World Bank Documentdocuments.worldbank.org/curated/en/690781468047696262/...(AHSP) in Kenya, for...

Document of

The World Bank

FOR OMCLAL USE ONLY

Report No. 13836

PROJECT COMPLETION REPORT

KENYA

ANIMAL HEALTH SERVICES PROJECT(IDA CREDIT 1758-KE; IFAD LOAN 188-KE; OPEC LOAN 407)

DECEMBER 29, 1994

Agriculture and Environment DivisionEastern Africa DepartmentAfrica Regional Office

This document has a restricted distribution and may be used bv recipients only in the performance oftheir official duties. Its contents may not otherwise he disclosed without World Bank authorization.

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KENYA

ANIMAL HEALTH SERVICES PROJECT(IDA Cr. 1758-KE: IFAD Ln. 188-KE; OPEC Ln. 407)

CURRENCY EQUIVALENTS

Currency Unit = Kenya Shilling (Ksh)US$1.00 (at appraisal) = Kshl6.00US$1.00 (December 1993) = Ksh67.80SDR1.00 (at appraisal) = US$1.18SDR1.00 (December 1993) = US$1.38

ACRONYMS/ABBREVIATIONS

AHSP Animal Health Services ProjectAl Artificial InseminationCBPP Contagious Bovine Pleuro-pneumoniaDVS Director of Veterinary ServicesDDVS/ADVS Deputy/Assistant DVSEC European CommunityFAO Food and Agriculture Organization of the UNFAO/CP FAO/World Bank Cooperative ProgrammeFMD Foot and Mouth DiseaseFTC Farmers Training CentreGOK Government of KenyaICIPE International Centre for Insect Physiology & EcologyIDA International Development AssociationIFAD International Fund for Agricultural DevelopmentKARI Kenya Agricultural Research InstituteKVA Kenya Veterinary AssociationMALDM Ministry of Agriculture, Livestock Development & MarketingMOLD Ministry of Livestock Development (now part of MALDM)OAU Organization for African UnityOPEC Organization of Petroleum Exporting CountriesPCR Project Completion ReportPMSU Project Management Support Unit (of VSD)PS Permanent SecretaryRMEA Resident Mission in Eastern AfricaSAR Staff Appraisal ReportTA Technical AssistanceUNDP United Nations Development ProgrammeVSD Department of Veterinary Services

FISCAL YEAR

GOK I July - 30 JuneIFAD I January - 31 DecemberIDA I July - 30 June

FOR OFFICIAL USE ONLY

THE WORLD BANKWashington, D.C. 20433

U.S.A.Off0o. ef Dbm..r4wW

Operut6 Evuaenu

December 29, 1994

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

Subject: Project Completion Report on KenyaAnimal Health Services Project (Credit 1758-KE)

Attached is the Project Completion Report on Kenya-Animal Health Services (Credit 1758-KE) prepared by the FAOlWorld Bank Cooperative Programme. The project was cofinanced byMAD and OPEC. Part II was submitted by the Borrower.

The project aimed to develop a sustainable institutional framework for the effective deliveryof animal health services by gradually shifting vaccinations and disease prevention from a parastatal(Department of Veterinary Services-VSD) to pastoralist groups and private veterinarians. Theproject was appraised and implemented during a difficult period of Kenya's economic and socialhistory. Project design was based on optimistic expectations about implementation capacity and theability of the Government to provide 60 percent of project costs. One third of the IDA Credit wascancelled.

While VSD partly succeeded in shifting responsibility for carrying out some disease campaignsto pastoralists and in training Government veterinarians to assume private practice, these activitiesare not sustainable due to inadequate funding.

The project failed to achieve the privatization of animal health delivery because ofGovernment's lack of commitment to reduce VSD's staff levels, to support private veterinarians, toprovide counterpart funds, and to achieve full cost recovery. During implementation, the projectfocussed instead on the provision of physical investments to rehabilitate VSD.

Milk and meat output have decreased since 1990. Accordingly, the project outcome is ratedas unsatisfactory, its sustainability as unlikely and its institutional development as modest.

The PCR is of adequate quality. No audit is planned.

Attachment

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

FOR OFFICIAL USE ONLY


KENYA

ANIMAL HEALTH SERVICES PROJECT

TABLE OF CONTENTS

PREFACE ......................................................... i

EVALUATION SUMMARY . .............................................. ii

PART I: PROJECT REVIEW FROM THE LENDERS' PERSPECIIVE .... ......... 1

1. Project Identity ........................................................ 12. Background and Sector Context ............. .............................. 13. Project Objectives and Description ......................................... 24. Project Design and Organization ............. .............................. 35. Project Implementation . ................................................. 46. Project Results and Impact . ............................................... 87. Project Sustainability .................................................... 108. Bank Performance . ................................................... 109. Borrower Performance .................................................. 11

PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE .... ........ 13

PART m: STATISTICAL INFORMATION .................................. 16

TABLES1. Related Bank Loans and Credits ............. ............................. 162. Project Timetable ..................................................... 173. Cumulative Loan Disbursements ............ .............................. 184. Project Implementation .................................................. 195. Project Costs and Financing . ............................................. 226. Project Results ....................................................... 247. Status of Covenants ...................... 278. Use of IDA Resources ...................... 28

ANNEX 1: Veterinary Aspects ...................... 30

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


KENYA

ANIMAL HEALTH SERVICES PROJECT(IDA Cr. 1758-KE; IFAD Loan 188-KE; OPEC Loan 407)

PREFACE

This is a Project Completion Report (PCR) for the Animal Health Services Project(AHSP) in Kenya, for which IDA Credit 1758-KE, IFAD Loan 188-KE, and OPEC FundLoan no. 407 in the amounts of SDR12.7 million, SDR7.1 million and US$5.0 million wererespectively approved on 6 March, 1987, 21 July, 1986 and 22 October, 1986. The projectwas also co-financed by the UNDP in the amount of US$0.8 million by way of grant. TheIDA Credit and IFAD Loan were extended twice involving a period of two years, to 31December, 1993. The OPEC Fund Loan has been extended for a year to 31 December,1994. About SDR4.7 million of the Credit and SDR1.2 million of the IFAD Loan remainedunutilized. The UNDP Grant was fully disbursed and the OPEC Fund Loan is expected to befully utilized.

Parts I and III of this PCR were prepared by the staff of the FAO/World BankCooperative Programme (CP) for the Agriculture and Environment Operations Division,Eastern Africa Region of the World Bank. The report is based, inter alia, on the StaffAppraisal Report; the Credit and Loan Agreements; supervision reports; correspondencebetween the Borrower and the Lenders, and information gathered by the CP mission whichvisited Kenya in January 1994. Part II has been prepared by the Borrower.

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KENYA

ANIMAL HEALTH SERVICES PROJECT(IDA Cr. 1758-KE; IFAD Ln. 188-KE; OPEC Ln. 407)

EVALUATION SUMMARY

Objective

The main objective of the project was to develop a viable and sustainable institutionalframework for the effective delivery of animal health services. The project was a successor totwo earlier IDA supported livestock projects (Cr. 129-KE and Cr. 477-KE) and two integratedagricultural development projects (Cr. 650-KE and Ln. 1303-KE). The livestock sub-sectorplayed a significant role in the Kenyan economy both as a source of income to manysmallholders, and also as an important element in the dietary intake of Kenyans. A keybottleneck to the further development of the sub-sector was the deteriorating state of thecountry's animal health services. The Department of Veterinary Services (VSD) which wasextensively involved, could no longer provide these services effectively, as Governmentresources were overstretched. The project aimed at evolving a strategy to ameliorate thissituation. IFAD was the initiator, mainly targeting the physical rehabilitation of VSD facilities.IDA joined in later and helped to shift the project's focus away from rehabilitation per se torestructuring the role of VSD and institutional reform for effective delivery of animal healthservices.

Project Implementation

The project got off to a slow start. The IDA Credit and IFAD loan became effective sixmonths late due to delays in fulfilling conditions of effectiveness, particularly the recruitmentof consultants to review the management systems of VSD. After it became effective, the projectwas immediately faced with budgetary problems following the split of the then Ministry ofAgriculture and Livestock Development into two separate ministries. Lack of adequate operatingbudget dogged the project throughout implementation, (GOK financed only about US$ 15 millionof the total project costs, against an appraisal estimate of US$ 41.5 million). There were alsosuspensions of disbursements by both IFAD and OPEC because of GOK's default on servicingearlier debts. Other implementation problems, particularly in the early years, includedprocurement delays.

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The project lost about 18 months due to start-up delays. This, along with the procurementbottlenecks, resulted in a very low rate of disbursements; as such, when the Mid-Term Review(MTR) was done in August 1991 (after almost 4 years of project implementation), only about25% of the IDA Credit had been disbursed. A decision was therefore taken by GOK and thefunding agencies to extend the project by one year to December 1992. This was later followedby another extension to December 1993. In December 1992, the IDA Credit Agreement wasamended to include an Emergency Drought Recovery Component (EDRC) to whichUS$2.5 million was re-allocated.

Actual project costs are estimated to be about US$38 million (including US$1.7 millionspent on EDRC) or about 54% of the appraisal estimate. This financial under-delivery is partlyattributable to over-optimism at appraisal but is also due to GOK's inability to provide adequatebudgetary resources for the project (contributing only 36% of the appraisal target of US$41.5million). Also the continuous devaluation of the local currency reduced the project costs andfinancing when translated into US Dollars or SDR. About SDR5.2 million of the IDA Credit andSDR1.2 million of the IFAD Loan remained unutilized. The UNDP grant was fully disbursedwhile the remaining US$1.0 million of the OPEC Loan is available to GOK through the end of1994.

Project Results

Initial project performance was beset by delays and project impact with regard to variouscomponents was felt only belatedly. With the exception of the successful pilot trials on tse-tsetrapping, encouragement of privatization of various animal health services, introduction of costrecovery measures, and provision of inputs, project benefits were not impressive. Thus, in viewof the tardy rendering of the project activities, AHSP could not achieve all that it set out to do.Overall, AHSP's performance was unsatisfactory, even though the project is deemed to haveended on a high note. AHSP contributed towards disease control and treatment by providinglarge quantities of vaccines, drugs and acaricides. To date, however, the impact of these inputson the functioning of VSD has been limited. The project also eased the transportationdifficulties of VSD by providing the department with 237 four-wheel vehicles, 350 motor cyclesand 600 bicycles. When all of these vehicles have been distributed, each district will have atleast one saloon-type vehicle and one pick-up or lorry. It enhanced VSD's diagnostic facilitiesthrough extensive provision of laboratory and camping equipment, and significant rehabilitationof the dilapidated buildings and laboratory facilities at Kabete.

Government has also carried out, albeit belatedly, the institutional reforms relating tostrategic management information systems (MIS), defined field duties, veterinary medicinedistribution and stores management systems, and vehicles management, in accordance with therecommendations of the studies undertaken by consultants. Training was provided to staff tocarry out their responsibilities as defined in these reports. A total of 170 staff received trainingtowards the end of the project. Had the reports been processed and implemented on time(1991/92), the benefits in terms of improved institutional efficiency would have beenconsiderable.

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Although the privatization efforts supported by the project did not show spectacular results,AHSP made a significant contribution to the development and acceptance, by senior Governmentofficials, of the new vision of public veterinary services which went far beyond cost recoveryand better management. The official perception of VSD's role thus underwent a majortransformation during project implementation. GOK staff have already carried out or havebecome increasingly committed to privatization of cattle dipping program, the ArtificialInsemination Service (AI), and as far as possible, the privatization of clinical veterinary services.It also went a long way to withdraw from public sector distribution of veterinary drugs andmedicines. VSD transferred the responsibility of management of about 3,800 dips (80% of total)to farmer committees; but many tasks have yet to be carried out before these dips are sustainablyutilized. The need for funds to purchase acaricides, the influence of droughts and the need foraccessing dips along the stock routes, are some of the crucial factors which would contribute tothe longer term sustainable management of the dips. Further, the expected establishment ofprivate veterinary practices did not materialize because the parallel EC funded intervention inthis regard had not taken off by the time AHSP ended. Efforts to privatize Al services have alsobeen hindered by the continuing availability of an Al service subsidized by VSD. However,useful steps were started towards cost recovery. The project successfully encouraged GOK tomove towards full cost-recovery for clinical services offered by VSD.

Pilot trials on tse-tse trapping were successfully carried out; however, trials on tickcontrol were inconclusive. The tse-tse trials were the most successful component of the project;their success relates to the fact that they were participatory and demand driven and wereimplemented efficiently. Extended community-based participation in tse-tse trapping hasresulted.

The quantifiable financial and economic benefits accruing from the project cannot beassessed largely because during implementation there were no mechanisms to monitor andevaluate the expected project benefits of reduced rates of mortality and morbidity, reducedcalving interval rates, higher fertility and faster growth rates of cattle. A recommendation atMTR for annual sample surveys in selected districts was not implemented.

Sustainability

By far, lack of adequate operating budget for VSD constitutes the greatest threat to thesustainability of project investments and the eventual realization of its objectives. Unless thepresent macro-economic environment changes, GOK's ability to adequately fund the departmentwill remain constrained or even worsen. The physical inputs of the project such as vehicles,laboratories and equipment will therefore not be operated to capacity or properly maintained.The answer lies in VSD further divesting itself of more of its current duties and increasing cost-recovery for its services. For the activities VSD hands over to communal operation andmanagement (such as dips), farmers and rural leaders have to be sensitized to the need forimproved management of facilities and ensuring the availability of adequate operational funds.The issues relating to the lack of adequate operating and managerial resources need to beaddressed, in order to ensure the sustainability of the divestiture activities undertaken by theDepartment. The proposed Arid Lands Project (ALP), which would cover the eight Arid Land

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districts in North and East Kenya, would assist in managing this lacuna. ALP is envisaged toinclude initiatives for the restoration and maintenance / operation of cattle dips, water points,and holding areas; rehabilitation of traditional livestock routes; and the provision of basic animalhealth care services, among others. The project seeks to involve local communities, NGOs andother stakeholders in planning and implementing these activities; this participatory approach todevelopment is expected to foster stakeholder committment and thereby increase the prospectsfor sustaining activities initiated under AHSP.

Lessons Learnt

The major lessons derived from the implementation of this project are: (a) simplificationof project design and management (a feature attributed to this project in the SAR) may notnecessarily produce better results, and adequate attention should be paid to the overall macro-economic context and the specific ecological and socio-economic setting in which the project isto be implemented; (b) participatory and demand-driven project activities such as the tse tsetrapping trials under AHSP, which were implemented by an appropriate institution (rather thanbeing handled through the public sector), are likely to succeed more than others; (c) given thepromising signs of GOK's commitment and support to the privatization process with regards toanimal health services, future projects should aim at supporting efforts in this direction, ratherthan diffusing resources to support a variety of activities; and (d) the fmancial burden imposedon the recurrent budget of the Borrower by the maintenance and operating costs related to publicsector capital investments, should be evaluated up-front as well as during project implementation.

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KENYA

ANIMAL HEALTH SERVICES PROJECT(IDA Cr. 1758-KE; IFAD Ln. 188-KE; OPEC Ln. 407)

PART I: PROJECT REVIEW FROM THE LENDERS' PERSPECTIVE

1. Project Identity

Project Name Animal Health Services Project

Credit/Loan No. IDA Cr. 1758-KE; IFAD Ln. 188-KE; OPEC Ln. 407

RVP Unit Eastern Africa Region

Country Kenya

Sector Agriculture

Sub-sector Livestock

2. Background and Sector Context

General

2.1 The Animal Health Services Project (AHSP) was a follow-up to earlier IDA-assistedlivestock projects (Cr. 129-KE and Cr. 477-KE) and two integrated agricultural developmentprojects (Cr. 650-KE and Ln. 1303-KE) which had large livestock components. The Governmentof Kenya (GOK), realizing the need for further assistance to the livestock sub-sector, approachedIFAD in the middle of 1984 to support a program that would rehabilitate animal health services.IFAD commissioned the FAO Investment Center (FAO/IC) to undertake a project preparationmission to Kenya in early 1985. FAO/IC submitted their report in May 1985 on the basis ofwhich the project was appraised by IFAD in August that year. As at the time, IDA was alsodeveloping a project for animal health, it was subsequently agreed that IDA appraise the IFADproject so that the two institutions could co-finance it. IDA undertook the appraisal in May 1986.The project was presented to the IFAD Board at the end of April 1986 arid to the IDA Board

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in February 1987. The IFAD Loan and IDA Credit were signed in July 1986 and March 1987,respectively. The OPEC Fund Loan was signed in October 1986.

Sector Development Context

2.2 The Government's Fifth Development Plan, which covered the period 1984-88,identified livestock, particularly animal health, as one of its priorities for the agricultural sector.The livestock sub-sector was targeted for specific attention because of its importance to thenational economy. At the time, almost half of all smallholders owned livestock, supplying overtwo-thirds of the national milk production. Livestock contributed an average of about 25 % ofthe smallholders' income and was essential to balanced nutrition. However, the productivity ofthe national herd was low and the sector was loosing substantially through readily preventableanimal diseases. Given a rapidly increasing human population, particularly in the urban areas,it was necessary to boost the local production of livestock products, particularly milk and beef,in order to avoid shortages and the country becoming increasingly dependent on imports. Up tothe early 1980s, such imports had been maintained at fairly low levels.

2.3 The overriding policy issue facing Kenya's animal health services in the mid-1980s,was the extent to which GOK should be involved in delivery of animal health services. TheDepartment of Veterinary Services (VSD) which was extensively involved, could no longerprovide animal health services effectively, as Government resources were overstretched. Therewas therefore a need for a review of the responsibilities of VSD and examination of alternativeways of delivering animal health services to the farmers, with the aim of leaving VSD with onlyits core responsibilities of safeguarding the national herd from serious epidemic diseases andmaintaining strict control of zoonoses. AHSP was designed to further this strategy.

3. Project Objectives and Description

Objectives

3.1 The main objective of the project was to develop a viable and sustainableinstitutional framework for the effective delivery of animal health services.

Project Description

3.2 The project comprised of the following eight components:

(a) the development of strategic management and information systems tostrengthen VSD's policy making, planning, budgeting and monitoringsystems;

(b) the development of detailed operating and supervision guidelines for frontline field staff of VSD;

(c) training of VSD staff to introduce and implement the newly designedmanagement systems and operating guidelines;

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(d) support to disease and pest control activities;(e) rehabilitation of veterinary laboratories and support to disease surveillance

activities;(f) support to the Tick Control Program;(g) support to clinical services and extension on herd health; and(h) pilot trials for developing cheaper methods of control of tse tse flies and

ticks.

3.3 As shown in Table 5, project costs were estimated at US$70.5 million, of whichIDA would finance US$15 million (SDR12.7 million); IFAD would contribute US$8.2 million(SDR7.5 million); and the OPEC Fund (OF) would finance US$5.0 million. UNDP committeda US$0.8 million grant to fund the technical assistance aspects of the project. The remainderof the costs, US$41.5 million or 59% of total project cost would be contributed by GOK. Theproject was to be implemented over a 4-year period.

3.4 In December 1992, the IDA Credit Agreement was amended to include anEmergency Drought Recovery Component (EDRC) to which US$2.5 million (SDR1.7 million)was re-allocated. This component was to include a vaccination campaign in 10 ASAL districts.A new disbursement category was created to finance 100% of expenditures related to theseactivities.

3.5 Actual project costs are estimated to be about US$38 million (includingUS$1.7 million spent on EDRC) or about 54% of the appraisal estimate. This financial under-delivery is partly attributable to over-optimism at appraisal but is also due to GOK's inabilityto provide adequate budgetary resources for the project (contributing only US$15 million of theappraisal target of US$41.5 million); thus, GOK was able to contribute only 36% of itscommitment. Also, the continuous devaluation of the local currency reduced the project costsand financing when translated into US$ or SDR. About SDR5.2 million of the IDA Credit andSDRl.2 million of the IFAD Loan remained unutilized. The UNDP grant was fully disbursedwhile the remaining US$1.0 million of the OPEC Loan is available to GOK through the end of1994.

4. Project Design and Organization

Design

4.1 The project as initially designed for IFAD financing emphasized the physicalrehabilitation of VSD facilities. However, after IDA joined the project, the focus of AHSPshifted towards restructuring the role of VSD and institutional reform for effective delivery ofanimal health services. Although this conflict of priorities impacted project performance in theearly implementation phase, close coordination between IFAD and IDA and a flexible designallowed corrections in the project focus as warranted. Nevertheless, in retrospect, a weaknessthat emerges in the project's design relates to significant emphasis being placed on capitalinvestments and physical rehabilitation aspects, thus inadvertently exerting additional pressure

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on GOK's already over-burdened recurrent budget situation. Had some of these resources beenchannelled to the privatization initiatives under the project (e.g., by way of loans to VSD staffwanting to establish private practices), both project outcome and sustainability would havebenefitted substantially.

4.2 The Project adopted a somewhat simplistic view of the ecological and socio-economic situation in which it was to be executed. An assessment of three districts (one highpotential, one marginal and one pastoral) was specified for the review of front-line services,without due importance being accorded to the fundamental differences that exist in Kenyabetween the northern semi-desert pastoral areas, the higher potential pastoral and ranching areasfringing the highlands, the marginal small holding areas with and without tsetse infestation, andthe high potential farming areas of central and western Kenya. These different zones requiredifferent strategies for the effective delivery of animal health services because their needs andconstraints, including privatization and community participation, are not the same.

Organization and Management

4.4 Overall responsibility for project implementation was assigned to the Director ofAnimal Services (DVS). A Project Management Support Unit (PMSU) was established at VSDheadquarters in Nairobi for the daily management and coordination of project activities. ThePMSU was primarily staffed by veterinarians. In retrospect, project implementation would havebenefitted from personnel drawn from other complementary disciplines such as economics,finance, animal husbandry and production, and possibly sociology. Lack of adequate projectmonitoring and evaluation is partially attributable to this imbalance in the staff composition, asare, the lack of adequate project-level financial data and the belated submission of financialreports to donors. The tick control pilot trials were contracted to ICIPE through KARI. Thearrangement worked successfully.

5. Project Implementation

General

5.1 The project became effective in December 1987, six months late, due to delays infulfilling conditions of effectiveness, particularly the recruitment of consultants to review themanagement systems of VSD. After it became effective, the project was immediately faced withbudgetary problems following the split of the then Ministry of Agriculture and LivestockDevelopment into two separate ministries. VSD moved to the new Ministry of LivestockDevelopment, but with a considerably reduced operating budget than was agreed at loannegotiation. Lack of adequate operating budget dogged the project throughout implementation,(GOK financed only about US$ 15 million of the total project costs, against an appraisal estimateof US$ 41.5 million). There were also suspensions of disbursements by both IFAD and OPECbecause of GOK's default on servicing earlier debts.

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5.2 Project implementation in the early years was characterized by delays inprocurements, as PMSU staff were not familiar with the donor procurement procedures andrequirements. Local procurement was further complicated by the split funding of the project,whereby, while the share of project budget funded by the donors was available for purchases,GOK funding was not always available on a timely basis (due to budgetary constraints) and theproject had to make partial payments to the suppliers while awaiting the release of the GOKfunds to pay the remaining portion of the invoices. This cumbersome arrangement contributedto project delays.

5.3 Project implementation was somewhat affected by the fact that the initial projectpreparatory work by IFAD had stressed rehabilitation of services rather than the redefinition ofgovernment and private sector roles as later set out in the IDA Staff Appraisal Report. As such,transfer of VSD's responsibilities to the private sector began in earnest only in 1991, targetingdip management but with little prior notification or sensitization of the farming communityconcerning their new responsibilities.

5.4 The project lost about 18 months due to start-up delays. This, along withprocurement bottlenecks referred to above, resulted in a very low rate of disbursements, suchthat, when the Mid-Term Review (MTR) was done in August 1991, after almost 4 years ofproject implementation (the original project closing date was December 1991), only about 25%of the IDA Credit had been disbursed. Although, by then, the project had made progress in theareas related to the handing over of cattle dips to farmer committees, cost recovery and pilottrials, more needed to be done under the project, particularly with regard to further privatizationof animal health services, and strengthening and refocussing the Veterinary Service Department'scapacity. On the basis of the recommendations made by the MTR mission (on the priorityinterventions required), both, IDA and IFAD agreed to extend the project by another year to 31December, 1992. Subsequently, another extension of one year was accorded. The project finallyclosed on 31 December, 1993. OPEC have agreed to extend their loan for a further period ofone year. In December 1992, the IDA Credit Agreement was amended to include an EmergencyDrought Recovery Component (EDRC) to which US$2.5 million was re-allocated.

5.5 The implementation of the individual aspects of the project is summarized below.

Management Systems and Related Training

5.6 After lengthy delays, a comprehensive review of VSD activities and systems wascarried out by an external firm of consultants. Draft reports mainly covering procedural mattersof reporting, accounting, stores management, veterinary medicine distribution and vehiclemanagement were released to GOK by the consultants in 1988. However, due to belated receiptof the Ministry's comments on the reports, these could only be finalized in 1991. Theconsultants' recommendations have now started being implemented. Another firm of consultantswas later engaged to carry out a strategic review of the VSD with the aim of restructuring itwithin the framework of the privatization policy being pursued by GOK. The consultants' draftreport was submitted to the Ministry in 1992 and had not yet been finalized by the time theproject closed.

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5.7 Staff training started in 1990 and ended towards the end of 1993; material from the1991 consultancy reports was utilized to structure the later training program. The projectextended training to about 170 members of VSD, comprising 4 Fellowships for VeterinaryOfficers (VOs) to study for an MSc in veterinary epidemiology and economics at the Universityof Nairobi; short courses for around 75 DVOs, SVOs and more senior staff offered locally atGOK training institutes, supplemented by the seminars referred to above; further seminars for56 VOs on monitoring and information systems; as well as courses in vocational skills fortypists, mechanics and drivers.

Rehabilitation of Veterinary Laboratories

5.8 Belated use was made of funds earmarked for laboratory rehabilitation. From 1990onwards, supervision missions urged that detailed plans be drawn up for this component in orderto help correct deteriorating disease surveillance. Eventually consultancy reports were produced,including measures to correct the serious dilapidation of buildings at Kabete VeterinaryLaboratories. Furnishings, equipment, electrical fittings, building roofs etc. were all in a stateof disrepair, thus impairing the diagnostic capability of the laboratories. With intensive IDAfollow-up and the active intervention by the current PS of MALDM, work started in November1993. The civil works were completed in May 1994 and the equipment procured earlierinstalled.

Disease and Pest Control Activities

5.9 Except for tick control, little consideration was given to reviewing strategies fordisease control either in different livestock production systems/areas, or by use of othertechniques. The epidemiology and economics unit of VSD was constrained, in part, by theinadequacy of field reports, a problem which has only recently been addressed. Without suchreports, particularly regarding reliable information about disease incidence, it is difficult toevaluate the impact of this component. Some nine hundred sera samples collected from variousdistricts for rinderpest vaccination monitoring showed that less than 39% of cattle were immuneto the disease in 1992, five years after the project had started. However, recovery of viable virusfrom field outbreaks of foot and mouth disease was commendably high (89-95% over 3 years)and allowed for the judicious use of vaccines.

Tick Control

5.10 The process of transferring the management of communal dips from VSD to dipmanagement committees composed of local livestock owners was started in 1991 - rather latein the life of the project. The rapid transfer of responsibilities led to inadequate training of dipcommittees and failure to comprehend the full extent of their responsibilities. The projectprovided funds for the purchase of acaricides, which enabled the committees to accumulatevarying levels of operating funds from collection of dipping charges. However, few committeeswere able to build up sufficient funds and the devaluation of the Kenya Shilling in 1993 left themajority unable to continue. Further supplies of inputs from the project have helped revitalizeoperations and the committees are becoming increasingly aware of their responsibilities.

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5.11 There is evidence of a reduction of dip utilization approach by owners ofunimproved zebu cattle in marginal areas. This may be a valid approach because there has beenno concomitant increase in mortality in those areas from tick-borne diseases (TBD). It isdesirable that the ICIPE trials on the length of dipping intervals be replicated in such areas, sothat strategies for TBD control can be defined for different ecological zones with indigenousanimals and up-graded high potential cattle.

Clinical Services

5.12 The project aimed at facilitating a transfer of clinical services from VSD to theprivate sector (veterinary practitioners and drug companies), on the grounds that these serviceswere not a statutory function of VSD and yet diverted personnel and scarce resources fromhigher priority activities. Although there are 55 veterinarians in private practice in Kenya, thehope that this number would be increased through a parallel EC funded intervention has notmaterialized. It is expected that loans will be available through the EC intervention to helpestablish or expand 20 private practices during 1994/95. There has been no importation ofclinical drugs by VSD since 1992, and the DVS is committed to further withdrawal as soon asfeasible. Cost recovery measures for various clinical services have also been established andare being pursued.

Pilot Trials

5.13 Although some time was lost organizing a mechanism for transferring project fundsthrough KARI to ICIPE, the pilot trials on tsetse and tick control were undertaken on the linesenvisaged in the SAR. They were concluded in 1990 and a final report on the trials wastransmitted by ICIPE to KARI in January 1992. On receipt of the report, VSD actively followedup with community-based tsetse control in Homa Bay, Kajiado and Kwale. An additionalallocation of US$40,000 was released from project funds to enable further staff and communitytraining by ICIPE in support of this work. Some training was undertaken by ICIPE during the1988-90 trials. The on-going work on community based fly-trapping, using ICIPE methods, isa significant contribution of the whole project. The tick control trials however, were relativelyrestricted and had limited applicability.

Emergency Drought Recovery Project Component

5.14 The ICB procurement of drugs and other supplies was started in early 1993, butdue to delays in procurement processing and evaluation by the Department of VeterinaryServices and the application of restrictive evaluation criteria, IDA no objection for only abouthalf the proposed drugs and supplies was given in May 1993. After protracted correspondenceconcerning Kenyan regulations on the irnportation of vaccines and given the lack of competitionfor supply of vaccines, finally no objection was given in September for the supply of vaccinesby a local firm. However, the selected supplier was unable to fulfill the supply order (forvaccines), before the credit closing date of December 31, 1993. Only US$1.7 million (SDR 1.214

7

million) was disbursed against the US$2.5 million made available for drought recovery. Theshortfall was primarily due to non-performance of the local firm selected for supply of vaccines.

6. Project Results and Impact

6.1 Initial project performance was beset by delays and project impact with regard tovarious components was felt only belatedly. With the exception of the successful pilot trials ontse-tse trapping, some encouragement to privatization of animal health services, introduction ofcost recovery measures, and provision of inputs, project result were not impressive. Thus, inview of the tardy rendering of the project activities, AHSP could not achieve all that it set outto do, and project impact was rather limited. Overall, thus, AHSP's performance wasunsatisfactory, even though the project is deemed to have ended on a high note.

Physical Results

6.2 According to PMSU and as shown in Table 4, the Project contributed largequantities of vaccines, drugs and acaricides for use in disease control and treatment. The Projectalso provided VSD with 237 four-wheel vehicles, 350 motor cycles and 600 bicycles. When allof these vehicles have been distributed, each district will have at least one saloon-type vehicleand one pick-up or lorry thus greatly facilitating mobility. In addition, some ten prefabricatedhouses and offices have been instaUed at seven field stations, and significant quantities oflaboratory and camping equipment have been procured. With the completion of therehabilitation of buildings and facilities at Kabete, the diagnostic capability of VSD has beenfurther strengthened.

6.3 To date the impact of these inputs on the functioning of VSD has been limited. Forexample, although the project provided transport facilities and vaccines, the number of animalsvaccinated still fluctuates from year to year, with the two most recent departmental annualreports indicating a fall of one million in the number of cattle vaccinated against rinderpest in1991 compared with 1990. Moreover, sera sampling across several districts in 1992 shows thatless than 39% of cattle had immunity to rinderpest; suggesting that Kenya may be moresusceptible to rinderpest outbreak now than before the project. On the other hand, thedepartment has made commendable and consistent efforts to follow up field outbreaks of footand mouth disease (FMD).

Management and Administrative Systems of VSD

6.4 Government has also carried out, albeit belatedly, the institutional reforms relatingto strategic management information systems (MIS), defined field duties, veterinary medicinedistribution and stores management systems, and vehicles management,in accordance with therecommendations of the studies completed by consultants. Training was provided to staff to carryout their responsibilities as defined in these reports. A total of 170 staff received trainingtowards the end of the project. It is expected that VSD will soon start implementing the otherrecommendations in the report. A draft report on the strategic review of the departmnent was

8

completed in 1992 but is not yet finalized. Had the consultants' reports been processed andimplemented on time (1991/92), the benefits in terms of improved institutional efficiency wouldhave been considerably higher.

Privatization

6.5 Although, the privatization efforts supported by the project did not show spectacularresults, A-SP made a major contribution to the development and acceptance, by seniorGovernment officials, of the new vision of public veterinary services which went far beyond costrecovery and better management. The official perception of VSD's role thus underwent a majortransformation during project implementation. GOK staff have already carried out or havebecome increasingly committed to privatization of cattle dipping program, the ArtificialInsemination Service (Al), and as far as possible, the privatization of clinical veterinary services.It also went a long way to withdraw from public sector distribution of veterinary drugs andmedicines, and steps were taken by VSD to stop selling veterinary drugs where these may beobtained from local shops. VSD transferred the responsibility of management of about 3,800dips (80% of total) to farmer committees; but many tasks have yet to be carried out before thesedips are sustainably utilized. The need for funds to purchase acaricides, the influence ofdroughts and the need for accessing dips along the stock routes, are some of the crucial factorswhich would contribute to the longer term sustainable management of the dips. Further, theexpected establishment of private veterinary practices did not materialize because the parallel ECfunded intervention in this regard had not taken off by the time AHSP ended. A commitmentwas also made to withdraw departmental clinical services where private veterinary practicesexist. While efforts to privatize Al services have been hindered by the continuing availabilityof an Al service subsidized by VSD (for example, the department now charges KSh4O.00 foreach AI compared to a real cost of around KSh270.00 in Central Province and much moreelsewhere), useful steps were started towards cost recovery. The project successfully encouragedGOK to move towards full cost-recovery for clinical services offered by VSD.Pilot Trials

6.6 Pilot trials on tse-tse trapping were successfully carried out but those on tick controlwere inconclusive. The trials were the most successful component of the project; their successrelates to the fact that they were participatory and demand driven and were implementedefficiently. Extended community-based participation in tse-tse trapping has resulted.

Cost Recovery

6.7 The project successfully encouraged GOK to move towards full cost-recovery forclinical services offered by VSD. It also encouraged VSD to transfer dip funding to thecommunities which use them. While the savings from these activities will benefit GOK, theirlevels should take into account farm household incomes and zonal location so as to determinean equitable rate. For example, fewer animals are being dipped than before, as farmers try tominimize costs. This could be counter-productive as the animals are then exposed to diseaseswhich are otherwise preventable. On the other hand, the farmers could be right in exposing theanimals to a certain level of tick-borne diseases in order to build up endemic resistance.

9

Financial and Econoniic Impact

6.8 The financial and economic impact of the project cannot be assessed. This isbecause during imnplementation there were no mechanisms to monitor and evaluate the expectedproject benefits of reduced rates of mortality and morbidity, reduced calving interval rates,higher fertility and faster growth rates.of cattle. The MTR recommended that annual samplesurveys be initiated, covering 120 farmers in 6 districts, but this has not been undertaken.

7. Project Sustainability

7.1 Lack of adequate operating budget for VSD is by far the greatest threat to thesustainability of project investments and the eventual realization of its objectives. It is not certainwhat share of Government's recurrent budget VSD can expect to command in the future, but thebudget allocations and trends over the project period suggest that there will continue to besubstantial shortfalls between the department's realistic requirements and GOK's budgetallocation to VSD. Already shortage of operating funds constrains the gainful use of projectvehicles. Moreover, some types of vehicles bought are not well-suited to use in remote districts,and in one district at least (Isiolo), the project vehicle has been grounded for the past two years.Lack of operating budget will also adversely affect the operations of the rehabilitated laboratoriesdue to shortage of funds for maintenance and to buy consumable materials.

7.2 Many of the dips which have been divested from VSD are facing managementproblems because of inexperienced operators. They are also facing financial problems partlybecause of inadequate contributions from members but also because of the sharp devaluation inthe local currency which has pushed up the cost of inputs. Many of the dips therefore lackoperational funds to buy drugs, acaricides and for maintenance of the facilities. These problemsneed to be addressed, in order to ensure the sustainability of this and other divesture activitiesundertaken by the Department. In particular, farmers and rural leaders have to be sensitized tothe need for improved management of facilities and ensuring the availability of adequateoperational funds. The proposed Arid Lands Project (ALP), which would cover the eight AridLand districts in North and East Kenya, would assist in managing this lacuna. ALP is envisagedto include initiatives for the restoration and maintenance / operation of cattle dips, water points,and holding areas; rehabilitation of traditional livestock routes; and the provision of basic animalhealth care services, among others. The project seeks to involve local communities, NGOs andother stakeholders in planning and implementing these activities; this participatory approach todevelopment is expected to foster stakeholder committment and thereby increase the prospectsfor sustaining activities initiated under AHSP.

8. Bank Performance

8.1 Bank performance at appraisal was constrained by the fact that IFAD and GOK hadalready gone a long way in finalizing the project document. The change of concept and emphasisfrom physical rehabilitation aspects, to the efficient delivery of animnal health services created

10

some hindrances particularly in the early implementation phase of AHSP. The early supervisionmissions also seemed to waiver on the main project objectives and tended to be preoccupied withdisbursements. It was not until the MTR of 1991, four years after the project had started, thatsupervision focussed adequately on the main thrust of the project.

8.2 As shown in Table 8, eleven IDA/IFAD supervision missions visited the project.There was adequate continuity of mission members and a reasonable mix of skills. Theircontribution was appreciated by PMSU, in particular, with regard to the flexibility shown whenIFAD and OPEC suspended disbursements and IDA funds had to be re-allocated to alleviatefinancial constraints related to core components affected by the suspensions.

8.3 A significant feature of IDA supervision since the MTR was the intensive inter-missioncontacts and follow-up through regular meeting with PMSU and field visits. These, coupled withmore intensive supervision helped improve project implementation as evidenced by the rates ofdisbursements and fulfillment of physical targets in the post-MTR period.

9. Borrower Performance

9.1 GOK's failure to ensure adequate budgetary allocations to the project was primarilyattributable to the fact that AHSP was implemented during a period of deteriorating macro-economic environment and budgetary cuts. However, the designation of AHSP as a "core"project, entitled to priority funding, reflected Government commitment to the project.

9.2 Although there were initial impediments related to donor coordination and lack offamiliarity with the various procurement procedures, PMSU managed the projectconscientiously. As mentioned above, their performance would have been enhanced by a widermix of skills and professions.

Project Relationships

9.3 The project relationships were based on mutual cooperation and despite theinvolvement of many Donors, the interaction and dialogue between Donors and Borrowerremained constructive.

Consulting Services

9.4 Consultants were engaged to review the administrative procedures of VSD. Inretrospect, this review should not have taken place before establishing a strategic policyframework for the effective delivery of animal health services by VSD. Subsequently, aconsulting firm was engaged to undertake a strategic framework review, and to examine thepresent and future role of VSD. This exercise should have preceded the review of administrativeprocedures, and on the basis of its recommendations, existing procedures should have beenreviewed and tailored towards future requirements. A further consultancy was retained to

11

examine VSD's staffmg norms but its report had not yet been presented by the time the projectclosed.

Project Documentation and Data

9.5 The SAR and the legal agreements for the project were comprehensive and aidedproject implementation. Project records maintained by GOK were however, somewhatinadequate. The annual work plans produced by the individual cost centers lacked prioritization.There is no data to monitor project impact and, absence of accounting staff at PMSU hascontributed to the scarcity of project level financial data.

Lessons Learnt

9.6 The major findings and lessons which have been learnt from implementing thisproject are:

(a) simplification of project design and management (a feature attributed tothis project in the SAR) may not necessarily produce better results, andadequate attention should be paid to the overall macro-economic contextand the specific ecological and socio-economic setting in which the projectis to be implemented. Besides over-estimating the ability of VSD tooperate effectively within the budgetary and administrative constraints ofGOK, AHSP adopted a somewhat simplistic view of the ecological andsocio-economic situation in which it was executed;

(b) tse-tse trapping and tick control pilot trials were successful because theywere participatory and demand-driven, and because an appropriateinstitution (ICIPE) was assigned the task, rather than the trials beinghandled through the public sector. The benefits from such inexpensiveactivities are many and could far exceed those from the high expenditurecomponents;

(c) given the promising signs of GOK's commitment and support to theprivatization process with regards to animal health services demonstratedunder AHSP, future projects should aim at supporting efforts in thisdirection, rather than diffusing resources to support a variety of activities;and

(d) the financial burden imposed on the recurrent budget of the Borrower bythe maintenance and operating costs related to public sector capitalinvestments, should be evaluated up-front as well as during projectimplementation.

12

PART II: PROJECT REVIEW FROM BORROWER'S PERSPECTIVE

ANIMAL HEALTH SERVICES PROJECT

Evaluation Summary

Project Implementation

Too many conditionalities by donor delayed the start.

In allocating GOK US$41.5 million - no consideration was made for staff inputs,traveling and accommodation, maintenance of plant and equipment which were fullyfunded by GOK and therefore did not, quality for re-imbursement. Emphasis waslaid on where the GOK was to provide funding i.e. 85%:15% ratio hence the lowrate in GOK contributions.

Servicing of loans by GOK was beyond the scope of the implementing Departmentalthough it resulted in a lag in implementation especially for privatization of theacaricide supply and procurement of vehicles.

Procurement: This remained a bottleneck even at the closure of the project nothinghad been done to speed up the procurement procedure on both GOK and donor sides.

Budgetary allocation: At the time of appraisal the economy was good but during theproject life the economy deteriorated affecting the direct implementation, e.g., devaluationand other external factors.

Project Funds: In the appraisal report the IFAD and IDA were funding similar lineof items of Drug Sera and Vaccine - the biggest item consuming 60% of the funds.Acaricide falls under this item. Under the same paragraph it was stated that IFAD funds tobe exhausted before utilization of IDA funds - this conditionality resulted in funds under IDAremaining unutilized because it took up to 4 years of project life to almost exhaust the IFADfunds.

While it is agreeable that projects can be co-financed, a clear borderline should bedrawn to find out what each donor should fund to avoid unnecessary delays. For the successof the project GOK contributions should be minimal.

Project Results

Pilot trials: These were not the only successful aspects of the project. They formedan initial consultancy for two years and therefore were able to be accomplished on time.However, only the tse tse trials were considered successful as they developed the simpleNGU-traps which can be used for the communities, but the tick control trials did not giveany results.

13

Privatization: The project was not to engage in the process of privatization but asstated in the SAR, was to facilitate the privatization i.e. prepare the farming communitiesto be ready for privatization of Dipping and Clinical services at the end of the project.

Issues on privatization:

Extension was not part of the project therefore the community or farmer was notfully prepared to accept the privatization and the pilot phase was too short thus thefarmers felt they were being abandoned.

However credit should be given to GOK for taking an initiative to hand over theDipping Services to the user, increasing user charges of the clinical drugs and beingprepared to hand over a number of services to the private sector.

The privatization could have succeeded if done in a phased manner and the projectshould have been divided in a number of phases with Phase II tackling this issue asa follow up Phase I to fit in with Structural Adjustment programmes.

Disease control: In the initial years the disease control was notable but in subsequentyears there was drought in neighboring countries and in-flows of animals, brought in diseaseslike Rinderpest, which had earlier been eradicated.

The control is a continuous process and cannot be expected to end unless the diseasesare eradicated within the country and in neighboring countries.

Transport: The supply of a fleet of 237-4WD vehicles, 350 motorcycles and 600bicycles has eased the transport problem and this is appreciated.

Rehabilitation: Rehabilitation of Kabete laboratories has been successfully completedand virology laboratories which were out of order are being equipped with equipment boughtunder the project.

Institutional Reforms and Training: Should have been done at the beginning of theproject but were done at the end due to a delay in finalization of the FAO/Price Waterhousereport. More support is still needed on the institutional reforms.

Privatization of Artificial Insemination: Was not included in the initial project butwas incorporated in the last few months with efforts being concentrated on training andawareness.

Privatization of Veterinary Services: This is an EEC sponsored project to beimplemented by the Kenya Veterinary Association. It should not have been linked to thisproject. IFAD or IDA should have initiated a pilot project to be taken up by EEC and anyother willing donors. Hence the failure of rapid privatization of clinical services was dueto lack of funds for the private sector and the DVS could not neglect providing services

14

when there were no established private veterinarians to hand over to. However a lot ofprogress has been made and now KVA is ready to implement the project.

Monitoring: In the Appraisal no basis or indictors were put on monitoring andeventually evaluation of the project. Hence this was not properly done.

Sustainability: Dipping services will be taken up by the communities while forvaccinations efforts will be made to educate the farmers on cost sharing through extensionprocess.

Operating funds will need to be increased from the Treasury to enable the departmentto maintain infrastructures obtained under the project. An element of vehicle rehabilitationor repair will be required to ensure the fleet of vehicles purchased is sustained.

The local community participation in Disease Control and other veterinarycomponents especially dipping and tse tse control, illegal livestock movement need to beaddressed in another project or through the NEP II as an additional component.

Departmental staff need to be trained on management to ensure maintenance of thevarious resources.

Lessons Learnt

(i) It is agreed that livestock and other technical projects should not be oversimplified during the appraisal.

(ii) Public sector involvement has to be well coordinated especially in researchand privatization so that all stake holders are well informed.

(iii) Projects should be revised to accomnmodate the changing circumstances fromtime of appraisal.

(iv) Multi-donor projects to be well coordinated making sure that each donor fundsspecific or parallel items.

(v) Since privatization was started in this project, a future project should beenvisaged to continue the process before the communities lose interest and startexpecting government support in all activities.

(vi) GOK contribution to be reasonable to enable the project to move.

(vii) The project was too large i.e. area to be covered, that resources were spreadthinly. For proper supervision and funding such projects should cover few regionsand be phased.

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PART III: STATISTICAL INFORMATION

Table 1. Related Bank Loans and Credits

Title Purpose Term Amount ConunentsI I (US$M)

Kenya Livestock Development Credit for ranch development, 1969-74 n.a. A partial success, constrainedProject (KLDPI, Cr. 129-KE) including new group ranches; by the 'controversial

inputs to marketing organization set up toimplement the project' (AuditRep. 1317, 1976)

Second Kenya Livestock Expansion of KLDPI to cover new 1974-83 n.a. Only 58% of the Credit wasDevelopment Project (KLDPII, areas disbursed (Audit Rep. 6160,Cr. 477-KE) 1986)

Emergency Drought Recovery Focussed on N. Kenya 1993- 27.2. On-going, based in part onProject after 1991-92 drought US$2.5 M from Cr., 1758-KE

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Table 2. Project Timetable

Item Planned Date Revised Date Actual Date

- Identification a/ n.a.

- Preparation 5/85

- Appraisal Mission (IFAD) 8/85 8/85

(IDA) 5/86 5/86

- Loan/Negotiations 9/86 12/86

- Board Approval 11/86 1/87, 2/87 2/87

- Loan Signature 3/87

- Loan Effectiveness 6/87 10/87 12/87

- Loan Completion 6/91 6/92;9/92; 6/936/93

- Loan closing 12/91 12/9212/93

3/93;12/93

a/ There was no formal identification. In mid-1984, GOK approached IFAD to support a programme torehabilitate animal health services. It was on the basis of this request that IFAD commissioned the FAOInvestment Centre to undertake project preparation in early 1985.

17

Table 3. Cumulative Loan Disbursements

IDA Fiscal Year

1987 1988 j 1989 I9 1 1991 1992 J 1993 j 1994

............................. millions of SDRs .

SAR estimate 0.3 2.2 6.1 9.3 11.7 12.7

Actual 0 0 1.5 2.1 3.1 3.6 4.6 8.0 Y

Actual as % of SAR estimate 0 0 24.6 22.3 26.5 28.3 36.2 63.0

i Equivalent to US$10.4 million.

Table 4. Project Implementation (Page 1)

A. Components

Key Indicators

Unit SAR Estimate Actual

Studies, Training & Management

l Consultants m/month 24 n.a.

l Staff training number n.a. 170

l Computers bought number 3 4

Disease & Pest control

l Vaccines & drugs:

l Rinderpest '000 doses 25,000 n.a.

l CBPP '000 doses 9,300 n.a.

.FMD '000 doses 32,500 n.a.

l Staff housing no. stations 11 10

Laboratory Rehabilitation

l Cold rooms number 8 7

l Extension civil works number n.a. 1 (Kabete)

Tick Control

l Acaricides '000 ltr. 1,126 1,216

l Dips maintained n.a. 10,000 n.a.

Pilot Trials

l Tick control number 1 1

. Tsetse control number 1 1

19


B. Procurements

Item Quantity Specified at Quantity BoughtAppraisal

Vehicles

wd pickups/hardtops 184 164

2wd pickups 43 43

Traction wagon cars 8 8

-t lorries 19 19

Minibuses 3 3

-t trucks 4

Tractors 2

Conversions to mobile labs 4 4

Motorcycles 300 350

icycles 1,200 600

Camping EquipmentOfficers' tents 50 25

ush tents

Camp beds 200 96

Matresses 200 200

amping tables & chairs 300

Heating & Lighting Equipment

Gas cookers 80

as cylinders 240

Gas lamps 80

Pressure lamps 50 50

Kerosene stoves 30 30

erry cans 50 42

Cold Storage

Cold rooms 8 7

REVCO deep freezers 6

Freeze driers 6

Autoclave 1

Refrigerators (5-10 ft3) 110 101

Deep freezers 18 14

20


B. Procurements

Item Quantity Speciried at Quantity BoughtAppraisal

Vehicles

45 45Kerosene freezers

Kerosene fridges 70 40

Cool boxes 660 840

Flasks 30 30

Acaricides ('000 1) al

Dehan DFF 34.4 133.9

Stelladone 126.9 601.4

Supona 50 20.1 263.3

Supadip 2.6 85.3

acdip 14.5 105.7

Asuntol 26.8

Pumps & Generators

ater pumps 5

Generators n. a.

Laboratory & Clinical Equip.E'Spectrophotometer 1

Centrifuges 7

ncinerators 5Coulter counter 2 1

Muffle furnace 1 1

Microscopes 9 30

hromatographs 4 4

Instrument sterilizers 50 50

a/ The quantities of acaricide bought cover 8 years, 1986-87 to 1993-94.Original specification was in packets, not litres.

c/ Only major items are listed: the full list includes about 40 items.

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Table 5. Project Costs and Financing

A. Project Costs

SAR Estimate Estimate Actual!'

Component Local |Foreign| Total Local 2j |Foreign !'I Total.......................... ............... US$.

Disease and pest control 9.0 14.9 23.9

Tick control programme 7.3 14.5 21.8

Vet. labs & surveillance 1.1 1.6 2.7

Clinical services 2.0 3.9 6.0

Studies, training & 0.8 0.8 1.6management

Pilot trials 0.1 0.1 0.3

Base Total 20.3 35.9 56.2Contingencies 5.2 9.1 14.3

TOTAL 25.5 45.0 70.5 38.28

' No breakdown is available between local and foreign currency costs.

n.a. = The Ministry's accounting records are organized by expenditure categories, and not by component. It wasnot possible to reconcile the two.

SOURCE: SAR and PMSU, Nairobi.

22

Table 5. Project Costs and Financing

B. Financing-

Unit Actual as % ofMillion Planned Reallocation Actual Estimate

A. IDA Category

. Vehicles SDR 0.85 0.91 107

. Incremental Support SDR 9.94 (1.70) b 5.68 57Costs

. Technical Assistance SDR 0.64 0.16 25

. Emergency Drought SDR - 1.70 1.25 73Recovery Project

. Unallocated SDR 1.27 0 -

Sub-total SDR 12.70 8.00 63(US$15.00 M) (S$10.92 M)

SDR 7.05 5.91 84B. IFAD (US$8.20 M) (U$8.04 M)

C. OPEC FUND US$ 5.00 4.00 " 80

D. UNDP US$ 0.84 0.84 100

E. GOK US$ 41.46 15.00 36

TOTAL US$ 70.50 38.28 54

The figures shown here reflect disbursements processed by 13, May 1994 for IDA and I March, 1994 for IFAD.As per DCA amendment of 28 December, 1992.OPEC has agreed to avail the remainder of the funds to GOK for utilization not later than 31 December, 1994.

Source: IDA, IFAD and PMSU.

23

Table 6. Project Results

A. Benefit#

Milk & Beef Production Appraisal Estimate PCR Estimate

Baseline Without Project I With Project

Milk ('000 t/y)Smallholder 521 489 527 N/A b

Large farm 447 432 452 N/ATotal 968 921 979 N/A

Beef ('000 t/y)

Dairy herd culls 29.9 23.6 32.3 N/A

Beef herd culls 25.0 16.5 30.3 N/A

Steers/bulls 68.9 63.4 72.8 N/ATotal 123.8 103.5 135.4 N/A

' The SAR assessed benefits in terms of milk and beef production as tabulated above. These figures werederived from assumed changes in individual production parameters, such as calving interval, mortality,yield per lactation and age at slaughter. The size of the national cattle herd was assumed to remainconstant, with a total herd of around 11 million head comprising 1 million dairy cows (850,000 onsmallholdings and 150,000 on large farms) and a 'national beef herd' of 8 million. No benefit stream wasdeveloped for livestock other than cattle.

b' N/A = Information not available. As the Project included no provision for monitoring these parameters,they cannot be reassessed at project closure without a major input to collect field data and/or to analyzesurvey data derived from other sources. However, country statistics recorded in the FAO Yearbook 1992suggest that the benefits postulated were not obtained. Fresh milk production in Kenya, for example, isreported as having declined over the past three years from 2.3 million t in 1990 to 1.8 million t in 1992.Beef production fell over the same period from 251,000 t to 222,000 t.


B. Economic & Financial Impact

- No base case ERR was calculated at appraisal.

- In view of the dearth of statistics, and the difficulty of separating Project-related andextraneous influences, it is not possible to estimate the financial and economic impactof the Project. The positive net economic impact which the SAR predicted for all yearswas almost certainly not realized.

24


C. Studies

Purpose Defined at Appraisal Status Impact

1. Comprehensive review of VSD's management systems and operational procedures

a. Front-line services"To specify how animal health services Draft Report and Used for training under (c) but not

will be delivered to livestock owners in Manual 1988; yet in field use. Proposals and

efficient and cost-effective ways". revised 1991. formats relate to the old-style VSD,with little innovation.

b. Stores, vehicle, financial management etc.To develop appropriate systems/procedures Draft Reports Some parts in use, others pending.

for the above. 1988-90; revised Use should improve accountability1991. but no major impact on delivery of

improved services is expected.

c. Supplementary review (by different Draft report 1993; No impact as yet, but provides the

consultants) of management and delivery comments sent broader and forward-lookingsystems, including options for privatization May '93; final perspective lacking in earlier

etc. version still reports.awaited.

2. Pilot Trials (by ICIPE)To reduce costs and increase community Executed with No noticeable follow-up to tickparticipation in tsetse fly and tick control slight delay; final control trials, but community-based

report delivered tsetse-trapping now ongoing inJan '92. three localities with very promising

results.

25


D. Training

Subject Target Group Training Provided

1. Training specified at Appraisal

(a) Tick control Dip attendants and dipping Dip-side and FTC training startedcommittees 1991 and is continuing.

(b) Clinical services district vet staff (Partially included under (e) in 1993)

(c) Vehicle operations and DVOs 1993: 28 drivers/mechanics for 2maintenance drivers/mechanics days

(d) Monitoring and information PMSU staff and others 1993: 56 PMSU and district staff forsystems 2 days

(e) district vet services DVOs/SVOs and Executive 1990: 57 DVOs/SVOs/EOs for Imanagements Officers (EO) month

1993: 52 staff for 3 days

(f) HQ management DDVS and other senior HQ 1990: 19 ADVSs/other staff for 3staff weeks

(g) Training of trainers VSD "trainers" 1993: 25 ADVSs etc for 4 days

2. Additional Training

(a) MSc (Epidemiology and 4 two-year fellowships at UniversityEconomics) of Nairobi funded by UNDP 1990-92

(b) Computer operation Typists, etc Special 10-day course mounted in1993

(c) Tsetse and tick control VSD staff and communities 3 staff trained by KIPE andtechnology community training in tsetse control,

now underway

26

Table 7. Status of Covenants

DCA Subject Status CommentsSectionI

3.03 The borrower shall regularly review with the Association the project's annual work Partly complied The borrower reviewed the Annual Plans with IDA. However, salaryplan and budget with a view to ensuring that salary expenses within VSD are expenses remained above 50% of total operating costs.maintained at levels not exceeding 50% of the Department's total operating costs.

3.04 (a) The borrower shall (i) establish user charges for dipping services, and (ii) increase Largely Government run dips have been handed over to farmer committees in manysuch charges annually in order to achieve recovery of full operating costs by complied districts. User charges (minimum at cost) have been raised.completion of the project.

3.04 (b) The borrower shall (i) annually review with the Association user charges for clinical Largely User charges for Government-provided clinical services have been reviewedtreatment services; and (ii) maintain the charges at such levels as to achieve recovery complied and revised. DVS is gradually ceasing to provide clinical services in areasof the full cost of operations. where private vets are established and operating.

3.04 (c) The borrower shall (i) maintain until completion of the projec full cost recovery for Partially Drugs are being sold at retail prices. VSD is gradually ceasing to distributeveterinary clinical drugs distributed by VDS; and (ii) annually review with the complied drugs in areas which are well served by private practitioners andAssociation the prices of such drugs. pharmacies/chemists.

3.05 The borrower shall enter into arrangements with ICIPE satisfactory to the Fully compliedAsociationn for ICIPE to carry out the pilot trials on the control of tsetse flies andticks under Part E of the project.

4.01 (a) Shall, through the Director of Veterinary Services, submit semi-annual reports to the Largely The project authorities have submitted semi-annual reports which showAssociation recording the said project costs and outstanding disbursement claims and complied project costs and outstanding disbursement claims. Annual reports are alsoshowing how the costs and claims are to be reconciled; and not later than six months prepared, but not always submitted on time.after the end of each fiscal year, the borrower shall prepare, according to the formatof the monthly report, and submit to the Association, an annual report certifying thatthe accounts included in that report are consistent with the fmal unaudited relevantborrower's ledger accounts.

4.01 (b) The borrower shall maintain or cause to be maintained separate accounts reflecting Partly complied The borrower maintained separate accounts reflecting all expendituresall expenditures on account which withdrawals are requested from the credit account incurred using SOEs. However, the quarterly submissions were not madeon the basis of statements of expenditures; it being specified that said statements shall regularly.be prepared on a monthly basis, and it being further specified that the borrower shall,on a quarteerly basis, submit the said statements to the Association and certify thatthey are consistent with the relevant borrower's ledger accounts.

4.01 (c) Borrower shall have the accounts referred to in para. (a) of this Section audited, and Partially Audited accounts were subrmitted, but invariably always late.furnish to the Association, not later than eight months after the end of each such compliedyear, a certified copy of the report of such auditors, as to whether the proceeds ofthe credit withdrawn frcm the Credit Account on the basis of statement ofexpenditure have been used for the purpose for which they were provided.

6.00 The VSD shall prepare annual and semi-annual reports. Complied

7.00 The borrower shall establish a vehicle monitoring system with DVS to ensure proper Not complied A fully workable vehicle monitoring system is yet to be established alonginvestment planning and management. the guidelines recommended in the consultant's study.

Table 8. Use of Bank Resources

A. Staff InDuts _______l

Stage of Project '86 '87 '88 '89 '9 '91 '92 '93 '94

C ycle _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ __ _ _ _ _ _ _

Preparation/Preappraisal 0.6

Appraisal 4.3 10.2

Negotiation 3.2

Supervision 8.7 22.0 13.3 11.8 6.5 7.0 4.4 4.9

Other 13.4

TOTAL 4.9 22.1 22.0 13.3 11.8 6.5 7.0 4.4 18.3

Table 8. Use of Bank Resources

B. Missions

Stage of Project Cycle Mission Sent by Month/year No. of No. of Days in Specializations Performance Type ofPeople Field Represented Rating Problems

Identification - - -

Preparation FAO/CP 5/85

Appraisal IDA 8/85 2 E,VSupervision 1 IDA 1/87 1 15 V 2

2 IDA 11/87 3 12 L,E 2 R,F3 IDA/IFAD 8/88 3 10 L,P,E 2 R,F4 IDA/IFAD 2/89 3 10 L,P,G 2 F5 IDA 9/89 2 10 L,E 2 A6 IDA 4/90 1 14 L 3 P,F7 IDA 3/91 3 5 E,P,F 2 A8 IDA/IFAD 9/91 6 13 E,F,L,P 2 A,P9 IDA 9/92 4 13 E,L,P,F 2 F,A,P10 IDA 2/93 3 15 S,E,P 3 F11 IDA 8/93 3 13 S,E,P 2 F,P

Project Completion Report FAO/CP 1/94 3 10 F,L,V

' There was no formal identification mission for the project.

E = Economist; V = Veterinarian; L = Livestock; P = Procurement; F = Finance; S = Services; R = Consultant Recruitment; A = Audit

Annex 1

VETERINARY ASPECTS

A. INTRODUCTION

1. During the course of the PCR mission Kwale, Homa Bay, Kajiado and KiambuDistricts as well as the Kabete Veterinary Laboratories, ICIPE, the Delegation of the EuropeanMission and PARC Headquarters, were visited to gather information for this

B. DISEASE AND PEST CONTROL

2. The 1985 Annual Report of the Dept. of Veterinary Services (VSD) is the mostrecent in print. Draft reports for 1990 and 1991 have been made available as well as variousdistrict and provincial annual reports and briefing reports compiled by DVO's in Kwale, HomaBay and Kajiando.

3. No clear distinction is made between suspected and confirmed outbreaks of diseasenor is the associated mortality reported accurately. As a consequence various assessments ofproject effectiveness are somewhat subjective. The Epidemiology and Economic Unit of theDivision of Veterinary Field Services is presently introducing a standardized reporting systemin an attempt to up-grade the quality of disease incidence reports.

Rinderpest

4. Rinderpest is a major plague of cattle and several wildlife species with mortalityin susceptible animals of over 90%. An extremely effective and cheap vaccine (US$0.94 per100 doses) provides life long protection to immuno competent cattle. Political turmoil inperipheral countries and the influx of refugees presents a great threat to livestock health and thestated policy of the VSD is to vaccinate all cattle in border districts annually.

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KENYA: Animal Health Services ProjectAnnex 1: Veterinary Aspects

5. Actual vaccination cover in selected border districts showing the approximatepercentage of the total cattle population in brackets is outlined in the Table below:

1984 1985 1987 1988 1989 1990 1991 1992

KAJIADO 0 0 4 245 129 290 188 72(35%) (18%) (41%) (27%) (10%)

(0.6%)

KWALE 24 - 33 30 39 60 50 0(19%) (26%) (24%) (31%) (48%) (46%)

GARISSA - 131 - - 218 273 192 167(23%) (38%) (48%) (34%) (29%)

WAJIR - 69 - - 94 34 203 73(41%) (55%) (20%) (119 (43%)

MANDERA - 37 - - - 36 65 56(38%) (37%) (67%) (57%)

** S. 65 80 - - 77 -

NYANZA (11%) (13%) (13%)

HOMA - - - - - - - 37BAY (8%)

MIGORI - - - - - - - 18(14%)

TABLE. Numbers ('000's) of cattle vaccinated annually against rinderpest in selected borderdistricts. (Approximate percentage of total cattle population shown in brackets)

** South Nyanza was divided into two districts, Homa Bay and Migori, in 1992.

6. There is an indication of a somewhat improved performance during the life of the projectespecially in the North Eastern Province. Elsewhere at no time were more than 50% of thetargeted population vaccinated and usually substantially less.

7. A limited sero monitoring exercise (900 sera from 4 districts) showed that only 39% ofthe animals tested were immune to rinderpest (Ann. Rep. Vet. Lab Services 1992). This is wellbelow the level required to prevent fresh epizootics recurring.

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8. The number of new outbreaks and the number of cattle vaccinated against rinderpest areshown in the table below:

No. of New Outbreaks (No. (000's) VaccinatedAnnually

1985 0 27171990 1 31951991 1 2112

Contagious Bovine Pleuropneumonia (CBPP)

9. Contagious Bovine Pleuropneumonia is probably enzootic in northern pastoral areas andsporadic outbreaks occur elsewhere introduced by trade animals. Control is more difficultbecause of the existence of clinically healthy carrier animals which can only be identified byserological tests. Testing and quarantine are a major constraint to the trade in fattening andslaughter stock from pastoral areas, moreover the testing of whole populations to eliminatecarrier animals is beyond the capacity of the VSD. More confidence should be placed in the useof vaccines to control the disease and the VSD should review the policies for movement of tradestock to (a) semi-marginal ranching areas and (b) high potential areas. The Ti broth culturevaccine has been tested rigorously and is a highly effective immunizing agent. The freeze-driedvaccine has been shown to be effective in the field but it is desirable that it be tested by the samerigorous protocols as used for the broth culture vaccine so that a comparison of immunogenicitycan be made.

Foot and Mouth Disease

10. The VSD has been able to get a commendably high rate of recovery of viable virus fromfield outbreaks of Foot and Mouth Disease (FMD), i.e. 89-95% over 3 years. Since thevaccines are expensive (US$0.36 per quadrivalent dose, US$0.09 per monovalent dose) and haveto be administered twice yearly this should have allowed the VSD to make cost-effectiveselections of appropriate vaccines for prophylaxis and to control the spread of clinical outbreaks.

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11. The number of outbreaks of FMD and the numbers of cattle vaccinated annually areshown below:

No. of New Outbreaks (No. (000's) of Cattleof FMD Vaccinated

1985 159 33181990 128 30941991 49 1665

12. The direct correlation between the number of new outbreaks and the number of cattlevaccinated suggest that the vaccinations are carried out in response to disease outbreaks ratherthan routinely to prevent disease outbreaks.

Trypanosomiasis Control

13. Trypanosomiasis is a disease of humans, cattle, small ruminants, horses, pigs and camels.Wildlife is an important reservoir. Transmission is usually by tsetse flies (Glossina spp)although trypanosoma vivax can be transmitted by other biting flies. Visits were made to tsetsecontrol units in Kwale, (Ukunda and Shimba Hills), the Nguruman escarpment in Kajiado districtand the Lambwe Valley in Homa Bay district. At the latter site half the persons questioned hadfamily members who had been affected by or died of sleeping sickness.

14. Community-based tsetse control programmes are being promoted or are in place in eachof the above-mentioned sites. Technical assistance is being provided by ICIPE, KARI, KETRIand VSD. Previously tsetse control has depended on the use of insecticides, bush clearance andthe elimination of game animals; all of which methods are ecologically unacceptable. Thepresent community-based control programmes depend on the use of various fly traps and odourattractants.

In Kwale KARI and VSD staff are combining:

(1) To identify the most effective trap design and other attractants for the existingtsetse populations

(2) To identify the principal fly routes out of the Shimba Hills National Park

(3) To monitor various health and productivity parameters of local cattle prior tostarting the community-based programme.

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15. At Nguruman escarpment the management and repair of fly traps has now been takenover by a committee of local group ranchers. Traps are placed at approximately 1 km intervals,more densely in newly opened-up areas. Wear and tear requires that they are replaced every6-12 months at a cost of about US$8.00 each. The secretary of the management committeereported that the consumption of trypanocidal drugs had fallen from 20-30 doses a day to 2-3a month since the installation of the traps.

16. At Lambwe valley ICIPE staff had trained five trainers to conduct one-day courses forlocal villagers. The courses include the local history of trypanosomes and tsetse, the life cydesof both and the design and making of traps. Since the disease affects both humans and livestockthere was a considerable and intelligent interest from villagers and, although not paid, thetrainers were very confident which reflected on the good training they had received from ICIPEstaff.

17. The community-based tsetse control programmes are an outstanding sociological andtechnical achievement which should be promoted not only in Kenya but in other countriesaffected by tsetse fly. It is essential that, as the prevalence of trypanosomiasis decreases, themanagement committees maintain their vigilance and replace traps and odour attractants whennecessary. The ecosystem for tsetse survival will not have been altered and the increasednumbers of livestock will provide an increased number of blood meal sources.

C. TICK CONTROL

18. About 3800 cattle dips are now managed by committees of an original 5000 communaldips in ECF enzootic areas previously managed by VSD. The process of handing over startedin July 1991. Training of the committees was variable in quality. VSD set guidelines forcomputing dip charges but not all dip committees took the advice believing that VSD wouldcontinue to help when in need. IFAD funds provided acaricides initially which allowedcommittees to build up operating funds from dipping fees. Few, however, accumulatedsufficient funds and after the devaluation of the shilling early in 1993 the majority were unableto continue. Latterly IFAD has contributed more acaricides which have been taken up withalacrity and revitalized many of the committees. The set-back has been beneficial in that it hasdrawn the committees attention to their responsibilities. Dipping charges are now between KSh5and KShl3 per animal.

19. Visits to dips were made in Kajiado and Homa Bay districts. Few cattle were broughtfor dipping because of the drought which had compelled owners to move cattle elsewhere.

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20. In South Nyanza (Homa Bay and Migori) only 4 of an original 68 communal dips arenow functional. In Kwale district annual dipping figures have dropped from 800,000 to 42,000over 10 years. In both areas the majority of cattle are unimproved zebu. Owners' perceptionsmay be valid since in Kwale, at least, there has been no concomitant increase in mortality fromtick-borne diseases. It is desirable that the ICIPE trials on the length of dipping intervals bereplicated so that strategies for TBD control can be defined in different ecological zones for zebucattle and up-graded high potential animals.

21. Gas chromatograph equipment has been available at the Kabete Vet. Labs and MariakaniVeterinary Investigation Laboratory (VIL). The project has provided more equipment andtechnicians have been trained to use it so that each VIL will have one unit while there will be4 units at Kabete. This will reduce the waiting time for acaricide concentration estimationswhich at present is unacceptably long.

22. There has been no clear policy about the re-deployment of dip attendants since the VSDhas handled over the management to dip committees. A few have been engaged by thecommittees themselves.

D. DIAGNOSTIC CAPABILITIES

23. The deterioration of several buildings at the Kabete Veterinary Laboratories had seriouslycompromised the diagnostic capacity of the laboratories. The mid-term mission commented onthe lack of standardization and monitoring of diagnostic techniques at Kabete and the VIL's andthe relative absence of hygiene capacity either to protect operators or to dispose of pathologicalmaterial.

24. At present extensive rehabilitation works preclude all diagnostic work except in thechemistry/toxicology laboratories which have inadequate fume cupboards and the helminthologylaboratory which has no water.

25. Most samples are submitted by livestock owners and VIL staff. Few are submitted byfield staff. During 1990 all the laboratories examined a total of 65,000 samples from 20,000cases investigated. In 1991, 50,000 samples were examined from 23,000 cases.

26. Veterinary laboratories are essential for accurate diagnosis. Many disease reports are notauthenticated throwing considerable doubts on the validity of the disease incidence reportssubmitted to the Epidemiology and Economics Unit.

36


27. Since trypanosomiasis, TBDs and helminthiasis are the major enzootic diseases theLaboratory Service should ensure that all the district and divisional centres have the equipment,reagents and trained AHA's to carry out the routine diagnostic tests for these diseases.

E. CLINICAL SERVICES AND EXTENSION

28. These are provided through 248 clinical centres serviced by the Clinical Services andExtension Division of the VSD as well as by a few cooperative societies and privateveterinarians.

29. The services supplied by CS.E Division have been constrained by the lack of drugs,equipment and transport. Over 90% of interventions have been carried out by Animal HealthAssistants (AHAs). It was agreed in 1986 to charge the full cost of drugs while maintaining asubsidized charge for professional services and transport. Reporting of activities is poor. In1991 it was claimed that 114,000 cases were treated and earned KSh6.4 million of which only37% of the drug costs were recovered. These figures indicate that on average 8 cases weretreated weekly at each clinical centre at a charge of KSh56 per case (US$2.00 at existingexchange rates). If one considers that clinical services were only provided for grade animalsthen the figures indicate that 5.2% of the group received clinical attention. If one considers thatall animals including camels, small ruminants and pigs may have required clinical interventionsthen only 0.4% of the whole group received any. Obviously these figures are conjectural butthey do indicate the low rate of clinical interventions achieved by the CS.E Division. Thedivision ceased to buy drugs after 1992 after which time owners and veterinary staff boughtdrugs from pharmacies and other outlets.

30. The most frequent clinical intervention (37%) was the treatment of intestinal worms.This problem which is widespread, since clinically affected animals are only the visible tip ofthe iceberg, would be better addressed by the provision of extension messages to livestockowners. An integrated Agricultural/Livestock Production Extension Service is in place and itis to be regretted that the VSD maintains a separate extension service. In Kajiado district therewere informal links between the two which reduced costs and made the extension services moreattractive to livestock owners whereas in Kiambu district the two services were reportedly quiteexclusive of each other. Anthelmintics are very expensive and considerable benefit could be hadin defining worming strategies in different ecological zones in regard to different species, agegroups, etc.

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KENYA: Animal Health Se-vices ProjectAnnex 1: Veterinary Aspects

31. No new veterinary graduates have been recruited into VSD for 3 years and the majorityare unemployed. 55 veterinarians are in private practice, mainly in the high potential areas ofCentral Province and Rift Valley Province. A pilot project for the establishment of 20 privateveterinarians has been set up by the Pan African Rinderpest Campaign (PARC) and funded bythe European Development Fund. Over 50 applicants were screened by a Kenya VeterinaryAssociation (KVA) Steering Committee, of which 20 were short-listed on account of theirexperience, area of operation and collateral. Barclays Bank is the lending agency and a KVATrust has been set up to act as guarantor. The Bank will re-assess each application beforeagreeing a loan. Each applicant may borrow up to KShl.2 million at commercial interest rates.There is a grace period of 3 months before paying interest and 1 year before commencingrepayment of principal. The project may agree to pay half the interest charges over 10%.Private veterinarians will not be allowed to manage communal dips but they will be allowed tocarry out artificial inseminations if they wish.

32. It is probable that the subsidized government clinical service has inhibited theestablishment of private practices. Many of the 55 private veterinarians have set themselves uprecently including a few of the short-listed PARC supported vets who were unwilling to wait anylonger for the project to become operational. Government has agreed to withdraw its ownservices where private veterinarians become established. The KVA should strongly insist thatgovernment keep to this undertaking.

F. Al SERVICES

33. The Al services have over the years had a considerable impact on up-grading the cattlepopulation and increasing productivity. Smallholders etc. in high potential areas are entirelydependent on the service to get their cows in calf. The Al Division of the VSD has a bull studat the Central Artificial Insemination Station (CAIS) at Kabete and plans to open a second stationin Western Kenya. The Division also provides Al delivery but is constrained by lack oftransport so that many farmers have to supply transport for the inseminator.

34. There is no legislation, other than disease control regulations, limiting the provision ofAl services to the Al Division. In fact the Division will assist importers of semen by providingimport clearance and storage facilities at the CAIS.

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KENYA: Animal Health Services Project

Annex 1: Veterinary Aspects

35. The number of inseminations has halved over the past 10 years, viz:

1982 525,000 Inseminations1983 463,000 "1984 385,000 "1985 486,000 "1987 385,000 "1988 359,000 "1989 410,000 "1990 396,000 "1991 250,000 "

36. At present a charge of KSh4O is made for a primary insemination and up to 3 repeatswhereas the real cost of a single insemination is KSh17O in Central Province and moreelsewhere. This high level of subsidization is a strong disincentive to privatization of deliveryservices. Conception rates and calving intervals on 2 smallholder farms visited in Kiambu wereexcellent.

37. In Kwale district a completely different situation was found. Because of lack of liquidnitrogen containers, room temperature RT semen was used. 97% of all semen samples werediscarded because of immotility, thereby increasing the cost of each usable semen dose by afactor of 33. In fact the real cost of a single insemination in Kwale district was said to beKShll,000, at which price the farmer could have been provided with an adult bullock ratherthan half a potential embryo. Lack of transport, unsuitable semen, high rates of returns andfrequent abortions caused mainly by endemic trypanosomiasis has brought the AI service intodisrepute. In fact it is highly questionable whether AI services and the consequent up-gradingof cattle are desirable in areas of high trypanosomiasis endemicity and underlines the point madebefore that different strategies are required for different classes of animals in different zones.Should the community-based tsetse control programme in Kwale prove successful the use of Alcan be reviewed.

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