Document of The World Bank FILE' "-

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No. 3050-BEN

PEOPLE'S REPUBLIC OF BENIN Public Disclosure Authorized

SECOND FEEDER ROADS PROJECT

STAFF APPRAISAL REPORT

Public Disclosure Authorized December 1, 1980 Public Disclosure Authorized

Western Africa Project Department Feeder Road Section, RMWA

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

Currency Unit = CFA Franc (CFAF) US$1.00 = CFAF 210 CFAF 1 million = US$4,762

FISCAL YEAR

January 1 - December 31

SYSTEMS OF WEIGHTS AND MEASURES: Metric

Metrie British/US Equivalents

1 meter (m) 3.28 feet (ft) 1 kilometer (km) 0.62 mile (mi) 1 square kilometer (km2 ) 0.386 square mile (sq. mi) 1 metrie ton (m ton) 2,204 pounds (lb) 1 hectare (ha) 2.47 acres 1 cubic meter (m3) 1.308 cubic yards

LIST OF ABBREVIATIONS

CARDER Centre d'Action Regionale pour le Developpement Economique Rural DER Division de l'Entretien Routier DRDR Division des Routes de Desserte Rurale DRP Direction des Routes et Ponts FAO Food and Agriculture Organization FED (EDF) European Development Fund GNP Gross national product GRVC Groupement revolutionnaire a vocation cooperative GV Groupement villageois GVC Groupement a vocation cooperative INSAE Institut National de Statistiques et de l'Analyse Economique ITC Inter-ministerial Technical Committee MDRAC Ministere de Developpement Rural et de l'Action Cooperative MITPCH Ministere des Travaux Publics, de la Construction et de l'Habitat RIA Road influence area SWKP Scott Wilson Kirkpatrick & Partners, U.K. UNCDF United Nations Capital Development Fund UNDP United Nations Development Program SOBEPALH Societe Beninoise de Palmier a Huile SODERA Societe de Developpement de Ressources Animales SONACO Societe Nationale pour le Coton SONAFEL Societe Nationale des Fruits et Legumes SONAGRI Societe Nationale pour la Production Agricole SONAPECHE Societe Nationale d'Armement et de Peche PEOPLE'S REPUBLIC OF BENIN FOR OFFICIAL USE ONLY

SECOND FEEDER ROADS PROJECT

STAFF APPRAISAL REPORT

Table of Contents

Page No.

I. BACKGROUND ...... 1

A. Geographic and Economic Setting ...... 1 B. Demography ...... 2 C. Agriculture ...... 2 D. Transport ...... 5

II. ROADS AND ROAD TRANSPORT ...... 6

A. The Network ...... 6 B. Road Administration ...... 6 C. Road Maintenance ...... 6 D. Road Planning ...... 7 E. Road Engineering and Construction ...... 7 F. Feeder Road Construction ...... 7 G. Financing of Road Construction and Maintenance ...... 9 R. Road Transport and Road Transport Industry ...... 10

III. THE PROJECT ...... 15

A. Objectives and Project Content .. .15 B. Improvement Program . . .16 C. Road Maintenance . .16

D. Technical Assistance...... 17 E. Monitoring of Road Impact . . .17 F. Execution ..... 17 G. Procurement . . .18 H. Cost Estimates.. 19 I. Financing and Disbursement . . .20 J. Project Control-Financial Auditing and Progress Reporting . . 21

IV. ECONOMIC EVALUATION .30

A. Benefit Estimation .30 B. Costs .... 31 C. Rates of Return and Risks .32

V. RECO1JMMENDATIONS .. 34

This report has been prepared by Mrs. Brigitta Mitchell (Economist) and Mr. Snorri Hallgrimsson (Sr. Engineer) following Appraisal and Post-Appraisal Missions in April/Mfay, 1980. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Table of Contents (Continued)

Annexes

1. Population Data for Project Evaluation. 2. Economic Evaluation. 3. Technical Assistance. 4. Selected Documents in Data File.

Map

IBRD 15160 I. BACKGROUND

A. Geographic and Economic Setting

1.01 The People's Republic of Benin covers 112,600 km2 between Nigeria in the east, Togo in the west, and Upper Volta and Niger in the north; it has a southern seaboard of some 150 km and a north-south exten- sion of about 700 km. The terrain is mostly flat or rolling except in the north-west, where the Atacora mountains are located. The country's river systems are important; they comprise those of the northern part of the country (Pendjari, Mekrou, Alibori and Niger) which define most of the borders with Upper Volta and Niger, and those of the centre and south (Oueme, Zou, Okpara, Kouffo and Mono), the fertile floodplains of which are areas of considerable agricultural potential but present obstacles to east-west transport. Five natural regions can be distinguished in Benin:

(a) a narrow coastal belt of flat sandy soil lying between the ocean and the lagoons, typical of the West African coast;

(b) an intermediate zone consisting of fertile plateaux of ferruginous silty clay, intersected by river valleys and marshy depressions;

(c) a central zone (200-300 m above sea level) consisting of plateaux of ferruginous sandy clays, requiring controlled agricultural practices if the continuing fertility of the land is to be retained;

(d) the basement complex of the Atacora Mountains (600-800 m above sea-level) forming the watershed of the river systems and where the Oueme, Pendjari, Mekrou and Alibori rivers rise;

(e) the Niger plains (100-150 m above sea-level) consisting of fertile clay soils supporting a savannah type of vegetation.

1.02 Climatically, Benin can be divided into two zones: the south where two rainy seasons (May-July and September-October) provide average annual precipitation of 1,300 mm, and the north, where a single rainy season (July-September) averages 1,000 mm p.a.

1.03 Benin's economy has grown on the average about 4% p.a. in the 1970s, and the country remains among the poorer nations in Africa with an estimated GNP per capita of US$230 in 1979. Natural resource endow- ment is limited, although recent off-shore exploration for oil has discovered a small field near Seme which, with Norwegian assistance, will shortly enter production at an expected rate of 8,000 barrels daily. There is also active prospecting for gold and phosphate in the north, but none of the deposits found are as yet being commercially exploited. The mainstay of Benin's economy remains agriculture. Since rainfall is insufficient for high-value tree crops like coffee and cocoa, -2- only less remunerative crops such as palm products, cotton and groundnuts are grown for export. Agricultural production has fluctuated in recent years without any steady trend.

1.04 On balance, the primary sector has stagnated over the past decade. The basic strengths of the Beninese economy are an industrious, although insufficiently trained, workforce, skilled traders, and a reasonably ade- quate main transport network that offers competitive transit links for Niger and Nigeria. Between 1972 and 1976, in response to buoyant Nigerian demand, the secondary sector showed a temporary growth of 10% and the tertiary, over 5% p.a. Both have since returned to a status lacking growth and similar to that of the primarv sector.

B. Demography

1.05 Preliminary results of the population census carried out in 1979 indicate a total population for Benin of 3.3 million inhabitants. The majo- rity (1.8 million) are concentrated in the three coastal provinces of Atlantique, Oueme and Mono, where population density reaches 154/km2 . These provinces also have the highest proportion of urban dwellers 42.5%. 1/ The corresponding figures for the centre province of Zou are population densities of 30 persons/km2 of which 13.5% are urban, for the northern provinces of Borgou and Atacora 12 persons/km2 of which 11% are urban. The annual rate of population growth since 1961, the year of the last complete census, averaged 2.6% overall, with over 8% in the urban and 1.3% in rural areas. The population decrease between 1977 2/ and 1979 in the Zou and Mono provinces is attributable to emigration to econom- ically more attractive neighbouring countries such as Nigeria.

C. Agriculture

1.06 Over 70% of the total population of Benin depend on agriculture for their livelihood. Most work on small family farms of 1.75 to 3 ha. Maize, sorghum, yams and cassava are the staple foods, and increasingly, these crops (particularly maize) are being produced for sale in city and neighbouring country markets. Traditional export crops have been palm products, groundnuts and cotton.

1.07 Although Benin maintained a positive food balance throughout the 1970s, the official statistics suggest that foodcrop production was stagnant. This confusing situation largely reflects the major element of unofficial international trading in foodstuffs. Industrial crops showed a declining trend for cotton, but increasing output of groundnut and palm products. Irrigated crop production has been introduced recently, and can be expectd to have an increasing effect on improving the bottomlands rice produc- tion and the modern irrigated sugar plantation, and on the refinery being established at Save in the Zou province. In 1979, the country imported 72,000 tons of grain, mainly wheat and rice.

1/ See Annex 1. 2/ Ministry of Planning, Central Census Bureau, Cartographic Census, 1977. TABLE 1

Production of Main Crops, 1971 - 1978 ('000 tons)

CroR 1971/2 1972/3 1973/4 1974/5 1975/6 1976/7 1978/9

Manioc 689 615 599 548 461 624 534 Yams 527 535 500 428 445 590 624 Maize 175 207 238 229 217 182 232 Sorghum 48 50 78 79 52 72 59 Millet 8 6 16 16 15 4 5 Rice 5 5 8 9 13 18 15 Beans 31 22 19 14 NA 23 30 Groundnuts 42 42 60 42 35 61 59 Cotton 48 50 44 31 23 22 25 Palm Oil 20 15 16 28 39 NA NA Palm Kernels 81 85 82 82 83 NA NA

Source: Ministry of Rural Development (1971/1977) and mission estimates based mainly on CARDER data (1978/1979).

1.08 Livestock rearing is traditionally important in the north of the country and a small net increase in cattle numbers is estimated to have occurred during the past decade.

1.09 Fisheries outputs, traditionally a very important food item in the south of the country, have declined in recent years, mainly due to over-fishing in many lakes and lagoons and deterioration of the facilities for industrial (ocean) fishing. To reverse this trend, the construction of fish-ponds is being promoted in many rural communities; no production statistics on this effort are available as yet.

1.10 A total of 2.1 million hectares are classified as forest, of which the majority are in the north, with Borgou containing 64% and Atacora 29% of the total. Some of the forest areas in the south have only recently been formally gazetted and for most afforestation is only at a planning stage. The main species planted is fast-growing teak for for local consump- tion and fire'ood.

1.11 The Government has been increasingly concerned about the poor performance of the primary sector where agriculture accounts for 70% of employment but contributes only about one third of GNP 1/. This reflects the fact that only 10% of agricultural land is cultivated and emphasizes the scope for increased labor productivity throughout the sector. The Government's objective of emphasizing investment in rural development and infrastructure should contribute significantly to reversing this situation. l/ 1976 figures. -4-

1.12 The current Three-YearNational Plan (1978-1980)stresses the attain- ment of self-sufficiencyin food and to achieve this priority is being given to agricultureand rural developmentinvestments. The principlesof current developmentpolicies are:

(a) import substitutionand the attainmentof self-sufficiencyin foodstuffs,concomitant with improvementin standardsof nutrition;

(b) to stimulatethe domestic market by increasingthe purchasing power of the rural population;and

(c) to develop a dependableexportable agricultural surplus to finance the import of manufacturedgoods and equipment.

Implementationof this policy for acceleratingrural developmentrequires considerableinvestment in inputs, extension servicesand rural infrastructure. The proposed project would make an essentialcontribution to this objective.

1.13 IDA has financedfour projects in the rural sector. The first, Hinvi AgriculturalProject (Cr. 144-DA,US$5.2 million, 1969), consisted of planting 6,000 ha of oil palm, preparing 6,000 ha for annual crop production,and constructingan oil mill. The project has been completed and although projectoutput has been lower than appraisal estimates,planta- tion maintenancehas been good, and strong Beninese project management is a positive aspect.

1.14 The second project, Zou-BorgouCotton Project (Cr. 307-BEN, US$6.1 million, 1972) performeddisappointingly. During the project period, cotton output declined drasticallymainly because of Government'spolicy switch, specificallyto discouragecotton productionand, to a lesser extent,due to bad weather and low producer prices. However, fooderop production in the area increasedin compensation,and this trend has continuedunder the stimulus of higher free market food prices relative to controlledproducer prices for cotton.

1.15 The third project, TechnicalAssistance (Cr. 716-BEN, US$1.7 million, 1977) has the objectives to institutionallystrengthen SONAGRI and the CARDER and to prepare proposalsfor future agriculturalinvestment projects. This project has achieved little in its institution-buildingobjective but has been instrumentalin preparingstudies for rural developmentprojects in the Borgou and Zou provinces.

1.16 The fourth project is a Rural Roads Project (Cr. 717-BEN, US$5.5 million, 1977), ongoing. Its purpose is to establisha feeder road planning and constructioncapability in the then Ministry of Equipment,now Ministry of Public Works), to improve some 845 km of rural roads and to maintain another 425 km of roads improvedunder the Zou-Borgou project. Performance under the project is summarizedin paras. 2.05 ff. - 5 -

1.17 The Bank is currentlyappraising the Government'sproposal for the Borgou ProvinceRural DevelopmentProject, for which roads are included under the proposed project. The main objectivesof the Borgou project are the expansionof foodcrop and cotton production,and raising farmers' incomes and living standards, through provisionof assistanceand support services, improvementand better utilizationof cotton infrastructure,mainly ginneries and transport. The expected cost is about US$41 million, excluding feeder road costs included in this proposedproject, the rate of return is estimated at 15-20% includingfeeder road costs. Preparationof a similar project for Zou provincewill be completedby March 1981, but appraisalis unlikely before 1982.

D. Transport

1.18 Transport plays a significantrole in Benin's economy and conti- nues to be an important source of foreign exchange and employment. To remain competitiveas a provider of transit facilitiesfor Niger and Nigeria, the country'sprimary transportsystem has been well developedand reason- ably maintained.

1.19 The country'sonly internationalairport in Cotonou handles some 2,000 commercialflights and a similarnumber of other aircraft movements annually. The yearly number of passengers(excluding transit) has fallen from 44,000 in 1973 to 39,800 in 1978. Freight handled, on the other hand, has increasedfrom 2,400 tons to 3,900 tons over the same time. Air Benin has 2 Fokker Friendshipplanes to provide connectionsto five very summarily- equipped provincialairfields as well as to Togo, Nigeria, Niger and Upper Volta. Benin is a member of Air Afrique, which serves as the country's internationalflag carrier.

1.20 The countryhas a modern deep-waterport built in 1965 that handles an importantshare of the mainly bulk imports destined for Niger (235,000 tons in 1978 and growing) and Nigeria (263,000 tons in 1978 and declining). Originallyequipped with four general cargo berths, a jetty for bulk cargo, a transit area with storage sheds and a fishingport with one berth and deep-freezestorage facilities,it almost reached its estimatedannual capacity of about 500,000 tons of general cargo and the same amount of bulk cargo in 1976. To accommodatethe increasingvolume of transit trafficwhich, in 1979 accounted for almost 60% of a total volume of 1.5 million tons handled, a port extension project involvingconstruction of an additional610 m of general cargo berths with transit sheds, hardstandings,roadway, railway and services, and the constructionof a new cut-off breakwateris currentlyin progress. Its total cost is estimatedat US$50 million; the project is jointly fi- nanced by IDA (Cr. 826-BEN,US$11 million, 1978) and seven other multi- lateral and bilateralagencies. A worrisomedecline in port operation efficiencyin Cotonou, only partly imputableto the constructionworks, and combinedwith increasedcapacity at Lome and Lagos, has in the past two years resulted in considerablediversion of general cargo traffic to these last two ports.

1.21 Road services are by far the dominant form of transport. They are estimatedto account for about 70% of domestic freight, as well as for the bulk of domestic passengertraffic. The road sector is dealt with in Chapter II. - 6 -

II. ROADS AND ROAD TRANSPORT

A. The Network

2.01 Benin has a road network of reasonably adequate extent. It consists of about 7,270 km, of which 3,500 km or just under half are rural roads. Of the 3,770 km of interstate, national and secondary roads, some 900 km are paved, 2,700 km are laterite-surfaced and the remainder are earthroads. Average road density for the country is 65 m/km2 but there is considerable variance between provinces ranging from 44 m/km2 in Borgou to 139 m/km2 in Atlantique. It is estimated that roughly half of the rural roads are unimproved earth-tracks which are impassable to four-wheel traffic during most of the rainy season. A further 4,000 km of local roads are hardly more than footpaths and are not considered part of the network. A detailed breakdown of the distribution of roads by province and by surface-type is given in Table 1.

B. Road Administration

2.02 The Directorate of Roads and Bridges (Direction des Routes et Ponts, DRP) of the Ministry of Public Works, Construction and Habitat (Mini- stere des Travaux Publics, de la Construction et de l'Habitat, MTPCH) is responsible for road construction and the maintenance of the 3,770 km of interstate, national and secondary roads, and some 1,200 km of feeder roads. While the responsibility for maintaining the remainder of the (mostly unclas- sified) network nominally lies with the Ministry of Interior and local author- ities, this will gradually be assumed by DRP. The Ministry, under the First Feeder Roads Project, has created a Feeder Roads Division (Division de Routes de Desserte Rurale, DRDR), which is now well established and has become the focus for the hitherto uncoordinated rural roads activities. Further, the Ministry intends to establish an Administrative Division to improve and accelerate processing of purchases, payments, analytical ac- counting and of other routine matters. However, staffing is a severe constraint; this is expected to be overcome gradually as trainees under the Third Highway and First Feeder Road Projects become fully operational, and more are trained under the proposed Second Feeder and Fourth Highway Projects.

C. Road Maintenance

2.03 Maintenance of the interstate, national and secondary road net- works is the responsibility of the Maintenance Division (Division de l' Entretien Routier, DER) in DRP. Main road maintenance has improved over the years as a result of the Association's three highway projects, but is still hampered by shortage of equipment, poor equipment maintenance and insuf- ficient local funds. The proposed Fourth Highway Project currently under preparation will address these shortcomings. Rural road maintenance will have to be reorganized under the DRP since underfunded local authority efforts have rarely been able to assure all-weather utilization of feeder roads, and the rural road network has deteriorated to the point where less than half of the rural communities are accessible by vehicle transport throughout the year. The proposed project will, inter alia, provide DRP with - 7 - the slhort-termcapacity to give financial support and supervision to labor- intensive maintenance work carried out by workers to be drawn from the local communities, while a new organization of road maintenance activities is being established in conjunction with the proposed Fourth Highway Project. To ensure continued maintenance of the improved rural road network, the Govern- ment is currently examining possible means of raising funds for this purpose, e.g. by including a small levy for road maintenance in the official pricing schedules (baremes) of cash crops.

D. Road Planning

2.04 The Directorate of Studies and Planning in the Ministry of Transport, assisted by previous Bank projects, is responsible for data collection and analyses of transport problems, investment plans and policies. The Ministry of Plan makes the final decision on the investment plan to be pursued.

2.05 The First Feeder Road Project included financing for establishing a comprehensive data base for rural road planning and for developing a metho- dology for establishing road improvement priorities. DRDR has established a system to collect province-level data on population, agricultural production and social infrastructure relevant for rural road evaluation. The regional development authorities (CARDERs) will, in the future, provide indicative road improvement priorities to DRDR for its economic evaluation and establishment of annual construction programs to be presented for approval to an Inter-minister- îal Technical Committee (ITC), on which the technical ministries involved in rural roads are represented. This process has been initiated for the three CARDERs (Mono, Zou, and Atacora) where road improvements are currently being carried out by DRDR and will gradually be expanded to cover the entire country.

E. Road Engineering and Construction

2.06 The Service d-Etudes Generales is responsible for project pre- paration and the Division of New Works for the supervision and execution of new projects. The country lacks local contracting organizations of suffi- cient capability for major works which are undertaken by foreign contractors. Most projects financed by foreign aid agencies are prepared and supervised by consultants. However, improvements to secondary roads and of feeder roads are carried out by force account by DRP, both by equipment intensive and labor intensive methods.

F. Feeder Road Construction

2.07 Feeder road construction and maintenance is being actively sup- ported to enable an increased agricultural output. The European Develop- ment Fund (EDF) is financing a 220 km program in the Atacora province, being carried out by an equipment-intensive brigade. The UN Capital Development Fund (UNCDF) is financing a 120 km program in the same province. IDA's First Feeder Road Project was the most ambitious; its objectives were:

(a) reinforcing the ability of the Ministry of Public Works to improve motorized access to rural areas by assisting in the creation of a Feeder Roads Division (DRDR) within the Ministry; -8-

(b) the establishment of a feeder road project evaluation, planning and monitoring capability, with the aim of promoting optimal investments for a continuing rural road improvement and main- tenance program;

(c) the development and implementation of appropriate rural road construction and maintenance methods, based on care- ful comparison of the technical and economic effectiveness of alternative construction technologies; and

(d) the construction of about 845 km of feeder roads, and mainte- nance of about 425 km over 3 years.

2.08 The First Feeder Road Project has succeeded, albeit at a slower pace than anticipated at appraisal, in establishing the DRDR as a func- tioning entity in the DRP. The slow start was mainly due to cumbersome administrative procedures which greatly retarded the setting-up of the new Division and delayed the start-up of road construction activities by some eighteen months. In addition, the almost complete absence of Beni- nese counterpart staff initially resulted in extensive reliance on tech- nical assistance (Scott, Wilson, Kirkpatrick and Partners, SWKP, UK), who will have provided a total input of 192 man-months by December 1, 1980, 58 more than foreseen at project appraisal. These difficulties were gradually overcome and since early 1980 DRDR has been working with a full complement of Beninese staff. Further, the DRDR has assumed responsibi- lity for the organization and supervision of the UNCDF brigade and would shortly take over the FED brigade currently directed by the Atacora CARDER.

2.09 Specific feeder roads were selected by the Government and agreed upon by IDA to be included in the first of the three annual construction programs. The second and third-year programs were indicative only, to be finalized by the new Feeder Roads Division. Consistent selection and evalua- tion criteria have been established for priority ranking of works being undertaken by all brigades and the original DRDR work program has been reshaped accordingly. Whereas institution-building thus finally shows solid signs of success, the delays in project start and supply problems have had very adverse effects on physical production: out of 845 km planned to be improved, only 300 km are expected to be completed when project funds are exhausted by mid-December 1980. The dollar devaluation, from about CFAF 245 at appraisal to CFAF 210 in 1979, has further meant a loss of about CFAF 192 million, or almost US$1 million at prevailing exchange rate. However work is now proceeding satisfactorily. DRDR employs close to 1,000 staff and laborers, or about 50% of the total employed by DRP. All four of the IDA- financed brigades (2.labor-intensive, 1 intermediate, 1 equipment-intensive) are operational on worksites in widely dispersed locations.

2.10 The appraisal of the First Feeder Road Project asserted that rural road construction by labor-intensive methods could be economically competitive with equipment-intensive methods. It was estimated that at annual production rates of 45 km, 75 km and 135 km for the labor-based, intermediate and heavily equipped brigades respectively, per-kilometer costs of road improvements would be the same. Consequently, three dif- - 9 -

ferent types of brigade were set up. After close to a year of operation, output rates by the labor-based brigades are on target or have slighly exceeded it. Intermediate brigade output has attained 70%-80% estimated output, while heavy brigade production has been only about half that pro- jected at appraisal. The shortfall for the intermediate brigade stems largely from the difficulties inherent in organizing mechanized works in conjunction with labor-intensive ones. The shortfall for the mechanized brigade is mostly caused by problems with supply of fuel and spares. Recent experience from mid-1979 shows, however, that these essentially admini- strative problems have been overcome and while the original estimates may have been optimistic, the mechanical brigade is now functioning satisfactorily with a production rate of over 10 km/month. By contrast, labor is readily available at the prevailing wages paid by DRDR (currently FCFA 9,867/month) in sufficient numbers throughout the year and its productivity is good. Since labor-based methods have thus (i) proved economically competitive, (ii) are relatively insensitive to the supply and repair problems of the mechanized brigades, and (iii) have the additional advantage of returning a considerable amount of construction costs in wages to the local economies the roads are going to serve, the DRDR will in the future reduce reliance on equipment and expand the utilization of labor-intensive technologies.

2.11 There are three major tasks for the DRDR in the coming years: (i) on-the-job training of the Beninese counterpart personnel to phase out reliance on technical assistance; (ii) consolidation of the road planning capacity and collaboration with the CARDERs, and (iii) improvement of brig- ade outputs and the development of an appropriate maintenance organization that will safeguard the rural road investment.

G. Financing of Road Construction and Maintenance

2.12 Foreign sources have contributed about 85% of funds for road con- struction over the last decade; the part of foreign participation has remained stable in this period. Road maintenance funds are mainly local. To ensure an adequate level of funding for road maintenance, a Road Fund was set up in 1970. CFAF 4 per liter of fuel is earmarked from the fuel tax, and the Covernment contributes from its general revenues remaining funds to arrive at an appropriate budget. However, funds become available only after long delays not allowing the budget to be fully spent, and no provision is made for equipment renewal. The Ministry of Finance has agreed in principle to deposit quarterly the allocations in the Road Fund; this should greatly improve liquidity. The Ministry of Works will prepare the 1981 budget including an equipment provision, and will discuss with the Ministry of Finance whether the fuel tax contribution, or the tax itself, should be increased. At present, prices to consumers are CFAF 130, 127 and 104 per liter of super, regular gasoline and diesel-oil respectively, including taxes of CFAF 30.85, 30.3 and 18.65. Alternative sources of funds for rural road maintenance are also being explored (para. 2.03). Past expenditures on roads are summarized in Table 2, and those of the DRDR, in Table 3. - 10 -

H. Road Transport and Road Transport Industry

2.13 Size and composition of Benin's vehicle fleet can only be approxi- mately determined. Official statistics since 1970 have added new registra- tions to the then existing park but do not "deregister" cars that have come to the end of their useful lives. On the assumption of an average eight- year vehicle life, the vehicle fleet would seem to have almost remained stationary in numbers at about 13,000, but its composition has changed passenger cars and pick-ups decreased from 83% (1970) to 56% (1979); light trucks (up to 7 tons) increased their share from 7% to 25%, and heavy trucks and trailers from 8% to 18%. Fuel consumption has grown at an average rate of 4.5% per annum between 1970 and 1978 which is partly attributable to the changes in vehiele fleet composition, but also indicates an increase in vehicle utilization rates.

2.14 The road transport industry in Benin consists of a number of semi-public and private enterprises. The most organized among these are the state-run companies such as TRANS-BENIN, and the provincial transport companies. Some of the large public sector companies also have a sizeable transport fleet. To-date, most of the interstate and national transport is still handled by private transporters. Local short distance is the domain of small operators who own four vehicles or less.

2.15 Traffic on feeder roads comprises (a) agricultural products destined for local and national markets; (b) agricultural inputs and con- sumer goods flowing from centres of production or importation to the rural areas; and (c) passengers. No systematic traffic counts have been under- taken on feeder roads in Benin, but large variations in traffic can be observed. Typically, feeder road traffic in Benin will vary from two or three vehicles per day on most roads to about 40 v.p.d. in the densely-popu- lated southern provinces. Bush taxis and "buses" (up to 2.5 ton utility vehicles) carry passengers and small loads of produce; for major commodity movements, 7-10 ton trucks are most commonly used. There also is consider- able mobylette and bicycle traffic, especially in the vicinity of larger villages and towns.

2.16 Freight and passenger tariffs are set by inter-ministerial decree and were revised in April 1980 from their very inadequate 1974 levels, but do still not provide transporters sufficient margins to allow for proper equipment maintenance and renewal. 1980 freight tariffs and estimated vehicle operating costs compare as shown in Table 4. However, private transporters do not strictly adhere to official tariffs, and it is rather supply and demand and road conditions which determine rates. Chapter II Table 1

PEOPLE'S REPUBLIC OF BENIN

SECOND FEEDER ROADS PROJECT

Road Network by Province and Surface Type - 1980

Routes Nationales Routes Routes Inter Etats Nationales Secondaires Province Road (RNIE) (RN) (RS) Tertiary Total Area Density Province km km km km km 2 km/kmn2

Oueme 119 138 27 272 556 4,700 0.12 Atlantique 141 36 - 267 444 3,200 0.14 Mono 82 76 84 239 481 3,800 0.13 Zou 497 42 144 685 1368 18,700 0.07 Bourgou 848 382 114 884 2228 51,000 0.04 Atacora 436 430 170 1153 2189 31,200 0.07 Totals 2123 1104 539 3500 7266 112,600 0.06 (29.2%) (15.2%) (7.4%) (48.2%)

Surface Type

Paved 782 112 - 894 (12.3%) Gravel 1162 992 539 2693 (37.1%)

Earth 179 - - 3500 3679 (50.6%) TOTAL 2123 km 1104 km 539 km 3500km 7266 km 112 _ Chapter Il Table 2 PEOPLE'S REPUBLIC OF BENIN

FEEDER ROADS PROJECT

Expenditure on Road Construction and Maintenance 1973 - 1979

(CFAF million)

1973 1974 1975 1976 1977 1978 1979

Total Expenditure 1126 2374 2768 2652 3747 3273 5677

Maintenance 1/ 402 401 404 427 448 625 629

Investments 724 1973 2276 2168 3299 2648 5048

Balance to Reserves - - 88 57 - - -

Total Financing 1126 2374 2768 2652 3747 3273 5677

Local Sources 561 674 793 654 828 1297 1642

Fuel Levy 250 223 243 252 258 327 281

Ordinary Budget 159 273 309 244 366 332 366

Special Budget 104 104 241 158 198 495 530

Balance from Re- 48 74 - - 6 143 465 4/ serve

Foreign Aid 565 1700 1975- 1998 2919 1976 4035

IDA 149 657 636 1198 2071 508 1639 2/

EDF 106 608 827 500 3/ 670 3/ 1004 3/ 1339 3/

Nigeria 225 ------

USAID - 429 504 300 3/ 141 3/ 353 661

FAD - - - - 37 4 385

BAD - - - - - 107 il

Others 85 6 8 -

i1 Includes normal administration and salary costs of established personnel. 2/ Includes projects jointly financed with other agencies 3/ The division into year of actual expenditure is estimated from known total over the period. 4/ Includes 260 million CFAF in 1978 and 534 million in 1979 as provision for local com- mitment to Cotonou New Bridge.

Source: Ministry of Public Works, Caisse Autonome d'Amortissement and Mission. - 13 - -Chapter I PEOPLE'S REPUELIC Of BENIN Table 3 SECOND FEEDER ROAOS PROJECT

Past and Estimated OPORExcendituresi'

1977 / 7a 1978 /79 1979 / 80 180 / 81 1981 , 82 1982 /E

Equipment and Spares 260 Z378 404 143 132

Fuel, Supplies and Materials 2 40 97 190 256 261

Wages 1 34 106 160 263 287

Building - 10 32 2 - -

Technical assistance 21 105 162 141 143 50

Total 304 241 796 897 805 730

/ Includes ail operations handied by DROR, (financed by the Gavernment, EDF, UNCOF, UNDP, and IDA) Chapter II Table 4 14

PEOPLE'S REPUBLIC OF BENIN

SECOND FEEDER ROADS PROJECT

VOC and Prevailing Freight/Passenger Tariffs, 1980

VOC Tariff Full Load voc Vehicle Type CFAF/km per pass/km No. pass. Income CFAF/km (gravel) or ton/km or tons CFAF/km (earth) (good) (bad)

Taxi (Peugeot 504) 55.5 4.5-7.5 6 - 8 27 - 60 80.7 Bus N.A. 5.0-6.88 25 - 32 125 - 220 N.A. Bush taxi (bachée) 54.7 5.0-6.88 10 - 15 50 - 103 86.7

Truck - 7 ton 156.2 22 7 154 246.6 Truck - 13 ton N.A. 22 13 286 N.A. Semi-Trailer (30 ton) 285.4 22 25 - 30 550 - 660 502.6 - 15 -

III. THE PROJECT

A. Objectivesand Project Content

3.01 The objectivesof the Second Feeder Roads Project are:

(a) to continue the developmentof the DRDR inside the DRP organizationthus reinforcingthe MTPCH's competencefor planning,construction and maintenanceof the feeder road network;

(b) to constructthe roads identifiedas necessary for successful implementationof the proposed IDA-financedBorgou II Rural DevelopmentProject (about 300 km);

(c) to constructsome 400 additionalkilometers of priority feeder roads, part of the Government'scountrywide program;

(d) to program and carry out maintenance of all roads improved under the Project as well as those improvedunder the First Feeder Roads Project (about 300 km), the Zou-Borgou Project (about 160 km) and the FED and UNCDF-financed roads in Atacora Province (about 340 km);

(e) to identify and evaluate the roads necessary for successful implementation of further rural development projects being identified and prepared during the project period.

3.02 To these ends, the project will provide for:

(a) procurement of a limited amount of equipment and spare parts ta continue optimal utilizationof existing equipment throughout the project period;

(b) procurement of equipment and tools for two labor-based brig- ades;

(c) construction of two simple equipment maintenance sheds and procurement of a limited amount of equipment maintenance tools;

(d) operation of road improvement and maintenance brigades during a three-year period;

(e) technical assistance in operating DRDR and training DRDR staff;

(f) implementation of a pilot monitoring and road impact study in one province. - 16 -

B. Improvement Program

3.03 The road improvement program under the project will provide construction of about 700 km of feeder roads representing 300 km in support of the proposed Second Borgou Agricultural Development Project, and about 400 km of high-priority feeder roads in other parts of the country. Although the first feeder road project did not meet its construction targets current indications are that teething troubles have been overcome and production rates of both the labor-intensive and mechanized units should be able to substantially comply with the proposed production of 45 and 100 km per year respectively. The proposed works consist of roadway shaping, provision of selected surface material where required (expected on about 70% of total length) and construction of drainage system.

3.04 The First Feeder Roads Project specified essentially uniform design standards which have proven to be reasonably adequate. The only change proposed for the Second Project is a reduction of platform width from 6 m to 5 m where justified by soil conditions and projected traffic levels. Gravelled surface width, where required, would be 4 m with gravel thickness varying from 10 cm to 20 cm as deemed appropriate by DRDR and the consultants. Clearing width would remain at 8-10 m and drainage would be held to a minimum consistent wîth reasonable all-weather service. Every effort will be made to accommodate the alignment to terrain conditions which will avoid excessive cut or embankment work. Standards were agreed at negotiations.

3.05 Work programs have been established by the DRDR for all its opera- tions for the first two years of the project period, representing the 1980/ 81 and 1981/82 work seasons. The work program until the end of 1981 has been approved by the ITC, and the 1981/82 program has been evaluated for presenta- tion to the Committee. The roads were selected on the basis of either: (i) their importance for planned or presently active agricultural projects, or (ii) individual evaluation of economic feasibility. For the third year a tentative program has been drawn up; in the final establishment of this program, identical criteria and procedures will be applied. The project would account for about 60% of all DRDR operations during the project period (Tables 1 and 2).

C. Road Maintenance

3.06 The Project roads will be maintained under the Project. In addi- tion, it will establish maintenance capabilities for the roads constructed under the First Feeder Road Project and for those built under the FED and UNCDF-financed feeder road projects that are underway or will start shortly. One maintenance brigade will be established in Atacora. Equipment maintenance facilities will be provided for within existing maintenance shops or in new installations to be provided under the proposed Fourth Highway Project. Additionally, mobile workshops will be provided under the proposed highway project to provide routine field maintenance. The proposed Fourth Highway Project will also support the Government's commitment to improve secondary road maintenance. This maintenance work and the feeder road improvement program will be closely coordinated by DRP. - 17 -

D. Technical Assistance

3.07 The technical assistance being provided under the First Feeder Road Project will continue through the first year of the proposed project. Whereas the first feeder road project relied heavily on technical assistance to establish and operate the DRDR, under the Second Feeder Road project the main object of the technical assistance is consolidation through staff training, of procedures introduced in the DRDR under the first project, for planning, administration, execution and supervision of works. Since all Beninese counterparts under the first project have been in post since early 1980, phasing out of technical assistance will commence as soon as the counterparts have received sufficient training to assume full responsibility for their tasks; this is expected to happen about 12 months after the start of the Project. Training of personnel will be mainly on-the-job, but short theoretical courses are to be provided as well. To keep technical assistance costs at a reasonable level, a Dutch volunteer is employed in the position of economist throughout the project period.

3.08 The technical assistance will also assist the DRDR in (i) imple- mentation of the improvement and maintenance programs, (ii) continued identification and economic evaluation of roads to be included in the work programs for the third year of the Project and for subsequent years, (iii) project monitoring, and (iv) the introduction of a project impact evaluation.

3.09 The experts job descriptions and required qualifications for the technical assistance, and the duration of the assignments, are given in Annex 3. During appraisal, agreement was reached with the Government on the content of technical assistance; this was confirmed during negotiations. Assurances were also obtained from the Government that it will continue to assign qualified counterparts to the technical assistance.

E. Monitoring of Road Impact

3.10 The project planning and evaluation unit in DRDR will carry out a program of impact monitoring on the roads improved under the First and proposed Second Feeder Roads Projects. This will consist of regular (3-4 times annually) traffic counts and origin-destination surveys on the majo- rity of project roads, and a more detailed investigation of population movement, cropping patterns, marketing activities and utilization of social service facilities for a small sub-sample of roads in one province.

F. Execution

3.11 The MTPCH will be the executing agency for the Project. The three existing subdivisions of the DRDR in Mono, Zou and Atacora will be augmented by a fourth in Bourgou which was originally established under the First Bourgou Agricultural Project. This fourth subdivision will concen- trate on necessary road works for the support of the Second Bourgou Agricul- tural Development Project scheduled for board presentation in April 1981. - 18 -

3.12 Physical execution of the Project will start in December 1980 and be completed by November 1983 (Table 3). All works will be carried out by force account in accordance with declared Governnent policies. Occasional plant hire may be employed for temporary replacement of equipment under repair.

3.13 Three techniques were employed under the first project, fully mechanized, intermediate and labor-intensive. Although the fully mechanized brigade failed to meet its construction rate target, this was primarily due to administrative bottlenecks which have now been substantially overcome (para. 2.08), and henceforth, a target of 100 km per year should be attain- able. The labor-intensive units were the most successful, particularly as the supply and quality of labor was higher than expected. Per km construc- tion costs were comparable for the labor-intensive, the intermediate and the fully-mechanized units. The intermediate units, although making substantial approach to target production rates, suffer from inherent problems related to coordinating labor-intensive techniques with relatively high equipment inputs. To avoid this problem, while at the same time recognizing that some equipment- intensive effort will continue to be necessary, the mechanized brigade will continue in operation under the project, while equipment from the present intermediate brigade will be used to (i) reinforce the mechanized brigade and (ii) establish a maintenance brigade.

3.14 In the labor-intensive brigades, clearing, raising of formations, shaping and initial spreading of materials will all be done by hand. Transportation of materials, final shaping, watering and compaction will be done by mechanized means. Based on present experience, each labor-intensive brigade is expected to construct about 45 km of road per year. The fully- mechanized brigade is expected to yield a yearly output of 100 km. Al- together, one mechanized and four labor-intensive brigades will be in operation under the Project.

3.15 Maintenance operations will essentially be done manually, with assistance by a grader. Routine maintenance will be organized on a labor- intensive basis as road construction works proceed. Also, a mobile grader unit for routine grading and occasional repairs will be formed by end-1981 partly with equipment from the present intermediary brigade.

3.16 The work program for the 1980/81 work season, which is acceptable to the Association, has been approved by the ITC. The 1981/82 program, duly prepared by the DRDR and agreed to by the ITC, will be submitted to the Association for its approval not later than June 1, 1981. The DRDR will continue evaluation of roads to be included in the Project for the 1982/83 work season (October to June), for presentation to the Inter-ministerial Technical Committee (ITC) which was set up under the first project, and to the Association, for approval (Table 1).

G. Procurement

3.17 The majority of equipment purchased or rehabilitated under the first project will remain in service throughout the Second Feeder Road Project. Supplementary equipment will be required to (i) replace worn-out - 19 -

equipment; (ii) equip the two additional labor-intensive construction brigades and the maintenance brigade. The Project also provides for the purchase of materials (steel, cement and timber) for construction of drain- age structures and for spare parts and supplies such as fuel, lubricants, tires and office supplies.

3.18 Equipment and vehicles for the new brigades will be purchased in accordance with the Association international competitive bidding guidelines utilizing bidding documents and detailed specifications prepared under the first project. Replacement items and supplementary equipment of which the DRDR already possesses some units will also be purchased in accordance with international competitive bidding guidelines, but bidding documents will note that for this equipment, additional weight will be given to the desir- ability of standardization with existing equipment. Rand tools will be acquired under current Government local procurement regulations which are deemed acceptable. Goods manufactured locally would be given a preference margin up to 15% or the applicable customs duty, whichever, is less. Table 4 lists equipment to be purchased. Fuel, construction materials and supplies will be purchased through Government distributors, free of tax. During negotiations, confirmation of these purchasing procedures was obtained from Government.

H. Cost Estimates

3.19 The total cost of the Project, net of taxes and duties, is esti- mated at US$8.7 million equivalent, with a foreign exchange cost of US$4.3 million equivalent. As was the case for the First Feeder Roads Project, all Project acquisitions, with the exception of office supplies and mate- rials, will be made free of taxes. Below follows a summary of costs; more details are given in Table 5.

Net of Tax Costs, as of May 1980

US$ thousand of Foreign Local Foreign Total Cost

A. Feeder Road Improvement 3,008.3 2,231.2 5,239.5 42.5 B. Feeder Road Maintenance 382.4 347.3 729.7 47.5 C. Sheds and Tools 11.7 27.3 39.0 70.0 D. Technical Assistance 163.9 929.8 1,093.7 85.0 Sub-total 3,566.3 3,535.6 7,101.9 E. Contingencies 904.4 738.1 1,642.5 Total 4,470.7 4,273.7 8,744.4 48.9

3.20 Estimates of equipment and tool costs are based on suppliers' quotations to the DRDR from April/May 1980. Operating costs are based on the latest available cost accounting data of the DRDR, dating from April 1980. - 20 -

Average cost of road improvement,excluding tax and technicalassistance, is CFAF 1.9 million per km (US$9,300per km) at April 1980 prices. In- cluding all technicalassistance, this cost rises to about CFAF 2.3 million (US$11,200per km).

3.21 Technical assistanceis estimatd to cost US$l.1 million equivalent and is assumedprovided by a consultingfirm. It will total about 10 man- years of engineersand senior technicians. The averageman-month cost is estimatedat US$10,200including fees, outstation allowance,local and internationaltransport, housing and subsistence,and company overheadsand profits, and is based on present cost of providing consultingservices in Benin. In addition,three man-years of economist'stime will be provided by Dutch volunteeraid. There is a possibilitythat Dutch volunteer aid may replace some senior technicians,leading to a reductionin the cost of technicalassistance; this is being pursued with the Government.

3.22 Physical contingenciesof 5% on equipmentpurchases and 10% on other items have been included to allow for increase in quantities. Price increasesare estimatedat 10.5% in 1980, 9.0% in 1981, 8.0% in 1982 and 7.0% in 1983.

I. Financingand Disbursement

3.23 The proposed credit of US$7.0 million equivalentwill finance about 80% of total Project cost, net of taxes and duties, i.e., all foreign costs (US$4.3million equivalent)and US$2.7 million equivalentof local costs. The remaininglocal costs of the Project, US$1.7 million equivalent, will be financed by the Government. During negotiations,confirmation of this commitmentwas obtained from the Government. The disbursement of credit funds will be on the followingbasis:

(i) 100% of expendituresfor equipment, tools, spares, fuel and lubricants;

(ii) 60% of wage cost incurred by the DRDR in Project execu- tion;

(iii) 70% of office supply costs and equipmentrepair and hire charges;

(iv) 90% of the cost of technical assistance.

3.24 Expendituresto be financed in the period between exhaustionof funds under the First Feeder Roads Project and signature of the Second Feeder Roads Project for the cost of operatingfield brigades and the DRDR head office will initiallybe financed by the Government. To this end, the Govern- ment will establishan advance account in the Caisse Autonome d'Amortissement (CAA), to which the sum of US$175,000,estimated to cover one months operating cost of DRDR, will be depositedmonthly startingDecember 15, 1980. During - 21 - negotiations,the Governmentand the Associationagreed on retroactive financing of these expendituresup to an amount of US$0.7 million. Expendi- tures on technicalassistance during this period will be made with funds from the Second Highway Project (CR. 415-DA). Requests for disbursementsagainst all items will be fully documented. Any funds remainingundisbursed at the end of the Project would be cancelled. Estimateddisbursements are given in Table 6.

3.25 An IDA revolvingfund of US$300,000equivalent will be established as under the First Project; it will be replenishedon the basis of the regular Government reimbursementapplications.

J. Project Control - FinancialAuditing and Progress Reporting

3.26 To provide the Governmentwith appropriatecontrol over expen- ditures and the relationshipbetween costs and physical progress of the project, a basic accountingand progress reportingsystem will be estab- lished as part of the Project'smanagement routines. Auditors acceptable to the Government and the Associationwill be employed to ensure the Project's adherence to good financialmanagement throughregular audits of DRDR's accounts as prepared for submissionto Caisse Autonome in support of re- quests for replenishmentof the RevolvingFund. Presently employed physical progress reportingprocedures will be consolidatedto relate directly to the accounting records so as to provide management informationon comparative costs and related informationin connectionwith the constructionand maintenanceof the Project roads.

3.27 The Associationand the Governmentagreed at negotiationson the extent and detail requiredin the accounting,auditing and progress reporting material. - 22 - Chapter III Table 1 Pg. 1 PEOPLE'S REPUBLICOF BENIN

SECONDFEEDER ROADS PROJECT

1980/81 Improvement Program

Length (km)-/ Prog. Proj. Brigade Road No. Route works works

Mech. 12 Natintingou - Kouarfa Atacora 22 - 13 Kotopounga - Kouarfa 21 21 14 Wansokou - Dikiboumi 6 - 15 Baribonjifa - Tchakalou 6 6 16 Bori - Sonoumon Borgou 17 17 17 Bori - Serou (part) 23 23 95 67

Interm. 21 Keboua - RNIE 2 Zou 5 - 22 Kilibo - Djegbe 44 44 49 44

L.I. 1 23 Kpinnou - Ferme Rizicole Mono 4 - 24 Houegame - Lokogba il 16 10 19 Tchetti - Doume Zou 22 22 42 32

L.I. 2 26 Zogbodomey - Akiza Zou 14 14 27 Abomey - Kana " 15 13 28 Abomey - Sinhoue - Zome 16 16 (part) 45 33

TOTAL1980/81 231 176

1981/82 Improvement Progran

Mech. 17 Bori - Serou (part) Borgou il 32 Toume - Gando 28 33 Bouanri - Biro 35 34 Boura - Dounkassa " 15 89 L.I. 1 36 Ketou - Adakplame Oueme 12 38 Kpedekpo - Gbegon " 7 37 Ketou - Adekambi 22 41

L.I. 2 28 Abomey - Sondoue Zoume (prt) Zou 4 45 Bankoto - Kokey Borgou 4 46 Founougo - Kandera 21 48 Atabenou - Guinbagou (prt) " i 40

L.I. 3 30 Gogonou - River -Boudi Jorgou 29 '°ori -zagou 45

L.1. 4 31 Bodjicali - Garou Borgou 22 49 Garou - Kassa (part) 14 36

TOTAL 1981/82 251 - 23 - Chapter III Table 1 Pg. 2

PEOPLE'S REPUBLIC OF BENIN

SECOND FEEDER ROADS PROJECT

1982/83 Tentative Improvement Program

Road No. Route Province Length (km)

43 Angara - Fuay Borgou 16

42 Angara - Saa - Kandy " 33

40 Bagou - Sonsora 32

41 Beroubay - Yarra " 30

44 Kargui - Harimana 17

47 Liboussou - Limanta 22

48 Atabenou - Guinbagou(part) " 12

49 Garou - KasSa (part) 16

18 Tchetti - Kokondji Zou 26

20 Hounkpougon - Gbedavo " 5

29 Dan Mountchi - Oueme " 14

25 Dogbo - Deve Mono 13

35 Yossa - RNIE 2 Zou 29

TOTAL 1982/83 265 - 24 - Chapter III Table 2

PEOPLE'S REPUBLIC OF BENIN

SECOND FEEDER ROADS PROJECT

Actual and Forecast DRDR Production 1978-1983 (in kilometers constructed during each year October 1 to September 30)

1978/79 1979/80 1980/81 1981/82 1982/83

Mechanized Brigade I 18(4mths) 57 95 89 90 Intermediate Brigade 35 53 49 - - Labor Intensive Brigade I 12 (4mths) 39 42 41 44 I" "" II - 34 (llmths) 45 40 44 "l i" III - - 45 44

IV - - 3ff9mths) 36(9mths) 43

Sub Total (Pro4ect) 65 183 231 251 265

EDF Mechanized Brigade-/ - 5 (2mths) 80 100 100

UNDP Labor Brigade -/ - - 30 (llmths) 45 45

*?Il- . . _ - 25 (lOmths) 45 45

TOTAL (DRDR) 65 188 366 441 455

Note: Less than optimal outputs derive from necessity of moving brigades between work sites. Source: DRDR and Mission estimates. - 25 - Chapter III Table 3

PEOPLE'S REPUB2LICOF BENIN SECOND FEEDER ROADS PROJECT ImplementaLion Schedule

1980 1981 1982 1983

Equipment Procurement

Prepare bid documents Call for bids x Evaluate bids x Select suppliers x Approve contracts x Deliver equipment Programme preparation-

Preparation of work programmes - Present programmuleto ITC x Present programme to IDA x x x

Works execution

Mechanical brigade Intermediate brigade __--_--______--______-______Labour brigade I Labour brigade Il Labour brigade III Labour brigade III Labour brigade IV Maintenance brigade ______----

Source: Mission Estimates - 26 - Chapter IEII Table 4

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PEOPLE'S REPUBILIC OF PLNIN

SECOND FEEDER ROADS PROJECT

PROJECT C0';T (net of taxea)

-- CFAF Millions------US$ Thousands-- Financlng Item Local Foreign Total Local Foreign Total IDA RPB

A. Feeder Road Improvement 1. Equipment 11.8 136.1 147.9 57.6 663.9 721.5 721.5 - 2. Spare Parts 13.8 123.7 137.5 67.3 603.4 670.7 670.7 - 3. Repair Charges 88.1 9.7 97.8 429.8 47.3 477.1 334.1 143.0 4. Fuel and Lubricants 20.5 143.1 163.6 100.0 698.1 798.1 798.1 - 5. Wages 381.7 - 381.7 1861.9 - 1861.9 1117.1 744.8 6. Materials 63.3 7.2 70.5 308.8 35.1 343.9 206.3 137.6 7. Office Costs 37.5 37.6 75.1 182.9 183.4 366.3 256.6 109.7

Subtotal 616.7 457.4 1074.1 3008.3 2231.2 5239.5 4104.4 1135.1

B. Feeder Road Maintenance

1. Equipment 3.5 40.7 44.2 17.1 198.5 215.6 215.6 - 2. Spare Parts 1.4 12.2 13.6 6.8 59.5 66.3 66.3 - 3. Reoair Charges 8.7 1.0 9.7 42.4 4.9 47.3 33.2 14.1 4. Fuel and Lubricants 2.1 14.0 16.1 10.2 68.3 78.5 78.5 - 5. Wages 55.0 - 55.0 268.3 - 268.3 161.0 107.3 6. Materials 4.8 0.5 5.3 23.4 2.4 25.8 15.6 10.2 7. Office Costs 2.9 2.8 5.7 14.1 13.7 27.8 19.5 8.3

Subtotal 78.4 71.2 149.6 382.4 347.3 729.7 589.7 139.9

C. Equipment Repair Facilities

1. Sheds 1.8 0.2 2.0 8.8 1.0 9.8 5.8 3.9 2. Tools 0.6 5.4 6.0 2.9 26.3 29.2 29.3 -

Subtotal 2.4 5.6 8.0 11.7 27.3 39.0 35.1 3.9

D. Technical Assistance 33.6 190.6 224.2 163.9 929.8 1093.7 984.4 109.3

Total (A-D) 731.1 724.8 1455.9 3566.3 3535.6 7101.9 5713.6 1388.2

E. Contingencies

l. Physical 72.4 63.7 136.1 353.2 310.7 663.9 522.4 141.5 2- Price

1980/81 5.0% 1.0.6 18.3 28.9 51.7 89.3 141.0 122.0 19.0 1981/82 12.8% 37.8 32.1 69.9 184.4 156.6 341.0 267.3 73.7 1982/83 21.8% 64.6 37.2 101.8 315.1 181.5 496.6 374.6 122.0

TOTAI, (E) 185.4 151.3 336.7 904.4 738.1 164 2.5 1286.3 356.2

CRA&NDTOTAL 916.1 876.1 1792.6 4470.7 4273.7 8744.4 7000.0 1744.4 PEOPLE'S REPUBLIC OF BENIN

SEC;oNDFEEDER ROADS PROJECT

PROJECTCASH FLOW (Net of taxen in million CFAF)

__- _____1980/81------1981/82-_----_ -- 1982/83 ------otal ------Financin8 Item 1 by IDA Local Forcign Total Local Foreign Total Local Forei&n Total Local Foreign Total IDA PP8

A. Feeder Road Im.rovement 147.9 1. Equi-rent 100 9.4 108.3 117.7 1.7 20.0 21.7 0.7 7.8 8.5 11.8 136.1 147.9 2. Spare Parts 100 5.1 45.7 50.8 4.3 38.2 42.5 4.4 39.8 44.2 13.8 123.7 137.5 137.5 3. l-pair Charges 70 27.3 3.0 30.3 29.1 3.2 32.3 31.7 3.5 35.2 88.1 9.7 97.8 68.5 29.3 4. F,fe1 and tubricênti 100 6.1 43.0 49.1 7.0 48.6 55.6 7.4 51.5 58.9 20.5 143.1 163.6 163.6. - 5. Iages 60 87.8 - 87.8 145.0 - 145.0 148.9 - 148.9 381.7 - 2C1.7 229.0 152.7 6. Iateri ls 60 15.2 1.7 16.9 23.5 2.6 26.1 24.6 2.9 27.5 63.3 7.2 70.5 42.3 28.2 7. Office Cents 70 12.5 12.5 25.0 12.5 12.5 25.0 12.5 12.6 25.1 37.5 37.6 75.1 52.6 22.5 Subt.eta1 163.4 214.2 377.6 223.1 125.1 348.2 230.2 118.1 348.3 616.7 457.4 1074.1 841.4 232.7

B. Feeder Road M,totenance

1. Ecuter.ent 100 2.8 32.3 35.1 0.5 6.0 6.5 0.2 2.4 2.6 3.5 40.7 44.2 44.2 - 2. Spart arta 100 0.4 3.1 3.5 0.5 4.5 5.0 0.5 4.6 5.1 1.4 12.2 13.6 13.6 - 3. Fe-^tr Ch-.zes 70 1.6 0.2 1.8 2.7 0.3 3.0 ; 4à4 0.5 4.9 8.7 1.0 9.7 6.8 2.9 4. ruel and Lubricants 100 0.3 1.7 2.0 0.9 6.1 7.0 0.9 6.2 7.1 2.1 14.0 16.1 16.1 - 5. Leges 60 7.3 - 7.3 22.8 - 22.8 24.9 - 24.9 55.0 - 55.0 33.0 22.0 6. >'ateriala 60 0.2 - 0.2 1.7 0.2 1.9 2.9 0.3 3.2 4.8 0.5 5.3 3.2 2.1 . Oefice Costs 70 0.4 0 3 0.7 1.2 1.3 2.5 1.3 1.2 2.5 2.' 2.e 5.7 4.0 1.7

Subto;li 13.0 37.6 50.6 30.3 18.4 48.7 35.1 15.2 50.3 78.4 71.2 1'i9.6 120.9 28.7

C. Eju!pmert Repair F a i lit'e 0.8 1. Sbeda 60 1.4 0.1 1.5 0.4 0.1 0.5 * - - 1.8 0.2 2.0 1.2 .2. Tools 100 0.4 3.6 4.0 0.1 0.9 1.0 0.1 0.9 1.0 0.6 5.4 6.0 6.0 _

Subtotal 1l,' 3.7 5.5 0.5 1.0 1.5 0.1 09 1.0 2.4 5.6 8.0 7.2 0,8

Teclteical Assistfnce 90 14.9 84.5 99.4 14.9 84.5 99.4 3.8 21.6 25.4 33.6 190.6 224.2 201.8 22.4

Total vA-D) 193.1 340.0 533.1 268.8 229.0 497.8 269.2 155.8 425.0 731.1 724.8 1455.9 1171.3 284.6

E. Ccnttngenciêê 1. Pyvs1cal 10S other item 18.7 27.0 45.7 26.8 21.6 48.4 26.9 15.1 42.0 72.4 63.7 136.1 107.1 29.0 2. fric* 28.9 25.0 3.9 ao- P IC5,v/8j 5.02. 10.6 18.3 28.9 - . _ _ _ _ 10,6 18.3 15.1 * 1 1V8;182 12.87. - - - 37.8 32.1 69.9 - - - 37.8 32.1 69.9 54.8 76.8 25Q0 1982/63 21.8% - - - 64.6 37.2 101.8 64.6 37.2 101.8 H TCITAI (E) 29.3 45.3 74.6 64.6 53.7 118.3 91.5 52.3 143.8 185.4 151.3 336.7 263.7 73.0

CRASIDTOTAL 222.4 385.3 607.7 333.4 282.7 616.1 360.7 208.1 568.8 916.1 876.1 1792.6 1435.0 357.6 - 29 - Chapter III Table 6

PEOPLE'S REPUBLIC OF BENIN

SECOND FEEDER ROADS PROJECT

STAFF APPRAISAL REPORT

DISBURSEMENT SCHEDULE

IDA Fiscal Year and Cumulative Disbursements End of Quarter (US$ '000)

1981

3rd 500 4th 1,000

1982

lst 2,000 2nd 2,500 3rd 3,000 4th 3,500

1983

lst 4,000 2nd 4,500 3rd 5,000 4th 5,500

1984

Ist 6,000 2nd 6,500 3rd 7,000 - 30 -

IV. ECONOMIC EVALUATION

A. Benefit Estimation

4.01 The proposed project will finance a three-yearslice of a longer- term feeder road improvementprogram the realizationof which is a neces- sary, although not in itself sufficient,condition for increasingagricul- tural productionand improving the level of living of the rural population in Benin. While a firm constructionprogram for the first two years of the project has been evaluated, it is understoodthat road improvementpriori- ties for the second and later years may change, if changes in regional developmentprojects so dictate. To be included in the investmentprogram, a road must have a minimum estimatedeconomic rate of return of 10%, estab- lished in accordancewith the methodologyused for evaluatingthe original program.

4.02 The roads to be improved under the project essentiallysupport local agriculturalor rural developmentactions and schemes. In some of the CARDERs they are part of integratedrural developmentprojects financed by IDA; in others they will support and complementdevelopment efforts financed by regional authoritiesor other agencies.Since project benefits are thereforepractically everywhere attributable jointly to agriculturaland road improvements,the economic evaluationof the feeder road improvement program has been based on estimated producer surplus (PS) or net incremental value added (NIVA).

4.03 To establish producer surplus "without" and "with" the road improvement and other investments, the followingprocedure has been employed:

(a) population in the road-influencearea (RIA) (5 km to each side of the road, unless geographicalobstacles indicate otherwise)is establishedfrom the 1979 census;

(b) present (without-project)value of productionis estimated based on provincialaverages developed from production statisticsestablished by the Ministry of Rural Development;

(c) "without the project" agriculturalproduction is assumed to remain at the traditionallevel (i.e. little change in productiontechnologies) and increase only at the rate populationincreases;

(d) "with the project" two differentsets of assumptionsare applied dependingon whether the RIA is a densely or sparsely populatedarea. The latter is defined as popu- lation being less than 350 inhabitantsper km of road or per 10 km2 of RIA. For densely populatedareas, adoption of improved agriculturaltechnologies will result in productionincreases above previous levels, - 31 -

and the road will ensure that all of the surplus above farmers' subsistence needs can find its way to the market reliably and at reasonable cost. For sparsely populated areas of good agricultural potential, the same assumptions apply; but in addition, a larger than average population increase in the RIA is postulated up to the point when 350 inhabitants/km or road are attained. There is thus a second part of incremental production in the RIA due to road-induced population growth. It is assumed that migrants will come from among those who would otherwise have left areas of population pressure on the land for the cities, where employment prospects are scarce.

4.04 While it would be correct and desirable to include road user savings on non agriculture-related traffic, traffic data for rural roads in Benin are presently so uncertain that it is considered prudent to omit this component. However, for each of the roads evaluated, an estimate of future traffic based on expected surplus marketed from the RIA is established. The proposed program of impact monitoring under the project (para. 3.10) will establish traffic and transport cost levels connected with both agricultural and other activities on a representative sample of project roads and endeavor to establish the distribution of road user savings between producers, trans- porters and consumers.

4.05 For the roads included in the first and second year construc- tion program, economic rates of return were thus estimated on the basis of net incremental value added only, and assuming a ten-year project life. Besides the quantified benefits derived from increased crop production for the market, some 175,000 rural inhabitants will benefit from better access to administrative and social services, and will thus be more effectively integrated into the regional and national community.

4.06 Greater reliance on labor-intensive construction methods will provide a larger number of communities, from which labor is drawn, with the cash-earnings that will allow farm households to pay for the improved agricultural tools and inputs needed for more intensive exploitation of their lands. The economy as a whole will benefit from foreign exchange savings on reduced grain imports and higher foreign exchange earnings on increased production of traditional export crops such as cotton and groundnuts.

B. Costs

4.07 The road construction and maintenance costs used in the economic evaluation are based on the actual costs of operating equipment and employing labor experienced under the first project updated to August 1980, net of taxes. No shadow pricing of local labor was applied, since there are alter- native, if somewhat less well remunerated, employment opportunities in local agriculture. The costs of improved agricultural technologies are taken into account in the estimates of net incremental producer surplus. They include - 32 - the estimatedcost to the farmers of ox-drawn cultivationand more intensive use of modern inputs; Government subsidieson fertilizersand pesticides; and an estimate of the incrementalcapital costs associatedwith higher input use and improved extensionservices.

C. Rates of Return and Risks

4.08 0f the 470 km of roads retained in the program through individual economic evaluation,24% show ER between 10% and 14%, 41% between 15% and 24%, and 35% in excess of 25% (Table 1). An additional312 km of roads in Borgou province have been justifiedas part of the proposedBorgou Rural DevelopmentProject II. Preliminaryestimates indicate an economic return of this project of about 18%. The overall economic rate of return for the project as a whole is estimatedat 19%, neglecting any salvagevalue of the roads after the 10-year evaluationperiod.

4.09 There are three major areas of risk which may prevent the project from realizing the anticipatedlevel of benefits:

(a) the quality of road maintenanceafter constructionis completed;

(b) the level of producer prices set by Government for diffe- rent agriculturalproducts and their competitivenesswith those prevailingin neighboringcountries; and

(c) adequate supply of agriculturalinputs and extension services.

4.10 Since the project includes an initial maintenancecomponent and technicalassistance for developingappropriate maintenance procedures, and Government is in the process of establishingnew sources of financing for rural road maintenance(para. 2.03), the first risk should not be a serious one. After severalyears of stagnatingproducer prices (which resulted in a considerablevolume of illegalproduct sales to Nigeria and Togo where higher market prices prevailed),the Government of Benin has, in the past year, increasedproducer prices for cotton,maize and rice, and implicitlyaccepted "free" local market prices for fooderops. There is thus some movement in the directionof providingprice incentives to farmers. Adequate supplies of inputs and appropriateextension supportwill be provided at least in some of the CARDERs through proposed rural developmentprojects, although they may remain deficient in some regions. On the whole, therefore, the risks associatedwith the project are acceptable. 4.11 Sensitivityof estimatedERs to cost increasesor shortfalls in benefits has been tested: a 20% increase in road constructioncosts would reduce the ER to 16%; a 20 % shortfallin benefits would drop the ER to 15%; the combination of the cost increase and benefit shortfall would still leave the project viable with an ER of 12%. The ER would fall below ten percent-- the estimated opportunity cost of capital in Benin--if road construction costs increased by 65% or benefits decreased by 41%. If benefits lagged by one year, the most likely rate of return to the project would fall from 19% to 14%. -33 Chapter IV PEOPLE'S REPUBLIC OF BENIN Table 1

SECOND FEEDER ROADS PROJECT

COSTS BENEFITS ERR Benefi- Cost/Bene- Population Export ROADS Length Const. Mainten. Net Incremental ciaries ficiary Benefit- Surplus No. Name (km) CFAF million value added 1/ per km. CFAF ting Tons/yr. Vpd 2/ 11 Toukountouma-Peperkou 15 30.0 25.5 55.7 10 173 11,560 2,595 130 1 12 Natitingou-Kouarfa 22 44.3 36.5 83.9 Il 214 8,880 4,708 235 1 13 Kotopounga-Kouarfa 21 40.1 34.0 85.6 13 224 8,035 4,704 235 1 14 Wansokou-Dikiboumi 8 9.8 10.9 34.9 22 375 3,100 3,000 150 1 15 Baribonsifa-Tehakalou 6 10.2 9.2 31.4 21 300 5,330 1,800 90 1

16 Bori-Sonoumou 17 31.2 27.2 a) 117 14,755 1,989 300 1 17 Bori-Serou 34 70.1 54.4 " 151 12,880 5,134 770 2 30 Gogonou-River Bouli 29 50.9 46.4 112 14,770 3,232 485 1 31 Bodjicali-Garou 22 44.6 35.2 " 246 7,800 5,403 810 2 32 Toumé-Gando 28 56.7 44.8 ' 59 32,680 1,638 245 1 33 Bouanri-Biri 35 61.3 56.0 ' 133 12,320 4,695 705 2 34 Bouka-Dimkassa 15 28.3 24.0 219 8,140 3,279 490 1 39 Sori-Bagou 16 28.7 25.6 320 5,290 5,125 770 2 40 Bagou-Sonsoro 32 66.1 53.8 224.8 24 238 8,190 7,616 1,140. 3 41 Beroubay-Yarra 30 54.9 48.0 a) 132 13,080 3,957 595 2 42 Angara-Sas-Kandi 33 85.1 61.8 193.7 16 206 11,810 6,798 1,020 3 43 Angara-Fouay 16 32.2 26.6 54.7 10 94 20,210 1,504 225 1 44 Kargua-Karimana 17 36.0 27.2 a) 144 13,860 2,452 370 1 45 Bankolo-Kokey 4 10.0 6.4 570 4,105 2,278 330 1 46 Fonougou-Kanoera 21 55.9 33.6 " 138 18,185 2,900 'S35 1 47 Liboussou-Libante 22 42.9 35.2 t' 152 12,140 3,333 500 1 48 Atabenou-Guinbagou 23 40.1 36.8 't 127 12,905 2,925 440 1 49 Garou-Kassa 30 68.8 52.9 242.1 27 257 8,420 7,710 1,155 3

18 Tchetti-Kokoudji 26 40.3 44.2 119.0 19 142 10,290 3,692 2,215 7 19 Tchetti-Doume 22 27.6 37.4 170.3 34 245 4,825 5,390 3,235 10 20 Hunkpougon-Gbedavo 5 8.5 8.5 37.2 27 240 6,670 1,200 720 2 21 Keboua-RNIE 2 5 8.5 8.5 33.0 21 420 3,810 2,100 1,200 3 22 Kilibo-Djegbe 44 87.2 78.3 321.6 25 141 13,265 6,204 3,720 12 26 Zogbodomey-Akiza 14 26.7 22.7 125.6 25 536 3,360 7,504 4,500 15

28 Abomey-Sinhoue Zoume 20 38.2 35.6 205.3 28 700 2,570 14,000 8,400 30 29 Dan Mountchi-Onêmé 14 25.2 22.1 103.7 22 479 3,550 6,706 4,020 12 35 Yossa-RNIE 2 29 58.4 51.6 265.9 28 224 7,200 6,496 3,895 12

27 Kissamey-Ouakpé 35 88.8 67.2 252.0 18 514 4,930 18,000 920 2 23 Kpinnou-Ferme Rizicole 4 8.5 6.8 16.2 10 250 8,000 1,000 50 1 24 Honegame-Lokogba 16 25.4 24.0 73.6 16 525 2,860 8,400 420 1 25 Dogba-Deve 13 24.3 22.9 65.0 12 592 3,625 7,696 385 1

36 Ketou-Adakplame 12 24.2 19.9 83.2 21 450 4,220 5,400 -540 2 37 Ketou-Adekambi 22 49.0 38.3 87.8 10 195 10,770 4,290 429 1 38 Kpedekpo-Gbegon 7 12.4 10.9 32.3 16 214 7,810 1,498 150 1

a) Justified as part of Borgou RDP Il with about 17% rate of return. 1/ Takes into consideration required agricultural investments, outside this project. 2/ Estimated traffie level as a function of current exçortable surplus - i.e. hypothetical value to be validatedfrevised on the basis of planned traffic monitoring on a sanmle of roads (of para. 3.10). - 34 -

V. RECOMMENDATIONS

5.01 During negotiationsthe followingitems were discussed and agreed upon with the Government:

(a) design standardsto be employed in feeder road improvement and constructionworks (para. 3.04);

(b) job descriptionand qualificationsrequired for the techni- cal assistance(para. 3.09);

(c) continuedassignment by the Governmentof qualifiedBeni- nese staff to the DRDR (para. 3.09);

(d) timely submissionof annual work programmesfor the Association'sapproval (para. 3.16);

(e) procurementprocedures for equipmentand supplies (para. 3.18);

(f) Government'scommitment to provide local funds (paras. 3.23 and 3.24);

(g) retroactivefinancing (para. 3.24); and

(h) accounting,auditing and progress reporting (para. 3.27).

5.02 As agreementhas been reached and confirmedwith the Government on the items mentioned in para. 5.01, the proposed Project would be suitable for a Credit to the People's Republic of Benin in the amount of US$7.0 million on standard IDA terms. - 35 - ANNEX 1

STAFF APPRAISALREPORT

POPULATIONDATA FOR PROJECT EVALUATION

1. Many of the rural roads to be improvedunder the projectwill open up hitherto sparsely settled areas with good agriculturalpotential for settlement. "Without"and "with" road populationgrowth estimates are thereforean importantparameter of road benefit estimation. This annex summarizesthe populationdata and assumptionsused in the economic evalua- tion of the project.

2. During the past twenty-yearperiod, two populationcensuses were carried out in Benin: the first in 1961, the second in 1979. In between, a number of sample censuseswere undertakenbut their reliabilityis less good. Table 1 below shows province-by-provincepopulation g&owth rates for the 1961-79 inter-censalperiod and compares them to the presumed growth rates indicatedby mid-periodsample censuses. Overall, the popula- tion of Benin has increasedat a rate of 2.6% p.a. between the two offi- cial censuses but there is considerablevariance around the mean in the differentprovinces (lowest: 1.7% in Zou, highest: 4.6% in Atlantique which includes the major city Cotonou). The apparent populationlosses in some provincesbetween 1977-79are at least in part due to over-estima- tion in the 1977 data. The global trends, however,which show a loss from the centre to the southern regions and a close to average growth in the north are consistentwith observation.

Table 1. POPULATION GROWTH BY PROVINCE - 1961-1979

Population in 000 % Annual Growth Regions and ______Provinces 1/ 2/ 3/ 4/ 1961- 1967- 1977- 1961- 19617- 1967 l977 1979 1967 1977 1979 1979

Ouémé (Southeast 463.5 557.0 614.2 627.1 3.11 0.98 1.04 1.70 Atlantique (SoutA) 309.4 404.0 631.8 693.3 4.55 4.57 4.75 4.56 Mono (Southwest) 289.9 321.0 494.2 476.5 1.72 4.41 (1.89) 2.80

SOUTH 1,062.8 1,282.0 1.740.2 1,796.9 3.20 3.10 1.62 2.96 ------…______------Zou (CENTRE) 425.1 510.0 637.6 569.5 3.08 2.26 (5.80) 1.68 ______--______--______--______--______--______---______…______

Borgou 304.6 350.0 473.9 490.3 2.38 3.07 1.72 2.68 Atacora 313.5 336.0 477.3 481.5 1.13 3.58 0.44 2.41

NORTH 618.1 686.0 951.2 971.8 1.76 3.32 1.08 2.54

ALL BENIN 2,106.0 2,478.0 3,338.2 3,338.2 2.75 3.00 0.14 2.59

_- . - - - - - For sources see over ... - 36 - Annex 1 Page 2

1/ Enquete Demographique au Dahomey, 1961 INSEE, Paris 1964.

2/ InteTim Survey (no source) quoted in Zou-Borgou Cotton Project Preparation Report, 1970 (Annex 3).

3/ Cartographic Census 1977, Ministry of Planning, Central Census Bureau.

4/ 1979 Census - Preliminary Results, Part 1: Households and population by sex (March 1979). a

3. As is true for most developing countries, Benin has experienced sharply different growth rates between urban and rural populations. Table 2 compares urban population in 1961 and 1979, taking into consideration the change in localities classified as "urban" in the respective years. Since the administrative definition of the "urban" group includes many households who depend on agriculture for their livelihood and whose consump- tion patterns differ very little from those of the inhabitants of "rural" areas, an attempt was made to distinguish the "truly" urban (i.e. non-agri- cultural-dependent) population from the total living in urban districts.

Table 2: URBAN POPULATION - 1961, 1979

% increase p.a. 1961 1979 1961/1979

Urban (a) 209,400 636,000 6.36 Urban (b) 209,400 1,404,650 11.14 Urban (c) 209,400 961,640 8.83

ad (a) Population of the cities of Porto Novo, Cotonou, Ouidah, Abomey, Bohicon, Parakou and Djougou - the only ones considered "urban" at the time.

ad (b) 1961 as (a). 1979 population of all districts administra- tively defined as urban now.

ad (c) 1961 as (a). 1979 as (b) minus estimated proportion of population living in urban districts, but depending on agriculture (cf. Annex, Table 1).

For the purpose of the present project evaluation, it is thus assumed that the rural population has grown from 1,896,000 in 1961 to 2,375,000 in 1979. This implies an average annual rural growth rate of 1.26%. Table 3 below gives urban/rural population growth rates by province, based on estimate (c) of urban population. - 37 AY'NEX 1 Page 3

Table 3: URBANAND RURAL POPULATIONGROWTH BY PROVINCE:1961-1979

1979 Pop.D4 1961-79 1961 Population(OOO) 1979 Population(OOO)ersons/km y ann.growth Province TOTAL Urban Rural TOTAL Urban Rural OTAL Rural Urban Rural

Ou6mé 463,5 64.0 399.5 627.1 259.3 367.8 133.4 78.2 8.02 -0.39 Atlantique 309.4 95.5 213.9 693.3 428.4 264.9 16.0 82.2 8.69 1.20

Mono 289.9 - 289.9 476.5 90.1 386.4 125.4 101.7 N.A. 1.61 Zou 425.1 26.4 398.7 569.5 76.2 493.3 30.5 26.4 6.06 1.19 Borgou 304.6 14.0 290.6 490.3 63.2 427.1 9.6 8.4 8.74 2.15 Atacora 313.5 9.5 304.0 481.5 44.4 437.1 15.4 14.0 8.95 2.0

ALL BENIN 2,106.0 209.4 1,896.6 3,338.2 961.6 2,376.6 29.6 21.1 8.83 1.26

4. It is these provincial averages of rural population growth that are used in establishing "without" and "with" road population development in the influence area of the roads evaluated for inclusion into the annual improvement programs. A distinction is made between sparsely and densely populated areas. The former are defined as road bands (5 km each side of the road) with a population of less than 350 persons per km of road (or, at an average size of household of seven persons, of less than 50 households per 10 km2 of road influence area), which implies that about 10% of the available land area is cultivated. Where population density is between 350/km and 700/km, growth is assumed to take place at the provincial average. Areas with more than 700 persons/km are assumed to remain stationary. In sparsely populated areas of good agricultural potential, population is assumed to grow disproportionately: one family of 7 persons per km of road improved will move into the road influence area in the year following reconstruction; subsequently, population will grow at 2.6% p.a. until 350 persons per km of route are attained. At that point growth will decline to the provincial norm in annual decrements of 0.2%. - 38 ANNEX- Page 4

Estimate of Urban Population not Dependent on Agriculture for Their Livelihood by Province

OUEME PROVINCE X Urban Deperd No. "True" Locality No. Rural No. Urban on Agriculture Urban

Adjarra 28,815 5,305 25 3,979 Adjohoun 33,979 7,625 25 5,719 Aguegues (Lacustre) - 15,062 - 15,062 Il Akpro-Miss 29,590 9,909 25 7,432 Avrankou 41,203 8,915 25 6,686 Bonou 14,348 4,658 75 1,165 Dangbo (Lacustre) 6,470 36,808 - 36,808 1/ Dangbo (Town) - 6,255 50 3,128 Ifangni 33,128 11,087 25 8,315 Ikpinle 26,116 4,809 25 3,607 K^tou 31,528 8,381 50 4,191 Pobè 36,126 16,682 25 12,512 Porto Novo I - 40,063 - 40,063 Porto Novo II - 53,927 53,927 Porto Novo III - 37,999 - 37,999 Sakoté 22,278 19,414 25 14,561 Sèmè-Podji 31,122 5,528 25 4,146

Total 334,703 292,437 plus 33,127 - 259,300 33,127 Adjusted Total 367,830 259&300

ATLANTIQUE PROVINCE

Abomey-Calavi 51,772 9,329 9,329 Allàda 50,366 11,770 11,770 Cotonou I - 40,117 - 40,117 II 44,400 - 44,400 "9 III - 24,122 - 24,122 IV - 48,172 - 48,172 V - 97,089 - 97,089 VI - 73,695 - 73,695 Kpomasse 35,714 5,688 25 4,266 Ouidah 27,117 25,343 _ 25,343 So-Ava (Lacustre - 37,709 - 37,709 1 Toffo 40,270 2,869 25 2,152 Tori Bossito 20,389 8,153 25 6,115 Ze 33,710 5,496 25 4,122 433,952 Total 259,338 -428,401 plus 5,551 5,551 Adjusted Total 264,889

1/ Communities built on water and employed exclusively in fishing - they depend on agriculture products produced by the land-based communities. - 39 - ANNEX 1 Page 5

MONOPROVINCE

% Urban Depend. No. "True" Locality No. Rural No. Urban on Agriculture Urban

Aplahoué 40,564 11,597 50 5,799 Athiémé 38,819 22,353 25 16,765 (of this Lokossa 12,621) Bopa 31,816 8,371 25 6,278 Comé (incl. Lacustre) 19,847 12,402 10 11,162 Djakotomey 43,687 8,436 25 6,327 Dogbo 28,112 16,485 25 12,364 Grand-Popo (incl. Lac.) 18,058 8,814 - 8,814 Houéyogbé 37,115 6,917 25 5,188 Kloué Kanmé 35,357 9,918 50 4,959 Lalo 29,327 17,250 50 8,625 Toviklin 23,603 7,652 50 3,826

Total 346,305 130,195 plus 40,088 -90,107 40,088 Adjusted Total 386,393 90,107

ZOU PROVINCE

Abomey 11,345 38,825 25 29,119 Agbangnizoun 32,884 5,875 95 294 Banté 23,251 5,520 90 552 Bohicon 28,101 22,702 25 17,027 Cove - 25,634 50 12,817 Dassa-Zoumé 30,164 11,467 75 2,867 Djidja 37,217 6,561 95 328 Glazoué 33,914 4,097 90 410 Ouessé 26,625 5,062 95 253 Ouinni 16,223 6,052 95 303 Savalou 34,540 16,689 75 4,172 Savé 7,733 18,389 75 4,597 Zagnando 17,364 9,221 75 2,305 Za-Kpota 38,826 8,975 95 449 Zagbodomey 38,890 7,323 90 732

Total 377,077 192,392 plus 116,167 - 76,225 116,167 Adjusted Totals 4 76,225 40 ANNEX 1 Page 6

BORGOU PROVINCE

% Urban Depend. No. "True" Locality No. Rural No. Urbin on Agriculture Urban

Borgou South

Bembéréké 27,594 10,283 90 1,028 Kalalî 30,928 7,805 95 390 N'Dali 20,955 5,618 90 562 Nikki 18,673 15,586 90 1,559 Parakou - 60,797 25 45,598 Pèrérè 15,584 4,486 95 223 Sinendè 15,461 8,913 95 446 Tchaourou 26,071 8,757 90 876 Subtotal 155,266 122,245 50,682

Borgou North

Banikoara 46,374 13,664 90 1,366 Gogonou 23,913 4,267 95 213 Kandi 31,765 17,086 50 8,543 Karimama 10,767 8,885 95 444 Malanville 19,765 16,614 90 1,661 Segbana 13,891 5,840 95 292 Subtotal 146,475 66,356 12,519

rOTAL 301,741 188,601 plus 125,40 - 63,201 125,400 Adjusted Total 63,201

ATACORA PROVINCE

Bassila 22,914 9,433 90 943 Boukombé 33,369 13,863 90 1,386 Cobey 18,908 7,862 95 393 Copargo 22,247 12,294 95 615 Djougou 58,422 28,777 25 21,583 Kerou 13,376 14,203 95 710 Konandé 18,266 24,305 90 2,430 Materi 36,107 10,566 95 528 Natitingou 18,627 13,348 25 10,011 Ouaké 25,277 5,155 95 258 Pehunco 8,672 14,187 95 709 Tanguiéta 18,122 9,086 50 4,543 Toncountouna 18,123 6,00 95 300

Total 312,430 169,079 plus 124,670 - 44 409 124:670 Adjusted Total 437,100 44,409 - 41 - ANNEX 2

STAFF APPRAISAL REPORT

ECONOMICEVALUATION

1. The economic evaluation of the proposed road program compares producer surplus in the road influence areas (RIA) "without" and "with" improved accessibility and other agricultural investments.

2. To estimate project benefits assumptions have to be made con- cerning:

(a) production increases achievable in the RIA as a function of:

(i) increases in area cultivated (ii) increases in yields (iii) reduction of on-farm losses

(b) size and marketability of surplus produced in the RIA, as a function of:

(i) the amount of self-consumption (ii) market accessibility throughout the year (iii) the price obtainable by producers for surplus production in local/regional/national/international markets.

3. To take into account all relevant project costs, it is necessary to establish:

(a) the incremental costs of improved production technologies; and

(b) the cost of providing market access, i.e. of constructing the road and maintaining it throughout its life (10 years).

Assumptions Concerning Production Increases in RIA

4. In changing from subsistence farming to production for the market, the Beninese peasant farmer's first option is to increase area under crop since cultivable land is not yet a scarce factor in most places. Statistics on area cultivated per head of rural population (cf. Agriculture Annex Table 1, Project File) show a consistent value of 0.3 ha/rural inhabitant in the south; a high 0.45 ha/rural inhabitant in the center and a low 0.25 ha/rural inhabitant in the north. At prevailing (traditional level) yields, the 0.25 ha cultivated per inhabitant in the north suffices to assure food self-sufficiency (at 217 kg grain equivalent per person p.a.), whereas the higher figures in the center and south indicate some surplus production for the market. This is made possible by the existence of two cropping seasons over which labor inputs can be spread, whereas in the north available family labor is the main constraint on the amount of land a farmer can cultivate in a single crop-season. - 42 - ANNEX 2 Page 2

5. To alleviate the labor constrainta change in productiontechno- logy has to take place. The most feasible for Benin is adoption of animal traction,which is already being introduced by farmers in the north where cattle raising is an importanttraditional activity, while it is being more slowly adopted in the south of Benin. The economic evaluationassumes increasedadoption of animal traction by farmers living near improved roads who will most benefit from improved extensionservices promoting new tech- nologies, and who will have assured access to market for any surplus produc- tion. Adoption rates will be lower in the south than in the north; they are assumed to vary by province as shown below.

Oueme ) Atlantique ) 30% of all RIA farmers will have adopted Mono ) by year 10

Zou ) 40% of all RIA farmers will have adopted by year 10

Borgou > 50% of all RIA farmers will have adopted Atacora ) by year 10

6. Adoption of animal tractionwill allow farmers to extend their crop areas by about 15% overall. Conservatively,it is assumed that farmerswill continuewith their establishedcropping patterns, and devote a similar number of their own labor days to the cultivationof each crop as they did traditionally. (Table 7 of the AgriculturalAnnex in the Project File details comparativelabor-day inputs per hectare and crop for traditionaland animal-drawncultivation, and the estimated increase in area planted to each crop which was used in the analysis).

7. In addition to extensionof area under cultivation,CARDER efforts to promote modern inputs such as fertilizers,pesticides and improved seeds are expected to result in increasesin yields. Table 1 below summarizes the assumptionsretained for estimated crop yield increases, the time period over whieh they are expected to be attained as well as associatedinput costs to adopting farmers in the six provinces. Yield increaseshave been conserva- tively estimatedat only about a third of yields achieved in research in Benin or neighboringcountries. Full potential for most of the traditional foodcrops is expected to be reached over a five-yearperiod, while for cash crops fully improved yields are assumed to be achieved--inequal annual increments--overa ten-year period only. Incrementalcosts associatedwith modern input use include the cost to the farmer of animal traction,fertilizer and pesticides;Government subsidieson the latter, an annual amount of FCFA 500/ha cropped, over the full project period, to account for increased extension service coverage, and FCFA 1000/ha cropped, in years 1-3 of the project period, to account for the estimated costs of capital investments associateG with the provision of larger quantities of modern inputs and improved seeds. - 43 - A:INEX2 Page 3

Table 1: Estimated Yield Increases Due to Modern Input Use and Associated Incremental Production Cos&b Province - 1979

(Yield: Kg/ha; incremental cost: FCFA/ha)

Ouém4 Atlantique Mono Zou Borgou Atacora South North Manioc: Current Yield 5,000 5,400 7,000 4,800 7,800 7,800 3,500 Improved Yield 5,500 5,500 7,000 5,000 7,800 7,800 5,500 Period (years) 5 5 - 5 - - 5

Yams: Current Yield 6,000 - 10,000 12,920 8,340 8,340 7,850 Improved Yield 8,000 - 10,000 13,000 9,000 8,500 8,000 Period (years) 5 - - 1 5 5 1

Maize: Current Yield 700 850 820 980 730 680 760 Improved Yield 1,390 1,500 1,500 1,500 1,430 1,370 1,500 Period (years) 10 10 10 10 10 10 10 Incremental Cost 12,400 11,600 12,750 9,600 13,000 12,750 13,750

Sorghum: Current Yield - - - 610 780 730 670 Improved Yield 1,000 1,060 1,010 1,000 Period (years) 10 10 10 10 Incremental Cost - - - 6,500 5,630 5,630 6,500

Millet: Current Yield - - - 410 250 250 410 Improved Yield 620 620 620 620 Period (years) 5 5 5 5 Incremental Cost estimated at 50% of incremental valu

Rice: Current Yield 2,500 - 1,140 1,940 1,390 1,390 1,450 Improved Yield 2,800 - 2,500 2,500 2,600 2,600 2,500 Period (years) 10 10 10 10 10 10 Incremental Cost 4,900 22,000 9,150 19,800 19,800 17,100

Beans: Current Yield 450 400 420 310 430 430 500 Improved Yield 650 650 650 650 650 650 650 Period (Years) 5 5 5 5 5 5 5 Incremental Cost 6,500 6,500 6,500 6,500 6,500 6,500 6,500

Groundnuts: Current Yield 600 690 480 870 850 850 760 Improved Yield 800 800 660 1,370 1,340 1,340 1,250 Period (years) 5 5 5 5 5 5 5 IncrementalCcGt 2,500 2,500 - 11,180 11,180 11,180 11,180

Cotton: Current Yield 600 - 700 710 780 920 650 Improved Yield 1,100 - 1,200 1,200 1,200 1,200 1,150 Period (years) 10 10 10 10 10 10 10 Incremental Cost 20,000 20,000 19,400 16,600 11,300 20,000

I! These include estimated costs of fertilizers, pesticides, animal traction and subsidies. The latter are as follows: maize: 2,550)CFAF/ha/year Groundnuts: 2,600 CFAF/ha/yr rice: 7,725 CFAF/ha/year Cotton: 12,600 CFAF/ha/yr Source: Borgou Rural Development Project, Preparation Report, Annex 4, Table 10 CARDER reports and mission estimates. - 44 - ANNEX 2 Page 4

8. Based on 1978/79 volumes of agricultural production and prices, a value of agricultural production per rural inhabitant was estimated for each of the six provinces (cf. Tables 3-4, Agricultural Annex in Project File). Assuming annual per capita consumption of some 217 kg of grain equivalent per person, 1/ the shares of production needed for self consumption and available for marketing were also established for each province (cf. Agricultural Annex Table 6 in Project File). These are summarized below:

Table 2: ESTIMATED VALUE OF 1978/79 AGRICULTURAL PRODUCTION AND MARKETABLE SURPLUS BY PROVINCE

(in CFAF/Rural Inhabîtant)

Province Borgou Borgou Year Oueme Atlantique Mono Zou South North Atacora

1978/9 10,590 13,055 12,405 22,455 17,700 17,700 12,750 ------__------% self- consumed 83 69 91 49 80 80 94

9. "Without the project" agricultural production technology in the RIAs would remain virtually unchanged, since neither extension services nor modern inputs would be able to reach most of the farmers in the absence of improved access. The growth rate of agricultural production is therefore assumed to equal the rate of population growth in the RIA. What little marketable surplus may be produced often cannot be sold for lack of access to markets.

10. "With the project," a certain percentage of farmers (cf. para. 5 above) are expected to gradually adopt improved production technologies 2/ and to increase the share of their production for the market, which will have become accessible the year-round at a significantly lower cost than previously. Total incremental volume and value of production in the road influence area is estimated as a function of differential population growth in the road influence area, of improved technology, and of higher shares of marketable surplus actually marketed; the latter are a function of access road condition and, in general, are assumed to vary as follows:

1/ cf. "West African Foodgrain Study," IBRD Report No. 1252-WA, 1976, Table 1.5.

2/ For province-by-province estimates of incremental producer surplus per rural inhabitant due to adoption of improved technology over years 1-10 after road completion see Table , Agricultural Annex, in Project File. - 45 - ANNEX 2 Page 5

% of Marketable Road Condition Surplus Marketed

A. Satisfactory running surface only requiring routine maintenance 100

B. Fair running surface, occasional pot-holes and corrugation 100

C. Poor surface with many pot-holes and deformities, but passable at slow speed 80

D. Very poor surface, badly deformed and scoured, passable by 4-wheel drive vehicle 50

E. Passable by 4-wheel drive vehicle in dry weather, impassable in wet weather; new construction required 20

11. To establish the net incremental value added (net return to land and labor) "with the project" the incremental costs associated with higher input use, better extension, etc. are subtracted from the sum of incremental self-consumption and of production marketed, both valued at local market prices which, in the absence of official prices, are considered as producer prices. Net incremental value added or producer surplus is then compa;rcd c.o the cost of constructing the road and maintaining it over a ten-year period to determine the economic rate of return to the road and agricultural package.

12. Producer surplus is thus based on province-level data for the population and agriculture parameters used in the analysis. These present a considerable improvement on the national averages, on which the First Feeder Road Project appraisal had to rely. But additional refinement of the data base is necessary to more closely reflect production conditions in the various ecological sub-regions of the country. Work on this is currently ongoing as part of the final establishment of next year's annual construction program; it will be further intensified--especially with regard to traffic and transport cost data in rural areas--as part of the monitoring and road impact study foreseen under this project. 1 - 46 - ANNEX 3

People's Republic of Benin

SECOND FEEDER ROAD PROJECT

Technical Assistance to the DRDR

1. The DRDR will continue to require considerable technical assistance during the initial year of the project period, after which the Beninese staff in post would gradually take over operational responsibility. Since the tech- nical assistance is a considerable additional expense to the Project, bilateral voluntary aid is being solicited for the provision of specialists to the DRDR. One economist has been obtained from Dutch voluntary assistance for two years, and Dutch voluntary aid is actively trying to recruit additional staff to the DRDR; if this effort is successful, it would diminish the Project's require- ments for technical assistance, which at present stand as follows:

(a) Chief of Technical Assistance Team (14 months)

Duties:

(i) maintain responsibility and supervise quality of the work of the technical assistance team;

(ii) act as deputy chief of the DRDR in accordance with the prac- tice established under the First Feeder Roads Project and to supervise the planning, execution and monitoring of DRDR work programs in close cooperation with the chief of the DRDR;

(iii) supervise the consolidation of adequate accounting and reporting procedures;

(iv) supervise, in detail, the on-the-job training being provided by other members of the technical assistance team to their Beninese counterparts, and draw up theoretical training courses of short duration as required for the Beninese staff in view of experience with the on-the-job training.

Qualifications:

Civil Engineer (minimum 10 years professional experience, with experience in (i) planning, construction and supervision of road works, including low class roads; (ii) public works admini- stration; and (iii) personnel management and training.

(b) Engineer for Works Supervision and Training (32 months)

Duties:

(i) to carry out field supervision of works execution and ensure adherence to agreed design standards; - 47 - ANNEX 3 Page 2

(iî) to train Beninese counterparts;

(iii) to consolidate adequate reporting procedures and data collection for cost accounting.

Qualifications:

Civil engineering degree and a minimum of 7 years experience in construction projects.

(c) Accountant (14 months)

Duties:

(i) to consolidate financial and cost accounting procedures in the DRDR;

(ii) to train Beninese counterparts.

Qualifications:

Degree in business or public accounting and a minimum of 5 years experience.

(d) Technicians for Labor-Intensive Construction and Maintenance Works (34 months)

Duties:

(i) plan, direct, supervise and monitor the works of the light brigades in close cooperation with his counterpart; and

(ii) provide on-the-job training to local staff involved in the implementation of works carried out by the light brigades.

Qualifications:

Civil Engineer (minimum 5 years professional experience) with experience in civil construction projects using labor-intensive methods.

(e) Technician - Mechanized Brigade (12 months)

Duties:

(i) to plan and direct the work of mechanized brigade ensuring adequate efficiency and quality;

(ii) conduct on-the-job training of local staff (chief of brigades, mechanics and topographers) to ensure that daily operations can be completely handled after their departure. - 48 - ANNEX 3 Page 3

Qualifications:

Young engineer with a minimum of 5 years professional experience, or technician with a minimum of 10 years experience, including the operation of mechanized brigades in developing countries. 1 -49 - ANNEX 4

PEOPLE'S REPUBLIC OF BENIN

SECOND FEEDER ROAD PROJECT

SELECTED DOCUMENTS IN DATA FILE

The following documents are available in the project files:

1. DRDR: Main and Rural Road Inventory by Surface Type and Province.

2. AGRICULTURE: Volume and Value of Production for Subsistence and for the Market (Appraisal Mission, May 1980).

3. SWKP: Estimated Value of Agricultural Production per Rural Inhabitant by Province-1979-1980, (April 1980).

4. SONAGRI-CARDER BORGOU: Projet de Developpement Rural du Borgou; Annex 12: Pistes Rurales-Juillet 1979.

5. SWKP: Projet de Developpement Rural de Borgou: Volet Amenagement des Pistes Rurales, 2 Vol. Dec. 1979.

6. SWKP: Coordination of IBRD/UNDCF/EDF Brigades in Atacora Province, March 1979.

7. SWKP: Selection of Appropriate Technology for the Proposed UNDCF Funded Construction Brigade in Atacora, Feb. 1980.

8. SWKP: Interim Economics Report - Dec. 1979.

9. SWKP: Evaluation Report on the Road Projects Proposed for the 1980 Construction Program - Dec. 1979.

10. DRDR/SWKP:

- Review of Total Budget: Sept. 1980-Sept. 1981 (Rep. 77163/13).

- Estimated Cost of Technical Asst.: Sept. 1980-Sept. 1981 (Rep. 77163/14).

- Estimate of Capital and Running Costs: Sept. 1980- Sept. 1981 (Rep. 77163/15) of Liaison Vehicles.

- Plan Requirements of Feeder Roads Division (Rep. 77163/16).

- Estimate of the Costs of Improvements to Plan Repair and Maintenance Facilities at Provincial Centres (Rep. 77163/17). All issued Feb. 1980. - 50- ANNEX 4 Page 2

11. DRDR/SWKP: Monthly Progress Reports, Jan.-March 1980 (Rep. 77163/18-19-20).

12. DRDR/SWKP: Financial Report and Unit Construction Cost Analysis to Feb. 29, 1980. VOLTA \ Sc

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