Ethiopia SOCODEP CE - main report - IFAD

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large overdrafts on the vehicles and equipment category being highlighted in the 1997 and 1998 United Nations Office for Project Services (UNOPS) Supervision Reports. Road Construction (US$4.70m, 21 per cent) 13. The target at Appraisal was for the rehabilitation and heavy maintenance of a total of 700 km of rural roads, to a design standard that would permit labour-based maintenance. In the end, 122 km was constructed, to a higher standard (and consequently higher unit cost) than originally agreed. Thus reducing the amount of construction and rehabilitation possible and requiring machine-based maintenance in the future. Veterinary Revolving Drugs Fund (US$1.89m, 8 per cent) 14. This was intended to be a complement to other project activities – specifically to help to protect the livestock which were involved in ox loans and credit for small ruminants. The first purchases of drugs under this component were delayed significantly, taking place in 2001, and resulted in only about 19 per cent of the budgeted funds being disbursed by the time of closure of the project loans. Water Supply, Health and Basic Sanitation (US$4.02m, 18 per cent) – Belgium Survival Fund (BSF) Funded 15. Despite the assessment of a pre-Appraisal mission in 1993 that “…water supply is not a major problem in many parts of the project area … and in areas where needs are pronounced several NGOs are providing assistance”, a formulation mission addressing this and the wider issues of health and sanitation was sent in 1996 and the component commenced in 1999. This component has performed well meeting its targets related to health services (through construction, rehabilitation, equipping and training) and construction of water supply points in the 8 component Woredas. B. Assessment Relevance, Effectiveness and Efficiency 16. Relevance. SOCODEP addressed some real needs of the rural poor in southern Ethiopia (need for credit, need for improved market access, need for better health services and environmental health) and it was consistent with the government’s regionalization programme. At the time of design the rhetoric of the new Government and the framing of the new legislation made working through service cooperatives attractive and promising. However the use of service cooperatives as the channel for services to the poor turned out to be a significant design weakness. Similarly, the project had limited choices for partners with rural finance experience and should have been addressed with greater seriousness. 17. Effectiveness. The Project achieved some, but not all of its objectives. The Specific Objectives (SO) 1, 3, and 5 were mostly not met. These include SO1, providing a model for developing Ethiopian cooperatives under the new legislation, SO3 strengthening the Southern Regional Agricultural Bureau (SRAB) to carry out its mandate with respect to cooperative development, and SO5 relief of livestock health constraints, particularly with respect to draught animals, through provision of veterinary drugs. Specific Objectives 2, 4, 6 and 7 were met to varying degrees and include SO2 increasing capital and income among the rural poor in the project area through off-farm income-generating activities, SO4 providing credit to meet financial requirements for agricultural inputs and draught oxen and facilitate the supply of inputs through support to local traders and cooperatives, SO6 improving access of rural families to services and markets by rehabilitating and maintaining rural roads, and SO7 (BSF Component) reducing the burden of disease in eight woredas of the SOCODEP area. 18. Efficiency. Given the difficult operating environment in Ethiopia the project could have been more efficient if it had been more realistic and less ambitious. The vast geographic area, poor infrastructure and communication meant that the projected resources were not optimally used. Also, the overall emphasis on the Project’s numerical outputs (i.e. exceeding the number of restructured cooperatives) rather than the quality of those outputs, has resulted in a significant amount of wasted resources. As a result, many of the project’s activities were diluted to the extent that they failed to x
achieve their intended outcomes. Efficiency would have been greatly enhanced if the project design had concentrated on a smaller project area, involving a smaller number of SCs, and provided greater intensity of effort and resources. Cooperatives Restructuring C. Project Impact by Component 19. The number of cooperatives restructured through SOCODEP under the new legislation exceeded the Appraisal target by about 30 per cent. However, the quality of the restructuring and reorientation undertaken has not translated into an effective cooperatives sector in the project areas. The cooperatives encountered in this evaluation, and many others for which data was obtained, are suffering significant problems of poor management, misappropriation of funds and de facto bankruptcy. The findings of the evaluation in this regard are not new. To quote the internal review of the project carried out in 1999: “…with such limited capital, unprofitable business, increased misappropriation, weak management, absence of member education, and poor participation of members, the conceptual framework of promoting economically viable cooperatives … could not be achieved.” 3 Three years later, at the time of closure of the main loans, the situation had not changed significantly: “…the state of some cooperatives restructured under the project appear to be weak and in the worst case on the verge of bankruptcy … most restructured cooperatives critically need the support of the project …” 4 . In short, although SOCODEP re-registered about 267 cooperatives under the new law, it failed to re-orient the officers and members of those organisations, and leave behind a strong and sustainable cooperatives sector. Credit Delivery 20. The disbursement of loans achieved approximately 30 per cent of its target. Although many cooperatives and individuals received and benefited from loans, many of the target populations did not. Loans for cooperatives’ own businesses were generally unsuccessful. Because the cooperatives found that they could not compete with the leaner and fitter private sector, the majority of these ventures failed, and the cooperatives failed to repay their loans. Loans to individuals were generally much more successful, with ox loans being particularly popular (although the required ox insurance was not popular, and it failed to pay out in the majority of cases of mortality). Loans to women for the multiplication and fattening of small ruminants were also especially valued, and repayment rates were high. In general, repayment of loans was better in the western part of the project area than in the east and south-east. 21. CBE learned in the course of the project that provision of rural microfinance is a very different activity to the provision of commercial, urban, loans. It found it was ill-equipped to manage this project component, and it withdrew in 2002. The transfer of this component to the Region’s only Omo Micro Finance Institution (OMFI) in the last few months before closure of project loans was the only solution to a crisis. Because of the difficulties experienced by CBE, and the poor performance of many of the cooperatives, the opportunities for cooperatives or individuals to access further loans has been curtailed. Real benefits enjoyed by individuals made a difference for a time, but they may not have brought about lasting change. Promotion of Off-farm Income Generating Activities 22. Small enterprise promotion was undertaken through a pilot project involving training at the Rural Technology Centre, Sodo, and subsequent loans to individuals setting up in business. The impact of this activity on a few individuals was significant; however, the extent of that impact was negligible. 3 SNNPRS Cooperative Office (1999) Comprehensive Analaysis of Current Situation and Requirements of Cooperatives in SOCODEP Areas, April 1999, Awassa. 4 UNOPS Supervision Report, April 2002. xi
Page 1: PROJECT EVALUATION Federal Democrat
Page 4 and 5: Overall Responsibility Lead Evaluat
Page 6 and 7: TABLES 1. Statistical Data 3 2. SOC
Page 8: Ethiopian Birr to one USD 9.50 9.00
Page 12 and 13: into farmer-owned viable business e
Page 16 and 17: Institutional Capacity Building 23.
Page 18 and 19: the Derg into farmer-owned viable b
Page 20 and 21: them. The evaluation team is in fav
Page 22 and 23: 5. Quality of project delivery. SOC
Page 24 and 25: approaches be explored, either thro
Page 26 and 27: II. COUNTRY BACKGROUND 2. Ethiopia
Page 28 and 29: Table 2. SOCODEP Objectives Princip
Page 30 and 31: Source: Appraisal Report Regional A
Page 32 and 33: total of ten of the original 33 pro
Page 34 and 35: were never fully harmonized and int
Page 36 and 37: Aspect Table 3. SOCODEP Numerical T
Page 38 and 39: Box 1. Two Examples from Individual
Page 40 and 41: allowances for veterinary assistanc
Page 42 and 43: constructed two motorized water sch
Page 44 and 45: Achievement as % of Appraisal Targe
Page 46 and 47: The condition of many of the SCs (d
Page 48 and 49: provision of physical resources, an
Page 50 and 51: 101. Specific objective 5. Relief o
Page 52 and 53: Table 7. SOCODEP: Achievement of Sp
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Page 60 and 61: viable business model. To turn arou
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Water Supply & San, 2.28, 10% Healt
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49 Reconstructed Logframe for SOCOD
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51 A1.2.6 Development of audit proc
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53 A1.6.1 Organize initial orientat
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55 A2.1.7 Vocational training to en
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57 SO4 Provide credit to meet finan
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59 A6.3.2 Supervision of rehabilita
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61 A7.3.1 Provide Training - Number
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64 IFAD implementation workshops PC
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Evaluation Mission Itinerary, 18 th
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Eazo Multi-purpose service cooperat
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Bibliography 73 Appendix VIII Assoc
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Via Paolo di Dono 44 - 00142 Rome,
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