SCCD: G.G.

AFRICAN DEVELOPMENT FUNDTCH/PAAL/2002/01

Language: EnglishOriginal: French

APPRAISAL REPORT

PASTORAL LIVESTOCK SYSTEM SUPPORT PROJECT

REPUBLIC OF CHAD

NB: This document contains errata or corrigenda (see Annexes)

DEPARTMENT OF AGRICULTURAL AND RURAL DEVELOPMENT OCARCENTRE-WEST OCTOBER 2002

TABLE OF CONTENTS

Information Brief, Currencies and Measures, List of Tables, List of Annexes, List of Acronyms, Abbreviations,Basic Data, Project Logical Framework, Executive Summary

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1. PROJECT ORIGIN AND HISTORY

2. THE AGRICULTURAL SECTOR2.1 Background2.2 Land Ownership System2.3 Organisation of the Smallholder Area2.4 Poverty Profile2.5 Gender Issues2.6 Agricultural Sector Constraints and Potential2.7 The Credit System2.8 Agricultural Sector Development Policies

3. THE LIVESTOCK SUB-SECTOR3.1 Importance of Livestock in the Chadian Economy3.2 Livestock Systems and Production Parameters3.3 Stock Feeding and Health3.4 Marketing, Pricing and Consumption of Livestock Products3.5 Sub-sector Institutions3.6 Constraints and Potentials3.7 Livestock Sub-sector Policy3.8 Donor Intervention

4. THE PROJECT4.1 Project Design and Rationale4.2 Project Impact Area and Beneficiaries4.3 Strategic Context4.4 Project Objectives4.5 Project Description4.6 Productions, Markets and Prices4.7 Impact on the Environment4.8 Social Impact4.9 Project Cost4.10 Sources of Finance and Expenditure Schedule

5. PROJECT IMPLEMENTATION5.1 Executing Agency5.2 Institutional Arrangements5.3 Implementation and Supervision Schedule5.4 Procurement Arrangements5.5 Disbursement Arrangements

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778889111112

1313141516162020212223

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TABLES OF CONTENTS (contd.)

5.6 Follow-up and Evaluation5.7 Financial Statements and Audit Reports5.8 Aid Coordination

6. PROJECT SUSTAINABILITY AND RISKS6.1 Recurrent Expenses6.2 Project Sustainability6.3 Major Risks and Attenuating Measures

7. PROJECT BENEFITS7.1 Financial Analysis7.2 Economic Analysis7.3 Social Impact Analysis7.4 Sensitivity Analysis

8. CONCLUSIONS AND RECOMMENDATIONS8.1 Conclusions8.2 Recommendations and Conditions for Loan Approval

9. ANNEXES

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LIST OF TABLES4.1. Summary of Project Cost Estimates by Component4.2. Summary of Project Cost Estimate by Expenditure Category4.3. Sources of Finance4.4. Expenditure Schedule by Category and Source of Finance4.5. ADF/Government Financing4.6. TAF/Government Financing4.7. Expenditure Schedule by Component4.8. Expenditure Schedule by Source of Finance5.1. Arrangement for the Procurement of Works, Goods and Services (UA million)6.1. Recurrent Expenses Per Annum (UA million)

LIST OF ANNEXESAnnex 1. Map of Project LocationAnnex 2. Provisional List of Goods and ServicesAnnex 3. Summary of Economic AnalysisAnnex 4. Summary of Environmental and Social Management Plan (PGES)Annex 5. Bank Group OperationsAnnex 6. Project Organisation Chart

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No. Pages111211

This Evaluation Report was prepared by Messrs. M. L. Kane Agricultural Economist, Mission Leaderand M. Berekoutou, Livestock Specialist, Mrs. R. N. BA, Gender Specialist and a ConsultingLivestock Economist, following an appraisal mission to Chad in July 2002. For further informationon the project please contact the authors, or Mr. O. Aw, Division Manager, OCAR.3, Extension 4122,or Mr. C.R. Spencer, Director, OCAR, Extension 4152.

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AFRICAN DEVELOPMENT FUND01 BP 1387 ABIDJAN 01

Tel.: (225) 20 20 44 44; Fax: (225) 20 20 40 39

PROJECT INFORMATION BRIEF

Date: September 2002

The information given hereunder is intended to provide some guidance to prospective suppliers,contractors, consultants and all persons interested in the procurement of goods and services forprojects approved by the Boards of Directors of the Bank Group. More detailed information may beobtained from the Executing Agency of the Borrower.

1. COUNTRY : Chad

2. NAME OF PROJECT : Pastoral Livestock System Support Project (PASEP)

3. LOCATION : Sahelian and Sudano-Sahelian Region

4. BORROWER : Republic of Chad

5. EXECUTING AGENCY : Project Implementation Unit Within the Ministry of LivestockBP 750, N’djamena, ChadE-mail: pasep@intnet.tdTel: (235) 52 72 18; Fax (235) 52 72 17

6. PROJECT DESCRIPTION: All project outputs will be jointly financed by the ADF andOPEC. Components are ADF/OPEC components and as follows:

A. Enhanced professionalisation of livestock operators,B. Support to production, processing and marketing,C. Building the capacity of service providers, andD. Project management.

7. TOTAL PROJECT COST : UA 24.14 millionForeign exchange : UA 16.36 millionLocal currency : UA 7.78 million

8. BANK GROUP LOANADF : UA 14.64 millionForeign Exchange : UA 10.55 millionLocal currency : UA 4.09 million

9. OTHER SOURCES OF FINANCINGTAF : UA 0.93 millionOPEC : UA 6.17 millionGovernment : UA1.97 millionBeneficiaries : UA 0.43 million

10. DATE OF APPROVAL : November 2002

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11. PROBABLE START-UP DATE AND DURATION : June 2003; 5 years

12. PROCUREMENT OF WORKS, GOODS AND SERVICES :

Works, goods and services will be procured in compliance with the relevant Bank rules ofprocedure. Contracts for works, goods and services will be awarded to consultants recruitedthrough international competition based on a short list. The communications expert, the firm forcivil works and environmental follow-up will be selected through national shopping from a shortlist. Construction and development works will be procured through national competition.

13. CONSULTANCY SERVICES REQUIRED

114 person-months of technical assistance will be required for extension services, micro-finance and financial and accounting management. Consultants will be required for group survey,marketing, produce inspection and certification, follow-up-evaluation, contract award, auditing,midterm review, and training, for a total of 82 person-months.

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CURRENCY EQUIVALENTS(Current rate in July 2002)

Currency Unit : CFA FrancUA 1 : CFAF 874.915UA 1 : US$ 1.33046UA 1 : Eur. 1.41131

FINANCIAL YEAR1 January – 31 December

WEIGHTS AND MEASURESMetric System (SI)

LIST OF ACRONYMS AND ABBREVIATIONS

ASDEC Association for the Development of Savings and CreditASETO East Chad Livestock Sector Support ProjectBEAC Bank of Central African StatesCACIMIR Framework for Consultation on Rural Area OperationsCEC Savings and Credit FundCEMAC Economic and Monetary Community for Central AfricaCESPEL Livestock Policy Regulatory and Follow-up Study CommitteeCNAR National Research Support CentreCONAMAC National Council for Associative and Community Movement SupportCOOPEC Savings and Credit CooperativeDAOA Animal Food StuffsCSDR Rural Development Sectoral ConsultationDARNA National Chadian NGO (Notre Pays)DDPAP Animal and Range Productions Development DirectorateDSSP Statistics, Follow-up and Planning DirectorateENATE National School for Livestock TechniciansFIDEL Inter-professional School for Livestock DevelopmentFNE National Livestock FundGDS Health Protection AssociationGIE Community Interest GroupGIP Pastoral Livestock Interest GroupHDI Human Development IndexMFI Micro-finance InstitutionITRAD Chadian Research Institute for Agronomic DevelopmentLNRVZ Farcha National Veterinary and Zootechnical Research LaboratoryMAGAVET Veterinary Equipment and Products Supply StoreOHADA Organisation for the Harmonisation of Business in AfricaPACE Panafrican Programme for the Control of Animal EpidemicsPARC Panafrican Campaign for Rinder Pest ControlPIDR Rural Development Intervention ProgrammePSAP Agricultural and Range Services ProgrammeSIM Contract Information System

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PROJECT MATRIX: PASTORAL LIVESTOCK SYSTEM SUPPORT PROJECT

HierarchyOf Objectives

Objectively Verifiable Indicators Means ofVerification

MajorAssumptions/

Risks

Sector Goal:Contribute to poverty reductionin Chad.

1.1. The contribution of livestock to the agriculturalGDP is up from 32% to 35% at the end of theproject.

1.2. Per capita meat and milk consumption perannum up by 10% as of 2005.

National statistics ofthe MF&PSocio-economicsurveys.

Specific Objectives:Increase animal productionswith a view to stepping up theincomes of the beneficiaries inthe long term.

1.3. Animal production in the project impact areasup by 20% in 2007.

1.4. Incomes of stockbreeders up by 20% in 2007.1.5. Controlled exports of live cattle up by 10% as of

2005.

Project status reports.Supervision andreview reports.Specific studies,surveys, etc.

Climatepropitious.Socio-politicalsituationstable.Prices stable.

Outputs:A. Enhancedprofessionalisation ofoperators

1. Groups and associationscreated and strengthened.

2. Training infrastructure andmeans of communicationavailable.

B. Support to production,marketing and processing

3. Animal productionsdeveloped by infrastructure andfacilities managed using theparticipatory approach.

4. Marketing more efficientthanks to knowledge of marketsand better hygiene.

5. Processing capacity built.

1.1. 250 stockbreeders associations created including50 by women, 250 GIP given renewed impetus, 90cattle traders groups and 90 butchers’ associations setup and operational in 2005.1.2. 100 operators and inter-professional unionsestablished and operational in 2005.1.3. 15 training units set up and equipped in 2004;1.4. 150 savings and credit funds, 20 unions ofsavings funds and a national federation are set up2006.1.5.10.000 operators including 5.000 women areliterate and 2.000 auxiliaries are trained in 2006;1.6. 20 pastoral housewives trained and established in2005.

2.1. 15 local training centres opened in 2004.2.2. A communication system operational in 2004.2.3. 2500 officers including at least 500 women aretrained in the management of their organisation in2004.2.4. 18 training sessions on professionalisationorganised for 450 persons including at least 50women.2.5. 10 000 stockbreeders including 5 000 womenliterate in 2007.

3.1. 1500 km of migratory herding passagewaysidentified, acknowledged and marked in 2007.3.2. 80 stock watering wells drilled, 30 ponds fittedout, 6 watercourses parcelled out in 2007.3.4. 50 livestock schemes established in 2007.3.5. 1.500 km of delivery service roads marked outand equipped with 20 wells in 2005.

4.1. 25 cattle markets built and equipped in 2006.4.2. 10 border export formality points built andequipped in 2007.4.3. An information network on Cattle Markets inChad extended to include 10 cattle marketsoperational in 2004.5.1. 40 slaughtering areas and 30 butchers’ shedsbuilt and equipped in 2007.5.2. 80 technicians given continuous training inanimal food inspection in 2007.

PIU and follow-up-evaluation reports.Reports of experts andconsultants.

PIU and follow-up-evaluation reports.Reports of experts andconsultants.

PIU and follow-up-evaluation reports.Reports of experts andconsultants.

PIU and follow-up-evaluation reports.Reports of experts andconsultants.

PIU and follow-up-evaluation reports.Reports of experts andconsultants.

PIU and follow-up-evaluation reports.Reports of experts andconsultants.

Regulardisbursementof counterpartfunds.

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C. Building the capacity of theservices providers

6. Support to andstrengthening of public andprivate service providers.

D. Project Management

7. Project ImplementationUnit set up and operational.

8. Steering Committeeestablished and operational.

6.1. The Epidemic-surveillance network and itsregional diagnosis laboratories functional in 2004.6.2. 50 sectors/veterinary units. 5 delegationsoperational.6.3. At ENATE. 6 classrooms built and equipped in2005.6.4. A food inspection and certification centre built,equipped and operational in 2005.6.5. 3 officer scholarships a year. 10 specialisationgrants. 50 retraining grants per year for techniciansprovided in 2007.

7.1. PIU staff recruited in year 1.7.2. PIU premises rehabilitated in year 1.7.3. Technical assistants recruited in year 2.

8.1. Members of the PC appointed in year 1.PC meets at least twice a year.

Recruitment decree;Works deliverycertificate.Contract with the TA.

Appointment decree.Minutes of meetings.

Stability ofstaffseconded.

Key activities:1. Create groups.2. Create CEC and FIDEL.3. Establish a communicationsnetworks.4. Create inter-professionalnetwork;5. Sink the wells; build markets.Ponds, corridors, slaughteringareas.6. Set up the RESIMAT.7. Build, rehabilitate and equipthe ENATE, sectors/veterinaryunits and delegations.8. Build. , equip and makeoperational an animal food stuffcertification centre;9. Train, retrain and supportME officers of privateveterinary surgeons, serviceproviders and ME.10. Stabilise the banks for theprotection of the LRVZ site.11. Recruit staff.12. Launch the various BDs.14.Purchase equipment.15. Recruit consultants.16. Prepare quarterly reports.17. Conduct audits.18. Follow-up and evaluate.20. Prepare completion reports.

Resources: UA 24.14 million

1. Financing (UA million)Source F.E L.C.TotalADF 10.55 4.09 14.64TAF 0.73 0.20 0.93OPEC 5.09 1.09 6.17GVT 0.0 1.97 1.97Beneficiaries 0.0 0.390.43Total 16.36 7.78 24.14

2. Budget (in UA million)Component A: 6.58 (27.25%)Component B: 11.61 (48.09%)Component C: 3.30 (13.68%)Component D: 2.65 (10.98%)

Total: UA 24.14 million

Human ResourcesNational officersExpertise and consultants (p/m)

1. Duration of Project

5 years (June 2003-June 2008)

1. List andcomposition of POs.2. Minutes of POactivities.3. Amounts depositedin the CEC.4. Agreements withspecialised services.5.Progress andsupervision reports.

Decree appointing theofficers and staff.Contract with expertsand TAs.Progress andsupervision reports.

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EXECUTIVE SUMMARY

Project Origin and History: the diversity of Chad’s agro-ecologic systems makes it a country with amixed farming vocation, where one third of the rural population lives exclusively on livestockproducts. In 1986, the ADF alongside the World Bank, the French and Netherlands CooperationDepartments financed a National Livestock Project (PNE) which was implemented between 1989and 1999. Upon completion of the PNE and in response to the Government’s request of June 2000,the Bank accepted to finance the Pastoral Livestock System Support Project (PASEP) with a view toconsolidating the achievements of the PNE on the one hand, reducing poverty and boosting thecountry’s food security, on the other.

Bank Group Loan: the ADF loan of UA 14.64 million represents 60.64% of total project cost andwill be used to finance 64.48% of the foreign exchange cost (UA 10.55 million) and 52.57% of thelocal currency cost (UA 4.09 million).

Project Objectives: the project’s sector goal is to help reduce poverty in Chad. The specificobjective is to increase animal production so as to increase the incomes of the beneficiaries in thelong term.

Project Outputs: the ADF and OPEC will finance jointly all project outputs with the participation ofthe Government and beneficiaries. Outputs include: strengthening and supporting associations ofstockbreeders, cattle traders and butchers through increased professionalisation, introducing localand national representatives of the profession; helping to train operators; encouraging thecompetitiveness of livestock products by modernising production (livestock facilities and schemes),marketing (cattle markets and alleys), processing infrastructure (slaughtering areas, butchers’ stalls)and building the capacity of service providers (rehabilitation of some outreach structures,certification of animal food stuffs).

Project Costs: total project cost is CFAF 21.12 billion net of taxes and custom duties or UA 24.14million.

Sources of Financing: the ADF will provide UA 14.64 million of project funds, TAF UA 0.93million, OPEC UA 6.17 million, the Government UA 1.97 million and beneficiaries UA 0.43million.

Project Implementation: the project should be implemented in 5 years by a unit set up within theMinistry of Livestock (ME). It will work in close collaboration with the ME technical directoratesconcerned, ENATE and private institutions.

Conclusions and Recommendations: the project is a priority for Chad and will contribute toreducing poverty and improving the country’s food security. All livestock operators are concerned.The PASEP will contribute to professionalisation, promoting the competitiveness of all pastoralsub-sectors and building the capacity of service providers. With an economic rate of return of 24%,the project is cost-effective. In view of the foregoing it is recommended that an ADF loan notexceeding UA 14.64 million be granted to the Government of Chad for the purpose of implementingthe project as described in this report, subject to the conditions laid down in the Loan Agreement.

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1. PROJECT ORIGIN AND HISTORY

1.1. The diversity of Chad’s agro-ecological systems makes it a country with an agro-pastoralvocation where one third of the rural population live exclusively of livestock products. In 1986, theGovernment obtained from the African Development Fund (ADF), the World Bank as well asFrench and Netherlands Cooperation Departments, funds for the National Livestock Project (PNE),devised as the first phase of a 15-year programme to revive the livestock sub-sector so that itscontribution to the national economy improves. Implemented from 1989 to 1999, the PNE made itpossible to lay the bases for the development of livestock in Chad. A completion report on theproject was written in 2001. Overall, the PNE met its objectives because it led to the constructionof the headquarters of the Ministry of Livestock, the training of officers, the creation of a livestockfund, a start to the privatisation of veterinary services, the liberalisation of veterinary input supply,the rehabilitation and privatisation of the refrigerated slaughterhouse in Farcha and the protection ofpart of the bank of the river Chari a threat to the slaughterhouse. However, the objective to increaseproduction did not lead to better incomes or a higher standard of living for the pastoralists.

1.2 Nonetheless, who belong to Chad’s poorest population stratum continue to carry out theiractivities in a hostile and harsh environment. Forced into long periods of migration in search ofwater and pasture for cattle, the pastoral livestock system exercises pressure on natural resourcestriggering conflicts between those who use the resources. Despite a large stock, myriad constraintsweigh down on the system thereby weakening productivity and reducing the incomes of theherdsmen and maintaining them in a state of never-ending poverty. Demographic growth coupledwith the first oil era, have imposed a high demand for food both in quantity and quality, that thecountry must meet particularly with livestock products. Against such a challenging backdrop, theGovernment intends to give breadth and depth to livestock and make it one of the priority sectorsthat could reduce poverty in the rural area and boost food security. Therefore, during its FourthRound Table held in October 1998 (Geneva IV), followed by a sectoral consultation on ruraldevelopment held in N’djamena in June 1999, the Government listed the livestock sub-sector as oneof the priorities of its strategy for rural development geared to increasing agricultural incomes,reducing poverty while protecting the environment.

1.3 At the end of these consultations, the Government applied to the African Development Fundin June 2000, which accepted to finance the Pastoral Livestock System Support Project (PASEP).PASEP was thus identified during a multi donor mission to Chad in February 2001. Thanks to aProject Preparation Fund (PPF) of UA 400,000 from the ADF, the Government prepared the projectwith the participation of pastoralists’ associations, rural communities and partners. This appraisalreport is based on the findings of the preparation report, consultations and discussions with theauthorities, social partners, civil society, donors, and field trips during the ADF appraisal mission toChad in July 2002. Once implemented, PASEP will make it possible to consolidate theachievements of the PNE on the one hand, help reduce poverty and boost food security, on theother.

2. THE AGRICULTURAL SECTOR

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2.1.Background

2.1.1. Landlocked and spread over 1 284 000 km² Chad boasts four agro-ecological zones over alength of 1.800 km from North to South: i) the Saharan or desert zone with a rainfall of less than200 mm a year; ii) the Sahelian pastoral zone with an annual rainfall of 200 to 400 mm and asteppe-like vegetation; iii) the Sahelo-sudanese or Sahelian agro-pastoral zone where 400 to 700mm of rain falls every year covers nearly 1/5 of the country; iv) the Sudano sub-humid zone and its700 mm of rain per annum as well as 1,200 to 1,400 mm in its southern sections and tree savannah.Apart from Lake Chad, the country encloses several watercourses, ponds and valleys such as theBatha, Ouadi Rime, Barh Azoum, Bahr Erguig, Logone, Pende, Chari, etc.

2.1.2. With a population estimated at 7.3 million in 1999 by the Central Census Bureau, Chad laysclaim to an average density of 5.8 inhab/km² with differences varying between 0.1 inhabt/km² inBorkou-Ennedi-Tibesti and 63 inhab/km² to the South of Western Logone. More than 85% of thepopulation live of agro-pastoral activities.

2.1.3. A breakdown of total agricultural production shows 52% of food crops, 9% of cotton and39% of livestock and fisheries. The following five sub-sectors take pride of place: cotton, with anaverage annual production of 200 000 tonnes, an income of CFAF 49 billion in 1997/98 and CFAF27 billion in 1999/2000, for 380 000 producers and CFAF 117 billion for livestock in 2001; 100 000households produce 45 000 tonnes of paddy for an estimated income of CFAF 1.6 billion a year;groundnut involves 470 000 farms with 250 000 tonnes of shells and CFAF 10 billion of incomeannually; and about 12 000 tonnes of gum Arabic are produced for a value of CFAF 7 billion everyyear.

2.1.4. Regarding the fisheries sub-sector, marine stock has declined as a result of repeated droughtsand unreasonable fishing practices. There are numerous expanses of water, a wide variety ofspecies (135) and a large number of operators (300 000). The average annual production isestimated at 80 000 tonnes. An ADF-financed study is underway to prepare a master plan andpropose a priority fishery and fish farming development project.

2.1.5. Forests cover about 230 000 km² or 18% of Chad’s surface. These forests are strewnprimarily with various species of acacia (A. senegalensis, A. seyal, A. mellifera). Weather hazardsof recent decades, over-grazing and excessive felling of trees have caused the forest cover to recedeexposing thereby the soil to intense erosion. Fruit tree growing is rather limited and practised in theoases and Sudanic areas.

2.2. Land Ownership System

2.2.1. In Chad, land belongs officially to the State. A land code clearly spells out the conditions forland development which should take concrete expression by at least a permanent and visible print inthe soil. The right of usage for agricultural activities and land reclamation are explicitly dealt with.Alongside the land code, traditional land regulations established by traditional authorities stillpersist. This duality sometimes leads to conflicts over the use of land and access to naturalresources. The attendant decisions are often detrimental to women. The ongoing decentralisationprocess focuses on sedentarisation and is prompting pastoralists to make considerable concessionsin the use of grazing land.

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2.2.2 The main text regulating land is decree n° 23 of 22/7/1967 relative to public property andcustomary law. The latter does not call to question the rights of the rural population who continueto be legitimate holders of land that is occupied and farmed. The only infringement on customarylaw is Article 16 according to which rural dwellers who refuse to enjoy customary rights lose themafter 10 years. Conversely, Article 21 of decree n° 186 of 1/8/1967 gives priority to land used foragricultural and forest development or animal husbandry by making it easier to obtain official titledeeds to land.

2.2.3 The Water Code of 18/8/1999 gives much importance to livestock. Water requirements foragro-pastoral activities are ranked second after drinking water. The Mediature, a public institutionfor the official regulation of conflicts, has listed among its priorities the settlement of conflictsbetween farmers and stockbreeders by virtue of the Decree relative to the statute of decentralisedrural communities that has led to a bill on range management currently being tabled in the NationalAssembly.

2.3. Organisation of the Smallholder Community

2.3.1. Chad’s smallholder community features numerous types of groups including women’sassociations found predominantly in the Sudanese zone. The principal legal instruments regulatingsocio-professional organisations in Chad are: Order n° 27/INT/SUR of 28 July 1962 defining therules of an association; Decree n° 165/INT/SUR concerning the procedures and practical modalitiesfor declaring and managing associations, including stockbreeders associations, and Order n°025/PR/92 concerning the status of cooperative groups, applicable to pastoral interest groups (GIP),health defence groups (GDS), their unions and federations. These groups may enjoy economic andfiscal advantages pursuant to the texts in force. The economic interest groups (GIE) are governedby the provisions of OHADA which became effective in Chad in 2000 and which offers advantagesfor statutory laws, legal personality and tax exemption.

2.3.2 Traditional organisations have been grounds for the responsibility of community and socio-economic activities that projects and NGOs have been supporting. Traditional hierarchy also comesinto play in the organisation of resource management and conflict settlement. As far as women areconcerned, such organisations seem to be a means of emancipation, a tool for communicating withthe outside world and for access to means of production and marketing. The diversity of theactivities of such structures represents a considerable source of wealth but a clarification of thevarious functions they perform would be justifiable. Moreover, their limited or poorly defined“financial bases” testifies to a low capacity for collective management which requires majoradvisory and training support. The high illiteracy rate is generally considered a constraint to lift.Federative organisations are few and often not functional.

2.3.3 The principle of administrative decentralisation has been established by the Constitutionalthough the legislative process to lead to its implementation is at a teething stage. Act002/PR/2000 establishing the Statutes of Decentralised Territorial Authorities (CTD) and Decree003/PR/2000 establishing the Electoral System of the CTDs have been adopted. The latter havebeen endowed with a legal personality and financial autonomy and divided into 4 levels: RuralCommunity Authorities, Communes, Departments and Regions. The process has the support of thedonor community. However, it is yet to become effective in the field. Some Services (livestock forinstance) have peripheral units (regional delegations, sectors, electoral districts, etc.). Thedecentralisation process must be taken into account in the design of every development projectinvolving grassroot associations and communities which should prepare their own programmes to

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submit to the Departmental Committees for approval and funding by the local development fundwhich the donors of the PIDR will finance.

2.3.4 Concerning livestock, the PNE has prompted the creation of organisations by setting out astrategy for intervention and transfer of responsibility and building the capacity of officers of theprofession. Almost 500 groups have been set up in ten years but some have disappeared for lack offollow-up. The existing organisations take active part in community activities. The capacity ofsuch groups to manage, prepare and implement local development plans must be built. Studiespreparatory to this project suggest the need to continue promoting these associations of women,pastoralists, cattle traders and butchers in the pastoral areas. Assistance to the developmentcommittees in the impact area and to the professionalisation of operators will ensure a better labourproductivity, make products more competitive and help manage conflicts that may restrict theirprofession.

2.4. Poverty Profile

2.4.1 Judging from Chad’s composite indicators it is one of the poorest countries in the world.Indeed, if one refers to UNDP’s HDI the country ranks 167 out of a total of 174 countries classifiedin 2000, down 5 places from 1999. In 1997, the poverty threshold was estimated at 54.6%. Thehuman poverty index (HPI) for Chad was estimated at 57% in 2000; in other words 57% ofChadians have a low life expectancy and cannot meet the basic health, education, economic andwelfare requirements. The per capita income rose from 221 to 225 US dollars from 1999 to 2001,although it is the lowest of the BEAC member countries.

2.4.2 Poverty is more pronounced in the rural than urban area. The poorest households are found inBiltine and Ouaddaï (about 60% of poor households). In the rural area, such households lackadequate means of production to grapple with a hostile agro-climatic environment. In the urbanarea, more often than not the unemployed, unskilled, war-disabled, demobilised soldiers, widowsand divorcees make up most of the poor households.

2.4.3 A large number of the poor also belong to the so-called marginal groups. In the area ofeducation and training the crude enrolment rate at primary level has improved; up from 57.5% in1996-97 to 71.6% in 1999/2000 for boys and 54.6% for girls) against regional disparities betweengirls and boys. In 1999, 50% of adults were illiterate. In the area of health, the infant mortality ratewhich was 103 deaths for 1000 live births over the 1992-1997 period rose in 1999 to 105.1 againstthe average for Africa of 76.4. The immunisation coverage is low and the main cause of morbidityof the under fours. The maternal mortality rate for its part dropped from 900 for 100 000 in 1990-1996 to 827 in 1996-1997 but remains higher than the African average of 698 in 1990-1996. Thus,life expectancy at birth from 50 in 1993 fell to 48.5 years of age in 1999.

2.4.4 Lastly, according to the people consulted during PRSP’s preparation, a long spell of war andpolitical instability, poor governance, inadequate gender enhancement, lack of adequate means ofagricultural production, deterioration of the environment, lack of paid employment, difficult accessto health services and quality education, drinking water, electricity, land and a adequate housing aremajor poverty factors.

2.4.5 The core elements for the poverty reduction strategies have been defined in the PovertyReduction Strategy Paper (PRSP), which is being fine-tuned. The strategy has been on course since2001 and is hinged on the following 5 axes: improving the social, legal, political and economicenvironments; ensuring strong and sustainable growth; developing the human capital; improving the

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living conditions of the vulnerable and victims of HIV/AIDS, tuberculosis and malaria; restoringand protecting the ecosystems; strengthening the regulatory framework and the capacity to managenatural resources and controlling deforestation and desertification.

2.5. Gender Issues

2.5.1. Women account for 52% of a population of 7.3 million. Social barriers and a youngpopulation mean a high fertility level. The infant-juvenile mortality rate is 103 for 1000, that ofmaternal mortality 150 for 1000; HIV/AIDS prevalence rose from 3% to 10% in 1999 whereasmalaria and tuberculosis remain endemic. Illiteracy affects 95% of women against 87% of men.The overall literacy rate is less than 60%. The crude enrolment rate was only 67.6 % in 1998/1999,with a rate of 84.6% for boys and 50.0% only for girls.

2.5.2 From an economic standpoint, the majority of women practice agricultural and pastoralactivities and have limited access to outreach, training and research, credit, health and informationservices. Their access to drinking water, sanitation, transport and communication is difficult.Polygamous women and heads of household are forced to work harder. The structure by gender ofactive workers suggests that 86% of women are occupied in agriculture, 7.8% in trade and 2.7% inthe administration. In the informal sector, women are occupied in small-scale trade and restorationwhere they outnumber the men (37 men for 63 women). In the area of livestock, they are veryactive in processing and marketing dairy products, tanning and drying meat. It is vital that women’sassociation be given some assistance if their activities are to improve.

2.5.3. Although according to Decree 23/24/25 of 22 July 1967 governing land ownership, allcitizens have a right to a land title deed, women by tradition have no or very little access to land,natural resources, especially fertile and reclaimed land. In the event of economic upheavals, themen go in search of other sources of income whereas the women hold on to their land. Sometimesforced to head the household, her hours of work increase to meet the needs of her family. In such acontext, women should be involved in the drive to reduce poverty, their health protected to ensurework in the production units and their capacity to take initiatives.

2.6. Agriculture Sector Constraints and Potential

2.6.1 The in-depth analysis of the rural sector carried out in 1999 by the CSDR revealed weak coreservices, lack of competitiveness of the sub-sectors, deteriorating natural resources, poororganisation and accountability of rural dwellers, inefficient public operations and jarringapproaches and uncoordinated players. Furthermore, findings suggest that sustainable ruraldevelopment in Chad will be possible only if the three fundamental “capitals” that is to say,productive, social and financial, currently threatened are maintained and reorganised.

2.6.2. Despite the above constraints there is still potential to tap. The lead sectors like cotton,livestock, fishing and gum arabic have development potential that must be financed andaccommodated because already in 2000, they accounted for 40% of the GDP at factor costs.Several other areas like shea, dried mango, cashew, sesame, hides and skins and spirulina are ofeconomic interest with possible outlets locally or abroad and therefore deserve to be developed andorganised.

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2.7. The Credit System

2.7.1. Chad’s financial sector boasts five commercial banks all based in N’djamena. They financethe cotton season exclusively, disbursing an average annual amount of CFAF 60 billion andmanaged by a single operator COTONTCHAD. The inadequacy of their financial products in thelight of the rural demand has led to the emergence of micro-finance institutions. Out of the 128structures listed (see working document, Volume II), 17 are independent and 11 are affiliated to 5mother institutions working along the lines of mutual principles. Most of these institutions comeunder the Decree of December 1992, establishing the General Statute of Cooperative Groups andCooperatives. Of those run independently, some come under the Decree of 28 July 1962, relative tothe Rules and Regulations for National and Foreign Associations. A National ConsultationFramework for the Development of Micro-Finance Institutions within the Ministry of Planning wasset up in June 2000, in the context of a wider poverty reduction programme.

2.7.2 With CFAF 635 million of deposits and savings collected, Chad’s micro-finance sectorrepresents 1.9% of the assets of individual clients held by the entire banking and financial sector.Credits to clients stand at 1.3 billion or 3.27% of all credit granted to the same private sector byfinancing organisations. There are 32,000 members or clients of services provided by micro-financeinstitutions. Such structures are located mainly in three areas, Moundou (37), Pala (21) andN’djamena (19). With the exception of the pastoral areas, thirty-eight other towns or localities haveat least one micro-finance institution.

2.7.3 The American NGO VITA-PROJECTS ENTERPRISES is a reference institution in Chadcreated in 1984. With a credit balance of CFAF 968 million, it accounts alone for 71% of themicro-credit activity. Replenished exclusively with external resources, VITA has not developedsavings operations. The consulting firm responsible for the liaison of charitable and developmentactivities (BELACD) prompted the creation and financing of the Mayo-Kebi Union of Savings andCredit Clubs (UCEC) and the Savings and Credit Funds Network Support Project (PARCEC),located in the region of Pala. Established in 1993, UCEC is also a micro-finance network that hasdeveloped in Chad. Its rate of converting available resources into credit is 44%. PARCEC has 6branch affiliates and is less developed. UCEC and PARCEC are financed by international catholicNGOs via the dioceses of the regions concerned. The Study Centre for the Promotion and Cost-effectiveness of Community Initiatives (CEPRIC) is a lawful Chadian NGO established in July1988, run with the support of World-Vision and accounting for 41 structures but has not developedsavings activities. The Association for the Development of Savings and Credit (ASDEC), set up1993, groups 19 rural savings and credit funds whose mission is to develop into professional mutualsavings and credit funds. Its resources are derived from various NGOs. Financed by UNDP, theUnion of Savings and Credit Cooperatives of N’djamena (URCOOPEC) was created in 1995 andgroups 8 cooperatives all located in the capital.

2.7.4. Chad is one of the countries to have benefited from the Bank’s pilot programme AMINA. Inthe context of the AMINA Programme later to become the Central Micro-finance Unit (COMU),micro-finance institutions operating in the country were identified in 1998. Eight (8) micro-financeinstitutions and NGOs (particularly URCOOPEC, SECADEV, ASDEC, AFTEC, UCEC, PARCEC,BELACD and ACORD) with a credit component were selected to receive institutional support.AMINA organised training seminars on credit management, internal control and inspection fromChad’s MFIs. Technical assistance missions were fielded to SECADEV, ASDEC and AFTECenabling them to improve the organisation and management of their institutions and develop newfinancial products. Two study tours were organised to Benin to make it possible for Chadian MFIsto familiarise with the experience of the Federation of Funds and Mutual Agricultural Credit of

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Benin (FECECAM) in recycling savings and in internal inspection and control of mutual funds.With a view to preparing the national micro-finance strategy in Chad, a delegation of Chadianexperts including MFI representatives visited Senegal in September 2002. Organised and financedby COMU/AMINA the trip enabled Chadian experts to familiarise with BCEAO regulationsgoverning micro-finance and take inspiration from the manner in which well-run Senegalese MFIsare managed. A set of 20 information technology units is en route for Chad so as to better monitorclients of Chad’s MFIs partners of AMINA. Lastly, COMU/AMINA has provided technicalassistance to restructure the credit component of the ADF-financed Cotton and Food CropProduction in the Sudanese Zone –PCPVZS.

2.7.5 A review of the number of clients of micro-finance institutions reveals that 24% of the latterhave at least 10 members while 51.4% account for more than 200 members. The average deposit isCFAF 28 000, paid at 3%. The average loan is CFAF 74 000 with an interest rate of between 12% ayear for short term credit, 18% a year for agricultural equipment loans, 24% a year for seasonalcredit, 30% a year for solidarity credit to women and 36% a year for credit to small and medium-sized enterprises. The sectors concerned are trade (55%) agriculture (36%) and livestock (8%); ascan be seen the interest in livestock is little.

2.7.6 The equity of the micro-finance institutions is estimated at CFAF 500 million including 380million of subsidies and endowment funds. 52 out of 76 declared structures display equity ofbetween CFAF 1 and 10 million. Only CEPRIC presented a consolidated balance sheet for 41 of itsaffiliates. Thus, 8 boast 1 million and 5 show a net negative situation. Out of 76 structures payingtaxes, 7 have net equity higher than 100% or enough to finance fixed assets. For those structurescollecting savings, the ratio of converting resources into credit varies between 20 and 62%. Thesoundness of financial institutions can also be measured by the solvency ratio (equity overoutstanding credit) that must not fall below 8%. Of Chad’s micro-finance institutions, 59 have asolvency ratio of 12% and 55 of 30%. Over 60% have a recovery rate of 90%.

2.8. Agriculture Sector Development Policy

The national strategy for the development of the rural sector was defined during the CSDRof June 1999. The Government’s political options that have guided the preparation of the strategyare: rationalisation of public intervention, State withdrawal, promotion of the private sector andgrassroot initiatives, promotion of equal access to public services and involvement of operators andusers in the sector’s management. The five specific objectives are: increase in production,emergence of the competitive sub-sectors, concerted and sustainable management of naturalresources, promotion of the rural area and improvement of public sector operations.

3. THE LIVESTOCK SUB-SECTOR

3.1 Importance of Livestock in the Chadian Economy

The livestock sub-sector contributed over 51% of exports, 12.7% of the national GDP and32% of agricultural GDP in 2001. Livestock keeps 40% of the population busy countrywide and80% in the rural area. Animal production is the main activity and often the only source of incomeand food of the dwellers in the Saharan and Sahelian zone where plant productions are limited byweather hazards. Productions are estimated at 87 000 tonnes of meat and 100 000 tonnes of milk,generating an overall CFAF 117 billion including CFAF 65 billions of exports in 2001.

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3.2 Livestock Systems and Production Parameters

3.2.1. There are three main livestock systems in Chad: transhumant, agro-pastoral and sedentarylivestock. The first two are better adapted to a naturally difficult pastoral environment where cattlemust graze over extensive rangeland. Mobility and the shifting lifestyles are privileged forms of thespace management strategy in a context where food resources fluctuate in time and space. There areoften conflicts between the transhumant and sedentary systems and a framework for consultationand settlement of conflicts must be defined. Incomes generated by agriculture are often investedinto livestock enabling thus the practice of mixed farming whereby fields can be manuredorganically and cattle fed on farm residues.

3.2.2. Zootechnical parameters are negligible. Natural growth of cattle is estimated at 2.46% perannum. In the absence of a comprehensive census exercise, official figures are under-estimated at 5800 000 cattle, 2 400 000 sheep, 5 200 000 goats, 1 200 000 camels, 350 000 horses, 360 000donkeys, 62 000 pigs and 24 million poultry. Species include: the arabic zebu (75%), m’bororo(3%), fulani (16%) and others (6%). The Sahel goat dominates the goat population, followed by thedwarf goat or kirdimi of the South. Sheep include the Arabic and Fulani type in the North and thekirdimi in the South. The annual weighted production per animal is 50 kg live/camel, 30 kglive/cattle and 5 kg live/small ruminant. The gross milk production is on average 600 l/cow and permilking session and 450 litres/camel and per milking session. Fertility rates vary between 100 and130% for small ruminants against 55% for cattle and sheep and 10% for camels. The annualmortality rate is around 10 and 20%. The annual growth rate of the herd is 20%-30% for smallruminants, 3.5% for cattle and 1.5% for camels. The exploitation rates are 25%-30% for smallruminants, 12% for cattle and 6% for camels. These parameters are low but consistent with theecological environment, which cause them. Their improvement will depend on the level of supportdrummed up to reduce mortality, improve health and provide cattle with the right feed.

3.3 Stock Feeding and Health

3.3.1. Natural pasture and harvest residues, highly dependent on rainfall remain the main sources ofcattle feed. The average production of the biomass varies between 300 and 1500 kg/ha/yr in theSahel region and 500 to 3000 kg/ha/yr in the Sudanic region. Large-scale dissemination of the PNEexperience in pilot pastoral schemes and renewed attention under the Pastoral Pilot Programme onintegrated range management will enable a control of transhumant agriculture and better feed forcattle. 45% of stock watering needs are met by surface water and 55% by underground wateralthough the quantities are far from adequate. Water requirements remain considerable and can bemet if wells are sunk and the existing ponds developed.

3.3.2. Animal diseases are dominated by cattle infections such as anthrax, fowl cholera andtrypanosomiasis. There are still cases of contagious bovine pleuro-pneumonia although no case ofcattle plague has been reported for several years. However, Chad remains the essential link to thehealth chain against cattle plague between West Africa and regions that are still contaminated inCentre and East Africa.

3.4. Marketing, Prices and Consumption of Livestock Products

3.4.1. Productions controlled by the public services are estimated at 640 000 heads of cattle and 1800 000 heads of small ruminants. These provide annually, 80 000 tonnes of beef and 36 000tonnes meat of small ruminants. Milk production is estimated at 20 million litres of milk and that ofhides and skins at 500 000 pieces. Out of 640 000 heads of cattle, 520 000 are exported. To that

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must be added 250 tonnes of meat of small ruminants, 20 million litres of milk, 500 000 cattle hidesand the marketed portion not taken into account by official services. Export prices are CFAF 200000/cattle and CFAF 30 000/small ruminant. In the domestic markets, prices are on average CFAF150 000 for cattle and CFAF 30 000 for sheep.

3.4.2 Several actors are involved in the trade of cattle and meat, each playing a specific role. The“guarantor” plays a lead role controlling action and ensuring protection against theft. Exports aresent to Cameroon, Central African Republic, Libya, Nigeria and Sudan. More than 90% oftransactions are done with Sudan and Nigeria. Dromedaries are exported to Sudan and Libya. Theherds move in droves both for domestic commercial purposes and for export. In the CEMACregion, N’djamena is the town where meat is cheapest (CFAF 800/kg) and the price differentials areby far in favour of Chad. The country’s comparative advantages in meat make it the main centre ofsub-regional supply especially to Nigeria. In addition, it is hard for the international market to beatdomestic supply for, because Chad is landlocked it is protected from imports. The hides and skinssub-sector is rather artisanal (120 000 processed skins) and its players lack training. Consequently,the quality of dried and tanned leather leaves much to be desired.

3.4.3 Only N’djamena, Abeche and Sarh have fenced slaughterhouses with acceptable facilities.The other towns only have slaughtering areas more or less adequately fitted out. The Farchaslaughterhouse in N’djamena built in 1957 rehabilitated by the ADF under the framework of thePNE and privatised in August 1999 is the main slaughtering house. In the secondary urban centresanimals are often slaughtered in the open because there are no slaughtering houses, making mattersworse for the Health Inspectorate and exposing the population to various diseases from consumingsuch meat (tuberculosis for instance).

3.4.4 In terms of kg/inhabitant/year, meat consumption is as follows: 10 countrywide, 9 in the ruralarea and 14 in the urban area. Fish consumption is 5 kg/inhabitant/year at national level and7kg/inhabitant/year in urban areas. That of milk is 9 kg/inhabitant/year at national level. In 2010,the requirements in meat will be higher than by 40% to those of 1999 or 102 000 tonnes against 73000 tonnes. Milk requirements will be around 90 million litres and those of fish 51 000 tonnesagainst 36 000 tonnes. The project should contribute to maintaining or better still improving thecurrent intake of animal protein.

3.5. Sub-sector Institutions

3.5.1. The livestock sub-sector is supervised by the Ministry of Livestock and under the technicalresponsibility of the General Directorate. Four technical directorates heading 2 or 3 divisions andthe regional livestock delegations are attached to the General Directorate (see details in workingdocument volume II). These are the Directorate of Animal Productions and PastoralismDevelopment (DDPAP), the Directorate of Statistics, Monitoring and Planning (DSSP); the FarchaVeterinary and Zootechnical Research Laboratory (LRVZ); the National School for LivestockTechnicians (ENATE); 5 regional delegations, 18 sectors and 98 veterinary units. An epidemic-surveillance network for Animal Diseases in Chad (REPIMAT) is the first stage of an epizootydetection and monitoring system although its operating capacity needs to be built. A natural pastureobservatory (ROPANAT) provides a reference base for ecological follow-up. Privatisation affected25 private veterinary units established in Chad, 3 wholesale importers of zoo-veterinary productsand 3 000 auxiliaries. The financial base of private veterinary agents is low and cannot meet thebasic requirements of the herdsmen in their region. There are too few private agents to cover thecountry’s needs therefore efforts must be made to train more and increase the number of auxiliaries.

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3.5.2. The human resource capacity of the ME stands at 77 veterinary surgeons, 3 agro-pastoralists,1 biochemist, 1 ecologist, 9 agronomists, 32 engineers (3 in design, 11 zoo-technicians and 18 inapplied sciences), 44 livestock techniques engineers, 16 livestock activity engineers, 80 livestockcontrollers, 334 technical livestock agents, 8 veterinary nurses, 3 geographers, 24 generaladministration officers, 43 contractual workers and 162 service agents. In the field, regionaldelegates, sector heads, heads of veterinary units are faced with inadequate or lack of workingmeans (office supplies, fuel, etc.). As a result of demotivation, technical supervision of theherdsmen has slackened. The main weaknesses of the Livestock Department lie in the demotivationof the supervisory staff, the difficulties in financing field services, the mismatch between skills andthe services expected in the area of control, regulation and supervision. Most of the buildingshousing livestock services are old, some have worn out roofs others have cracks in the walls and assuch a good many need repairs. In addition, premises should be allocated to some of thedecentralised services.

3.5.3 Apart from the State budget, a national livestock fund (FNE) was set up in 1990, thanks to thePNE, replenished with taxes collected from the sub-sector estimated at CFAF 500 million a year forthe purpose of financing the running of the ME. Unfortunately, the resources of this fund are paiddirectly to the Treasury and rarely reassigned to the Ministry. Steps should be taken to have thisfund reassigned to the Ministry and a portion allocated to beneficiaries. Thus, it will serve amongother things, for funding specific equipment, project operating costs and recurrent expenses.

3.5.4. The Ministries and institutions which collaborate with the Ministry of Livestock are: theChadian Institute for Agronomic Research (ITRAD) for research and development; the Ministry ofAgriculture for mixed farming and settlement of conflicts; the Ministry of the Environment andWater Resources for rural water supply and stock watering, the installation of firebreaks,reforestation and management of national parks and classified forests; the Ministry of the Interiorresponsible for decentralisation, which promotes involvement of farmer organisations in their localdevelopment.

3.5.5 The Economic Commission for Cattle, Meat and Fishery Resources (CEBEVIRHA) is aspecialised Institution of the Economic and Monetary Commission for Central Africa (CEMAC)1,responsible for the Meat and Fish Sub-sectors. Its tasks include working out policies fordevelopment, hygiene and development of by-products at sub-regional level. It is responsible forharmonising policies, training, and trading of meat products in the CEMAC area. In 1984, itproduced zoo-sanitary code that is being updated.

3.5.6. Of the NGOs assisting professionals, the Secours Catholique au Développement (SECADEV)provides support to mixed farmers in the Mongo, Bokoro and rural N’djamena region. It isinvolved in animal health, training of livestock auxiliaries and for small material loans to mixedfarmers. Some like BELACD, INADES, Darna, the Association for Rural Cooperation in Africaand Latin America (ACRAA), ACORD, Al Taoun and the Association for the Promotion ofCommunity Initiatives in Africa (APICA) are involved in the establishment of savings and creditfunds that would be useful to promote in the context of a development project.

1 CEMAC comprises Cameroon, Congo, Gabon, Equatorial Guinea, Central African Republic and Chad.

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3.6. Constraints and Potentials

3.6.1. Livestock activities in Chad are affected by various institutional, organisational, economicand technical limitations. Institutional constraints are dominated by illiteracy, poor training policiesand difficult communication; low operating capacity of public services; lack of reliable information;difficult conditions for export resulting in high transaction costs and limited competitiveness;restricted access to products and technical services; judicial insecurity of the herdsmen whichincreases their vulnerability and conflicts between farmers and herdsmen. Organisationalconstraints include the low professional level of operators; insufficient participation of organisationsin the sub-sector’s organisation and financing; deficient information on the sub-sectors and fewopportunities created or on offer to operators, as well as limited impact of research.

3.6.2. Economic constraints include inefficient control over the sub-sectors leading to poorcompetitiveness of livestock products and therefore insignificant share in the market; inadequacy ofthe regular financial systems against the credit requirements for livestock; lack of micro-creditstructures for the livestock sub-sector; inadequate facilities; the weight of legal and unofficial taxeson production costs; cattle theft, damage caused by wild animals, and low public and privateinvestment into the sub-sector.

3.6.3 Technical constraints include: difficulties arising from the practice of migratory farming; lowproductivity of pastures; gradual deterioration of pastoral ecosystems; poor utilisation of agro-industrial by-products; fragile zoo-sanitary situation and persisting diseases (small ruminant plague,Newcastle, African swine fever, horse sickness, rinderpest, contagious bovine pleuri-pneumonia andparasitosis).

3.6.4. Notwithstanding these constraints, the livestock sub-sector boasts some assets to ensure itsdevelopment in the long term. These include confirmed pastoral traditions and a large and variedherd, achievements in the control of the main epizooties, the herdsmen’s awareness of the need tochange their situation, the existence of areas with a marked pastoral vocation, availability ofagricultural by and agro-industrial products especially in the country’s cotton-growing areas. Fromanother standpoint and not least, population growth together with the oil era will lead to an increasein the demand for meat products.

3.7 Livestock Sub-sector Policy

3.7.1. The Government’s policy is consistent with the three focal points of the Geneva IVGuidelines: State withdrawal from production, marketing and processing activities; building thecapacity of organisations, grassroot communities and decentralised authorities; and increasingproduction in a protected environment in the long term. The strategy for implementing the sub-sector policy focuses on developing an adequate institutional framework, confirming Statewithdrawal; professionnalising operators and making them more accountable; building theoperational capacity of the State and service providers; generalising suitable technological packages;introducing a system for collecting reliable data and information; securing and diversifyingproduction systems; managing in the long term food resources by promoting migratory farmingmarketing and processing.

3.7.2 Thanks to the assistance of external partners, Chad has implemented some of the measurescontained in its policy (see Section 3.8 on donor intervention). These efforts have not been enoughfor the livestock sub-sector which still faces the various restraints described in Section 3.6. Indeed,a review of agricultural sector financing reveals that the livestock sub-sector has been provided only

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with 2% of all investments in the last twenty years. These investments are far from compensatingthe economic weight of the sub-sector in the formation of agricultural GDP which is 32% andnational GDP of 12.7%.

3.8. Donor Intervention

3.8.1. Overall, the livestock sub-sector has benefited from only one major operation and a few otherminor ones. The National Livestock Project (PNE, the prime project of the sub-sector, implementedfrom 1988 to 1999) was jointly financed to the tune of UA 25.09 million by the ADF (37.3%), theWorld Bank and the French and Netherlands Cooperation departments. The PNE enabled theconstruction of the headquarters of the Ministry of Livestock, 104 buildings of the veterinary sectorsand stations, 70 stock watering wells; train officers; establish a livestock fund; liberalise the supplyof veterinary inputs; rehabilitate and privatise the refrigerated slaughterhouse of Farcha and set up300 pastoral farming interest groups. Among the lessons learnt from the PNE’s implementation isthat its implementation period was too long (10 years), production support activities were of littlescope and the cattle-meat sub-sector was excluding from the activity; the pastoral farming interestgroups did not take women into account and the operation’s overall impact on poverty reduction isnot visible. In addition, the frequent changes of project managers and unfamiliarity with Bank rulesof procedure for the procurement of goods and services contributed to lengthening the duration ofthe project and limit its performance. Lastly, the recruitment of a civil engineering consulting firmtowards the end of the project made it possible to speed up the facilities planned.

3.8.2. Chad has also benefited and contributed to other small-scale livestock projects. These includethe following ongoing operations: the Panafrican Swine Fever Control Programme (PARC) whichlater became PACE focuses on the control of animal diseases, training of livestock supervisors andauxiliaries; the Agricultural and Agro-pastoral Services Programme (PSAP), financed by the WorldBank contributes to the strengthening of producer organisations, including some herdsmen’sassociations; the Almy-Bahaïm Project, financed by GTZ aims at stock watering, management ofnatural resources and organisation of herdsmen in Ouaddaï-Biltine; the East Chad Livestock SectorSupport Project financed by the French Cooperation Department; the Producer OrganisationsStrengthening Project (PRAOP), financed by the World Bank and Norway, focuses on integratedrange management and initiates associations in preparing and managing their local developmentplans in a pilot area; the Kalamat Integrated Development Project (PDIS, IDB, ABEDA) comprisesa livestock component (drugs, water supply, vaccination yards, veterinary stations for CFAF 1billion) the Kanem Wadi Agricultural Development Project (PDAOK, IFAD) also comprises alivestock component; the Lake Prefecture Development Project (PDRL, ADF) has allocated aboutUA 2 million for the protection of the Kouri bovine species; and the N’djamena Dairy Project(PLN), financed by AFD (CFAF 3 billion) aims at improving the quality and quantity of milk anddairy products and is slated to contribute to the organisation of the milk sub-sector around the townof N’djamena.

3.8.3 In their implementation, these livestock projects usually focus only on one or two aspects oflivestock issues and are often limited to one Prefecture. No one has tackled the sub-sector in itsentirety, which limits the efficiency, and results expected of such projects. PASEP is crafted toaddress such shortcomings taking into account the entire cattle-meat section of the pastorallivestock system which upkeeps over 80% of the stockbreeder population and accounts for 82% ofthe national herd of cattle. The experience gained by PRAOP in integrated range management andin the implementation of local development plans will be taken into account for this project.However, in the context of decentralisation, it is important to support sub-sector operators in thepreparation and implementation of their local development plans.

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4. THE PROJECT

4.1. Project Design and Rationale

4.1.1 The Livestock System Support Project (PASEP) was identified in the context of the RuralDevelopment Intervention Programme (PIDR) which is a well-structured, coherent and expandableframework of multi donors (that have a signed a cooperation agreement) for the implementation ofall the strategic axes of the CSDR. The pastoral livestock system targeted has comparativeadvantages better than those of other livestock systems (peri-urban or sedentary). It will contributebetter to reducing poverty and boosting food security in the country because it remains the mostwidespread system (82% of the stock, providing subsistence for more than 1.7 million people),contributing significantly to agricultural (32%) and national (12.7%) GDP and acting as a genuinesocial, economic and environmental capital. Contrary to the PNE which was implementedcountrywide, PASEP concerns in particular, areas where the pastoral livestock system is practised,including areas of migratory farming. The project impact area so demarcated, had never beforebeen the subject of a project designed to include all players of the sub-sector with actions intendedto advance the sub-sector’s contribution to the national economy. Hence, as designed, the projecthas the full support of the people and authorities of Chad.

4.1.2 The project’s design stems form the lessons learnt from the PNE and those learnt from theother livestock projects described in paragraph 3.8.3. PASEP intends to address the shortcomingshighlighted promoting vertical integration of production, marketing, processing and consumption onwhich the project logic and organisation are based for a positive impact on all consumers of meatproducts. The PASEP approach is hinged on the three poles underlying the pastoral livestocksystem. The human capital is the core pole, which must be organised and professionalised for agreater efficiency of socio-economic strategies. The animal capital is a distinctive trait of livestockand determines methods and organisation that have a direct impact on the social environment,ecosystems and national economy. Furthermore, man and animals evolve in a space that representspole 3 to be protected through concerted and long term management. This livestock systemmaintains relations with the rest of the economy through its traditional sub-sectors which structuresrelations between producers, traders, butchers, consumers and service suppliers. Consequently,PASEP takes into account the sub-sector dimension in order to promote in the long-termcompetitiveness, economic performance and the social utility of Chad’s pastoral livestock system.All such actions had not been taken into account in the design and implementation of the PNE.

4.1.3. PASEP aims at organising and consolidating the mechanism whereby beneficiariesthemselves are in control of their development initiatives, following State withdrawal.Consequently, a “live and let live” policy will come into being although the possibility to intervenewill remain open with a view to addressing weaknesses, assessing results and controlling the qualityof services provided. In line with the PIDR mission, a mechanism for the transfer of the operationalmanagement of project activities will be developed soon after start-up to enable operators identifytheir priorities, draw up their community development plans (FDC), formulate their micro-projectsto submit to a FDC for approval and financing. Service suppliers will play the role of interface andintermediary to assist in training beneficiaries and implementing the micro-projects. Structures willbe implemented at the request of associations that will accept to contribute at least 20% (10% incash and 10% in kind) and undertake to maintain them. Some actions will be carried out using thelabour intensive system. If development and equity are to be complementary, more weight will begiven to income-generating activities for women (milk processing, meat drying, hides and skins) sothat they can play a more important role in stepping up the project’s impact.

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4.1.4 From the onset, the participation of beneficiaries including women fundamental to thesuccess of the project was secured. Thus, representatives of pastoralists, cattle traders and butcherswere involved in project preparation and appraisal sitting permanently with the team set up. Theentire project area was visited and grassroot communities expressed their concerns directly. Fiveregional and one national workshop comprising several beneficiary representatives, regional andnational authorities, civil society, NGOs and other donors were organised to validate the preparationreport. The appraisal mission for its part visited four departments, organised 12 meetings withbeneficiaries and held discussions with all donors and NGOs represented in Chad. All pointed tothe importance of the project for Chad and expressed their satisfaction at the approach adopted andtheir support of all the outputs scheduled.

4.2. Project Impact Area and Beneficiaries

4.2.1. Project Impact Area the project impact area covers the established and transhumant areaswhere stockbreeders live on pastoral or transhumant stockbreeding often overlooked in thecountry’s development programmes. Under the ongoing decentralisation of Governmentdepartments, the country has been divided into departments. The project impact area covers 16departments2 which correspond to the three natural agro-ecological regions of the pastoral livestocksystem, showing all the area’s constraints. The Sahelian zone receives 200 to 400 mm of rain in 3months of the year and features a grass or shrub steppe comprising annual herbaceous and spinyligneous types. It is used by nomadic and transhumant stockbreeders. The Sahelo-sudanic or agro-pastoral Sahelian region registers 400 to 600 mm of rain and accounts for a sedentary or semi-transhumant system practised by transhumant pastoralists from the north. The portion north of theSudano sub-humid zone (Lake Iro, Bahr-Kho) is taken into consideration so that it includes thesouthern points of the transhumant front. Thus, the project impact area is of massive dimension,landlocked and without roads, commands long and difficult ranges before joining the regions,sectors, livestock units and beneficiaries. Accordingly, considerable logistic means will benecessary for an efficient implementation of the project.

4.2.2 Pastoral activities remain traditional with rather rudimentary techniques that greatly limityields and increase women’s workload. Furthermore, women as well as being mothers areoverburdened by production and household chores. They spend a lot of time milking and wateringcattle. They have no control over animal or natural resources especially large livestock, pastures orland. Conversely, they control food crop production, dairy produce and take charge of drying meat.

4.2.3 According to estimates the project impact area boasts 4 750 000 cattle (82% of the nationalcattle population), 1 760 000 sheep (74% of the national sheep stock), 4 160000 goats (80% of thenational goat stock), 300 000 horses (81% of the national horse stock) 330 000 donkeys (93% of thenational donkey stock), 946 000 camels and 1 200 pigs (2% of the national pig stock). Of Chad’s 7054 942 tropical cattle units (TCU), the project area accounts for 81%. Husbandry of animals isbased on mobility which is strategic for the use of natural resources that are subject to agro-climatichazards. The zootechnical parameters and constraints are not different from those encountered atnational level and described in Sections 3.2.2 and 3.6.

2 The 16 departments are: Assongha, Baguirmi, Bahr El, Gazal, Batha West, Batha East, Biltine, Dababa, Gera, HadjerLamis, Kanem, Lac, Ouaddaï, Salamat, Sila and North of Lac Iro and Bahr-Kho.

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4.2.4 The area has considerable potential for the development of migratory herding if running andmanagement are improved. Natural grazing areas cover nearly 830 000 km² or 65% of the country’ssurface, two thirds of which are found in the Sahelian zone. Most of this area is made up ofsedimentary terrain containing several underground water tables. The volume of these water tablesis estimated at around 350 billion m3/year with a turnover of around 21 billion m3. If 30% ofChad’s livestock requirements are met with perennial surface waters and 15% by non-perennialwaters the remaining proportions concern 35% of underground water from traditional wells and20% from modern wells.

4.2.5 Project Beneficiaries: in 2002, the population of the impact area was estimated at 3 million.The poverty index in the project area is 80% against the national level of 75%. Pastoralists areestimated at 1.7 million including 0.9 million women (52%). The number of production units(herder households) is estimated at 250 000 with an average of 7 dependents. Each production unithas an average of 20 cattle, 25 small ruminants and 5 camels. The first beneficiaries are thepastoralists grouped in traditional units known as ferricks or pastoral interest groups. At the bottomend of the sub-sector the other beneficiaries are operators who take part in the processing andmarketing of cattle and meat products. The project will target directly 100 000 units of productionor 700 000 people. The other pastoralists will benefit from project actions via means ofcommunication that will be set in motion.

4.2.6 The project impact area groups 500 PIGs set up under the PNE, of typology and operatingnorms that are unheard of. Because means are lacking, they have not been monitored by publicdepartments since the completion of the PNE. In addition, contrary to Chad’s Sudanese zone,micro-finance and micro-credit institutions are inexistent in the impact area where the very cultureof micro-credit and savings is unusual. Therefore, production, marketing and processing facilitiesare few. Finally, the “word of mouth” communication system limits experience sharing and slowsdown the spread of information. It is consequently, all such actions that the project is slated to carrythrough or reinforce.

4.3 Strategic Context

4.3.1 This project is consistent with the new strategy adopted by the Government during the RuralDevelopment Sector Consultation of June 1999, which identified the livestock sub-sector as one ofthe development priorities designed to reduce poverty and boost food security. It falls into line withChad’s CSP for the 1999-2002 period updated in 2002, and is an answer to the leanings of Chad’spoverty reduction strategy paper (PRSP) which aims inter alia, at improving the social environmentand standard of living of the vulnerable; restoring the ecosystems; developing human resources andmanaging natural resources. Indeed, despite the oil era, Chad remains an essentially agro-pastoralcountry. Traditional livestock, the only source of income of people living in the Saharan andSahelian region faces a variety of institutional, organisational, technical and economic obstacles.These obstacles mean low livestock productivity, low income from the activity and a poor quality ofmeat products sold for consumption. Furthermore, traditional pastoralists make up 80% of thepoorest stratum of the population living with less than 1 US$ a day. Often they have no access tobasic infrastructure (9% have access to safe water against 31% at national level and 10% of childrenare vaccinated against 33% at national level).

4.3.2 The overall direction of PASEP relies on optimising the use of livestock products in order toincrease production of cattle, meat and milk, securing transhumant herding, reducing the tensionbetween migratory and sedentary pastoralists, modernising trade and processing of livestockproducts with a view to stepping up cattle exports and improving in the long term the incomes of

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the beneficiaries. The activities proposed are different from those of projects already implementedin the manner in which they will be conducted. The requirements brought about byprofessionalisation and the quest for more competitive pastoral sub-sectors, means a diversificationand quality of services provided and therefore an indispensable need to build the capacity of theGovernment services involved, on the basis of what the PNE achieved.

4.3.3 Once implemented, the project will contribute to boosting food security, reducing poverty,improving the incomes of the operators and protecting natural resources. All these alternatives havebeen discussed and endorsed by the people during workshops organised to validate the preparationreport. Moreover, by towing the line of the PIDR which brings together all donor interventions, theproject will contribute funds to the efforts of Chad’s partners in a coherent framework for optimumresource utilisation. As designed, PASEP comprises three axes and the channel mentioned in 4.1.2,and is the hinge of the various PIDR components. Lastly, women who play a frontline role inhusbandry, processing and marketing are interested in this project as a means of improving theirstandard of living.

4.3.4. The project also falls into line with the Bank Group operational strategy in Chad which aimsat diversifying and developing agricultural and animal production, enhancing human resources,reducing the precarious living and hygiene conditions of the people especially rural dwellers andpromoting the micro-project initiatives including those in favour of women and those crafted tocontrol the deteriorating rural area.

4.4 Project Objectives

PASEP sector goal is to help reduce poverty in Chad. Its specific objective is to increaseanimal productions with a view to increasing the incomes of the beneficiaries in the long term.

4.5. Project Description

4.5.1 ADF and OPEC will conjoin to finance all project components alongside the beneficiariesand Government. Both institutions will together finance all expenditure categories. The financialbreakdown by expenditure category and source of financing is given in Table 4.4. Project outputsare: strengthening and supporting associations of stockbreeders, cattle traders, and butchers throughprofessionalisation; establishing their local and national representations; helping to train the players;helping to make livestock products more competitive by modernising production (pastoral structuresand schemes), marketing (cattle markets and delivery channels), processing infrastructure(slaughtering areas, butchers’ stalls), and building the capacity of the service suppliers(rehabilitation of some outreach facilities, certification of meat commodities). The main projectcomponents are:

a) Enhanced professionalisation of livestock operators;b) Support to production, marketing and processing;c) Building the capacity of the service providers; andd) Project management.

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Component A: Enhanced Professionalisation of Livestock Operators

4.5.2. This component aims primarily at backing operator organisations to enable self-promotionand accountability for the activities; building the operators’ capacity to negotiate with their publicand private stakeholders, defend their interests and integrate better into the country’s socio-economic fabric.

4.5.3 A consultant in organisational and community development will be recruited at project start-up for a duration of 12 person-months to conduct two studies: a first in-depth diagnosis of allassociations and groups in the project impact area with a view to identifying their strengths andweaknesses, defining their typology, preparing specifications that take into account an operationalprogramme for the professionalisation of operators, specifying activities that the associations havechosen with focus on women, as well as topics for the desired outreach activities. This study willalso shed light on existing service providers, which once identified could help beneficiaries prepareand implement their development plans. A second study will spotlight community development inthe impact area and will end with a procedures manual that outlines the criteria for setting up,granting, monitoring and assessing the community development fund which will be unveiled in thecontext of this project by the OPEC fund.

4.5.4 An institution specialised in rural extension activities and grassroot community organisationwill be recruited as of the 2nd year for 48 person months to sensitise, moderate and train groupsupervisors in the strategies and techniques of organising, creating and managing associations andcreating their activity sector. This institution will alongside the DPAP, at the request of grassrootcommunities, be responsible for founding 250 new GIPs including 50 women’s associations; 90cattle trading economic interest groups (GIEC), 90 butcher economic interest groups (GIEB), 100departmental unions of GIP, GIEC and GIEB and a national federation of livestock professionals. Itwill finance the construction and equipment of 15 units (1 classroom, one office) for trainingsessions, and various meetings with operators. 15 trainers will be taught to moderate the localtraining units. At the end of the project, 2000 livestock and environmental auxiliaries (4 perassociation), 2500 group supervisors including at least 500 women will be trained and at least 10000 operators including 5 000 women will be literate. Once trained, these auxiliaries will return totheir associations to take over project activities and assist in the various technical fields. Theproject will finance the running of the training units up to the 3rd year, and starting year 4 socialpartners will be chargeable for 50% then 75% of these expenses thanks to the earnings generated bythe livestock fund of which a percentage will be assigned at the start of project implementation, andto contributions collected from their organisations.

4.5.5 The project will encourage micro-finance institutions (PARCEC, UCEC, URCOOPEC,ASDEC, CEPRIC, etc.) that are well established in the country’s south, to spread and adapt thevillage fund approach which has been proven, to other regions of the country including the projectimpact area. Based on competition, at least two of such institutions will be recruited to sign anagreement previously approved by the ADF. Prior to the choice of these institutions a proceduresmanual will be prepared by a consultant specialised in micro-finance. The manual will containarrangements on measures to take (sensitisation of operators, establishment of funds, managementof funds etc.) and sound micro-finance practice. This consultant will also be required to assess theactivities of these institutions throughout project duration. To that end, the project will finance onbehalf of operators’ groups that so wish, funds (150) that will subsequently be regrouped intounions (20). The objective being to enable these funds to set up at national level, their own inter-professional livestock development funds (FIDEL). The project will finance basic equipment(safes, furniture) for the funds, unions and federation and provide training in savings collection,

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management, credit etc, for the managers of the funds. Furthermore, in order to build the capacityof the majority, the project will finance 4 annual workshops on community development for 1000(200 a year) group supervisors, mayors and local authorities. Under the project, literacy sessionswill be held for 10 000 auditors including 5 000 women in the project impact area. The project willalso take responsibility for training and equipping 20 traditional midwives and ensuring that theactivities of the Ministry of Health are directed to the project impact area.

4.5.6 In order to improve the educational communication system designed for pastoralists, fundswill be earmarked under the project for the purchase of production and audio-visual equipment, 5projection units for the local training centres and 2 mobile broadcasting units equipped with audio-visual equipment. Thus, beneficiaries could share experiences, disseminate topics on economicopportunities, management of grazing land, settlement of conflicts, both in the rainy season contactand migratory herding areas. An audio-visual database will be established to provide moderatorswith material for sensitising groups and for outreach activities. A consultant recruited on the basisof national and regional competition will be responsible for communication. Study tours will beorganised in the sub-region and elsewhere in Africa in the fields of production, marketing andprocessing of livestock products.

Component B: Support to Production, Marketing and Processing

4.5.7 Making the sub-sector more competitive demands an improvement of its key components.The project will provide support for the technical and economic aspects of production, marketingand processing in a transparent and favourable legal and regulatory framework.

4.5.8 Production and Marketing based on the experience acquired during the implementation ofthe PNE, and at the request of the operators ‘associations which will contribute at least 20% fortheir conduct and maintenance, the project will finance the marking of stock roads (1 500 km), theconstruction and rehabilitation of 80 stock watering wells, the development or over-deeping of 80ponds and the construction of 6 waterway structures. The pastoralists’ associations will receive helpto create 50 livestock schemes for the integrated management of grazing land, mark 1 500 km ofcommercial stock roads, construct and equip 25 cattle markets and 10 border control units. Thebeneficiaries will provide 20% in the initial investments (10% in cash and 10% in kind) and bechargeable for the entire maintenance cost. The project will use auxiliaries in environment andlivestock as well as trainers in livestock scheme management who will be trained in the technicalmanagement of all structures.

4.5.9 In addition, based on experience acquired from projects financed by the Bank in the area ofmarket information system (the Sudanese Area Cotton and Food Crop Project) PCPVZS- PNE), theproject will help give impetus to three networks that will contribute to the definition and applicationof livestock policies. These are: the Chad Cattle Market Information System (RESIMAT), theAnimal Disease Surveillance System of Chad (REPIMAT) and the Natural Grazing LandObservation Network (ROPANAT). This support will take the form of equipment for 10 pilot cattlemarkets to collect data and trade indicators that will be analysed and disseminated. The fact finderswill be trained and provided with motorbikes and test equipment. Satellite imagery will be acquiredby the project from the Montpellier School of Tropical Medicine which is already working inpartnership with the Farcha Laboratory, for the purpose of preparing bulletins on the status ofpastures to be distributed to producers and decision-makers.

4.5.10 Processing and Conditioning: in order to promote food hygiene and public health, under theproject, slaughtering areas (40) and sheds and butchers’ stalls (30) will be built and equipped.

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These structures will be managed by communal committees comprising the mayor’s office and atleast one representative of the three beneficiary groups (pastoralists, cattle traders and butchers).The organisations of the sub-sector will contribute 20% of the base cost of infrastructure and willmaintain them.

Component C: Building the Capacity of Service Providers

4.5.11 To consolidate the efforts already made under the PNE, the project will finance theconstruction and equipment of 6 training rooms in ENATE, 20 veterinary sectors and stations, 5regional delegations, the rehabilitation of 30 sectors and stations and the new Statistics andMonitoring-Evaluation Directorate of the Ministry of Livestock which must be responsible for theproject’s external follow up. Logistic means in the form of 110 motorcycles will be procured withOPEC funds for project implementation.

4.5.12 A meat product inspection and quality control unit will be built. Good livestock produceprocessing techniques and practices will be popularised (hygiene and processing of meat, milk,hides and skins). A specialised vehicle equipped with laboratory material will be procured fortaking samples in the field, preserving them and transporting them to the Farcha Laboratory inN’djamena. The technical staff of the inspection and quality control unit comprising a supervisor, 4laboratory technicians and 4 support staff will be trained for 6 months in similar reference units inAfrica and/or Europe. A consultant in meat produce hygiene and industry will be recruited for 3person-months, as will a laboratory control consultant for 9 person-months to assist the unit inquestion. The project will finance continuous training for technicians in the field of inspection,short term training in livestock trades, and retraining sessions for workers (50 a year for 3 years),using the teaching aid installed in ENATE which will be provided with a vehicle bought with OPECfunds.

4.5.13. Furthermore, the project will finance, following a selection of candidates, 10 scholarshipsfor continuous training and 10 scholarships for specialisation courses whose duration will not exceed12 months, divided into two modules (inspection and quality control of food products, informationand statistics system, pastoral communication, pasture management). The regional delegates willbenefit from a one-month training course to improve their ability for project monitoring. OPEC willfinance all long-term training activities. Lastly, the project will finance research activities the topicsof which will be identified in concert with beneficiaries in line with project objectives. This appliedresearch will be the subject of contracts with the Farcha Veterinary Research and ZootechnicalLaboratory, which is well equipped and experienced in such operations.

Component D: Project Management

4.5.14. The project will be managed by a Project Implementation Unit (PIU), supervised by theMinistry of Livestock. The PIU will comprise 7 national officers who will receive allowances paidby the project. Their curricula vitae, qualifications and professional experience shall be subjectindividually to prior approval by the Fund. A financial management firm with a computerisedaccounting system will be recruited for 48 person-months with ADF funds, for the parameterisationof the financial and accounting software procured during project preparation, training of staff in theuse of this software, preparation of the financial and accounting management manual and assumingthe position of co-manager of the project’s financial and administrative running alongside thecoordinator. Based on PNE’s experience when at the end of that project a consulting engineer hadbeen recruited to monitor achievements, PASEP will recruit an experienced civil engineering firmfor coordinating and monitoring all infrastructure and structures carried out under the project

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(assistance in the preparation and analysis of bidding documents, the follow-up of outputs,acceptance of works, establishment of all summary records required for the payment of contracts,and keeping of a geographically detailed inventory file of all outputs). This engineering firm will berecruited for 48 person-months with funds from OPEC. The communication expert recruited willbe part and parcel of the PIU. The project will finance the rehabilitation of the unit headquartersprovided by the Government within the Farcha Laboratory site, the purchase of equipment and costsrelative to the running of the unit.

4.6. Production, Markets and Prices

4.6.1 Animal products are abundant during and just after the rainy season and drop gradually asthe dry season advances. Pre-project productions were estimated annually at 640 000 heads ofcattle; 1 800 000 heads of small ruminants which provide 80 000 tonnes of beef and 36 000 tonnesof meat of small ruminants. Milk production is estimated at 20 million litres and hides and skins at500 000 pieces.

4.6.2. Based on current figures and trends, it is expected that the project will lead to an annualincrease of 4.6% for cattle, 6.5% for small ruminants and 2% for camels as of the 3rd year of theproject. The additional exploitable stock will rise on average over the next 5 years to nearly 280000 cattle, 100 000 goats, 45 000 sheep and 17 000 dromedaries. On that basis, it is estimated thatthere will be an additional 36 000 tonnes of beef and 7 000 tonnes of meat of small ruminants, 100000 cattle hides and skins and 100 000 of small ruminants. Milk production will improveconsiderably.

4.6.3. Animal prices are determined by the markets and pace of transhumant stockbreeding.Trading margins will improve thanks to a better organisation of the sub-sector (lower transactioncosts and access to better markets). In the domestic market, the average price per cow is CFAF 150000, CFAF 13 000 for sheep, CFAF 10 000 for goats and CFAF 200 000 for dromedaries. Exportprices for cattle vary according to destination at between CFAF 200 000 and 300 000, sheep atCFAF 30 000 and dromedaries at CFAF 400 000. The gross margin is around 11% of the sellingprice.

4.6.4 Apart from the domestic need which will rise following the population increase and oil era,Chad’s comparative advantages in meat makes it the main pole for the sub-regional meat demandespecially from Nigeria, Sudan, Libya, Cameroon and CAR. The latter’s demand for beef, muttonand camel meat from Chad is rather high. The actual markets will therefore easily absorb theadditional productions brought about by the project. With a better quality of meat through thevarious project activities planned, other markets especially those of certain Arab countries couldseek animal products from Chad.

4.7 Impact on the Environment

4.7.1 PASEP comes under environmental category II: the environmental impact assessmentconducted at the time of project preparation, rounded up the environmental issues of the projectimpact area, analysed the potential impact of activities planned and measures to attenuate thenegative and optimise positive effects listed in an environmental and social management plan(PGES) summarised in Annex 4.

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4.7.2 Positive Effects and Optimisation Measures: PASEP aims at improving the livestocksupport services and infrastructure, while ensuring that there is no pressure on pasture andecosystems made fragile already by successive droughts. Capacity building via the creation ofgroups, associations, unions or cooperatives of stockbreeders, cattle traders, butchers and otherservices providers will enable better utilisation and rational management of resources in the projectimpact area. A better management of water points and pastoral production facilities will improvethe living conditions of the people concerned who will benefit from good quality water. Safe wateravailable at hand will limit cattle movements. The fencing of deteriorated plots, the extension ofauto-managed pastoral schemes, the intensification of reforestation will help to contain thedesertification phenomenon, which is a major challenge in the area.

4.7.3 Negative Effects: implementation of the PASEP activities implies risks of deterioration ofnatural resources (plant cover, waters, soils) through over-grazing, wood logging, long stops ofanimals around stock watering areas and cattle markets. The invasion of protected areas may reducethe habitats of natural wildlife and disturb their peace. There is a risk of pollution from sewage andwaste matter (blood, dung, bones, hooves, horns, etc.) around the slaughterhouses and areas. Theconsumption of pond water by the animals and population may cause infectious and parasiticdiseases.

4.7.4 Attenuating Measures: the proposed environmental and social management plan takes intoaccount the following attenuating measures: creation of pastoral schemes followed by thepopularisation of integrated management of pastures, prohibition of grazing and prevention of bushfires, planting of trees around the watering points, markets and vaccination yards; sensitisation onsafe well water; management of dung from slaughtering areas (processing of compost, blood, etc);use of sewage water (for market garden crops) and sensitisation on health issues such as HIV/AIDS.An environmental education programme with a pastoral bent designed to attenuate in the long term,all negative effects will be implemented in the school for nomadic pastoralists, literacy centres andwomen’s centres. Plans have also been made under the project to train auxiliaries in environmentalissues for the sustainability of the actions.

4.7.5 Environmental Follow-up: the project unit will recruit a local environmental specialistentrusted with environmental and social follow-up. The PIU will be responsible for environmentalsurveillance to ensure that the relevant measures are applied. This will mean first and foremost, theorganisation and implementation of a modular training programme for pastoralists, auxiliaries andtechnicians involved in the project. Manuals will be designed for training, sensitising anddisseminating information. A database that takes into account the growth index of the plant cover,the soil deterioration and/or restoration index, the flora and fauna make-up, the water resourcebalance in the project impact area, will be established. A budget allocation of CFAF 140 millionhas been earmarked for the application of the environmental and social management plan.

4.8 Social Impact

4.8.1 The project will play a strategic role in the indispensable formation and development of thesocial capital and in the long-term fulfilment of the economic requirements of the population.Indeed, 250 groups will be set up, more than 100 000 families sensitised and 200 women trained inprocessing techniques. 1 000 supervisors will be trained in the management of their structures,1000 men and women taught to read and write, 2 000 community auxiliaries 30% of whom arewomen, trained. This organisation and training will enable operators to run their own concerns.

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The connection between pastoral infrastructure and range management will contribute to reducingthe duration of migratory herding, initiate security of the ranges, promote a collective managementof the ranges and concrete involvement of migratory pastoralists in rural civil society. Activitiestailored specifically for 2 000 women and support to their organisation will help reduce theirmarginalisation through a more assertive role, an expression of their aspirations, claims andinvolvement in all aspects of the project following a better and effective representation. Publichealth prophylactic measures and training of traditional midwives will help to better protect thevulnerable group they belong to.

4.8.2 The project’s impact on poverty will take concrete expression in an increase of about 10% inincome (from CFAF 457 000 to 609 000) and will lead to non-livestock effects thanks to an upturnin private entrepreneurship and trade. The consumption of food commodities will increase by 10%(from 10 to 11 kg/yr./yr.), meat and milk production by nearly 20%. Traders and butchers will reapprofit from a rise in the value added of cattle and meat, and several jobs will be created for youths.

4.9 Project Cost

4.9.1 Total project cost is estimated at CFAF 21 123 33 million or UA 24.14 million, net of taxesand custom duties. Cost breakdown is CFAF 14 316 12 million in foreign exchange or UA 16.36million and CFAF 6 807 21 million in local currency or UA 7.77 million. Tables 4.1 and 4.2 belowsummarise project costs by component and category. Detailed project costs are given in theworking document (see working document, volume II).

Table 4.1: Summary of Project Cost Estimate by ComponentCOMPONENTS Inn CFAF million In UA million % F.E.

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

A. Professionalisation of livestock operators 3602.00 1744.00 5346.00 4.12 1.99 6.11 67.43

B. Supp. Prod. Marketing and Processing 6532.50 2411.70 8944.20 7.47 2.76 10.22 73.09

C. Capacity Building 1740.00 902.00 2642.00 1.99 1.03 3.02 65.89

D. Project Management 1248.60 906.60 2155.20 1.43 1.04 2.46 58.13

Base Cost 13123.10 5964.30 19087.40 15.00 6.82 21.82 68.74

Physical Contingencies 776.05 224.07 1000.12 0.89 0.26 1.14 78.07

Price Escalation 416.97 618.84 1035.81 0.48 0.71 1.18 40.67

Total Project Cost 14316.12 6807.21 21123.33 16.36 7.78 24.14 67.77

Table 4.2: Summary of Project Cost by Expenditure CategoryCATEGORIES In CFAF million In UA million % F.E.

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

A. Works 6081.50 1993.50 8075.00 6.95 2.28 9.23 75.29

B. Materials and Equipment 1679.00 247.20 1926.20 1.92 0.32 2.20 87.27

C. Staff 0.00 1040.20 1040.20 0.00 1.15 1.19 4.92

D. Technical Assistance 1365.00 33.00 1398.00 1.56 0.04 1.60 97.50

E. Studies, Consultants 1215.00 416.00 1631.00 1.39 0.48 1.86 74.73

F. Training 194.20 458.80 653.00 0.22 0.52 0.75 29.33

G. Operating 1868.40 1595.60 3464.00 2.14 1.82 3.96 54.04

H. Other (Comm. Dev. Fund) 720.00 180.00 900.00 0.82 0.21 1.03 79.61

Base Cost 13123.10 5964.30 19087.40 15.00 6.82 21.82 68.74

Physical Contingencies 776.05 224.07 1000.12 0.89 0.26 1.14 78.07

Price Escalation 416.97 618.84 103 5.81 0.48 0.71 1.18 40.67

Total Project Cost 14316.12 6807.21 21123.33 16.36 7.78 24.14 67.77

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4.9.2. Costs were calculated on the basis of prices in force in Chad in July 2002. A 10% charge forphysical contingencies was applied to works and equipment. A 10% provision for price escalationwas applied to the local currency costs and 3% to the foreign exchange cost of all components. Thetotal envelope representing physical contingencies (CFAF 1 000 12 million) and provision for priceescalation (CFAF 1035 81 million) amounts to UA 2.32 million or 9.61% of the project’s total cost.

4.10. Sources of Finance and Expenditure Schedule

4.10.1 The project will jointly financed by the ADF, TAF, the OPEC Fund, the Government of Chadand the beneficiaries, as shown in Table 4.3 below.

Table 4.3: Sources of Finance

SOURCES In CFAF million In UA million %

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

ADF 9231.53 3578.61 12810.14 10.55 4.09 14.64 60.64

TAF 634.48 176.00 810.48 0.73 0.20 0.93 3.84

OPEC 4450.12 952.01 5402.12 5.09 1.09 6.17 25.57

GOV. 0.00 1722.63 1722.63 0.00 1.97 1.97 8.16

BENEF 0.00 377.96 377.96 0.00 0.43 0.43 1.79

TOTAL 14316.12 6807.21 21123.33 16.36 7.78 24.14 100.00

Table 4.4 Expenditure Schedule by Category and Source of Financing (in UA million)

CATEGORIES ADF % TAF % OPEC % GVT % Benef. % TotalA. WORKS 7.78 84.29 0.00 0.00 0.83 8.99 0.33 3.57 0.29 3.14 9.23B. EQUIPMENT 0.83 37.72 0.00 0.00 1.19 54.09 0.17 7.72 0.01 0.45 2.20C. PERSONNEL 0.67 56.30 0.00 0.00 0.00 0.00 0.51 42.85 0.00 0.00 1.19D.TECHN. ASSISTANCE 0.49 30.62 0.34 21.25 0.73 45.62 0.04 2.50 0.00 0.00 1.60E. STUD. /CONSULT 0.48 25.80 0.55 29.57 0.82 44.08 0.02 1.07 0.00 0.00 1.86F. TRAINING 0.61 81.33 0.00 0.00 0.10 13.33 0.04 5.33 0.00 0.00 0.75G. OPERATION 2.23 56.31 0.00 0.00 1.08 27.27 0.63 15.90 0.02 0.50 3.96

H. MISCELLANEOUS (FDC) 0.00 0.00 0.00 0.00 0.99 96.11 0.00 0.00 0.04 3.89 1.03Base Cost 13.10 60.03 0.89 4.07 5.73 26.26 1.74 7.97 0.36 1.65 21.82Not allocated 1.54 66.37 0.04 1.72 0.45 19.39 0.23 9.91 0.07 3.01 2.32

Total 14.64 60.64 0.93 3.85 6.17 25.55 1.97 8.16 0.43 1.78 24.14

4.10.2 The breakdown of funds between the ADF and Government on the one hand and betweenthe TAF and Government on the other hand is as follows:

Table 4.5: ADF/Government Financing

SOURCES In CFAF million In UA million %

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

ADF 9231.53 3578.61 12810.14 10.55 4.09 14.64 88.46

Government 0.00 1672.63 1672.63 0.00 1.91 1.91 11.54

Total 9231.53 5251.24 14482.77 10.55 6.00 16.55 100.00

Table 4.6: TAF/Government Financing

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SOURCES In CFAF million In UA million %

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

TAF 634.48 176.00 810.48 0.73 0.20 0.93 93.94

Government 0.00 50.00 50.00 0.00 0.06 0.06 6.06

Total 634.48 226.00 860.48 0.73 0.26 0.99 100.00

4.10.3. The ADF loan will cover 60.64% of total project cost or UA 14.64 million including UA10.55 million in foreign exchange and UA 4.06 million in local currency. It will meet 64.48% ofthe foreign exchange cost and the ADF share in the local currency cost represents 52.57% of totalproject cost. The Government was provided with a PPF from ADF resources to prepare the project.Pursuant to Section 3.7 of the “PPF Operational Guidelines” adopted by the ADF Board ofDirectors on 14/02/2000 (ADF/BD/WP/99/87/Rev.3), a provision of UA 400 00 is earmarked in theproject to repay the PPF amount. The TAF grant represents 3.84% of the project cost or UA 93million and will be used to finance technical assistance, consultancy services as well as repaymentof PPF.

4.10.4 The OPEC Fund loan will pay 25.57% of the project cost or UA 6.17 million to meet part of allcategories with the exception of staff expenses. The Government will intervene with CFAF 1 722 63million (UA 1.97 million), for the salaries of field project officers, the rental value of facilities aswell as part of the expenses for works, equipment, training and project running. The beneficiarieswill account for CFAF 377.96 million (UA 0.43 million) or their share in the works (wells, cattlemarkets, slaughtering areas and butcher stalls).

4.10.5 ADF responsibility for part of the local currency costs can be justified by: the use ofconsiderable manpower and local materials for the construction of various infrastructure andpastoral schemes, migratory herding pathways and cattle delivery service roads. In addition, therunning of the PIU implies major local expenses. The rate of gross domestic savings is low (3% in2001). Lastly, the Government is making noteworthy efforts in the context of the programmes andprojects, to step up the share of public spending on other priority sectors such as health, education,rural development and socio-economic infrastructure within the framework of the national povertyreduction strategy.

4.10.6. Project expenses will be borne in accordance with the expenditure schedule shown in thetables below (which also show physical contingencies and price escalation).

Table 4.7: Expenditure Schedule by Component (in UA million)

Component 2003 2004 2005 2006 2007 Total % Total

A. Professionalisation of operators 0.96 2.11 1.44 1.22 0.84 6.58 27.25

B. Support to Prod. Marketing and Processing 0.25 3.98 6.22 0.68 0.47 11.61 48.09

C. Capacity Building 0.78 1.24 0.53 0.50 0.26 3.30 13.68

D. Project Management 0.91 0.56 0.45 0.41 0.33 2.65 10.98

Total Project Cost 2.91 7.89 8.64 2.81 1.90 24.14 100.00

25

Table 4.8: Expenditure Schedule by Source of Finance (in UA million)

SOURCES 2003 2004 2005 2006 2007 Total %

ADF 1.13 4.91 6.50 1.22 0.89 14.64 60.64

TAF 0.53 0.13 0.16 0.06 0.05 0.93 3.84

OPEC 1.00 2.29 1.17 1.00 0.71 6.17 25.57

GVT. 0.25 0.43 0.57 0.48 0.24 1.97 8.16

BENEFICIARIES 0.01 0.12 0.25 0.04 0.01 0.43 1.79

Total Cost 2.91 7.89 8.64 2.81 1.90 24.14 100.00

5. PROJECT IMPLEMENTATION

5.1 Executing Agency

The project will be implemented by a project implementation agency within the Ministry ofLivestock. Premises will be provided for the PIU whose tasks will be to coordinate, inspect andmonitor all project activities, prepare activity programmes and annual budgets, prepare, submit andprocess bidding documents and disbursement requests and prepare and keep financial statementsand quarterly project progress reports. It will comprise the following 7 national officers: acoordinator, veterinary surgeon or zoo-technician with proven experience in project management; alivestock officer with experience in pastoral organisation and professionalisation for component A;a livestock officer with experience in supervising animal productions and/or marketing forcomponent B; a livestock officer responsible for the follow-up-evaluation of information networkson markets and production, a communications officer and gender specialist for organising women.The coordinator will be assisted by a procurements officer, a consulting civil engineer to monitorand accept all infrastructure works and support staff including a managing accountant, an assistantaccountant and three secretaries. All curricula vitae, qualifications and professional experience ofthe 7 officers shall be subject to prior approval by the Fund.

5.2 Institutional Arrangements

5.2.1 A Steering Committee (SC) will be established for general project supervision. Chaired bythe Ministry of Livestock and with the project coordinator as secretary, this committee willcomprise a representative from each of the following Ministries: Agriculture, Environment andWater, Social Action and Family, Planning and Cooperation, Finance and the Mediature. Inaddition, representatives of the operators’ organisations, 5 stockbreeders including 2 women, 2cattle traders and 2 butchers, 1 representative of rural civil society and 1 of he Permanent Unit of theCSDR will also be part of the committee.

5.2.2 Financial execution will be the onus of the PIU with the help of a computerised financial andaccounting management software purchased during project preparation. Technical implementationof project activities will depend on the decentralised structures of the Ministry of Livestock made upof 5 regional delegates, 18 sector supervisors and 98 unit heads. The terms of implementation aredetailed in working document volume II. Each regional delegate will be responsible for supervisinga number of sector managers and veterinary stations. The sector managers and unit heads will see tothe popularisation of technical topics, sanitary inspection, the Cattle Market Information SystemNetwork of Chad (RESIMAT) and the Animal Disease Epidemic-surveillance Network of Chad(REPIMAT), the monitoring of pastoral schemes, migratory herding, settlement of conflicts andother technical support. Quarterly planning meetings and statements will be planned by the unit

26

with the help of all field workers and beneficiary representatives. Specialised institutions recruitedfollowing shopping will be entrusted with sensitising operators and promoting savings and creditfunds. The creation of operators’ groups will be the responsibility of the DPAP. All local trainingcourses will be given by ENATE which will also make the necessary contacts for training coursesabroad. A contract for research and development will be signed with the Farcha Veterinary andZootechnical Research Laboratory.

5.2.3 The community development fund of UA 1.03 million will be set up with OPEC funds. Itwill be put in an account opened accordingly in a bank judged acceptable by the ADF. This fundwill be disbursed in an annual tranche of UA 250 000 starting from the 2nd year of the project andwill be used to finance, based on a procedures manual to be written by an independent consultant,socio-economic activities identified and proposed by the operators’ groups (warehouses,environmental protection, health centres, HIV/AIDS and malaria control, etc). The manual will takeinspiration inter alia, from experience acquired during the Producers’ Organisation StrengtheningSupport Project (PRAOP), financed by the World Bank and Norway. Experience shows that thegroups prepare their investment plans, submit them to a departmental selection committeecomprising local authorities, regional authorities of the Ministry of Livestock and four producerrepresentatives. The plan approved by the selection committee is submitted to the projectcoordination unit which notifies the association of its approval. This association shares up to 20%of the costs, 10% in cash and 10% in labour, food etc. The financial counterpart of 10% is paid intoa bank account co-signed by the representative of the beneficiary association and projectcoordinator. After this payment, the project then pays the remaining 80% into the association’saccount and the latter withdraws the first tranche to start works, followed by a second, then a thirduntil the account is empty. At each withdrawal it provides the coordination unit with justificationthereof. Technical follow-up of works shall be entrusted to the project consulting engineer.

5.3 Implementation and Supervision Schedule

Project activities will be implemented over a 5-year period as shown in the schedule below.A launching mission will be fielded upon fulfilment of the disbursement conditions. As of the firstyear, the Project Implementation Unit (PIU) will endeavour to prepare bidding documents, theprocedures manual, the group diagnosis and other project activities in line with the schedule and instrict compliance with Bank rules of procedure and terms of the loan agreement. A midterm reviewwill be conducted in the 3rd year by a consulting livestock economist.

Provisional Project Implementation Schedule

Activity Responsibility Start-up CompletionApproval ADF November2003 November2003

Signature of loan GVT/ADF January 2003 Jan. 2003

Entry into force GVT/ADF June 2003 June 2003

Recruitment of PIU staff GVT January 2003 February 2003

Recruitment of consultants PIU October 2003 June 2004

BDs, launching, award of contracts PIU March 2003 December 2003

Start-up of all activities PIU January 2004 June 2008

Supervision of operators PIU/Regions October 2003 June 2008

Midterm review ADF/GVT June 2005 October 2005

Audit of accounts ME/PIU January 2004 June 2008

Project completion GVT/ADF June 2008 December 2008

5.4 Procurement Arrangements

27

5.4.1 Arrangements for procurement are summarised in Table 5.1. All goods, works and services tobe procured with ADF resources will follow the Bank rules of procedure for the procurement of goodsand works or as the case may be the rules of procedure for the use of consultants using the standardbidding documents.

Table 5.1: Arrangements for the Procurement of Works, Goods and Services (in UA million)

In UA million

IC LCN Other Short List Fin. OtherthanADF/TAF

Total

a. Civil Works1.Stock watering facilities2. Zootechnical infrastructure7.Other livestock infrastructure

b. Goods1. Rolling stock2. Equipment and materials

c. Services1. Technical assistance2. Consultancy services

d. Training1. Local training2. External training

e. Staff1.Emoluments, benefits2.Staff salaries

f. Running

g. Miscellaneous

Base costNot allocated

1.19[0.16]

2.57[2.32]5.06[4.31]0.94[0.15]

1.01[0.67]

0.66[0.60]

0.16[0.10]

0.67[0.67]0.52

3.96[2.23]

1.03

1.60[0.83]1.86[1.03]

0.59[0.51]

1.850.250.810.79

1.371.030.34

1.600.770.83

0.140.080.06

0.52

0.52

1.73

1.03

9.23[7.38]2.57[2.32]5.72[4.91]0.94[0.15]

2.20[0.83]1.19[0.16]1.01[0.67]

3.46[1.86]1.60[0.83]1.86[1.03]

0.75[0.61]0.59[0.51]0.16[0.10]

1.19[0.67]0.67[0.67]0.52

3.96[2.23]

1.03

21.82[13.99]2.32[1.58]

Total 1.19[0.16] 9.58[7.45] 7.0[3.60] 4.05[2.37] 8.57 24.14[15.57]

N.B. the figures in brackets indicate amounts financed by the ADF.

5.4.2. National laws and regulations concerning contract award in Chad have been reviewed andjudged acceptable.

5.4.3. Works: works relative to the pastoral scheme development, planting of trees around waterpoints of a value of UA 0.66 million will be procured by force account on the basis of an agreementpreviously approved by the Bank, between the project and DDPA, which will be responsible forsupervising the stockbreeders. DDPA already has the relevant experience and technical skills forsupervising such works. Under the agreement, funds will be provided for the travel expenses of thetechnicians and the necessary equipment and materials, to be procured through local competition.

28

5.4.4 Works worth a total of UA 8.57 million will be procured through local competition (LC),since the amount per contract is less than UA 200 000. Works will take place in several sites at thesame time and grouped into various bid packages.

5.4.5 Goods: (i) information technology equipment, software and accessories, audio-visualequipment, GPS material, equipment for the certification unit and epidemiological equipment of avalue of UA 1.01 million will procured through international shopping (IS) because local suppliersare too few for competition and the amount per contract is lower than UA 50 000; (ii) rolling stockof a value of UA 1.19 million will be procured though international competition (IC) (iii) officeequipment and furniture, training material of a value of UA 1.19 million will be procured throughlocal competition (LC) since the amount per contract is less than UA 100 000 and the goodsrequired throughout the project. Supplies and other small equipment of a value of UA 4.99 millionand not more than UA 20 000 per contract, needed for project running will be procured throughnational shopping.

5.4.6. Services: external training of a value of UA 0.16 million will be procured through directnegotiation with internationally recognised specialised institutes, after prior approval by the Fund.Contract staff whose salaries cost UA 0.11 million and providers of micro-finance and moderationservices worth a total of UA 0.59 million will be procured through a call for candidates at nationaland regional levels only since the amount per contract does not exceed UA 350 000. Thecommunications expert will be recruited through a call for candidates at national level only. Allother consultancy service contracts of a total of UA 1.86 million will be procured throughinternational competition based on a short list.

5.4.7 Community Development Fund: goods, works and services procured in the context of theFDL will be procured in compliance with the procedures manual following its prior approval by theBank.

5.4.8 General Notice for the Procurement of Works, Goods and Services: the text of the generalprocurement notice shall be discussed and adopted at the time of loan agreement negotiations andpublished in Development Business, upon approval of the loan proposal by the ADF Board ofDirectors.

5.4.9 Examination Procedures: the following documents shall be subject to Bank review andapproval prior to publication: specific procurement information notice; bidding documents and lettersof invitation to consultants; bid evaluation reports comprising recommendations on contract award;draft contracts if the latter are different from the standard contracts included in the bidding documents.All community contracts shall be subject to a post ADF review conducted possibly during projectsupervision missions or procurement audit exercises.

5.5. Disbursement Arrangements

5.5.1 Disbursements in respect of contracts for civil works, vehicles, motorbikes and variousmaterials and equipment will be made directly to the contractors and suppliers. The same methodwill be used for contracts with technical assistants, short-term consultants, service providers withinthe framework of agreements signed between the project and specialised institutions.

29

5.5.2 A special account for the ADF loan proceeds and another for the OPEC loan proceeds andyet another for the borrower’s counterpart funds will be opened in a commercial bank acceptable tothe Fund. In addition, a blocked account should be opened under the same conditions as above forthe resources of the national livestock fund to finance recurrent expenses. The opening of theseaccounts shall be a loan condition.

5.6. Follow-up and Evaluation

5.6.1 Follow-up-evaluation will be both internal and external, via Bank supervision missions, amidterm review and a final evaluation exercise, including a borrower completion report. Permanentfollow-up-evaluation of the project will be onus of the project coordinator with the technicalassistance of consultants and ministries concerned by project activities. To that end, activities andachievements will be monitored against project objectives as contained in the matrix, and so willlong term effects and implications of the project vis-à-vis beneficiaries. Through their organisationthe latter will assess their own performance and their representatives in the steering committee willprepare an annual monitoring-evaluation report to be submitted to the Government and ADF.

5.6.2 External follow-up evaluation will be conducted jointly by the Ministry of Livestock(Directorate of Statistics, Monitoring and Planning), Ministry of Planning, Development andCooperation (Directorate of Planning, Financing and Programme and Project Monitoring) and thePermanent Rural Development Sector Consultation Unit which is responsible for keeping track onprogrammes and projects financed by donors in the context of the PIDR. These structures willensure consistency between national and project objectives.

5.6.3 In addition to Bank supervision, plans have also been made for a midterm review of projectachievements during the third year of implementation and a final assessment upon completion.Furthermore, the PIU will submit to the Bank a detailed plan of project activities over the first sixmonths following project launch, quarterly progress reports, annual financial statements, a midtermevaluation report and a project completion report.

5.7 Financial and Audit Reports

Project accounts will be kept by a manager backed by technical assistance and will besubject to the usual control of public administration and a second opinion will be sought from anindependent audit firm. The auditing expenses will be defrayed with ADF funds. Financialstatements and provisional budgets shall be subject to the approval of the steering committee andsent to the ADF not later than six months after the end of the financial year. Non-submission of theaudit report within that time frame shall lead to suspension of disbursements.

5.8 Aid Coordination

5.8.1 In Chad, international aid is coordinated by the Ministry of Planning and Cooperation.However, in the context of the PIDR, donors have devised a three-tier framework for coordinatingtheir aid: a steering committee comprising ministries and chaired by the Prime Minister; a technicalcommittee comprising general managers and a permanent unit responsible for monitoring theprogress of the strategy crafted by the Geneva IV Round Table. The Unit organises periodicmeetings with the three ministries concerned: Agriculture, Livestock and Environment.

30

5.8.2. Financed by all PIDR donors, the Unit frequently organises meetings of donors present inChad with a view to better defining development actions and avoiding duplication of players in thevarious sectors. It works closely with the three technical follow-up-evaluation divisions of each ofthe three ministries in charge of rural development.

6. PROJECT SUSTAINABILITY AND RISKS

6.1 Recurrent Expenses

6.1.1 The project’s operating expenses are estimated at UA 4.99 million throughout projectduration. Operating expenses in respect of ADF financing are estimated at UA 2.23 million andconcern its share in the operating expenses of the project unit as well as those for infrastructure,equipment, materials and development.

6.1.2 At the end of project implementation, recurrent expenses for maintaining water points,production and development, processing and marketing facilities will be borne regularly bybeneficiaries by means of a percentage of taxes and dues levied by the State and allocated to themfrom the National Livestock Fund (FNE) as of project take-off. The revenue of the FNE has beenestimated at CFAF 5.93 billion (UA 6.77 million) as of year 6 of the project. According to one loancondition, a percentage of the PNE is to be paid into a special account as of the 3rd year to financerecurrent expenses at the end of project implementation. National project staff salaries are notconsidered additional Government expenses, as they are part of the State’s regular budget.

6.1.3 Recurrent expenses arising from project implementation concern staff expenses and the costsof operating and maintaining buildings, offices, equipment and rolling stock belonging to the projectunit. The trend is as follows:

Table 6.1 Trend of Recurrent Expenses

Source. Financ. 2003 2004 2005 2006 2007ADF 0.27 0.53 0.51 0.48 0.45Government 0.11 0.13 0.22 0.28 0.32Beneficiaries 0.01 0.03 0.08 0.09 0.12Total 0.39 0.69 0.81 0.85 0.89

6.2 Project Sustainability

6.2.1 Each infrastructure or development will be fully managed by a local committee which willtake part in their financing through beneficiary contributions. The sums collected will be used tomaintain the infrastructure in question. Thanks to the participatory approach, the population willdevelop their capacity for self-management and self-help. Moreover, the training of 2 000auxiliaries selected from among the people will contribute to ensuring sustainability. At the end ofthe project, staff will still be engaged in livestock structures authorised to pursue activities, in theorganisations set up or with service providers. The National Livestock Fund to be divided betweenthe Ministry of Livestock and beneficiaries will also contribute to activity sustainability. Theinfrastructure management committees will take care of maintenance with earnings collected fromusers. Provision has been made to allocate part of the oil revenue to rural development includinglivestock, thus enabling the Ministry to take charge of some of its expenses. Securing the

31

transhumant livestock system will step up production without disrupting the ecosystems because theactions planned will help to protect and develop natural resources.

6.2.2. State withdrawal from production to the benefit of the private sector and grassrootorganisations will prompt the stockbreeders and other operators to organise themselves better inorder to take more part in trade which requires a sound understanding of market mechanisms. Thecreation of training centres, an audio-visual communications network and market and naturalresources information systems will reinforce supervision and sensitisation of stockbreeders andoperators. Supporting the establishment and consolidation of a micro-finance system could enablethe latter to grow wider and fulfil the economic initiatives of the stockbreeders and operators. Astrengthening of the services provided would help guarantee quality services that are indispensablefor the long-term improvement of production and productivity, as for effective marketing systems.The demand for better food hygiene, the need to make meat products more competitive thanks torecognised quality control will also help give more weight to training in livestock occupations.

6.3 Major Risks and Attenuating Measures

6.3.1 The main project risk concerns the weather because the dry season which dictates migratoryherding, and drought are difficult to control. The project proposes solutions like the creation of welland ponds and the promotion of integrated range management that will limit considerably theduration of migratory herding. In addition, the supervision and professionalisation of stockbreederswill force them to gradually adopt methods that entail smaller and very productive herds.

6.3.2 The risk of seeing a fall in the price of cattle and meat will be attenuated by an increase inpopulation and the demands of the oil era which imply a higher consumption of meat. Moreover,neighbouring countries like Nigeria and Cameroon with a huge demand for live cattle and meat willcontribute to maintaining at least the producer price.

6.3.3 Lastly, the stability of the PIU is a decisive factor for proper project implementation and areduction in implementation time. According to the terms of the project any change of staff shall besubject to prior ADF approval.

7. PROJECT BENEFITS

7.1 Financial Analysis

7.1.1 Indirectly, the project will benefit a population of 1 700 000 of which 52% are women. Thisfigure represents 250 000 family units of about 7 members each. Thus, with a target of 100 000units of production, the project will directly benefit 700 000 people. The financial analysis of thecase farms reveals that the project will have a significant impact on the incomes of stockbreedersfrom an increase in the production of cattle, meat and milk (Annex 1 – Volume II on the operatingaccounts).

7.1.2 A financial analysis was made of the case farms of the main categories of stockbreedersencountered in the project impact area. The provisional operating accounts change depending onthe types of animals raised and their respective places in the herd. For an average income of CFAF457 000/year pre-project, a herd owner and head of production unit may make an additional profit ofCFAF 150.000 of 33% more, post project. All balances are surpluses because the productionsystems are low input variants and production costs are estimated at 18% of earnings per herd, postproject. After project gains average CFAF 600 000 per production unit. If milk production is taken

32

into account net profits will increase appreciably. With a positive balance as of the first year, abeneficiary could make savings and share in the financing of his own development.

7.1.3 Export traders have average margins per animal of less than CFAF 20 000, post project. Byenhancing the professionalisation of the sub-sector and building the traders ability to negotiate, theproject will increase the number of rotations annually and reduce the unofficial taxes, “informal”tolls and other surcharges for animals in transit. With a drop in transaction costs, an additionalmargin of nearly CFAF 22 000/animal will be generated. Butcher-slaughterers have a low netincome of CFAF 1 500/animal if all charges are taken into account. Post project, a net additionalmargin of over CFAF 7 000/animal will be generated. The same applies to the typical butcher witha net margin of more than CFAF 5 000 per carcass. Pre project, tanning generates less than CFAF700/skin but this sum is expected to rise to nearly CFAF 1 700/skin, post project.

7.1.4 Based on the operating accounts for cattle and meat, the overall analysis of the project’sfinancial situation over a 20-year period adds up to a net discounted profit of CFAF 5 billion withan internal financial rate of return (IFRR) of 17%. Such a bottom line should secure theinvolvement of stockbreeders and operators in the running and maintenance of the schemes andfacilities unveiled under the project. Detailed results of the financial analysis are given as Annex 3.

7.2 Economic Analysis

7.2.1 All project costs including expenses for research-development and the PIU were taken intoaccount in determining the project’s economic rate of return. Custom duties were excluded fromthe financial costs. There is no value put on the family labour used on farms. Project profits arederived from the increase in production of stockbreeders supervised under the project. Thesebenefits were calculated on the basis of projections on project benefits and production costs given inthe income statements.

7.2.2 The financial prices of live cattle, as shown in the income statement were adjusted for theeconomic analysis reflecting the following export prices: CFAF 175 000/head for cattle and CFAF275 000/head for dromedaries. Recurrent project expenses were forecasted. Aggregate annualoperating income stands at about 40% of earnings, post project. Additional income is taken intoaccount as of the 3rd year when the project will be at full development. Owing to a lack of reliabledata, earnings from milk, offal, hides and skins were not taken into account although they contributeto the project benefits especially with the system of production integration that it allows. Theinternal economic rate of return (IERR) stands at 24% and the net discounted profit of the project atCFAF 13.8 billion for a 12% opportunity cost of capital and a duration of 20 years. The IERR issatisfactory for a project such as this one which underscores the development of the rural area withfocus on the competitiveness of the sub-sectors, better living conditions and poverty reduction.

7.2.3 In the short term, the project will be exempt from duties and taxes and will not have anymarked effect on Government tax revenues. Notwithstanding, Government revenues will go up as aresult of the increase in custom and tax recovery. Enhanced responsibility on the part of theproducers for their production instruments will enable a drop in transaction costs, a rise in cattleexports, a better processing of milk, more efficient public/private relations, more evenly spreadduties and taxes and therefore higher on the marketing of project products.

33

7.3 Analysis of the Social Impact

7.3.1 The project’s building of organisational capacity is key to livestock development in Chad.By allowing the more unsettled migratory pastoralists to better value resources in the Sahelian zone,the project will help reduce pressures in the South and thereby play a strategic role in the settlementof conflicts and in fostering peace in the country with a view to tapping its potential (livestock, oil,etc.).

7.3.2 Women will be associated at all levels (production, supervision, moderation, projectimplementation unit). By playing a more assertive role in production thanks to the project, newvistas will open to them through education, literacy, vocational training, etc. They could takeadvantage of the decentralised credit systems to finance income-generating activities, increasefamily incomes and craft projects that promote easier economic integration into the market.

7.3.3 Stabilising and securing migratory herding and improving the output of the production unitswill mean an increase in income and consequently a higher purchasing power of producers. Thelatter’s income level will out step the country’s poverty threshold. The project will also contributeto the creation of jobs both at the top and end of the line; the involvement of several economicoperators (suppliers of inputs, implementation agencies, veterinary surgeons, consultants, tradersand processors of project products), will mean additional incomes thanks to the project.

7.4 Sensitivity Analysis

The sensitivity analysis shows that with a 10% increase in charges the IERR stands at 22%whereas a drop in revenues makes the IERR fall from 24% to 21%. The IRR is also sensitive to a10% drop in revenues and a 10% increase in charges. The results of the sensitivity analysis are asfollows:

Assumptions IRRBase 24 %10% increase in charges 22 %10% drop in revenues 21 %10% increase in charges and 10% drop in revenues 20 %

8. CONCLUSIONS AND RECOMMENDATIONS

8.1. Conclusions

8.1.1 A majority of Chad’s population is poor with less than 1 dollar per day per inhabitant. Morethan 70% live in the rural area and 52% are women. Pastoralists who practice pastoralstockbreeding (about 1.7 million of them) are among the poor and their profession is faced with ahostile environment that forces them to travel over long distances in search of water and pasture.The project is fashioned to help reduce the poverty of these stockbreeders and more importantly, toboost food security. PASEP will provide direct support to over 100 000 families (700 000 people)by: fostering professionalisation of the 500 associations to be set up; drilling of 80 wells and 80ponds; developing 1 500 km transhumant stock roads; building 25 cattle markets, 40 slaughteringareas and 30 butchers’ stalls; managing in concert 50 pastoral schemes; introducing a system oflocal and national beneficiary representatives; training over 10 000 operators and 2 500 auxiliaries;creating a more competitive sub-sector by establishing food commodity quality control units;rendering public intervention more efficient by training and disseminating well-adapted and

34

appropriate production technologies. With focus on the actual participation of operators and womenat all levels, the project will help them take up the reins of their own destiny. Furthermore, theseinitiatives will lead to at least a 20% increase in production (36 000 t of beef and 7 000 t of meat ofsmall ruminants). The expected additional income is estimated at 10% per annum as of the 3rd year(from CFAF 457 000 to 609 000) per farmer.

8.1.2 The approach adopted by the project encourages self-promotion of stockbreeders andoperators and makes them responsible for ensuring project sustainability. The project will alsoallow for a consolidation of efforts to protect the environment and control desertification. It willhelp consolidate the livestock policy which is part of the PIDR and develop animal resources inChad. With an economic rate of return of 24%, the project is socially viable, economically andinstitutionally feasible and environmentally friendly.

8.2. Recommendations

In view of the foregoing, it is recommended that a loan of not more than UA 14.64 millionand a grant not exceeding UA 1 million from ADF resources, be granted to the Republic of Chad forthe purpose of implementing the project as it is described in this report, subject to the specificconditions set out in the loan and grant agreements.

A. Conditions Precedent to Entry Into Force of the Loan: entry into force of the loanshall be subject to fulfilment by the Borrower of Section 5. 01 of the General Conditions.

B. Conditions Precedent to Disbursement: disbursement of the loan resources shall besubject to entry into force of the loan agreement and fulfilment by the Borrower of the followingspecific conditions:

i) Undertake to adopt a law establishing the division of the National Livestock Fundbetween the Ministry of Livestock and operators of the sub-sector (§4.5.4 and 6.1.2);

ii) Provide the Fund with proof that the Project Implementation Unit (PIU) has been setwithin the Ministry of Livestock (§ 4.5.14);

iii) Provide evidence that a building comprising offices and a meeting room has been putat the disposal of the project to accommodate the PIU (§ 4.5.14 and 5.1);

iv) Provide evidence that the project has been provided with a building within the FarchaLaboratory to accommodate the Meat Products Inspection and Certification Unit (§4.5.12);

v) Provide evidence that the following five special accounts have been opened in acommercial bank judged acceptable by the Funds: a) one into which the ADF loanresources will be paid; b) one into which the OPEC fund resources will be paid; c)one for the local development fund; d) one into which the Government counterpartfunds will be paid; and e) one for the resources of the National Livestock Fund(FNE) to meet project recurrent expenses (§ 5.2.3 and 5.5.2);

vi) Provide evidence of the appointment of the following project implementationofficers: coordinator; an officer with experience traditional farming organisation forcomponent A; an officer with experience in extension and guidance on animal

35

production for component B; an officer for follow-up-evaluation; a gender specialistfor women’s community development; an officer in procurement and an accountingmanager. The curricula vitae, qualifications and professional experience of the saidofficers shall be subject to prior approval by the Fund (§ 4.5.14 and 5.1);

vii) Provide evidence of the establishment of a project steering committee chaired by theMinistry of Livestock and comprising: a representative of the Ministry ofAgriculture, a representative of the Ministry of the Environment and WaterResources, a representative of the Ministry of Social and Family Matters, arepresentative of the Ministry of Finance, one of the Mediature; 5 representatives ofstockbreeders associations (including two women); one representative of the cattletraders; one representative of the butchers; two representatives of rural livestocksociety and one representative of the Permanent Rural Development SectorConsultation Follow-up Unit (§ 5.2.1);

viii) Provide evidence of OPEC’s share of project funds or its pledge to finance theproject in question (§ 4.5.1 and 4.10.1);

C. Other Condition

The Borrower shall furthermore:

Adopt not later than 31 December 2004, a decree ruling on the distribution of theNational Livestock Fund between the Ministry of Livestock and operators of the sub-sector (§4.5.4 and 6.1.2)

Aozou

Bardaï

Zouar

Faya-Largeau

Fada

Koro ToroOum Chalouba

BORKOU-ENNEDI-TIBESTI

Mao

Moussoro

KANEM

BolLAC

Lac Tchad AtiOum Hadjer

BATHABiltine

BILTINE

Abéché

Adré

OUADDAI

Am Timan

SALAMAT

MongoBitkin

Melfi

GUERA

Bokoro

Bousso

N’Djamena

CHARI-

BAGUIRMI

Bongor

Pala

MAYO-KEBBI

LaïKelo

TANDJILEKyabé

SahrKoumra

Doba

GoréBaïbokoum

LOGONE ORIENTAL

Moundou

LOGONE

OCCIDENTAL REPUBLIQUE CENTRAFRICAINE

SOUDAN

LIBYE

NIGER

NIGERIA

CAMEROUN

N

Annex 1Republic of Chad: Pastoral Livestock System Support Project (PASEP)

ADMINISTRATIVE MAP OF CHADProject Impact Area

This map has been drawn by the personnel of the African Development Bank exclusively for the use of readers of thereport to which it is attached. The names used and the borders shown do not imply on the part of the Bank Group andits members any judgement concerning the legal status of a territory nor any approval or acceptance of those borders.

LIBYA

SUDAN

CENTRAL AFRICAN REPUBLIC

CAMEROON

Annex 2: Republic of Chad: Pastoral Livestock System Support Project (PASEP)PROVISIONAL LIST OF PASEP GOODS AND SERVICES (in UA million)

CATEGORIES Total ADF Government TAFAmount

F.E. L.C. Total % Amount (L.C.) % F.E. L.C.. Total %

A. Works 9.23 6.30 1.48 7.78 84.29 0.33 3.57 - - - -B. Materials and equipment 2.20 0.78 0.05 0.83 37.72 0.17 7.72 - - - -C. Consultancy services 1.86 0.48 0.00 0.48 25.80 0.02 1.07 0.36 0.18 0.55 29.57D. Training 0.75 0.12 0.48 0.61 81.33 0.04 5.33 - - - -F. Running 3.96 1.36 0.87 2.23 56.31 0.63 15.90 - - - -G. Staff 1.19 0.00 0.67 0.67 56.30 0.51 42.85 - - - -H. Technical assistance 1.60 0.49 0.00 0.49 30.62 0.04 2.50 0.34 - 0.34 21.25I. Miscell. (FDC) 1.03 - - - - - - - - - -Not allocated 2.32 1.02 0.52 1.54 66.37 0.23 9.91 0.02 0.02 0.04 1.72

Total 24.14 10.55 4.09 14.64 60.64 1.97 8.16 0.73 0.20 0.93 3.85

CATEGORIES Amount OPEC Beneficiaries

TotalF.E.. L.C. Total % Amount (L.C.) %

A. Works 9.23 0.65 0.17 0.83 8.99 0.29 3.14B. Materials and equipment 2.20 1.14 0.05 1.19 54.09 0.01 0.45C. Consultancy services 1.86 0.54 0.27 0.82 44.08 0.00 -D. Training 0.75 0.10 0.00 0.10 13.33 0.00 -F. Running 3.96 0.78 0.30 1.08 27.27 0.02 0.50G. Staff 1.19 0.00 0.00 0.00 - 0.00 -H. Technical assistance 1.60 0.73 0.00 0.73 45.62 0.00 -I. Miscell. (FDC) 1.03 0.82 0.17 0.99 96.11 0.04 3.89Not allocated 2.32 0.33 0.15 0.45 19.39 0.07 3.01

Total 24.14 5.09 1.08 6.17 25.55 0.43 1.78

Annex 3: Republic of Chad: Pastoral Livestock System Support ProjectECONOMIC ANALYSIS

1. Assumptions used to calculate the IERR

- All project costs were taken into account to determine the economic rate of return;

- Costs and benefits of programmes were evaluated over a 20-year period;

- There is no price attached to family labour used in farms;

- The financial costs exclude custom duties;

- The financial price of live cattle used in the income statement was adjusted for theeconomic analysis and the export prices kept;

Annual operating expenditures were estimated at 40% of the post project income.

2. Calculation of the Internal Economic Rate of Return (IERR) and the net discounted value at 12%

Year Year Project Additional expenses RecurrentAdditionalrevenues Additional

s expensesBalance

1 2003 2,501,663,600 444,891,295 0 0 -2,946,554,895

2 2004 6,617,317,700 444,891,295 0 0 -7,062,208,995

3 2005 7,559,052,900 444,891,295 0 1,112,228,237 -6,891,715,958

4 2006 2,121,612,700 2,138,354,050 0 5,345,885,125 1,085,918,375

5 2007 1,408,113,600 4,719,906,232 0 11,799,765,580 5,671,745,748

6 2008 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

7 2009 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

8 2010 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

9 2011 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

10 2012 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

11 2013 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

12 2014 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

13 2015 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

14 2016 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

15 2017 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

16 2018 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

17 2019 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

18 2020 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

19 2021 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

20 2022 4,719,906,232 1,100,000,000 11,799,765,580 5,979,859,348

IERR 24% over 20 years

NDV at 12%CFAF

13,852,399,575

Or CFAF 13.8 billion

Annex 4: Republic of Chad: Pastoral Livestock System Support Project Page 1 of 2Summary of the Environmental and Social Plan (PGES)

1. Short Description of Project

1.1 The main activities scheduled under the project are: assistance in professionnalisingstockbreeders and livestock sub-sector operators’ organisations; making traditional livestock sub-sector products and inputs more competitive; infrastructure building and development; providingservices and fostering a socio-economic and legal environment propitious to the production,marketing and procession of traditional livestock products.

2. Major Environmental and Social Impacts

2.1 Strengthening the capacity of the traditional stockbreeders will have a number of positiveeffects both from the environmental and social vantage points; traditional groups, associations,unions and cooperatives of pastoralists and livestock professionals will help improve the use of therural space and rationalise the management of resources in the project impact area. A bettermanagement of water points and traditional livestock production facilities will enhance the livingconditions of the people concerned. Available water will mean fewer chores for the women andchildren. The women will therefore have more time to educate their children, take initiation andtraining courses in social welfare and income-generating activities. Intercommunity conflictsaround the water points will tone down and fodder crops needed for cattle during the lean periodwill be given more attention.

2.2 During implementation of PASEP, there could be risks of increased deterioration of naturalresources (plant cover, water and soil resources) near the facilities and could thus contribute tocreating new imbalances. The plant cover, soil and water are often adversely affected by animalsstaying for long periods around the stock watering points and cattle markets which could accentuatethe desertification process. Migratory movements of herds near protected areas could destroy thenatural habitat of wildlife and disturb their peace. With the support provided for the traditionallivestock system, the current annual growth rate of 2.5% could increase with the attendant negativeimpact on the environment: damage in particular to the areas around water points, considerablemodification of the flora and fauna along the migratory herding passageways. In the long term thiscould mean a reduction in carrying capacity of the already poor ecosystems in the project impactarea.

2.3 There will be risks of pollution around the production and traditional livestock systemprocessing facilities from sewage and waste outflows (blood, dung, bones, hooves, horns, etc.) intorivers and open air as is the case with all slaughtering areas in Chad. Polluted ponds can be a sourceof infectious and parasitic diseases.

3. Optimisation and Impact Mitigating Programme

3.1 Education, information and environmental sensitisation through the nomad educationestablishments and organisations will enable possible control of areas trampled by cattle. Theprohibition of grazing on deteriorated areas, the extension of market garden and fodder crops,intensification and reforestation will step up the potential of the project impact area in fodderresources and help contain the phenomenon of desertification which is a major challenge in the area.

Annex 4: Republic of Chad: Pastoral Livestock System Support Project Page 2 of 2

3.2 Prohibition of grazing will also contribute to the improvement of the biodiversity andprotection of endangered species such as the Lake Kouri Zebu in the region which are well adaptedto their natural habitat. The development of water crossing pathways will facilitate the passage ofanimals and humans and avoid loss of life from drowning.

4. Environmental Control and Follow-up Programme

The project implementation unit will take the necessary steps to plan activities for theimplementation of the PGES. It will also ensure, with the help of service providers, that theprogramme for training sensitising and informing is carried through. The environment will bemonitored via a database that takes into account the growth index of the plant cover, the soildeterioration and/or restoration index, the flora/fauna make-up, as well as the water balance in theproject impact area. The National Research Support Centre (CNAR), the Regional EnvironmentalInformation Management Programme (PRGIE) and other specialised institutions with the relevantinstruments will assist accordingly.

5. Capacity and Institution Building

Stockbreeders associations and groups of traditional livestock tradesmen will helpimplement activities scheduled under the various PASEP components. Under the project, users oftraditional livestock areas will be made more accountable and water points and fodder will bemanaged more rationally in order to limit cattle wandering over long distances. To that end, theparticipation of all players and users will be sought through information, sensitisation, training andoutreach activities for rural dwellers, and provision made to ensure that the relevant texts aredisseminated and applied at all levels by both authorities and people.

6. Public Consultation

The project document was prepared using the participatory approach. During works, far-reaching consultation was organised through surveys, local meetings and national and regionalworkshops. This approach will be maintained during project implementation so that livestockproducers are kept informed and made fully responsible for the management of natural resources.Environmental information will be disseminated via a community radio (provided for that purposeunder the project), an information bulletin in the vernacular, workshops and direct contacts.

7. Cost Estimate

The cost of implementing PGES activities is estimated at CFAF 140 million.

8. Implementation Schedule and Reporting

Activities for implementing mitigating measures will start as of the first year with in particulartraining/sensitisation and which gain momentum as the project progresses. The PIU will produceperiodic reports on the status of PGES.

ANNEX 5: Republic of Chad: Traditional Livestock System Support ProjectBANK GROUP OPERATIONS (in UA thousand) as at 30/09/2002

Approval Date of Date of Closing Status Net Amount Amount Disburs.

PROJECTS BY SECTOR Window Date SignatureEntry into

Force Date Approved Disbursed Rate %

1BOL POLDER IMPROVEMENT

A.D.F. 12/12/1975 15/01/1976 12/11/1976 31/12/1992 Completed 4 142.80 4 142.80 100

2SATEGUI-DERESSIA IRRIGATION DEVELOPMENT A.D.F.

14/04/1986 // // //Completed

0.00 0.00 0

3INSTITUTION SUPPORT TO RURAL ENGINEERING A.D.F.

14/04/1986 07/05/1986 13/03/1987 30/06/1994Completed

948.70 948.70 100

4MAMBI POLDER IRRIGATION DEVELOPMENT A.D.F.

18/06/1986 17/07/1986 18/03/1988 31/12/2002 Active/Effective 11 448.70 7 292.50 63.7

5CHAD REGION MASTER PLAN STUDY A.D.F.

23/03/1987 10/06/1987 18/03/1988 31/12/1999Completed

1 777.60 1 629.50 91.7

6LAKE REGION DEVELOPMENT PROGRAMME A.D.F.

18/05/1987 10/06/1987 18/03/1988 30/06/1999Completed

14 046.00 14 024.90 99.8

7NATIONAL LIVESTOCK PROJECT A.D.F.

29/04/1988 29/05/1989 29/12/1989 30/06/2000Completed

10 896.00 10 328.70 94.8

8LEATHER/SKIN SECTOR DEVELOPMENT STUDY A.D.F.

23/02/1989 28/05/1989 15/09/1989 31/12/1996Completed

503.00 503.00 100

9RUNOFF WATER DEVELOPMENT STUDY A.D.F.

14/05/1990 30/05/1990 11/06/1991 31/12/1999Completed

1 155.90 1 155.90 100

10COTTON SECTOR IMPROVEMENT PROJECT A.D.F.

28/08/1991 22/04/1992 08/05/1992 31/12/2000Completed

13 815.80 13 043.50 94.4

11CONTON AND FOOD CROP PRODUCTION PROJECT A.D.F.

02/09/1993 21/03/1995 11/07/1996 31/12/2001 Active/Effective 18 950.00 11 616.00 61.3

12BILTINE RURAL DEVELOPMENT PROJECT A.D.F.

13/10/1993 13/01/1995 20/05/1996 31/07/2001Completed

670.00 598.60 89.3

13SPIRULINA PRODUCTION DEVELOPMENT PRE-FEASIBILITYSTUDY

A.D.F.15/04/1997 29/05/1997 23/03/1998 30/06/2001

Completed369.00 320.10 86.7

14ENVIRONMENTAL IMPACT ASSESSMENT OF RUN-OFF WATERDEVELOPMENT STUDY

A.D.F.29/04/1998 29/05/1998 15/09/1999 31/12/1996

Completed510.00 0.00 0

14 SUPERFICIAL RUN-OFF WATER CONTROL DS 4A.D.F.

29/04/1998 29/05/1998 15/09/1999 31/12/2005Active/Effective

11 900.00 620.00 5.2

15 LAKE CHAD PREFECTURE RURAL DEVELOPMENTA.D.F.

17/03/1999 25/05/1999 04/09/2000 31/12/2004Active/Effective

3 060.00 0.00 0

16 FISHING AND FISH FARMING STUDYA.D.F.

08/12/1999 19/01/2000 10/07/2000 31/12/2004Active/Effective

737.20 200.60 27.2

17 BILTINE RURAL DEVELOPMENT PROJECTA.D.F.

19/09/2001 20/12/2001 // 31/12/2007Active/Effective

9 000.00 0.00 0

18 NATURAL RESOURCES MANAGEMENT STUDY - PPFA.D.F.

16/07/2001 19/09/2001 08/01/2002 15/10/2002Active/Effective

460.70 200.50 43.5

19 PASEP STUDY - PPFA.D.F.

04/10/2001 11/02/2002 26/02/2002 31/12/2002Active/Effective

400.00 164.00 41

20 ROAD MAINTENANCE PROGRAMMEA.D.F.

24/08/1978 04/11/1978 31/12/1982 Completed 0.00 0.00 0

21 EMERGENCY PROGRAMMEA.D.F.

04/12/1981 15/12/1981 30/09/1982 30/06/1994Completed

12 978.00 12 978.00 100

22 ROAD REHABILITATION – MAINTENANCEA.D.F.

26/10/1987 23/03/1988 30/12/1988 31/12/1998Completed

12 194.10 12 194.10 100

23 DJERMAYA ROAD DEVELOPMENT PROEJCTA.D.F.

23/01/1997 11/02/1997 30/07/1997 31/12/2000Completed

13 250.00 10 173.20 76.8

24 MASSAG ROAD DEVELOPMENT PROJECTA.D.F.

27/04/2000 18/05/2000 09/10/2000 20/06/2004 Active 12 000.00 0.00 0

25 SANITATIONA.D.F.

26/10/1976 02/08/1976 04/02/1977 31/12/1992 Completed 4 605.30 4 605.30 100

56 N'DJAMENA RAIN WATER DRAINAGEA.D.F.

23/09/1986 04/11/1986 08/02/1990 30/06/1994Completed

396.00 396.00 100

27 SATIGUI-DERESSIA IRRIGATION ( OMVSD)A.D.F.

22/03/1974 10/05/1974 02/02/1975 31/12/1992Completed

3 684.20 3 684.20 100

28 SATIGUI-DERESSIA IRRIGATION ( OMVSD)A.D.F.

26/10/1976 11/11/1996 31/03/1977 31/12/1992Completed

3 684.20 3 684.20 100

29 SUDANESE AREA MASTER PLAN STUDYA.D.F.

17/09/1990 08/01/1991 03/01/1992 31/03/2001Completed

1 430.10 1 430.10 100

30 ELECTRICITY SUB-SECTOR MASTER PLAN STUDY (GRANT)A.D.F.

16/12/1991 22/04/1992 10/12/1992 31/12/2000Completed

940.20 940.20 72.9

31 INFRASTRUCTURE REHABILITATION TA.D.F.

18/12/1986 05/02/1987 26/08/1987 31/12/2002Completed

14 273.70 14 273.70 100

32 INSTITUTIONAL SUPPORT TO ONPT-NDJAMENAA.D.F.

15/02/1990 09/03/1990 05/07/1990 31/03/2001Completed

2 135.40 2 135.40 100

33 INSTITUTIONAL SUPPORT TO BDT.A.D.F.

23/02/1989 23/02/1989 27/03/1990 31/12/1994Completed

1590.00 1590.00 100

34 SCHOOL OF SCIENCES (I.N.S.E.)A.D.F.

22/11/1976 11/12/1976 31/07/1977 31/12/1994Completed

3 921.80 3 921.80 100

35 HYGIENE SECTOR STUDYA.D.F.

23/03/1987 10/06/1987 21/06/1988 30/06/1994Completed

488.40 488.40 100

36 HYGIENE SECTOR STUDYA.D.F.

23/03/1987 10/06/1987 21/06/1988 30/06/1994Completed

963.40 963.40 100

37 EDUCATION PROJECT SECTOR STUDYA.D.F.

23/04/1987 10/06/1987 10/01/1989 31/12/1994Completed

500.60 500.60 100

38 REHABILITATION OF SCHOOLS IN CHADA.D.F.

20/09/1988 28/05/1989 30/11/1989 31/12/1996Completed

10 776.30 9 535.50 88.5

39 BORKOU PRIMARY SCHOOL REHABILITATIONA.D.F.

18/09/1989 10/10/1989 30/05/1990 30/06/2000Completed

8 623.80 8 543.30 99.1

40 EDUCATION PROJECT IVA.D.F.

28/08/1991 22/04/1992 01/04/1993 30/06/2001Completed

7 557.00 5 795.70 76.7

41 PRIMARY HEALTH STRENGTHENING PROJECTA.D.F.

05/05/1993 12/05/1993 12/05/1994 30/06/2002 Active/Effective 9 210.50 7 893.60 85.7

42 POVERTY REDUCTION & ACTIONS IN FAVOUR OF WOMENA.D.F.

04/09/1997 09/10/1997 04/02/1999 31/12/2003 Active 300.00 0.00 0

43 POVERTY REDUCTION & ACTIONS IN FAVOUR OF WOMENA.D.F.

04/09/1997 09/10/1997 04/02/1999 31/12/2003 Active 5 300.00 806.60 15.2

44 EDUCATION PROJECT VA.D.F.

28/02/2001 29/05/2001 21/02/2002 31/12/2005 Active 1 300.00 41.50 3.2

45 EDUCATION PROJECT VA.D.F.

28/02/2001 29/05/2001 21/02/2002 31/12/2005 Active 5 431.00 0.00 0

46 HEALTH SYSTEM STRENGTH. & HIV/AIDS CONTROLA.D.F.

21/11/2001 20/12/2001 // 30/06/2005 Active 5 000.00 0.00 0

47 HEALTH SYSTEM STRENGTH. & HIV/AIDS CONTROLA.D.F.

22/11/2001 20/12/2001 // 30/06/2005 Active 1 000.00 0.00 0

481 RESTRUCT.ECON. & FINACIAL PUBLIC SECTORA.D.F.

18/01/1989 23/02/1989 10/04/1989 30/06/1982Completed

27 631.60 27 631.60 100

49 INSTITUTIONAL SUPPORT TO 3 MINISTRIESA.D.F.

17/12/1990 08/01/1991 15/05/1991 30/06/1999Completed

3 868.40 3 837.50 99.2

50 STRUCTURAL ADJUSTMENT PROGRAMME IIA.D.F.

02/10/1997 09/10/1997 28/11/1997 31/12/1999Completed

18 000.00 18 107.80 100.6

51 STRUCTURAL ADJUSTMENT PROGRAMME IIIA.D.F.

06/02/2002 08/02/2002 // 31/12/2002 Active 8 700.00 0.00 0

COUNTRY TOTAL 323 825.40 223 008.30 68.9

Annex 6 : Republic of Chad: Pastoral Livestock System Support Project (PASEP)

Project Organisation Chart

STEERING COMMITTEE GENERAL LIVESTOCKDIRECTORATE

WOMEN'SORGANIZATION

IMPLEMENTATION OFFICERSCOMPONENT A and B

Stockbreeders, Traders, Butchers

5 Regional Delegations18 Livestock Sectors100 Livestock Units

FOLLOW-UP,AND

STATISTICS

MANAGEMENTAND FINANCE

Project Implementation UnitPIU

MINISTRYOF LIVESTOCK

Annex 7 : Republic of Chad: Pastoral Livestock System Support Project (PASEP)List of Annexes Contained in the Working Document -Volume II

ANNEX 1. Operating Account Pre and Post ProjectANNEX 2. Calculation of Rate of ReturnANNEX 3. Range and Conflict ManagementANNEX 4. Physionomy of the Micro-Finance Sector in ChadANNEX 5 Breakdown of Donor AchievementsANNEX 6. Terms of Reference of the CoordinatorANNEX 7. Conditions for Project Implementation in the FieldANNEX 8. Detailed Project Cost by Component

Annexe

SCCD: G.G.

CONFIDENTIAL

AFRICAN DEVELOPMENT FUND ADF/BD/WP/2002/118/Corr.104 December 2002Prepared by: OCAROriginal: FrenchTranslated by: M. Ferran (03/12/02)

Probable Date of Board Presentation

TO BE DETERMINEDFOR CONSIDERATION

MEMORANDUM

TO : THE BOARD OF DIRECTORS

FROM : Cheikh I. FALLSecretary General

SUBJECT : CHAD : PROPOSAL FOR AN ADF LOAN OF UA 14.64 MILLION ANDA TAF GRANT OF UA 0.93 MILLION TO FINANCE THE PASTORALLIVESTOCK SYSTEM SUPPORT PROJECT *

Please find here below a corrigendum relating to the above-mentioned document (dated 08/11/02):

- Page 12, Paragraph 3.8.2, on the sixth line, read:« the Almy Bahaim Project, financed by AFD (instead of GTZ)».

- Page 34, Section 8.2, on the second line, read:«as well as a grant not exceeding UA 0.93 million» (instead of UA 1 million).

Further more, please be advised that the following modifications concern only the English version ofthe Appraisal Report.

- Page 1, Paragraph 1.2, read:«Nonetheless, pastoralists who belong to...» (instead of «Nonetheless, who belong..»).

- Page 12, Paragraph 3.8.1 line 6, read:«and made it possible to train officers…» (instead of «train officers …»).

Attach:

cc: The President

* Questions on this document should be referred to:

Mr. C.K. SPENCER Director OCAR Extension 4152Mr. O. AW Division Manager OCAR.3 Extension 4122Mr. M.L. KANE Agricultural Economist OCAR.3 Extension 4432Mr. M. BEREKOUTOU Livestock Specialist OCAR.3 Extension 4628Mrs. R.N. BA Gender Specialist OCAR.0 Extension 4768