Sao Tome et Principe: Second Artisanal Fisheries Development Project
The USD 3.3 million Second Artisanal Fisheries Development Project was approved in December 1990 and became effective in April 1992. The IFAD loan amounts to SDR 1.2 million, co-financing is provided by the French FAC for FF 4.5 million. Government and beneficiaries contribute USD 1 million. Disbursement in November 1994 was 41%. The Cooperating Institution is UNDP/OPS which carried out a total of five supervision missions.
The project is the followup to the first phase, focussed mostly on the distribution of imported fishing equipment, outboard engines and spare parts, and on providing maintenance facilities. Although there was a significant increase in production (according to the estimates of the Mid-term Evaluation of December 1988 and the Mid-term Review of March 1990) a number of constraints and issues arose during the implementation of the first phase, namely that:
- project autonomy generated a certain degree of confusion between Project Management and the Fisheries Directorate in terms of responsibilities for the project and for the formulation of a policy of coherent interventions enabling a more rational use of the total fish resources of the country:
- no mechanism to channel the foreign exchange that was needed to finance imports had been established. Thus, foreign exchange was only available through the project or from the Japanese grant;
- frequent unavailability of fuel constituted an increasing constraint in maintaining a sufficient return on investment in boats and engines. Credit repayments to the "Caisse Populaire" (on loans for engine purchase) severely dropped at the end of the first phase;
- the policy of Dobra devaluation, combined with the artificial prices practiced by the project (distributing equipment from the Japanese grant) made it impossible for private traders to be involved in the market. The project became the sole supplier and distributor of equipment and spare parts for the artisanal sub-sector;
- the project had administered a sizeable stock of items for which no or little demand existed, which consequently remained unsold; and
- support to associations, technical advice and extension on improvement of fishing techniques were insignificant.
The second phase was aimed at maintaining the increased level of investment and production capacity achieved under the first phase (while expanding the total area covered by the project to include the island of Principe); from the implementation of the latter, the following lessons and considerations were drawn and incorporated in the design of the second phase:
- a clear responsibility for the implementation of the project needed to be established by integrating it in the Fisheries Directorate, whose strategic planning capacity would then be strengthened;
- a mechanism to earmark foreign exchange revenue in the industrial sector for use in the artisanal subsector would need to be set up;
- distribution and service activities ought to be turned over to the private sector within the framework of the liberalisation of the economy; prices would then be adjusted gradually in order to provide a competitive market environment and a better basis for fishermen to make their projections and return calculations;
- fishermen's associations should constitute a basis for community development once provided with appropriate training, technical advice, extension and management support. They would need to fulfil a function in the expression of demands for inputs and would also assure the retail function vis-à-vis their members as well as fuel distribution;
- in view of reinforcing human resources, it was deemed necessary to provide substantial technical assistance, particularly in order to improve existing fishing techniques.
The objectives of the project are to: i) increase the well being and income of the artisanal fishermen and the saleswomen; ii) contribute to the formulation of a rational sector policy; iii) develop autonomous fishermen organisations and to establish a financing mechanism which would assure the sustainability of inputs supply; and iv) consolidate the production potential which had been built up during the first project.
The project's strategy takes into account the limited fish resources within reach of the artisanal fishermen and focusses on consolidation of previous investments and the increase in their productivity rather than on extending new investments in boats, engines and fishing gear.
The target group includes all families that are directly or indirectly involved in the artisanal fishery sub-sector, or about 2 000 fishermen and 2 000 sales women, a total family population of 18 000 persons. Estimated household income from fisheries is about USD 160 per head, less than half the 1990 per capita GDP of USD 322.
The project includes the following four components.
Support to Distribution and Maintenance The project provides the required foreign exchange through an Artisanal Fisheries Development Fund (AFDF), to be established, for the import by the private sector of fishing gear, replacement outboard engines and spare parts. Demand estimates will be provided by the Fishermen Associations. Foreign exchange counterpart funds will be used to establish a credit line in the Caisse Populaire to allow Associations to buy the required inputs. The central project repair workshop will be privatized and regional private workshops will be supported.
Extension Development and Institutional Support The project initiates an extension programme focussing on the improved use of traditional techniques. To bring more of the open water fish within reach of the artisanal fishermen, tests with the Fish Concentration Device (FCD), successfully applied elsewhere, will be undertaken. Major improvements in sailing techniques are possible and the project will undertake a demonstration programme. Technical assistance for 30 months have been included. Institutional support will involve the construction of additional office space and the provision of several support missions by short term experts in unsold stock management and disposal, sectoral policy formulation, and in the design of operating procedures of the AFDF.
Support to Associations The project will support 10 existing Fishermen Associations and will promote the creation of new association on beaches where they do not exist. They will be active in input supply and support will be provided in the construction of community centers. Women groups will be promoted which will procure boats to be rented out to fishermen. A pilot exercise with a women group managing a fish transport vehicle will be undertaken. Training will be provided to repair mechanics and selected NGOs will implement health activities in fishermen villages. Consultant support is foreseen for the training of project staff and for the design of a simple accounting system for Associations.
Monitoring and Evaluation Taking into account a planned project for the evaluation of maritime resources and an ongoing UNDP project for price and market statistics, the support to M&E remains limited to the analysis of the data generated by these external sources and to the establishment of links between project activities and the data provided. A project reporting system will be drawn up. IFAD will provide consultant support to design the M&E system. Staff training and funds for specific studies have been included.
The Fisheries Directorate, under the Ministry of Agriculture and Fisheries will be responsible for the implementation of the project. A Technical Department in the Fisheries Directorate will be established which will include the extension and community development staff, while a Monitoring and Evaluation Unit will be attached to the Directorate.
The AFDF will be established as an account in the Central Bank. The annual allocation of foreign currency is made available to the Chamber of Commerce, who will be responsible for the import of required inputs. The Caisse Populaire will manage the credit line for Associations. The extension programme will be implemented by the Technical Department at both islands of the country. Test results of the FCDs and of improved fishing techniques will be recorded in detail in collaboration with the M&E unit. The institutional support component will be implemented by the project management. Support to Associations will be implemented both by the project and the Cooperative League of the USA, (CLUSA), an NGO.
Context and results
Under government's macro-economic policies, the currency has been devalued from Db145=1 USD in 1990 to Db960=1USD in November 1994 or by 85%. Simultaneously energy subsidies have been abolished, nearly doubling the price of petrol. Inputs for fisheries have been subsidized with the help of Japanese grant funding which terminates in 1995. Fish selling prices have followed the general inflation trend and as a result, in commercial market prices and in the absence of subsidies, the squeeze on the gross margin is increasing for fishermen using techniques which depend largely on imported items for its operations such as fuel, spare parts and replacement of engines. Mission estimates indicate negative returns on motorized boats using imported fishing gear. With the official recognition of the parallel foreign exchange market, the scarcity of foreign exchange for the purpose of trade imports has been largely eliminated and the need for the establishment of the AFDF is no longer obvious. After the establishment of a new government,in October 1994, the fisheries sector became the responsibility of the new Ministry of Trade, Industry, Tourism, Agriculture and Fisheries.
The lack of data refering to the situation before the project, even on a sample basis related to a limited number of beaches, does not allow the effects of the activities financed to be measured. No general trend of production increase or improvement of the quality of life can therefore be identified. Nevertheless, on the beaches visited by the Mission there appeared to be a strong demand by the fishermen for spare parts, fishing gear and related short-term credit, as well as a widespread need for the transportation and conservation of fish.
As far as the formulation of a fishing resource management policy is concerned, no progress has been made nor has an attempt been started in this sense.
In the third year of the project, the objective of developing autonomous male and female fishermen organisations linked to the private sector for their supply in fishing gear and fuel could not be reasonably attained. Nevertheless, the underlying conditions that will enable these objectives to be met in the fifth year were not found at the time of the evaluation. This situation is revealed by the slight diversification and the artificial, subsidized network of the economic activities of the associations, and the lack of an autonomous financing mechanism.
Target Group: the 29 associations that have been set up (23 fishermen, 6 palayés) gather less than half of the expected total beneficiaries of 4 000 persons, with a marked imbalance toward the fishermen.
Project achievements are reviewed below by component. Start-up was delayed by lengthy procedures with co-financier FAC and negotiations with CLUSA on an implementation contract. Field activities started in 1993 and by the time of the Mid-Term Evaluation, 20 months of experience had been accumulated.
In early 1993, the government received a third equipment grant for the artisanal fisheries sub-sector from Japan. It included boats, outboard engines, nets, cloth for sails, ropes, lines, hooks, etc. Sale prices were set by the Ministry of Trade at about 10% of commercial prices, which induced leakages to other sectors or to other countries in the region. Under these conditions, involvement of private traders in the supply of similar inputs at normal market prices was not possible. In view of the difficulty of mobilizing the private sector for the supply of fishery inputs, the project promoted the establishment in 1993 of a Federal Union of Fishermen Associations (FUFA), which however would have to face the same financial constraints. In March 1994, the Artisanal Fisheries Development Fund (AFDF) was formally established by decree. Operating modalities still need to be defined. As the AFDF is not yet effective, the counterpart funds for the credit line also have not been generated. Two draft subsidiary agreements with the Caisse Populaire have been drawn up which need adjustments to reflect the project intentions better (interest rates, loan ceilings, signing authority). The central workshop was privatized without a prior feasibility study. Essential equipment for outboard engine repair was removed and activities now focus on vehicle repair. Due to the lack of credit, strengthening of regional workshops did not take place.
The external projects which were supposed to generate information about fish resources and the structure of the artisanal sector have not provided the expected results, which made the design and implementation of an extension programme difficult. The project has itself undertaken an inventory of the, rather selective, fishing techniques in use. Productivity can be raised with simple means. Boat design can be improved to reduce wear and tear. Sailing techniques and the use of sailing in up-wind directions are constrained by the low quality of sail material in use (old polyester sacks) and by the design of the sail. After the first eight Fish Concentrating Devices (FDC) installations, five were damaged or disappeared: two for technical reasons, one was destroyed by a fisherman and the other two disappeared for unknown reasons. Initial results seem to indicate a substantial increase in productivity per boat from 1-2 kg of fish per hour without FCD to about 4-5 kg/hr with FCD. Institutionally, the project has not been integrated in the structure of the Fisheries Directorate and operates as a separate autonomous entity directly reporting to the Minister. The new project office was finalized in October 1994. None of the consultant support foreseen has been used.
At present there are 23 fishermen associations, including a total of 1 043 members or an average of 45 members per association. The six associations of trade women are smaller with membership ranging between 15 and 25. In most associations, the accounting system is still embryonic and does not allow members to exercise an effective control over management. Economic activities mostly include the sale of fishing equipment and gear with pricing policies not always discriminating against non-members, thereby demotivating members to pay their regular contributions. Several associations are also involved in the operation of a small store where essential consumer goods are sold. On the whole, economic activities are only yielding marginal results because of the lack of initial capital. Stocks normally are worth about USD 50. Three out of the six women groups have already acquired a motorized boat which is rented out to fishermen. The provision of a transport vehicle to the women group in Santa Catarina has not yet been realized. A total of 12 Community Centers have been constructed, of which four were initiated under the first phase of the project, six are still in progress and four more are being programmed. Because of lack of people's involvement, some centers were constructed in locations or for reasons which were not accepted by the associations. Several centers served as campaign offices for party staff during the last election campaigns. Association members receive recurrent training under the CLUSA support programme. Project efforts in training have been more sporadic. Training of mechanics has not been initiated. Instead of supporting NGO's in health programmes, the project has trained 12 members of associations as health agents and equipped them with a batch of medicines including antibiotics and requiring the use of syringes. The mission considers that, taking into account the basic training level of the agents, this operation carries a definite health risk.
The staff responsible for M&E was sent to Portugal for a six month training course, mainly in handling of computer programmes. While some of the required information has not been provided by external projects such as the Resource Evaluation Project, other detailed information on the functioning of associations is available at CLUSA but it has not been presented or analyzed properly in project progress reports. Such reports have not been produced to an acceptable standard during the whole course of the project. IFAD support in the drawing up of the M&E system, as foreseen at appraisal, has not been realized.
Project management is weak and lacks initiative. Programming of activities on the basis of the project strategy and the corresponding budgeting has not been undertaken. Together with the lack of proper reporting, this makes it impossible to compare what was intended to be achieved with actual results and with the corresponding expenditures. Financial reports of project expenditures have been prepared, but they do not relate to project activities but to categories of expenditures. The only available audit report covers 1993 and is not up to standard.
The Cooperating Institution, UNDP/OPS, has carried out five supervision missions since the beginning of the project. The most important constraints affecting proper implementation had already been identified by the supervision mission of November 1992. These include: the weak capacities of the project management, especially in programming, budgeting and M&E; the need to monitor closely the financial return of using outboard engines in view of rising fuel, maintenance and replacement costs; and the requirement to explore the potential of improved sailing techniques, the improvement of traditional fishing techniques and the support to processing and marketing. These issues are repeatedly mentioned by all subsequent supervision missions, but no solutions have been applied. The Evaluation mission considers that a better translation of these issues into operational recommendations should have been sought in order to guide and stimulate improvement in project performance. This would have involved the actions that the Mission recommends below: the provision of technical assistance in project management, the replacement of the staff responsible for M&E by an economist, the modification of the proposals for the supply of inputs and the shift in emphasis towards non-motorized techniques. The Evaluation mission took note of the commitment in November 1993 of the Minister of Trade, Industry, Tourism and Fisheries vis-à-vis the supervision mission to raise the sales prices of equipment received under the Japanese grant to commercial levels, which was not subsequently applied in practice.
Objectives and strategy In the present and future macro framework, high import intensity technologies are not sustainable. The maintenance of the production potential thus should be achieved by the application of low costs, alternative technologies, based on the use of FCDs, improved fishing techniques and use of the sail.
Target group The target group should not change, but a greater effort needs to be undertaken to raise the participation rate of women, which at present is 10%.
Support to Distribution and Maintenance A simple inputs import scheme, based on quick turn-over to avoid financial and storage costs can be implement by the Chamber of Commerce. Traders will replenish the required foreign exchange from their own sources. Project support to Associations will be provided to establish Revolving Funds through matching grants. This will allow Associations to buy their inputs cash, avoiding the need for credit. The consultancy on stock disposal needs to be undertaken urgently as a large unsold stock is kept by the project under quickly deteriorating conditions. The essential equipment needs to be placed back in the privatized central workshop and the project should support a private workshop on Principe island.
Extension Development and Institutional Support It is recommended that the project undertakes its own, limited data gathering concerning an inventory of fishermen, boats, engines, fishing gear used and the basic parameters required to estimate stock evolution. A demonstration programme on improved fishing techniques needs to be implemented. A consultancy on improved boat design needs to be undertaken to improve the lifespan of boats. An exchange programme with fishermen from Mozambique to improve sailing techniques is recommended. FCDs should be constructed with as much fishermen participation as possible. The technical assistance contracted should be extended by one year to implement the demonstration and FCD programme. Transport vehicle management should be undertaken on a pilot basis by two women groups. A female volunteer should be recruited to implement a fish conservation and processing programme with women groups. The consultancy on policy formulation should be undertaken quickly, now that government has changed.
Support to Associations Project support should focus on monitoring and further training of existing associations. The contract with CLUSA therefore needs to be extended as foreseen for two years. Project staff in Community Development should be trained in Burkina Faso. Mechanics training should be undertaken as foreseen and the design of simple accounting systems needs to be realized. Further implementation of the community centers and health activities needs to be reconsidered to improve people's participation in the former and to reduce village pharmacies to current medicines in the latter.
An economist should be recruited to head the M&E Department of the project. A three-months support mission by an international expert will allow the establishment of a simple, operational system on the basis of selected indicators. The M&E system will be closely coordinated with the CLUSA system and some additional work to be undertaken by CLUSA will be subject of a covenant to the contract with the project.
The management capacities of the project staff are insufficient and need strengthening. It is therefore recommended that an expert in project management be recruited for 15 months, to assist the project director in all his tasks, including the implementation of the above described recommendations. It is essential to carry out as soon as possible an audit of all project accounts, beginning from the first disbursement in 1992 up to the end of 1994. If necessary, further disbursements should be postponed to enforce this recommendation.
The impact of the recommendations on the remaining project funds has been estimated. It is based on the project budget for the last two implementation years and on the recommendations of the Mission. It assumes the discontinuation of support to regional workshops; construction of community centers; credit financing of a vehicle for women groups (for which an NGO has expressed interest); the health programme; and the support mission to define the operating procedures of the AFDF. Other support missions have been shortened. The costs of input distribution has been reduced by the assumed higher turn-over of stocks.
Recommended new activities include the funding of the matching grants for the revolving funds of associations; the development and improvement of boats; the support to marketing and processing, including the recruitment of a female volunteer; the fishermen exchange programme with the IFAD project in Mozambique; the training of Community Development staff in the GRAAP method in Burkina Faso; the procurement of three motorcycles for the monitrices; and the recruitment of 15 months of management technical assistance. A contingencies allowance has been foreseen.
The Evaluation Mission has taken care to design its recommended adjustments in such a way that they do not constitute a substantial change in the scope of the project, nor in its objectives, components, modalities of execution, target group, procurement and financing. Therefore, the adjustments can be accommodated through a routine amendment of the Loan Agreement to take on the financing of so far unforeseen activities, including the extension programme which also covers the activities to improve boat design; and technical assistance for management. Two categories, Extension Programme and Management Support should be created for this purpose. A reallocation between categories is thus required and a proposal is in the main report.
Following approval of the Mid-Term Evaluation Report by IFAD, it is recommended that the conclusion and recommendations be reviewed and discussed with the government and that assurances on the following specific issues be obtained:
- the prolongation of the extension programme, including the maintaining of the present expert in place, up to June 1996 on project funding. This is the most effective manner to complete the foreseen programme of putting in place of the FCD's and to extend improved traditional fishing techniques. Alternatives through the mobilisation of additional external funding from the French Cooperation or others carry a high risk of delay, as experienced in the beginning of the project, and would jeopardize the required synchronization with the rest of the project activities;
- the implementation of a policy of real prices for inputs provided by external sources on grant or other concessional terms. This assurance is crucial for the establishment of an environment in which privatisation of input supply becomes feasible;
- the amendment of the Loan Agreement along the lines proposed in this report;
- the carrying out as soon as possible of an audit of all project accounts since 1992, according to internationally acceptable standards.
The assurances on the pricing framework and on the audit are considered of such importance that IFAD may consider to make them conditions for further disbursement.
12 December 1992