NGO "ANOTHER WAY" (STICHTING BAKENS VERZET), NETHERLANDS, SUSTAINABLE INTEGRATED SELF-FINANCING DEVELOPMENT PROJECTS AND ADVANCED DEVELOPMENT TECHNOLOGIES

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(FRANÇAIS)

“Poverty is created scarcity”

Wahu Kaara, point 8 of the Global Call to Action Against Poverty, 58^th annual NGO Conference, United Nations, New York 7^th September 2005.

Edition 01 : 14 December, 2009

Edition 02 : 21 February, 2011

Chapter 07: Financial Justification

07.07.01 Costs and benefits analysis.

Detailed analysis of costs and benefits.

07.07.02 Introduction.

Traditional costs and benefits analyses are usually limited to the monetisation on savings on current expenditure in a given project area. Many of the new structures during project execution which improve the quality of life of the populations are not taken into consideration. For example, 200 schools can be built in a project areas where there were none before. The schools can be staffed with teachers who are not yet available. And in one stroke most of the Millennium Development goals in the area can be achieved and surpassed. Yet these activities are not taken into account in traditional costs and benefits analyses. The formation of 200 nursing centres, 40 medicine distribution points, and the creation of a network of 40 bicycle ambulances are not taken into account either.

Similarly, the introduction of a local money system is not taken into consideration as a benefit, because no equivalent exists at the moment the project starts. The enormous benefits resulting from the local money systems, including some 4.000 new occupations, the formation of numerous sports clubs, cultural centres, productive activities etc have a zero value for traditional costs and benefits analyses, because they do not exist at the moment the initial «photograph » is taken.

The result of the applications of traditional costs-benefits analyses is that what does not exist at the moment the initial «photograph » is taken, cannot be monetised. No account is taken of the creation within the framework of each project, of numerous structures enabling most of the Millennium Development goals to be achieved together with a good quality of life for all in the project area.

Conclusion

It can therefore be concluded that practices relating to costs and benefits analyses produce results that are notoriously false, even to the limits of fraud, and benefit the least scrupulous operators who deliberately magnify future revenues and reduce the future costs to produce a good monetary ratio between the supposed benefits and the investments made. The decision to carry out and/or to finance a development project calls for an ethical evaluation which takes the

07.07.03 The project area.

The indigenous population is mostly [ ].

In general the area can be described as “abandoned” where all activities are precarious. [Description]

About [ ]% of foods consumed in the project area come from outside the project area itself. Most of the population id deprived of food security.

Economic activity in the area is essentially informal and de-monetised. In line with the above introduction, this make it unsuitable for a western-style costs and benefits analysis.

07.07.04 Some benefits from integrated development projects which could fall under traditional costs and benefits analyses.

01. Water points at 100m from homes.

Average benefit 1 hour’s water fetching per day (being 10% of a 10 hours working day) x revenue Euro 3 per day, being Euro 0,30 per day x 10.000 women = Euro 3000 per day x 365, or Euro 1.095.000 per year.

02. Washing places.

Benefit 4 hours a week (being 40% of a 10 hour working day) x daily revenue Euro 3 = Euro 1,20 x 52 weeks x 10.000 women = Euro 624.000

03. Reduction of medical treatment costs for water-borne diseases :

50% of the population (25.000 part of 50.000) at least once a year x average cost for medicines and doctor’s fees average Euro 20 = 25000 x Euro 20 = Euro 500.000

04. Productivity increase due to reduction in illness caused by water-borne diseases :

50% of the adult population (50% de 30.000) x ten days per year x revenue Euro 3 a day = 15000 x 10 x 3 = Euro 450.000.

05. Reduction in the costs of treating people suffering from hunger, or due to inadequate hygiene, or caused by smoke in and around homes :

25% of the population at least once a year x average costs for medicines and doctor’s fees Euro 20 = 25000 x Euro 20 = Euro 250.000.

06. Reduction of 50% in the cases of malaria

(being 40% of the population at least once a year) through drainage of surface waters, use of mosquito nets, hygiene education courses etc. Reduction of 50% of costs for of 40% of the population at least once a year, being 50% of the costs of 20.000 persons average anti-malaria treatment (Euro 10 per case) or Euro 200.000, of which 50% = Euro 100.000

07. Increase of productivity due to reduction in the number of cases of malaria :

10% of the adult population (being 10% of 30.000 or 3.000 adults) x 10 days x revenue Euro 3 per day = 3000 x 10 x 3 = Euro 90.000.

08. Reduction in the cost of urgent transportation of sick family members

to hospital in a large town (a car is rented for € 38 a time, paid by a collection amongst all family members) ; 10% of the population of 50.000 at least 1 time a year, being Euro 38 x 5.000 = Euro 190.000.

09. Elimination of the need to fetch firewood:

60% of families (being 60% of 10.000 families or 6.000 families) x 4 hours per week (or 40% of a 10-hour working day) x revenue Euro 3 or Euro 1,20 per week. Euro 1,20 a week x 6.000 women = Euro 7200 per week, or Euro 374.400 a year.

10. Reduction in the costs of purchase of wood for cooking (or alternatives) :

40% of families (or 40% of 10.000 or 4.000 families). In town (or larger centre) a 5=person family typically uses about +/- € 0,75 worth of wood or equivalent per day. Reduction of 65% through the use of improved stoves Euro 0,50 per family per day. 4000 families x Euro 0,50 x 365 = Euro 730.000.

11. «Automatic » reforestation 6.5kg (part of traditional use of 10kg per family per day

for savings in wood x 10.000 families x 365 = 23725 tons per year @ average value of standing timber for pulp Euro 7.5 per ton = Euro 178.000 per year. Refer to Menu for : 09. CDM funding indications for the selected applications and methodologies (in Block 8, Section 5) for details of finance applications for different categories of CDM afforestation and reforestation projects.

12. Fertiliser savings.

A recent conservative source is Richert A. et al Practical Guidance on the Use of Urine in Crop Production Stockholm Environmental Institute (SEI), EcoSanRes Series 2010-1, Stockholm, 2010, ISBN 978-91-86125-21-9. Table 2 on page 2 suggests an average of 550 kg of urine and 51 kg of faeces per person per year, with a total production of 4550 gr, of nitrogen and 548 gr of phosphorus. Table 8 on page 3 refers instead to South Africa for which the indications are 3980 gr. of nitrogen and 580 gr. of phosphorus. A more interesting statistic is provided in table 8 on page 8, where a comparison between human wastes in Burkina Faso and their industrial equivalents is made. The table suggests that the nutrients in the excreta (urine and faeces) of a family (or group) of 9 people is the equivalent of one 50 kg. bag of urea plus one 50 kg. bag on NPK 15:15:15 fertiliser.

On this basis, the population of 50.000 people in each integrated development project area (5500 groups of 9 persons) produce the equivalent of 5.500 bags of urea and 5.500 bags of NPK.

This is the equivalent of 275 tonnes of urea and 275 tonnes of NPK 15 :15 :15 fertiliser per project per year.

Local commercial prices can be calculated when each individual project documentation is drafted. Current world prices are about € 387 per tonne for 46% urea, and € 402 for NPK 15/15/15 fertiliser. The fertiliser savings is therefore to the order of 275 * (387 + 402) = € 217.000 per project per year.

Local production of fertilisers due to recycling of urine and faeces is enough to cover the production of all of the food needed by the inhabitants, at the same time guaranteeing a varied diet. This does not imply any extra work load on women during rainy seasons when they have to help their husbands in the fields to cultivate food as well as carry out their normal household chores. Outside the family fields women have heir own fields which they use the generate their own revenue.

13. Reduction of 80% in the costs of importation of food into the project area.

At the moment poor populations often lack food security. In many areas 80% of staple foods (millet, maize) needed have to be imported into project areas. This may be the biggest single cause of financial leakage in some areas, and therefore of the extreme poverty of the people there. Average cost of food is about Euro 2,20 per family per day, of which 80% is Euro 1,75. Euro 1,75 x 10.000 families x 365 = Euro 6.387.500 a year.

[In Africa, the price of a family-sized dish of food is +/- € 1,10. 2 dishes of food are needed to feed 5 people, so the cost is +/- € 2,20 a day. Preparation time is very long, as the millet has to be ground by hand, which can take anything up to 2 hours. The price of food is much higher if it is ground by a miller. Milling costs about € 0,15 per kg. This is because of the high cost of fuel in most project areas. Outside the larger centres, there is often no mill available at all because of the international cost of fuel to run the mills. The total time needed each day to prepare food for a family of 5 can be anything up to 5 hours, with a total cost up to € 3,80.]

14. Savings through local production of bio-fuels.

09-07. Demonstration afforestation and/or reforestation projects using Jatropha on lands having low inherent potential to support living biomass. In case of application, bio-fuels for a value of up to € 550.000 per year.

15. Through the introduction of mills,

time savings (up to 2 hours per day) to grind millet by hand. Average time saved : 1,5 hours per woman per day being 15% of the revenue of € 3 per 10-hour working day, or € 0,45. € 0,45 per day x 10.000 women x 365 days = € 1.642.500

16. [Excluded from the calculation of costs and benefits.] Cooperative Local Development Fund :

€ 0,65 per person over 4 years (net of fixed expenditure € 260.000 a year) and € 0.75 per person during years 5-10 (net of fixed expenditure €350.000 a year); €0,90 per person years 11-15 (net of expenditure € 390.000 a year) ; € 1,10 per person during years 16-20 (net of expenditure € 460.000 par an) . The amount recycled systematically interest-free (and cost-free in formal money terms) for micro-credits amounts to at least € 2.600 per family during each period of 10 years. Euro 2.600 x 10.000 = Euro 26.000.000 over 10 years, or an average of Euro 2.600.000 a year. Average savings in formal money interest and costs 20% : Euro 520.000 a year.