B- W~~~~~~~..., t U/ V I X Document of The World Bank FOROFFICIAL USE ONLY Public Disclosure Authorized MICROFICHE COPY ReportNo. 9618-UNI Report No. 9618--UNI Type: (SAR) RANADE, C./ X34486 / J-5241/ AF4AD STAFF APPRAISAL REPORT Public Disclosure Authorized FEDERAL REPUBLIC OF NIGERIA NATIONAL FADAMADEVELOPMENT PROJECT FEBRUARY 4, 1992 Public Disclosure Authorized Agriculture Operations Division Public Disclosure Authorized Country Department IV |Ths document has a restdted distdbudon and may he ued by redplenu only in the perfonnance of t . '--I' II J[. I a I I II CURRENCY EOUIVALENTS !.urrency Unit k Naira (N) US$1 = N9.50 N1 (100 kobos) US$0.105 WEIGHTS AND MEASURES Unless otherwise stated all weights and measures used in this report are metric. 1 metric ton (m ton) = 2,205 pounds Qb) 1 hectare (ha) = 2.47 acres (ac) 1 kilometer (km) = 0.62 mile (mi) 1 meter (m) = 3.28 feet (ft) 1 millimeter (mm) - 0.04 inch (in) FISC:ALYEAR January 1 - December31 FOR OFFICIALUSE ONLY FEDERALREPUIC OF NGERIA NATIONAL FADAMA DEVELOPMENT PROaIEi LIST OF ACRONYMS ADP AgriculturalDevelopment Project APMEU AgriculturalProjects Monitoringand EvaluationUnit BASIRDA Bauchi State Integrated Rural DevelopmentAuthority BSADP Bauchi State AgriculturalDevelopment Program CPA CooperativeFinancing Agency EA EnvironmentalAssessment EC European Community FACU Federal AgriculturalCoordinating Unit FDA Federal Departmentof Agriculture FDD Fadama DevelopmentDepartment FGN Federal Governmentof Nigeria FID Fadama InfrastructureDivision FMAWRRD Federal Ministryof Agriculture, Water Resourcesand Rural Development FUA Fadama Users Association FUAD Fadama Users AssociationDivision FASCOM Farmers Supply Company IFAD InternationalFund for Agricultural Development ILO InternationalLabour Organization KNARDA Kano State Agriculturaland Rural DevelopmentAuthority LGA Local GovernmentArea LGC Local GovermnentCouncil MANR Ministry of Agriculturaland Natural Resources MSADP Multi-StateAgricultural DevelopmentProject NACB Nigerian Agricultural and CooperativeBank NATSP National AgriculturalTechnology Support Project NFDP National Fadama DevelopmentProject NFF National Fadama Facility NFFCC National Fadama Fund CoordinatingCommittee ODA Overseas DevelopmentAdministration (U.K.) PCC Project CoordinatingCommnittee PMU Project MonitoringUnit RBDA River Basin DevelopmentAuthority RDA Rural DevelopmentAuthority SAP StructuralAdjustment Program SARDA Sokoto State Agriculturaland Rural DevelopmentAuthority SG State Government SIA State ImplementationAgency TSC TechnicalServices Contract UNDP United Nations DevelopmentProgramme of their officialduties. Its contents may not otherwise be disclosedwithout WorldBank authorization. FEDERAL REPUBLIC OF NIGERIA NATIONAL FADAMA DEVYELOPMENTPROJECT TABLE OF CONTENTS Page No. LOAN AND PROJECT SUMMARY ........................ iv - vi I. BACKGROUND ......... ............................ 1 A. Introduction ................................... 1 B. AgriculturalSector and EconcnnicEnvironment .... ......... 1 C. Government's AgriculturalPolicies and. the Bank's Sector AssistanceStrategy ................... 3 D. Donor Funded Projects in Agriculture ................... 4 II. FADAMA SUBSECTOR: EXPERIENCE,VISION AND TRANSMON. 7 A. Description. 7 B. Need for Irrigation ......................... 8 C. Techniquesof Small-ScaleIrrigation in Fadamas ........................ 8 1. Lift Irrigation by Direct Pumping ................... 9 2. Pumpingfrom ShallowAquifer .................... 9 3. ControlledFlooding ........................ 10 D. Expansionof Fadama Irrigation ...................... 10 E. Future Vision, Reasons for Market Failure and Transition Steps ............................ 1. GovernmentSupport ...... ........... 11 2. Technologyand Extension ............ 1.....1 3. Fadama Infrastructure ....... .......... 12 4. Financial Intermediation ........ ......... 12 5. Farmer Organizations ....... .......... 14 6. ContractingFadama Development.14 7. EnvironmentalProtection .15 The report is based on the findings of an appraisalmission which visited Nigeria in March 1991, comprisingMessrs. C.G. Ranade (MissionLeader), L. Campbell, R. Tillman, D. Ilebani (World Bank); A. Schumacher,M. Hossain and G. Schokman(consultants); Q. Umar, M. Nasim and P. Yadav (FACU). Messrs. S. Barghoutiand R. Deshpandewere the peer reviewers. Ms. M.L. Ahkee provided assistancein the cost tables of the report and Mmes. A. Bagai and Ellen Storm provided the secretarialsupport. Messrs. J. Joyce and E. Lim are the managingDivision Chief and the Departnent Director, respectively, for the operation. - ii Page No. III. THE PROJECT ..................................... 18 A. Project Rationale and Objectives ...................... 18 B. Project Area . ................................. 18 C. Detailed Description ......... .................... 20 1. ShallowTubewells ....... .................... 20 2. Fadama Infrastructure ......................... 21 3. InstitutionalDevelopment ....................... 22 4. Planning, Monitoringand Evaluation ..... ........... 22 5. NationalFadama Fund ....... .................. 24 IV. COST ESTIMATESAND FINANCIALARRANGEMENTS .... ..... 25 A. Project Costs . ................................. 25 B. Financing Plan ............ ..................... 25 C. Procurement .............. .................... 26 D. Disbursement.................................. 28 E. Auditingand Reporting Requirements................... 29 V. PROJECT IMPLEMENTATION.31 A. Implementationof the Fadama DevelopmentPrograms through the ADPs .31 B. Federal CoordinatingRole .32 C. Implementationof Specific Components ........ ......... 32 D. Mid-Term and CompletionReviews .36 VI. FINANCIALAND ECONOMICANALYSIS .37 A. Markets .37 B. Financial Analysis.37 C. EconomicAnalysis .38 VIl. BENEFITS,JUSTIFICATION AND RISKS . .40 A. Indirect Benefits.40 B. Direct Benefits.41 C. Risks .42 VIII. AGREEMENTSREACHED AND RECOMMENDATION... ....... 44 ANNE= Annex I - Potential Irrigable Area Annex11 - IrrigatedArea in 1990 Annex III - Area BroughtUnder ShallowTubawells, Direct Pumping and Controlled Flooding in Bauchi, Kano and Sokoto During 1983-1990 Annex IV - Future Vision, Current Status and Transition Steps for Fadama Development AnnexV - EnvironmentalOverview Annex VI - Functionsand Workingof Fadama Users Associations Annex Vn - EligibilityCriteria for Allocationof Funds Under the National Fadama Fund AnnexVIII - Project Cost Tables Annex IX - Estimated Scheduleof Disbursement AnnexX - OrganizationalChart Annex XI - Terms of Referencefor EnvironmentalAssessment Annex XH - Terms of Referencefor Irrigation Engineer, Irrigation Agronomist, and Contract Administrator Annex XmI - Technical Assistanceand Local Consultants Annex XIV - Project ImplementationSchedule Annex XV - Project MonitoringRequirements Annex XVI - Project Supervision Annex XVII - Tables on Financial and Economic Returns Annex XVm - Cost Recovery Arrangements Annex XIX - DocumentsAvailable in Project File IBRD NO. 23119 - Nigeria: Project States IBRD NO. 23158 - Nigeria: GroundwaterProvinces - iv- rEDERAL REPUBLICOF NIGERIA NATIONALFADAMA DEVELOPMENT PROJECT LOAN AND PROJECT SUMMARY B>orrowel: Federal Republic of Nigeria Beneficiarie: Federal Republicof Nigeria, and Bauchi, Jigawa, Kano, Kebbi, Sokotoand other eligible States. Amnt: US$67.5 million Terms: Payable over 20 years, includinga five-year grace period at the Banlk'sstandard variable rate. On-LendingTerms: The Federal Govermnentwould on-lend, on the same terms as the Bank loan, US $55 million to Bauchi, Jigawa, Kano, Kebbi and Sokoto States, with each being eligible for at least US $3.5 million with additionalamounts being drawn from the balance of US $37.5 million on a first-come-first-servedbasis. An amount of US $5.9 million for a NationalFadama Facility would be on-lent to other states, on the same terms as the Bank loan, on the basis of specific eiigibilitycriteria, such as completionof a shallow aquifer survey and availabilityof qualified and experiencedstaff to implementthe project. The states would bear the foreign exchangerisk. The Federal Govermmentwould retain US$6.6 million for environmentalassessment, monitoring and studies. Project Description: The project would construct about 50,000 shallow tubewells in Bauchi, Jigawa, Kano, Kebbi, Sokoto and other eligible states over a period of four years. The maximumirrigation potential would be 100,000 ha, but in practice it is unlikelythat this potential would be fully realized, and a conservativeassumption of 50,000 ha of irrigated cropping has been used for calculatingthe project benefits. In addition to providing for new irrigation, the project would: (a) privatize drilling; (b) construct fadamaand access roads and marketinginfrastructure; (c) simplify drilling technologyfor shallowtubewells, conduct aquifer studies and upgrade irrigation technologies; (d) organize fadama farmers for irrigation management, cost recovery and better access to credit, marketing and other services; and (e) complete a full environmentalassessment of future fadama development. Estimatb Ca Local Forie Qn (US$ Million) A. ShallowTubewells ,/ 29.0 28.3 57.3 B. Fadama Infrastructure 3.2 6.6 9.8 C. InstitutionalDevelopment 3.0 3.8 6.8 D. Planning, Monitoringand Evaluationk/ 2.6 7.4 10.0 E. National Fadama Facility 4.0 3.7 7.7 Total Base Costs: 41.8 49.8 91.6 Physical Contingencies 3.9 4.4 8.3 Price Contingencies 2.3 3.7 6.0 Total Project Costs: q/ 48.0 57.9 105.9 .a Includes the cost of pumps. k/ Includes US$ 1.6 million for environmentalassessment.