Problems in implementing the integrated rural development project in Liberia

Audit report covers the period 1976-1980 and is based on document review, site visits, and discussions with project officials. Although $1.9 million of the $5 million A.I.D. loan has been expended, there has been no substantive progress toward developing the institutional capacity of four farmer cooperatives (co-ops) or in establishing a revolving credit fund. Lack of progress is due to inadequate funding of the cooperatives and farmers" distrust of the project management unit and lack of confidence in the utility of the co-ops. Moreover, the management unit has put too much emphasis on developing its own capabilities and too little on extending its technical expertise to farmers. The revolving credit fund has not been properly managed and is undercapitalized. Finally, USAID/L management of the project has been inadequate -- no evaluations and infrequent, undocumented site visits. Because of these factors, the co-ops have recruited only 3,065 farmers, farm inputs have not reached planned levels ($754,000 expended out of $2.1 million), and, as a result, agricultural production targets have not been met. Since the potential for establishing a viable rural development project is questionable and the project will not achieve its production targets, it is recommended that USAID/L: (1) reassess its strategy of assisting farmers through development of farmer co-ops; (2) develop a revised project budget and deobligate any unneeded funds; (3) instruct the project management unit to promptly record all loan payments from farmers and deposit the cash proceeds into the revolving fund; (4) improve project management and arrange for an independent evaluation of the project; and (5) immediately deduct $32,867 from the next voucher submitted by the project management unit in order to offset a duplicate payment. Nonetheless, USAID/L recommends that the project revert to Liberian management a year ahead of schedule since this would be a first in the development experience of Liberia and possibly all of West Africa.