _

Actual Diaburemesnt (US$ million) 0.6 1.6 3.8 5.0 S.5 6.4 7.3 7.6 8.3 8.5Actual a X of estimate 38Z 47X 70X 73X 711 752 862 892 98 t00Date of fiual disbursunat Kay 10. 1983Principal repaid to 12/31/81 none

IXSSION DATANo. of HanDaye Special 4etion, Performance Types of

Misaion Date nereone in field R9preeented t Trend Problom

-tdentification

FAO/ aBD Feb.19699 n.-.S. n.e. n.e.

Prearaetion

PAO CP/aWRD Sept. 1969 n.e. M.A.FAD CP/IBgD Sept. 1970 n.e. oa.

Polov-u~ Prop.

iselozL £BRD Doe. 1971 2 32 c, a

Apoprateelhay 1972 4 96 a, b, c

Sob-otal 128

Supervistion I leb/March 1974 2 32 4, a 2 2 n &ad TSupervision 2 Sept/Oct 1974 2 10 d. e 2 2 t a*nd TSu,arvision 3 March 1975 2 22 a, 3 1 n and tSupervisuon 4 March 1976 4 116 a, c, e, b 2 2 1T and PSupervision 5 October 1976 1 5 a 2 2 14 r end FSupervision 6 Apr/May 1977 2 44 e, b 2 L n T and VSupervision 7 September 1977 2 3b b. a 2 2 14 T and PSupervision 8 January 1978 1 3 b 2 2 M T and FSupervision 9 April 1978 2 24 b. a 2 1 FtT and YSupervision 10 September 1978 3 42 b, a, c 2 2 M T P 4aid PSupnrvision 11 May 1979 2 32 a. c 2 2 M F T and PSupervtsion 12 September 1979 2 24 a b 2 2 14 F P and TSupervision 13 Fuhbruery 1980 2 30 a c 2 2 Y P4 ,, Aid TSupervision 14 sept/Uut 19S0 4 32 a. b, c, d 2 I M r P and rsuperv IH ion 15 ht7ritcry 19H1 2n 2 24 b.f -

Superv is toil Ito 4I- /.I tie 19Nt 2 22 4. c 2 I M P , rSoii,rvla ISm 17 .i-ivt/L't I'Mtl 2 2' .1. C( 2 1 m r 1 intl rScipervi iOm,, I) 1., I./ r r1I82 2 22 . ' M P .11 'T

T4 i rAl . ........

BEST COPY AVAILABLE

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OTHER PROJECT DATA

Borrower: Government of ZaireExecuting Agency: National Ranching DeveLopment Authority (NRDA)Fiscal.Year of NRDA: January 1 to December 31Name of currency: Zaire (Z)

Average Exchange Rates 8/

Appraisal year average 1973 US$ I- Zalre 0.50Implementation year average 1974 US$ 1- Zalre 0.50

1975 US$ 1- Zaire 0.501976 US$ I- Zaire 0.8071977 US$ 1. Zatre 0.8571978 US$ 1- Zatre 0.8361979 US$ I 2aare 1.7291980 US$ 1- Zatre 2.801981 US$ 1- Za£re 4.384

1) Percentage calculated from date Board approval

2) Percentage calculated from date Board approval. Closing date extended.

3) Employees of P.M.M.K.

4) a = Livestock specialist; b - Economist; c - Financial Analyst;d = Agricultural Economist; e - Agriculturalist; andf - Management Specialist.

5) 1 - problem free or minor probleas; 2 moderate problems; and

6) 1 - improving; 2 - stationary; and 3 deteriorating

7) F - Financial; M - Managerial; T - Technical; P Political.Hostcritical problem first to left.

8) Information obtained from International Financial Statistics publishedby International Monetary Fund.

9) No data available on mission participation and mandays in field.

10) No rating. Mission's objective to carry out an in-depth diagnosis ofONDE, in order to prepare recommendations for possible restructuringof the institution.

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ZAIRE

FIRST LIVESTOCK DEVELOPMENT PROJECT - Cr. 398 ZR

Project Completion Report

Highlights

The Livestock Development Project was IDA's first agriculturaloperation in Zaire. The project was identified and prepared by FAO/IBRDCooperative Program (CP) missions in 1969 and 1970 and a joint Bank/CPmission in 1971. Appraisal was carried out in May 1972 and the Creditapproved in June 1973. The project was designed to support the developmentof three existing Government ranches in Shaba over a period of six years;key objectives were: (a) to make more efficient use of pasture and otherranch resources and thus increase production; (b) to build a nucleus ofwell-run ranches that could support smallholder ranch development at alater stage; (c) to provide training for Zairian staff in ranch management;and (d) to promote Zaire's agricultural development efforts more generallythrough preparation of sound agricultural projects for external financing.Incremental production was expected to be 2,000 tons of meat a year at fulldevelopment, equivalent to about 15% of Zaire's meat imports in 1973.

The project had a turbulent history. During the project's life,most commercial agricultural activities in Zaire were first nationalized,then returned to private ownership. The entity established to implementthe project (ONDE) was in the thick of events, as all private ranches weretemporarily given to ONDE and its assignments and job changed frequently.Zaire's economic crisis was born and worsened over the period, and theunsettled political and military situation in Shaba had repercussions forthe ranches, which were located nearby. More narrowly, projectimplementation encountered numerous problems, including poor consultantperformance, difficulties in recruiting staff, heavy cattle losses (duringan import program), steady lion losses, persistent low fertility, andmounting problems in supply of basic inputs (fuel and veterinary productsin particular). Low cattle and meat prices, a rigid administered pricesystem, and the efforts of Shaba authorities to apply even tighter pricecontrols than those generally in force at the national level were alsopersistent problems throughout the project's life. Training of Zairianstaff was overall a failure and was one of the greatest disappointments inproject implementation.

Achievements fell considerably short of appraisal estimates interms of physical development, cattle production, and financial andeconomic returns. Physical development stood at about 50% of appraisalestimates. Production in 1981 was 46%, 49% and 21% respectively ofappraisal projections for the three project ranches. The 1981 weaning rateof about 50% was far below the target of 77%. These physical shortcomingsare partly explained by the fact that capital expenditures were far lessthan projections (33%) and that construction of basic infrastructure suchas houses, livestock roads and bridges and provision of capital inputs fellsubstantially short of objectives. On the other hand, operating costs

v

(technical assistance costs, purchases of imported inputs, and ranchworking capital) were far higher than projected. Actual project costs wereUS$ 12.9 million or 86% of appraisal estimates. The IDA credit was fullydisbursed but Government and ONDE financing was less than anticipated.Delays and low Government budget allocations were a persistent problem.

The project's financial and economic rate of return at projectcompletion are estimated at 9% and b% respectively, compared to 11% anr 17%at appraisal. Official livestock prices have had a key role inprofitability and in financial rates of return; also, because of ONDE'suncertain future it has been assumed that no further herd growth will takeplace. Nonetheless, important risks remain and the future of ONDE and itsranches is uncertain. Discussions between the Bank and the Government onthe future of ONDE are still on-going. It is hoped that a satisfactoryagreement can be reached shortly.

The project has been partially successful in achieving the mainobjective set out at appraisal - to increase beef production. However,production was substantially less than appraisal expectations. The projectexperience has raised numerous issues. Institutional development was a keyobjective, and the experience was mixed. ONDE, a new parastatal, wasestablished and survived, and has acquired experience and stature inZaire. Nonetheless, it still has many weaknesses, including an inflatedheadquarters, inadequately trained staff, weak financial management, aprecarious financial position, and inadequate management systems. Theinstitution's role and future are uncertain and there is a need for carefulreview and planning. Other institutional issues include project managementissues and numerous problems with recruitment and employment of technicalassistance personnel. From a technical standpoint, the project'sobjectives were limited and iaodest - to build on an existing ranchingtechnique proven in Zaire. At one stage efforts were made to introduce newtechniques (seasonal breeding for example) which failed; while theseoffered long term promise the time was not propitious and innovations werenot well prepared. Technical management was disappointing. Financialmanagement was an almost perpetual problem for the project, and continuingefforts were required, particularly since 1977, to ensure that properaccounts were kept and audited and to resolve successive financial crises.The lack of any internal Government supervision and accountability is a keyexplaining factor. Overall, management was made unusually difficultbecause of external circumstances.

Pricing policies are an interesting case study. While specificcovenants, which required consultation on price changes, were not inthemselves respected or proved an effective tool, IDA played a key role inencouraging price changes at several junctures, and twice clearlyencouraged the Government to increase prices despite a reluctance born ofconsumer pressures in urban areas and mining centers. The dialogue onpricing issues evolved substantially over the project life, from arelatively narrow focus on the level of an individual commodity price to asector wide concern with pricing policies, leading to major changes in thesystem overall in recent years.

- vi -

Project implementation raises special problems and demands when acountry faces economic difficulties as serious as these confronting Zaire.However, as demonstrated by the progress of an important project component(the Muhila ranch with an overall economic rate of return of 22%), thesedifficulties can often be overcome. It is clear, however, that specialefforts are needed to simplify designt to build in flexibility to allowadaptation to change, and to ensure careful supervision and effectiveaction to resolve problems as they arise (para 10.01). The major lessonslearned from this experience are:

(a) Pricing policies have direct and critical importance forthe success of a project, but were difficult to handlewell solely in a proje't context and needed to be partof an active sector dialogue (para. 6.29ff).

(b) The difficulties of institutional development must not beunderestimated. Sustained efforts and specialist input oninsItitutional issues are critical in the early stages andduring implementation to meet the ever changing situation(para. 5.01).

(c) Budgetary allocations proved an unending problem and IDAwas not successful in ensuring that needed funds wereincluded in the budget and were released in reasonabletime until a country wide approach was taken and until weunderstood the budgeting system and its problems better(para.6.30). The importance of establishing good, cleararrangements for accounting and auditing was underlined(para. 6.23-25).

(d) Difficulties of recruiting and retaining qualifiedtechnical assistance staff, in a remote area such asShaba, should not be underestimated. Careful planning andsupport from IDA were imperative (6.06 ff).

(e) IDA supervised the project intensively and provided directand valuable support in management anid problem solving.It was clear, however, that a more coherent approach,based on an appreciation of broad sectoral issues, andreview of key project problens at high level in theGovernment and the Bank were most effective in resolvingproject problems (8.03 ff).

(f) Training programs need to be carefully defined atappraisal, and continuous attention should be focused ontheir implementation, as there is a marked tendency forsuch programs to drop in priority when other problemsmount, despite their long term importance (para. 6.13).

(g) Although "privatization" - divesting the Government ofa parastatal (ONDE) and parastatal ranches - waEexplored, it proved far more complex than antica.pated andobjectives and means must be more carefully examined ifthe effort is to succeed (para. 5.24).

ZAIRE;

FIRST LIVESTOCK DEMELOPMENT PRJJEcTr (CR. 398-Z,R)

PROJECT COMPLET1ON REPORT

1. INTRODUCTION

1.01 The Livestock Development Project was the Bank Group's firstagricultural opera-ion in Zaire. Financed by Credit 398-ZR (US$8.5million), the project was designed to support the development of threeexisting Government ranches in Shaba, and agricultural project preparationwork. The primary objective was to increase beef production, throughexpanding area of ranches (from 340,000 ha to 700,000 ha) and stocking(from 30,000 to 60,00U heads), and by increasing herd productivity. Theproject was carried out by a parastatal institution, Office National deDgveloppement de l'Elevage (ONDE), established for the purpose.

1.02 The project -,as prepared by FAO/IBRD Cooperative Program (CP)missions in 1969 and 1970 and a joint Bank/CP mission in 1971. Appraisalwas carried out in lay 1972 and the Credit was approved and signed in June1973. The Credit was declared effective in February 1974. The closingdate was extended once to December 31, 1981. The last disbursement wasmade in May 1983 and the Credit was closed thereafter with all fundsdisbursed. The final closing was delayed because some minor payments werepending for goods held up for an extended period by Zairian customsauthorities.

1.03 This report is based on a review of project files and interviewswith Bank staff and Borrower representatives. The primary purpose of thefinal supervision mission was to obtain information required to prepare thecompletion report; ONDE had assembled some data to support the exercisebut did not prepare a full completion report.

II. THE LIVESTOCK SUBSECTOR

2.01 Agriculture provides a livelihood for about 70% of Zaire'spopulation, but the agricultural potential is far from fully exploited, andthe sector contributed only about 33% of GDP in 1981. Farming andproduction systems vary widely, reflecting Zaire's enormous size andgeographic variety; the modern, commercial sector, with large farms andplantations, and the traditional sector are particularly sharplydistinguished. At independence in 1960, the commercial and traditionalsectors contributed roughly equal shares to production. This position hassince changed; overall, commercial production has declined, whilesubsistence production has barely kept pace with population growth. Bothcivil and political strife and an unfavorable policy environment have

seriously disrupted production, and Zaire depends heavily on food importsto feed its population. Fooderop production dominates the agriculturalsector; major export and industrial crops are coffee, oil palm, cocoa,rubber, cotton and sugar. Animal production (broadly defined) plays arelatively small role; livestock prnduction, hunting, and fishingcontribute only an estimated 6% of total value added in the agriculturalsector, and only about 3% of the rural population are engaged in livestockproduction. Fisheries is much more important than livestock and huntingboth as a source of protein and in total output; total fish production wasestimated at 160,000 tons in 1980.

2.02 Zaire has good livestock potential, but livestock husbandry is notwell developed. It is not part of traditional farming systems in mostregions, and most commercial ranches established before independence havemarked time or declined in recent years. Cattle production is the mostimportant animal husbandry activity (althou.h the total herd Is only aboutone nillion). Goat, pig and poultry production are largely rtetricted to,iaistence farms; some commercial poultry farms are developing near major

urban centers. About 34% of Zaire's land area, most in the savanna belts,is classified as natural grasslands; only about 10% of pastures are nowproductively exploited. Disease (above all trypanosomiasis, endemic inmost of Zaire) is an important problem, and largely explains the small herdsize and its conceatration in a few regions (Shaba, Kasai Occidental, Kivu,and Haut Zaire); location of markets (Kinshasa and the mining centers) andpasture quality are also important. Cattle production differs greatly intraditional and modern systems. Pastoralists and small producers togetherown about 600,000 to 650,000 head of cattle, most run in small individuallyowned herds, ranging in size from a few head to herds around 60-70, mostlyin North-east Zaire. Modern livestock producers include private ranchers,State and mixed companies, and missions, with a total of 400,000 to 45D,000cattle, most concentrated in Sihaba Region. They produce substantially morethan traditional producers. The livestock sector declined sharply afterindependence, and herd size dropped by about 25%; production recovered topre-independence levels in the early 1970s, but declined again during thezairianization-nationalization period (para. 4.01). Since 1977 livestockproduction has grown slowly but the sub-sector is beset by problems andshows little dynamism.

2.03 The picture on livestock production, consumption, imports, anddemand is murky, as statistics are very poor. Overall, however, over thepast 15 years, demand has greatly exceeded supply, per capita beefconsumption has remained very low by international standards, andproduction has stagnated or, at best, grown slowly. Estimates of Zaire'slivestock production from 1969 to 1980 are summarized below (FAO figuresshow significant production of game and other forms of meat: (70,000 t and37,000 t respectively in 1980):

1969-71 1978 1979 1980Livestockherd or flock '000 head-

Cattle 968 1,145 1,155 1,170Goats 2,250 2,636 2,640 2,7225heep 675 720 722 738Pigs 611 678 690 720Horses 1 1 1 1Poultry 8,167 12,530 13,059 13,589

Production -------------- '000 tons --

Beef 18 21 22 22Goat 6 7 7 7Mutton 2 2 2 2Pork 24 27 27 29Poultry 11 13 14 15

Source: 1980 FAQ Production Yearbook, Vol. 34.

2.04 Livestock product imports have been substantial for severaldecades. Official meat and meat product imports were estimated at about10,600 tons in 1981; compared to an estimated 12,500 tons in 1970; but bothestimates are subject to wide margins of uncertainty, particularly recentlyas unofficial imports have increased. Most dairy products are alsoimported. Import levels have been determined largely by foreign exchangeavailability. At appraisal, imports were virtually unrestricted byregulations or by the foreign exchange situation, but recent acute foreignexchange shortages have curtailed imports except for the luxury market.Zaire's heavy dependence on meat imports is likely to continue for theforeseeable future. Meat and milk consumption in Zaire is very low byinternational standards; this contributes to serious nutritional problemsand particularly protein deficiencies. Zaire's population is among thepoorest fed in the world, as the following figures on comparative milk andmeat consumption illustrate:

Milk Beef Mutton---Kg per capita per year--

Zaire 1.4 1.1 0.5Kenya 37.0 8.5 1.0Uganda 27.0 6.1 1.2Madagascar 3.4 11.3 0.8Ethiopia 11.0 7.3 6.0USA 142.0 51.4 1.2United Kingdom 155.0 20.3 8.5Ireland 213,0 19.9 10.8

Source: FAO Food Balance Sheets 1977

-4-

2.05 Marketing of livestock and meat products is a serious impediment tolivestock development. Problems include Zaire's poor communicationsnetwork and long distances separating production areas from markets, severeshortages of vehicles, spares and fuel, and security problems. Abattoirsare old, with out of date equipment, lack spares, and are generally poorlymanaged. The Governient's direct intervention in livestock and meatmarketing has varied over the past two decades, from virtual"laissez-faire" to efforts to institute a direct Government role. Before1972, cattle and meat marketing (including imports) was dominated by a fewlarge, private foreign owned firms. In the 1973-1976 period, these firmswere nationalized and Government agencies, notabl, ONDE, were directed toexpand direct marketing activities substantially; established privatetrading companies and channels were severely disrupted. More recently,marketing activities have returned to private hands, but problems remain.The most serious are linked to the ecomomic crisis; notably, the roadnetwork is in a lamentable state and transport equipment is lacking.

2.06 Pricing policies have critical importance for the livestocksubsector and have been discussed continuously between the Government andIDA since project identification. The administered price system has beencumbersome, official prices too low, and gaps between price adjustmentslong. At appraisal, the pricing system in force involved formaladministered prices for beef at producer and retail levels. As aprecondition for proceeding with the project, beef prices were raised in1973. In 1976, the pricing system was changed significantly (linked todiscussions of the IDA-financed Ituri Project), to stipulate that farm gateprices of cattle were subject to a Government decreed minimum price. Theminimum price system has generally worked reasonably well, and for mostpastoralists and small farmers market forces have determined actual cattleprices. However, the official system has been unevenly applied and someserious problems have arisen where minimum prices have been treated as amaximum, and where regional authorities have fixed their own maximum pricesto protect consumers. Parastatals have often been obliged to sell atminimum prices, making operations unprofitable. In 1981, the Governmentbegan to act to implement a new policy of price liberalization; this newreform is now being implemented, but to date the position of meat andlivestock products is unclear. Pricing issues are discussed in greaterdetail below (paras. 6.29 - 6.35).

2.07 Historically, Government institutions played a relativelyrestricted role in Zaire's agricultural development. The private sectordominated modern agricultural activities and Government support fortraditional agriculture was particularly weak. This pattern changedabruptly during the 1973-77 period, when "zairianization" measurestransferred ownership from foreign individuals and firms to Zairians(para. 4.01). Shortly thereafter, enterprises were nationalized, andparastatals, old and new, took responsibility both for direct productionand sector regulation. Private ranches were particularly affected, as mostwere foreign owned and were taken over by the Government, parastatals, andprivate individuals. After 1977, former owners were invited to return andtoday most commercial ranches are owned by mixed capital companies, withminority government holdings, or by private individuals. The Governmenthas in the past few years defined a clear policy of relying whenever

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possible on the private sector, with the Government role confined to policydirection, provision of essential services, and pilot programs. Theenormous oscillations in the Government's position on the respective rolesof private and public sectors over the project perio(d have been a vitalfactor for sector development overall and for the project itself.

2.08 The Ministry of Agriculture and Rural Development (MARD) has a widemandate, covering crops, livestock, research, rural water supply, forestryand tourism, as well as planning and policy direction. Services providedby MARD are weak, and have declined sharply in recent years; extension workand other servic:es are virtually moribund in most areas. Planning,preparation, implementation, and supervision of projects have also beenweak. The Ministry's livestock activities are maraged by the AnimalProduction Division which, besides planning effjrts, endeavors to overseeveterinary services; these are almost totally ineffective except wherespecific projects are underway. Organization of livestock se:vices haschanged little through the project period. Agricultural research hasdeclined dramatically since independence, and present research on livestockis virtually non-existanto Livestock development is also affected by theMinistry of National Economy, which administers price policies, theMinistry of Portfolio, which plays a critical role in managing Governmentparticipation in public and mixed capital enterprises, the Office desRoutes (OR), responsible for development and maintenance of much of thenational road network, and regional and local authorities, responsible formaintaining order, coordination of development activities,and land issues.The Ministry of Education handles agricultural education; training forlivestock staff figures fairly prominently within the agriculturaleducation system, although the quality of training generally is poor and isnot responsive to sector needs.

2.09 Some parastatal institutions (notahly ONDE) are important foragriculture, but their role is less pervasi - than in many othercountries. The Government, however, holds shares in most large companiesoperating in Zaire. A large number of parastatals were created and thendisbanded over the project period, and this has had important effects onsector development. At present, the most important parastatals are ONDE(Office National Pour le Dgveloppement de l'Elevage), established toimplement this project, and OZACAF (for coffee). ONDE's development isdescribed in Chapters IV andl V; in general, it is considered one of thesoundest of the paraatatals, and was one of the few survivors of 1978 movesto abolish inefficient parastatals. Ranching companies and ONDE arerepresented in the Association National d'Entreprises Zairoises (P&NEZA), anorganization of private enterprises. ANEZA represents producers in pricenegotiations with the Government and on other issues of importance to thesector. SOFIDE, the development finance institution (which has benefittedfrom six IDA credits), offers medium and long term credit. Lending forlivestock haa increased but is relatively restricted because cattle are notaccepted as collateral, and SOFIDE's activities concentrate on medium andlarge scale enterprises.

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2.10 Zaire is a classic case of neglect of the agricultural sector.For decades, agriculture received less attention than other economicsectors, and agricultural development activities suffered from the lack ofa systematic approach. There has been no shortage of efforts to definepolicies and plan development. In written documents and statements,priority has always been accorded to agriculture. The problem is thatthese have not been translated into action. Agriculture's share ofinvestment effort has been low, and only sporadic efforts nave been made toestablish a clear policy framework and to address the enormousinstitutional problems which impede sector development. The Bank Group hasprovided considerable support in recent years to efforts to improveagricultural planning and policy formulation. Notably, a special WorkingGroup on agriculture, under the aegis of the Consultative Group (CG) ofZaire, was established in 1977, and a series of meetings have beenorganized with agriculture as the focus. The most recent was a specialmeeting of the CG on agriculture in June 1982. Agriculture has figuredprominently in the most recent Public Investment Programs. Further, theGovernment of Zaire has stated its commitment to agriculture in categoricalterms, and has made laudable efforts to improve the performance ofinvestment projects.

2.11 No specific, formal effort has been made to define a livestockdevelopment strategy. Nonetheless, in terms of action and investmenteffort livestock development has been accorded an extraordinarily highpriority given its relatively minor role in overall agricultural productionpatterns. For example, in the 1981-83 Public Investme,it Program livestockinvestments totalled nearly 25% of projected investments in theagricultural sector. The focus on livestock is explained by deficits inmeat production and concern for nutritional issues, but also by a keeninterest of the Government and many policy makers in the ranching systeminherited from the pre-independence era. Because ranches received repeatedblows after independence and during the zairianization/nationalizationperiod, they were prime candidates for rehabilitation efforts. Livestockhas played an important role in IEA's agricultural portfolio, with threeprojects specifically focussed on livestock development (First Livestock,Ituri, and North East Rural Development); other donors are also active,notably the Canadian, French, and German Governments (which cofinance theIturi Projects), the Belgian Government (livestock scheme in Ubangi andtechnical assistance support), and FAX (Kivu livestock program).

III. PROJECT FORMULATION AND DESCRIPTION

A. Identification, Preparation and Appraisal

3.01 IDA consideration of the project originated with the first formaleffort to identify agricultural project opportunities for the Bank Group inZaire. An FAO/IBRD Cooperative Program (CP) mission in February 1969reviewed a series of project proposals with the Government and identifiedthree projects, one of them a livestock scheme. The initial projectproposal included two ranches in northern Zaire (Lola, Selco Ranches)(both Government-owned) and a cattle disease control component in Ituri.The project was prepared over the period 1969-72, primarily by FAO/CP, withinputs by Bank staff, particularly during the final period. A working

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group was established in the Ministry of Agriculture to support andcoordinate project preparation, but the focus of preparation work was theFA,0/CP missions. During the preparation period, the project's definitionunderwent important modifications; the most significant were a decision todefer investments in the traditional livestock sector, and changes in thenumber and type of ranches slated for development. Traditional sectorcomponents were dropped at a relatively early stage because of the extremeweakness of institutions and particularly livestock services, but there wasspecific agreement that a project preparation effort directed attraditional, small-scale producers would be launched; this led to the IturiLivestock Project, approved in April 1977, Ranch selection proveddifficult above all because of uncertainties on financial. viability, and asignificant number of ranches were considered and ultimately dropped.Further, the initial objective was to focus on private ranches, but theywere subsequently excluded because alternative finance was thought to beavailable. Ranches in several regions of Zaire were originally considered,but ultimately the project ranches were all located in Shaba Region,because of its advantages in terms of underutilized pasture and reLativelylimited disease problems.

3.02 The preparation report was completed in February 1971, followingan FAO/IBRD/CF mission in September 1970. This report was presented as anofficial Government request for Bank financing. The project proposalenvisaged a ranch development scheme which was described as the first stepof a long-term program to develop the beef cattle industry in Zaire. It Issignificant that the long-term aspect of development was repeatedlystressed throughout the preparation and appraisal process. The pTeparationreport included both Government and private ranches (six in total). rotalproject costs were estimated at US$5.6 million. Project management was tobe coordinated through a new Livestock Development Fund within thedevelopment bank (then known as SOCOFIDE, now SOFIDE).

3.03 After the preparation report was completed, there was extensivediscussion of the project within the Bank and with the Government, and afurther joint IBRD/CP mission in December 1971 discussed key issuesincluding prices, project scope, and management arrangements. The Bankview was that the proposal for a Livestock Development Fund wasproblematic because it largely bypassed the Ministry of Agriculture;tentative agreement was reached with the Government on creation of a newparastatal, but this issue had not been finally resolved by appraisal. Thefinal mission also set out pre-conditions for appraisal, including surveysof ranches, review of legal issues for the project implementation agency,analysis of heifer availability, and reviews of cash flows. Increases inprices were seen as an essential prerequisite for proceeding with theproject. Project scope was also a continuing issue: the project proposaldiscussed during the December 1971 mission included ten ranches at a costof US$12 million; the ranches were established public ranches (includingsome to be resuscitated), and four ranches owned by mixed capitalcompanies.

3.04 In the final stages of preparation, two developments wereapparent: first, there was some impetus to proceed with the project, sinceit was the first IDA agricultural project in Zaire and the Government wasdisplaying some signs of impatience with the Bank on alleged slow movementin acting on project proposals. Second, the idea of supporting private

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ranches was dropped, partly because the new development bank was supposedto meet their financing needs, but also because a wary attitude amongranchers had emerged vis-a-vis Government; reports indicated that orivateranchers were plainly uneasy about the political climate. The major issuesidentified through the identification/preparation process were tht,sorganizational (how should the ranches be managed) and pricing policy. Lowbeef prices, in particular, were seen as a critical constraint to livestockdevelopment and to the project, and action on this front was defined as anessential prerequisite for proceeding with project processing.

3.05 The apprai al mission, composed of three Bank staff and oneconsultant, visittd Zaire in May/June 1972. The mission agreed on someimportant modifications, and the project proposal following appraisaldiffered from that presented in the preparation report. Specifically, theten ranches were reduced to three, because of the marginal financialprospects and dispersed locations of three proposed ranch sub-projects(Kasese in Shaba, Kilo Moto in Haut Zaire, and Lola in Equateur) and in aneffort to simplify project administration. Both private and mixed capitalcompany ranches were exclud.d, as their needs were expected to be met bySOFIDE, The project period was extended to six years, because the missionrecognized that project implementation would be difficult and would takesome time. The issues identified at appraisal were, first and foremost,prices, followed by organization and management, technical assistance,cattle availability, and some legal problems related to ownership of theranches. The price issue figured prominently through the processingperiod; in July 1972 beef prices were increased, only to be reduced thefoLlowing month in response to consumer protests in Kinshasa. There werefrequent exchanges on the subject between the Government and the Bank inthe ensuing months. The organizational issue was also actively debated.Of particular concern was the scope of responsibility of the new livestockparastatal to be established. It was clearly intended by the appraisalteam as a project implementing agency, but shortly before negotiations itbecame apparent that some Government officials envisaged the agency with amuch broader authority, extending eventually to all private ranches inZaire. The project was seen as a risky and difficult operation and effortswere made to introduce safeguards and to simplify it. Training issuesreceived specific attention and substantial funds for training wereincluded, although proposals were not defined. At yellow cover stage acomponent was added to support preparation of a range of agriculturalproject proposals and thus to enrich the agricultural project pipeline andportfolio for Zaire.

3.06 The IDA credit for the project was negotiated in Washington in April1973. Cattle and beef prices were increased in January 1973, and thatissue was considered resolved. Issues discussed and agreed upon includedfuture livestock producer price policy, and ONDE's role and organization.Further important issues were arrangements for establishment of ONDE andtitle to the ranches, including assurances that there were no unsettledclaims outstanding (there had been some concern that there were unsettleddisputes over assets with former ranch owners). There was also somediscussion of interest rates (the Government would have preferred asubsidized on-lending rate to ONDE of b% but this was not seriouslyconsidered). Negotiations generally went smoothly and extensivediscussions were held on both project scope and detailed issues, including

financing arrangements. IDA was the sole cofinancier which, in retrospect,probably simplified subsequent project administration somewhat.

3.07 The Credit was approved by the Executive Directors in June 1973and was signed shortly thereafter. rhe Board discussion focused on Zaire'screditworthiness situation, on pricing issues, and on technical problems,notably availability of breeding stock and proposed procurementprocedures. Some conditions of Credit Effectiveness, including thecreation of ONDE, and the conclusion of a subsidiary loan agreement betweenthe Government and ONDE were met on time. The recruitment of a technicalassistance team took longer, however, and the date of effectiveness waspostponed twice; the Credit agreement became effective on February 14,1974, eight months after the date of signing.

B. Project Description

Project Objectives

3.08 The central objective of the project was to increase beefproduction for the local market. At the time of appraisal, locallyproduced beef supplied only about 40% of total consumption, and the gapbetween supply and demand was widening. The potential for increased cattleproduction was considered to be good, and cattle ranching techniques hadbeen proven through many years of successful private ranching. While therewas clear recognition that, in the long term, traditional livestockproducers should play an important role, both the Government and IDAconcluded that enormous organizational obstacles confronted a traditionalsector operation and that the more straightforward ranching operationshould proceed whilu these issues were addressed. Private ranchers hadaccess to funds through the banking system and so were not included in theproject scope. The project, therefore, was designed to support thedevelopment of three existing government-owned ranches. The objectiveswere threefold: first, to make more efficient use of resources and thusincrease production, notably by using under exploited pasture; second, tobuild a nucleus of well-run ranches that could support smallholder ranchdevelopment at a later stage; and third, to provide training for Za!rianstaff in ranch management. A final project objective was to supportZalre's agricultural development efforts more generally through preparationof several sound agricultural projects for external financing. There wasrecognition of the difficulty of implementing projects in Zaire, reflectedin efforts to simplify project design and to ensure that projectimplementation arrangements were straightforward and clear.

3.09 In quantitative terms, annual incremental production was expectedto amount to about 8,000 head of cattle for slaughter or some 2,000 tons ofmeat at full development in year 12; this was equivalent to about 15% ofbeef imports at the time of appraisal. Total ranch production (includingthe pre-development output) was projected at 11,300 head of cattle, or2,700 tons of meat. In addition, Z,900 heifers a yea' were to be sold asbreeding stock. The expected annual value of cattle sales at fulldevelopment was estimated at US $2.5 million (1972 prices).

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Project Description

3.10 The project provided for development of three cattle ranches inShaba Region - MuhiLa, Mitwaba, and Kayembe-Mukulu. Ranch development andmanagement were to be undertaken by ONDE, a new parastatal establishedspecifically for this purpose. Over a six year period, investments were .obe made in ranch irfrastructure construction and herd build-up, primarilythrough purchase of an estimated 9,900 heifers and 700 bulls. It wasassumed that most stock would be purchased locally, but provision was madefor some imports. Ranch area was to be doubled, and pasture improvementundertaken. Project costs iacluded ranch operating costs, includingexpatriate technical assistance (which represented 10% of total costs),over the project period. The project also provided for training of Zatrianstaff, technical support to the project authority, ONDE, and more generaLstudies, particularly for project preparation. These components, however,were not defined in any detail, in part because they were included in theproject well after the appraisal mission.

3.11 The three ranches were already established and operating, andcovered an area of roughly 340,000 ha (see map). The Government owned aLlthe ranches at the time of appraisal (paras. 3.23 - 3.26), but two, Muhilaand Mitwaba, had previously been privately owned. The appraisal reportincluded a detailed budget and analysis of each ranch, but it was expectedthat ONDE would prepare detailed development plans for each ranch. Detailsof area and stockcing were as follows:

Area (ha) Stock No.At appraisal Appraisal Plan At appraisal Appraisal Plan

(Year 12) (Yesr 12)

Muhila 260,000 520,000 25,800 63,800Mitwaba 45,000 124,000 500 7,700Kayembe-Mukulu 35,000 60,000 2,500 7,700

340,000 704,000 28,800 79,200

Project Costs and Financing

3.12 Total project costs were estimated at about US $15.0 million,with a foreign exchange component of US $8.5 million or 57%. About 30% ofthe total base costs were for capital investments, including purchase ofbreeding stock, building and infrastructure construction, and purchase ofvehicles. Operating costs accounted for about 55% of base costs, and werehigh primarily because they included management costs for internationallyrecruited consultants and operating costs of the three ranches over thesix-year investment period. Training of Zairain staff and preparation offurther livestock or agriculture projects accounted for about 15% of basecosts. Details were as follows:

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Local Foreign Total Local Foreign Total ForeignCategory --- Z'OOO------- ------- US$'000----- Exch.

A. Investments

Housing & Construction 118 55 173 236 110 346 32Vehicles & Equipment 60 81 141 120 162 282 57Fencing materials & seeds 30 41 71 60 82 142 58Breeding Stock 339 965 1,304 678 1,930 2,608 74

Sub-total 547 1142 1,689 1,094 2,284 3,378 68

B. Operating CostDuring Development

Management Cost 1,266 691 1,957 2,532 1,382 3,914 35Administrative Expenses 79 bO 139 158 120 278 43Vaccines, Minerals & Drugs 147 380 527 294 760 1,054 72Vehicles & Travel 91 142 233 182 284 466 61Vehicle Replacement 45 60 105 90 120 210 57Maintenance & Other Costs 102 69 171 204 138 342 40

Sub-Total 1,730 1,402 3,132 3,460 2,804 6,264 45

C. Training & ProjectPreparation 181 722 903 362 1,444 1,806 80

D. Contingencies

Physical 228 254 482 456 508 964 53Price 551 730 1 1 12460 5 57

Sub-Total 779 984 1,763 1,558 1,968 3,526 56

TOTAL 3,237 4,250 7,487 6,474 8,500 14,974 57e=em ==5Z-a ==u=- =-== ==== ===

Price contingencies were estimated on a basis of 6% annually on all costsand physical contingencies were 10% of investment and operating costs.

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3.13 The project financing plan was as follows:

ONDE Government IDA TOTALLiU$'00 %% USS500 %u US$'000 X

Item (including contingencies)

Investments - - 1,330 32 2,901 68 4,231 100

Operating Costsdiring Development 4,031 47 693 8 3,919 45 8,643 100

Training and ProjectPreparation 420 20 L,680 80 2,100 100

TOTAL 4,031 27 2,443 16 8,500 57 14,974 100

3.14 The IDA Credit of US$8.5 million (on standard terms) was tofinance the project's foreign exchange component. ONDE's contribution wasto be derived from sales revenues from ranch operations less loan interestpaid to Government. The project was expected to generate about US$300,000from import duties and other taxes, partially offsetting the estimatedGovernment contribution of US$2.4 million.

3.l5 It was an important project objective that each of the threeranches should eventually become financially viable and this was reflectedin onlending arrangements. Of US$8.8 million ranch development costsfinanced by the Government and IDA, US$1.7 million was to be passed on asequity to ONDE and the balance of US$7.1 million was a loan carryinginterest at 10i% annually (the rate charged by SOFIDE), repayable over 20years including a seven year grace period. A financing agreement betweenthe Government and ONDE along these lines was discussed at negotiations andsigned in December 1973. Remaining funds (for training, studies andproject preparation) were to be managed directly by the Government. Othersignificant financial provisions were the stipulation that the Governmentintended that all ranches should be operated on a sound commercial basis,the requirement that ONDE would submit to IDA for approval work plans andbudgets, and specific provision for Government budget allocations to ONDE.

3.16 The Credit was to be disbursed over six and a half years;disbursement arrangements essentially provided that the IDA credit wouldcover 100% of foreign expenditures for capital costs, training, management,and project preparation and 30% of total expenditures for ranch operatingcosts.

Organization and Management

3.17 At appraisal, agreement was reached that an autonomous parastatalranching authority would be established to manage the project ranches(various alternative proposals had been actively discussed during thepreparation period - para. 3.03). A National Livestock Development Agency(Office Nationale de Developpement de l'Elevage) was to be responsible to

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the Ministry of Agriculture, but it was the Government's intention that itshould operate on a strictly commercial basis. ONDE was created in August1973 with a mandate which covered support for livestock developmentnationwide (para. 3.05). Initially, however, ONDE's primary and soleresponsibility was to be the management of the three project ranches, andIDA consultation on any change in ONDE's responsibilities was specificallyrequired. ONDE was to be administered by a Management Committee and aGeneral Manager (who was to be a Zairian national), assisted by anAssistant General Manager. The appraisal report summarized ONDE's tasks asfollows:

(i) to invest capital and manage mixed companies or rancheswith Government financial participations;

(ii) to participate in the capitalization of public andsemi-public ranches managed by other bodies;

(iii) to provide supporting technical services toparticipating ranching enterprises;

(iv) to prepare individual development plans of ranchingenterprises;

(v) to assist other national bodies (e.g. SOFIDE andcommercial banks) in the technical preparation andevaluation of loan applications for ranching developmentfrom the private ranching sector;

(vi) to carry out studies on the cost structure and developmentof the beef industry;

(vii) to assist in training personnel in ranch management andoperation; and

(viii) to develop methods for livestock enterprises includingcost accounting.

Technical assistance was considered vital for project management, and,because of recruitment difficulties, it was agreed that there should be asingle management contract for all technical assistance for projectranches. A team of five expatriate consultants was to support ONDE, forthe full project period, including a deputy director general, a financialmanager for ONDE and three ranch managers.

3.18 Two separate Decrees established ONDE and defined itsresponsibilities: Decree Law No. 73-029 of August 30, 1973 establishedONDE, with the status of a body corporate with financial autonomy andreporting to the Minister of Agriculture. With headquarters at Lubumbashi,its area of operations covered all Zaire. ONDE's purpose was defined aspromoting the development of stockraising and in particular improvingproduction, health protection, processing, and marketing. ONDE was to beresponsible for the rehabilitation, operation, and management of all

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State-owned ranches, farms and veterinary laboratories whose manageme.it wasassigned to ONDE by the Government. Decret No. 74-018 of January 10, l974assigned ONDE specific responsibility for the three project ranches,transferred rights to the ranches to ONDE, and specified that the ranchboundaries area would be extended (as provided under the credit agreement)before June 1974. This structure reflected a compromise agreement betweenthe Government and IDA at negotiations, as the Government proposed thatONDE be established with a broad mandate, while IDA was concerned that, atleast in the initial phase, the agency not be overburdened and that projectmanagement arrangements be clear (para. 3.05).

Legal Framework

3.19 All significant legal covenants were reflected in the DevelopmentCredit Agreement of June 21, 1973; there was no Project Agreement and nospecial side letters. The special covenants in the Credit Agreement wereprincipally designed to provide a comprehensive set of safeguards with afocus on management. The agreement stipulated that ONDE should beestablished and assigned full authority to carry out the Project; IDA wasto be consulted before ONL)E was assigned any additional responsibilitiesfor management of ranches or farms. Technical assistance positions to beprovided were precisely specified. The agreement specifically requiredsubmission of annual work plans and budgets for IDA approval and provisionby the Government of funds to carry out the project. A pricing covenantprovided that there should be an annual Government-IDA review of producerbeef prices and prior consultation with IDA before beef prices were changedwas required. Conditions of effectiveness were establishment of ONDE,signature of a financing agreement between ONDE and the Government, andemployment of the five technical assistance personnel specified in theagreement. The agreements included standard covenants on accounting andauditing, and stipulated that ranch accounts should be maintainedseparately. The only special condition specified as a remedy of theAssociation was dissolution or reestablishment of ONDE, or action thatprevented ONDE from discharging its responsibilities.

C. Technical Background and Objectives

3.20 The technical provisions for the project and preliminary ranchplans were based essentially on prevailing management systems practiced oncommercial ranches in the Shaba Region. The focus was on increasing laborproductivity and herd performance and increasing both herd size and rancharea. More intensive methods were to be adopted as experience was gained;in particular, the project was to include, mainly for Muhila ranch, smallscale experiments using paddocks and tropical legumes. ONDE was to preparedetailed ranch development plans for each ranch. The initial emphasis wasto be on Muhila and Mitwaba ranches; Kayembe-Mukulu was in the firstinstance to serve as a holding ranch. Herd size was to be increased, inpart through purchase of an estimated 10,000 heifers and about 700 bulls.It was expected that private ranches in Shaba would supply about 8,000 headat reasonable prices, with the remainder imported from neighboringcountries (Botswana, South Africa, Zambia, and Rhodesia/Zimbabwe!).

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3,21 Ranch development plans essentially assumecl reliance on the"gardiennage system" which had been developed and tested in Shaba andelsewhere in Zaire over a 30-40 year period. This system was viewed by thepreparation and appra:lsal missions as a generally sound approach, whichoffered possibilities for progressive improvements to increase herdlproductivity and carrying capacity. "Gardiennage" is an extensive systembased on close supervision of herds ranging from 150 to 500 head byherdsmen. Cattle are grazed during the day and confined for the night inkraals of one to two hlectares. Herd size varies; breeding cow herds arehalf or two-thirds the size of steer herds, and some ranches keep an eliteherd. Bulls are generally kept with the breeding herd throughout theyear. Each herd is cared for by two herdsmen, responsible to a foremaa or"Capita", overseeing three to five herds. Capitas report to a "Chef deSection". Depending on natural conditions a section (the basic managementunit of the ranch) may have from 2,000 to 5,000 head. Two or threesections may be combined into a "sector". Grazing blocks are divided byfirebreaks, forest galleries, or roads (there is no fencing). Normallyblocks are burned in succession to remove stubble and encourage pastureregeneration, and herds are moved from block to block. After grazing,blocks remain fallow for a year to 18 months, to allow the grasses to seed,to store reserves in their roots, and to form sufficient dry matter forsubsequent burning. Advantages of the system include minimal capitalexpenditures for fencing, water supply or pasture improvement; cattle areclosely supervised, so disease problems can be noticed promptly andbreeding problems dealt with. Herdsmen also provide protection againstpredators. The system's efficiency, however, depends on good herdsmen whoare difficult to find because in Zaire there is no livestock raisingtradition except in the northeast. Iurther, grazing is limited during thecool hours of the evening and at night, as animals are confined to smallkraals, which become muddy during the rainy season, exposing cattle (andparticularly calves) to serious disease dangers. Gardiennage methodsrequire a relatively large number of hectares per animal unit, even inareas with a short dry season; a stocking rate of one animal to 10 hectaresis common, although carrying capacity varies widely by ranch. Steersusually take 3-1/2 to 4-1/2 years to reach marketable age and the offtakeis about 15 to 18%.

3.22 Assumptions on the "before development" position of projectranches were based on actual field observations (since ranches wereoperating), and on the coefficients on some private ranches. The appraisalreport herd projections assumed significant increases in herd size andproductivity. A critical element was to be an increase in weaning ratesfrom about 50% to 77%, a decline in mortality to about 2%, and an increasein sales weight of steers from about 430 kg to 480 kg.

D. Ranch Status at Appraisal

3.23 The ranches were located in quite difficult ecological conditionsand were far separated one from another. Muhila ranch is close to LakeTanganyika, 90 km from Kalemie, was (and is) by far the largest of thethree ranches, and had a good track record of development in the 1960s.Situated in well watered rolling country, around 1,500m altitude, it lies650 km by road from Lubumbashi, and 500 km from Mitwaba ranch.

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Temperatures range f:rom 15°C to 230C, and annual rainfall is about 1,200mm. Mitwaba ranch is in the north central area of Shaba Region near thesmall, mining town of Mitwaba, 40 km from Lubumbashi. At appraisal, theproperty was made up of two separate blocks of open rolling grassland of26,000 ha and 19,000 lha about 45 km apart by road. The Upemba NationalPark runs along the western boundary of the ranch. Altitude is about 1,600m, temperatures range from 14WC to 25°C, and rainfall is about 1,200 mm.Kayembe Mukulu ranch is on the Lubilash River in southwest Shaba in theTerritoire de Sandoa, 126 km from a rail-head at Kamina, and 550 km fromLubumbashi. At an altitude of 950 m, the ranch lies on the edge of theSudano Zambezian ecological zone; temperatures range from 17°C to 30°C.

3.24 Muhila ranch was started in 1947 by Cobelkat (Compagnie Belge duKatanga), a mixed Belgian Company established in the 1930s. The mainshareholders were CSK (Comitg Special du Katanga), which managed the sharesof the Belgian Government; Union Miniete du Katanga (now GECAMINE); Cheminsde fer du Bas-Congo au Katanga (then KDL); GEOMINES; and Cotonco (thenCottoni). The ranch was established to provide mea>: for the mines,following a Government order requiring that mining companies suipply beef totheir workers. In 1950 there were 900 head of cattle; this number hadincreased to 14,000 head by July, 1961 when Cobelkat was nationalized bydecree of the then Government of Katanga. Cobelkat's shareholders decidedto liquidate the company, although many Cobelkat employees remained inMuhila and continued working under the Katanga Government. In 1965 anagreement was reached between the Belgian Government and the Government ofthe re-unified Democratic Republic of Congo under which the CongoleseGovernment took over the Belgian Government's shares of the company.After nationalization, the ranch was run by a series of governmentcommittees. and at appraisal was managed as semi-autonomous unit, with noformal, separate legal status, responsible to the Ministry of Agriculture.Up to 1970, the ranch showed a consistent increase in cattle numbers (from14,000 in 1961 to 26,176 in 1971).

3e25. But thereafter growth slowed, notably because of a reduction incalving rates. The ranch was run by a Zairian Director General (aqualified veterinarian), who reported to a management commitree consistingof The Regional Director of Veterinary Services (Chairman), and six otherof the Ministry of Agriculture and regional officials. The DirectorGeneral lived in Lubumbashi where the ranch maintained its main accountingoffices. At appraisal it was clear that siginificant expansion of ranchoperations could only occur with an input of external financial resources;there was a clear need for improvement in management.

3.26 Mitwaba Ranch. This ranch was established in 1926 by a privatecompany. The ranch area was enlarged in the late 1950s, but activitieswere slow until 1958 when the Syndicat d'Elevage de Kibara relaunchedoperations and constructed some infrastructure. In 1959 there were 2,250cattle, but these were removed in the early 1960's, and the companyapparently relinquished ttheir claim to the property and the Government tookover. The cattle herd numbered 700 in 1971. The ranch was run by anexpatriate manager, as a section of Muhila; all accounts and records werekept at Muhila.

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BEST COPY AVAILABLE3.27 The Kayembe-Mukulu Ranch has always been Government-owned. It wasone of four Government ranches in the area developed by the Fonds duBien-Etre Indigene (FBI) to produce beef and to introduce hetter animalproduction methods into the area. It started operations in 1959 and by1963 had 2,260 head. Afrikander cattle, primariLy from Botswana and SouthAfrica, were bought to stock the ranches. In 1965 Government assignedmanagement responsibility for the ranches to FBI's successor, AssociationInternationale de D6v6loppement Rural d'Outre-Mer (AIDR), a private Belgianaid organization partly financed by the Belgian Governmeit. 1968 and 1969were difficult years but by 1970-71 ranch operations were well underway.An expatriate veterinarian oversaw all AIUR livestock projects in Zaire andRwanda. AIDR also provided a qualified ranch manager. There were 75workers and the ranch had adequate housing and facilities for its existingstaff. Ranch accounts were kept separately and deficits were met by AIDRon a grant basis. In 1970 AIDR was asked to make all ranches selfsufficient and relinquish management by 1975. The Government want l to seea faster rate of expansion than could be achieved through AIDR resourcesand therefore included Kayembe Mukulu amongst the ranches to be supportedby the IDA project. Responsibility for the ranch was to be transferredfrom AIDR to ONDE after the first project year.

IV. PROJECT IMPLEMENTATION

A. General Environment

4.01 From its beginning in 1969 to its completion in 1981, theLivestock Project was directly and indirectly affected by turbulentpolitical and economic events taking place in Zaire. Even in itsconception, the project involved rehabilitatioDn of rancihes affected by theKatanga wars and the political events surrounding the seccession issue. Atappraisal, a wary attitude towards private ranches prevailed. Ranchers'concerns proved to be well founded when shortly after project approval, adramatic announcement by the Government in November 1973 essentiallydeprived foreign individuals and firms of ownership of their property;this was a major upset for the livestock sector, where foreign privateinterests dominated commercial ranching enterprises. This move was areflection of a deeper movement towards nationalization and Africanization,an effort to zairianize the entire economy and society, and it was duringthis period that names of the country, currency, rivers, and places wereall changed. The results of the zairianization/nationalization werecatastrophic, and brought the country's economy to a virtual standstill.The Government, in an attempt to salvage a faltering economy, reversed thereform, and beginning in 1977 invited ousted foreign investors,businessmen, and planters to return. The pace of return was slow butgradually many foreign firms came back; this process still continues today.

4.02 Zaire's economy was doing quite well at appraisal, and prospectsfor future growth looked favorable. However, a first blow fell in 1974when world copper prices fell by more than 50% while import prices, notablyfor oil and grain, rose. The inevitable shock was severely exacerbated bythe impact of the zairianisation/nationalization process (then taking

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place), and the seeds of a severe economic crisis, which persists to thisday, were sown. Zaire was unable to service its enormous debt, largelycontracted before 1974, foreign exchange became increasingly scarce, andgalloping inflation set in. The economic crisis has had many implicationsfor projects; for the livestock project, the most direct effects have beenenorr'ous difficulties in communications as the road network deterioratedand transport equipment became scarcer, increasing difficulties in supplyof basic inputs and commodities, and rapid inflation. A particularlydisruptive event was a chaotic currency exchange operation in late 1979,which left the ranches with worthless cuirrency and disgruntled workers.

4.03 In 1977/78, Shaba Region passed through another unsettled period.Secessionist forces crossed over from Angola, and occupied Kolwezi, themining metropolis. With the help of French and Belgian paratroopers, peacewas again restored. Nonetheless, the period of strife had a disruptiveeffect on economic activities in the area, including the ranches.

4.04 In the past two to three years, the Zairian Government has pursueda policy of "privatization", the objective being to divest the Governmentof ownership of productive enterprises, returning them to private owners.Since ONDE is a parastatal whose primary activity is production (ranching),its raison d'gtre has been called into question. In late 1980, the ConseilExecutif formally decided that ONDE would be "privatized". Although thisdecision was later reversed, efforts have subsequently been made to divestONDE of the less profitable ranches, selling them to private individuals.No decisive action has yet been taken (primarily because no buyers havebeen found). The uncertainty resulting from the general environment (manyparastatals have been disbanded), and from rumors and concrete movestowards changes in ranch ownership has had negative consequences for ONDE'soperations, and rendered increasingly difficult the task of defining aclear future role for both the ranches and the organization itself. Inreviewing the history of project implementation and in judging performance,it is essential that these successive developments be borne in mind, for itis clear that at almost no time was there a favorable, "normal" operatingenvironment, and project management faced in essence one major shock afteranother.

B. Project History

Project Start-up

4.05 The early stages of project start-up went fairly smoothly althoughthere were some important problems from the outset. The credit was signedin June 1973; by September, ONDE had been legally established and a longlist of firms had been invited to submit proposals for a technicalassistance team to support project management. The Government announcedits selection of a South American firm in November, IDA approval of theselection was given shortly thereafter, and a draft contract was receivedin December and approved in January, 1974. The consultant team arrived andtook over ranch management responsibilities in February and the Credit wasdeclared effective on February 14, 1974. The first supervision mission,which took place just at the time of effectiveness, reported that from aproject implementation stand-point the situation was well in hand, with theconsultant team in place and apparently competent, and the ranch situationroughly that prevailing at

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appraisal. Low weaning rates and high mortality were a concern butgenerally no major project problems were reported. The key issues raisedwere the need to prepare detailed training programs and to assigncounterpart staff promptly. In these early stages, the presence of a Bankmission in Kinshasa, which included agricultural staff, may havefacilitated communciations and speeded up the procedures involved inproject start-up, but there were problems in communications betweenheadquarters and the field.

Impact of Zairianization/Nationalization

4.06 Just at this time, however, the Zairianization measures, whicheventually resulted in a profound d3.sruption of Zaire's agriculturalsector (para. 4.01), were announced (on November 30, 1973), and werecarried into effect almost immediately. The measures had a direct andfar-reaching impact both for the livestock sector and for ONDE, which hadonly just been established. All foreign-owned livestock enterprises,variously estimated at 75-150, with about 340,000 cattle, representing onethird of Zaire's total cattle herd, were zairianized and responsibility forall was assigned to ONDE shortly after the zairianization announcement.The February-March 1974 supervisio-i mission expressed concern about thesedevelopments, noting that the change in ONDE's responsibilities representedan important breach of the Credit agreement, since IDA consultation wasrequired to any extension of ONDE's responsibilities (paras. 3.05, 3.19). Aseries of meetings with Government officials were held on the subject. Themission, suppported by the Resident Mission, recommended that IDA' agree tothe change in ONDE's mandate, provided that a special proJect unit beestablished within ONDE to manage the project. In retrospect, it isstriking that this profound change was not the subject of more intensivedebate within the Bank, particularly since the issue of ONDE's mandate hadbeen so carefully reviewed at appraisal.

4.07 Since this marked the beginning of a period of enormous andshifting responsibilities for ONDE, it is noteworthy that the implicationsof the change on ONDE's structure and staffing were not fully appreciated;the primary focus was on the project ranches, and not on the institutionalor the policy environment. A key factor was probably the lack ofcontinuity between appraisal and supervision within the Bank, which waslinked to the internal reorganization in 1972, the gap in field contactbetween appraisal (March 1972) and the first supervision mission (February1974), and an understandable failure to grasp immediately the enormousimplications of the zairianization measures. Although the supervisionmission informed the Government that the change in ONDE's statutes was aserious issue and recommended changes in the Credit Agreement to reflectONDE's changed situation and the new role of the project unit, no actionwas taken on this. Although new draft statutes for ONDE were prepared andreviewed by IDA in mid-1975, they were apparently never enacted. Thereasons why no action was taken were that the situation remained so fluid,and in the final analysis, Bank staff concluded that no serious breach ofthe Credit Agreement had occurred and that the Credit Agreement wassufficiently flexible to allow implementation to proceed withoutamendments. ONDE's statutes were not formally changed until 1978, whenthey were somewhat modified to conform to a new basic law on parastatalinstitutions.

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4.08 ONDE's situation remained fluid, and its responsibilities changedfrequently over the next few years. The situation did not stabilize until1978, and there have been other shifts since then. In May 1974, all butfour formerly foreign-owned private ranches were turned over from ONDE toprivate Zairian owners; ONDE retained responsibility for the four largestranches. ONDE still had some vestigal responsibility for supervising these"privatized" ranches, but no details had been worked out. An importantchange was the establishment of ONDE's headquarters and the transfer of theDirector General and his staff from Lubumbashi to Kinshasa, and ONDE'sheadquarters have remained there ever since. An important lingeringproblem was that in the short period of inflated responsibility betweenDecember 1973 and May 1974, ONDE substantially increased its staff andhence its overhead costs, and was subsequently unable to fire them.Further, some good staff from project ranches were transferred away andranch management was accordingly weakened. Finally, ONDE experienced somefinancial problems that hindered operations, although these were fairLyshort lived. In January 1976, agreement was reached to use part of creditproceeds from the project preparation component of the project to financegeneral technical assistance to ONDE in an effort to strengthen theinstitution in its new role.

Ranch Management Problems and Concern about Consultant Peformance

4.09 By late 1974, attention shifted from the general problems of ONDEto the project ranches, for Muhila ranch faced serious difficulties. Themost critical problem was a dramatic rise in cattle mortality, estimated tohave increased from 5% at appraisal to 7% in 4arch-hpril, to 17% in July1974. Causes remained a subject of dispute for some time, but two factorswere key: supply problems which resulted in shortages of salt andveterinary products (these were apparently related to disruptions linked tozairianization measures) and new pasture management measures introduced bythe consultants which concentrated herds in specific areas, and sought tostop the traditional practice of burning. Fires started anyway and over80% of ranch area burned. Tensions between ONDE's management and theconsultant team mounted, and there were bitter recriminations on eitherside. The onsultants replaced the project director on their team andother stafL, but the situation did not improve significantly. Theconsultants clearly made concerted efforts to implement the project,they prepared detailed work plans as required and they exchangedcorrcsponder_.e frequently with IDA on specific issues (notably on themerits of an airplane purchase and on cattle purchase). In early 1975,however, a supervision mission portrayed an alarming picture at the ranchesand on relations between the Government and their consultants. In additionto the central issue of herd productivity and high mortality, the missionwas concerned about poor financial management, a rapid increase in costs,delayed Government budget contributions, and low livestock prices; thisproblem, however, was handled at this stage primarily in conjunction withappraisal of the Ituri Project (para 6.33). Efforts were once again madeto patch up the situation and agreement was reached on specific measures toaddress critical problems, notably an intensive program of pregnancytesting because weaning rates had dropped to a level of 39%.

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4.10 In early 1976, the situation of the ranches and relations betweenONDE and the consultants deteriorated further, The precipitating factorswere continuing high mortality, and a disastrous experience with imports ofheifers and bulls from Botswana in early 1976. In April 1976, the DirectorGeneral of ONDE wrote to the consuLtants terminating their contract, Afterextensive meetings involving the consultarnts, ONDE, Government officialsand IDA staff, in Zaire and in Washington, a decision was reached to givethe consultants another chance, and to review the situation again later inthe year. rhe consultants had vigorously protested their dismissal,attributing problems to lack of autonomy in management, failures of supply,and the enormous difficulties inherent in working in the general Zairiansituation. They agreed to replace several members of the team, and thesituation temporarily improved. However, in August 1976, the GeneralManager of ONDE decided definitively to terminate the contract and theconsultant team ended their involvement shortly th('reafter, although twoindividuals remained under direct contracts with ONDE. The consuLting firmleft with considerable bitterness, alleging that their performance had beenmisjudged and that the fault lay primarily in a failure to give themadequate authority to discharge their responsibilities. It is clear,however, that there were numerous and enormous problems with ranchmanagement, many avoidable, for example failure to dip when chemicals werethere; a more difficult judgement but one borne out by many observers atthe time was that the consultants did not develop good relations withZairian staff and introduced significant technical innovations (seasonalbreeding, and intensive pasture management) without first studying andappreciating the methods being used in the Region and explaininginnovations to Zairian staff.

Mid-term Review and Recruitment of New Technical Assistance Staff

4.11 From late 1976, when the consulting firm departed, ranchmanagement entered a period of limbo, and attention focussed on efforts tobuild up the herd and to recruit technical assistants. An intensive IDAsupervision mission in early 1976 had effectively reappraised the project,seeking to establish more realistic objectives. These were reflected in adetailed correspondence with the Government in late 1976 and early 1977.The changes introduced involved a scaling down of investment because ofcost escalation amounting to 116% in Zaires and 40% in US dollars, (theresuLt of delays, some under-estimation of costs, but above all infLation),as well as substantial delays already encountered in developing physicalinfra.structure and increasing herd size. The revision in the project wasclosely linked to ongoing discussions on beef prices, and it was onLy afterthe Government tripled prices, then increased them by 30% more in early1977 that the new cost and production estimates could be finalized andadopted as a basis for proceeding with the project.

4.12 During 1977 and 1978, the central issues for the project wererecruitment of expatriate management staff, continued concern about poortechnical performance on the ranches, heifers and bull imports, andfinancial problems which had begun to beset ONDE, particularly lack offoreign exchange and delays in government budget allocations. Contactsbetween the Government, ONDE, and IDA were frequent, and IDA wasparticularly closely involved in the recruitment effort and in far-rangingdiscussions on technical issues. There was a renewed focus on revisingranch investment and operating programs to ensure

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that they were realistic and to address the critcal management problensthat were manifested above all in low fertility; physicaL targets wereagain revised in Late 1977 anti early 1978 and an action program to improveranch management was hammered out. Zaire's economic crisis, which wasbecoming acute around this time, began to have direct repercussions onONDE. Supply problems were becoming increasingly serious and heroicefforts were required to maintain fuel suppLies and to obtain evencritically needed spare parts; at one stage, a senior manager went toDar-es-Salaan to try to arrange transport of bLocked goods from there toKigoma and thence to Shaba. The Credit Agreement was amended in April 1978to allocate additional funds to cover investment costs (including importedcattle) and to allow 1002 financing and hence direct payments from IDA forveterinary supplies and a fuel stock. This reflected the prevailingshortage of foreign exchange which made it impossible for ONDE to receiveforeign exchange allocations even for criticalLy needed j-nputs.

4.13 The issue of cattle imports proved highly problematic and occupiedconsiderable energy in the 1976-78 period. At appraisal, it had appearedthat heifers and bulls were available locally, and imports were providedfor only as a last resort. However, after project start-up, theconsultants and ONDE management concluded that local supplies wereinadequate (largely because of the zairianization measures) and began animport program. Although international tendering had been anticipated, theconsultant team simply sought quotations, presenting IDA with a faitaccompli which was eventually accepted. A first group of cattle wereimported from Botswana in early 19 6 (1600 heifers and 200 bulls). Theresults were catastrophic, and 800 heifers and 135 bulls died; IDA adviseda stop to imports. Nonetheless, ONDE determined to proceed, and reachedagreement with the suppliers that some animals (460 from the firstpurchase) would be replaced because the suppliers accepted responsibilityfor faiLing to innoculate animals against disease risks. Internationalcompetitive bidding procedures were followed this time and a Botswanasupplier was again awarded the contract. A total of almost 2400 animals infive consignments were successfully imported between January and July1977. Heifer imports were stopped at this point, however, because of thehigh cost and substantial risks involved, and because IDA supervision staffurged that ONDE management focus first on the problems of improvingfertility of the existing herd. Some further bulls were imported in 1978,Although surviving animals have done well, the costs were high and therewere clearly serious risks involved.

Shaba War and Demonitization

4.14 The situation in Shaba was affected by the unsettled poLitical andmilitary situation in 1977-78 (para. 4.03). Effects on the project weredirect and indirect. One ranch (Kayenbe-Mukulu) was briefly occupied (byarmies on both sides of the conflict), and was in the path of fighting;operations were affected and cattle losses increased substantially.Indirect effects were above all increasing disruption in internalcommunication and supplies throughout the region. The events nay explainin part the continuing concern of Shaba authorities to keep meat prices low(para. 6.31).

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4.15 The Project was dealt a further serious blow by the exchange ofcurrency notes (d&nongtisation) in December 1979, which aggravated thealready precarious financial situation oE ONDE. The ranches were left withworthless currency which they were unable to exchange, cattle could not besold, ranch employees could not be paid, and procurement of key supplieswas delayed, all because the operation drastically reduced currencyavailable in rural areas. Despite numerous promises, the Government nevertook effective action to rectify the situation, but graduaLly the situationreturned to normal.

Ranch Situation after 1978

4.16 From 1978 onwards, the ranch situation generalLy stabilized andthere have been no serious crises in management since then. Overall,ONDE's management slowly but quite surely improved (credit is dueparticularly to the Director General and to some excellent technicalassitance staff and Zairian ranch managers). ONDE headquarters onsupervision of ranches improved somewhat, and there was some improvemenit intechnical coefficients. Especially at Muhila, technical and fiaancialperformance was better, although fertility remained at a relatively lowlevel. Muhila had become a profitable operation and has remained so eversince. Muhila experienced some difficulties when the ranch was dividedinto two because of its vast size in 1979, but this decision was reversedand no serious consequences resulted. The situation of the two smallerranches, however, was a continuing subject of concern. At litwaba, themost serious problem appeared to be lions, and mortality from lions from1979 on was very high (close to 400 head per year). Mitwaba borders on theUpemba National Park, and, because of poor comnunications, ONDE had builthouses and dipping tanks in areas which had officially been designated aspark land; however, this problem, while evidently serious from both apractical and legal standpoint, does not explain the sharp increase in lionravages nor their steady pace. An official of the Ninistry of NationaLResources speculated cattle trekked from Botswana to MLitwaba brought afollowing of lions with them; further, that the presence of cattLe,particularly confined in kraals at night, led to a change in hablts amongthe lions (they found a steady and easy source of food); and finally, thatdehorned cattle put up no resistance. The mystery of the high lion ravagesremains unsolved and losses continue to this day, despite lion traps andother devices; while lions are clearly a serious problem, it seems likelythat human predators have also contributed to high losses. AtKayembe-Mukulu, particularly after the Shaba war, the major difficulty wasrelations with ranch staff, and ranch managemnent was plagued by unrest andpilferage. The problem has never been satisfactorily resolved, despite thepresence of an excellent manager in the final years.

4.17 Recruitment of expatriate staff was a serious and continuingproblem from 1976 to 1980-81. Extraordinary efforts were nade by ONDE withextensive IDA support, to explore every possible source of expatriatestaff, but it proved almost impossible to find well qualified invidivualswilling to work in eastern Zaire. There were many frustrations as staffwere accepted but then were not available, partly because the recruitmentprocess was so cumbersome. Further, the performance of some staff was verydisappointing and they were let go. In 1980, the situation finally

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improved, and a German firm was recruited to provide three key expatriatestaff; the Belgian Cooperation Agency provided some staff, and a ranchmanager was recruited under an IDA secondment contract. Issues fortechnical assistance are discussed below in greater detail (paras 6.06 -6.12). It is important to emphasize the enormous efforts that went intothe search and the adverse effects on ONDE of lengthy hiatuses when keypositions were simply not filled.

Financial Management Problems and Informal Suspension of Disbursements

4.18 During 1979-80, the most serious problem for the projectwas the patently unsatisfactory financial management situation. ONDE'saccounts were in serious disorder, audits were delayed, auditors gavequalified opinions, and there was evidence of misappropriation of funds.In mid 1979, a decision was reached by IDA that immediate remedial actionwas needed. In August 1979, the Government was informed that IDA wasconsidering a suspension of disbursements and that no withdrawalapplications (except direct payment for technical assistance) could beacted on until audited accounts for 1977 and 1978 were received. Thisaction had a positive, galvanizing effect and ONDE moved promptly tocomplete the audit of its 1977 and 1978 accounts. In March 1980,dis1mursements were resumed.

4.19 ONDE has since made concerted efforts to improve financialmanagement, and accounts and audits have been completed in a relativelytimely manner. The presence from this stage through project completion oftwo financial advisers - a liaison officer in Lubumbashi, and a financialdirector in Kinshasa, helped to establish a more normal financialmanagement position. However, worsening problems in obtaining Governmentbudget allocations posed serious financial problems. The problem was moreserious in 1979 than it had been before and in mid 1980 ONDE had receivedno counterpart funds for either 1979 or 1980. Supply problens(particularly for fuel) also worsened during this period, and ONDE and theranches suffered as Government services generally, and the veterinaryservice is particularly weakened and were completely unreliable. An issuewhich was actively debated was ONDE's role in cattle marketing; ONDEadvanced a plan to transport live cattle to Kinshasa, but this was droppedat IDA's urging.

Extension of Closing Date

4.20 In mid 1980, the credit closing date was extended for two years,from December 31, 1979 to December 31, 1981. This step was taken (afterconsiderable debate within the Bank) for three reasons: first, physicaldevelopment targets were far from achieved and works were behind schedule.Second, technical assistance support was still urgently needed and it wassimply not practical to aobilize alternative sources of funding in the timeavailable. Finally, IDA staff hoped that through the extension period itwould be possible to review and redefine the future role of ONDE and theproject ranches in Zaire's livestock sector. Consideration was given to aone year extension, but that alternative was rejected primarily because ofthe need to make longer term commitments to technical assistance staff.

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Impact of "Privatization" Issue

4.21 Since 1981, ONDE's future has been in question, the subject ofdebate and rumor. Since the Goverrvment was in the process of divestingitself of responsibilities for direct management of production units, ONDEclearly came in for scrutiny (para. 4.04). The issue was at leasttemporarily resolved when, in September 1981, a Cabinet decision wasannounced stating that ONDE would continue to manage the three projectranches. Nevertheless, it was becoming quite clear that ONDE could counton no further Government financial support to cover decifits, and ONDEquite deLiberately received no budget allocation at all in 1982. ONDE,with IDA supervision missions, began to review the two key financialproblems facing the institution: continuing financial losses of Mitwabaand Kayemube Mukulu (the two smaller ranches), and an inflated headquarterswhich could never be supported financially by the ranches. No conclusiveaction on critical issues had been taken at the project completion date.

C. The Situation at Project Completion

4.22 At the project completion date (December 1981), ONDE continued tohave responsibility for management of the three project ranches, asenvisaged at appraisal; ONDE had other responsibilities, but by late 1981these were quite restricted and management of the project ranches wasONDE's key responsibility, and its principal financial support. ONDE'sheadquarters was staffed with the same Director General who had started theorganization and a primarily Zairian staff. Technical assistance staffincluded the financial director (he fled Zaire in early 1982, whenfinancial irregularities were discovered), two ranch managers and theLubumbashi liaison officer; they left in mid 1982. Additional technicalassistance was being sought, to be financed under an Agricultural TechnicalAssistance Project (approved in 1982) (para. 9.01).

4.23 The ranch situation had improved substantially since 1977-78, butthere was little doubt that only Muhila ranch had attained the degree oftechnical and financial viability envisaged at appraisal. Cattle were ingood condition except at one ranch, Kayembe-Mukulu; the status of thisranch was uncertain because the Government had announced that it would besold to private interests but no buyer had been identified. Muhila ranchremained by far the largest, with about 38,000 cattle in total (comparedwith an appraisal estimate for 1981 of 64,000). TechnicaL coefficientswere improving, management was generally good, and the ranch showed afinancial surplus. Mitwaba ranch also showed an improvement; herd size wasabout 7,410 (the appraisal projection was 7,700), but the ranch still hadhigh mortality (a continuing lion problem) and was losing money.Kayembe-Mukulu ranch was in the worst shape, and represented a steadyfinancial drain for ONDE. Herd size was about 3,600 compared to theappraisal projection of 7,700. Technical coefficients were as follows:

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Muhila Mitwaba Kayembae-Mukulu1981 App.Est. 1981 App.Est. 198) App.Est.

(for 1981) (for 1981) (for 1981)

Extraction rate 11 17 8.3 17 10.7 17Calving 49 n.a. 52 n.a. 31 n.a.Weaning rate 48 77 45 77 29 77Mortality 2.4 2.0 6.4 1/ 2.0 6.7 2.0

1/ 367 head reported killed by lion

In 1981, about 5,660 cattle were sold (equivalent to roughly 2,650 tonsliveweight); this was about 50% of appraisal targets. No breeding heifershave yet been sold; the appraisal target for 1981 was 2,150 heifers. Theaverage liveweight per head of cattle from Muhila increased over theproject period from 438 kg to 476 kg (1976 and 1981 figures). Pasturedevelopment was about 46% of appraisal targets. Annex 3 provides a moredetailed comparison of appraisal projections and achievements at projectcompletion.

D. Project Preparation and Training Components

4.24 The project included a significant component for studies, projectpreparation work, and training (US$1.8 million, 15% of base projectcosts). Specific plans for these activities had not been defined atappraisal, and in fact there were several quite separate objectives.First, the project was explicitly designed to support one specific elementof the livestock sector (Government-owned commercial ranches) but both theGovernment and the Bank had Jlearly identified the need for action tosupport traeitional livestock producers; a separate project was thus to beprepared. Second, the Bank was only just becoming involved in Zaire'sagricultural sector and the project pipeline was very weak. Therefore, anotional amount was included to support the general agricultural projectpreparation effort. Finally, the lack of trained staff was seen as acritical problem and funds for training were included.

4.22 Only about one half of funds allocated for these activities wereutilized, and most activity was concentrated in the early years of projectimplementation. Some preparation work for the Ituri Project (Cr. 697-ZR)and other projects (notably Cotton) was financed under this project, but ingeneral other funds were available to finance most preparation work thatwas in fact undertaken during the project period. From 1976 on, it wasapparent that cost escalation for the ranching component was a seriousproblem and both Government and IDA staff hesitated to draw on projectpreparation funds under this project when alternative sources wereavailable. One unanticipated use of funds was to support technicalassistance to ONDE itself after it outgrew its original role as a projectmanagement agency; two positions were agreed on at ONDE headquarters witha mandate that went well beyond project implementation - a financialdirector and an animal production specialist; only one of these posts wasfilled. Regarding training, despite a series of efforts, beginning in

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1974, to define comprehensive plans, actual training efforts were sporadicand limited and not much money was actually spent. The most substantialtraining effort was a program in 1974-75 in Argentina. Thenceforth,training consisted largely of specialized trips for senior project staff.A ranch training center at Muhila was proposed and periodically discussed,but, with overall management difficulties facing the project as a whole, itis clear that training simply could not be accorded the priority that itevidently deserved. Training activities undertaken were worthwhile butwere inadequate and i.nsufficiently focused.

V. ONDE - INSTITUTIONAL DEVELOPMENT ISSUES

5.01 The critical importance of institutional issues for the projectwas recognized at project identification and has been a continuing conernthroughout project implementation. Three key problems have giveninstitutional issues a special significance; first, the striking weaknessof institutions responsible for agriculture in Zaire; second, difficultiesin establishing ONDE, a new parastatal, on a sound footing; and third, thefar-reaching changes in Government policy and action on public institutionsover the project period, which profoundly affected ONDE and demandedcontinuing efforts to adapt to new circumstances. This chapter summarizesissues related to ONDE's development and provides an assessment of itscurrent position and prospects. It draws on several supervision reportsbut particularly on a January 1981 mission which reviewed ONDE's status andfuture prospects. Specific proje:t organizational issues are discussed ingreater detail in Chapter VI.

ONDE's Development

5.02 ONDE was established in 1973 specifically and solely to implementthe project (para 3.17). The new parastatal was to become in a short spaceof time commercially viable and autonomous, under the general supervisionof the Ministry of Agriculture. Initially, its sole responsibility was tobe management of the three project ranches but its mandate was defined muchmore broadly. ONDE was to be based at Lubumbashi. Although ONDE's rolehad been actively detailed and alternative types of institution cunsidered,there was no specific effort to plan for the institution's development orto set up management systems and procedures. Heavy reliance was placed onthe technical assistance team to be recruited to handle these matters.

5.03 After ONDE's establishment In 1973, headquarters were set up inLubumbashi. The office there was very small, consisting essentially of afinancial director in charge of procurement of equipment and materials forthe ranches, and maintaining accounts. The general management was locatedat Muhila ranch, and supervision of th2 other two ranches (Mitwaba andKayembe-Mukulu) was handled from there.

5.04 Following the zairianization measures in November 1973 - a fewshort months after ONDE was established - ONDE was entrusted with enormousnew responsibilities which went far beyond any notion of ONDE's role thathad been considered in its creation. The change severely taxed its limitedorganizational structure and meager human resources: ONDE was given theownership and management of all new Government ranches (para. 4.06). Theimmediate consequences were to force ONDE's management to recruit

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additional staff without any planning or training, and to manage a largenumber of organizations, each with dLifferent procedures inherited from theprevious owners. ONDE was totally unprepared for this task. ONDE'sdirector-general, just appointed, and his staff had virtually no managementexperience, and financial and administrative procedures were not yet fullydefined. The organizational and financial structure of the institution wassimPly not set up For a task of this magnitude.

5.05 From 1974 through 1978, ONDE was in a constant state of changecaused by the successive and, at times, contradiccory decisions of theGovernment on the distribution of responsibilities for nationalized andgovernment owned livestock production units (ranches, farms, abattoirs, andveterinary facilities) among various public institutions. Even ONDEat times had difficulty in defining precisely its responsibilities and IDAstaff were sporadically informed of action to add new units and to takethem away. Each supervision mission was obliged to take stock of exactlywhere ONDE stood and what changes had taken place in the preceedingmonths. From 1977 on, with the dezairianization measures, most of ONDE'sproduction units were returned to their previous owners, but this"retrocession" process was not completed until mid-1979. UNDE's tumultuoushistory is described in greater detail in the previous chapter.

5.06 Three principal consequences resulted from this troubled period:ONDE's headquarters, which had been transferred from Lubumbashi to Kinshasaduring the zairianization period, remained in Kinshasa; second, ONDE had toabsorb the staff recruited and inherited, even though its activities werereduced; and third, the office in Lubumbashi became ONDE's liaison office,2,000 km away from Kinshasa, in charge of ensuring liaison between theheadquarters in Kinshasa and the ranches, and between the ranchtes and theexternal market (procurement of goods and cattle sales). The Lubumbashioffice effectively assumed the functions of a project unit within ONDE, butits responsibilities and functions were never clearly defined.

5.07 ONDE's organizational structure has therefore been subject tothree exogenous constraints: (a) politico-economic interference(zairianization/dezairianization measure); (b) plethora of personnel inrelation to tasks and responsibilities; and (c) extremely difficultcommunications within the organization because of the geographicaldistances and the limited transport infrastructure.

Present Organization

5.08 ONDE has a three-level structure, with a Kinshasa headquarters, aLubumbashi liaison office (effectively a project unit), and productionunits (Chart 1). ONDE's production units now include the three Shaba beefcattle ranches at Muhila, Mitwaba, and Kayembe-Mukulu, two farms inBas-Zaire (the Njili poultry farm; and the Kabuba cattle farm) (1,000head), the Gungu-Katutu cattle ranch (1,000 head) in Bandundu, and twoslaughterhouses at Kinsagani and Bunia in Haut Zaire (the Bunia abattoir isto be transferred to a producer cooperative organization). Of these unitsthe three Shaba ranches are by far the largest and most significantactivity both in terms of staff and production.

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5.09 The headquarters in Kinshasa has four major functions: (1) tocentraLize accounting, financial, and technical information; (ii) to manageONDE's entire staff; (iii) to liaise with political, administrative, andtechnical bodies of Government (the Executive Council, the Parliament, theMinistry of Agriculture, and the Ministry of Portfolio), and with theMinistry of Finance and the Central bank (for Government counterpartfunding and foreign exchange quotas); and (iv) to liaise withinternational organizations (bilateral and international financialinstitutions, and commercial banks).

5.10 The Lubumbashi Liaison Office has two major functions: (i) toprovide accounting ant financial management services to the Shaba ranches(it performs some financial supervision of the ranches on behalf ofONDE headquarters); and (ii) to provide commercial services to the Shabaranches, principally for the procurement of supplies and equipment and forcattle sales.

5.11 The salient feature of ONDE's present organizational structure isthat it is much inflated as compared to the structure enviraged atappraisal, to the needs of the current organization, and to its financialmeans. ONDE has survived financially because it has received budgetsupport for the Government; without subsidies its finances would beseverely strained. The creation of new headquarters in Kinshasa, whilemaintaining the Lubumbashi liaison office, has had the effect of increasingcommunication difficulties between ONDE's center of managerial decisionsand controls and its operational units. This has obliged both the liaisonoffice and the ranches to seek greater autonomy because of the remotenessof headquarters, and created a double administration, thereby duplicatingstaff numbers and functions, notably between the Financial Department atHieadquarters and the Lubumbashi Liatson Office. Finally, although there isclearly a need for permanent representation in Kinshasa in the Zairianpolitico-administrative context, the headquarters organizational structureis overly complex and burdensome and well over half its staff of about 80are redundant.

ONDE's Strengths

5.12 ONDE's development has been profoundly affected by its generalmanager. Appointed in 1974 (after serving several years as director ofMuhila ranch), he has shaped the institution from the beginning and livedthrough and survived all its vicissitudes. This institutional continuityhas had vital importance and probably explains in large measure ONDE'ssurvival and development. He established effective relations with IDA,Government institutions, and private ranchers. He has clear authoritywithin ONDE, and has developed staff. Under his leadership, ONDE hasbecome a solid Zairian enterprise; in agriculture, particularly, there arefew others. ONDE has acquired '-ubstantial experience, notably in ranchingbut also in procurement and livestock and meat marketing. ONDE is a majorcattle producer, ranking among the three largest cattle producers inZaire and has been a vehicle for introducing new techniques (pastureimprovement, early calf weaning). ONDE has acquired a broad knowledge ofcattle husbandry development in Zaire. ONDE could now plan the development

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of a cattle ranch or farm, select the most appropriate type of cattle for agiven ecological environment, plan physical and herd development, set up amanagement system, and ! bilize the resources (huwran, technical, andfinancial) necessary to make such enterprises profitable. Frnm 1tTexperience in ranch development, either from scratch (e.g. at Mitwaba) orfrom a development of new lands on an existing farm (e.g. at Muhila a 1Kayembe-Mukulu), ONDE has, in theory, the capacity to promote cattlehusbandry techniques in Zaire, provided, of course, that it retains itsstaff.

5.13 ONDE has also been successful in developing young Zairian middlemanagement staff who could become managers of other livestock enterprisesin Zaire, public or private, or who could start their own livestock farms.At leaqt in theory, they could promote a productive and prosperousdevelopment of small and medium scale farms and ranches. This could haveimportant long term benefits, but it is important that key bottlenecks beremoved, notably the absence of credit for small and medium scalecommercial farmers. ONDE has also acquired some experience in variousfields of activities, including abattoir management (in Haut-Zaire),poultry farm development and management, and cattle breeding for sale tosmallholders (in Bandundu).

ONDE's Weaknesses

5.14 Inadequate Human Resources are ONDE's most important problem.Senior staff lack training in management and are too thin on the ground.Reliance on expatriates is excessive. Training has been inadequateoverall. This is an area which demands specific attention and action.

5.15 Management of expatriates: since ONDE was established in 1974,there have been on average five expatriates permanently with ONDE.However, turnover of expatriate staff has been hi-h. due both to adjustmentand performance difficulties. Overall, ONDE's use of expatriates has beenmost ambiguous. It was handled at no stage with a clear objective oftransfer of technology and know-how from the expatriates to the nationalstaff, nor with a clear schedule for replacement of expatriates bynationals in senior managerial positions.

5.16 Organization. ONDE's organizational structure is characterized bya duplication of services between ONDE's headquartets in Kinshasa and theLubumbashi liaison office, in particular financial and commercial services(para 5.11). As a result, there is a duplication of staff positions, andeven of procedures: the Liaison office had established specific accountingand budgetary procedures for the three operational units in the ShabaProvince before the headquarters' financial division had designed suchfinancial procedures for the institution as a whole. Another consequenceof the inflated organizatior.al structure is the increased operating costsfor ONDE not only in terms of staff salaries, but also in terms of travelexpenditures, radio communications, equipment, building maintenance, etc.

5.17 Managemenc Systems. ONDE still does not have clearly definedmanagement systems. There has never been awlyone with the necessarycompetence to design a management system for ONDE; successive financialdirectors have always had to concentrate on updating and maintaining

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accounts raLner than on the design of an accounting and financialmanagement system. With respect to the adminstrative management, theprincipal weaknesses are: (i) tasks and responsibilities within the companyare not well defined; and (ii) there is no well-established communicationsystem, due partly to unclear distribution of responsibilities, but also togeographical distances, and to the plethora of personnel.

5.18 With respect to the management of human resources, the principalweaknesses are: (i) job descriptions are generally poorly designed; (ii)there is no personnel management policy, including no recruitment policy tohire the best talents for a given position; no staff incentive policy(salaries, fringe benefits, promotions, etc.); no career developmentpolicy; and no vocational and professional training program. Various adhoc efforts have been made over time by ONDE's management, such as theintroduction of performance bonuses to ranch managers and section chiefs,and some limited individual training activities; and (iii) the plethora ofpersonnel; this is due partly to ONDE's expansion during the zairianizationperiod, but also to the prevailing socio-economic environment in which theGovernment is reluctant to authorize laying-off staff from publicenterprises because of lack of alternative employment opportunities.Pressures to assist the "extended family" are still very strong anddifficult to resist. This plethora of personnel is costly and adverselyaffects ONDE's profitability. It also affects its productivity, and leadsto personal frustrations and tensions.

5.19 With respect to financial management, the principal weaknessesare: (i) the financial department is poorly organized and the distributionof responsibilities between the financial department at headquarters andthe Lubumbashi Liaison office remains unclear, in particular with respectto commercial activities and cash management of the ranches. The financialdepartment often dictates the distribution of Government subsidies betweenthe ranches, and has also at times ordered cash transfers unrelated toranch earniTigs from cattle sales; (ii) financial procedures remain verylimited. There is no cost accounting system, no standard budgetaryprocedures, no cash management system, and no stock management and controlsystem, and the general accounting system is unsatisfactory. Efforts weremade in 1977-78 to establish simple and standard procedures for theranches, the Lubumbashi Liaison office, and Headquarters includingguidelines to prepare and monitor the budget according to a definiteschedule; to keep books, manage stocks. schedule orders to equipment andsupplies; and to maintain aceounts at various levels and operate simplecash management and cost accounting systems. This effort was not fullyfollowed througi. partly due to the negligence of certain ranch directors,and to the lack of authority of, and supervision from the financialdirector. Further efforts were made in 1978 and 1980 to establish clearprocedures but financial management procedures remained unclear atcompletion; (iii) the financial staff remains weak. ONDE has had unusualdifficulties in recruiting competent accountants, in particular for theranches. The history of malversatiou from the cashiers and the accountantsis disconcerting. Further, accounting staff are unable to maintain theaccounts accurately and process them in time to prepare the financialstatements as in a normal commercial enterprise. While these deficiencies

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are explained in part by the insufficient technical training and practicalexperience of staff, the difficult environment in which they work alsoconditions their performance.

5.20 Finally, technical management still suffers from majordeficiencies, including the lack of productivity objectives, erraticveterinary controls, the unsatisfactory organization of infrastructuremaintenance and development, and lack of herd development objectives,principally in terms of breeds.

5.21 Commercial Policy. The lack of a clear, well-articulatedcommercial strategy with objectives for each production unit is a seriousproblem. In the absence of such policies, decision making has tended to bead hoc. For example, steer sales from the ranches have been determined asmuch by tradition (e.g. five-year old steers and above) as by cash needs,without proper consideration of cattle condition or return on investment.ONDE has incurred major losses of value-added and seriously damaged itsfinancial position over time. An exercise carried out in 1978 by anIDA-supervision mission demonstrated that at Muhila, when cattle were sold50 kg below the optimal weight, earnings were reduced by millions ofzaires. In addition ONDE has been unable to develop an ONDE label of itsmeat comparable to other ranching companies in Shaba Region. The majordeficiencies in ONDE's commercial policy include: i) at ranch level, theabsence of a steer finishing policy with weight and quality objectives,cattle maintenance guidelines, trek preparation and management guidelines,and clientele development policy; and (ii) at company level, uncleardecision-making responsibilities leading to *uncoordinated and oftencontradictory orders to ranches, and lack of planning and monitoringsystems.

5.22 ONDE's management has clearly operated under serious constraints.Above all, the Government's cattle pricing policy has posed problems.Despite official establishment in 1977 of a minimum price system (para.6.31) Shaba regional authorities have never implemented decrees andofficial prices have been maintained as maximum prices. ONDE had hadlittle flexibility in fixing prices and official prices have generally beentoo low to ensure profitability. In addition, pressures have been exertedat times by politicians on ONDE's management to obtain cattle even whensuch sales were not optimal for the commercial performance of the company.Finally, ONDE has never had adequate commercial staff, and no trainingprogram has ever been designed in this field.

5.23 Overall Corporate Strategy. Since its establishment ONDE haslacked a coherent strategy. ONDE's initial objective was to produce beefas a commercial ranching concern, but unstated objectives have always beenbroader and there have been frequent and significant changes inexpectations and demands. ONDE has been seen variously as a smallproduction unit, manager of all Zaire's commercial livestock units,extension agency for small livestock producers, cattle and meat marketingagency, and policy planner for national livestock sector development. Inretrospect, it appears that objectives were very broadly defined at theoutset and were never clearly modified when circumstances changed. One canlegitimately question whether: (i) the structure recommended in the

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appraisal report was adapted to the development of such large-scaleranching operation; (ii) it was reasonable to expect that a totally newinstitution could manage three separate production units in the complicatedgeographical and socio-economic environment of Shaba; and (iii) hiring ateam of consuLtants would suffice to achieve the stated objectives. Theseissues, however, are somewhat academic given the changes which occurred asONDE developed. What is most important now is to clarify ONDE's currentobjectives and to define an effective strategy for attaining them.

ONDE's Future Development

5.24 At project completion, ONDE's role in the livestock sector andspecific responsibilities remained unclear. ONDE retains responsibilityfor the three project ranches and for a few other small units. ONDE'sfinancial situation is poor and it is not at this stage a commerciallyviable entity. Some Government officials have broader expectations of theinstitution, which they see in a leadership role in the livestock sector.There is little question that such leadership is needed, and ONDE clearlyhas important assets and has gained valuable experience in the sector. Asystematic - -view of alternative strategies for development therefore seemsapproprist

5. alternative, which has received serious consideration, andwhich might well occur by default if no action is taken, would be todisband ONDE, assuming that ranches would be purchased by private owners.The issue of privatization of ranches has been explored in some detail andoffers interesting possibilities. It seems unlikely, however, that asimple sale of ONDE or its parts to private owners is feasible and wouldyield good results. The transfer (through a sales agreemnent or any otherarrangement) of all or some of ONDE's ranches to individuals withoutprevious managerial and technical experience in the livestock sector wouldalmost certainly lead to the complete erosion of a capital which ONDE tookmore than seven years to develop. It bears mention that a move to divestONDE of ranches would call for consultation with IDA under the terms of theDevelopment Credit Agreement.

5.26 A second alternative worth exploration would be to seek privateparticipation in ONDE. While Zairian entrepreneurs are not numerous,livestock is among all agricultural activities the one most likely toattract them. Livestock is a traditional source of prestige and wealth.It offers a valuable capital in an insecure political environment.Livestock farmers in a few areas might possibly be interested in acquiringpart of ONDE's capital. The objective of "privatization" of ONDE might beproductively pursued by seeking participation of such farmers in a mixedcapital venture. The Governmeat could also call on the expatriate privatesector, most cattle ranches of Zaire belong to expatriate privateentrepreneurs who have a longer experience with this activity than ONDE.However, this might result in a replacement of Zairians by expatriates, andmany benefits might well be transferred outside Zaire.

5.27 A third and more ambitious alternative which is worth exploringwith a careful prior review would be to expand and change ONDE's role toemphasize its leadership role in the sector (for example, planning,

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technical assistance for ranches, extension services). While ONDE'sstatutes do provide for such a role, no systematic analysis has yet beendone on specific possibilities in any of these areas and a cautiousapproach is warranted. Nonetheless, there is clearly a need fordevelopment of the livestock sector and ONDE's potential contributionmerits consideration.

5.28 Several measures could be adopted by ONDE within its presentstructure to optimize returns on existing investments and achieveself-financing. These include:

- carry out an in-depth study (covering economic, technical,ecological, and human aspects) of each production unit.This would assist ONDE and the Government in re-analyzingthe initial objectives, and might facilitate a decision toeliminate non-viable production units.

- Review ONDE's organization, particularly overlap betweenHeadquarters services and the Lubumbashi liaison office.

- Modify current management procedures to increase efficiencyand productivity.

- reconsider the current use of human, technical and financialresources, to eliminate excessive staff, reduce redundantconsumption of technical inputs, and rationalize budgetutilization.

Discussions between the Bank and the Government on the future of ONDE arestill on-going. It is hoped that a satisfactory agreement can be reachedshortly. There is also a need for action by the Government to guaranteeallocations of foreign exchange for livestock development, to finance keytechnical assistance positions, purchase of veterinary products and othertechnical inputs (equipment, vehicles, breeding material, etc.), andtraining activities.

VI. PROJECT PERFORMANCE

A. Policy Environment

b.O1 The overall policy environment in Zaire was the most importantfactor affecting project performance. The most fundamental policy issuewas the Zairian Government's changes in approach to private ownership ofranches and to the role of parastatals. The zairianization-nationalization/denationalization period subjected ONDE, a brand-newentity, to a dramatic increase in responsibilities, and perpetualuncertainty as these responsibilities were thenceforth frequently changed.ONDE's management was thus, understandably, in constant turmoil (ChaptersIV and V). Recent policy decisions to "privatize" Government ownedproduction units have again cast a pall of uncertainty on ONDE;announcements that ranches would be privatized perturbed ranch operationsfor several months, and uncertainty still persists. Broad macro-economicpolicy issues have also had far-ranging direct and indirect effects on

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project implementation. Zaire's catastrophic economic situation led toworsening communications, critical shortages of supplies, gallopinginflation, inadequate budget allocations, and lack of foreign exchange.The failure to establish a clear price policy was a problem from beginningto end; Although a more reasonable pricing systen has emerged in the pasttwo-three years, the Government's object.ives in this field are not yetentirely clear and ONDE's position is affected both by the official pricecontrols and by measures taken by Shaba authorities to keep meat prices inthe region low. The 1979 demonetization (exchange of currency notes) was afurther blow to this project, as it was to others, as it wiped outliquidity of rural institutions and disrupted marketing.

B. Organizational Issues

6.02 Project management has been a central issue from beginning toend. ONDE's role and development and its future prospects are discussed inChapter V. Three specific organizational issues are reviewed below: theproject management structure, the role of technical assistance andarrangements for employing technical assistance personnel, and fortraining.

Project Management Arrangements

6.03 Project management arrangements were reviewed with particular careduring the project preparation and appraisal stages, because thelimitations of existing institutions in Zaire were clearly recognized.Bank staff wade particular eEforts in this instance to assess alternativeinstitutional arrangements. The decision to establish ONDE was, inretrospect, a pragm.atic and well-reasoned decision given the clear lack ofalternatives; there was no other institution which could have handled thetask. In one respect the basic project management concept proved to beflawed: it was a cleat, if unstated objective that the establishment ofONDE would help to insulate project implementation from the broaderenvironment and particularly general institutional weaknesses. Inpractice, ONDE was not insulated and was buffeted throughout by externalpressures, which resulted notably in the changing responsibilitiesdescribed in the previous chapters.

6.04 Specific project management arrangements were not spelled out indetail at appraisal, and much was left to be defined by the projectmanagement team. IDA did require annual budgets and specific ranchdevelopment plans, and these instruments proved to be essential duringproject Implementation. In retrospect, however, the difficulty of the taskof establishing ONDE was underestimated at appraisal, and It would havebeen beneficial to provide in more detail for development of jobdescriptions, operating procedures, financial management systems, and otherbasic management systems. In the event, the dismissal of the projectmanagement team in 1976 lead to serious discontinuity in development ofproject management systems, and in effect a new start had to be mademid-way through project implementation. Thus, in retrospect, it is clearthat project management arrangements per se were deficient in manyrespects, and basic management systems and internal controlr have been andremain weak.

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6.05 In assessing project management performance, an essential issue isGovernment support for the project. At most stages this support wasvirtually nil, and ONDE was obliged to take all initiatives both to developproject mniunagement systems and to resolve problems. The weakness ofGovernment supervision of ti.is (and other) projects was forcibly underlinedin the 1982 review of the agricultural projec portfolio, carried outjointly by the Government and IDA. In effect, the Ministry of Agricultiurehas only just begun to develop rudimentary procedures for supervision ofand support to projects. Strengthening of these systems is an importantobjective of the on-going Agricultural Technical Assistance Project (Cr.1244-ZR).

Technical Assistance Issues

6.06 Technical assistance arrangements proved to be particularLyproblematic under this project. Employment of technical assistance was acontinual source of concern, although a number of formulas were tried torecruit and employ expatriate technicians. The major problems wereenormous difficulties in recruiting qualified staff, unsatisfactoryperformance of a number of consultants, long gaps when key jobs wereunfilled, and a general failure to achieve one of the principle objectivesof technical assistance - to train Zairian staff. This is a case where thelack of a clear Long-term program for technical assistance proved to be aserious problem.

6.07 It was expected at appraisal that ONDE would need a full technicalassistance team throughout the project period; provision was made for about25 staff-years of technical assistance. In the event, despite long periodswhen technical assistance posts remained unfilled, about 45 staff-years oftechnical assistance were provided; o' this about 12 staff-years werefinanced by bilateral sources, and the remainder by IDA. On balance,technical assistance needs were substantially underestimated. Given theproblems ONDE now faces and its continuing technical assistance needs, itis striking that no specific analysis of long-term technical assistanceneeds or human resource development was undertaken at appraisal. The broadrole expected of technical assistance, and the spec!fic responsibilities ofindividual consultants were never cLearly defined and at no time wereobjectives for transfer of technology and know-how from expatriates tonational staff clearly stated, or clear schedules for their replacement bynationals established.

6.08 This project affords an interesting case study in the use oftechnical assistance under Bank projects, because several formulas forrecruiting and employing technical assistance were tried, and because somany problems arose. Technical asststance was employed through two firms(one of which was dismissed), individual contracts, an IDA secondmentarrangement, and bilateral aid arrangements. At first, a single managementteam was provided, while thereafter arrangements were mixed. Technbicalassistance posts remained unfilled for long periods. IDA staff played aparticularly active role in technical assistance recruitment from 1976 on.

6.09 The first major problen was the unsatisfactory experience with theconsulting firm engaged to provide the full project management team from1974-76 (para. 4.09-10). In restrospect, the appraisal decision to rely on

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a consulting firm under a single management contract was well-consideredand sound, The selection process involved consideration of a wide range offirms, and the firm selected had considerable livestock experience. Giventhe difficulty of the tasks involved, however, and the special problems ofoperating in the project area (technical issues and logistic problems), itwould have been advisable for IDA staEf to have sought a more active rolein the consultant selection process, In the event, IDA's approval of thecontract was given with limited technical review of the proposal orqualifications of individual consultants, and was based primarily on thefirm's reputation and the draft contract document itself. The outcome ofthe selection might well have been the same, but specific e-xpectations fromconsultants would probably have been nore clearly defiined and the firm'slack of African and specifically Zairian experience rnmght have been moreexplicitly noted.

6.10 After the firm was empLoyed, three questions arose: whether IDAstaff could have acted earlier to avert the problems which led to theconsultants' dismissal in late 1976, whether IDA's role in discussionsprior to handling of the final contract termination was appropr'ate, andfinally wbether the decision to terminate the contract was a wise one. Theconsulting firm was critical of IDA's role, and indicated in a 1977 letterthat in their view IDA supervision was too infrequent, was inordinatelycritical of consultant performance, and focused insufficiently on shorfallsin Government performance. They were aLso critical of IDA involvement inthe final stages of review of their performance with the Government.Finally, they argued consistentLy that their performance was unfairlyjudged. In reviewing the issues raised, it seems clear that theconsultants' performance was not satisfactory (although the team generallyhad good technical qualifications). There was clearly a tendency on theirpart to rely too heavily on IDA staff intervention to support themvis-a-vis the Government, and they appear not to have beea receptive tocounsel and suggestions froD supervision missions. IDA staff handled theLssue with prudence and made special efforts to ensure that both theinterests of the Borrower and the consultants were taken into account. Onbalance, the dacision of ONDE's management to terminate the contract wasjustified and taken after careful and professional review of the issues.Despite the co.nsequences in terms of lack of continuity and gaps ir, ranchmanagement staff, it is difficult to see that another decision could havebeen made.

6.11 After the consulting firm was dismissed, ONDE and IDA staff agreedon recruitment and employment of individuals. This decision reflecteddissatisfaction with the consulting firm formula and a conviction that somequalified staff had already been identified and other individuals could befound fairly readily. Although severaL individuals (including two who hadcone to Zaire as part of the original consulting team) were immediatelyrecruited, the recruitment effort was not fruitful and became a nightmarewhich continued for several years. A very large number of recruitmentmechanisms were tried and sources of staff pursued. The basic problem wasthat it proved extrenely difficult co find qualified staff to work in theextremely difficult circumstances in Zaire, and specifically in Shaba.Ultimately, in 1977 ONDE decided to seek support for positions it had beenunable to fill through a consulting firm, and proposals were invited,

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eventually from over 20 firms. IDA agreed to recruit a particularlyqualified individual directly on a secondment contract. In the final yearsof the project, therefore, technical assistants were employed under avariety of arrangements, that is: bilateral agency contracts, directcontracts with ONDE, contracts between a firm and ONDE, and an IDAsecondment contract. Despite the complexity of these arrangements, thesystem worked fairly smoothly and was supplemented by ONDE's use ofshort-term consulting services for specific purposes.

6.12 Overall, the performance of individual technical assistance staffwas very mixed, ranging from poor to excellent. A major factor was theability of individuals to adjust to prevailing conditions and to work withZairian staff. Of the two firms employed, the performance of one wasdisappointing, the other reasonable, although the firm's contribution layprimarily in its recruitment of and support to individuals.

Training

6.13 Training was considered from the outset a vital project component,and a significant financial allocation was made for training in projectcosts estimates. However, details of training programs had not been workedout at appraisal, and the focus of training efforts was through technicalassistance. Efforts were made early on in project implementation to definetraining programs and a group of Zairian staff were trained in Argentina.However, when management problems grew, there was a tendancy to focus onthese problems to the clear detriment of training (para. 4.22). In thelatter project years formal training efforts were Limited and sporadic andincluded attendance at a few short overseas training courses and studytours. ONDE has also experienced serious problems over the past few yearsin recruiting Zairian staff. These problems are linked to general problemsof civil service and parastatal staff conditions of serv'ce, but have beenseverely exacerbated by inflation and failure to adjust civil servicesalaries in line with the increasing cost of living.

C. Technical Issues

6.14 Two sets of technical issues arose through the projectimplementation period: first, there has been heated debate on appropriatetechniques for ranching development in Zaire (focused particularly onpasture management and breeding practices, and to a lesser extent, ondisease control), and second, the caliber of ranch management has been acontinuing problem and rarely attained the standard expected at appraisal.Initially, the debate on technical "models" centered around the performanceof the consulting firm which handled project management from 1974-76. Theyhad endeavored to introduce a seasonal breeding program and pasturemanagement techniques which differed substantially from the prevailingpractice on Zairian ranches. In restrospect, we conclude that from apurely technical standpoint the changes the consultants were seeking tointroduce offered interesting avenues for increasing ranching productivity,but they were doomed to fail because they were introduced too quickly, withinadequate preparation, and at a time when :1ational economic problemscreated an environment where such innovations were difficult. The

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evaluation of ranch nanagement performance boils down to an assessment ofthe relative importance of individual competence and management systemsversus the impact ot the overall environment which made good managementparticularly difficult. Clearly, the performance of some staff was poor byany standard, and long hiatuses caused by difficulties in recruiting andretaining qualified staff had great importance. More broadly, ONDE failedto establish effective and workable mechanisms for supervision of andsupport to ranches. In some instances, management was so poor as to borderon the irresponsible, for example, failure to dip or to plan stock importsproperly. On balance, we conclude that the role of external forces was thekey issue; appraisal expectations were ambitious but not outlandishgiven the situation in the early 1970s. They were based on experience inthe region and the project built on established ranches. However, thestandards set simply were unattainable given the overall situation thatprevailed in Zaire over the project period, and the central and continuingissue of shortage of human resources and weak institutions.

6.15 Some important technical issues merit continuing review in thecontext of developing Zaire's long-term ranching potential. These includebreeding problems, notably mineral deficiencies, potential avenues forimproving pasture quality and introducing new pasture managementtechniques, prospects for herd upgrading and cross-breeding, and moreefficient anad cost effective disease control programs. While some ranchesin Zaire are extremely well run, overall the past decades have not beenconducive to experimentation and innovation, and there has been effectivelyno research. Scope for introducing and testing new techniques and forimproving productivity clearly remains.

6.16 In terms of physical targets (pasture deveLopment and constructionof basic infrastructure such as houses, livestock roads and bridges)achievements fell substantially short of ob4ectives. The main cause wasinadequate input supplies, notably construc.-on materials, and transportfacilities including fuel, vehicles, and spare parts. These were generalproblems in Zaire which worsened substantially over the project period. Inthe latter part of the project period, ONDE had to rely almost completelyon its own devices to obtain all supplies, and costs escalated rapidly.Pasture improvement through sowing of leguminous species (Stylosanthes) didnot go far beyond the trial stage. Less pasture was required because theherd increase remained behind appraisal projections. Social infrastructureon the ranches has been improved but remains inadequate. Several schoolswere built for the children of ranch personnel, but it has been difficultto recruit teachers. Medical services are also inadequate for want ofresidential doctors.

6.17 Performance issues for the three ranches differed significantly.Overall, production (head of cattle sold and consumed on ranch in 1981) atMuhila, Mitwaba, and Kayembe-Mu1ulu stood at 46%, 49%, and 21%,respectively, of appraisal projections. Muhila, the largest ranch withabout 26,000 head of cattle at appraisal and about 38,000 at projectcompletion, has been the most sLiccessful of the three ranches. Muhilafaced serious management problems in the 1974-77 period, when mortalityclimbed steeply and fertility was patently unsatisfactory, but thereafter,the situation improved. When the ranch was sub-divided in 1978, there were

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some management difficulties, largely related to personality problems, butthese have largely been resolved (division has been postponed), as havedisease problems which arose. The 1981 weaning rate of around 50% was farbelow the target of 77% (1983) while cow and heifer culling rates werehigher than projected. Appraisal projections on weaning and mortalityrates seen very optimistic. Mitwaba has been plagued by extremely highlosses (largely explained by the lion problem) and the ranch's viabilityremains questionable as long as such losses continue (para. 4.16). Inretrospect, the problems of proximimity to the Upemba park were seriouslyunderestimated, and clearly Mitwaba's problems should be considered ifsimilar situations arise elsewhere. At Kayembe-Mukulu, social andecological conditions increasingly impeded production in the second half ofthe implementation period. Thefts and unauthorized sales contributed tolow production and high losses, and disease problems were more serious thanat the other ranches. The viability of this ranch has been questionablefor some time, and its operations should probably have been halted at anearlier stage. It might have been more successful had it been conceived asa small breeding statiori for farmers in the area.

D. Financial Issues

Project Costs and Disbursement Performance

6.18 Actual proiect expenditures were US$12.9 million or 86% ofappraisal estimates. Savings resulted from lower than expected purchasesof breeding stock and reductions in vehicle and equipment purchases whichcost 26% and 66% of appraisal estimates respectively (Annex 1). Purchasesof breeding stock were lower than appraisal estimates in part becauseadequate stock were not available in Zaire, as had been anticipated, whileimports proved to be a costly and risky business, and were stopped after1978, when the focus snifted from cattle purchase to improving theproductivity of existing herds. The reduction in vehicles and equipmentpurchase was the result of decisions to economize in this area because ofoverall project cost escalation. Overall, only 33% of expected capitalcosts were incurred.

6.19 Actual operating costs for administration, vehicles, travel andvehicle replacement varied widely from appraisal estimates. Actualadministrative expenses were US$1.5 million or 369% of the US$0.4 millionestimated at appraisal. These wide variations can be attributed mainly torampant inflatiorn and the heavy demands on ranch resources from ONDE'sKinshasa office, as well as to the extended project period. Training andproject preparation expenditures were well below the appraisal target or29% of the total (para. 4.22). Overall, an estimated 86% of appraisalexpenditures were incurred, but only about 50% of the physical targets setat appraisal were attained.

6.20 While IDA disbursed 100% of its commitments, the actualcontributions made by Government and ONDE were US$2.1 million and US$2.4million respectively or 84% and 60% of appraisal estimates. ONDE'sshortfall was due to lower sales than anticipated; only 44% of the salestarget set at appraisal was reached and fewer funds were, therefore,available to be ploughed back. The Government's failure to meet itscommitment can be attributed to budgetary constraints and general economicconditions prevaiLing in recent years. IDA disbursements lagged far behind

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appraisal estimates in Project years one (40%) and two (49%). .l,ey beganto pick-up in year four and stayed at about 75% of appraisal estimates,until new estimates were made in June 1980; disbursements remained close toestimates; the actual closing date was two years later than anticipated.Disbursement procedures were complex to administer throughout, and projectstaff and the Controllers Department was frequently involved in sorting Odtcomplex disbursement issues. Because of the change in Zaire's economicsituation and lack of foreign exchange, in 1978 the Credit Agreement wasamended to allow 100% disbursement against the costs of imported inputs (asopposed to 30% in the original agreement).

Financial Management Issues

6.21 OND)E's financial management systems have been weak and this hasposed serious problems from the outset. The financial department waspoorly organized and the distribution of responsibilities poorlysynchronized (para. 5.19). Financial procedures remained inadequate, withno cost accounting system, no standard budgetary procedures, no cashmanagement system, no stock management or control system, and a generallyunsatisfactory accounting system. Finally, there has been discontinuity infinancial directors, particularly at ONDE headquarters, and hence a lack ofleadership. Further problems resulted from difficulties in recruitingqualified financial staff. ONDE has also been plagued by both evidence ofand accusations of financial misappropriations. Several incidents havebeen proved and those responsible punished, but the prevailing atmosphereof suspicion and innuendo was itself a serious problem. The most seriousincident arose after the closing date in April/September 1982. An externalaudit revealed serious mismanagement and fraud, involving an amount ofZ 500,000, signed blank cheques and falsified invoices. Several ONDEemployees were implicated, some were arrested (including the director ofpersonnel) and temporarily jailed, while others were tipped off and fled.The expatriate financial director left the country, although no wrongdoinghas been proved.

6.22 Audit arrangements for ONDE accounts were fairly satisfactory inthe early project years, but were the source of continuing problems from1976 on. The basic problem was the confused state of ONDE accounts before1979, when the situation improved, but in addition ONDE had greatdifficulty in establishing satisfactory arrangements with externalauditors. The situation reached a critical stage in late 1979 when IDAdisbursements were informally suspended pending receipt of 1977 and 1978accounts (para. 4.18). Thereafter, performance improved markedly and ONDEaccounts have been produced promptly and audited regularly ever since.ONDE has at last worked out effective arrangements with an audit firm. Thedifficulties underline the critical importance of financial management andestablishment of satisfactory audit procedures, as well as the peculiardifficulties involved in working in Zaire, where few audit firms wereestablished and could work effectively.

ONDE Finances

6.23 ONDE is wholly owned by the Zaire Government; its total capitaland reserves in 1982 amounted to Z 1.6 million; since its establishment and

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until 1981 ONDE has received Government subsidies. ONDE's 1982 auditedaccounts show the following results:

(i) a total operating deficit of Z3.1 million (1981 ZO.7million) and a deficit of Z2.8 million (1981 ZO.5 million)before depreciation; and

(ii) a cumulative loss of ZO.8 million.

Details of the 1982 balance sheet and profit and loss statements are givenin Annex 5, Tables 1 and 2 respectively, together with comparative figuresfor 1981.

6.24 ONDE is thus not a viable financiaL institution at present, andits financial future is uncertain. The main problem is inflated operatingcosts. ONDE's management has not acted to date to reduce its overheadexpen'itures, although this issue and possibLe solutions have been reviewedin detail during IDA supervision missions. Salaries alone representedabout 50% of total expenses in 1982. The ranches, which are still in thedevelc,ment stage, cannot bear this burden. Problems are aggravated by afurther problem in recovery of debts from other entities, a current problemin Zaire, which has resulted in serious liquidity problems. It seems quiteclear that ONDE will not be in a position to repay any of the Government'sloan for the project (para. 3.15). ONDE has never paid any interest toGovernment; apparently the subsidiary financing agreement signed inDecember 1973 has been ignored.

Budgetary Allocations

6.25 The December 1973 financing agreement between ONDE and theGovernment stipulated that the Government would onlend proceeds of the IDAcredit for ranch development and would in addition pass on at least Z884,200 as a grant and Z 150,000 as a loan. Annual amounts were specifiedin the agreement. The estimated schedule for Government disbursementscompared to actual disbursements was as follows:

Estimated Actual ActualZ I 0'00 Z ' 0 Z ' ou-

(current (constantprices) 1973 prices)

1974 164 165 1301975 196 96 561976 149 248 811977 117 42 81978 129 195 251979 129 196 121980 - 1,166 521981 - 1,520 491982 - 0 -

Z 884 Z 3,628 Z 413

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Although the Government contributed Z 942,000 from 1974 to 1979, due tovery high domestic inflation, these amounts were far below estimatedrequirements and actual needs; no provision had been made in the subsidiaryfinancing agreement between Government and ONDE for either cost overruns orinflation. Apart from inadequate budgetary resources, ONDE also sufferedfrom very Late and unpredictable disbursements and often operated undersevere cash flow constraints. Enormous energies have been devoted toefforts to ensure that funds were budgeted and that budgeted funds werereleased, and this was a constant refrain during IDA supervisionmissions; most agricultural projects in Zaire have suffered similardifficulties linked to delayed and insufficient budgetary allocations.ONDE has received no budgetary allocations since 1981, and has had todepend entirely on revenue from the ranches. It is highly doubtful thatthe ranches can long continue support ONDE-Kinshasa's ever-increasing costof operations. Continuing Government subsidies would be required if theheadquarters operations are to be maintained at their present level;otherwise, unhearthy pressures would be put on the ranches to increasesales, to the detriment of long term development.

6.26 Another serious problem has been and remains access to foreignexchange. ONDE has had virtually no access to foreign exchange throughnormal channels, and to finance both investments and imports for normaloperations had to rely entirely on IDA disbursements. Although ONDE hasset up an organization to import veterinary products, the Government hasmade only two modest allocations of foreign exchange to this new andpromising effort. ONDE's management has been obliged to purchase foreignexchange from private banks, at the parallel market rate. The issue offoreign exchange availability will evidently have critical importance forONDE's future survival.

Procurement

6.27 Severa'i brious procurement probleiua arose during projectimplementation. These were due primarily to the limited experience ofconsultants and implementing agency staff. In several cases, Bank/IDAguidelines were simply not followed. Specifically, purchases were split inorder to remain below the US$30,000 maximum for direct purchases, ICBprocedures were not followed, and contracts were awarded to supplierswithout informing IDA. The most serious problems turned around the issuesof cattle imports (para. 4.13). As a result of considerable efforts byIDA supervisory staff, communciations on procurement issuies improved and inthe latter project years, Bank/IDA guidelines were respectcd. After 1977,the most critical procurement issue for ONDE was the need to establishsystems for supply of basic inputs (fuel, veterinary supplies, parts),which was extremely difficult. Initially ONDE's performance in this areawas extremely poor, but it improved markedly from 1978 onwards. ONDE nowhas assumed the role of importer of veterinary products for the livestocksector, and appears to be handling the responsibilities well. Broadly, theextreme difficulty of project procurement in Zaire should be emphasized.Reliable suppliers are few and far between and administrative proceduresare cumbersome and difficult to follow. It was no accident that the creditaccount remained open for about 18 months after the closing date because esupplier had not been paid.

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E. Is-ues of Pricing Policy

6.29 Official pricing policies, for cattle and for beef at wholesaleand retail levels, have had critical importance throughout the projectlife. Four specific issues merit review:

(a) changes in pricing policy over the project period;

(b) admi'nistration and application of pricing policies;

(c) price levels and their impact on incentives to produce; and

(d) IDA's role in review of pricing issues and dialogue with theGovernment.

6.30 Pr'cing Policies. The Government's approach to pricing policieschanged significantly over the life of the project. In general, pricingpolicies overall and specifically for cattle and meat have not been clearlyand consistently defined by the Government and the legal framework does notestablish a comprehensive sys.tem for price reviews and administration. TheGovernment's approach has thus been rather ad hoc and has varied dependingboth on changing orientations of policy makers at the central level andregional authorities. Since there is no specific review calender ormechanism, prices hiave tended to be reviewed in response to specificpressures or problems; the most significant changes in meat and livestockprices have come as a result of exchanges with IDA, particularly in thecontext of negc.4 stions for projects. Broadly, prior to 1977 ZaLre'sagricultural price control system was based on official, administeredprices, reviewed at irregular intervals. Livestock and meat prlces weregenerally set for each region. In 1977 the official system changed so thatofficial livestock prices were to represent a minimum, floor price; intheory, producers were free to sell at prices above the level. Since 1981,the Government has taken steps towards a progressive liberalization orprice controls for many commodities. To date, however, the pricing systemfor livestock and meat has not been officially changed and the minimumprice system still applies. At no stage has the Government clearlyestablished a basis and criteria for price reviews; agreement "inprinciple" was reached with IDA in 1977 that an index to guide meat pricereviews would be developed (parad 6.32), but this has been a dead letter.

6.31 Application of Price Policies. Official price levels are set bythe Conseil Executif and published in an Arrete. The review process onwhich the decisions have been based has involved recommendations by theMinistry of Agriculture, ONDE, and ANEZA to the Ministry of NationalEconomy, which in turn makes price proposals to the Government. Priceshave been reviewed and changed sporadically, but in recent years livestockprodtcers have exerted more effective pressure to stimulate Governmentaction on prices. With galloping inflation in Zaire, official prices arequickly outdated and have catastrophic financial consequences on producersif applied. Larger producers (public and private), obliged to F--ll mostcattle at official prices, have had increasing interest in the reviewprocess. A special problem has affected ONDE and other large producers inShaba: regional governors have frequently applied price regulations which

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were not set out in law and which contradicted the Government's officialpolicy: specifically, they have set and actively enforced maximum beefprices and announced that minimum livestock prices were in fact a maximum.Shaba regional authorities have been particularly concerned to keepconsumer prices in the mining centers low. In general, the degree ofenforcement and hence the real impact of official prices has been veryunequal. Smaller producers can generally sell at free market prices, butlarger producers could be and have been monitored, at least sporadically;ONDE has had no real choice but to sell at official prices (even thoughcattle were probably resold at much higher prices immediately thereafter).The parastatals (i.e. ONDE) and large ranchers have thus been affected byofficial price levels far more than other segments of the livestocksub-sector.

6.32 Price Levels. Official price levels have been changed veryirregularly; there is is no established monitoring system for marketprices and little is known about actual market trends except in a fewregions. No systematic data on prices or quantities of meat imports isavailable. Official price levels remained unchanged from 1967 to 1972; in1972 prices were increased, then immediately decreased when a consumerprotest developed, but were finally increased in 1973. Thereafter, priceswere not changed again until 1977 when they were tripled, then increased bya further 30%. In 1979 a further price increase was announced, and therehave been two adjustments since. It is important to emphasize that theimpact of official price levels was quite different after Zaire's economicsituation began to deteriorate. First, with inflation running at up to100% and a cumbursome (10 month) price review process, new prices wereinvariably out of date even before they were announced. Second, thesporadic price reviews which had prevailed in the past no longer provided aworkable framework because of a need for much more rapid price adjustmentsin line with inflation. Third, as the economic crisis worsened, exchangerate policies became a serious distorting factor. Specifically, someentities, notably Gecamines, were able to import meat at official exchangerates (because they had re-ady access to foreign exchange through exportearnings), and could sell meat at prices well below official rates andbelow the real value of imported meat. On the other hand, entities such asONDE, which had access to foreign exchange to purchase inputs at officialprices, had clear advantages at least on the production cost side, overprivate ranchers who were obliged to buy at parallel market rates. Theresulting situation was clearly very unsatisfactory and incentives havebeen completely confused. Official liveweight prices may be summarized asfollows:

Z/Kg/w at Z/Kg/w atcurrent prices constant 1973 prices

Year Category 1/ I II III I II III

1972 (max) .18 .16 .15 .20 .18 .161973 (max) .24 .21 .19 .24 .21 .191976 (max) .75 .67 .57 .24 .22 .181977 (min) .98 .87 .74 .19 .17 .151979 (min) 4.15 3.75 3.25 .27 .24 .21

l/Categories I, II and III correspond to different qualities of cattle.ONDE has always sold at Category I prices.

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The 1973 price levels were roughly comparable to import parity; since then,official prices at the official exchange rate have risen well above importparity levels, but at parallel exchange rates are well below them.

6.33 IDA Role. Pricing policies and specific price levels wereclearly identified by IDA staff as a critical factor for the livestocksector from the beginning, and have figured prominently in project, sector,and macro-economic discussions over the entire life of the project.Initially, IDA staff focused on specific price levels, seeking to obtainincreases; the standard of comparison was principally import paritylevels. The covenant included in the DCA for the project reflected thisview, and called for consultation on price increases and assurances thatprices would be adjusted at appropriate intervals. The appraisal reportindicated that the price review would be based upon inter alia importparities and producer incentives. From 1975-76, however, discussionsfocused both on price levels and on the pricing system more broadly; andwere conducted primarily in conjunction with appraisal of the Iturilivestock project. Agreement was reached (reflected in the Ituri ProjectCredit Agreement - Cr.697-ZR) that the official price would not be bindingbut would be a minimum price, above which prices could fluctuate "accordingto market forces of demand and supply". IDA agreement on the initial pricewas required (section 4.06). The covenant also required the Government toestablish and maintain indices, satisfactory to IDA, to assist in futurerevisions in minimum prices; the indices were to reflect changes in costsof beef production in Zaire. The covenant also specified that prices wouldbe reviewed and adjusted annually (in consultation with IDA) as required byapplication of the indices and taking into consideration changes inimported beef prices. This price review mechanism has never been applied,although in internal discussions of price revisions in Zaire productioncosts levels as set out in the DCA, have been the most important reviewcriteria, which was the "spirit" of the Credit Agreement.

6.34 Since 1977, the focus of discussion of pricing policies hasshifted to a broader, policy level, and IDA's position has consistentlybeen to urge a liberalization of price controls for many commodities,including livestock and meat. Consultations on pricing policy, which havebeen sporadic and not always satisfactory, have taken place primarilywithin this context in recent years. The dialogue appears to have becomeincreasingly fruitful as the Government has taken important steps both todefine a more appropriate pricing policy and to move towards a system thatwas more realistic and did not rely on unenforcable and cumbersome pricecontrols. Nevertheless, pricing issues have not been completely resolved,and in practice price controls of various kinds are still exerted byregional authorities.

6.35 In summary, pricing issues have had major importance for theproject. The Government's appreciation of pricing issues and willingnessto act has materially improved over the project period. The approach topricing issues among IDA staff also broadened over the life of the project,reflecting with an increasing understanding of Zaire's agricultural sector,increasing importance of pricing policies as a result of the economiccrisis, and a more general evolution in IDA's approach to pricing as a keyinstrument of agricultural policy. The pricing covenants in both the First

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Livestock Project and the Ituri project did not afford either much guidanceon price consultations or an effective remedy, but given the fast changingsituation it is difficult to see how different covenants would have beenfeasible or would have led to better results. The pricing issue is now thestubject of a fairly effective dialogue with the Government, but, given thecomplexity of the problems, particularly wher2 application of policies isconcerned, it is vital that continuing efforts be made to follow up and todefine more precisely the Government's policies and practices in thisfield.

VII. FINANCIAL AND ECONOMIC RESULTS

Financial Rate of Return

7.01 At appraisal, the financial rate of return (FRR) from the threeranches was calculated at 11% excluding the value of, and returns fromexisting assets; and including existing assets, at 7%. The returns onindividual ranches were calculated as follows: Muhila, 13%; KayembeMukulu, 7%; and Mitwaba, 6%. The incremental financial rates of return(Annex 4) for the three ranches together are now estimated at 9%(appraisal, 11%) and for the ranches individually, the FRRs are: Muhila,36.5%; Mitwaba, 1%; and Aayembe Mukulu, negative. The followingassumptions were made in calculating the FRR:

(i) the benefits without the project have been taken as perappraisal estimates;

(ii) that current meat prices would continue to prevail in realterms; and

(iii) that herd size would stabilize at December 1981 levels.Because of ONDE's uncertain future it seems prudent toassume that no further herd growth will take place, althoughherd size is far below original plans.

7.02 There are major risks of further deterioration in ranchingresults which are not reflected in these assumptions. With the generaleconomic crisis prevailing in Zaire and reduced availability of foreignexchange to import veterinary products and other inputs, animal healthcould be seriously compromised. A'.so with the premature departure oftechnical assistance personnel, cbefore successors are adequately trained),a decline in management standards and increased theft and pilferage fromthe ranches are serious possibilities. If Kayembe-Mukulu is sold toprivate owners, as is the current plan, its financial performance mightimprove, but that is highly uncertain.

7.03 Official livestock prices have had a key role in ONDE'sprofitability and in financial rates of return. Issues are discussed inparas 6.28-34. The 1974 producer price has been deflated over theimplementation period (Annex 6, Table 1). The result shows that between1974 and 1978, there was a decline in real terms in prices to producers,while from 1979 to 1983 increases in prices were translated into anincrease in real terms.

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Fconomic Analysis

7.04 The economic rate of return (ERR) on investments under theProject for the three ranches combined is now estimated at 6%. For theranches individually the ERRs are: Muhila, 22%, Kitwaba, 7%; andKayembe-Mukulu, negative. This compares to appraisal estimates of 17% forthe three ranches combined and of 20% for Muhila, 12% for Kayembe-Mlukuluand 9% for Mitwaba individually. The difference between the ERR atappraisal and at Project completion is mainly due to poor performance ofthe Kayembe-Mukulu ranch which has shown a negative ERR. The undiscountedbenefits of Kayembe represent only 36% of undiscounted total costs.However, the combined ERR of Muhila and Mitwaba ranches is 12%. The ERRcalculations are based on actual herd growth for the years 1974 to 1981 andon the following assumptions: (a) that herd figures for 1982 and beyondwould stabilize at their December 1981 level; (b) Kinshasa border priceswere used for meat after adding transport costs to Lubumbashi, and allowingfor a 20% quality premium for Project output over imports; (c) unskilledlabor was shadow priced at 50% of wages paid to reflect better the realcost to the economy, as there are few alternative employment opportunitiesfor this type of labor in the regi'n; d) foreign exchange was shadowpriced on the assumption of a premium of 50%; and (e) contributions paid bythe ranches to Kirishasa Head Office for services rendered were reduced by80% because only 20% of the overhead cost of the ONDE Kinshasa office canbe considered justified; most of these expenses are unrelated toproductivity of the ranches (para 5.11).

7.05 There remain serious risks for this project; because of greatuncertainty about ONDE's future. The same risk factors mentioned underfinancial analysis (para. 7.02) apply equally here. The ERR could easilyturn out to be negative if any one of these risks materialized. However,given the constraints under which the project has had to function, the ERRof 6% may be considered remarkable. While it is below the opportunity costof capital in Zaire, the return could well have been much lower. It isalso possible that the real rate of return is higher than 6% (although wecannot realistically estimate by how much) for two reasons:

(i) Thefts that reduced the financial rates of return aretransfers from ONDE to private individuals, but should be seen asbenefits from the economic point of view (this includes cattleand inputs including medicines). Thieves probably used goodswith as much economic efficiency as ONDE would have done.

(ii) The value of foreign exchange may exceed the 150% ofofficial exchange rate used in the analysis. Such an assumptionwould raise the rate of return because all project benefitsreplace imports while only a portion of costs are in foreignexchange.

VII. GOVERNMENT AND BANK PERFORMANCE

8.01 Project justification and objectives. Given the situation inZaire in the early 1970s, the selection and appraisal of this project madesense. It appeared at the time as a sound investment, building onexisting ranching systems, and had a good chance of success because

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it was essentially simple in design and placed little burden on theGovernment, either administratively or financially. In retrospect, thebasic focus and design are more questionable. First, had the instabilitywhich plagued Zaire been known in advance, it would have raised seriousdoubts as to the projects feasibility. In particular, the long distancesinvolved assumed new importance, as communications difficulties becamesteadily worse. Further, the development of parastatal ranching cannot beseen as a priority for the agricultural sector overall. Meat supplies arestill short and Zaire clearly has untapped potential for ranching, but ifwe were to identify a project now, this project would not figure high on apriority list.

8.02 Bank Appraisal. The identification/preparation/appraisal processidentified and analyzed carefully the key issues which affected theproject; in retrospect we see few areas where issues were not reviewed andanalysis conducted. Perhaps the major shortfall was in the area oforganizational and human resource analysis. Further, the mission did notanticipate the turmoil which would affect Zaire but that seemsunderstandable. The technical achievements of the project suggest that theappraisal mission over-estimated the likely effects of Project activitieson production. Muhila, the best managed ranch, has given good results, yetits production in 1981 was only about half of that estimated at appraisal.Nevertheless, appraisal estimates were not extravagent since comparableresults had already been achieved by ranches in the same region. Theappzaisal mission clearly under-estimated the effects of proximity to theUpemba National Park but it was plainly difficult to imagine the extent ofthe damage lions could do if, indeed, they are to blame for all that isattributed to themi. Social and ecological conditions might have beenassessed more carefully, especially at Kayenbe-Mukulu. The appraisalmission clearly underestimated communications problems in the area, butthese were severely exacerbated by later events and the 4.conomic crisis.

8.03 IDA Supervision. This project received very intensivesupervision by IDA, particularly in the period since 1976; staff inputsrecorded on supervision work averaged 38 staffweeks a year between FY 1976and 1982, which is about three times the average for agricultural projectsin the region. Supervision work was very demanding, in part because ofthe enormous difficulties involved in travelling to the project area, thecomplexity of the general environnent in Zaire, the lack of establishedgovernment supervision mechanisms, and the inherent difficulty of theproblems which the project posed. IDA staff were involved not only instrictly supervisory functions but also in technical assistance which attimes bordered on direct management responsibilities, and assumedsupervisory functions normally handled by Government agencies. Given theproblems the project faced and the difficult environment prevailing inZaire, we conclude that the level of supervision was appropriate; at somestages more frequent or intensive supervision might have yielded evenbetter results.

8.04 In comparison with other projects, there was substantialcontinuity in supervision of this r oject, and at no stage was there acomplete break in continuity between one mission and the next. In thefirst project years, missions were quite infrequent, but the Bank'sresident mission in Kinshasa then included agricultural staff who were infrequent contact with project managers. The project was supervised atleast twice a year from 1977 onwards. Supervision missions were well

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balanced between technical and financial/economic staff, and specialistsupport was engaged to assist in handling complex institutional issues.Supervision missions were thorough, with detailed reviews of herdperformance and of financial management issues carried out during virtuallyevery mission. Supervision letters were generally promptly issued and verythorough. They provided a continuing update on herd performance,inparticular, which facilitated the effort to monitor developments on eachranch.

8.05 The Government's response to the supervision efforts. wasgenerally disappointing, and specific reactions by the Ministry ofAgriculture to issues raised during supervision were rare. On the otherhand, ONDE management and project staff clearly relied heavily on IDAsupport and advice and expressed appreciation for the assistance anddialogue involved. Up to about 1977, it was extremely difficult forsupervisory staff to meet with senior Government officiaLs, and often theproblems raised (e.g. prices) could not be solved at project level. Theeffort to discuss project issues systematically with senior governmentofficials (in Project and Country Implementation Reviews and other fora),which intensified after about 1979, was clearly beneficial for this projectand aided in solving severe problems. The supervision effort was lesseffective on broader institutional issues, but here productive dialogue wasprobably impossible early on, given the complex and changing politicaLsituation in Zaire. At specific crisis points problems were raised atsenior levels, both within the Government and the Bank, and results werepositive; in retrospect it might have been useful to direct managementattention to issues more frequently, particularly in the early phases whenproject management arrangements and ONDE's structure wore repeatedlyaffected by external events. The project was rated as a problem projectonly once; this reflected a continuing assessment that problems wereserious but not critical. In retrospect, the problems were probablysufficiently serious that a specific management review of problems mighthave been appropriate, and helpful at several points. The decision in1979-80 to suspend disbursements informally was a practical and effectiveapproach to the problems and the result was positive in that it directedattention to key problems and stimulated a search for solutions.

8.06 Project supervision was handled from Headquarters except from1973-77, when agricultural staff assigned to the Kinshasa office sharedresponsibility for supervision. During the start-up period, the presenceof field staff clearly facilitated administrative procedures, but problemsarose on occasion when headquarters staff were not fully involved in somecritical issues such as selection of the consultant team and handling ofmanagement problems at an early stage. It is striking that despite thepresence of agricultural staff in Zaire, supervision missions wereinfrequent in the early years; Lubumbashi and the ranches are a long wayfrom Kinshasa and communciations were difficult and time-consuming. Therole of the Bank's Resident Mission was vital at many stages throughouit theproject period, and without an effective permanent office and activeResident Representative communications between IDA and ONDE on the projectwould have been much more difficult.

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8.07 ONiDE and its ranches are in a sense left high and dry at theconclusion of the project, and this raises issues both for the Governmentand the Bank. Perhaps the most fundamental critisism that can be Levied onthe supervision process, both Government and IDA, is that it focusedpredominantly on specific project management issues, and rarely consideredthe project in a broader policy and strategic context. Given the complexsituation of Zaire generally and the enormous problems which had to besolved to allow project management to proceed, this is understandable, butnevertheless the experience underlines the need for continued strategicthinking throughout the life of a project. It is regrettable that therehas been little effective diaLogue betveen the Government and the Bank,on ONDE's future role, despite extensive reflection on both the Governmentand the Bank side. GLven the investment in ONDE it seems important thatthis diaLogue be pursued.

Performance on Legal Covenants

8.08 In several respects the Government failed to fulfill itsobligations u.-i- r the Credit Agreement. Particular problem areas were thefollowing:

(a) changes in ONDE's responsibilities without priorconsultation with IDA (SectLon 4.05 of the CreditAgreement);

(b) the late or non-provision of budget funds and facilities(Section 3.01 (a) of the Credit Agreement);

(c) generally poor nanagement, for example, overstaffing ofONDE's central administration (Section 4.01 of the CreditAgreement);

(d) delays in changing producer beef prices and failure toconsult regularly with IDA (Section 4.06 (a) of the CreditAgreement);

(e) inadequate provisions for training and studies (Section3.05 (b) of the Credit Agreement);

(f) expansion (decree of July 1975) of the Upemba National Parkitto the Mitwaba Ranch (Sertion 3.03 of the CreditA.greement);

(g) delayed audit of ONDE accounts (Section 4.02 (c) of theCredit Agreement); and

(h) delays in recruitment of consultants (Section 3.05 (a) ofthe Credit Agreement).

8.09 Breaches in covenants were frequently brought to the attention ofGovernment officials by IDA staff, during supervision missions and incorrespondence. In one instance (1979-80), IDA indicated that it intendedto invoke remedies under the Credit Agreement in an effort to resolve the

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serious problem of delays in audited accounts. In general, the covenantswere relatively simple and well designed, and failure to comply reflectedthe overall problems of project management, which have been extensivelydiscussed in the report. An important issue is whether IDA could andshould have acted more decisively in the face of the breaches incovenants. While there is no single point where firmer action wouldclearly have been appropriate, it appears nonetheless in retrospect thatthe breaches in covenants were indicative of serious implementationproblems and probably should have been reviewed more systematically bysenior officials of the Government and the Bank.

IX. FOLLOW-ON PROJECTS

9.01 No specific follow-on project, either for ranching generally orfor the project entity, has been proposed nor is one currently planned.Some consideration was given to possible new investments in ONDE and Itsranches, but the idea was not pursued for three principal reasons: first,development of cattle ranching, particularly through parastatals, was notseen as a priority within the agricultural sector, particularly givenlimited resources available for lending; second, the project's mixedperformance record did not establish a clear basis for continuinginvestment efforts; and third, the Government's approach toward both ONDEand the ranching sector had not been clearly defined at project completionand this precluded an effective exchange of views between the Governmentand IDA on future strategy. However, because it was clear at projectcompletion that ONDE still required technical assistance support, and thatit was, despite its shortcomings and uncertainties on its future, aworthwhile institution, some limited technical assistance support for ONDEwas provided in the Agricultural Technical Assistance Project (Cr. 1274-ZR)approved in May 1982. Two specialists were recruited in late 1982; asenior animal production specialist, an.d a procurement manager for theLubumbashi office. Support was also provided to establish accounting andcontrol procedures and for training of ONDE's Zairian staff in Zaire andoverseas. Finally, the project provided for some purchases of vehicles andspare parts for ONDE.

9.02 Three other IDA projects, involving the livestock sector andONDE, have been approved since implementation of the First LivestockProject began: the Ituri Livestock Project (Cr. 697-ZR), approved in April1977), its successor, the North East Rural Development Project (Cr. 1325-ZRapproved in February 1983), and the Kwango Kwilu Technical AssistanceProject (Cr. 1152-ZR, approved in May 1981).

9.03 The Ituri Project (Credit 697-ZR), appraised in 1975, supporteddevelopment of the traditional livestock sector in northeast Zaire, throughimprovement of veterinary and animal production services, and developmentof better marketing and slaughter facilities. I- addition, three existingranches were to be developed to provide a means ior fattening cattLe fromsmallholder areas and reduce overstocking. It was expected that ONDE wouldmanage the ranches and this was reflected in the Credit Agreement.However, this never happened, although ONDE has had responsibility forrehabilitating and managing the Bunia Abattoir. ONDE was not directly

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involved in implementation of Ituri project, which was managed by a projectunit which was part of the Ministry of Agriculture. The project wasgenerally very successfully implemented and a successor project, morebroadly based, was approved by the Executive Directors in February 1983.The design of the Ituri Project reflected some important changes over theFirst Livestock Project, notably in the areas of project organisation andpricing. The establishment of a new parastatal was not even discussed, andmanagement arrangements reflected the tumultuous period Zaire had passedthrough between 1973 and 1976. Pricing covenants are more precise andreflected the evolution of the sector dialogue (para. 6.32). The NorthEast Rural Development Project (Credit 1325-ZR) also reflected many lessonsgained from experience with previous projects. Notably, organization ofproducers is emphasized, the specific Government role is more clearlydefined, and training and monitoring programs were carefully designed andbuilt in from the start.

9.04 The Kwango-Kwilu Technical Assistance Project grew from an ideafor a proposed ranching scheme in Bandundu and at one stage ONDE was tomanage the scheme. The project, however, finally included only a smalllivestock component and ONDE is not involved. A decision was reached thatan effective regional institution must be established before investment ona significant scale (including livestock) could be justified, and a newmixed capital company has just been established.

X. SPECIAL ISSUES

10.01 The First Livestock Project was implemented during a period ofpolitical instability and economic crisis in Zaire. These externalcircumstances created an environment in which it was extraordinarilydifficult both to implement and to supervise the Livestock DevelopmentProject, which was designed along relatively conventional lines. Theproject would have been a demanding enterprise under most circumstances,given, for example, the sheer enormity of the physical distances involved,but constantly changing external circumstances rendered the task of projectmanagement extraordinarily difficult. The most striking events were thezairianization and de-zairianization measures, which led (and continue tolead) to uncertainty both as to the future of project ranches and the roleexpected of the project implementing agency, and the Shaba events of1977-78, which had repercussions, both short and long term, for ranchoperations. Further, the economic crisis which has beset Zaire since 1977has had numerous effects on implementation of this project, mostdramatically the galloping inflation (particularly with a fixed-pricesystem), acute shortages of foreign exchange and budget resources, problemsof supply, and transport difficulties. The lessons and conclusions aretwo-fold: first, in circumstances such as those facing Zaire specialaccount must be taken of external circumstances in project design(accentuating for example, the importance of simplicity, clear covenants,and built-in flexibility to respond to changing circumstances); second,there should be a clear recognition that in comparable circumstancesproject supervision involves special demands in terms of staff inputs andcapacity to deal with a wide range of project and policy issues.

- 54 -

X. CONCLUSIONS

10.01 When the IDA project came to an end in early 1982, the situationof ONDE and of the three project ranches was very uncertain. Theinstitution and the ranches had both survived in a turbulent period. TheGovernment had decided, at least tentatively, that ONDE would not beabolished, even though it was a public sector production agency and theGovernment's policy was to withdraw from direct public sector productionactivities. The Government's decision specified that the ranches were notbe "privatized", that is granted to or sold to private interests, althoughthis option was seriously considered in the final project year.Nevertheless, ONDE was abruptly "weaned" from Government subsidies when itreceived no budget allocation in 1982. The possibility that ranches mightyet be transferred to private owners remains. Since consultation with IDAwould be required in such an event, it is particularly important that thedialogue with the Government and ONDE on these issues be pursued. ONDE'srole and responsibilities are ambiguous and there is a need for a review ofits functions and clarification of its future. Without Government support,it seems unlikely that ONDE will long survive in a recognizable form. Thissupport must include above all provision of technical assistance, foreignexchange allocations, and support in resolving structural financialproblems either by authorizing staff reductions or by budget subsidies tosupport high overhead costs. Thus, there is little certainty on what thefuture will hold for ONDE and the ranches, and it is unusually difficult toforecast what the position will be, say five years from now.

11.02 The project has been partially successful in achieving the mainobjective set out at appraisal - to increase beef production. However,production was substantially less than appraisal expectations (only onehalf) and the economic rate of return was low. The project's financial andeconomic rate of return at project completion were 9% and 6%, respectively,compared to 11% and 17% at appraisal. More positively, ONDE, the agencyestablished to implement the project, has emerged despite a difficultestablishment period as a worthwhile institution which has acquiredexpertise and goodwill in a variety of fields. There is good potential forfuture institutional development if ONDE's role and objectives areclarified, and technical assistance and training support are sustained.

11.03 The project has clearly confirmed the basic technical andfinancial viability of ranch development in Shaba, if a reasonable level ofmanagement can be assured. More broadly, the project's objective oflaunching a revival and expansion of private and parastatal ranching hasbeen severely compromised by the turmoil of the zairianization/nationalisation period, and the future of ranching appears much moreuncertain now than it was at appraisal. Nonetheless, ONDE has been arelatively stable force in a confusing period and Muhila ranch doesrepresent an important nucleus which may provide a Zairian structure tosupport further ranch development in the region.

11.04 The Project's contribution to training and to studies coveringthe livestock subsector and the remainder of the agricultural sector hassignificant, though much more limited than planned. Very few proposals for

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project preparation were advanced specifically in the context of thisproject, and most agricultural project preparation undertaken by theMinistry of Agriculture has been financed from other sources.

11.05 The project appears much more risky and ambitious in retrospectthan it did at appraisal, and project implementation would probably havebeen difficult even if the situtation had been more settled. A single, sixyear project is unlikely in itself to have a sustained impact in a sectoras complex as livestock and in an unsettled environment, where institutionswere poorly developed as they were in Zaire. This conclusion essentiallyargues for the ne.ed to set targets at reasonable levels and to ensure thatdevelopment plans are cast in an appropriate long-term developmentperspective. It is also vital to build in management systems that allowfor systematic adjustment of targets as circumstances change, and torecognize that sustained commitment over a lengthy period is necessary toachieve institutions building goals. Further, the critical importance ofthe policy environment is forcibly emphasized, and government policyactions in the areas of pricing, private sector involvement, marketing, andpersonnel had important and direct consequences for the project.

11.06 The experience of this project offers a rich source of lessons oncountry and project strategy, on project design, and on projectimplementation and management. Issues and conclusions are presented invarious parts of the report, but key lessons are briefly summarized below:

(i) institutional development is critically important but itis difficult and takes a long time. The difficulties wereunderestimated in this case, in the design of the project,in the early stages and during implementation, andinstitutional development aspects often receivedinsufficient attention; for example, an earlier input insupervision by specialist staff on institutional issuesmight have rendered IDA counsel on institutional issuesmore practical and actionable. The difficulties ofstarting a new institution from scratch were notappreciated and so it was over-burdened both in projectdesign and with new tasks asbigned to it by theGovernment;

(ii) the role of prices wras key, but was difficult to handlewell solely in a project context; IDA's inputs becamemore effective when pricing issues were handled as part ofan active sector dialogue;

(iii) the Government clearly faced serious difficulties inproviding budget allocations, both because money was shortand because of confused budgeting and disbursementmechanisms. It was essential for the project entity andfor IDA to make special efforts to prepare and defineannual budget requests and to intervene at high levels toensure that funds were budgeted and released. Knowledgeof overall budgeting problems and systems was thereforeessential;

- 56 -

(iv) the issue of public versus private sector roles inranching proved to be more complex than Governmentofficials and IDA staff appreciated; "privatization" wasa desirable goal, but careful thought on how it shouldproceed is still needed;

(v) the difficulties of recruiting and retaining qualifiedtechnical assistance staff were amply demonstrated throughthis project, which illustrated Murphy's law (that what cango wrong will go wrong). Direct recruitment proved farmore difficult than expected and the experience suggeststhat careful planning and intensive inputs are needed ifsuch efforts are to succeed. Technical assistance needsoverail were underestimated;

(vi) the training components tended to receive less attention asproblems mounted, but should have received more explicitfocus throughout given their long term importance;

(vii) ranch development can be profitable and productive butproved much more difficult than originally expected; ranchoperations are particularly fragile and subject todisruption in situations of political and economic turmoil,for example, because they rely so heavily on supplies ofkey imported inputs.

(viii) both continuity and continuous follow-up during IDA'sproject supervision proved to be important because theGovernment services were particularly poorly equipped tosupport and supervise the project. The role of supervisionwas problematic, however, because of heavy reliance by ONDEon IDA inputs, which pushed IDA staff close to a projectmanagement role they were ill equipped to handle from manythousand kilometers away.

In part because of the intensive supervision effort for the project, thelessons have been marked and many are reflected in the design of subsequentprojects in Zaire, in the sector work program and policy discussions, andin the internal organization of supervision work in the Region.

Annex ITable/Tableau I

ZAIRE

FIRST LIVESTOCK DEVELOPMENT PROJECT - Cr. 398-ZR PREMIER PROJET DE DEVELOPPEMENT DE L'ELEVACE - Cr. 398-ZR

PROJECT COST AND FINANCING COUTS ET FINANCEMENT CU PROJET(in USS '000) I/ (En $ EU 'UOO) If

Appraisal Estimate/Estimation de 1'Evaluation Act ual 2 of

COMPONENTS Total Actual Appraisal/ COMPOSANTESForeign[ Cost/Total CoGit Effectif 2

Local Devises Total Effectif Evaluation

A. Investeoents InvestissementSHousing & Construction Z98 144 442 372 84 Logements et ConstructionsVehicles & Equipment 149 201 350 178 50 Vehicules et MaterielFencing Materials 4 Seeds 68 86 154 7 5 Clotures et SemencesBreeding Stock 839 2,446 3,285 840 26 Animaux reproducteurs

Sub-Total 1,354 2,877 4,231 1,397 33 Sous-Total

B. Operating Costs CoUts d'ExploitationManagement 3,470 1,944 5,414 6,029 111 Couts de gestionAdministrative 184 210 394 1.454 369 Depenses d'Ad.inistrationVaccines, Mineral & Drugs 380 1,050 1,430 1,487 103 Vaccins, S.bstancea .in4rales et sedicaaenzaVehicles & Travel Z38 389 627 1,057 169 UVhicules et dAplacementsVehicle Replacement 143 156 299 503 1,8 ReMplacement des vehiculesMaintenance & other costs 285 194 479 376 71' Entretien et coDts divers

Sub-Total 4,700 3,943 8,643 10,906 107 Sous-Total

Formation ProtessionnelleC. Training & Project Prep. 2/ 420 1,680 2,100 603 29 et Preparation de Frojets

Total 6,474 8,500 14,914 12,906 86 Total

Financing: Financement:

a) IDA 8,500 8,4473/ 99.4 a) IDAb) Government 2,443 2,055 84.0 b) Couvernementc) N.R.D.A. Ranches 4,031 2404_ 59.6 c) O.N.D.E.

14,974 12,906

Sources: Appraisal Report/Rapport d'Evaluation

1/ Exchange rates used: Z 0.50/US$1.O0 at appraisal and yearly average for actual costs./Taux de change utilises:Z 0.50/E.U$1.00 a l'evaluation et cours moyen de l'annee pour couts effectifs

2/ Include distribution of contingencies price - price contingencies of 6% annually on all costs and a physicalcontingency of 102 on investment and operating costs/Y compris provisions pour imprevus; calculees a raisond'une hausse des prix de 6% applicable a tous les coats et de depassements de quantites de IOZ appliques auxinvestissements et aux couits d'exploitation. gin

3/ Balance of USS 53,000 disbursed by IDA in 1983. BEST W PY AVAILABLE

Annex 2

Table/Tableau I

ZAIRE

FIRST LIVESTOCK DEVELOPMENT PROJECT - Cr. 398-ZR PREMIER PROJET DE DEVELOPPEMENT DE L'ELEVAGE - Cr. 398-ZR

ACTUAL PROJECT EXPENDITURES BY FINANCIAL YEAR DEPENSES EFFECTIVES DL PROJET PAR ANNF- FIIANCIERE(Z' 000 Unless Otherwlse Indicated) (Z' 000 Sauf Indication Contraire)

TOTAL TOTALCOMPONENTS 1974 1975 1976 1977 1978 1979 1980 1981 Z USS/SEU COMPOSANTE;X

('000)A. Investments Investisseaents

Housing 6 Construction 14 22 37 32 70 119 369 381 1,044 372 Logemencs et ConstructionsVehicles 6 Equipment 15 15 10 23 27 31 223 155 499 178 Vehi..les et MaterielFencing Materials & Seeds 2 3 4 1 4 - - 6 20 7 ClStures et SenencesBreeding Stock 221 181 475 740 255 439 -8 42 2,361 840 Anlcaux reproducteurs

Sub-Total 252 221 526 796 356 589 600 584 3.924 1,397 Sous-Total

B. Operating Costs CoSts d'ExploitationManagement 303 449 625 739 1,051 2,087 4,146 7,539 16,939 6,028 Coats de gestionAdministrative 47 97 113 221 539 923 1,587 2,254 5,781 2,057 Depenses d'administrationVaccines, Mineral & Drugs 74 77 173 118 322 923 963 1,527 4,177 1,486 Vaccins, Subst.olnerales 6 medicamenrsVehicle 6 Travel 32 5Y 57 49 205 361 909 1,300 2.971 1,057 Vehicules et deplacenentsVehicle Replacement 29 39 55 124 222 336 298 310 1,413 503 Remplacement Jes vebiculesMaintenance & other costs - S 7 ' 27 171 172 667 1.056 376 Entretien et toats divers

Sub-Total 485 725 1,030 1,258 2,366 4,801 8,075 13,597 32.337 11,97 Sous-Total

C. Training 6 Project Preparationl/ For!atlon Professtoanelle

TOTAL 737 946 1,556 2,054 2,722 5,390 8,675 14,181 36,261 12.904 Total

Exchange Rate (Z1US$) 0.50 0.50 0.807 0.857 0.836 1.729 2.80 4.384 2.81 Taux de Change CZ/StU)

Total In USS ('000) 1,474 1,892 1,928 2,397 3,256 3,117 3,098 3.234 12,904 Total en SEU ('000)

August 7. 1982

Sources: Audited Financial Statenents/Bilane vSrifi&s

1/ Costs component: no details available on yearly basis included in operating expenses/Les coats ne sont pas disponibles par annee inclus dans les coOts d-exploltatinn-

REST COPY AVAIUBLE

Annex 2Table 2

ZAIRE

MUNILA RANCH

FIRST LIVESTOCK DEVELOPMENT PROJECT - Cr. 398-ZR PREMIER PROJET DE DEVELOPPEMENT DE L'ELEVAGE - Cr. 398-ZR

ACTUAL PROJECT EXPENDITURES BY FINANCIAL YEAR DEPENSES EFFECTIVES DU PROJET PAR ANNEE FINANCIERE

(Z' 000 Unless Otherwise Indicated) (Z' 000 Sauf Indication Contraire)

COHPUNENTS 1974 1975 1976 1977 1978 1979 1980 1981 TOTAL TOTAL COMPOSANTES

Z US$I$EU('000)

A. Investments Investlssements

Housing & Conttruction 8 15 24 5 47 49 273 288 709 239 Logements er ConstructionsVehicles 6 Equipment 6 11 5 19 13 17 144 103 318 107 Vehicules et Materiel

Fencing Materials & Seeds 1 1 2 1 - - - 6 11 4 Cl8tures et Semences

Breeding Stock 144 166 - - 127 _ 8 - 2 445 150 Animaux reproducteurs

Sub-Total 159 193 31 25 187 66 425 397 1,483 500 Sous-Total

B. Operating Costs Coats d'Exploitation

Management 195 317 443 449 673 1,493 2,812 5,617 11,999 4,040 Couts de gestionAdministrative 27 60 66 61 306 554 925 1,503 3,502 1,179 Depenses d'administration

Vatcine3, Mineral & Drugs 57 65 114 68 196 721 720 1,244 3,185 1,072 Vacclns, Subst.min.S medica=ents

Vehi,les & Travel 26 46 36 23 136 190 532 856 1.845 621 VEhicules et deplacementsVehicle Replacement 8 27 38 85 131 250 195 232 966 326 Remplacement des vEhiculesMaintenance & other costs - 3 3 2 21 150 108 578 865 291 Entretlen ec co6ts divers

Sub-Total 313 518 700 688 1,463 3,358 5,292 10,030 22,362 7,529 Sous-Total

Formation ProfessionnelleC. Training & Project_Preparatiom - - - - - - - - - - et Pr4paration de Projets

Total 472 711 731 713 1,650 3,424 5,717 10,427 23,845 8,029 Total

Exchange rate (2/US$) 0.50 0.50 0.807 0.857 0.836 1.729 2.80 4.384 2.97 Taux de Change (Z/REU)

Total in USS ('000) 944 1,422 906 832 1,974 1,980 2,042 2,378 8,029 Total en dollars E.U. ('000)

Augusr 7, 1982

BEST COPY ftAVAIUBLE

Annex 2TablIe 3

ZAIRE

MITWABA RANCH

FIRST LIVESTOCK DEVELOPMENT PROJECT - Cr. 398-ZR PREMIER PROJET DE DEVELOPPEMENT DE L'ELEVAGE - Cr. 398-ZR

ACTUAL PROJECT EXPENDITURES BY FINANCIAL YEAR DEPENSES EFFECTIVES DU PROJET PAR ANNEE FINANCIERE

(Z' 000 Unless Otherwise Indicated) (Z' 000 Sauf Indication Contraire)

:OMPONENTS 1974 1975 1976 1977 1978 1979 1980 1981 TOTAL TOTAL COMPOSANTESZ USS/SEU

('000)

N. Investments Investissements

Housing & Construction 3 5 7 23 10 56 46 37 187 76 Logements et Constructions

Vehicles 6 Equipment 5 3 4 4 10 6 43 50 125 51 Vehicules et Materiel

Fencing Materials & Seeds - I - - 4 - - - 5 2 C18tures et Semences

Breeding Stock - - 448 740 86 206 1,480 599 Animaux reproducteurs

Sub-Total 8 9 459 767 110 268 89 87 1,797 728 Sous-Total

B. Operating Costs Co8ts d'Exploitation

Management 48 51 74 129 178 280 696 1,113 2,569 1,040 Coets de gestion

Administrative 13 18 24 79 122 167 389 459 1,271 515 Depenses d'administration

Vaccines, Mineral & Drags 3 4 16 22 81 106 131 166 529 214 Vaccins, subst. min. & medicaments

Vehicles 6 Travel 3 6 7 13 50 81 240 256 656 266 Vfhicules et deplacements "

Vehicle Replacement 10 3 11 15 52 43 71 51 256 104 Remplacement des vehicules

Maintenance & other coats - I 2 1 2 10 24 43 83 33 Entretien et couts divers

Sub-Total 77 83 134 259 485 687 1,551 2,088 5,364 2,172 Sous-Total

Formation Professionnelle

C. Training & ProJect Preparation - -- - - - - - - - Preparation de projets

Total 85 92 593 1,026 595 955 1,640 2,175 7,161 2,900 Total

Exchange rate (Z/US$) 0.50 0.50 0.807 0.857 0.836 1.729 2.80 4.384 2.47 Tau. de Change (Z/SEU)

Total in USS ('OOQ 170 184 735 1,197 711 552 586 496 2,900 Total en dollars E.U. ('000)

August 7, 1982

BEST COPY AVAILABLE

Annex 2

Table 4

ZAIRE

KAYEMBE - MUKULU RANCH

FIRST LIVESTOCK UEVELOPMENT PROJECT - Cr. 398-_F PREMIER PROJET DE DEVELOPPEMENT De L-8LEVAGE - Cr. 398-ZR

ACTUAL PROJECT EXPENDITURES BY FINANCIAL YEAR DEPENSES EFFECTIVES DU PROJET PAR ANNEE FINANCIERE

(Z' 000 Unless Otherwise Indicated) (Z' 000 Sauf Indicatinn Contraire)

COMPONENTS 1974 1975 1976 1977 1978 1979 1980 1981 TOTAL TOTAL COMPOSANTESz UssSKOE-

(*000)

A. Investments InvestissementsHousfng & Conscruction 3 2 6 4 13 14 50 56 148 58 Logements et ConstructionuVehicles & Equipment 4 1 1 - 4 8 36 2 56 22 Vehicules et Materiel

Fencing Materials & Seeds I 1 2 - - - - - 4 2 Cltures et Semences

Breeding Stock 77 15 27 - 42 233 - 42 436 171 Animaux reproducteurs

Sub-Total 85 19 36 4 59 255 86 100 644 253 Sous-Toral

B. Operating Costs l'euta d'ExploitationManagement 60 81 108 161 200 314 638 809 2,371 930 CoOts de gestionAdminIstrative 7 19 23 81 111 202 273 292 1,008 395 O8penses d'administration aVaccines. Mineral & Drugs 14 8 43 28 45 96 1Ž2 117 463 182 Vaccins, subst. win. & m5dicanents

Vehicles & Travel 3 6 14 13 19 90 137 188 470 184 Vehicules et deplacenentsVehicle Replacement 11 9 6 24 39 43 32 27 191 75 Remplacement des vehicules

Maintenance A other costs - 1 2 4 4 11 40 46 108 42 Entretien et couts divers

Sub-Tot.l 95 124 196 311 418 756 1,232 1,479 4,611 1,808 Sous-Total

Formation Professionnelle et

C. Training i Praiject Preparation - - - - - - - - - - Pr8paration de projets

Total 180 143 232 315 477 1,011 1,318 1,579 5,255 2,061 Total

Exchange rate (Z/USS) 0.50 0.50 0.807 0.857 0.836 1.729 2.80 4.384 2.55 Taux de Change (ZI$EU)

Total in USS ('000) 360 286 287 368 571 585 471 360 2.061 Total en dollars E.U. ('000)

BS COPY AVAILABLE

ZAIRE

FIRST LIVESTOCR DEVELOPMENT PROJECT - CREDIT 398-ZR PMER PROET DE DEVELOPPEMT DE L'ELEVAGE - CREDIT 398-ZR

Completior Report Rapport d'AchZvem.znt

Animal Load on Ranches Effectifs ae BetRil sur 1es Farehes

Taux de charge/Stocking RateSurface ' Are (ha) Nombre de t8tea de b4tail / Cattle No. (ha par tete / ha per head)

Accuelle / Current Evaluation I Appraisal Fin 1979Vitesse (Prolection d'evaluation)

Evaluation Exploitee Non-exploitee de croisiere Fin 1981 Actuel Objectifs Revisie d 1979 ActuElRanch Appraisal L Exploited Non-Exploited Total Full Develooment End 1981 Current Revised Target 2 (Apisa Po ectio) _lrrLn

Muhila 520,000 217,000 210,000 427,000 64,000 60,870 37,888 60,000 12.0 5.7

Mitwaba 124,000 76,000 119,000 195,000 7,700 7,335 7,410 12,000 11.3 10.3

Kayembe-Mukulu 60.000 40,000 66,000 106,000 7,700 7.641 3,590 7,700 5.3 11.1

TOTAL 704,000 333,000 395,000 728,000 79,400 75.846 48,888 79,700 6.3

1/ At full development. 1/ En vitesse de croisidre.2/ As presented in the Supervision Report of August 15, 1977, 2/ Selon lea estimations presentees dans le rapport

and reflecting a revised distribution of cattle in viev of de supervision du 15 aout 1977: reflete aussi unethe poor performance at ?kbila and the accuisition by distribution du betail revisee en fonction de laMitwaba of grazing areas free of tabanid fly. faible performance au Mahila et de l'acauisition

par Mitwaba de piturage dipourvus de mouche Tabanid.

April, 1982 avril, 1982

na

BEST COPY AVAILABLE

- 63- BEST COPY AVAILABLEANNEX 3Table 2

ZAIRE

FIRST LIVESTOCK DEVELOPNENT PROJECT - CREDIT 398-ZRk

Completion iepoSt

Key Indicators

Acbievement_ ObjectiveInitial Current Target 1983

(at Appraisal) Supervision Supervision Appraisal Revised-ltem 057)(5/81) (3/82) _____ ____

MUHILA RANCH

Ranch area (ha) 260,000 427,00D 427,000 2/ 520,000 480,000Animals (head) 25,800 36,549 37,888 64,000 45,500Breeding cows/(head) 6,500 10,715 9,649 19,000 12,000Sales (head)- 3 2,900 4,519 4,075 11,400 6,000Weaning rate (%) 3/ 48 50 48 77 68Adult mortaLity (X)- 3 4.1 2.5 2 2Extraction rate (X) 11 12.6 10.9 18 13

MITWABA RANCH

Ranch area (ha) 45,00D 195,000 2/ 195,000 z/ 124,000 195,000Animals (head) 50D 6,706 7,410 7,700 8,800Breeding cov1(head) 230 2,726 2,708 2,300 2300Sales (head)- 170 299 598 1,300 650Weaning rate (Z3)- 3t 65 46 45 77 63Adult aoirtalicy (O- 5 3.9 3.9 2 2Extraction rate ()-, 34 4.6 8.3 17 7

KAYEMBE MUKULU RNCH

Ranch area (ha) 35,000 106,000 21 306,00 2/ 60,000 106,000Animals (head) 2,500 3,617 3,590 7,700 4,000treeding cows (head 800 1,247 1,033 2,300 1,200Sales (head)- 170 394 390 1.400 400Weaning rate (%)-./ 65 33 29 77 58Adult mortality (%)- 2 B.1 6.7 2 3Extraction rate (%)3/ 7 10.6 10.7 19 10

1/ By supervision mission of 2/80 (Annex 3, Herd projections)2/ Only 51%, 39% and 38% of the total ranch areas are exploited In Nubila, Miœwaba, and Kayembe-Mukul3/ For a 12-month period (weaning rate equals calving rate minus calf mortality)

April, 1982

ZAIRE

LIVESTOCK DEVELOPMENT PROJECT - Credit 398-ZR PROJET DE DEVELOPPEMENT DE L'ELEVAGE - Credit 398-ZR

Completion Report Rapport d'Achevement

Mubhila Ranch Ranch de Muhila

Herd Performance Performance du troupeau

Appraisal/Evaluation

Vitesse decroisiere]

Full Fin 19811 Actuell Actuel en % d'evaluation/Development End 1981 Current 11 Current as % of appraisal

Animal load (head) 63,863 60,870 37,888 62 Effectif de betail (tetes)Bulls 657 657 679 103 Taureaux

Cows 16,434 16,434 9,649 59 Vaches

Calves 12,654 12,654 8,304 66 VeauxHeifers 1-2 years 6,201 5,934 2,675 45 Genisses 1-2 ansHeifers 2-3 years 6,077 5,342 1,881 35 Genisses 2-3 ansSteers 1-2 years 6,201 5,934 2,999 51 Bouvillons 1-2 ansSteers 2-3 years 6,077 5,342 3,210 60 Bouvillons 2-3 ansSteers 3-4 years 5,955 5,131 3,924 76 Bouvillons 3-4 ansFattening cull cows and heifers 2,416 2,416 1,788 74 Vaches et genisses reformeesDraft oxen and cull bulls - 71 - Boeufs et trait

Heifers 3-4 years 1,191 1,026 2,708 264 Genisses 3-4 ans

Adult mortality (2) 2! 2.0 2.0 2.5 125 Mortalite - Betail adulte (%) 2/

Commercial extraction (Y) 2/ 18.4 17.41 10.9 63 Taux d'exploitation commerciale (j) Z/

1/ December 31, 1981 1/ 31 decembre 19812/ Period 2/81 - 1/82 21 Periode 2/81 - 1/823! This figure does not yet indicate that the necessary 31 Ce chiffre n'indique pas que le taux 7%

7% bull/cow ratio has been achieved. necessaire taureaux/vaches a ete atteint

April, 1982 avril 1982

ZAIRE

LIVESTOCK DEVE_P_EN PROJECT - GRT 398-ZR _ROJET DE DEVELOPPEMENT DE L'EIEVAGE - CREDrr 398-ZR

Completion Report Rapport d 'Achevement

1¶itwaba Ranch Ranch de MitwabaHerd Performance Performance du rroup3au

Ap ri sal /valiationVitesse de croisiere/ Pin 1981 Actuel/ 1 Actual en X d'evaluacion

Full DeveloDment End 1981 Current- Current as Z of apPraisal

Animal load (head) 7,704 7,335 7.410 101 Effecti*-de betail (tetes)Bulls 81 18 177 219 TaureauxCows 2,020 2,020 Z,708 134 VachesCalves 1,556 1,556 1,505 97 VeauxXeifers 1-2 years 756 753 9 1 GeniRses 1-2 ausReiters 2-3 yeara 747 °49 721 III Genisses 2-3 ansSteers 1-2 years 762 753 -- 0 BouvilllonS l-Z ansSteers 2-3 years 747 649 678 104 BouvilZons 2-3 ansSteers 3-4 years 73Z 037 4 132 Bouvillons 3-4 ansaFatting cull cows and heifers 297 238 32 13 Vaches et genisses r6formeesDraft oxen and cull bulls -- -- 8Beufs et traitHeifers 3-4 years -- -- 732 -- Ceniases 3-4 ans

Adult mortality ) 21 2.0 2.0 3.9 195 Mrtalite-betail adulte r' 21Conercial extuction (7.) 2! 18.95 17.09 8.3 49 Tau. d'Exploitation colmerciale (o -

1) December 31, 1931 I/ 31 decembre 198]2! Peri.od 2)81-1/82 if period 2J31-1)82

The fgure does not yet indicate that the necessary 1% bult/cow ratio has been achieved. Si Ce thiEfre ntindique pasque le taux 7 7. ueCessaitecaureauxtvaches, a iEtdetteint.

April, 1982 avril. 19f2

BEST COPY AVAILULE

ZAIRELIVE DoCK DEVElo P

MRAT - CREyr 39S-8R

P T DE DEVIE WE -E1XVGE . c T 398ZRCompletion Report__wple i _ep_r_:

Rapport d'Ach evementKayembe Wkulu Ranch Rsneh te Kayembe hkulu

fferd Per,07orma-ce

Perfortanie du Trobuneau

A raisal fZvaluationVitesse de crajsiere/ Fln 1961 Actuel ZI Actuet en 7 d1'ea tjnpull Deve1o>ent &:d-196. Current Current at tprafaI

Anlmtl toad (head) 7,704 7,641 3,590 47

Buill, 847

9 163

Bvlls

SI 81 94

116 3_ Effectif de betail (tete)

Calves 2,020 2,020 1,033 51- Taureaux

Calves 1,55656

1,155 74 Vaches

Hltifers 1-2 years 762 762 140 18 Veaux

Stefere 2-3 years 747 736 69 9 Genisses 1-2 ents

Steers 1-2 years 762 762 145

19 Genisses 2-3 ens

I

Steers 2-3 tears 747

736 50 7

Bouvillons 1-2 ans ,

Steers 3-4 yeara 732 691 343 50 Bouviltons 2-3 ans

FattmnB cull cows and hbifers 297 297 160 54 BouvilIons 3-4 ans

Draft oxen and cull bulls - 4 D Vaches et genisses riformEes

111fero 3-4 Yeara -- - ~ 392 o Baeufs et traitGenisses

3-4 ans

Adult mortality (7) / 2.0 2.0 6.7 335 7'

Cemercia1 extraction (71) 2/ 18.95 17.27 10.7 62 hortdUItae-etail Adulte (1) -Taux d'Exploitation counerciale (71) -1/December 31. 1981

/3dcebe91

2/ Perind 2J81 - 1/81

2/ 31 de 2/81 1912

3/This RPlure does not yet intdicate that the .enxeai/7

zPerssa±e2/1-12bull/cow ratio has been achieved.e that the nece t2

3/ Ce chiffre n'indiquepas qua le taux 7 71neeessaire taureauxivaches a ete atteint.

April, 1982

.vril 1982

BEST COPY AVAHLABLE

ANNEX 3

Toble 6

Llvz20 Dm0L. 1 nir 00 1 r P -0 w09 . 08-z5Q21J 0 ET M D09 WLO?PS1 eL L' V1182 - CaDIT 398-ZR

CowpIlion Rport llJApport d'Ach8e0ment

10hi4. Iub Rtmob de Mub,it1Rard P516.116, lowis~8-1tion do TropeSou

Dhn o91st Colot (1983)Evteltiten 4-p tt I wEImsttScoAppraisal 7fn de/End of poll Dslo, st (1983

5172 167'. 1973 1976 2977 197gi -snv 19 -1 et Af e.i0

Held C-paltij tooOtiOo 4. 7ro c

9011.-v 427 724 943 1,094 1,044 514 719 745 1,076 657 T1r90 UX0°/CO9S 6,344 8 930 9.075 9.787 10,143 10.460 11.157 10.881 11.0I 7 IB.B0 V.Avoomere 2.016 4,603 4,575 4.900 6,236 7,605 8,27 8.304 12,654 8Sewr08 sfors 1-2 ywn 1,837 3,341 2.677 3,127 2.568 2.390 2,999 2.927 2.675 o.Yol Gors.mt 1-2 *00.t1r. 2-3 yeer. 2,675 249 1,039 1,595 2,202 1.576 1,75 1,561 2,231 6,077 Ceosses 2-3 SUNBulling Heifers 2.826 4.431 4.776 3.328 2.822 2.693 2,993 J.354 2.708 6.192 0en1055 .- tn . eSteer 1-2 yusto 2,099 3,325 2,S53 2.399 231 2,665 3,076 3.209 2,999) 6,201 )oo..lllo 1-1 a...Stet, 2-3 rt 2.619 1. 20 2.243 1,033 2,205 2.364 2,330 2.528 3,210 6,077 ioigtll4 2-3 * Staen 3-4 9e1 2,432 1,402 1,653 2,092 1.808 1,793 1,972 2.271 2,639 5.955 Boudllo 3-4St-e or 4 1.421 62 1 058 535 3.627 1_494 _9S2 J59 owsvil19 plus de 4 us

25,765 27,w 30,640 30,305 31,570 32,210 35,10d 36.9n 37,888 63,863 A5IKA3X T6OTX

T0.L YD06L Unt;Ts 22,930 25,072 26,037 27,730 26,670 25,947 27,703 28,670 29,584 51,206 D.C.D. 1910IX

vart.1 lltv tbt-llt

13.12 30 76 34 33 36 1a 49 48 35 13 Toote.s.cVe 249 1,020 349 730 399 313 219 643 353 353 V-..W1.0n..43 100 114 193 70 187 177 233 171 30 3avo003golfes 1-

27yars 84 249 114 153 168 72 55 in so C9 Geoi,5 1

23t

Heifers 2-3 year. 102 65 99 12 62 47 33 us8 33 122 GeoIse. 2s-3aosu7hoilog lEifero 90 265 189 217 102 8L 10 3 94 24 00009se0 a0 T36aureeSteer, 1-2 y as b8 570 186 347 219 8 41 in 77 99 Bon,,111as s 1-2 -Sters 2-3 nears 180 98 S0 74 22 71 33 81 '1 122 BO-.VSIIO- 2-3 onsSteer. 3-4 yure s0 117 32 11 29 54 14 M 48 119 BovItIons 3-4 DtoStetmt e.r 4 "ru _L5 31 391 _3.3 17 45 3 n 25 _o ilonrt plao de 4 ons

TOTAL 901 2.5061 1,204 1,S15 1,U32 968 626 1,286 957 1,401 TO1

5l 9 V005 2

Culled 8ulls 167 9 - 57 90 3 0 92 249 129 Tae'- tlefO.W,11d Cow. 025 1,303 1,392 425 802 1,485 690 2.1 2.179 2,392 Veobes Reforons

vYe - - 10 14 161 38 9 - 137 - SwVronaStsorw 1-2 r9 - - - - - - 15 -nsfIlass 1-2 a..Steeet, 2-3 yoeara- - - 40 a - oo..1t1O1* 2-1 ft.Stoeos3. 3 .4 y- 91 10 3 128 - I - BSo"1um, 23-4 -,.Ste1t3 g-0tr 4 yS- 2,0O0 3,735 S6l 2.210 577 1,737 1,773 1., 1,920 3,712 Bou illoSs plou de 6 oUNadled 61i0ers 134 _ 1147 35i _ 930B __ 685 3_187 Ceo-e-.. flef-oee

TM 29246 3,0t721 2.510 3,142 1,928 3.266 2,950 4.310 S,214 11,420 TOTAL

P.r06.0 ASM,149

bullc - - . - 8 - _ 14 TaureiBrodOso R*4f.-V 1.3623 1.140 _ _ _ _ Geotaeos Reproductrices -

TOM6 - 2.363 1140 - - 0b - _ 14 WTOTA

To.b.1-01 CoeffLoIs. (Z)

Weanig Ratre 65 - - 52 41 44 so SO 48 77raQ dc D vrsS.Aduslt X.Ttllty 3 10 4 6 4 3 2 * 3 2 Utdtote de Grot 08to1lt;o 0.l1g 000. 11 - - .6 12 15 16 23 31 Ton d- V. Seh- Ref.-.,.0.1i0.. COllief Rate 5 - - 13 IS 25 21 26 24 12 T.- do Gols.... RWof...eo0111 Cutting 1,, 15 1 13 14 8 11 it 26 20 Tos do Toea0- WoforWWIN/Cto RC1.10 - 6 5 7 0 8 4 6 2 S3ppotI Taureonrivuhefe

0/ 20In16d10g &.ti,, 0re1ti., c.1Iled, .. d 3 y.eoa old 0/Y -p-r 0s r.Ie: en r. r.0erf-. or terltS.- 3 M.11/ Th. greaMdos, of 0or0 lit. in 1974 by tltegor7 is ., ,,11ote bowed 1/ L',-Um,roti., de. oort.listes e 1974 fer 101e091. est no ca0ttruttlon

on tbe t5-ge09 distribtlon for the first ten .1tt6. of th0 ye., pplied b.... .. 0r ure dLtr1 10 dc0 0ortelit.. P.r p 61 a 1 et au pocdut It090 . 2 etel f 2.,97 LO..1 premiers .ois de l'so,e. *pllqe * unpl,e r1ostlOu .oo. l do 2.599 n-I--.Z Esti.ate obtained fr.. adjusting 10-4tth data tO a pearly b60i.. 2t p0110.1 obeene F-r un d1e .01 rt...qgtme.t. loses Scr 191/ Nhrther 01f.. vorthes.. are ignored for th.e prpo.. of this eserhle.. mOi. o use bose anwelle.

41 Atu.al at1. 00 at .. d of yr.Tt A3 4ac0. -oppleeawftlres de Soots... bont leglige$ POUT les fins de cct er6clce.Rsin leo- 197-0-3 0,c164c locuCv,young bullos,nd `restiog bulls as sol. Z1 000et00 r6elloa

I 2luniitS 1 4l-r1 h 0 0 mt01 r.tion frr-, 1980 -d.o .dpo r/ foF t.t por- 1979-1983 y .poprls les jeunes taure1Ul0 Le Irittifn1 e1- 0.5 1es t--rwu "'fl r.p..".

y/ " r.rim Csomt0110n tu6 Tench a polItir de 19E0.

April. 1902 -0il, 150

BEST COPY AVAILABLE

T.bl. 7

ZAIRE

LIVRSTOC D0V1040 PROJECr - CR0D1T 308-ZR PR0J0T DE DEVELOP1007E9 DE L'ELEVAOE - CREDTT 303-7.R

ConpTiotiO Rapo-t R0pp0.. d'Ach2veovot

Mlc8b. 8 ncb Raeh d. 08rb.

Herd p.ole.tiOn ERoltiom d. TroopeOo

DMeleppseot CnC-pl.o (1983)Evlv. tion/ d apres I 6"044 00Ap,crdaL" 7 d o-/Rd 4 4 4/ (ISb3)

M/n 1974 1975 1976 1977 q976.' 1979_ 1980- 1981- of A.r_e l

Hard Co0-,oltiE t T CL nsitto du TrnuxD

0o11

. °' 20 23 27 86 188 fl 202 153 233 81 .- _'

C-`0 233 396 391 473 1,126 1,840 2,391 2,675 '.722 2,317 V.06.8

Wv.0r. 163 175 203 250 856 773 1,343 1,623 1.505 1.556 S..TC7-

heifr. 1-2 year. 20 1IS 41 162 113 440 275 611 9 762 0 l1.8. 1-2 au

h E.11- 2-3 yo.-. 6 36 157 -- 680 75 122 202 721 747 * .I... 2-3 00s

0011100 ln8 err 49 18 66 1,628 2,256 ,438 1.009 455 751 _ Isloseas * Toorcoo

Ste.. 1-2 ye..- 13 87 24 138 L2 15 111 523 762 b. noilo- 1-2 *n

Steers 2-3 year s - 74 104 107 136 248 192 286 678 747 I I.ea 2-3

Se- 3-4 y.. -- 3 82 63 96 2 135 264 I'S 732 '.vtllos 3-4 *n

steers over 4 ears -- 12 83 6 6 177 43 4 331 R-o,lilo,8 pio do 4. A*

TOTAL ANIMALS 504 939 1,198 2,913 5,467 5,179 53,23 6.796 7,410 7.704 6A28Mb1 TOTAUX30

ToTAL ANIwMAL UITN 341 764 95 2,663 4,611 4,406 4,580 3,173 5,905 6,1448 CC... r70TA0T

mortality EM-tdit

Hall I __ _ 153 7 35 4 4 1 2 I 1e14

coen 14 -- -- 17 25 149 40 a8 65 40 V.0b..

Wev .er3 86 311 83 270 232 31 Sev..-

eifers 1-2yea I __ __ 2 6 6 6 15 50 27 IS Gfotlses 1-20on

Heifers 2-3 years 2 __ __ 761 160 80 e 34 36 15 C.61s.e. 2-3 8e0

b011100 Ettfere -i t _ 11 137 70 18 10 20 -_ .rnms01 *- T.-.e*

Steer. 1-2 yes.. -- - -- 3 1 13 1 14 31 15 B-0v111008 1-2 8

Steer 2-3 y- -rs _ 2 1 -- 7 23 0 15 L.uvilloor 2-3 8nd

Steer. 3-4 - _ __ _ 2 12 10 1 1 3 15 Ba.dIll 3-4 *se

SteOl Over 4 years - 1 3 0 0 Booillous plus de 4 s

TOTAL t _ 963. - 435 735 100 I6" 435 148 MTEAL

Was508 ventes ±

Culled Bulls 3 -_ __ 6 26 14 19 7 is 16 0a8re1u.c Rfonufs

CoIled Co,, 1Z2 - -- 7 107 314 263 242 276 294 V.8,.. Ref-c0 e.

We"re -- _ _ 1 17 52 3 - 95 Se Sw."OO

Sled. 1-2 ye.s- 44 _ _ _ 114 -- __ - 3 __ ., UII-n 1-2

Stter. 2-3 yests 44 -- 3 -1 :::Sta 2-1 an$

Steer 3-4 ye... *4 __ __ 47 to -- -- _ _- _- Bnll. 3-4 -

SteArB 00?v 4 years 44 -. -- 34 56 56 140 25 204 702 B.v-ill.n plw do 4 r

C.1106 Helfer. 25 13 3 96 3 ee. 8ef8refts

TOTAL 171 -- -- 95 343 436 423 299 692 1,407 TOTAL

BunLu _- -- 217 1oo 52 s0 7 _ z7800.8 2/

Breediog Etfer- -' _ _ Z,275 2,264 -- - -- - u- t1ni.ses Reprod-tri-c-

Teah.1-1l Coeffioionta (7) Coeffictents Torhone.s (Q)

v.W0ntM Rate 65 __ _ 52 41 19 43 46 45 77 T.-nde. S-S.o

Adult Mortality S _ _ 52 to 10 2 4 4 2 Mortal0t8 de (roS 06ta8l

Cgv CulltMa Rate 11 -- -- -- 30 10 25 12 10 15 Taue do V.7he. .eford-e

Heifer Coling Rate 5 -- -- -- 2 3 4 11 18 IS Tult de C2.nis8e. Reformees

B.l" Cotlaa R.1 3/ 20 -- -- -- 35 9 7 6 7 20 T.- d. Teno.-. R1f0.t.

8ul,/Cow 0rt10 - 9 -_ -- 4 6 S 6 S 7 4 Rapport Tenrea./vJrlh/1

_/ Ilnaudig s.ttt, restiog, c01146, md 3 yest n.oi. St C-Pols to 00tv1o, 00re1o00. -lrcts et tlolIloue 3 *D

1/ pp... Lelade 5bou0 050 -1-1. boported frooe O te .hich --.. 1odequ tVIy j/ Ch0.f p. y n- -lr .as do 050 8nu- 805-.e1 d. B0t-v0 q401 n6et1t

protect d .inst trpeaosocisSio. pas suffissent proteSge contr0 trypeoosmissis.

2/ FPrth-r beZOnf purcnhe- 0D Saog.od fer thn purp078 of th01 nerte. -/ Aehet- d ppono.ere- de 8 0 n= efg11888 pour Is. fit. do .t noc-..1.

31 Patios for 1978-1983 include iVective yo,ng bulls qd retine' bolls as well. 31 Rapport pour 1978-1983 y coopris 1's jen.. tOoOeOOo iaectif. et Ousi 1e

4/ Actl. da.a 0at 01 00po98.

!i Tronsfr f0. Nubil- thwuh 7981. 41 Iam08ie r1f1el

6/ l..l.d01g on-r,onh con.-pti-n ftr 1900 -rd., Sl Tr-0for d. 8.h41. I-q. 1981.

_/ Y tvarl. con- l on urot nh a wetl r de 1980

Ap4t1, 1982 2011. 190'

REST COPY AUVAILBLE

ANN5231.810 8

ZAIRE

1l.V11070K 3E11070T30 PR70 - C80D8T 3n8-ZR 70PRO De DEVEI1. 2E DE 1.ELVAIE - CREDIT 30D-2J

Cop ioo-. fP Rapporo d'Achloeoent

A.yembe-M6lu aMuch Ranh de Oveoyo-M1k.l.

llerd crolttg aloOln dv rn,,.s

Developpeuut Couplet (1903)Vo.1a0tiou/ d'8Po5 Ov.eIldetiou

APP001881 70. "/E8 of lo11 De0t107.o.0 (1983>

5r12 1974 1975 1976 1977 178- 1979 1980of 1981- . . of AppI !

lSes6 C o pootttrog Cuosu*t8on du Tropeoou

bu1, if 51 115 7n 34 74 65 107 109 115 81 78r8auxScoo 797 1,175 1,839 1,617 1,478 1,731 1,411 1.251 1.152 2,317 V.ch.wle8 5D7 979 1,060 639 757 532 725 775 1.155 1,556 SDOoOSgotten I-Z Years 194 172 343 404 352 327 226 92 140 762 Ceni--e- 1-2 *vgm4f0.0 2-3 ye.. 283 252 168 240 356 325 256 127 69 747 r60ts*8s 2-3 no.Bolan1 8 golfen 12 897 328 210 235 113 286 61S 433 -- 0008 88 28*u T0.8St0080 1-2 yeaoo 296 190 381 4i5 331 251 147 77 145 762 B-vill-o 1-2 -St0t00 2-3 ye 12$ 237 196 316 345 343 la 04 50 747 0O801

110 7-3 88

5r-0 3-4 y5 129 409 236 177 263 307 296 189 147 732 8-o00ll 3.6 4stteer 00r 4 y8S0 - It _ _ 104 138 323 164 _z8_ B-tillaus 918 .d s 4

7WTAL AIAL1S 2.503 4,426 4,v37 4,283 4.191 4,098 3,776 3,389 3.590 7,70S4 A2X041 0T00

TOM AN1116L 2872 1,99f 3,447 3,377 3,644 3,434 3,566 3,051 2.814 2,435 6,148 0.0.G. TO=I1

llortolity

0.11. I 1 3I -- a 5 7 21 6 2 TuesoCo" 28 40 106 __ 216 138 147 134 111 40 V sIf -- 10 L 5 _ 52 27 5s 37 43 31 5.-o0

etfen I - 2 yea". 7 7 5 -- 32 26 26 20 6 13 G1n64se 1-Z Asaofe 2 - 3 y..e -- 5 8 -- 4 26 17 9 6 IS 0&.i.- 2-3-801l110960el8e r_ 12 48 -- 21 9 9 6 44 _- GEts au T 8 re.Steere I - 2 7 3 12 7 -- 61 20 57 12 4 LS 3-ftlloo1-2 3Ste8n 2 - 3 7yr 2 2 6 -- 44 27 17 16 2 15 Iouvillos 2-

3o 5steee 3 - 4 8r00_ 2 3 _ _ 11 25 to 6 -- 15 SosLIL 3-4

Sto ver 4 yee n _ _ _ 8 9 8 2j 15 4 _oasllons p18 de 4 888

7OTAL 41 91 223 -- 48 311 373 274 228 148 T0131L

C0lad Bol1 4 22 8 -- - 8 13 13 16 T*-e8 00080008Cuilet Cove S 94 63 __ 24 67 62 116 116 2S4 Va0bs8 Retormees11808.00 -. .- -. -- 4 46 1 - 4 -- ge'1Steers0 2 y3 - - -- - 67vlln 1-2 308St1802- 3 a 4 rs -- __ __ __ U2 __ O _ tl7o Z-3 a1oe-re3-4 yes- -- - --- -- 1 I - EooIlloue

3-

4.o-S0 c8m 4 yeas 63 181 393 -- 63 267 189 274 129 702 Bo-68I18 pis de 4 88

Caf2wd 0e.8rs' 11 a I- _ _ _ _ 1 37 395 C0e8r-- Rer.0tn

T01 146 297 472 -- 244 48 25S 194 380 5. 1,407 1.

9te@/ 3Igr MmEt,880 A08008S

Wll1 - - . - 57 37 z3 SO 10 2 T<-8 2B8dinag f0lef 2/ __ 7D3 W -- -- __ -- _ - 06n8o88 Rc8r00 etri01 /-

Th100081 08801106080 (E 00886408*-t Td-hLq-. ME

n8000 0A0 65 51 51 -- 41 30 22 33 29 77 7884 88 08086±t wwrtality 2 5 5 __ S2 a 18 8 7 2 Mor0t8tt6 de Cros Bt.ilC0 C.81100 888 12 8 6 -_ __ 8 13 22 22 25 T8 4.0.0880 7-fooo.148t06 Osl A tA S -- -- -- -- -- 47 17 12 15 T707 de 6;*88"s 0008Oro8*Boll Cl11l10 E90r 20 -- -- -- -- 3 25 12 12 20 T.- de T78r0 _f4.8lu111oo 080in- 4 10 4 -- 4 4 8 7 7 4 187900rt rame* cb.so.

_/ t8ci0860g 1ctie.8 re0ti8818 culed, 3 yean old. 2' i =nt. 00 880t1 90 f 080t9.08efor078 et 000v*loo. 3 o.11 8417 - -8c 8. 1974. If S81810= 41o 8*8 1834.

t/ Fur8her hetfetk W1h88 srt 8goted for the p7r0p08e of t018 8s88is8. t/ 8g8708 8 1PPlNeut1ois d- ffatses wct 811860 PMo0 les f88 de3/ Rt0o1 f0t 1978-1983 81 10 1 It young bull 8 "reet1v bal a8 88. we llo.otoeActual data at yr - 6. 2_/ l8P9rt 7080 1978-7193 y 00o00r8 les Ito t8s00r08 1_10f0 0T/ ?oof.. r.- M381. tbroo1 1101. 80.04 Is. 080088 0.808

;/ laelloin oo-ron8h eoosowt. foo. 1980 -re 4I Donate zftUva

57 0rr08fer Ce. 3t8ll0 Iwqo 8 1981.6/ Y t04s oonoo.r-oo -ot -wcb 8 0807Ir cr 1800

AP-i. 1982 ari', 1982

BEST COPY AVAIUBLE

- 70 *

ANNEX 3

ZAIRE

LIVESTOCK DEVBLOPMENT PROJECT - CREDIT 398-ZR @%U.t' DE DVtLOt?iEI1 ZOL'LEVAG c' CI2DIT ;7-ZR

coapletion Reort ppor J'Afl0VOmOnt

Frequent Mortality Causes Caiuses Principalus de ptalitu

---------------------------------------- Number of casee/Nombrc d cas -----------

MHuhila uhIa1/

Losses and slaughter 2/ for consumption 408 Abattagea ratiors et port-is&naplascosis 91 AnaplnsmoacPneumonia 72 PneumoniaGeneral debility 59 Cachexie debilitc _Found decomposed 54 Trouve decomposeEndoparaaites (helminths) 5, VerminoseaPoisoning 4' Intoxicatio,Calving 4 5N lrgeDematogls 4 'ermatoseOcitis 31I Ot(iteDialocation 3' I:mbourbementLightening 3: 'oudre3-day sickness 2: Yievre de 3 joursSnake bites 1M SerpentsGastro Enteritis lU Gastro-enteriteDiarrhoea 16 DiarrheeDrowning 14 NoyadeTrypanosomiasis 13 TrypanosomiaseSepticaemia 12 SepticemieTheileriosis 10 Theileriose Not diagnosed 10 Ron diagnostiq'iesAccident 4 Accident de travailOthers 20N Autres

Total 1,316 Total

Hitwabn-/ Mitwaba l'

Predators 367 FouvesLosses and slaughter 3/ 122 Abattates rations et pertea-/Calving accident 8 Accident velageNot diagnosed 8 Non diagnostiqueDrowning 6 NoyadeLightening 5 PoudreGeneral debility 5 Cachexie debiliteSepticeamia 4 SepticemleTheileriosis 4 TheilerioseDecomposed 3 DecomposeDislocation 3 EmbourbementPneumonia 3 PneumoniaOthers 1 Autres

Total 55 Total

Kayembe-Mukulu 1/ Kayembe-Mukulu

Losses and slaughter - for consumption 92 Abattages rations et pertesGeneral debility 38 Cachexie debiliteDecomposed 26 DecomposeNot diagnosed 26 Non diagnostiquesAnaplasmosis 19 AnaplasmoseTrypanosomiasis 17 TrypanosomiaseSepticeemia 11 SepticemieEndoparasiten (heleinthes) 9 VerminoseDrowning/dislocat ion 8 Noyade/etnbourbementaSnake bites 7 SerpentsTtuberculoses 6 TuberculosePneuronia 5 PneumonieParalysis 2 ParalysieOthers 14 Autres

Total 280 Total

1/ February 1981 through January 1982, l/ Fevrier 1981 jusqu'a janvier 1982 aexcept for Kayembe-Hukulu covering I'exception de ICayembe-Mukulu quiCY 1981. couvre l'annee calendrier 1981.

2/ 404 head. 2/ 404 tetes.3/ 89 head. 3/ 89 tetes.4/ 52 head. 4/ 52 tetes.

April, 1982. avril, 1982,

FIRST LIVtSO 4000 8 tRtCt - Ce. 398-S" I mum 0t DE 0918810 L' 91 - Ct. 398-21nigIA lAMW OF 813003 AX ITS nItADIL E ?1308CI732

197 19735 1976 1977 197s 1979 198D 1981 1972 1993 19S4 19 96 3952192 1M93*1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~15 U283 tll! 191>8, 18

I- 7. an"o ZS9 193 31 z2 187 6t 425 397 2O0 200 225 250 250 25D 250 Ct. 1 .ti .

2. o58.. o., 313 51S 700 688 1,463 3.358 5.292 10,03D 11,.0 13,2M0 I9z 15.2S IS,S0 0 5 I.600 16.400 C.0. d£2- 1t.12.0

472 711 731 713 1,650 3.924 5.717 10.427 11.700 13.400 14.750 16.050 16.050 16.050 16.650

3. 2oo 324 302 495 544 2.172 3.977 6.111 11,531 13.100 I 5,000 16,50 17,900 17 900 17.900 19.000 zo-ew de* Tea"

4. Oo t ft. (148) (487) (36) (169) 522 5S3 394 1,105 1,400 1,600 1.750 1,60 3,850 1.850 2.X50 19=1nn 9.

531C .iChWCtb..lOJ: 180 137 324 32 - 9_ 96 96 96 96 96 96 96 96 96 &..0f8 I oP "jet

5. Bc7.W.. _,. lC .18 te j1tt O3C8) (540) (160) (221) 522 461 299 1.009 1.364 1.506 1.654 1.754 1.754 1.754 2.254 M E 8. o0

6. J5000iaI 0t00 of 10t,: 36.57 El._l__ 6_

1. I7 t-t C-os 8 0 459 767 110 268 89 87 50 55 15 75 75 75 75 c o wat1sowts

2. 0 txt e 77 83 134 259 485 687 I ,55I 2,088 2,MO 2250 2.350 21 2.DO 24W 5 2.tOo C-ot. d-fty3 od

85 92 593 1,026 595 955 1.640 2.175 2.250 2.300 2.425 2.57S 2.575 2.579 2.673

3. 7re_,.. 2 3 32 83 145 428 60 2.053 2.2DO 2.350 2,700 2.950 2.950 2.95n 3.500 38O00 6.0V98.6

4. 3t B..0l. (83) (89) (561) (943) (430) (527) (980) (122) (505 S0 275 37 5 375 375 82 5 A.t"- .30

3.02oo 1tb-e 00J-c (12) (10) (10) (2) - - - - - - - - _ _ b 1. lo e3

S. lb tu h otlt.- 5|Ptael a

Co. to h olet (71) (79) (531) (941) (450) (527) (98D) (122) (50) So 275 375 )75 375 e25 n Me ___ ei-t

Too. 4. 80.140111186. n.0a001I itate of Rt.=:tO 0.892 T t

1. 2..t-t t,. tv aS 19 36 4 S9 255 86 100 125 125 325 125 125 125 125 COtO loWStlAtO

2. Oo.-oo Ct,. 93 124 196 311 418 756 1.232 1,479 1.100 1.575 1.650 1,650 1.650 1,6S0 b1650 Co. A oloft t e

18D 143 232 315 477 1.011 1,318 1.579 1.625 1,700 1.775 1.775 1.775 I3.7 1.775

3. Zo. 25 53 64 69 147 366 702 666 820 886 922 960 960 960 1.100 7Io 4d V.0

N ,t olaffit (355) (90) (168) (247) (330) 1645) (616) (913) (8S5) (614) (953) (815) (915) (815) (675) oA.803 80.

4. edfl. Vitt..- Proje.. (8) 11 12 7 8 10 30 10 10 30 10 30 10 10 13 690183 530 1Ie P. 30t

5. 801 AMtdio.1A e Lt. !8e 0 la2.w tolroo btoDae to rroo1.t (347)) (1033 (I00) (254) (338) (655) (626) (923) (815) (624) (863) (825) (925) 1825) (t85) TiX" dao, 1e!

_~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. n. Ce t*blllte6. F1L.001* 0000 of valorm, 8g.cioo P10.0180 lkg164

Mee''t tANC *S ODM88 ESSE9 3LE DES TbIS 65 W12eS

1. t._0t C s 252 221 525 794 356 539 600 584 375 375 47.5 4650 S0 450 0 CoOt. 1 7tit.

2. Opoo.tftg COOto 485 723 1.033 1.258 2.366 4.891 8,075 13.597 15.200 1,2 18S25 19.92 19,950 39,93' 23,630 CoOl. A6oo27o1O.oon

7}7 906 1.5S6 2.tl5 2,722 5.390 8.675 14,181 15.D75 17.400 18.950 230,00 20.400 2D, 6. 21.300

3. 20006 351 35a 791 6S5 2,464 4,771 7,473 14,251 16.120 18,236 Z3,322 21,810 21,81n 33.8' 23,600 koo 4.3 V1t003

80I 3a80it1 (386) (55S) (763) (I3,5 ) (258) (619) (1,202) 7° 545 836 1,172 1,410 1.410 1.410 2.5so 6A031.A 000e

a8t1t litboot OtojOet 140 140 126 57 8 102 106 106 106 106 106 106 106 106 106 A 0.0S 1 000100

4. let A.tditiool Ift4its -0000 5otoe-to3o4. 3 I 0 t ot9 It (526) (728) (891) (1,416) (266) (7ZI) (1,308) (3o) 439 7y3 1,056 J.J14 1.1,24 3.36 2.394 21.8. d. 441tt

d e 9.tobtitlte

5. filonciel Itte of gstoto 9.1S 3eODe?e0e: Y.n

DEtT rDV AVAII ARI r

- 72 -

Annex 5Table 1

ZAIRE

OFFICE NATIONAL DE DEVELOPPEMENT DE L'ELEVAGE

Kinshasa Headquarters

Balance Sheets (Z millions)

1981 1982

Fixed Assets 0.5 0.6

Current Assets

Debtors 0.1 0.4Personnel 0.3 0.2Net amount due by ranches 1.7 0.8Cash 0.9 1.1

3.0 2.5

Current Liabilities 0.4 0.3

Net current assets 2.6 2.2

3.1 2.8

Financed by:

Capital and Reserves 2.4 1.6

Long term Loans 0.7 1.2

3.1 2.8

- 73 -

Annex 5Table 2

ZAIRE

OFFICE NATIONAL DE DEVELOPPEMENT DE L'ELEVAGE

Kinshasa Headquarters

Income And Expenditure Accounts(Z millions)

Income 1981 1982

Service charges to production units 2.7 0.7

Sundry income 0.3 0.2

3.0 0.9

Expenditures

Salaries/Social charges 1.6 i.7Transport and other charges 1.6 1.4Sundry charges 0.3 0.6Depreciation and provisions 0.2 0.3

3.7 4.0

Net Loss for the year (0.7) (3.1)

- 74 -

Annex 5Table 3

ZAIRE

OFFICE NATIONAL DE DEVULOPPEMENT DE L'ELEVAGE (ONDE)

Consolidated Balance Sheet of *)NDE as of 31 December 1981

WLtnouL Projec:. With ProjectZ (mLLlions) Z (millions)

Fixed Assets 1.2 3.3

Guarantees over one year - 0.2

Cattle for reproduction 1.3 31.0

Current Assets:

Stocks 6.5 15.7Debtors 0.8 5.2Advances to suppliers 0.2 0.5Inter-ranch accounts 2.2 -Cash 1.2 3.2

10.9 24,6

Current Liabilities 0.7 4.1

Net Current Assets 10.2 20.5

12.7 55.0

Financed by:

Capital and Reserves 12.0 44.8Long term loans 0.7 10.2

12.7 55.0

- 75 -

Annex 5Table 4

ZAIRE

OFFICE NATIONAL DE DEVELOPPEMENT DE L'ELEVAGE (ONDE)

Consolidated Profit And Loss Accounts For Year Ended December 31, 1981

Without Project With Project

Sales 1.8 14.5Sundry Income 0.6 2.2

2.4 16.7Service Charges received 2.7 2.7

5.1 19.

Expenditures

Salaries/Social charges 2.9 6.9Transport and other charges 3.8 10.0Sundry charges 0.5 1.1Depreciation and provisions 0.6 1.9

7.8 19.9

Net Trading loss for year (2.7) (0.5)

- 76 -

Annex 6Table i

ZAIRE

FIRST LIVESTOCK DEVELOPMENT PROJECT - Cr. 398ZR

Procucer Beef Prices (Liveweight)

1974 1975 1976 1977 1978 1979 1980 1981

Producer Price 0.24 0.24 0.30 0.65 1.35 3.15 4.95 8.20:Current Z/kg)

,.N.P. Deflator 100 133.8 241.9 408.8 606.4 1221.8 1758,1 2427.2

teal Producer Price 0,24 0.17 0.12 0.16 0.22 0.26 0.28 0.34'1982 Z/kg)

- 77 -

Annex 7

COMMENTS RECEIVED FROM ONDE ON PROJECT COMPLETION REPORT

For Kapur/Info. de Capitani, Marshall

Re: Livestock I, Cr. 398-ZR

No. 0510 of November 8, 1983

We acknowledge receipt of completion report on First LivestockProject, Credit 398-Zr. We do not have any specific comments to make; thereport seems objective to us. We would point out, however, that theresults as of the project completion date, i.e. December 31, 1981, shouldbe considered as the results of the first phase of the project; resultsregarding financial return and production in the twelfth year, i.e.December 31, 1985, should also be considered.

We believe that the efforts to remedy the apparent weaknessesduring the first three years have been sustained and that many areas ofweakness are presently showing improvement, especially the accounting andfinancial management system, training following the IDA Credit forTechnica'l Assistance and ONDE's organ'zation. We would also note that theprice policy has been improved by the Government following the decreeliberalizing agricultural prices, which has a favorable impact on thereturn from the ranches.

The role of ONDE has been clarified by the Government, which isno longer envisaging privatization of ONDE, whose function will continue tobe to act as a production agency by developing the ranches throughself-financing or bank credit without state subsidies, to serve theGovernment in an advisory capacity in setting livestock policy, and to helppromote medium-size stock farms through training and advisory services.

Dr. Mpiana Yenga Di N'TuPr6sident Dglggug GgngralONDE

- 78 -

CHART I

ZAIRE

OFFICE NATIONAL DE DEVELOPPEMEN D '. 'ELEVAGE

O.N.D.E.

Organlration Chart

tinistryof

Agricultnre

Boardof

Directors

Cha irmnan

ManxagingDirector

HEADQUARTERS Admi t rat ion& Sechnical Personnel

- Kinshasa Finance Dept. Department Department

Lubunbeshl REGIONAL OFFICE Office

FI-ELDPRODUCTION i tb y R e Xare|Slaughter ueterinary'JNITS n - Rbub - NDjili llouses Inary

POOL SLID - … ----- --a P -L buRani

- -- - -- POOL SUD - -POOL NORD

miATr 2

ZAIRE - HINISTRY OF AGRICULTURE ORGANIZATION 1/

CABiNETSenior Adviser

KINISTER - 2 AdvisersSecretary Agricultural) ONDE LLvestockTypist Parastatals ) OZACAP Coffee

INERA Research

|St.t. Sec rtar State Secretaryl

Rural Devel:pmoent- 20 Projects Agriculture - 34 Pro,jects

Rural Rural Rural Equipe -Division Studies and Animal Health Crop Administration Regional

Engineering Protioton Economics Polyvalent Unique' Agricultural and Producction Production DivisLon Agrlcultural

Policy Organizarion

- MAPpins - Cooperatives - Studies - Flnance I

- StiatIca - Animal Health - Personnel Region

- Construction - Extenaion and - Agricultural - Inter- - Personnel 65 Staff (4 officesa)

and Rural Assistance to Credit Disciplinary - Finance Sub-Region

Roads Farmers teams - Training - Animal Froduc- (Accountlng I I

- Trade and Infor- tion and Financial Zones

msation (3 offices) Control) I

W water - Social - Training 150 Staff Location

Promotion and Courses - Aninal Food

- Asriculture - Activities - progr-a- ng

Kechanization and iLudies- Project

Supervision

T TrainingUnit Technical Assistance: FAO for Agricultural Statistics; 2 French experts for training

and infurmatloni 3 technical assistants to studies and planling. Expect 4 new assistants- Secretariat under USAID project; 4 technical assistants In Anlmal Health Division; 2 technical assistants

in Administration Divison.

The Secretariat has 3 technical aasistantas. 2 agricultural engineers, plus

one sociologist, in addition to a "eredit cell'. supported by, FAO andreporting directly to the State Secretary.

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