Ir700

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During much of the 20th century, governments world-wide made substantial investments in building and in later years rehabilitating large-scale irrigation schemes. In Asia and Africa, newly independent countries continued this trend, often at an even higher rate than their colonial predecessors. However, by the late 20th century, governments and investment institutions lost interest: global food prices were substantially lower, reducing the economic justification; and there was growing awareness that many such schemes were white elephants, performing far below their potential; some were total failures, and environmentalist opposition was making itself heard.

In the 21st century, major investments to construct new, or expand existing, large-scale irrigation schemes have returned in sub-Saharan Africa (SSA). Examples include Bura and Mwea in Kenya, the Shire Valley Transformation Program in Malawi, and various projects in Nigeria, Niger and other West African countries. These involve investments by the World Bank, JICA, Kuwait Fund, Millennium Challenge Corporation, and others. "Farmer-led Irrigation Development" is the current rhetorical buzzword, promoted even by the World Bank, but in reality, the big bucks are going into large-scale construction projects.

This development is especially surprising in light of a long history of disappointing outcomes, and several important studies that decisively demonstrate the very high likelihood that large-scale irrigation projects do not achieve the expectations identified in project preparation documents. For example, in 2007, IWMI and the World Bank published a major comprehensive study that examined detailed cost and performance data from several investment banks for 314 irrigation schemes in 50 countries in Asia, Africa, and Latin America (Inocencio et al., 2007). That study confirmed that overall unit costs were significantly higher in SSA than other regions. The main reason was the very high likelihood of a project being a "failure" in SSA. The study concluded that well-designed investments in small-scale irrigation schemes can yield good returns: "large irrigation investment projects supporting many small-scale irrigation schemes are likely to lead to the best results." Even the World Bank concluded that, "there are few examples of successful, or even adequate, results from [large scale irrigation] investments in recent years, and there have been a number of spectacular failures" (World Bank, 2008: 31).

A subsequent study supplemented the 2007 study with additional data and found that small-scale and micro irrigation projects have far lower unit overhead as well as construction costs and perform better than large-scale schemes (Fujiie et al., 2011).

A recent study (Kikuchi et al. 2020) takes a different approach: it evaluates the economic viability of constructing large-scale irrigation schemes in the 21st century by estimating what it would cost today to construct a very successful large-scale irrigation scheme (Mwea in Kenya). Mwea, a rice scheme, is one of the most productive large-scale irrigation schemes in SSA. Nevertheless, the conclusion is clear: the project would be marginally viable only if the shadow price of rice were as high as the world price prevailing during the mini-rice crisis in 2008-2013. At current and likely future prices it is not an economically viable investment.

Further, even projects that at completion seem to be performing well nearly always deteriorate rapidly, requiring additional investments in their rehabilitation. This applies to Mwea as well as many others. Sustained quality operation and maintenance requires adequate finance as well as human resources. These are in short supply in SSA. Additionally, studies have shown that per beneficiary, large scale irrigation investments are far more expensive than small-scale irrigation investments. For example, de Fraiture and Giordano (2014) found from surveys that while motor pumps cost on the order of USD 400/ha, canal irrigation costs can be as much as USD 10,000/ha with some variation either way.

Why are investments in large-scale irrigation back in vogue with international finance institutions and African governments? Have solutions been found to the causes of poor returns on previous investments? Have public sector irrigation management agencies become transparent, accountable, financially solvent, more skilled in construction and scheme management, and better at working with farmers? The World Bank lists these as critical for success. But examining the new projects in Kenya, Malawi, and West Africa, for example, does not reveal any substantial restructuring and capacity strengthening of the relevant government agencies.

My hypothesis is there are other significant drivers of these investments. On the one hand, international investment institutions are designed to make large projectized investments. They must "move" large amounts of funds to developing countries every year, and large-scale irrigation projects certainly do move money. This is in contrast with supporting "farmer-led irrigation development": to do this effectively requires patient long term attention to policy reform, building up private sector-based value chains for making available the finance, equipment and support services, and development of effective output markets to make irrigated agriculture profitable. They can support this as a sideline, but not as a major institutional focus.

Further, governments thrive on attracting funding for large-scale civil works. They bring much-needed resources into the government. They offer an opportunity for politicians to win votes by announcing and initiating large new projects. Public sector irrigation agencies are often politically powerful, and their civil engineers are trained to design and construct large-scale infrastructure. Day-to-day management of irrigation schemes and responding to the needs of their supposed clients (farmers) is not rewarding, either intellectually or financially. They want to manage large contracts, which offer all kinds of below-the-radar opportunities. Politicians and civil servants collaborate in this process.

It is therefore no surprise that efforts to bring about significant structural reforms in public irrigation agencies always fall short of finance institutions' expectations. The vested interests in the status quo are powerful and well-entrenched, and there is no incentive for the finance institution to seriously rock the boat, for example by withholding large amounts of funds.

My conclusion is that, first, SSA governments and their financial partners must abandon projects to construct new large-scale irrigation schemes. Second, any investment in rehabilitation or modernization of existing large schemes must be contingent on actually implementing (not simply promising) major structural reforms to create the incentives needed to achieve sustainable high performance. Third, international finance institutions need to reform themselves to make then effective partners in achieving long-term farmer- and consumer-driven agricultural development. If they do this, they will be more effective in helping governments implement reforms.

References

De Fraiture, C., Giordano, M. 2014. Small Private Irrigation: A Thriving but Overlooked Sector. Agricultural Water Management 131: 167-174. https://doi.org/10.1016/j.agwat.2013.07.005.

Fujiie, H., Maruyama, A., Fujiie, M., Takagaki, M., Merrey, D.J., Kikuchi, M. 2011. Why Invest in Minor Projects in Sub-Saharan Africa? An Exploration of the Scale Economy and Diseconomy of Irrigation Projects. Irrigation and Drainage Systems 25: 39-60. DOI 10.1007/s10795-011-9111-4.

Inocencio, A., Kikuchi, M., Tonasaki, M., Maruyama, A., Merrey, D., Sally, H. 2007. Costs and Performance of Irrigation Project: A Comparison of sub-Saharan Africa and Other Developing Countries. 2007. IWMI Research Report 109. http://www.iwmi.cgiar.org/Publications/IWMI_Research_Reports/PDF/PUB109/RR109.pdf.

Kikuchi, M., Mano, Y., Njagi, T., Merrey, D., Otsuka, K. 2020. Economic Viability of Large-scale Irrigation Construction in sub-Saharan Africa: What if Mwea Irrigation Scheme were Constructed as a Brand-new Scheme? Forthcoming, Journal of Development Studies. Also: JICA Research Institute Working Paper 200, January 2020 (https://www.jica.go.jp/jica-ri/publication/workingpaper/wp_200.html), and Discussion Paper Series of Hitotsubashi University (https://hias.hit-u.ac.jp/glecs/hias_dps/hias-e-87/).

World Bank. 2008. Investment in Agricultural Water for Poverty Reduction and Economic Growth in Sub-Saharan Africa: Synthesis Report. http://documents.worldbank.org/curated/en/167991468303275116/Investment-in-agricultural-water-for-poverty-reduction-and-economic-growth-in-Sub-Saharan-Africa-synthesis-report.

Photo Credit: Jean-Yves Jamin/Cirad