Agricultural Activities and Restoration of Lake Chad

1. Introduction

Situated at the heart of the African continent, in an arid Sahelian environment where every water point is a source of life, Lake Chad is at the heart of a complex issue related to the choice between economic activities and ecological balance. For a long time, priority was given to economic activities which, combined with the growing effects of global warming, have particularly led to the loss of 90% of its water surface area, thus going from 25,000 Km² (in 1964) to less than 2,500 Km² today and exposing the local resident populations that depend on it to climatic vulnerabilities [1]. NASA mapping surveys in 2001 (Figure 1-A below), corroborated by satellite imagery (Figure 1-B below), confirm this. These figures also allow us to note that the northern part of Lake Chad, integrating Niger and Nigeria, has completely disappeared, and is taken over either by vegetation or expanses of sand, or by human settlements.

Today, safeguarding Lake Chad is a major concern for the planet. This concern is reflected in the willingness of the riparian states to restore this natural asset, through the construction of an inland waterway through which it would be supplied with water. In addition to its very high cost of construction and despite a high proportion of favorable opinions, this project is not socially desirable in the sense of Pareto since it could generate another cost for society. Indeed, the restoration of Lake Chad is likely to have contrasting effects not only on the environment, but also on the population engaged in agricultural activities on its shores and surroundings. In order to meet the Pareto criterion, these negative social consequences require compensatory transfers reflecting the loss incurred by the local population, mainly agricultural. How much should potential agricultural victims be compensated? What is the social benefit of such a project? These are two related questions that can be summarized in one main question, which is precisely the issue of this study: would the restoration of Lake Chad provide benefits that exceed the costs it would impose on farmers?

The aim of this study is precisely to answer these questions by carrying out an economic analysis of this project in order to clarify and justify the appropriateness of its implementation. Specifically, the study aims to estimate and compare the benefits and costs that the implementation of the Lake Chad Restoration Project would entail, considering only the preferences and motivations of the populations of the Cameroonian part of Lake Chad, notably the Logone and Chari departments of the Far North Region of Cameroon. This choice was mainly justified by the unavailability of time and resources to carry out a regional study including the four countries bordering the natural area which are: Cameroon, Niger, Nigeria and Chad.

The rest of this chapter is as follows: the next section sets out the analytical framework for the study. In sections 3 and 4, we carry out a monetary evaluation of the benefits and costs associated with the implementation of the project, specifying the methodological aspects specific to each part of the evaluation. Section 5 will allow us to compare these values and discusses the results obtained.

2. Analytical framework of the study

Safeguarding natural assets faces a complex dilemma to be resolved, because every choice, every option (to preserve the resource in its natural state, to let it degrade or to transform it for another use) has consequences in terms of gain or loss of value. Thus, it is only after carefully weighing all the values gained and lost under each used option that one can decide on the relevant option to be retained. For this, it is necessary to implement tools to facilitate the decision-making process. Among these tools, it is common to use cost–benefit analyses (CBA), which make it possible to shed economic light on the definition of a public objective, to make public decisions more transparent and to take into account the opinions of all the stakeholders concerned by these decisions.

In our context, a CBA could be used to justify whether or not the project to restore Lake Chad should be carried out, as it allows a monetary comparison of the costs incurred and the resulting benefits for the population. Its theoretical foundations are essentially as follows: benefits and costs are defined respectively as gains and losses in human well-being or utility [2]. Thus, a project or policy satisfies the cost–benefit criterion if its social benefits are greater than the social costs it imposes on society¹ as a whole [2, 3, 4].

However, in the case of environmental policies, the monetary evaluation of costs and benefits is difficult given the non-market nature of these goods and the services they provide. To overcome this issue, CBA assumes that individual preferences for environmental goods should be considered as the source of value. These are measured by a willingness to pay (WTP) in the case of a benefit and by a willingness to accept compensation (WTA) in the case of a cost [2]. In other words, an increase in an individual’s level of well-being can be measured by the maximum amount that the individual would be willing to pay to benefit from the policy. If, on the other hand, the policy results in a reduction in well-being, it will be measured by the amount of money that the individual in question would require as compensation for accepting the policy.

Among the range of methods for valuing non-marketable environmental goods, it is common to use the contingent valuation method (CVM) to reveal these preferences [5, 6]. It is a method of valuing non-marketable goods that allows an estimate to be generated of the measures that compensate for the change in individual well-being induced by the implementation of a given public policy. Its objective is to create and simulate a hypothetical market, based on a questionnaire, in which agents are led to reveal their preferences in terms of WTP to receive a benefit and/or WTA as compensation for tolerating a given cost [7]. Using these values, it would now be possible to quantify the benefits or costs of the change one wants to make to the good concerned.

However, although CVM is the most widely used method for valuing environmental goods today [2, 5, 8], it has been strongly criticized², calling into question the reliability and validity of the values obtained [9]. However, instead of stopping its use, these criticisms have instead made it possible for the work to perfect it both in terms of data collection techniques and the econometric treatment of responses [10]. Although still controversial, academics and policy makers increasingly recognize this approach as a flexible and powerful method for estimating WTP [2].

However, it is important to point out three orientations that set us apart from several studies using the methods presented above. Firstly, to our knowledge, with the exception of [11], most of the work on the use of CBA to evaluate policies for safeguarding wetlands has been mainly oriented towards a comparison between the benefits and investment costs, in order to determine the appropriateness of safeguarding them without seeing their potential productive use. Then, unlike [11]³, we are interested here in the benefits of the potential agricultural use of wetlands and use CBA to measure both the benefits of restoring Lake Chad and the cost involved. Finally, we disregard the principle of discounting, which makes it possible to know whether a project is profitable by comparing different values observed at different times. Indeed, the problem that concerns us here is the difference in time between economic and ecological investments. However, economic time has nothing in common with biological or ecological time, which can extend over several hundred years. Consequently, the updating process has a clear bias against the future for long-term environmental problems, as it implies a reduced interest in the future compared to the present, and is thus a deterrent to the protection of the natural environment. Moreover, the omission of such a principle does not pose a major problem insofar as its use in the evaluation of environmental projects is still debated.

3. From the estimation of household WTP to the social benefits of the project⁴

The monetary evaluation of the social benefits of the Lake Chad restoration project is based on two steps: the identification of the factors explaining the WTP of households wishing to participate in the Lake Chad restoration program and the calculation of the average WTP, which, when aggregated with the entire population concerned, enables us to obtain the said benefits.

4. From the farmers’ WTA estimate to the social costs of the project¹¹

The objective here is to estimate the farmers’ willingness to receive financial compensation for the losses that would arise from the restoration of Lake Chad and to deduct the induced social cost. This section is thus structured around these two main axes.

5. Comparison of values and discussion

The average WTP is estimated (in the medium term) to be €85 per household, or a total benefit of €5,549,576.832 from the Lake Chad restoration project. On the other hand, the average compensation to be paid to potential victims is in the order of €1,405.515, so the total cost of the project would be around €37,960,149.12¹⁴. It thus appears that the costs of restoring Lake Chad clearly outweigh the benefits. This result is in line with the conclusions of [25, 11] on the trade-off between productive/non-productive uses of wetlands, but contradicts the work of [22], which highlights the superiority of the benefits (12.6 million euros) over the costs (2.3 million euros) for the preservation of 2000 hectares (ha) of natural habitats along the Garonne River. This difference in results can nevertheless be explained by the observed differences in the sizes of the beneficiary populations (250,000 households) and their standards of living. For the average WTP is around €50.4/year and the average WTA around €1150/ha/year.

We thus find ourselves in a paradoxical situation in which, in the medium term (5 years), the agricultural conversion benefits of Lake Chad are far greater than what the people of the region will be willing to give to save it. This result would therefore justify the trade-off to be made in favor of a productive use of Lake Chad’s wetlands. However, this difference must be tempered given:

• The omission of negative externalities (water pollution, deforestation, etc.) in the calculation of the benefits induced¹⁵ by agricultural activities;

• The overestimation of costs due to the impossibility of counting the potential victims of the project;

• The low representativeness of the sample¹⁶ in relation to the total population living along the shores of Lake Chad;

• The time horizon: economic or ecological. For an economic horizon (5 to 10 years), it is not profitable to carry out the project. On the other hand, if the ecological horizon is chosen (from 35 years), it becomes profitable to carry out the project, because the benefit/cost ratio would then become greater than 1, since the benefits of the project would then be around €38,543,518.56.

The amounts announced are therefore indicative for all policy choices, and must therefore be taken with caution. That said, the results obtained can nevertheless serve as a basis for deliberation among the parties concerned, without being a sufficient or necessary condition for the decision to implement a policy to restore Lake Chad. Other reasons may justify this policy.

6. Conclusion

At the end of our study, it is very clear that the protection of Lake Chad is of crucial necessity, given the economic and environmental importance of this natural area. In economic terms, Lake Chad is much more than a source of recreation for its residents; it is the very foundation of their food security. It guarantees the economic and social dynamics of the region and constitutes, in a way, a pool of jobs linked to the economic activities that are found around it. From an environmental standpoint, the survey also reveals that Lake Chad is perceived by its neighbors and farmers as a true natural heritage and, as such, should be saved from its likely fate. To this effect:

• 73.51% of the riparian populations are in favor of the Lake Chad restoration project, and 63.40% would not hesitate to allocate a certain portion of their income to participate financially in the realization of such a project.

• Despite their dependence on the productive services it provides, 70% of riparian farmers are in favor of the project. This percentage rises to about 87% when financial compensation is offered in return.

Its statistics are thus proof that, from the population’s point of view, there is a real benefit in preserving Lake Chad, even if the estimate of this benefit appeared low, or at least lower than that generated by the agricultural use of Lake Chad’s shores. However, this difference does not mean that the economy should be favored over the environment, but it does make it possible to highlight the possible perverse effects that could result from carrying out the Lake Chad restoration project without taking into account its potentially negative impact on agricultural activities, and thus on the food security of the riparian populations. In view of the above, we propose a new approach to save Lake Chad from its probable disappearance, one that takes into account both economic and environmental objectives. Thus, rather than opposing the quality of the environment to the pursuit of economic development, we believe that these two objectives are in close interaction and that a policy to save Lake Chad should ideally take into account all of them rather than focusing on one or the other. The economic literature speaks of sustainable development.

Furthermore, we believe that restoring Lake Chad without addressing the causes that led to its dwindling could be an unsustainable solution because the same causes will produce the same effects. Indeed, even if this natural asset were to be restored, there is no guarantee that it will not dwindle again and endanger the river that provides it.

Thus, whatever the choice of decision-makers, it is essential to implement policies for the protection of this natural heritage. To this end, it is crucial to move from logic of supply management of the natural resources of the lake basin to logic of demand management of the said resources. This can be achieved by putting in place incentive mechanisms for the sustainable management of the wetlands of Lake Chad and the biodiversity associated with them.

Annex