LAKE FISHING CREDIT PROJECT LAKE NOKOUE PEOPLE'S REPUBLIC OF BENIN

Delphin Gnohouedokonon

Centre d'Action Régionale pour le Dévelopement Rural

1. INTRODUCTION

CARDER, the Regional Action Centre for Rural Development, which has been operational since 1976, is a state body of industrial and commercial character with civil status and financial autonomy. It is responsible for all Technical Departments of the Ministry of Rural Development and Cooperative Action at a provincial level.

The Village Development Fund (VDF), which provides financial assistance in the form of credit and subsidy to village communities (particularly cooperatives), was set up in 1979 by the Atlantic section of CARDER with the assistance of the Benin-German Rural Development Project, to provide material and financial support to peasants', stock-breeders' and fishermen's cooperatives.

1.1 Fish resources of Lake Nokoué

Lake Nokoué is a dynamic ecosystem composed of varying elements: sea, lagoon and flood-plain. It is the largest (160 km²) and most important body of water in Benin's lagoon system. Mineral deposits of marine and continental origin constitute the basis of the lake's primary productivity. The lake's connection with the Atlantic Ocean through the Cotonou channel attracts marine and anadromous species. The composition of the water facilitates the reproduction of freshwater species, particularly Cichlidae, which dominate the catch. Akadja, or branch fisheries¹, are of major importance to the lakeside villages, providing more than 50 per cent of the lake's output when ecological and biological conditions are favourable. Since 1985, however, the lake has been in a state of ecological degeneration brought about by the permanent reopening of the Cotonou channel. Before, the lake was relatively rich in biological resources. The fishing community utilizes various techniques and gears to catch, in order of importance: Cichlidae, crabs, Cluplidae, Penaeus duorarum, Bagridae and Mugilidae. On the basis of statistical data furnished by the Lake Fishing Project, the output of the lake was estimated at 16 682 tonnes in 1987 and 14 396.36 tonnes in 1988. Taking the average price of a kilogram of mixed fish and shellfish as CFAF 400², the economic value would be CFAF 6 672 800 in 1987 and CFAF 5 758 544 in 1988.
¹ Branches which are fixed to the lake bottom to form a so-called fishing park act as a fish aggregating device or fish habitat, which is then fished at regular intervals.
² CFA Franc 1 = F0.02

1.2. Socio-economic environment of the fisherfolk

Over 90 per cent of the men living on the lake shore are involved in fishing activities, such as branch fishing, barrier-trapping, fixed-net fishing, sweep-net fishing and line fishing. The rest are involved in river transport, principally in trading with Nigeria. Women deal with fish marketing and processing, such as smoking, salting and drying. Trade is a part of women's daily lives and the substantial income which their activities yield ensures them a position of importance in their society.

2. PROJECT OBJECTIVES

The project has the following objectives:

• to grant loans for the procurement of fishing equipment, such as branches and nets, to help fishermen's associations and cooperatives to develop branch fisheries;

• to stimulate and encourage self-help among members of the cooperatives;

• to create and develop the material basis of these structures, and

• to promote self-management of the loans at their disposal.

2.1. Financial analysis and profitability study

An estimated investment of CFAF 3 026 100 is required to set up 3 ha of Akadja (the surface area recommended since 1983). The loan from the VDF is CFAF 2 700 000; the remaining CFAF 326 100 required is the contribution of the cooperative which is composed of 20 people on average. The loan is repaid in three equal instalments over a period of three years. The financial viability drawn from the profitability study is presented in Table 1.

¹ The returns are estimated on the basis of:
- average selling price of CFAF 350 per kg;
- a production of 2.5 tonnes/ha in the first year;
- a production of 3.0 tonnes/ha in the second and third years;
- a production of 3.5 tonnes/ha in the fourth year. (Thus, in the first year, 2.5 tonnes × 3 ha × 350 f/kg =CFAF 2 625 000)
² Operational costs include: hiring of fishing equipment, labour,renovation of fishing park (25 per cent of the initialinvestment costs), amortization of loan and other expenses.From the fourth year onwards, there are two changes in theseoperational costs:
- the loan is repaid
- the renovation charges increase to 50%.

3. PROJECT IMPLEMENTATION AND RESULTS

In the promotion of branch fisheries, the technical operations conducted by CARDER-Atlantic on Lake Nokoué are directed towards the fishermen of the sô-awa and Cotonou districts. The Project Officers help the cooperatives to exploit fishing parks. After two or three years of constant monitoring, the cooperatives are assessed according to their efficiency. A loan request may subsequently be proposed by the Project Officer, who establishes the amount required in terms of the size of the cooperative and its management capacity.

To request a loan from the VDF, application forms, available for each agricultural sector, are filled in by the Project Officer and signed by the three members of the Executive Council of each cooperative. These are then countersigned by the Project Officer, who dispatches them to the Rural Development Officer of the district concerned. After appraising each application, the latter conveys them to CARDER general management. As applications arrive, they are assigned to the VDF which centralises them. On the basis of criteria which are elaborated below, a technical commission, composed of the VDF Officer, the Head of the Rural Engineering Department, the Head of the Agricultural Inputs Department and the Head of the Cooperative Action Division, meets periodically and studies the dossiers.

After scrutiny and appraisal of each application, the commission sends a report on its work to a committee for the coordination of VDF activities, which is the deciding body. This committee is chaired by the Director-General of CARDER and made up of the Head of the German Cooperation Mission, the Provincial Director of Atlantic Planning and Statistics, the Director of the Caisse Régionale de Crédit Agricole Mutuel (CRCAM) and two Rural Development Officers. The VDF runs the secretariat. On the convocation of its chairman, the VDF Coordination Committee meets to assess the results of the work of the technical commission. The Committee, which sits twice a year during the first and third quarters, makes important decisions and recommendations: it may approve, detain or reject applications. In order that parks may be installed before the rise in the water level, the fisheries dossiers are considered by the Coordination Committee at its meeting in the first quarter. The whole procedure takes between two and three months from the identification of the borrowers to the decision of the Committee. Decisions are communicated to the applicants in writing. If endorsed, credit delivery mechanisms are set up in agreement with management and according to the applicant's needs. Coordination is ensured by the Fisheries Division and the Cooperative Action Division.

As mentioned above, the cooperative seeking a loan must fulfill the following conditions.

• it must have been in existence for at least two years and be registered with the Cooperative Action Division;

• it must hold an undisputed area of at least 5 ha on the lake, and

• it must have a current or savings account at the CRCAM or at the Caisse Locale de Crédit Agricole Mutuel (CLCAM).

In addition, certain guarantees are required. In the Sô-awa district cooperative members have to pledge their pirogues, fishing boats and nets. In the Cotonou district it is necessary to deposit a driving licence or a residence permit with the VDF. Handwritten commitments are legalised in the main town of the cooperative members' district of residence.

To contribute towards the administrative expenses of the fund, each cooperative paid a cash contribution of CFAF 1 000 upon endorsement of their loan application. While initially no interest was charged on the loans, this changed in 1986. The interest rates rose from 5 per cent in 1986 to 7.5 per cent in 1989.

Loans concerning fishing activities were not subsidised. However, the VDF subsidized the construction in 1983/84 of a warehouse for fishing equipment in Sô-Tchanhoué in the Sô-awa district. Following problems encountered by the cooperatives in the hiring of equipment for the exploitation of their parks, a project to set up a collectively managed centre of fishing equipment was initiated. As a consequence, seven cooperatives of the region were united and received a VDF loan for procurement and collective management of fishing equipment. Construction of the warehouse was ensured by the CDF subsidy.

Loan administration and the implementation of various operations demand prior training and supervision, the former comprising several components. In the framework of cooperative monitoring, all cooperative members are trained on site once a year in technical management of the parks by the CARDER Fisheries Division, and in administration and finance management by the Cooperative Action Division. Furthermore, the members of the Executive Council of the cooperatives attend a course reiterating the same themes at the CARDER training centre. Finally, extra training in finance management is sometimes organized by the VDF for treasurers of cooperative structures. The first two training courses were financed by the German mission.

Installation of the parks is supervised by the Fisheries Division and officials from the relevant agricultural sector, from the purchase of branches and bamboo to the construction of parks. This monitoring ensures a better management of financial resources by cooperatives and avoids misappropriation of funds.

Upon sanctioning of the loan and completion of all formalities, the loan is disbursed in six cash instalments corresponding to the various stages of installation of the parks. A loan of CFAF 2 700 000 would be divided into two instalments of CFAF 600 000, another three of CFAF 400 000 and a final one of CFAF 300 000. Disbursement at the CLCAM covers a period of two to three months.

Credit recovery is another important stage. The VDF management establishes individual credit limits and maturities according to the character and basic conditions of a given project. The policy of the CDF Coordination Committee is to complete repayment in three years, through agricultural extension agents of the sector and sub-sector where the loan recovery agents collect repayments. These are subsequently transferred to the VDF agent. Technical support is provided by the VDF management, which organizes periodical campaigns to promote repayment and to recover payments on the spot. In addition, the VDF management monitors financial data of the sectors and sub-sectors.

As far as loan administration is concerned, it is very difficult to calculate the costs. An annual budget is allocated to the VDF to ensure the functioning of its very diverse activities. Very little of the substantial amount assigned to lake fishing is allotted to its administration, compared to other loans granted to draft animal farming, the sinking of village wells, or vegetable and forestry production. No distinction is made, however, between administrative expenses of VDF-financed projects. Administrative expenses of lake fishing credits cannot, therefore, be distinguished.

The credit situation from 1979 to the first quarter of 1989 is summarized in the following table:

The table shows that loan disbursements stopped completely after 1986 in view of declining loan repayment rates, which are attributed to declining returns as a result of ecological deterioration of Lake Nokoué following the permanent reopening of the Cotonou Channel which damaged many of the Akadjas installed with the help of credit.

Continuous monitoring of the operation of CDF-financed parks has for some years enabled an accurate projection of costs and returns. These data show that for those cooperatives which have been able to restore their parks to good working order, the returns correspond to the projections in the profitability study undertaken at the project outset. On the other hand, those which have maintained theirs in a poor state have suffered a substantial reduction in returns.

In view of the cooperatives' repayment difficulties, the CARDER authorities have proposed restructuring the loans. The last evaluation mission of the CARDER-Atlantic Project proposed writing off debts of non-viable cooperatives. Yet, although the physical state of the parks no longer guarantees the level of returns necessary to respect repayment deadlines, the majority of the fishermen's cooperatives are still functioning. The officially adopted policy to be applied henceforth is the withholding by the Project Officer of half the returns to repay a part of the loan. The other half is earmarked for rent, external labour costs and renovation of the park. This system might enable the VDF to recover their credit over a relatively long period.

The Lake Fishing Credit Project had positive socio-economic effects on the fishermen's cooperatives over the first six years of its implementation. During this period, the living conditions of cooperative members clearly improved. Revenues from the system of collective exploitation enabled most to attain their own parks. Although the degeneration of the ecosystem of Lake Nokoué has compromised the success of the project, its organizational structure can, perhaps, be extended to other areas of Benin or indeed West Africa.