Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 2864-KE

KENYA FISHERIES PROJECT

STAFF APPRAISAL REPORT

May 14, 1980

East Africa RegionCentral Agriculture Division

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

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CURRENCY EQUIVALENTS

Currency Units = Kenyan Shillings (K Sh)US$1 = K Sh 7.5 1/K Sh 1.00 = US$0.133

WEIGHTS AND MEASURES

Metric British/US Equivalent

1 meter (m) = 3.28 feet

1 hectare (ha) = 2.47 acres

1 kilometer (km) 2 = 0.62 mile1 square kilometer (km ) = 0.39 square mile (sq mi)1 kilogram (kg) = 2.2 pounds (lb)1 liter (1) = 0.26 US gallon (gal)

= 0.22 British gallon (imp. gal)1 metric ton (m ton) = 2,205 pounds (lb)

ABBREVIATIONS

CBK - Cooperative Bank of Kenya, Ltd.ICDC - Industrial and Commercial Development CorporationKFC - Kenya Fishnet Company Ltd.KFI - Kenya Fishing Industries, Ltd.MOCD - Ministry of Cooperative DevelopmentMENR - Ministry of Environment and Natural ResourcesMOW - Ministry of Works

FISCAL YEAR

Government, CBK - July 1 to June 30

1/ Since October 1975 the Kenya Shilling has been pegged to the SDR at arate of SDR = K Sh 9.66; the rate vis-a-vis the US dollar has fluctuatedsince that time, and US$ = K Sh 7.5, the average rate prevailing at thetime of appraisal has been used in evaluating this Project.

FOR OFFICIAL USE ONLY

KENYA

FISHERIES PROJECT

Table of Contents

Page No.

I. BACKGROUND ................................................ I

A. Project Background 1 ... . .1

B. The Agricultural Sector.. . . 1C. The Fisheries Subsector ......................... . 2D. Government Services to Fisheries . . 9E. Fisheries Credit . . .10F. Commercial Services .... . .12

G. Marketing and Processing . . . 13

II. THE PROJECT .. 15

A. General Description . .15

B. The Project Area . . ...... 16C. Detailed Features . . .16D. Project Costs . ........................................ 24E. Financing .......... 25F. Procurement ........................................ .27

G. Disbursements . . ....................................... 28H. Accounts and Audit . . . 29I. Environmental Impact . .... . .29

III. ORGANIZATION AND MANAGEMENT .30

A. Project Management and Staffing . . 30B. Management of Project Components . . .31

C. Project Implementation Schedule .............. . .... . 33D. Monitoring and Evaluation . . .35

IV. PROJECT PRODUCTION .35

A. Technical Features .. 35B. Financial Benefits .. 37C. Production Estimates. ..... 37

This report is based on the findings of an appraisal mission whichvisited Kenya in July-August 1979, composed of Messrs. S. Capoluongo,F. Kada, B. Mbida-Essama (IDA), J. Brown, J. Moller, and Y. Pruginin(Consultants). A follow-up mission composed of Messrs. S. Capoluongoand Y. Gazzo visited Kenya in January-February 1980.

This d"menr has a restricted distribution and may be ucd by recipients only in the performanceof eMciii duties. Its contents may not otherwist be disc losed without World Bank authorization.

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Table of Contents (Continued) Page No.

V. MARKET PROSPECTS AND PRICES .............................. 38

A. Markets .......................................................... # 38B. Prices ............ .. ............ * ........ a *a***............... 39

VI. ECONOMIC BENEFITS AND JUSTIFICATION ...................... 39

A. Benefits .......... ..... O*......................................... 39B. Economic Rate of Return . .................... ..... 40C. Risks ................. ....... ............ 40D. Sensitivity Analysis .. * ........ ........ . o........... . 41E. Income Distribution and Employment ................... 41

VII. GOVERNMENT BUDGET - .... ..... ... . ......... .. ............ .. ...... . 42

VIII. AGREEMENTS AND CONDITIONS . ....... ............................. 42

SUPPORTING TABLES, CHARTS, AND ILLUSTRATIONS

TABLES

Table 1. Proposed StaffingTable 2. Project Costs SummaryTable 3. Government Cash FlowTable 4. Estimated Schedule of DisbursementsTable 5. Economic Rate of Return

CHARTS

Chart 1. Ministry of Environment and Natural Resources,Department of Fisheries

Chart 2. Project Management

MAPS

Map 1. Kenya - Project Areas - IBRD 14619Map 2. Kenya - Lake Victoria - IBRD 14620Map 3. Kenya - Indian Ocean Coast - IBRD 14621

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ILLUSTRATIONS

Fig. 1. Gill Net and Long LineWorld Bank 20825

Fig. 2. Bottom Trawl Net and Beach SeineWorld Bank 20826

Fig. 3. Dip Net and Midwater Trawl NetWorld Bank 20827

Fig. 4. Gill Net BoatWorld Bank 20828

Fig. 5. "Sesse" Canoe

Fig. 6. "Mashua" Dhow

Fig. 7. Nile Perch

Fig. 8. Fish Farming Development CenterWorld Bank 20835

MATERIAL AVAILABLE IN IMPLEMENTATION VOLUME

KENYA

FISHERIES PROJECT

I. BACKGROUND

A. Project

1.01 In June 1979, the Government of Kenya requested that the Bank Groupconsider financing a Fisheries Project. The Project had been prepared by theDepartment of Fisheries, Ministry of Environment and Natural Resources, withassistance from the FAO/IBRD Cooperative Program. Most Project investmentswould be in Nyanza province, along Lake Victoria, and in Coast province alongthe Indian Ocean shore. The main Project objectives would include an improve-ment of the productivity of small scale fishermen in marine and freshwaterfisheries and the development of fish farming. This report is based on thefindings of an IDA appraisal mission which visited Kenya in July-August 1979,composed of Messrs. S. Capoluongo, F. Kada, B. Mbida-Essama (IDA), J. Brown,J. Moller, and Y. Pruginin (Consultants). Ms. R. Deen (IDA) joined the teamduring the latter part of the mission. Several changes were made at appraisal:proposed investments in shore facilities were expanded and mechanized vesselswere reduced to assist a large number of artisanal fishermen, rather than afew industrial operators; the cooperative infrastructure was expanded toprovide better marketing services. The mission recommended that warm waterfish farming be developed in a location better suited than Sagana, in Centralprovince.

B. Agricultural Sector

1.92 Kenya has a total area of 583,000 km and of this more than 10,000km is covered by lakes and rivers. It is a country of great topographical,climatic and soil contrasts. Kenya's population is estimated at 14.7 million(mid-1979) and is growing at the rate of about 3.5% per year; about 90% of thepopulation is rural and depends on agriculture for a livelihood. There arewide variations in population density, settlement patterns and productionsystems.

1.03 Kenya's 1978 GDP in current market prices was estimated at aboutK Sh 40.8 billion, of which about K Sh 288 million (US$38.4 million) wascontributed by the Fisheries sub-sector (para. 1.05). The average annualincome of the rural population is estimated at K Sh 758 (US$101) in 1979.This figure is based on the First Agricultural Rural Survey for Kenya, whichwas carried out in 1974-75, and concentrated on the smallholder sector. Sincethis is the only available survey of rural incomes, its income estimates havebeen adjusted as far as possible and are used as a proxy for the rural popula-tion as a whole. A broad distinction can be made between the large farms,

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including Government farms, and the roughly 1.5 million smallholdings inKenya, most of which are farmed by their owners. Maize i5 the staple cropbut a range of other crops is grown by smallholders, most of whom also havea few head of livestock, and some 3,000 of whom are engaged in aquaculture(para. 1.08).

1.04 During the period 1972-78 agriculture grew at an average annual rateof 2.6%, in real terms, lower than the average annual growth rate of 4.2% itachieved from 1964-73. Agricultural output also grew more slowly than theeconomy and the industrial sector, which grew at over 5% and 8% respectivelyduring 1972-78. The share of agriculture in total GDP declined from about 35%in 1972 to 30% in 1978. Poor weather conditions and high prices of inputsafter the 1973 oil price increases were the main reasons for the slow growthduring 1974-76. This trend was reversed in 1977 when, as a result of the boomin world coffee prices and good weather, agriculture grew over 9%. In 1978agricultural growth declined again to under 2% per annum, owing to the cumula-tive effect of a drop in world prices for coffee and tea, and adverse weather.Kenya is a net importer of certain agricultural products including fish.

1.05 With little high potential land remaining uncultivated, the growingpopulation is applying increasing pressure to develop lower potential areas,forests and waters, making action for effective resource management of para-mount importance. The current contribution of the fisheries sector to GDPis less than 1% (para. 1.03), but the Government recognizes the importanceof fisheries to employment and nutrition. In the 1979-83 development plan,the Government seeks to increase total annual fish landings by 30%, to about60,000 tons by 1983.

C. The Fisheries Sub-sector

1.06 Little is known about potential fisheries resources. Kenya has 640km of coastline on the Indian Ocean, numerous lakes (para. 1q02), and severalthousand fishponds. Average annual fish production stabilized at about 30,000tons from 1971 to 1975. Freshwater fisheries provided about 80% of totalproduction; marine fisheries, 20%. During the same period, Lake Victoriaalone accounted for over 85% of all freshwater catches. Largely as a resultof higher catches in Lake Turkana, total fish production increased to about41,000 tons in 1976 and 1977, and to 46,400 tons in 1978. There is someevidence of overfishing of certain species of fish in Lake Victoria, but otheL7species are believed to be underexploited. Fish farming is relatively littledeveloped and there seems to be a potential for a higher output than is nowbeing harvested.

1.07 Fish consumption varies greatly among population groups and ishighest in the vicinity of the principal bodies of water and in the citiesoA substantial amount of Lake Victoria fish production is consumed in Nyanzaand Western Provinces, which account for about one third of the entire popula-tion of Kenya. Average annual per capita fish consumption was estimated atabout kg 3.5 in 1978, and is significantly lower than in neighboring countries(para. 1.56). One reason for the relatively low consumption of fish appearsto be insufficient supply. Kenya exports high value shellfish and importscheap processed fish but continues to be a net importer.

1.08 It is estimated that fishing provides the main source of incometo about 31,000 active fishermen and to a large number of fish traders.Approximately 3,000 smallholder farmers are said to be engaged in fishfarming.Both marine and inland fishing methods are generally traditional and labor-intensive, and operations are limited to shallow waters. Most of the catchcomes from about 7,000 small craft landing between 20 and 50 kgs per fishingday each. The marketing and processing of fish is mainly in the hands ofprivate dealers. Prices to fishermen range between 20% and 30% of the retailvalue. Most fish is consumed fresh for lack of adequate preservation facili-ties. Few fishing cooperatives are strong enough to provide effectivemarketing services to their members.

1.09 The Department of Fisheries of the Ministry of Environment andNatural Resources has primary responsibility for fisheries development. OtherMinistries, including the Ministries of Cooperative Development, of Works, andof Power and Communications are responsible for activities related to fishingoperations and trials (para 1.38). Kenya Fishing Industries Ltd. (KFI), aGovernment owned company, owns a trans-shipment cold storage facility inMombasa and operates two trawling vessels (para. 1.52).

Freshwater Fisheries

1.10 About 90% of all fish landings in 1978 were made in freshwaterfisheries. Lake Turkana and the Kenyan waters of Lake Victoria account forabout 95% of total freshwater landings. The remaining 5% comes from smallerlakes: Baringo, Naiviasha, Nakuru, Jupe, Hannington and Elmentaita and fromthe rivers such as tte Tana, Nzoia, Yala, and Sabaki.

111 Lake Victoria, located 1,100 m above sel level, is one of the largestin the world with a total area of about 67,000 km . Its waters fall withinthe national boundaries of Kenya, Tanzania, and Uganda. The Kenya shore isthe shortest but most experts agree that Kenya's Nyanza Gulf is one of itsmost productive parts. The chichlid fish family is the most numerous withTilapia and Haplochromis predominating. Stocks of Engraulicypris, an anchovy-like fish which feeds near the water surface, are now believed to be substan-tial. Only few species of tilapia are present but over 150 species ofhaplochromis have been observed. The three fishing zones are: shallow,0-10 m depth; mid-depth, 10-20 m; deep, 20-65 m. Few fish are caught beyond65 m. Most tilapia are found in the shallow zone because they build neststhere and establish a defined territory around them. While the data areinadequate, there is some evidence of overfishing in this zone, as total catchis at best stable; catch per unit of effort, and the average size of fishcaught seem to be declining.

1.12 Little fishing is done in the mid-depth zone, but it is probablethat fish from this zone contribute significantly to the present catch.Exploratory trawling in deep waters was conducted under the FAO/UNDP LakeVictoria Fisheries Research Project, from 1968 to 1972. Virtually no tilapiawas caught in trawls outside 20 m depth, but catches of haplochromis weresubstantial. Tentative estimates of the annual sustainable yield of

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haplochromis from the whole Lake are about 200,000 tons. However, since onlya small part of deep waters belongs to Kenya, the potential yield from itsterritorial waters would be a small fraction of the total and subject toannual end seasonal variations due to likely migrations of fish.

1.13 An estimated 18,000 fishermen operate about 4,000 canoes which varyin length from seven to 10 m. All these craft sail in shallilow waters, up to10 km from the shore. The larger canoes are used for transport of people,fish, and goods. "Sesse" canoes (Fig. 5) are mostly used for fishing. Theseare narrow beamed, planked canoes seven to eight meters long. They are builtlocally with hand-ripped planks using a unique frameless construction methodwhich produces a very light and easily driven hull. There are also a fewdug-out canoes.

1.14 Water and wind conditions are generally favorable for small boatnavigation. Afternoon breezes often alternate in direction with nightzephyrs making it possible to sail almost anywhere in the Nyanza Gulf bysimply waiting for a favorable wind. When calms prevail, the light "Sesse"canoes (para. 1.13) can be propelled on any course by paddle, or by being"shagged" along in shallow water using a pole.

1.15 The main method used to catch tilapia and other high value speciesis gillnet fishing (Fig. 1). Fishermen cast their nets overnight in thelake and haul them in the next day to collect their catches. The mesh sizesof the npts vary from 1-1/2 to 7 inches. The nets are washed and mended oncea week. The fish that are gilled early die and remain in warm water up to 12hours before being collected. During transport from thE fishing groundto the landing beach, the fish temperature may reach up to 350 C. Spoilagefrom bacterial action and autolysis therefore may start even before the fishis landed. The fishermen do not use ice at any stage.

1.16 Some high value table fish as well as haplochromis and engraulicyprisare also harvested with beach seines (Fig. 2) inside and outside the NyanzaGulf, wherever smooth beaches are found. The seines are 'rom 50 m to 100 mlong. The mesh size in the bag is small, 2 cm or less stretched, but biggerin the wings. Beach seining, especially for haplochromis, appears to beincreasing.

1.17 Catches of engraulicypris have increased from less than 800 tonsin 1971 to nearly 8,710 tons in 1978. As this tiny fish is easily attractedby light, it is caught by dip net seining (Fig. 3) at night with the aid ofkerosene lamps. Because this fishing is done close to shore, dug-out canoescan be used and sails are not necessary. The lamps are sometimes set onfloats and a beach seine with a very fine mesh is used.

1.18 Predators account for about 1,900 tons or 20% of the total catchin the lake. The main species are Claria, Bagrus and Lates (Nile perch).The latter (Fig. 7) was introduced to Lake Victoria about 20 years ago fromUganda, and has gradually spread to the Nyanza Gulf where its stock isbelieved to be steadily increasing. These predator species are caught by

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using long lines baited with various types of fish (Fig. 1). Longlining ischeaper than gillnetting, though less popular because it is less productive.Sport fishermen have been catching large Nile perch by trolleying with arti-ficial lures.

21.19 Lake Turkana. With an area of 6,405 km , Lake Turkai. is thelargest body of inland water in Kenya. It is situated in the northwest ofthe country in a semi-desert and extends southward from the Ethiopian border(Map 1). Because the lake has no outlet, its waters are highly alkaline witha pH of about 9.6. Water depths in 80% of the lake are less than 40 m.

1.20 Commercial fishing by traditional methods began in the 1960s, whenthe Government promoted Turkana settlement to try to alleviate famine. Fishlandings increased steadily from less than a thousand tons in 1964 to anestimated 15,600 tons in 1978. Estimates of sustainable yields vary widely;some experts have been predicting for some time that yields would stabilizearound 5,000 tons per year; others believe that the lake is capable of sub-stantially higher yields than are currently attained. The results of anechosounding and trawling survey undertaken with U.K. bilateral assistancehave not yet been released.

1.21 A fishermen's cooperative society was organized in 1971 and operateswith Norwegian bilateral assistance. While fish landings have reportedlyincreased each year from 1970 to 1978, the Turkana cooperative has recentlyexperienced severe marketing problems. Dried salted fish used to be exportedto Zaire, but demand is down due to that country's economic difficulties.This product is not selling well in Kenya, and unsold inventories are squeez-ing the cooperative's liquidity. While a Norwegian processing expert istesting ways to improve the quality of the dried fish, two additional invest-ments are expected to improve the marketing of Lake Turkana fish substantially:a seven ton ice plant, and a road to Kitale. NORAD, the Norwegian bilateralaid agency, has agreed to finance both. The combined effect of these twoinvestments would be to increase the availability of fresh fish in Kisumu andNairobi which have good road connections with Kitale.

1.22 The smaller lakes and rivers are generally fully fished, and annuallandings from these waters decreased gradually from about 2,400 tons in 1967to about 1,800 tons in 1978. In Lake Baringo, heavy silting has led towater turbidity resulting in a reduction in primary food production and alower capacity to carry fish stock. In Lake Naivasha commercial catchesdecreased from about 1,000 tons in 1967 to about 260 tons in 1978, mainlyas a result of Salvinia infestation.

Marine Fisheries

1.23 Most of Kenya's ocean coast is fringed by coral reefs close toshore. Beyond the reefs, less than three miles offshore, the water is atleast 100 fathoms deep, except for the North Kenya Banks (Map 3), where the100 fathom line is five to 20 miles offshore. To the west of the North Kenya

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Banks are fringing coral reefs and parts of the shelf are quite rough.Consequently the area of smooth bottom-suitable for shallow water trawling(Fig. 2) is extremely limited.

1.24 The Fisheries Department reported marine production of about 4,600tons in 1978. This represents an increase of 8% over the 4,300 tons reportedfor 1977. Landings from about ten trawlers operating in the Ungwama Bay,north of Malindi (Map 3) are excluded from these statistics. Also excludedare about 4,500 tons landed in Mombasa from deep sea tuna fishing vessels.The Fisheries Department statistics show that about one half of the catcheswere demersal species, about one fifth pelagic species, and the rest crustacea,sharks, oysters, squid and game fish.

1.25 The bulk of the production is harvested by artisanal fishermenusing about 2,000 small sailing craft. They fish at the reefs with handlines, drifting gillnets, trolling lines, and, in inlets, with traps. Thefishermen also dive, collecting lobsters and sea slugs by hand.

1.26 Sea and wind conditions along Kenya's coast are favorable forcoastal navigation. Major storms such as typhoons or hurricanes are unkrown.Many natural harbors provide shelter for small craft. Small craft can bebeached on the south coast where few harbors exist because the barrier reefshelters the shore from ocean waves. From September through April, theNortheast monsoon (Map 3) blows at Beaufort Force 3 (8 to 12 m.p.h.), withcalms occurring only two percent of the time. Gentle breezes blow against theprevailing ocean current (Map 3) but are not strong enough to generate steepwaves. These conditions are ideally suited for safe and efficient sailing.During the rainy season, from May to August, moderate breezes at BeaufortForce 4 (13 to 18 m.p.h.) prevail, but winds of Beaufort Force 5 (18 to 25m.p.h.) occur up to 40% of the time. Gale fcrce winds of 30 to 50 m.p.h.blow less than two percent of the time, but they are unpredictable and may behazardous to small sailing craft venturing over five miles offshore (Map 3).

1.27 Traditional boatbuilding on the ocean coast is sharply differentfrom that on Lake Victoria. Two distinct building traditions can be iden-tified in the north and in the south. South of Mombasa (Map 3) most of thetraditional craft are dug-out canoes propelled by sail and paddle; theirconstruction requires an entire mature tree for the one-piece hull and is,therefore, wasteful of timber. As supply is limited, log quality is diminish-ing. Because of poor handling characteristics in rough water, these canoescan operate only during the fair season of northeast monsoons, or within thearea protected by the reefs along the shore. This area of Kenya needs improvedfishing vessels.

1.28 North of Malindi, and particularly in and around the Lamu Archipelago(Map 3), a vigorous boatbuilding tradition exists. Sailing vessels over 30 mlong are still locally built for carrying international cargoes. Numerousfishing boats from seven to 10 m long are built and operated on the North coast.Their design and construction reveal Portuguese and Arab influences. Knownlocally as mashuas (Fig. 6), these boats are solidly constructed by skilledboatbuilders from noble timber in fair supply. They are seaworthy and cost

effective because they operate almost exclusively under sail. Nonetheless,meteorological conditions (para. 1.26) limit the operation of these mashuadhows to less than 200 days a year, and usually to within five miles of theshore.

1.29 There are several privately-owned freezing-at-sea trawlers withexpatriate crews based in Mombasa which trawl the shallow waters of Ungama Bayfor shrimp (Fig. 2). Since these boats are not equipped to hold the fish thatis caught in fairly large quantities together with the shrimp, they discard it.It is estimated that the tonnage of fish discarded is from five to 10 timesthe shrimp tonnage and would represent about the same value if landed.

1.30 An estimated 70% of juvenile shrimp living along the Kenya shoreshave their natural habitat in the extensive mangrove swamps that border theLamu Archipelago (Map 3). Shrimp fishing is done with traps and smallsail-operated trawls. Relatively small quantities are now harvested due tothe lack of ice and transport. Ice plants and cold stores exist only inMombasa.

1.31 In the Lamu Archipelago, there is good fishing for a variety ofhigh-priced demersal species including snappers and groupers. The fishermen,however, limit their fishing efforts to the periods of the unscheduled visitsof the fish collecting boats that come from Mombasa supplied with ice. Icesupplies and regular inter-island transport would allow fuller exploitation ofthe existing fishing capacity even with the simple sail craft and gear now inuse. Mechanized fishing with more seaworthy craft powered by simple inboarddiesel engines could Lead to further expansion of fishery activities in thatarea.

1.32 Present landings of pelagic fish are recorded at only 800 tons in1978. However, trial fishing for pelagic species such as Sardinella andCarangids was conducted along the South Coast and has shown promising results(Map 3). Shimoni could develop into an important fishing center. It islocated close to the Pemba Channel and to the protected grounds to the westtowards Vanga where gillnetting and driftnetting can be used during theoff-season for purse seining and other pelagic fishing.

1.33 Fishing for lobsters, crabs and molluscs is on a modest scale andtotal catches were about 366 tons in 1978. The sailing canoes involved inthis type of fishing carry divers who collect these species by hand. Explora-tory fishing for lobster, undertaken off the north coast, has had only modestresults so far.

Aguaculture

1.34 Fish farming was introduced in Kenya some 25 years ago by thecolonial administration, but it is still at an early stage of development.Except for some commercial trout farms on the slopes of Mount Elgon and MountKenya, most fish farmers grow tilapia in Western and Nyanza provinces, prin-cipally for home consumption. The number of tilapia ponds smaller than oneacre has been officially estimated at about 9,000. Most of them, however,

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have been abandoned for lack of technical knowledge and proper extensionservice. The Fisheries Department distributed tilapia fingerlings free ofcharge without providing the necessary technical guidance. Farmers did notknow, for example, what to feed and when to harvest. Although a few wellmanaged farms may have attained yields of three tons per ha per year,overall yields are estimated to average about 300 kg per ha per year. Noreliable sZatistics are available for the total production of fish ponds.

1.35 The Government Station, located at Sagana, Central Province, wasestablished in the early 1950s by the Department of Fisheries to conductresearch on tilapia farming. By 1959, a total of about 15 ha of experimentalponds with individual sizes ranging from 0.25 to 1.5 ha had been developed.The Station is staffed with one Fishery Officer, technicians and fish scouts.One of the miajor activities at the Station is the propagation and distributionof fish seeds for stocking fish farms and other bodies of public waters.Some experiments on feeds and feeding of common carp and on hybridizationof tilapia are being carried out, but little information is available as topractical needs of fish farm development, management and production. Thisaffects the efficiency of field extension workers, as they are lacking inpractical training.

1.36 In manv parts of Kenya, the environment and resources are favorablefor warm water fish farming. Market demand for fresh tilapia is strong, andthe Government encourages fish consumption. Nevertheless, the country hasbenefited little from its aquaculture development efforts. There areseveral reasons for the unsatisfactory performance. Many ponds, includingthose at Sagana, are located in areas unsuited to warm wc ter fish growth.Soil and water acidity in most ponds is too high and the pH factor below 7;the ideal range is between 7 and 9 pH. Water temperatures below 20 0C prevailat Sagana and at most ponds in Western and Nyanza provinces, while tempera-tures above 240C are required for satisfactory growth. Ponds are far fromeach other; the long distances make it impossible for extension officers tovisit farmers regularly. There is gap between fish farming development andresearch. The research carried out at Sagana is of little practical relevance.As a result, no technical basis for extension has been established. Theextension workers are not properly trained, therefore they cannot teachfarmers effectively (para. 1.40). Another reason for the slow progress offish farming could be that in some areas where it has been introduced, peopletraditionally do not eat fish.

1.37 The potential for aquaculture development in the tidal swamplandsalong the ocean coast has been recognized by several surveys carried out withbilateral and multilateral assistance. An FAO/UNDP pilot project for coastalequaculture is currently testing ways to develop this potential, mainly forshrimp culture.

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D. Government Services to Fisheries

1.38 Primary responsibility for the development of fisheries is vestedin the Department of Fisheries of the Ministry of Environment Pnd NaturalResources. A number of other Ministries carry responsibility oGr certainactivities which bear directly on the conduct of fishing operations andtrials. The Ministry of Cooperative Development has a Fisheries Section whichis responsible for fishermen's cooperatives; the Ministry of Works is respon-sible for feeder roads linking fishing centres with arterial highways andrailheads; the Ministry of Transport and Communications is responsible forharbors and fish landing facilities on the lakes. Kenya Fishing IndustriesLtd., set up as a joint venture in 1970 to operate a trans-shipment base fordeep-sea tuna from the Indian Ocean, is now fully Government-owned and isexpanding its activities in marine Fisheries (para. 1.52).

1.39 The Fisheries Department of the Ministry of Environment and NaturalResources 1s responsible for fisheries. It is staffed mainly by officerstrained in the biological sciences. Staffing is insufficient to meet all theneeds of the fisheries sector. In common with other Government agencies, theFisheries Department rotates its field staff at frequent intervals. Whilethis familiarizes staff with a greater range of problems, it also means thatthe continuity of research and other programs is broken. Research is alsohampered by lack of clear guidance on research priorities. The Departmentdoes limited economic research. Headed by the Director of Fisheries whoreports to the Permanent Secretary, Ministry of Environment and NaturalResources, the Department is divided into four divisions. Each division isled by an Assistant Director: (i) Inland Fisheries - Central; (ii) InlandFisheries - West; (iii) Marine Fisheries; and (iv) Research and Development(Chart 1).

1.40 The Department has a staff of 432 including 24 graduates who occupymost of the senior positions. The largest group is the 200 fish scouts who,together with the 65 Fishery Assistants, are involved in extension work. Thetotal number of active fishermen is estimated at about 31,000; the ratio offishermern to extension officers is therefore roughly 120:1, which wouldappear adequate. This ratio, however, excludes the requirements for fishfarming. Furthermore, the effectiveness of extension officers is impairedin several ways: most of them have inadequate technical background andrequire intensified in-service training, particularly in fish farming.Extension services also suffer from inadequate recurrent budgetary supportwhich seriously affects staff mobility and effectiveness.

1.41 Research. Until the end of June 1977, long-term fisheries researchwas done by the now defunct East African Community Fisheries Research institu-tions. With the collapse of the East African Community, responsibility forall fisheries research has devolved upon the Government. Consequently, anational fisheries research unit has been established. The unit will beexpanded during the current Plan period. Meanwhile an existing arrangementbetween the Fisheries Department and the University of Nairobi for collabora-tion in fisheries research is being strengthened.

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1.42 Training. The building of the proposed Wildlife and FisheriesTraining Institute at Naivasha will be completed in 1980, with the first intakebeing accepted in 1981. The Institute will provide technical training topublic officers in the middle and lower cadres of the service. The trainingof senior officers and of research fisheries officers will continue to beundertaken in local and foreign universities.

The Ministry of Cooperative Development (MOCD)

1.43 MOCD supervises the cooperative unions and societies providing themwith management advice. It consists of one Department headed by the Commis-sioner for Cooperative Development who has wide powers to regulate the co-operatives. The Cooperative Act of February 1977 spells out MOCD's role incontrolling and guiding the cooperative unions and societies in both theirpolicies and day-to-day operations. The Ministry's aim is to develop andguide unions and societies until they are capable of running their own affairs.

1.44 The Cooperative Movement. The cooperative movement of Kenya wasinitiated more than 30 years ago and has grown continuously since then. Manyof the rural poor are outside the cash economy and have no access to commercialservices. They rely on the cooperatives for input supplies, storage, andmarketing. At the end of 1977, there were about 1,400 active cooperativesocieties with a membership of about one million families. About one quarterof the estimated 31,000 fishermen are members of one of 34 fishermen's socie-ties. Over half of these are on Lake Victoria, one quarter on the oceancoast and the balance on other major lakes. Several marine fishermen'ssocieties, including those at Lamu, Shimoni and Vanga are commercially viable.Others, many of which are on Lake Victoria, are financially weak and have sofar been unable to provide adequate service to their members. Many of thelatter limit themselves to collecting a 10% commission from the fishmongerswho buy fish at their landing beaches. Because the turnover of these socie-ties is low, commissions are hardly sufficient to cover their administrativeexpenses and no funds are available to provide services to their members.On average, it is estimated that fishermen's societies market about 15% ofthe total catch.

E. Fisheries Credit

1.45 Credit to fishermen and fish farmers is available through institu-tions in the organized credit market and through individuals, mainly fish-mongers, operating in an informal market. The little institutional creditthat is provided is mainly under the Fishermen Loans Scheme which is operatedby the Ministry of Environment and Natural Resources. Other potential sourcesinclude commercial banks, the Cooperative Bank of Kenya Ltd (CBK) and theAgricultural Finance Corporation (AFC).

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Fishermen Loans Scheme

1.46 As spelled out in the 1969 Fisheries Act, for the purpose of pro-moting modern fishing methods, the Minister may prepare a scheme providingfor financial assistance by way of loans to fishermen in respect of expenditureincurred in t..e acquisition of fishing vessels or their gear, fishing nets andother equipment. Such a scheme has been in operation for more than 10 years.It is administered by a Loans to Fishermen Central Committee establishedspecifically for the purpose. Chaired by the Permanent Secretary, Ministryof Environment and Natural Resources, this Committee consists of the Director,Fisheries Department, the Senior Accountant responsible for Environment andNatural Resources, the Senior Trade Development Officer in charge of loans,Ministry of Commerce and Industry and a maximum of three persons, who arenot civil servants and who are appointed by the Minister for Environment andNatural Resources. The ceiling for loans for specific purposes is set by theCentral Committee. The present loan ceiling is KSh2O,OOO. Applicants forlarger amounts are advised to approach other lending bodies. Securitiesinclude land with title deed or plot number, permanent buildings and insurancepolicies; cattle, canoes and cash are not acceptable. The interest on loanscontinues to be 6.5% p.a. as set when the scheme was originally started. Therate of default from past operations is high with most loans still unrecoveredor completely lost. Apart from lack of supervision, an explanation for thissituation is that the boats given to the fishermen in the original scheme werenot acceptable to them. Under the present scheme, which is currently underrevision, use is to be made of local boatbuilders who would be supervised bythe Fisherit's Office-s.

1.47 The Cooperative Bank of Kenya Ltd._(CBK). CBK was established tostabilize the financial resources of the cooperative movement (para. 1.44)and utilize these funds for lending to the movement. CBK was registered asa Cooperative Society in 1965 and as a Commercial Bank in 1968. About 1,000cooperative unions and societies are members and shareholders of CBK. Theyrepresent about 80% of registered unions and societies. Only members may keepan account at CBK. CBK is the on-lending vehicle for three Bank group financedprojects. They are: The First Integrated Agricultural Development Project(IADP I) (Cr. 650-KE/1303-KE), the Smallholder Coffee Improvement Project(SCIP) (Cr. 914-KE), and the Second Integrated Agricultural DevelopmentProject (IADP II). Under all three projects, CBK finances loans from co-operative unions and societies to smallholders. IADP I became effective in1977, SCIP became effective in 1979, and IADP II was approved by the Board inDecember 1979, but the credit agreement has not yet been signed. Performanceof cooperative credit to smallholders under IADP I has been poor, mainlybecause some of the participating cooperatives were weak and inefficient.Under IADP II, the Government is taking measures to strengthen the coopera-tives and improve their management.

1.48 At June 30, 1978 CBK had K Sh 233 million (US$31 million) loansoutstanding and total assets of K Sh 569 million (US$76 million). Every yearsince it began operations, CBK has shown a profit and paid income taxes.CBK's profitability in fiscal 1978 was satisfactory, its liquidity high, andits capitalization adequate. Past due loans at October 31, 1978 were equal

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to 38% of outstanding loans. About half of the past due loans were one to90 days in arrears. While those percentages are high, they do not accuratelyreflect contractual extensions of loan maturities. Extensions are oftengranted to societies and members informally for legitimate reasons and theyare not properly accounted for by the Cooperative Unions. In addition,credit-worthy Unions sometimes relend to their members the proceeds of loancollections, rather than formally repaying CBK and reborrowing under thesame credit facility, because to do so would be lengthy and cumbersome.

1.49 There are ten Directors on CBK's Board. Six of them represent theCooperative Movement; four, the Government. The General Manager is the chiefoperating officer and reports to the Board of Directors. CBK has two Depart-ments: one has line responsibilities, and the other has staff support func-tions. It employs about 55 people, 25 of whom are professional staff.

Agricultural Finance Corporation

1.50 AFC was established in 1963 to assist in the development of agri-culture and agricultural industries. It is now the main credit channel forsmall and medium-scale farmers; particularly for long-term schemes includingIDA credits. Only two loans have been made for fish farming so far.

F. Commercial Services

1.51 A number of private companies and individuals are active in thefisheries sector. The Government has an equity interest in three of them.Commercial operators are mostly engaged in fish marketing, ocean fishing andboat building. The Industrial and Commercial Development Corporation (ICDC)is a widely diversified holding company which aims to promote foreign invest-ment in Kenya. The Government of Kenya has a controlling interest in ICDCwhich in turn holds 100% of the shares in Kenya Fishing Industries Ltd. (KFI),and 43% of the shares of Kenya Fishnet Company Ltd. (KFC).

1.52 KFI was organized in 1970 as a joint venture of ICDC, Taiyo FisheryCompany Ltd., Ataka & Co., and the Maritime Company. It built a jetty andfreezer storage with a capacity of 1,800 tons in Mombasa. This cold storewas to be used as a trans-shipment facility for the deep sea tuna longlinersoperated by Taiyo, a Japanese Company. The trans-shipment, however, becamefinancially unattractive after the oil price increases of 1974, and theturnover at the KFI plant decreased from over 7,000 tons in 1974 to about 600tons in 1976. In 1977, ICDC took over the shares of the Japanese partners,and in 1978 it took over the remaining shares, to become the sole KFI share-holder. KFI has ordered two tuna longliners, each displacing 250 gross tons,from Korea. The vessels would initially be operated by an all-Korean crew,to be gradually replaced by Kenyans. KFI plans to acquire two more vesselsin 1981. Plans also exist to establish a fish cannery, and a fish mealprocessing plant.

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1.53 KFC was organized in 1971 to manufacture fishing nets for thedomestic market. ICDC owns 43% of KFC's equity, and Hirata Spinning Co. Ltd.,45%. PrIvate Kenyan interests, including several fishermen's cooperativesocieties own the remaining 12% of the shares. KFC imports yarn from Japanand manufactures the nets in its seven year old plant in Kisumu. It employsabout 80 people, all Kenyans except for the Managing Director ana the chiefengineer who are Japanese. Plant capacity is more than adequate to supplythe domestic market. KFC has 12 retail outlets throughout Kenya, but it alsosells to independent retailers who earn a 13% mark-up.

1.54 Several private companies are engaged in wholesale and retail fish

marketing, cold storage and transport. The largest ones include Samaki Indus-tries (Kenya) Ltd., Kenya Cold Stores, Wanainchi Marine Products, and OceanProducts. While these are primarily fish traders, some of them operate theirown commercial fishing vessels. They deal mostly in marine products, butone of them actively trades freshwater fish. Nearly all sales are made inNairobi, Mombasa, and overseas.

1.55 There are a few experienced builders of modern mechanized offshore

vessels. They manufacture mainly sport-fishing and leisure craft. SpecializedMouldings Ltd., a Nairobi firm, has developed simple designs for inshoretrawlers of 33' and 45' overall length. The Department of Fisheries haspurchased one and operates it on Lake Victoria for experimental trawling.

G. Marketing and Processing

1.56 The average per capita consumption of fish in Kenya was estimated atabout 3.5 kg per person per year in 1978. While this represents an increaseover the 2.5 kg annual per capita consumption in the early 1970's, it is stilllow compared to that of neighboring countries. Average per capita fish con-sumption in Uganda and Tanzania is estimated to be more than 10 kg per year.The limited supply appears to be the principal reason for the relatively lowfish consumption rates. Fisheries Department statistics show that, from 1970to 1978, the prices of most fish species rose faster than most consumer prices.Moreover, landed prices paid to fishermen generally appear to be more thantwice as high as the prices recorded by the Department of Fisheries. Thelatter often reflect minimum prices payable to fishermen, rather than actualtransactions (para. 1.65).

1.57 In 1978, Kenya imported about 3,400 tons of fish and fish products,worth about K Sh 18 million, according to the Department of Fisheries.Fishmeal and canned fish represented a large share of these imports. Drysharks were shipped into Mombasa from Somalia and the Arabian peninsula forconsumption in the Coast province. Unspecified amounts of fresh water fishare believed to have been imported from Uganda, much of it illegally. Exports,mostly crustacea, were reported at about 600 tons, worth about K Sh 9 millionin 1978. Net imports of about 2,800 tons in 1978 were up 155% from 1,100 tonsin 1977. While exports decreased 25% from about 800 tons in 1977, imports

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rose 80% from about 1900 tons in 1977. Exports were down because of trans-portation difficulties to Zaire, the established market for Lake Turkana driedfish (para 1.21). Imports were up mainly because of unusually strong demandfor processed fish products. No fish meal processing or fish canning is donein Kenya.

Freshwater Fisheries

1.58 The marketing system for the Lake Victoria hinterland seems to becompetitive and relatively efficient, but the lack of infrastructure maycontribute to keeping prices relatively high. Fresh fish, particularlytilapia, is preferred to processed fish, but only about one-third of the catchis consumed fresh, because no ice is available along the Lake. Without iceand chilled storage, the spoilage of fish is high (para. 1.15). Most smallfish such as engraulicypris and haplochromis is sundried on the beach. Tablesize fish such as tilapia and catfish are smoked or roasted.

1.59 Within a few hours of capture, the fish is delivered to the numerouslanding beaches around the shore where private fishmongers individually buy upsmall quantities which they sell in the adjacent area. Except for sortingsheds at various sites, the beaches are without shore facilites. Conditionsof access roads are poor and the bicycle is a very common means of transport(Fig. 7). Because of rough handling methods, the quality of fish suffersconsiderably by the time it reaches the consumer.

1.60 The Kisumu City Council owns and operates a five ton flake ice plantat the Municipal Fish Market. The plant was erected about nine years ago withfunds from USAID. Fishmongers pay K Sh 240 rent per month for a stall and aresupplied with ice. Maintenance and repair facilities for the ice plant areinadequate and breakdowns, which occur from time to time, are lengthy.

1.61 There are at least three major retail markets for freshwater fish inNairobi. Fish is sold fresh, dried, and smoked. Fish traders who buy freshfish in Kisumu, bring their own ice from Nairobi. At least three quarters ofthe ice is melted by the time the Nairobi-Kisumu round trip is completed.Smoked and dried fish is transported primarily by bus, fresh fish mainly byprivate car. There is a small, but growing demand for freshwater fish inCoast Province.

Marine Fisheries

1.62 Marine catches are consumed in the fishing communities and nearbyvillages, in the larger towns and cities, including Lamu, Malindi, and Mombasa,and in the tourist resorts all along the coast. Marine products, packed inice, are also shipped regularly to Nairobi by train and by truck. Somelobster, shrimp, and tuna are frozen in Mombasa and exported.

1.63 In Mombasa, four private companies own and operate ice plants withcapacities ranging from four to 10 tons per day each. KFI (para. 1.52) has acold store capacity of 1,800 tons. The price of ice ex-plant in Monbasa wasabout K Sh 300 per ton in 1979.

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1.64 North of Mombasa, the only ice plant is in the Malindi Fish Market.This plant has been inoperative for several years and the municipality is aboutto replace it with a two tons/day plant. South of Mombasa, the only ice plantis in Shimoni and is also inoperative. If replaced, it could also serve Vanga,an important canoe fishing village close to the Tanzanian border. In RasNgomeni, KFI is currently building a fish receiving station which will beequipped with an ice plant. Post-harvest losses are not as severe as theyare on Lake Victoria, because marine fish deteriorates more slowly than freshwater fish. Moreover, in certain areas, notably the North Coast, the fishingeffort is limited due to the lack of adequate handling and refrigerationfacilities. Approximately one third of the fish supply for local consumption,however, is sundried or smoked, in order to avoid waste. The market value ofprocessed fish is substantially lower than that of fresh fish.

1.65 Fish is largely sold through fishermen's cooperatives and theminimum price to fishermen is regulated by the Government to provide anincentive to fishermen. In practice, actual prices are much higher thanminimum prices (para. 1.56).

II. THE PROJECT

A. General Description

2.01 The principat objective of the proposed Project would be to increasethe incomes of fisherm_~n by increasing marketed fish production; post-harvestlosses would be reduced and fish quality improved by providing storage andpreservation facilities. Improved fishing craft and gear would enable fisher-men to increase catches and productivity. The proposed pilot Fish FarmingDevelopment Center would also contribute to increasing marketed fish production.If its operation is successful, the Center could be the nucleus of a secondphase expansion. Outgrower fish ponds could be developed during this secondphase. The following Project components would be carried out over about sixyears:

(a) development, expansion, and upgrading of shore facilitiesfor fish landing, storage, preservation, and marketing;

(b) provision of fishing craft and gear to fishermen;

(c) establishment of a Fish Farming Development Center;

(d) training, research, and studies; and

(e) management, monitoring, and evaluation.

2.02 A management team would be established in the Ministry of Environmentand Natural Resources to carry out the Project. A Project manager would beresponsible for implementing the Project and would report to the PermanentSecretary. Three area managers, in Kisumu, Kabonyo, and Mombasa would eachbe responsible for carrying out Project activities in lake fisheries, fish

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farming, and marine fisheries respectively. They would report to the Projectmanager.

B. The Project Area

2.03 Virtually all Project investments would be along the Lake Victoriashore in Nyanza province, and along the ocean shore in the Coast Province.About 23,856 tons or 51% of total Kenya landings were harvested in 1978 inLake Victoria; about 4,634 tons or 10% of the total, in the Indian Ocean.The specific location of the main Project facilities has been determinedaccording to resource availability, concentration of fishermen, and lack ofexisting infrastructure. Map 1 (IBRD 14619) shows the location of the LakeVictoria Region and the Ocean Region. Map 2 (IBRD 14620) shows the LakeRegion in detail, the proposed sites for the Fishing Centers and the FishFarming Development Center, and the existing Fisheries Department installationsat Kisumu. Map 3 (IBRD 14621) shows the Ocean Region in detail, the proposedsites for the Fishing Centers and Stations, and the existing Fisheries Depart-ment installations at Mombasa and Malindi.

C. Detailed Features

Shore Facilities

2.04 Fishing centers and stations would be developed on the Lake Victoriaand Indian Ocean shores. The main purpose of these facilities would be tomake ice available for the marketing of fresh fish. Ice is a powerful aid tofish marketing in warm climates because it increases the storage life of fishfrom a few hours to several days. At present, virtually no artisanal fisher-men have access to ice in Kenya. Availability of ice is expected to reducepost-harvest losses and induce fishermen to increase their fishing effort inareas which have so far been under-exploited because of their remoteness.

2.05 Lake Victoria. Eight fishing centers and nine fishing stationswould be developed at the main landing beaches along the Lake Victoria shore.The Centers would be located at Port Victoria, Usengi, Misori, Kaloka, HomaBay, Mbita, Kindu Bay, and Karungu, (Map 2). The stations would be at PortSouthby, Naya, Kusa/Samo, Muhuru, Nyabiwa/Kitega, Wakola, Nyakweri, Luanda/Canam and Sioport. Both fishing centers and stations would have sortingsheds, insulated stores, drying racks and smoke houses, insulated ice boxes,and fish boxes. The critical factor to determine fish storage capacitywould be ice-making capacity (para. 2.06); about 1 kg of ice is required tostore 1 kg of fish. The fishing centers would also be provided with offices,stores, and housing for the managers. The centers would be larger than thestations because the former are more accessible and would serve as maincollection as well as direct landing points. To facilitate access by land tothe centers, about 10 km. of approach roads would be built. The approach oraccess roads would be constructed to standards now being used in the on-goingRural Access Road Program. These standards provide for a top width of 4.5 m

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on the subgrade with a gravel surface 4 m wide and 10 cm thick. Eight boatswould transport fish from the stations and other satellite beaches to the

centers. Their design would be basically the same as that of the gillnet

boats (Fig. 4), with a shorter overall length of 7.6 m.

2.06 Ice for the preservation of fish would be produced at Kisumu and

Homa Bay because of the availability of power and their proximity to the

other fish landing sites. The ice can be readily transported from these two

locations for use and storage with a minimum of difficulty. The Kisumu ice

plant would consist of four ice-making machines of one ton per 16 hourscapacity each. In addition to the ice plants, there would be one 10-tonchillroom at Kisumu to provide flexibility during varying cycles of demand.Homa Bay's ice manufacturing capacity would be provided by two one-ton ice

plants and the storage would be one five-ton chillroom. Flexibility topreclude complete interruptions of production during breakdowns as well aspower outages is assured by the multiple machines combined with the chilledstorage at these two locations. If a machine needed repair, ice productionwould proceed with the remaining plants in operation. Likewise, ice wouldbe in storage during a power interruption.

2.07 The investments would include fully equipped workshops, fuel tankswith pumps, buildings for the ice plants and chillrooms at Kisumu and HomaBay. Power and water lines would be extended and transformers provided at

these locations to serve the plants, chillrooms and other buildings.

2.08 Five pick-up trucks at Kisumu and Homa Bay would be the means of

transporting ice by road to the centers and stations and bringing filsh backif required. Each vehicle would carry up to a total load of 540 kg of ice foreach trip. Ice would be offloaded at each location as required for storageof the fish on hand.

2.09 Each center would be staffed with a manager, an accountant/store

clerk, and two laborers. Kisumu and Homa Bay, however, would in additionemploy three and two mechanics with assistants respectively. Two machineoperators would be stationed at each of these locations. Station staffingwould consist of a station supervisor, who would keep the records as well assupervise the station activities. Two laborers would maintain the facilitiesas well as unload and load ice and fish.

2.10 Project investments include working capital funds to allow the

centers to meet start-up expenditures, finance their prepaid expenses andinventory of fishing gear and supply, and maintain their liquidity.

2.11 Indian Ocean. Three fishing centers would be established at Lamu,Shimoni, and Vanga, and two small fishing stations, at Faza and Kisingitini(Map 3). Each center would have a building to house the chillroom, a sorting

shed with scales, a fully equipped workshop to service the ice making equipmentand boat engines, a store, an office, a house for the manager, a fuel tankwith a pump, ice boxes and fish boxes. At Shimoni, water supply facilities

consisting of pumps, a pump house, piping and a reservoir would be installedto supply the ice plant; the existing shed would be improved, and the office

enlarged.

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2.12 In Lamu, four ice plants would be provided; in Shimoni, three.Each individual ice plant would have a capacity of one ton per 16 hour-period. At Lamu, there would be a seven-ton chillroom; Shimoni, five-ton;and Vanga, two-ton. This combination of multiple ice Dlants with chill-rooms would provide the flexibility necessary to cope with generator andice plant breakdowns. Since neither Shimoni nor Vanga has adequate power,diesel powered generators would be provided to operate the ice plants andchillrooms at those locations. In Lamu, the power and water lines would beextended and a transformer would be provided.

2.13 The ice plants at Shimoni would serve Vanga and other landingbeaches south of Mombasa. Two pick-up trucks, one stationed at Shimoni andthe other one at Vanga, would provide transportation. Ice produced at Lamuwould be distributed to Faza and Kisingitini as well as other landing sitesas required. Four boats, two stationed in Lamu, and one each in Faza andKisingitini would transport ice to the fishing stations and ice packed fishback to the Lamu center. The boats would be provided under the Projectand their design and specifications are in Fig. 4.

2.14 Each fishing station at Faza and Kisingitini would be providedwith a floating platform, ice boxes, and fish boxes to facilitate unloadingand storing of ice to be used by the fishermen. The floating platforms forKisingitini and Faza would be constructed by lashing barrels to mangrovelogs and then nailing planks to the logs. Mangrove poles would be lashed tothe logs, supporting ropes on which reed mats would be laid to form shadesover the platform. These shades would shield the ice boxes from the sun andthus enable the slow melting ice to last longer. Landing facilities on thesebeaches would not be appropriate, because the water is very shallow and a longand expensive jetty would be required to load and unload fish and ice.

2.15 Estimated working capital requirements, based on experience offishermen's cooperatives, and mission's financial projections, are includedin Project costs.

Fishing Craft and Gear

2.16 Motorsailers. About 50 motor-sailing fishing boats 9 m longwould be built during the Project period. The marine fishery for pelagic,offshore species requires a seaworthy craft of about 9 m length for carrying alarge volume of gillnet through sometimes breaking inlets, and for casting andretrieving the net in open ocean waves. The payload is not especially heavybecause the nets are lightweight and the catch is modest, but the boat must belarge enough to allow the crew to work in a seaway. Each vessel woull bepowered by a 12-hp diesel inboard engine, and would carry about 20 m ofsail for economy and safety. Detailed specifications of this craft areshown in Figure 4. Standard equipment on each boat would include the rigging,propeller, shaft, bearings, and a spare parts kit. In addition, each boatwould be fully equipped with fishing gear, including 20 units of gillnet, 81 mx 9 m each. Most of these craft would be operated south of Mombasa where theneed for seaworthy boats is acute. Their main advantage over traditionalcraft would be to enable the fishermen to increase their fishing range and theaverage number of fishing days per year (para. 4.04).

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2.17 Sailboat Conversion. North of Malindi, where traditional boatbuilding is highly developed, about 15 existing "mashuas" (Fig. 6) of 9 moverall length would be fitted with inboard diesel engines of about 20 hp.More power is required because these traditional hulls are heavier thanthe motorsailers to be built under the Project. Propeller, shaft, bearings,and a spare parts kit would also be included in the conversion package. Thefishing craft so converted would be practically as efficient as the newmotorsailers and would enable crews to extend the fishing range and the numberof fishing days. The conversion cost, however, would be about one thirdcheaper than the cost of a new boat.

2.18 Sailboats. About 25 traditional "mashuas" (Fig. 6) would be builtlocally under the Project. These boats would be fully rigged and fitted forfishing, including simple low cost gear. They would be purchased on creditby experienced fishermen who did not own a fishing boat and who may prefer tooperate solely under sail for reasons of economy, familiarity, and remotenessfrom engine service facilities and fuel supply. This provision would avoiddiscrimination against the traditional fishery, and it would also encourageperpetuation of the wind-powered fleet, a valuable cultural heritage. As thesecraft would be used mainly in remote areas where the fishing effort has so farbeen limited due to the lack of ice, resource availability is not a constraint.

Fish Farming

2.19 A pilot Fish Farming Development Center would be established atKabonyo, in Kisumu d'strict, Nyanza province, (Map 2) or at any other suitablelocation made availa)le by the Government and acceptable to IDA (para. 2.34).The Government is in the process of acquiring land rights for Kabonyo. Selec-tion criteria for a different site should Kabonyo not be available wouldinclude water availability and quality, topography, and soil types and aciditylevels. The main objective of the fish farming program would be the experi-mental production (para 6.02) of a limited number of warm water species:Tilapia nilotica and a combination of chinese carp and common carp. Thesespecies are recommended because the local environment conditions are suitablefor their breeding and also because they utilize the various kinds of naturalfeed produced in the pond and therefore will not require costly supplementalfeeding.

2.20 Over 80% of production (para 4.09) would be of Tilapia niloticawhich is well established and accepted in Kenya but current supply of whichhas not been able to satisfy the growing demand. Common carp (Cyprinuscarpio), a bottom feeder, would help prevent the development of weeds. Silvercarp (Hypophthalmichthys molitrix) and big head carp feed on phytoplankton andzooplankton respectively and would hence require minimum feeding; grass carp(Ctenopharyngodon idella) a potential user of sugar cane leaves and otheragricultural by-products could become a major species where there is anabundant and cheap source of green fodder. Black carp (Mylopharyngodonpicens) would be introduced in every stocking program in order to controlthe Schistosomiasis vector snails.

2.21 Twenty four rearing ponds with water surface areas of 2.7 ha eachwould be developed by constructing earth dikes around each pond. The dikeson the lower end of the two sides would be 4 m wide on top and contain the

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supply canals with outlets to charge the ponds. All dikes would have slopesof one in three on water sides and one in two on land sides (Fig. 8). Thecenter line dimensions of each pond would be 107 m x 278 me Three spawningponds of 0.5 ha each, four nursing ponds of one ha each, aDd five storageponds of 0.2 ha each would also be constructed. The dikes -would have thesame typical sections as those of the production ponds. Metal fences wouldbe provided arcund the spawning and nursing ponds to protect the fry fromXenopus, a frog-like predator. No fencing would be necessary for the storageponds because the frogs do not prey on mature fish. Three weeks after spawningthe fry would be transferred to nursing ponds at a density of about 120,000/ha.They would remain there for 45-60 days until they reach at least 10 to 20grams each; at this size, the frogs can no longer swallow them. When the fryreach 30 grams in weight, they would be separated according to sex by handbefore being stocked into the rearing ponds. Chinese and common carp would beused in the same ponds. About one month would be needed to bring these fry tothe stocking size of five grams. Harvesting would be done at the end of eachgrowing cycle by reducing the water level in the pond and cropping the fishwith seines from a cropping sump located in the deepest part of the pond. Theharvested fish would be taken either to the market or to a storage pond. Thestocking pond would be subsequently refilled and restocked.

2.22 Civil works would also include structures for draining all pondsinto the drainage channel and into each other, and structures for fillingall ponds from the supply canal. Offices, stores, a laboratory, a garage,and a workshop would be built and about 1.5 km of access road developed tocomplete the production facilities of the Fish Farming Development Center.Fig. 8 shows a detailed layout of the Center, including research and trainingfacilities (paras. 2.30-2.32).

2.23 Investments in vehicles and machinery to operate the Center wouldinclude a four wheel drive pick-up truck, a wheel tractor, an eight tontractor trailer, a tank trailer, a 60 hp loader with backhoe, a two tonelevator, a blower for aerating the tanks, pumps and piping, and an adequatesupply of spare parts. Small tools and equipment would include workshopequipment, harvesting gear, aquariums, nursing tanks, and office furniture.

2.24 The main production inputs would be fingerlings, feed, fertilizers,and water. The Fish Farming Development Center would take brood stock oftilapia from lake waters. A limited number of carp fingerlings would beinitially imported. Rice bran and other cheap cereals would be used for dailyfeeding. The quantity of feed would be about 3% of the fish biomass in thepond. To maintain the needed level of nutrients in the water for optimalproduction of natural food, superphosphate and sulphate of ammonia wou1d be

applied every two weeks at the rate of 60 kg/ha each. About 40,000 m ofwater per ha per year would be required for filling each pond twice a year,after allowing for losses from seepage and evaporation. If this operationis successful, in Project year 5, the production cost of the Fish FarmingDevelopment Center is expected to be lower than revenues from sales of fish,and the Center would generate a profit. Staff salaries, and the cost ofmaintaining and operating the production facilities have been included in this

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calculation (para. 4.08). From Project year 0 to 4, however, current expendi-tures are expected to exceed cash revenues and the Center would need workingcapital support. Estimates of incremental working capital requirements duringthe development period were included in Project costs.

2.25 The Fish Farming Development Center would employ about 20 staffin its fish production operation. They would include a Center Manager, andhis deputy, an aquaculturist, a hatchery officer, financial staff, machineoperators, and support staff. An internationally recruited aquaculturistwould assist the national staff. A civil engineer knowledgeable in watermanagement would be employed as a consultant to supervise the constructionof the ponds and the Center structures (para. 2.22).

Training, Research, and Studies

2.26 Fisheries Research - Lake Victoria. After the collapse of theEast African Community, in 1977 (para. 1.41), the Department of Fisherieshas attempted to continue the research work which used to be carried out atJinja in Uganda by the East African Fresh Water Fisheries Organization. Theresearch section at Kisumu has been staffed, and the Department of Fisheriesis now focusing on applied economic research oriented towards the traditionalfishermen. Stock assessment also remains an important research objective forLake Victoria. Specific research programs would be formulated during theProject period and submitted to IDA for approval. Approval of the programswould be a condition of disbursement against investments in this component.While the precise specification of these investments would be in the detailedprograms, they are expected to include two four-wheel drive vehicles, two 9 mfishing boats, fishing gear, life rafts, diving equipment, an echo sounder,laboratory and office equipment, scholarships, exchange programs, books,periodicals, maintenance and operating costs. The feasibility of providinghigh quality fish freezing facilities would also be studied.

2.27 Boat Building, Training and Research. A boat building programis designed to train artisanal boat builders, while producing most boatsrequired for the Project. In addition, two prototype fishing boats would bedeveloped in an effort to adapt modern boat building methods and materialsto the long term needs and preferences of Kenya fishermen. The principalinvestments would be a light truck, shop improvements and tools for theFisheries Department boatyards at Kisumu, Mombasa, and Malindi, and toolingand materials for building the prototypes. An experienced naval architectwould be recruited internationally for the training and research program.Investments for this component would include the labor for the prototypes and50% of the trainee stipends. The remaining 50% would be part of the cost ofmotorsailers (para. 2.16) and transport boats (paras. 2.05 and 2.13).

2.28 Training would be confined to modern methods and materials applic-able to the design and construction of boats produced for the Project. Thecurriculum would stress the rapid construction of strong and light hullsbuilt primarily of wood using contemporary adhesives, coatings, and laminatingtechniques. When combined correctly with laminated wood, small quantities ofchemical adhesives such as butyls, silicones and epoxies allow the use of

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relatively low grade lumber in the construction of high grade boats. Engineinstallation, together with the installation of rudders and steering partswould be included in the curriculum for each trainee. Instruction in theremoval and replacement of all spare parts, provided T-rth each engine in anextensive spare kit, would be combined with scheduled maintenance training onin-service vessels. Courses would last one year. Graduates would qualifyfor the acquisition of a set of tools suitable for practising their trade inthe private sector.

2.29 Selected graduate trainees would produce prototype fishing craftwhich embody design, and construction to meet the evolving fishing and trans-port needs of the lake and marine fisheries. With the assistance and guidanceof the boatbuilding expert, the Kenyan boatbuilders would test ways to applymodern construction methods to combine a maximum of cheap local raw materialswith a minimum of expensive imported products.

2.30 Fish Farming - Research and Training. Besides its productionobjective, the Fish Farming Development Center (para. 2.19) would trainFisheries Department staff, produce fish seed, and carry out applied research.In addition to production, the staff of the center would be involved with thedesign and planning of a second phase expansion, carrying out applied researchon fish farming, and giving basic training in fish farming to staff of theFisheries Department.

2.31 During the second phase, the emphasis would be on the developmentand rehabilitation of several hundred outgrowers' fishponds and the provisionof extension services by the staff trained during the first phase. Trainingwould be expanded as needed. The rehabilitation and development of pondswould be done on a selective basis. Pond sites would have to meet selectioncriteria acceptable to the Center technical staff. The necessary servicessuch as chemical analysis of water and soil should be provided by the Centerthrough the extension officers.

2.32 The cost of the investments described in paras. 2.19-2.25 has beenallocated to production, research or training depending on the expectedutilization of resources. For example, the cost of piping for the rearingponds has been allocated to production, while the cost of piping for theexperimental ponds has been allocated to research. In addition to the above,the main investments in research and training would include a hatcheryshed, a hostel for trainees, dining facilities, a classroom and library,offices, experimental ponds, two four-wheel drive vehicles, furniture andteaching aids, and the cost of operating and maintaining these facilities.The detailed layout of the Center, including the production facilities, isshown in Fig. 8. Substantial technical assistance would be required to ensurea sound technical base for future development. In addition to the aquacul-turist (para. 2.25), a hatchery specialist would be recruited internationallyto serve for the entire Project period. Their appointment would be a condi-tion of disbursement against all Project investments in fish farming (paras.2.19-2.25 and 2.30-2.32). If necessary, consultants would be employed for

- 23 -

extension and fish disease control training, and for the preparation of thesecond phase expansion, as well as for selecting a suitable site (paras. 2.19and 2.34). The Government may contract for these services separately or witha single consulting firm (para. 3.06).

2.33 Stafr Training. About 30 staff would receive formal trainingunder the Project. Scholarships would be provided for the aquaculturist,the hatchery officer, cooperative and credit officers, the chief evaluationofficer, and senior financial staff to attend specialization courses atselected universities and technical training institutions abroad. The pro-curement officer would receive formal training and would then be seconded tothe Ministry of Works where he would receive in-service training on inter-national competitive bidding procedures. Equipment suppliers would trainthe maintenance supervisors as part of their supply contracts. Arrangementswould be made with the Ministry of Agriculture to provide in-service trainingto monitoring and evaluation staff on a rotating basis. The fishing centermanagers would receive training from the Cooperative College. Follow-uptraining would also be provided in Project years 1 through 4 as appropriate.

2.34 Studies. A suitable site for the Fish Farming Development Centerhas been identified at Kabonyo (para. 2.19). The Government has initiated theappropriate steps necessary to make it available for this Project. Shouldthis site be unavailable, the Government would employ an aquaculturist and anengineer to select another site. IDA's approval of the selected site would bea condition of credit disbursement against investments in fish farming (paras.2.19-2.25 anl 2.30-2.,2).

2.35 Lake Victoria Basin Development. The Project would include pro-vision to plan for and initiate an integrated development program for theLake Victoria catchment region. A regional development study would exploreprospects for the region outside fisheries; it would examine several develop-ment possibilities in the areas of social infrastructure, rural industryarid ancillary developments such as feeder road construction. This studyshould assemble available data on the region, propose a general developmentplan, and identify priority development activities. Pilot activities wouldbe initiated under this component, in order to provide a basis for futuredevelopment programs. They would include village processing facilities, suchas flour mills and oil presses, and development of social infrastructure andcommunity installations. Many of these activities have already been identi-fied, and relate to rehabilitation, or to strengthening existing services andinstallations. IDA's approval of the detailed investment plans would be acondition of credit disbursement for this component (para. 3.06).

2.36 Resource Management. To manage the Lake Victoria fishery effec-tively, fish stocks must be increased. Ways need to be found to improve theescape rate of young fish in the breeding areas and subsequent growth rates.A number of fairly simple management methods have been proposed; among these,the setting aside of a few bays and rivers as protected spawning areas shouldhave priority. In some parts of Lake Victoria this could be easily done byadding scrap metal to the spawning beds, thereby making the setting of nets

- 24 -

hazardous. In other cases more elaborate methods might be needed. Under theProject, funds would be provided for a consultancy on active management ofLake Victoria fisheries resources, including recommendations on appropriaterestocking methods (para. 3.06).

2.37 Fishermen's Training. Traditional fishermen both on Lake Victoriaand on the Indian Ocean are highly skilled and sophisticated within the limitsof their boats and gear. There may be some scope, however, for improvingtheir productivity with only small technological changes. For example, amid-water trawl net operated by two sail boats (Fig. 3), an aggressive fishingmethod, is likely to yield good results, but it has never been tried. Sportfishermen using lures, which are unknown to traditional fishermen, havereported excellent catches of Nile perch in Lake Victoria. Under the Project,the Department of Fisheries would employ an experienced master fisherman toconduct fishing trials and introduce fishermen to simple, low cost new fishingmethods. He would serve for six months on Lake Victoria, six months on theIndian Ocean.

Management, Monitoring, and Evaluation

2.38 While the Project is relatively small, its diverse components wouldrequire a considerable management and coordination effort (para. 3.01). Inaddition to the management of the Fish Farming Development Center (para.2.19), two management teams would be established in Kisumu and Mombasa.Each team would consist of an area manager, a cooperative officer, a senioraccountant, a maintenance supervisor, and support staff. A Credit Officer inMombasa would assist the coast cooperatives in their credLt operations. TheMinistry of Environment and Natural Resources would recrult a Project Manager,a Financial Controller, a senior Cooperative Officer, and a ProcurementOfficer to be stationed in Nairobi. Vehicles and office equipment would beprovided. Adequate office space is available in the Ministry of Environmentand Natural Resources in Nairobi, and at the Department of Fisheries RegionalHeadquarters in Kisumu and Mombasa.

2.39 Four statistical officers, four field enumerators, and a seniorstatistical officer would be recruited to monitor and evaluate Project pro-gress. The principal investments would be for means of transport, computing,and field equipment.

D. Project Costs

2.40 Total Project costs are estimated at K Sh 112 million (US$14.9million), of which about K Sh 56 million (US$7.4 million) or 50% representsforeign exchange costs. Details are summarized in the following table:

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a/ b/------ K Sh '000 ----- ------ US$ '000 ------ % of

Project Component Local Foreign Total Local Foreign Total Total

Shore Facilities 12,000 11,000 23,000 1,600 1,500 3,100 28

Fishing Craft & Gear 4,000 4,000 8,000 600 500 1,100 10

Fish Farming 5,000 7,000 12,000 700 900 1,600 15

Training, Research &Studies 13,000 17,000 30,000 1,700 2,300 4,000 36

Management, Monitoring &Evaluation 7,000 3,000 10,000 900 400 1,300 11

Total Base Cost 41,000 42,000 83,000 5,500 5,600 11,100 100

Physical Contingencies 4,000 4,000 8,000 500 500 1,000

Price Contingencies 11,000 10,000 21,000 1,500 1,300 2,800

Total Contingencies 15,000 14,000 29,000 2,000 1,800 3,800

TOTAL PROJECT COST 56.000 56,000 112,000 7,500 7,400 14,900

a/ Rounded to the nearest thousand.h/ Rounded to the nearest hundred.

2.41 Project costs were estimated at prices expected to prevail in June1980. A physical contingency of 10% was applied to all Project costs toreflect a measure of uncertainty on the quantities required. Price contingenciesfor foreign exchange costs were applied at 10.5% p.a. for 1980; 9%, 1981; 8%,1982; and 7%, 1983-85. Price contingencies for local costs were applied atthe rate of 10% p.a. for 1980-82 and at the same rates as for foreign exchangecosts thereafter (Table 2). These rates reflect current estimates of priceincreases in Kenya and worldwide. Taxes and duties on Project goods andservices are estimated at K Sh 12 million (US$1.6 million), which representsimport taxes and duties on goods and services not eligible for exemption fromcustoms, and taxes and duties on fuel and other operating costs. The phasingof Project investments is summarized in Table 2.

E. Financing

2.42 The financing of Project costs would be shared as follows:

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K Sh U $ %--- million ---

Government of Kenya 23 3 1 23Fishermen 2 0.2 2IDA 75 10.0 75

Net Cost (excluding Taxes and Duties) 100 13.3 100

Taxes and Duties 12 1.6Total Project Cost 112 14.9

2.43 The proposed Credit of US$10 million to the Kenya Government wouldbe on standard IDA terms. The Credit would finance about 75% of net Projectcost, including 100% of foreign exchange cost and 35% of local expenditures.Directly or through cooperative societies, fishermen would finance aboutUS$0.2 million or about 2% of net Project costs. The fishermen's contribu-tion would consist mainly of cash payments for fishing craft and gear, and isestimated to average about 10% of the total cost of those investments. TheGovernment contribution of US$3.1 million would finance 23% of net Projectcost.

2.44 Expenditures for civil works at the fishing centers and stations(paras. 2.05 and 2.11), the Fish Farming Development Center (paras. 2.19-2.25and 2.30-2.32), fisheries research (para. 2.26), boatbuilding (paras. 2.27-2.29), training (paras. 2.33 and 2.37), studies (paras. 2.34-2.36), and Projectmanagement (paras. 2.38 and 2.39) would be allocated to the budget of theMinistry of Environment and Natural Resources. The Government investmentsin the Fish Farming Development Center would take the form of regular budgetallocations. Expenditures for fishing centers and stations except civil works(paras. 2.05-2.10 and 2.11-2.15), and for fishing motorsailers (para. 2.16)would also be channelled through the Ministry of Environment and NaturalResources but the Project Financial Controller would account for them sep-arately, because the cooperative societies would be responsible for them(paras. 3.07 and 3.08). The Ministry of Environment and Natural Resources,however, would be responsible for procurement, shipping, and installation ofall goods and services needed to establish the fishing centers and stationsand to build the boats. It would, therefore, retain title to those assetsuntil the cooperatives took possession of them. CBK would finance the coop-eratives acquisition of the fishing centers, stations, craft, and gear as wellas their working capital requirements. The cooperatives would own and operatethe shore facilities and the motorsailers (para. 2.16) and sell the inboardengines (para. 2.17), and the sailboats on credit or cash to members (para.2.18). Fishermen would make down payments of about 10% of purchase price.

2.45 The Government would onlend credit funds to CBK at an interest rateof 6% p.a. CBK would in turn lend to cooperative societies at 9% p.a. Loanmaturities would be up to 10 years depending on the purpose of individualloans and the expected life of the equipment financed. Cooperative societies

- 27 -

would lend to their members at 10% p.a. for up to eight years to finance boatpurchases. These terms are consistent with currently prevailing lending termsin agriculture and with the Cooperative Act of February 1977. Interest ratesin Kenya have been virtually unchanged for several years and there is a grow-ing concern that the Government should adopt more active monetary and creditpolicies to respond to a changing domestic and international economic environ-ment. In May 1979, the Government undertook to review the current and futurelevel and structure of interest rates, in particular those relating to lendingin the agricultural sector. In this review, which is currently underway, theGovernment aims to ensure that interest rate policies are consistent with theobjectives of the Development Plan. The Government, after consulting withIDA, would apply any relevant change in general interest rates implemented asa result of the review to this Project. Assurances were obtained at negotia-tions that the Government would include the above lending terms and conditionsin the Subsidiary Agreement between the Government and CBK. The execution ofa Subsidiary Loan Agreement satisfactory to IDA would be a condition of creditdisbursement for the shore facilities and for fishing craft and gear. Thetotal amount of funds to be onlent to CBK and subsequently to cooperativesocieties and their members on a medium term basis would be about K Sh 25.7million (US$3.4 million) including contingencies. Maturities of the loan fromthe Government to CBK would be scheduled so as to match maturities of indi-vidual loans from CBK to the 11 participating cooperative societies. Thisprovision would be spelled out in the Subsidiary Loan Agreement to preventtemporary shortfalls in CBK's cash flow. Table 3 shows an estimate of CBK'sprojected loan amortization and interest repayments. The participatingcooperatives would be the direct obligors and ultimate borrowers of over 90%of Project credit funis. Because their number is limited, and substantialmanagement support ani guidance would be provided to them under this Project(paras. 3.03 and 3.07), it is not expected that the loan losses experienced inpast credit programs to fishermen (para. 1.46) and smallholders (para. 1.47)would be repeated. A spread of 3% and Government's financing of a creditofficer position (para. 2.38) would be adequate to ensure that CBK earns areasonable profit from its participation in the Project.

F. Procurement

2.46 Civil works contracts for fishing centers and stations (US$1.2million), and fish farming (US$2.7 million) would be carried out by localcontractors to be selected under local competitive bidding procedures whichwere examined during appraisal and are satisfactory. In order to attractcompetition and execute the work expeditiously, civil works for the LakeVictoria shore facilities (para. 2.05) would be tendered as one contract.Two contracts would be required for civil works for the Indian Ocean shorefacilities: one for Shimoni and Vanga in the south, and because of itsremote location, another for Lamu. Generators, ice plants, chillrooms,vehicles, and inboard engines (US$1.5 million) would be procured by inter-national competitive bidding according to Bank/IDA guidelines. Vehicles andequipment would be purchased with an initial supply of spare parts. The tenderdocuments would require that qualified suppliers be represented in Kenya bya responsible firm capable of maintaining and repairing the machinery without

- 28 -

delay. Supply contracts would also provide for the installation of theequipment and training (para. 2.33) as appropriate. Miscellaneous items suchas fuel tanks, electrical cable, piping, small tools, ice boxes, fish boxes,chlorinators, pumps, scales, workshop, office equipment and furniture (US$0.3million) would be purchased off the shelf as part of installation contracts.The East African Power and Lighting Company would be requested to constructthe power line extensions and sub-stations at Kisumu, Homa Bay, and Lamu.Materials and tools for boat building (US$0.5 million) would be purchased bythe Fisheries Department according to Government regulations which are satis-factory. Technical assistance (para. 3.06) contracts (US$1.8 million) wouldbe entered into on terms and conditions satisfactory to IDA. Unit costs oftechnical assistance are estimated at US$3,300 to US$7,500 per staff/month(para. 3.06).

G. Disbursements

2.47 Funds from the Credit account would be disbursed according to thefollowing schedule:

US$ Million

(a) 65% of total expenditures for civil works 2.1

(b) 100% of foreign expenditures and 70% oflocal expenditures for vehicles, boats,equipment, and machinery 1.2

(c) 100% of foreign expenditures and 70% of local expendituresfor boat building materials and boat construction 1.1

(d) 40% of the local operating costs of the Fishing Centersand of the Fish Farming Development Center 1.3

(e) 100% of expenditures for technical assistance,studies, and staff training 2.1

(f) 65% of operating costs of Project management,research, and training programs, includingstaff salaries 1.0

(g) an unallocated amount additional to the abovecategories and transferable to them as required 1.2

TOTAL 10.0

2.48 Disbursements against (a), (b), (e), and finished products in (c)would be fully documented. Disbursements against (c), except for finishedproducts, and (f) would be made against statements of expenditure, the docu-mentation for which would not be submitted to IDA but would be retained by theBorrower for inspection by supervision missions. An estimated schedule of IDAdisbursements is given in Table 4.

- 29 -

H. Accounts and Audit

2.49 The Project Financial Controller in the Ministry of Environment andNatural Resources would establish and maintain adequate books arP records ofthe receipts and payments in respect of the Project and the assets and liabil-ities created by Project transactions, in such a way as to enable separateidentification of all Project accounts from other accounts of the Ministry.He would prepare semi-annual Reports and submit them to the Permanent Secretary.MOCD, CBK, and the cooperative societies participating in the Project wouldalso maintain separate Project accounts.

2.50 The responsibility for auditing Government Ministries rests withthe Auditor General. The accounts of cooperative societies are audited bythe Audit and Accounts Division of Ministry of Cooperative Development,which is currently understaffed. MOCD is in the process of recruiting andtraining additional audit staff. Moreover, cooperative societies may, withMOCD approval, employ private accounting firms to audit their financialstatements. These arrangements are satisfactory. Assurances were obtainedfrom the Government at negotiations that: (a) separate Project accounts wouldbe maintained; (b) the accounts prepared by the Project financial controllerwould be forwarded to IDA, not later than six months following the end of thefinancial year to which they relate; (c) independent auditors acceptable toIDA would continue to be appointed to audit Project entities and accounts; and(d) arrangements satisfactory to IDA would be made for the audit of expendi-tures made against certificates of expenditures (para. 2.48).

I. Environmental Impact

2.51 There is no known significant source of pollutants affecting theLake Victoria and Indian Ocean fishing grounds in Kenya's territorial waters.Project investments in marketing and artisanal fisheries are not expected tohave any adverse environmental impact.

2.52 Investments in Lake Victoria Shore Facilities would aim at reducingpost-harvest losses and improving the transportation and marketing of highvalue fish, without further exploiting resources. Project incremental catchesin the marine fisheries would consist mainly of currently unexploited pelagicspecies, and are not expected to affect the ocean environment adversely.

2.53 Traditional boatbuilding requires substantial amounts of nobletimber. The wood required for one dug-out canoe (para. 1.27) could producethree fine craft using modern methods. Good quality hardwood is stillavailable on the Coast in fair supply, but it has become scarce in the LakeVictoria region. Modern boat building methods introduced under the Project(para. 2.29) would contribute to conserve the diminishing supply of firstgrowth tropical hardwoods. With modern adhesives, high strength, low weighthulls can be built with less wood and lower grade wood than traditionallyrequired. Low grade wood is in abundant supply in Kenya and is readilyrenewable.

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III. ORGANIZATION AND DEVELOPMENT

A. Project Management and Staffing

Management

3.01 A Project Manager in the Ministry of Environment and NaturalResources would be responsible for implementing this Project. Three areamanagers would each be responsible for implementing (i) the freshwaterfisheries, (ii) the marine fisheries, and (iii) the fish farming componentsof the Project. The area managers would report to the Project Manager. Themanager of fresh water fisheries would be stationed at Kisumu, on Lake Victoria,in Nyanza province, and the manager of marine fisheries would be stationed atMombasa in Coast Province. The manager of the Fish Farming Development Centerwould be stationed at the Center.

3.02 The Project Manager would have on his staff a financial controller,a procurement officer and a senior cooperative officer. The financial con-troller would keep all Project accounts with the assistance of senior account-ants in Kisumu, Mombasa, and at the Fish Farming Development Center. Theprocurement officer would ensure that goods and services for the Project wereprocured according to the procedures and implementation schedule agreed by theGovernment and IDA. In addition, he would personally review every order inexcess of K Sh 100,000 and recommend appropriate action to the Project Manager.The senior cooperative officer would ensure that the cooperatie societies areproperly managed and their staff properly trained.

3.03 The area managers in Kisumu and Mombasa would each be assisted by acooperative officer, a senior accountant, a maintenance supervisor, and juniorand support staff. The Mombasa office would include a credit officer. Thecooperative officers would be seconded from the Ministry of CooperativeDevelopment to assist participating cooperative societies in managing thefishing centers. The senior accountants would assist the cooperatives inmanaging their Project accounts and finances. The maintenance supervisorswould service and maintain the plant and machinery at the fishing centers.The credit officer in Mombasa would be seconded from CBK and would supervisethe Credit operations of the cooperative societies. Chart 2 shows the organ-ization of the Project.

3.04 A Senior Statistical officer would be responsible for gathering datafor Project monitoring and evaluation (para. 3.13). His staff would includefour statistical officers and four field enumerators. He would reportto the Project Manager. A Project Monitoring and Evaluation Committee wouldbe established to review the implementation of the Project. This committeewould consist of:

- Director of Fisheries - Chairman- Commissioner for Cooperative Development- General Manager, Cooperative Bank of Kenya- Managing Director, Lake Basin Development Authority- Project Manager, Secretary

- 31 -

The Committee would meet at least once quarterly to review the progress ofProject implementation and make recommendations as appropriate.

3.05 The Project Manager would report to the Permanent Secretary,Ministry of Environment and Natural Resources and would be selected by him inconsultation with the Commissioner for Cooperative Development and the Directorof Fisheries. His appointment would be a condition of Credit effectiveness.The terms of reference and required technical qualifications of the ProjectManager, the area managers, the financial controller, and the procurementofficer were agreed at negotiations. Assurances were obtained at negotiationsthat the Government would consult with IDA prior to their appointment.

Staffing

3.06 Approximately 150 new staff would be required to carry out Projectactivities. They would be mainly junior staff employed by the cooperativesand the Fish Farming Development Center, who are readily available. SeniorProject staff would be recruited mainly from MOCD and Fisheries Department andtrained as appropriate (para. 2.33). Table 1 shows the proposed additionalstaff, by seniority, and by origin. Planning for the recruitment of thesenior Project staff has already started. Technical assistance requirementswould be for two internationally recruited aquaculturists, one of them ahatchery specialist (paras. 2.25 and 2.32), and one boat builder (para 2.27).Consultancies would be needed for the following periods and purposes: (i)nine staff months for the preparation of the second phase of the fish farmingdevelopment program (F-ra. 2.32); (ii) nine staff months for extension trainingin aquaculture (para. 2.32); (iii) two staff months for fish disease control(para. 2.32); (iv) six staff months for the selection of a site for the FishFarming Development Center (para. 2.34); (v) 12 staff months for a LakeVictoria regional development study (para. 2.35); (vi) six staff months fora study of effective ways to restock certain species in Lake Victoria (para.2.36); (vii) two staff months for the feasibility study of a fish freezingplant (para. 2.26); (viii) 12 staff months for fishing trials and experiments(para. 2.37); and (ix) 2 staff months for the supervision of the water flowand drainage systems at the Fish Farming Development Center (para 2.22).Assurances were obtained at negotiations that the terms of reference for alltechnical assistants and consultants employed under the Project would besubmitted to IDA for approval, and that IDA would be consulted prior totheir appointment.

B. Management of Project Components

3.07 Shore Facilities. The area managers in Kisumu and Mombasa and theirstaff would be responsible for the erection of the shore facilities and wouldwork closely with the cooperative societies at each fishing center and station.Design, engineering and supervision of all building activities would be theresponsibility of the Ministry of Works. Each fishing center and stationwould be operated by a cooperative society with technical assistance from thearea manager and his team. Before a cooperative starts operating a center ora station, the area manager would have to certify that it had adequate and

- 32 -

competent staff. This certification might be withdrawn at any time at thesole discretion of the area manager, after consulting witb. the ProvincialCooperative Officer. The facilities would then be operated by staff reportingto the area manager. The minimum acceptable standards would be those currentlyset by MOCD for approving credit to cooperative societies. Those standardsare acceptable to IDA. Initially, the ice plants in Kisumu and Homa Bay wouldbe operated under the control of the area manager. Their management would betransferred to cooperative societies after no less than two years of uninter-rupted operation. This transfer would be subject to approval by the ProjectManager, the Ministry of Environment and Natural Resources, MOCD, CBK and theinterested cooperative society. Assurances that this procedure would befollowed were obtained at negotiations.

3.08 Fishing Craft and Gear. The Department of Fisheries boatyards inMombasa and Malindi would build the fishing motorsailers (para. 2.16) andthe transport boats (para. 2.13), at Lamu, Faza, and Kisingitini. Thetransport boats for Lake Victoria (para. 2.05) would be built at the Kisumuboatyard. Initially, the internationally recruited boatbuilder would fitexisting sailboats with engines. Graduates from the training course wouldeventually replace him in this function. Traditional "mashuas" would be builtby local boatbuilders selected by the Mombasa area manager, after consultingwith field staff of the Department of Fisheries and the boat building expert.The fishing motorsailers (para. 2.16) would be operated by the cooperativesocieties at Lamu, Shimoni, and Vanga, and their members would crew them.Converted sailboats (para. 2.17) and new sailboats (para. 2.18) would beoperated by their owners. Discussions have been initiated. between the Depart-ment of Fisheries and the Kenya National Assurance Compan1,7 a Governmentowned corporation, as well as the Cooperative Insurance Services, an affiliateof the Cooperative Bank of Kenya, regarding the possibility of providinginsurance coverage to Project boats. Assurances were obtained at negotiationsthat the Cooperative Insurance Services would provide insurance coverage toProject boats. If their rates should prove non-competitive, then the KenyaNational Assurance Company would be utilized. Assurances were also obtainedthat the societies would take appropriate steps to provide insurance coverageto their members.

3.09 Fish Farming. All Project fish farming activities, includingresearch and training (para. 2.30), would be the responsibility of theManager of the Fish Farming Development Center, who would report to theProject Manager. The Fish Farming Development Center would be an autonomousunit in the Ministry of Environment and Natural Resources. The establishmentof the Center would be a condition of disbursement against investments infish farming (paras. 2.19-2.25 and 2.30-2.32).

3.10 Freshwater Fisheries Research (para. 2.26) would be carried out bythe Department of Fisheries research staff at Kisumu. The boatbuilding expert(para. 2.27) would be responsible for boatbuilding training, and research.He would report to the Mombasa area manager. Staff training programs wouldbe prepared by the Project Manager in consultation with the Department ofFisheries, MOCD, the Ministry of Works, the Ministry of Agriculture, theDirector of Establishment and consultants hired under the Project (para.3.06) as appropriate. The Department of Fisheries would prepare the terms of

- 33 -

reference and recruit consultants for the selection of a site for the FishFarming Development Center (para. 2.19), the resource management study (para.2.36), the feasibility study for a fish freezing plant (para. 2.26), fishingtrials (para. 2.37), and the Lake Basin Development study and pilot activities(para. 2.35).

Project Completion Report

3.11 The Government would prepare a completion report summarizing Projectperformance and evaluating its impact. The report would be submitted to IDAnot later than six months after the closing date. Assurances on this subjectwere obtained at negotiations.

C. Project Implementation Schedule

3.12 The Project would be implemented over a period of about six years,beginning in July 1980. The first year is referred to as Project year 0because only start-up activities are expected to be carried out during thatperiod. The Project implementation schedule is summarized below and would bediscussed during negotiations:

KENYAFISHERIES PROJECT

Project Iepleorenation Schedule

Noj- l'y- 8 I 2 3 45

F,-ca Y.a.9,/0 1980/81 198lY82 1982/83 1983/84 198485 1985/0

2I3 T 3 1 2 3 8 1 2 3 4 1 2 3 4 / 2 3 4 1 2 3 4

1. ProjecPlanning/Preparation

T 1of Rd ... nce-- K., Stllf

S,ts r/4-io,n Fish .- , D- --04502t,4

T.-4/ of eeeRd-- -- 859/O-l OoIlo

2. P(pjeCt Staffing

8,5- M.o.S,,

Fiosm.-.en C0o11140

Conp-,t;ss Offiw-r

rH-h,, AsOMil f/

Hat-h-r OMlte

Fim.- a 4 refd A-s00flim,

FMio Co, 0 , nd I 1,h sl atin 0 -4 ooo,

P- --COt///O of- - - -i-n

-80eyof c,iT-W-n

90i-n0.;.dm-

Cood li C01 n,/r,0 Ijo IIIIn 8,sild 987)

Eqj4

9. elsr

- 35 -

D. Monitorin_ and Evaluation

3.13 The Project monitoring and evaluation system would have two objec-tives. The first would be to generate reliable statistical information; thesecond one to assess the results of the Project.

3.14 Statistical data collection would complement the Fisheries Depart-ment's work and would be limited to fishing communities affected by Projectinvestments. Information on catches, number of fishing days, markets, andprices is at present inadequate, making it difficult to assess the averageincome of fishermen and its variability. A better knowledge of the pre-Project situation is required so that the effect of the Project on productionand incomes can ultimately be measured.

3.15 The monitoring and evaluation unit would also provide useful feed-back to management to enable them to assess its effectiveness. The assessmentwould involve undertaking a number of ad-hoc studies periodically to judgethe impact of specific decisions. On the basis of these studies, the seniorstatistical officer would recommend action to improve the delivery of fisheriesservices. This analysis and the data collected would be available for use inthe preparation of other programs. Formal and in service training would beprovided to monitoring and evaluation staff.

IV. PRODUCTION

A. Technical Features

4.01 Increases in marketed fish production are expected to result fromthe Project investments in improved marketing infrastructure and from theprovision of fishing craft and gear to fishermen. The feasibility of attain-ing commercial yields from warm water fish farming would be tested. Severalmodels were developed to illustrate expected benefits to fishermen andfishermen's cooperatives benefiting from different combinations of Projectprovisions. Three of these are considered most significant: two modelsrepresenting about 3,000 fishermen who would use the improved shore facilitieson the Lake Victoria and Indian Ocean shores; and one model representing about260 fishermen using the improved mechanized boats provided under the Project.

Lake Victoria

4.02 The provision of ice and chilled stores for fish at eight majorfishing centers strategically located along the lake shore would reducepost-harvest losses and improve the quality of fish at the market. Thismeans that fishermen would be able to sell on average a higher proportion oftheir catch than they do now, at relatively higher prices than those currentlyprevailing. It is estimated, again on average, that about one third of thehigh value fish caught off Lake Victoria spoils before it can be sold. One

third reaches the market in relatively good condition, and the remaining

- 36 -

.hir- needs to be smoked or dried for preservation thus losing approximately60% of the fresh fish equivalent market value. From 1973 to 1978 high valuefish has averaged about 20% of total marketed yield from Kenya's Lake Victoriaw ~sr T, is finamr iellv more attractive to refrigerate high value fish,but occasionally small quantities of low value fish would also be refrigeratedto use up capacity. The marketable yields attainable with and without thePrcject iave been estimated at about 90% and 65% of the gross catch respec-tively. These yields reflect expected spoilage rates for various fish species,fishing methods, environmental conditions (para. 1.15), and mission estimates.

Indian Ocean

4.03 The provision of ice and chilled stores at three major fishingcenters along the Indian Ocean shore would also improve marketable yields offish. The technical coefficients, however, would be different because saltwater fish is less perishable than fresh water fish and the composition andrelative values of catches also vary from fresh water catches. Marketableyields with and without the Project are estimated at about 90% and 80% of thegross catch respectively (para. 4.09).

4.04 Fishermen who would operate mechanized fishing boats would catchpelagic fish with gill nets, a technique well established among Kenyan fisher-men. The new vessels would be more productive than those now in use which arenormally powered by sail alone. Inboard engines would give these vessels abroader fishing range than existing sailboats, they could put to sea inadverse weather conditions, especially in June through August when the monsoonblows hard offshore. These mechanized boats would also )e provided with sailsas standby power, and to economize on the cost of running the engines whenwinds are favorable. It is estimated that average yearly catches of themechanized boats would be about 20 tons. This is over 100% higher than thecurrent estimated average annual 9.6 tons catch of the existing sailing"imashuas" (Fig. 6).

Fish Farming

4.05 Target yields for the Fish Farming Development Center have beenset at 3.5 tons of tilapia per ha per year. If those yields are attained,at full development in Project year 6, the results of the experiment would beconsidered positive and further expansion could be plannede Technically, theproposed target yield is modest given the favorable growing conditions whichexist in many parts of Kenya. It is estimated that, with experienced manage-ment and intensive use of the land and water resources, yields of up to eighttons per ha per year are ultimately possible. It would, however, be unreason-able at this stage to expect yields of four tons per ha per year or higher,since knowledge and experience of warm water fish farming in Kenya are limited.

- 37 -

B. Financial Benefits

Fishermen

4.06 The benefits to fishermen from the proposed Project would be twofold.Cash benefits would accrue to fishermen selling a higher proportion of theircatch at better prices than at present, because of Project investments in fishrefrigeration and transport. Fishermen who operated the Project mechanizedboats could be expected to increase their average cash incomes from fish salesby about 40% during the Project period. Fishermen who installed an engine intheir "mashua dhows" (Fig. 6) could expect their incomes to increase by anaverage 30% during the Project period, as a result of higher catches. Finally,qualified fishermen who purchased a new "mashua" on credit would be likelyto increase their average cash earnings by about 60%. This increase wouldreflect the financial advantage of being an owner-fisherman as opposed tocrewing for pay.

Fishermen's Cooperatives

4.07 It is estimated that the financial rates of return from Projectinvestments in shore facilities would be 20% to the Lake Victoria cooperatives,and 12% to the Indian Ocean cooperatives. The higher return from the lakeinvestments would result mainly from the highly profitable land transport offish. It is not expected that the Indian Ocean cooperatives would engage inland transport of fish as they would rely on existing commercial operators.These financial rates of return reflect estimates of aggregate revenues andexpenses; financial returns to individual cooperative societies on LakeVictoria may be lower than 20%, but are not expected to be below 14%. If theoperation of the fishing motorsailers is included (para. 3.08), the financialrate of return from Project investments to each Indian ocean cooperative isexpected to exceed 15%.

Fish Farming Development Center

4.08 The financial rate of return from directly productive investmentsin fish farming would be 13%. The most critical assumption in this calculationis the yield target of 3.5 tons per ha per year (para. 4.05). If a yield ofonly three tons per ha per year were attained, then the financial rate ofreturn would be 10%. Conversely, if the yield were 4 tons per ha, thefinancial rate of return would be 15%. It is recommended that the Governmentshould not invest in any expansion of the Fish Farming Development Centeruntil yields of at least 3 tons per ha per year were attained.

C. Production Estimates

4.09 The expected incremental production resulting from the Project,while modest in absolute terms, would represent a substantial amount relativeto the size of the directly productive Project investments and to the currentlevel of national production.

- 38 -

Production Project Present Increment aswithout Incremental National Percentage ofProject I/ Production Production 1/ National Production------------- tons per year -- %

Fresh-water fish

- High value 2/ 5,900 375 12,400 3- Low Value 3/ 17,500 400 28,800 1

Sub-Total 23,400 775 41,200 2

Salt water fish

- High value 1,100 700 a/ 2,100 33- Low Value 1,400 800 b/ 2,500 33

Sub-Total 2,500 1,500 4,600 33

Fish Ponds - 300 c/ 600 50

Total 25,900 2,575 46,400 6

1/ Department of Fisheries estimates for 1978. The first column showsproduction in the Project area only.

2/ Includes mainly predators, and Tilapia species.3/ Includes mainly Haplocromis and Engraulycipris.a/ Includes mainly king fish and tuna.b/ Includes mainly shark and ray.c/ Tilapia and some carp.

4.10 Estimates of reduction of post-harvest losses have been made on thebasis of assumptions about the production capacity and projected utilizationrates of the proposed ice plants at Fishing Centers on the Lake Victoria andIndian Ocean shores (paras. 2.06, 2.12, and 2.13). Estimates of incrementalproduction rest on assumptions of estimated catch rates, the average number offishing days per year, and the number of additional fishing vessels proposedunder the Project (paras. 2.16-2.18). Production of the Fish Farming Develop-ment Center is estimated on the basis of target yields of 3.5 tons per ha peryear, and the planned development of fish ponds covering a total of 67 ha.

V. MARKET PROSPECTS AND PRICES

A. Markets

5.01 Project production would be marketed through existing channelswhich are adequate. The Lake Victoria cooperatives would sell high valuefresh fish to private traders and fishmongers who would supply the urban

- 39 -

markets, primarily Kisumu and Nairobi where demand cannot currently be met.Availability of ice at the point of sale, the fishing center, is expectedto be an incentive to more active marketing by local traders who would nolonger depend on ice delivered from Nairobi or Mombasa.

5.02 Demand for fresh marine products is also strong along the Coastand in the major urban centers, but private marketing companies should nothave any difficulty freezing and exporting high value table fish, shellfish,and crustacea if ever a temporary domestic surplus developed. It is notexpected that additional facilities would be required to market the fishfrom the cooperatives to the consumers.

B. Prices

5.03 Price assumptions underlying the financial analysis (paras. 4.06-4.08) reflect the available statistics, actual prices observed at variouslanding beaches in mid-1979, estimates of average catch compositions andof local inflation rates, and supply and demand projections. The averageex-beach price of low value freshwater fish was estimated at K Sh 2.00 per kg;high value, K Sh 6.00. The average ex-beach price of low value marine fishwas estimated at K Sh 4.00 per kg; high value, K Sh 6.00. Fresh tilapia fromponds would fetch an average of K Sh 8.00 per kg. At full development, inProject year 6, incremental production would represent only 6% of currentnational production (para. 4.09). This increase is not likely to depressprices. Moreover, tLe above prices are generally lower than prices for com-parable fish products observed in other developing countries, after takinginto account the relative scarcity of foreign exchange and other factors.

5.04 In Lake Victoria the low value portion of catches would consistmainly of haplochromis species and engraulicypris. The high value portionwould be predators such as Nile perch and tilapia species. Marine catcheswould yield mostly high value pelagic species such as king fish and tuna,as well as low value shark and ray. Marketable yields of valuable crustacea,and of demersal species such as snapper and grouper would also increase some-what, due to the availability of ice. Average price estimates also reflectthose species. Most high value species have a long term export potentialwhich, if realized, is likely to fetch higher prices. In view of the presentuncertainty, however, this factor has been conservatively ignored in the priceestimates.

VI. ECONOMIC BENEFITS AND JUSTIFICATION

A. Benefits

6.01 The principal economic benefits resulting directly from Projectinvestments would consist of increased marketed production of fish. Fishermen,traders, and consumers would share the benefits. The increase would reflect

- 40 -

Incremental catches in the Indian Ocean, production of the Fish FarmingDevelopment Center, and reduction of post-harvest losses in the marine andLake Victoria fisheries. Refrigeration and improved handling and transportare also expected to increase the quality of fish and its value. The valueof annual incremental benefits is estimated at about US$2.1 million at fulldevelopment in Project year 6. No significant foreign exchange benefits areexpected to result from Project investments. However, while immediate exportprospects are uncertain, some of the Project incremental production has exportpotential.

B. Economic Rate of Return

6.02 The overall economic rate of return from Project investments isestimated at 16% over 20 years. The economic rate of return from the invest-ments in Lake Victoria fisheries is estimated at 16%; Indian Ocean fisheries18%. The analysis Included the direct economic benefits (para. 6.01) and allProject investment costs, except research, studies, and training costs notrelated to the quantified economic benefits, such as training of fish farmingextension staff. Fishermen's labor costs were included in the analysis.Hired labor was valued at the market wage rate which is assumed to reflect itsopportunity cost. The labor of self-employed fishermen was valued at twicethe market wage rate to reflect the relative scarcity of entrepreneurs. Thisratio approximates the average variance in actual earnings. Foreign exchangecosts were valued at US$1 = K Sh 10.5 as opposed to the prevailing rate of US$1 = K Sh 7.5 to reflect the scarcity of foreign exchange. Cost and benefitscalculations are based on prices expected to prevail in June 1980 in Kenya.These prices were adjusted to arrive at the corresponding shadow price and toreflect expected relative movement on the world market prices of petroleumproducts. The establishment of the Fish Farming Development Center (para.2.19) is a pilot operation to test the commercial viability of warm water fishfarming in Kenya, and assemble operational and organizational data to planfurther expansion. The Center would train fisheries extension staff, carryout applied research, and produce fish seed. It would be the nucleous fordevelopment of fish farming among smallholders. The introduction of small-holders to fish farming technology would start in the third year of theProject and would be expanded in a second phase to be prepared under thisProject. The proposed size for the Fish Farming Development Center wasdetermined on the basis of the least cost at which the results of the experi-ment would be conclusive.

C. Risks

6.03 The Project's design is technically basic and simple, a featurethat is expected to minimize risks. Incremental production targets aremodest (para. 4.09), and well within the most conservative estimates ofresources availability. With the exception of fish farming, the Project'ssuccess does not depend on new or untried technology. While tilapia farminghas been going on for some time in Kenya, yields have generally been lower

- 41 -

than those projected for the proposed Fish Farming Development Center. Thiscomponent is experimental, and limited in scope because its ultimate viabilityis uncertain. Fishermen are well aware of the advantages of refrigeration,and those who have had the opportunity to use engines have become very profi-cient in their operation and maintenance.

6.04 The principal risk the Project would face is failure of the coopera-tives to manage the fishing centers effectively and to operate their facili-ties, mainly the ice plants and refrigerated stores efficiently. This riskis likely to be mitigated if the cooperatives receive the support and confi-dence of most fishermen in the areas they are serving. The cooperatives'ability to provide improved services would be a significant motivating factor.Private operators would lack the financial incentive to provide the sameservices to fishermen. The Government wishes to promote and guide thedevelopment of the fishermen's cooperatives but finds it neither appropriatenor feasible that their management and operation become direct long termGovernment responsibilities. It would appear that the only realistic longterm solution is for the cooperatives to operate the fishing centers to beestablished under the Project.

D. Sensitivity Analysis

6.05 It is difficult to quantify management risks. The most criticalactivity of the fishing centers, however, would be the production of ice.Management inefficiencies could result in lower ice production and reduce theexpected benefits from refrigeration. It is estimated that the ice plantswould run 16 hours a day, 230 days per year at full Project development.If the average running time were reduced to 12 hours per day, the economicrate of return would be reduced by one percentage point to 15%. If theplants operated 200 days per year instead of 230 days per year, the economicrate of return would be 15%. If the ice plants were operated three shiftsper day, instead of two, which is common practice in several countries, theeconomic rate of return would increase from 16% to 18%. If foreign exchangecosts were not shadow priced, the economic rate of return would be 20%.

E. Income Distribution and Employment

6.06 The relative poverty level in Kenya was calculated at US$122 percapita per year in 1978. About 80% of prospective Project beneficiariescurrently earn the equivalent of US$80 per capita per year on the averageincluding subsistence. The Project is therefore addressing the needs of thepoorer segments of Kenyan society. At full development, beneficiaries'average annual per capita incomes would have increased by about 50% to US$120in constant 1979 monetary units.

6.07 Employment creation would be modest. The Ministry of Environmentand Natural Resources and the Cooperatives would employ approximately 150additional people to provide Project related services. New jobs would alsobe created through the Project's construction activities.

- 42 -

VII. GOVERNMENT BUDGET

7.01 The cost of operating the fishing center" --"le be recovere;l fromthe fishermen by the cooperative societies mostly through sales commissions.The Government would in turn recover most development costs of the fishingcenters, including the cost of all renewable machinery and equipment, andworking capital advances directly from the cooperatives. The Governmentdoes not intend to recover the cost of roads, buildings, and other permanentinstallations at the fishing centers directly, because it considers them anextension of basic infrastructures that would benefit the population at large.Direct charges to recover these costs would act as disincentives to participa-tion in the Project. Some of these costs would be recovered indirectlythrough taxation of Project benefits and beneficiaries. The use of theProject shore facilities would not be limited to members of fishermen'scooperatives.

7.02 If the pilot experiment is successful, it is expected that allcosts related to the production of the Fish Farming Development Center,including the development costs, would be recovered through the sale of fish(para. 4.08). The cost of research, training, and studies for further aqua-culture development could only be recovered after the Project period tothe extent that the Government decided to expand production of fish fromponds. This decision would largely depend on the performance of the FishFarming Development Center.

7.03 During the Project period, the Government would contribute aboutK Sh 23 million (US$3.1 million) to Project expenditures (para. 2.43).Average annual direct expenditures for Project related services are estimatedat about K Sh 8.0 million (US$1.1 million) from 1980 to 1990 at current prices,reflecting current estimate of price increases in Kenya and worldwide (para.2.42). It is expected that the Government would recover most Project relatedcapital and recurrent expenditures through direct taxes and loan repaymentsand fund the balance from general revenues. The Project related Governmentcash flow shows a cumulative cash flow deficit of K Sh 9.6 million (US$1.3million) for ten years (Table 3).

VIII. AGREEMENTS AND CONDITIONS

8.01 During negotiations, agreement was reached on the following principalpoints:

(a) the site of the Fish Farming Development Center (para 2.19)would be at Kabonyo or at any other suitable locationacceptable to IDA, should Kabonyo be unavailable;

(b) the terms of reference of the Project Unit and of key staff;

(c) the Project boats would be insured by the cooperativesocieties on behalf of their members (para 3.08).

- 43 -

8.02 During negotiations, assurances were obtained:

(i) that separate Project accounts would be kept (para. 2.50);

(ii) that the accounts prepared by the Project financial controllerwoulu be forwarded to IDA not later than six months followingthe end of the financial year to which they relate (para. 2.50);

(iii) that independent auditors acceptable to IDA would continue tobe appointed to audit Project related entities and accounts(para. 2.50);

(iv) that arrangements satisfactory to IDA would be made forthe audit of expenditures made against certificates ofexpenditure (para. 2.50);

(v) that the Government would consult with IDA before appointingkey Project staff (para. 3.05);

(vi) that the Government would submit terms of reference andqualifications of consultants and internationally recruitedexperts engaged for the Project to IDA for its approvaland consult with IDA on their appointment (para. 3.06);

(vii) that the management of the ice plants in Kisumu and HomaBay would devolve to cooperative societies after no lessthan two yeirs of operation and with the approval of theProject Man.ger, the Ministry of Environment and NaturalResources, MOCD, CBK, and the interested cooperative(para. 3.07); and

(viii) that the Government would prepare a completion reportsummarizing Project performance and evaluating its successand that this report would be submitted to IDA not laterthan six months after the expected closing date (para. 3.11).

8.03 The appointment of the Project Manager would be a condition ofCredit effectiveness (para. 3.05).

8.04 The following would be conditions of Credit disbursement for thecomponents indicated below:

(a) Regarding Fisheries Research on Lake Victoria (para. 2.26),IDA's approval of detailed programs;

(b) Regarding fish farming (paras. 2.19-2.25 and 2.30-2.32),

- 44 -

(i) the appointment of an aquaculturist and a hatcheryspecialist (para. 2.32);

(ii) IDA's approval of a site for the Fish FarmingDevelopment Center (para. 2.34);

(iii) the creation of the Fish Farming Development Centeras an autonomous entity (para. 3.09);

(c) Regarding development studies and activity in the Lake VictoriaBasin (para. 2.35) IDA's approval of a detailed investmentplan; and

(d) Regarding shore facilities and fishing craft (paras. 2.04-2.18);the execution of a Subsidiary Loan Agreement satisfactory toIDA between the Government and CBK (para. 2.45).

8.05 Subject to the above assurances and conditions, the proposed Projectwould be suitable for a Credit of US$10 million to the Government of Kenya onstandard IDA terms.

May, 1980

- 45 -

MATERIAL AVAILABLE IN IMPLEMENTATION VOLUME

ANNEXES

1. Development Cost Projections

Table 1. Project Costs SummaryTable 2. Lake Victoria - Shore Facilities - Capital CostsTable 3. Indian Ocean - Shore Facilities - Capital CostsTable 4. Fishing Craft and Gear - Investment CostTable 5. Fish Farming Development Center - Investment CostsTable 6. Fisheries Research - Lake VictoriaTable 7. Boatbuilding - Training and ResearchTable 8. Fish Farming - Research and TrainingTable 9. Staff Training, Research and Studies - Investment CostsTable 10. Management Monitoring and EvaluationTable 11. Summary of InvestmentsTable 12. Average Vehicle Maintenance and Operating Costs.

2. A. Lake Victoria FisheriesB. Marine Fisheries

3. Fishing Cooperatives - Selected Statistics

4. Aquaculture

5. Financial Analysis

Table 1. Lake Victoria - Shore Facilities - ConsolidatedPro-forma Cash Flow

Table 2. Indian Ocean - Shore Facilities - ConsolidatedProforma Cash Flow

Table 3. Fish Farming Development Center - Pro-forma Cash FlowTable 4. Lake Victoria Shore Facilities - Operating CostsTable 5. Indian Ocean - Shore Facilities - Operating CostsTable 6. Fish Farming Development Center - Operating CostsTable 7. "Sesse" canoeTable 8. "Mashua" DhowTable 9. Mechanized GillnetterTable 10. Mechanized "Mashua"Table 11. CBK Balance Sheet at Year Ended June 30Table 12. CBK Profit and Loss Statement for the Year Ended June 30

(KSh Million)Table 13. CBK Funds Statement at Year ended June 30Table 14. CBK Schedule of Selected Financial IndicatorsTable 15. CBK Past Due Loans at 10/31/78

Appendix 1. Basic Assumptions

- 46 -

ANNEXES (Continued)

6. Economic Analysis

Table 1. Economic BenefitsTable 2. Economic CostsTable 3. Economic Rate of ReturnTable 4. Lake Victoria Fisheries - Economic Rate of ReturnTable 5. Marine Fisheries - Economic Rate of Return

Appendix 1. Basic Assumptions

- 47 -

KENYA FISHERIES PROJECT Table 1

Proposed Staffing

I/Senior- Junior

Personnel Originating from: Staff Staff Total

lo Ministry of Environmentand Natural Resources 7 87 94

2. Ministry of CooperativeDevelopment 1 2 3

3. Cooperative Bank of Kenya - 1 1

4. Cooperative Societies - 50 50

Total 8 140 148

1/ Job group K or equivalent and above.

May 8, 1980

- 48 -

Table 2

KENYA

FISHERIES PROJECT

Project Costs Summary(K Sh '000)

--------------------- Year -------------------- ForeignTotal Exchange

O 1 2 3 4 _5 0-5 2

Shore Facilities

Lake Victoria 100 4,710 5,171 1,367 600 - 11,948 43Indian Ocean 200 4,716 2,798 1,148 708 1,427 10,997 49

Sub-Total 300 9,426 7,969 2,515 1,308 1,427 22,945 46

Fishing Craft & Gear

Motorsailers - 697 1,394 2,091 2,788 - 6,970 47Engines - 98 199 199 249 - 745 63Sailboats - 90 134 157 179 - 560 4

Sub-Total - 885 1,727 2,447 3,216 - 8,275 46

Fish Farming Development Center

Development Cost - 5,673 2,912 92 - - 8,677 54Equipment - 386 269 426 - - 1,081 72Working Capital 64 323 436 666 325 - 1,814 48

Sub-Total 64 6,382 3,617 1,184 325 - 11,572 55

Training, Research, & Studies

Freshwater Fisheries Research - 642 699 291 279 267 2,178 71Boat Building - Research &-Training 326 603 371 2,198 406 61 3,965 59Fish Farming - Research & Training 250 7,895 5,033 2,421 2,584 1,974 20,157 57Staff Training 676 148 48 64 48 - 984 50Studies and Technical Assistance 1,463 450 300 300 300 300 3,113 67

Sub-Total 2,715 9,738 6,451 5,274 3,617 2,602 30,397 59

Management, Monitoring & Evaluation

Capital Cost 235 1,001 1,069 329 - - 2,634 69Operating Cost 93 921 1,364 1,480 1,480 1,480 6,818 17

Sub-Total 328 1,922 2,433 1,809 1,480 1,480 9,452 31

Total Base Cost 3,407 28,353 22,197 13,229 9,946 5,509 82,641 50

Physical Contingencies 340 2,835 2,220 1,323 995 551 8,264 50Price Contingencies 1/ 160 4.224 5,238 4,299 4,157 2,848 20,926 47

Total Contingencies 500 7,059 7,458 5,622 5,152 3,399 29,190 48

TOTAL PROJECT COST 3,907 35,412 29,655 18,851 15,098 8,908 111,831 50

1/ Base costs estimated at prices expected to prevail in June 1980.Price contingencies were estimated as follows:

Foreign Exchange Costs Local Costs

1980 10.5% per annum 10% per annum1981 9.0% per annum 10% per annum1982 8.0% per annum 10% per annum

1983-1985 7.0% per annum 7% per annum

February 19, 1980

- 49 -

Table 3

KENYA

FISHERIES PROJECT

Government Cash Flow(KSh Million)

------------------- Project Year ----------------------------0 1 2 3 4 5 6 7 8 9 10

Sources of Funds

IDA 2.3 3.7 9.0 11.3 15.0 15.0 18.7 - - - -

Taxes & Duties 0.4 3.9 3.8 3.2 3.0 2.6 3.5 3.7 4.0 4.2 4.7

CBK - - Amortization - - - - - - - 6.4 6.4 6.4 6.5

- Interest - - - 0.9 1.8 1.8 1.8 1.6 1.1 0.4 0.2

Fishermen - - 1.0 1.0 - - - - - - -

Total Sources 2.7 7.6 13.8 16.4 19.8 19.4 24.0 11.7 11.5 11.0 11.4

Uses of Funds

Project Expenditures 3.9 35.4 29.7 18.8 15.1 8.9 7.5 8.0 8.6 9.2 9.9

IDA Service Charge 4/ - - 0.1 0.2 0.3 0.4 0.5 0.6 0.6 0.6 0.6

Total Uses 3.9 35.4 29.8 19.0 15.4 9.3 8.0 8.6 9.2 9.8 10.5

Net Cash Flow (1.2) (27.8) (16.0) (2.6) 4.4 10.1 16.0 3.1 2.3 1.2 0.9

Cumulative Net CashFlow (1.2) (29.0) (45.0) (47.6) (43.2) (33.1) (17.1) (14.0) (11.7) (10.5) (9.6)

1/ In current prices2/ Includes estimated incremental sales and excise taxes3/ Loan amount KSh 25.7 million. Average grace period: 4 years. Average life of loan:

6 years. Average final maturity: 8 years. Interest rate: 7% p.a.4/ Standard IDA terms

March 12, 1980

- 50 -

Table 4

KENYA

FISHERIES PROJECT

Estimated Schedule of Disbursements

IDA Fiscal Year Cumulative Disbursement

and Quarter at Quarter End(US$ thousand)

1980-81

September 30, 1980December 31, 1980 a/ -March 31, 1981 100June 30, 1981 200

1981-82

September 30, 1981 300December 31, 1981 400March 31, 1982 600June 30, 1982 800

1982-83

September 30, 1982 1,000December 31, 1982 1,300March 31, 1983 1,600June 30, 1983 2,000

1983-84

September 30, 1983 2,400December 31, 1983 2,800March 31, 1984 3,200June 30, 1984 3,500

1984-85

September 30, 1984 4,000December 31, 1984 4,500March 31, 1985 5,000June 30, 1985 5,500

1985-86

September 30, 1985 6,000December 31, 1985 6,500March 31, 1986 7,000June 30, 1986 7,500

19"6-87

September 30, 1986 8,000December 31, 1986 b/ 9,000March 31, 1987 10,000June 30, 1987 c/ _

a/ Expected Date of Effectiveness - October 15, 1980b/ Expected Date of Project Completionc/ Closing Date.

December 13, 1979

KENYA

FIShERIES PROJECT

Economic Rate of Return(K Sh '000)

------------------------------------------------------------------------ Y ear ------- - - - - - - - - - - - - -0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15-19

Economic Benefits

Post-Harvest Loss Savings - - 1,062 2,125 3,187 4,250 4,250 4,250 4,250 4,250 4,250 4,250 4,250 4,250 4,250 4,250Fish Production - - 1,850 3,600 5,650 7,700 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400 8,400Marketing - - 738 1,475 2,213 2,950 2,950 2,950 2,950 2,950 2,950 2,950 2,950 2,950 2,950 2,950

Total Economic Benefits - - 3,650 7,200 11,050 14,900 15,600 15,600 15,600 15,600 15,600 15,600 15,600 15,600 15,600 15,600

Economic Costs

Capital Costs 1,707 14,389 13,207 5,826 4,822 1,629 1,287 2,038 1,005 242 820 5,347 5,546 1,249 765 526Operating Costs 314 2,021 3,812 5,311 5,621 6,223 6,223 4,943 4,943 4,943 4,943 4,743 4,743 4,743 4,743 4,743Physical Contingencies 171 1,440 1,321 584 483 163 129 203 100 24 83 535 554 126 77 52Adjustment for Working Capital (332) (1,362) (2,018) (2,533) (1,462) (1,100) - - - - - - - - - -Adjustment for Taxes (282) (2,280) (2,382) (1,561) (1,441) (1,099) (1,052) (978) (832) (725) (807) (1,413) (1441) (839) (771) (738)Adjustment for Foreign Exchange 299 2,454 2,419 1,356 1,197 757 703 721 554 432 524 1,235 1,266 579 501 463Incremental Fishing Effort - 90 150 200 250 500 500 500 500 500 500 500 500 500 500 500

Total Economic Costs 1,877 16,752 16,509 9,183 9,470 7,073 7,790 7,427 6,270 5,416 6,063 10,947 11,168 6,358 5,815 5,546

Net Economic Benefits (1,877) (16,752) (12,859) (1,983) 1,580 7,827 7,810 8,173 9,330 10,184 9,537 4,653 4,432 9,242 9,785 10,054

Economic Rate of Return: 16 %

February 18, 1980

KENYAFISHERIES PROJECT

Fisheries Department 1980 Organization Chart

Minister of Environmentand Natural Resources

I Perrnanent Secretary

Director of Fisheries |-m Director Research Institute 11_

| Assistant Director of Assistant Director of Assistant Director of | Assistant Director of Fisheries

Fisheries (Marine & Coastal) Fisheries (West) Fisheries (Central) (Research and Development)us

Senior Fisheries Senior Fisheries Senior Fisheries Senor Fseries Senior Fisheries Senior Fisheries Senior Fisheries Senior FisheriesOeniorcFisheries Ofnicr Fisheries Ofnicr Fisheries Ofnicr Fisheries Officr Fisheries Oeficr Flsheries Officer OfficerOfficer Officer Ofticer Officer Officer Oificer Marketing and Research and

Mombasa Deep Sea Lake Victoria Fish Farning Coordination Fish-Farming Statistics Training

Fisheries Fisheries Fisheries Fisheries Fisheries F Fisheries Fisheries

Officers Officers Officers Officers Officers Officers O Officers

Assistant Assistant Assistant Assistant Assistant

Fisheries Fisfseries Fisheries Fisheries Fisheries

Officers Officers Officers Officers Officers

January 31, 1980WWorld Bank - 21403rt

KENYAFISHERIES PROJECT

PROJECT MANAGEMENT

Project Monitoring andEvaluation Committee

PROJECTMANAGER

Procurement OfficerFinancial ControllerSr. Statistical OfficerSr. Cooperative Officer

Area Manager ~ ~ ~ ~ m uide

Kirsumu Manager F _A_r_e_a_ _ ___ u Manager anmMasdKi5umu* Fish Farming,Mom a .

R Development Center

X 1-H XT~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-

a L~~~~~~~n

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. ~~~~~~~~~Boat Building Boat BuildingL . | _ _ _ ~~~~ ~ ~~~~~~~~~~~Yard Yard _ ;_

l l l l~~~~~~~~~~~~7 Kisum u Mombasa and MalindiI

0 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Fam Jnsrngitina

January 1980 VWorld Bank- 21404

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UGA N DA a - Kakameg A 5. E T HI OP I A

'SOMALJA

_ 0 Ukm P g / Buf.3re(tta ~~~~~~~~~ >> @U g (ANtKNYA

; X ~~~a oSk<,lgcng0BIU -<

SA ' 2 e ~~~ _ >Ei seno:Ljk 33-0'

).4 ~~~~~~~~~~~~~~~~ \ ( ~~~~~~~~~~Inlernrotlonol trunk rod osprralr surface lO

\ \~~~~~~~~~~~~~~~~~~~~~~~~I.. I NaeLiurc trunk rooasaspnalr surfcce

iYord 33SSSAnnO,cas.rt/. iol Prrmary roads. aspha surfacesue@ C=unnere 55N O/ d d uf AThd d ea3viosw used aRdhdffle r> ro 4rT o Siccr.crI * PrIma ry roa ds, oorth ,rfuu so

i = r C v ~~~T AN Z A N I A \rAIOEE5 s I 15 20racass cis bouudoriec

-01W -a-ernrionol b- undies - oo

38 34 '0° /4'1 5p/enp7Cog,n rpt

0o o FISHERIES PROJEC KILOMETERS 0 10 20 30 40 0 60 7 0 EO 90 100oF15HERIES PROJECT I,...... .Indian Ocean MILES o) 10 20 30 40 5 0 6O

* Proposed fishing centers

* Proposed fishing stnations

Fishing grounds Gariona

Fisheries Department headquarters

.I Fisheries Department boatyords Ncbi N -

100 fathom line - r'

Direction of ocean currents iS M A L I A; -' Direction of monsoon winds

*' +~ Airfields / landing strips

' Raiiways o . r1° ASPHALT EARTH

\ % c_5HLVun International frunk roads

Natisonal trunk roads

- Primary roads

------ Secondary roads .

District boundcries "\

Provincial boundaries N 'N \/

International boundaries Hula

O ¢X.-jC =

T A N Z A N I A *\ < t I q S aANI~~~~~~~~~~~~~~~~~~~~~~~~~~ D A NE OEAVr

, /VA 39° i)nsf,o >\ t 4Po t ii 2 A N

rrrdt, ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~TAUA1 :1 6ily '1& b

+~~~~~~~~~~~~~~+

N I a S~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~UA

'~~~~~~~~~n no~~~~~~~~~~~ I,..

N~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~OAIN a~~~~~~~~~~~~~~~~~~~~~~~~~4

T N Z N I A NAZNAO2Aknr~~~ v,ror 'N Ttoo~~~~~~~ 4 ?t ~ ~ ~ /56ot~~~l}kryp, -or ~~~~~~ doom,~k

4n 2 .4o~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

½! 1 olindi V Q C F A N~~~~~~~~~~ZABIA /~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~OABO

39-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Ti opbab. rprdb h

I

Fig. 1

KENYAFISHERIES PROJECT

SELECTED FISHING METHODS

Marking

i/ nCanoe About 40 M Fiag

Sailing Canoe ., /

Surface ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ 0 c

Line ~~~~~~~~~~~~~~~~~~~~About 2 m

Sinkers

ine About 20m~~bou 8C

BotBi o.................... ...... ainWo Ma

ZSailin Canoe Lin

~~~~~~~~~~~~~~~~~~~~~~Vol Ban -lAbu 2082

KENYAFISHERIES PROJECT

SELECTED FISHING METHODS

Motor Trawler

x~~~~~~~~~~~~~~~~~~~~~~~~~~~~~rw ,Net

BOTTOM TRAWBL OET O

Otte,Bdr Bar

L a-v Net

| AB-OIJT 9rl

LI E A C H S E I N E

Wo~~~~~~~~~~~~~~~Vr d B-nk 208Bc,

Fig.

KENYAFISHERIES PROJECT

SELECTED FISHING METHODS

.:......vi. . ..... .... ... . .. .B~~~~~~ ........... V.%%

~~~~~~~~~~~~~~~~~~~~~............ .. ., ...x

</ | \\ / ... n .... - X.. ... . ...

FishermanKrosene Fisnerman

Lamp

Surface

DIP NET # Paddle

Fine Mesh Net

About 5 mn

2 Sailing Canoes

TRAWL NET (MID-WATER)

~~~+ ~~~~~~~- \rr a~~~~~F-ots

~~~--_ ) _T~~~ravvl Net

Bottom

World Bank - 20827

I S~~~~~~~~

X oD ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~... --e@wb ----

U.1t | i ------

m ~ " _ _ 7

, z

o '~~~~~~~~~~~~~~~1

.~~~~~~~~~~~~ 5-

I *~~~~~~~~~~~~-

00mImm

C' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ o= -5~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

3O 3 3

Fig. 5

"Sesse" canoes of Lake Victoria Provide subsistence incomes for about

Fig. 6

Sailing "mshiin" Ahnnrc nn Varmm7 I Or.rel_ 1

I -~~~~~~~~Wwr'~- xr Fig. 7

, M,i, . i x * .- ;

* £~~~~~~~

AL~~~~~~~~~~~~~~-

i :71~~~i;j

Lack of ice and transp o rs te mg of L V

ss ''-;''~~~~It -

b _!k ' ak'z'""' - ' i- - .~~

X '', S '-y d ;a%~~~~~~~~~~*s

F\~~~~~~~~~~4, 4 ,,,s' *~~~~~~~~~~~~~~~~~~~~~

r w % /e w w ,

Lack of ice and transportation restricts the marketing of Lake Victoria?'s

6 6

x A A x AlA A___WS

2: 1< ,t M: \, 1 2:1

A ~ j 2E4 i fA

A 264~~~~

A A

A ASECTION X - X

A A

A A 4 4

A A . W.S.

A A 31 11 3-t 31

_ I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1B B B B-E1_P B i94

C C § C C Fenced ~~~~~~~~~~~~~~~~~~~~~~~~~~~RIIN _ 590Fenced SECTION Y Y -

sPJw SPawn SPe E | E E056Ha 0'5He 05H || E E E

z ed E E Ete E E ET Fish Farming Development Center

LEGEND Surface AreaA Production Ponds 2 7 HaS - Storage Ponds 0.2 Hs

Building Aena C Nursing Ponds 3-1.0 He-1-0.5 Hafor Hatcher; ' \ Building Ares D Spawning Ponds 0.5 HaSIted, Labors. \ N' for Garage, Workshop, E E.wrerirenal Ponds - 18 - 0.05 Ha - B - 0.1 H.

tory. &Sotaff' Stares, Off ion. Clasaroone,Note. Nursing and spawning ponds to be fenced to prevenh

frogs fr.. entering

Nute. All dimensions in nters

Mul Ruad

World Bank -20d35