Mali - Telecommunications Project

RESTRICTED CIRCULATING COPY Report No. P-1083 TO BE RETURNED TO REPORTS DESK This report is for official use only by the Bank Group and specifically authorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALI FOR A TELECOMMUNICATIONS PROJECT June 1, 1972   INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALI FOR A TELECOMMUNICATIONS PROJECT 1. I submit the following report and recommendation on a proposed credit to the Republic of Mali for the equivalent of US$3.6 million on standard IDA terms to help finance a project for telecommunications. The proceeds of the credit would be relent to the Office des Postes et Telecommunications (OPTM) for 20 years including four years of grace with interest at 7-1/4 percent per annum. PART I - THE ECONOtY Background 2. A report on "The Current Economic Situation and Prospects of Mali" (AW-30a) was distributed to the Executive Directors on December 6, 1971 (R71- 265). A Country Data Sheet is attached in Annex II. The next economic mis- sion is scheduled for the fall of 1972. 3. Mali is a large land-locked country, extending from the center of the Sahara in the north into savannah-type open forest regions along its southern border. Nearly 40 percent of its area is desert; another 40 per- cent is usable for extensive livestock production, leaving only 20 percent suitable for rainfed agriculture and for irrigated agriculture along the Niger River. With a per capita GDP of about US$55, Mali is one of the poorest countries in Africa. Its known mineral resources are not economi- cally exploitable within the short and medium term because of their remote location. Manufacturing is very limited; it accounts for less than 2 per- cent of GDP. The main constraints on industrial development are the small size of the local market, the country's geographic position, which results in high transport costs and thus limits exports, and the lack of raw mate- rials. Hence, agriculture, livestock and fisheries remain the basis of Mali's economy and the principal source of foreign exchange. They account for 50 percent of employment, and GDP and virtually all exports. 4. Mali's present economic situation cannot be appreciated without reference to the economic developments during the 1960's following independ- ence. Under President Modibo Keita, Mali embarked on an ambitious program to modernize and develop its economy along socialist lines. A considerable number of state enterprises were established, mostly in industry, trade and  -2- transport and the activities of private merchants were limited directly and indirectly by comprehensive price controls. 5. These measures had considerable consequences. Excessive increases in current expenditures and a large investment program in combination with sluggish revenue growth resulted in sharply rising budget deficits. Large Central Bank financing of these deficits in turn gave rise to heavy losses of foreign exchange reserves. 6. In 1967, Mali devalued its currency by 50 percent. However, the effects of,even-such,7a substantial devaluation-were limited, as the Government hesitated to take the necessary complementarX measures. Fearing a major- .in- crease in' te urban cost of living and demands for higher public^service sal- aries, the Government offset price increase on imported goods by reducing. import duties and instructing public enterprises to sell a wide range.of merchandise below cost. As a result, financial losses of public enterprises, as well as imports, continued to rise. For fear of domestic price increases of agricultural products the Government did not pass on the higher export prices to producers. Thus, the devaluation also failed to stimulate pro- duction and exports, and the balance of payments further deteriorated. The Recovery Program 7. The military Government, which-took over in November 1968, declared Mali's economic recovery to be its main policy objective. One of its imme- diate measures was, to raise official prices of the most important crops (mil- let, rice, groundnuts and cotton) by 10 to 4.0 percent, and to liberalize - private trade in rural products. The latter resulted in a further increase of producer prices. These measures were instrumental in sharply increasing groundnut and cotton production and exports. However, price increases for millet and rice were insufficient to spur production and to assure an adequate supply for the domestic market. Hence large imports of food were still needed. 8. Nevertheless, the balance of payments improved substantially, with the overall deficit decreasing from $17.4 million in 1968 to $5.4 million in 19.71,. i.e. from 6-7 percent of GDP in 1968 and 1969 to about 2 percent in 1970 and 1971. Private capital flows increased sharply in line with the rising confidence in the Malian economy. 9. The Government, has been less successful in improving public fin-, ances. In spite of a successful drive to improve tax collections, as,a re- sult of which revenues rose some 4 percent annually between 1967/68 and 1971, public savings remained negative. This was mainly as a result of a 6 percent annual increase in .current expenditures, which was in turn largely due to the continued government policy of hiring all school leavers not finding employment in the private sector. Although some improvement in this respect wils recorded in 1971 it is unlikely thiat the current budget can be balanced wI,th.Iu thle next few years,, leaving tlhe Government dependent in diminishing imounts on a budget subsidy from France.  -3- .10. Heavy deficits of most state enterprises, due to inefficient manage- ment and inadequate pricing policies, were a further drain on public resources. The Government's recent decision to allow these companies to increase retail prices of several basic consumption goods is thus an important step. But more needs to be done in the way of price liberalization and improvement of manage- ment before the public enterprises can achieve satisfactory results. 11. Little progress has been made in rescheduling Mali's high foreign debt, two thirds of which is held by the U.S.S.R. and the People's Republic of China. Service payments amount to some 20 percent of government revenues and 13 percent of export earnings, but are projected to reach 50 percent of both budgetary revenues and exports by 1976, unless substantial rescheduling can be arranged. However, while there have been no formal agreements on this subject, Mali is already receiving, and is likely to continue to receive, a de facto moratorium for the bulk of its foreign debt, since the U.S.S.R. and China seem willing not to insist on timely servicing of their credits in a situation of serious financial difficulty. In consequence, the real debt burden is likely to be much lower than the above projections suggest, which would considerably ease the balance of payments and budget problems. Longer-Term Objectives 12. Mali's prospects for accelerating economic recovery are primarily dependent on agricultural production, both for exports and, increasingly, for substituting imports. The Bank Group and other external lenders are providing substantial assistance to Mali to carry out projects for rice and millet which will be crucial for the achievement of these objectives. However, the Government will also have to provide adequate incentives to farmers by in- creasing producer prices for these crops. The Government's continuing hesitation to increase producer prices, and thus to avoid cost of living increases, higher civil service salaries and higher public expenditures is only partly justified, since a large part of total urban demand for food is already covered by the black market at prices substantially higher than of- ficial prices. 13. In the longer run, the country should benefit from its highly competitive cost structure vis-a-vis neighboring countries. After the devaluation of 1967, Mali's production costs have become particularly favorable for products such as rice, millet and livestock. For the same reason, there is some scope for increased exports of manufactures, mainly textiles. Foreign Aid 14. During 1966/67-1970, Mali received, on the average, US$30 million of external aid per annum including technical assistance of about US$3 million. Nearly half of this aid was provided by the U.S.S.R. and the People's Republic of China in the form of long-term loans on concessionary terms. Close to 40 percent came from France and the European Communities in the form of grants. IDA's contribution was less than 3 percent.  -4 - 15. Gross External Aid Disbursements, 1966/67-1970 US$ million Development Financial Development Budget Loans Loans Grants /1 Grants Total France 1.5 19.2 17.1 37.8 FED 15.5 15.5 Other IBRD member countries 7.3 /2 3.1 10.4 IDA 3.9 3.9 UNDP (and other) 0.6 2.9 3.5 USSR/Mainland China 48.2 14.0 2.8 65.0 61.5 14.0 43.5 17.1 136.1 /1 Including technical assistance. 7T Mostly from U.A.R. 16. Foreign aid financed about 90 percent of public investment. Chinese assistance concentrated on manufacturing industries (sugar, textiles), while Russian development aid was mainly for geological research and the construction of a large sports stadium in Bamako. About half of the French development grants were for agricultural projects, while the European Development Fund/ (FED) mainly concentrated on infrastructure and schools. 17. The revised 1970-72 Rehabilitation Program envisages public invest- ments of US$170 million to be financed up to 87 percent (US$150 million) by foreign aid, which would imply an increase in foreign aid of almost 60 per- cent over the previous four-year period. However, it is more likely that only about 60 percent of the Program will be implemented. FED, FAC, IDA -and bilateral aid from Eastern countries have already committed some $100 million. Total disbursements during the period are estimated at $72 million, of which IDA would contribute some $12.6 million or 18 percent. 18. Given its limited capacity to raise public savings, its difficult foreign exchange situation and heavy debt service burden Mali will continue to rely heavily on foreign assistance. This assistance should, to the maximum extent possible, be on concessionary terms and cover a high proportion of total project costs, including substantial local expenditures. PART II - BANK GROUP OPERATIONS IN MALI 19. The proposed credit would be IDA's fourth operation in Mali bringing the total.to $27.3 miillion (net of cancellations). Bank Group lending during the 1960's was limited to one operation, the $9.1 million first railway credit in 1966, mainly as a result of poor economic performance  - 5 - and the absence of economically justified projects. However, project prepara- tion has been stepped up sharply. The Bank's 1969 economic mission, whose re- commendations were taken into account in the Government's Three Year Rehabili- tation Program, provided the basis for formulating a substantially expanded Bank group lending program. The first results of these efforts have already materialized. A highway rehabilitation and maintenance credit was approved in FY 1971, followed by a credit for the Mopti Rice Project and the proposed telecommunications credit. The total amount disbursed as of April 30, 1972 was $12.2 million; the amount undisbursed was $11.5 million. While progress under the first railway credit has been slow, the problem has now been resolved and the project will be completed by the end of 1972. Progress under the other two credits is satisfactory. Annex I contains a summary statement of IDA credits as of April 30, 1972, and provides further information on the execution of ongoing projects. 20. Bank Group lending to Mali aims essentially at three objectives, all of which are closely linked to the goals of Mali's Three Year Rehabili- tation Plan and longer term development goals. They are: (a) increasing production, mainly in the rural sector; (b) improving social and economic infrastructure; and (c) institution building. 21.. One ongoing project, the Mopti Rice project, and several other projects now in preparation, focus on the first objective. Half of the lending contemplated for the next five years (1973-77) will be channeled to rural production. Lending in areas such as livestock (where a project is due to be ready for consideration in FY 1973), cotton (FY 1974) and groundnuts (FY 1974) will be greatly facilitated by the experience already gained and research carried out in Mali and elsewhere in West Africa. How- ever, in other areas, particularly for integrated rural development projects (Haute Vallee Project, FY 1974), much groundwork and experimentation are still necessary before satisfactory projects can be prepared. But Mali provides an important instance of the need to establish new and more broadly based schemes to develop the rural sector, the benefits of which would be dis- tributed to a large number of farmers. 22. The second objective of improving infrastructure as a comple- ment to directly productive investments is illustrated by the recent trans- port projects and by the proposed telecommunications project. _The Bank Group's first credit to Mali in 1966 was for railway rehabilitation (95-MLI) and the road maintenance credit of 1970 (197-MLI) will help to reestablish a functional feeder roads system. A second highway project is being appraised and a second railway project (FY 1973) will be appraised shortly. The second highway project and the proposed telecommunications project will serve to improve internal communications and transport arteries, while the proposed second railway credit would mainly facilitate international trade. Another area of high priority is education, where it is hoped that Bank Group assist- ance somewhat later would help reorganize the educational system to make it more responsive to manpower requirements and also reduce its impact on the budget over the longer term. An education component will also be an important  - 6 - element in, the integrated rural development projects, mainly in the form of continuing and expanding Mali's recent encouraging experience with non-formal functional literacy programs. 23. Thirdly, an essential feature of Bank Group operations is the technical, managerial and financial strengthening of institutions. Thus an important purpose of the first railway credit was to make the Regie into a viable institution, an objective which has not yet been fully achieved. Sim- ilarly, the highway maintenance credit helps to establish a more efficient maintenance organization. Institution building is a major reason for involve- ment in the proposed telecommunications credit. 24. Lack of public savings and insufficient capacity to prepare and carry out projects will remain the main bottlenecks to increasing the amount of lending to Mali. The latter problem can be eased by increasing technical assistance. However, on the first problem, it would be unrealistic to expect public savings to increase rapidly enough to contribute significantly to investment. Thus, for some time to come, it will be necessary for external aid to finance a high proportion of total project cost, including for certain projects some (project related) recurrent expenditures. PART III - THE TELECOMMUNICATIONS SECTOR 25. Telecommunications services are so inadequate and costly that they are one of the main bottlenecks to a more efficient organization of produc- tion, trade and public administration. Mali's telephone density is extremely low (1 per 1,000 inhabitants). Furthermore, the distribution of existing capacity is heavily concentrated in Bamako, the capital, leaving the rest of this vast country virtually uncovered. Although in December 1971, Mali had 5,400 telephones, only a small number were in the savannah regions which contain a large part of the population and most of the economic potential. The quality of the service is poor because OPTM lacks experienced technical staff and its financial resources do not permit the domestic telecommunica- tions system to be adequately maintained. Lack of foreign exchange has par- ticularly hampered the purchase of spare parts. Consequently, fault rates are high and long distance circuits congested. 26. Although the tariffs are roughly in line with those in other former French West African territories, they are very high compared with similar services inmother developing countries. Local calls in-Mali cost US 144 as compared to US 2-5i in most other developing countries. 27. Past increases in the supply of telephones were far below demand. In recent years, the number of telephones increased by only 3 percent per annum while the demand based on the waiting list, was growing by 8 percent per annum in-Bamako and 6 percent in the main provincial towns.  -7- 28. To eliminate this serious bottleneck, the Government has decided to more than double its telecommunication investment from around MF 1.1 bil- lion ($1.9 million) in the current 1970-72 investment program to some MF 2.2 billions ($4.3 million) in the 1973-76 Plan. This program constitutes the proposed project. It would provide sufficient capacity to cover the existing backlog and projected demand through 1976. PART IV - THE PROJECT 29. A report entitled "Appraisal of a Telecommunications Project of the Office des Postes et Telecommunications du Mali (OPTM), Mali" (No. PU-89a, dated May 17, 1972) is being circulated separately to the Executive Directors. A Credit and Project Summary is provided in Annex III. The Project 30. The project comprises OPTM's 1972-1975 telecommunications program, which aims at rehabilitating and expanding the principal local and long distance facilities in order to improve the physical condition of the network, eliminate congestion, improve the quality of service, and meet present and expected demand through 1977. The project is based primarily on a study carried out in 1965 by the Bureau d'Etudes des Postes et Telecommunications d'Outre Mer (BEPTOM), a consulting and advisory organization sponsored by the French Government. Because of inadequate funds, OPTM has been able to implement only a portion of the consultants' recommendations, namely, an addi- tion of 1,000 lines to the Bamako automatic exchange. The study was reviewed and updated by OPTM in 1970 in consultation with IDA. The proposed project has been selected from the remaining portion of the recommended expansion. Negotiations took place in Washington from May 3-8, 1972. The Malian Delega- tion was headed by His Excellency, Mr. Tieoule Konate, President Director General of the Malian Development Bank. 31. The project comprises the following main items: (a) the rehabilitation of existing switching equipment, the addi- tion of 1,000 lines of switching equipment to the Bamako automatic telephone exchange, and the replacement of manual equipment in five provincial towns by 1,300 lines of automatic switching equipment (14 percent of total project cost); (b) the expansion of cable distribution and subscriber facilities to provide for approximately 2,500 additional direct exchange connections and the rehabilitation of existing cable distribu- tion and subscriber facilities (10 percent of total project cost); (c) the construction of a microwave link between Bamako, Segou, San and Mopti, with multiplexing equipment and trunk switching  equipment for 60 channels, expandable to 960 (54 percent of total project cost); (d) the' rehabilitation of open-wire routes and the expansion by' VHF of spur rout&s originating from towns along the microwave-- link (14 percent of total project cost); (e) the employment of consultants for the detailed engineering, procurement, supervision of project execution and reorganiza- tion of OPTM's accounting (5 percent of.total project cost); and (f) the employment of a management expert tc assist the Director of Telecommunications (3 percent of total project cost). Cost and Financing 32. Total project costs, net of taxes, are estimated at $4.3 million with a foreign exchange component of $3.1 million. The proposed IDA credit of $3.6 would finance 84 percent of total costs, covering the foreign exchange component, and 45 percent' of local expenditures. The balance, $0.7 million equivalent, would be financed by OPTM. Such cost' sharing is in line with Mali's limited domestic resources and the need for external lenders to fin- ance a substantial part of total costs. The proceeds of the credit would be relent by the Government to OPTM at 7-1/4 percent annual interest to be repaid in 20 years, including a grace period of four years. The Government would bear the foreign exchange risk. Project Entity 33. The OPTM was established in 1960 as a government-owned entity. The Chairman of the Board of Directors is the Minister of Transport, Tele- communications and Tourism. OPTM's organization is divided into four departments--Telecommunications, Administration, Accounting and Postal/ Financial. This last Department operates the postal system and a country- wide public checking account service. The statutes that created OPTM give it an industrial and commercial character and endow it with legal person- ality and financial autonomy. However, in practice OPTM has not been able to enjoy the degree of financial autonomy accorded it by its statutes. Project Execution 34. Present telecommunication facilities in Mali are in poor condition because of insufficient maintenance and plant replacement, and OPVT is lack- ing staff with technical and managerial experience to carry out the urgently needed rehabilitation and expansion. Therefore, although overall responsi- bility for the project execution rests with the OPTMI, construction of the main works would be carried out by the equipment suppliers under the consultants' supervision. OPTi's staff would be associated with this work in order to  -9- obtain training. Contractual arrangements with the suppliers would also provide for training of OPTM's staff in the maintenance of the equipment installed under the credit. To strengthen the managerial and the technical capacity of OPTM in the execution of the project, assistance will be provided to advise and train Malian counterparts, particularly in the preparation of bidding documents and contracts, bid evaluation, supervision of project works, accounting, auditing, and in day-to-day operations in switching, transmission and local networks. Financial Arrangements 35. The present financial difficulties of OPTMI's Telecommunications Department have several causes. Before 1968, both the Postal/Financial and the Telecommunications Departments operated at a loss. Since 1968, however, telecommunications operations have been profitable, producing a surplus more than sufficient to cover the annual losses from postal/financial operations. Although OPTM's statute requires the Government to meet any overall annual deficit which it may incur, it nevertheless did not do so, when OPTM was regularly incurring annual overall deficits before. Further- more, the Government has not settled its bills for telecommunications and other charges. OPTM has been able to continue its operations only by being permitted to overdraw on its current Treasury account and by utilizing private funds deposited in OPTM's public checking accounts. The arrangements, des- cribed in paragraphs 36-39 below, which have been made to put OPTM on a sound financial basis, are thus an essential part of the proposed project. 36. The settlement of outstanding debts between the Government and OPTM's Telecommunications Department will be achieved by offsetting the deficits of the Telecommunications Department prior to 1968 and the unpaid charges for telecommunication services rendered to the Government through December 1971 against the balances due to the Government by OPTM in respect of telecommunications at the end of 1971. The Government has also guaranteed adequate working capital for the Telecommunications Department's future operations. Furthermore, the Government will prepare a plan to settle the deficits of the Postal/Financial Department of the OPTM prior to 1968 and restore the financial position of the Department to good order. The Gov- ernment will also cover any future deficit arising from postal/financial operations. 37. In order to ensure that OPTM will not find itself without the funds to meet its commitments as it occasionally has in the past, OPTM will transfer the funds necessary to carry out the project quarterly and in advance from OPTM's account with the Treasury to an independent bank account in OPTM's name. 38. For the continued viability of the project, assurances have been obtained that domestic telecommunication tariffs will be reviewed when the accounts for telecommunications and postal/financial services are effectively separated, and the assets inventoried and valued in order to achieve a rate  - 10 - of return on OPTM's telecommunication net fixed assets in operations of not less than 10 percent beginning in 1977. 39. Assurances have also been obtained that, without prior approval by the Association, OPTM will not incur long-term or short-term debts for tele- communications operations above the limits defined in the Section 4.08 and 4.09 of the Project Agreement, neither will it undertake any capital expendi- tures for telecommunications, other than under the Project, in excess of $75,000 equivalent in any year unless the Association shall have approved a financing plan therefor. Procurement 40. All goods and services (except consultants) financed by IDA would be procured through international competitive bidding, except for small quantities of tools and miscellaneous services. IDA financing for these exceptions would-amount to about US$75,000. The Government will relieve OPTM of customs duties and import taxes on all imported equipment for the project, and bid evaluation will be made net of such charges.. Benefits 41. A conservative estimate of the economic return on the project, using present tariffs and December 1971 prices, is 13 percent. Present forecasts indicate that, after 1973, OPTM would have surplus funds from telecommunications operations sufficient, after meeting the requirements of the project, to permit a transfer of funds to the Government. It is estimated that the total amount available for transfer over the project period would be MF 240 million, equivalent to 50 percent of net telecom- munications profits or a dividend of 3 percent per annum on the Telecom- munications Department national equity. 42. In giving emphasis to regions with promising potential for future economic growth outside the capital, the project will also provide non-quantifiable economic benefits by promoting the commercialization of rural products (mostly rice and fish), expanding exports and encouraging trade with Bamako, the main distribution center for imported goods. PART V - LEGAL INSTRUMENTS AND AUTHORITY 43. The draft Development Credit Agreement between the Republic of Mali and the Association, the draft Project Agreement between the Association and the Office des Postes at Telecommunications (OPTN), the Recommendation of rthe Conutmlttee provided for in Article V, Section 1 (d) of the Articles of AAreetiieait of the Association and the text of a resolution approving the proposed credit are being distributed to the Executive Directors separately. Conditions for effectiveness of the Agreements would be (i) the employment  of engineering consultants, (ii) the making of satisfactory arrangements for the extension of financial assistance for OPTM's present financial adviser and (iii) the making of a satisfactory financial settlement for the Telecommunications Department of the OPTM. 44. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 45. I recommend that the Executive Director approve the proposed credit. Robert S. McNamara President Attachments Washington, D.C. June 1, 1972   ANNEX I THE STATUS OF BANK GROUP OPERATIONS IN MALI A. Statement of IDA Credits (as of April 30, 1972) Credit Amount (US$ million) Number Year Borrower Purpose IDA Undisbursed 95-MLI 1966 Republic of Mali Railway 9.1 1.6 197-MLI 1970 Republic of Mali Highway 7.7 3.0 Maintenance 277-MLI 1972 Republic of DIali Rice 6.9 6.9 Development Total now held by IDA 23.7 Total undisbursed 11.5 B. Projects in Execution The US$9.1 million Railway project of 1966 (95-MLI) is now com- pleted as originally planned. However, the Association has agreed that savings of $480,000 under the credit be used for track renewal on an addi- tional 14 km. The closing date, originally June 30, 1970, was first postponed to December 31, 1971 and, in view of the additional track renewal, has now been postponed to December 31, 1972. Performance under the Credit has not been fully satisfactory. In particular, the Railway's financial situation has remained precarious. Most of the forwarding business on the Railway is handled by two private agencies which often are not paid regularly by their clients (predominantly public enterprises) and which therefore delay payments to the Railway. Furthermore, the Government has not reimbursed the Railway for past deficits and has not provided funds to ensure repayment of debts to the Senegal Railway as originally agreed. However, action is now being taken to settle debts and improve the financial situation. The US$7.7 million High- way Maintenance project of 1970 (197-MLI) is being implemented in cooperation with the International Labor Organization (ILO). The Borrower's performance is good and the project is progressing on schedule. The US$6.9 million Rice Development credit of January 1972 (277-MLI) is expected to become effective shortly. It is the first in a series of scheduled Bank Group operations in Mali's agricultural sector.  COUNRYDlo ATA COUNTYII: Mali AMEA: 1,200,000 be2 POPUILATION: 5.2 ndlliaa (-nd 1 971 ) D0N5I?Y: 6. per be2 Egt-.rrT-nth 2.5 % (frn 1960 to 1971) ibid 20.00 perbm ofarableiaead POPU2LATION CHMiMTERISTICS. HDELTH. Crude Birth Rate (per 1,0CC) 50 (mid 1971) Ppj)itinn per physician 51,1o (1966) Cr.de Death Rate (per 1,000) 2)4 (aid 1971) Population per hnepita1 bed 1,3)4 0 966) Infant Rartulity (per 1,000I live births) 120 (mid 1971) INCOMEW DSTRIB1LJTION DISTRIBETON OP LANDI OWNERSHIP. 7. af -utl-v1 ln-. .aes ..ina... a.a.7 af land a...d by tap lb% mar .a bl0hae qcI le . 11 af land anned by smallest 10% anr .a ACCESS TO POTABLE WATE_R 17. of popnlnrlnm) uCCESS TO ELECTRICITY 7% nE papolaclam) Erba a.. Urban a.a NUTRITIOR: CDP PER CAPITA. $ 51 (19573) EDUICATION: Cua.rie latake per capita 2,100 (1970) _Adul1tMitorony ruts 10 (1970) Per .apit. p,atein i.iuka (gruanne) nu.Primay enbaol aroleet ()1)4 (1970) GROSS DRISESTIC PRODUCT (19701 NULRT FGOT GDP At eaklae prine 2fl-V 1A a a 275 n Gross In...nan )a.) 18.1 aa25 aa Oruss Onmoeti Ouings 36.7 13.7 0 0O.u Currant Annaunt.Balanc -14.5 5.L ..-00 Deports nf Gods, SOS 3$ A lbA a.a 15.0n.a Iepn-te of Goaode, RET 2 77.1 28Ia a 10a.. ORPT. LTO FORCE iNS Value iddld Labor e-r V.u.s Adde Per Worher us7 7 EiSin 5n Tt (us 5) 5 of eationa.I average Agrio.ltur 11 9. 1,4.60..a.. Indutry 37.8 1)4.1a..a.. Or-etoe 110.2 )41.30..a.. PIUBLIC EFBINANRY 00 (1971) (PraSEd, nay) I of AIR uVe?O~~~~~~~e 9~ of GOP average So hilli-o ME S f 92DP 1569/70/71 (anmat) 4 of GOP Currant R ...lpta 21.5 1)4.4 13.5 Currn V eairs mitrefr)22.5 15.0 15.3 Currat S-rpiac/Doficit -)-1.0 .0.6 -0.9 Capital DEpadt-res 1.7 1.1 1.0 Eateroal Aaietu-a (vet) 2.0 1.3 2.0 PRICES ABS COUDIT- sad of year., jgsLZui j3,.k..... RE. Rc Credit to Publi1c secor , IRE.. Bank Credit to Private Sector 2/ lidn 3107 bas - Slin OM hnBillion of M1E nag 1968 172.0 7. - 1968 16.5 - 1968 5. -- 1969 169.1 178.0 11.3 1.7 1969 53.6 15.3 1969 7. 3 30.)4 1970 179.1 009.1 5.9 17.5 1970 55.5 3.5 1970 R.)4 15.1 Sept. 1970 18)4.7 203. - - Skpt. 1971 196.0 292.1, 6.1 2)4.0 1971 58.8 5.9 1971 9.6 1)4.3 WI0CSiNDISE EXPORTS (averge 1968/1969/1970) Renorded BALANRCE OP PiTYMENTS IR , 1969 1970 US 971 (9ea. DEparts of Goode RFS 21.3 39.2 30.6 8nin .2 32.4 IoRarte of Goads, OPS 5o.2 86.8 77.1 ivtob7.7 30.7 R.s.u.. BacRO (defiait,-- -I. -31.6 -3Li. Or-d.ote 3.6 136 Fiehe-ie. 2.7 10.7 Ieterse t Paysante (net) IOthe 3.2 12.6 Worhers' Resitta,,oe 252 10 Other Faoct- Payanta (net) C 20.9 22.6 24.O TOTAL5. 10. Ret Transfers Balanae on Currat Anasnt -TA.O j.0 -11.8 ERrant Foreign oeeeo Kedian and L.og- te Lo..e ~ae-t) EXCTERNiL SEBT OR DrEYR2RPI 31. 1970 Diebureaneste a 1.0 11.9 12.2 ($ sOo.) .mrti.ati.a Median and Lang-ter Credits, Publia Offinia1 Granto RosG-Oanteed Private 14T Other Capital (net) Rrrocd 0,vuoivns 0.5 3.1 - 3.1 Tat1 Outstanding and Dishared 236.2 Blanviur: renteonto (vat) ~~~~15.5 0.9 - All other itmes DOB? sERvicE, RATi'o (1970)13 Or-u nre-flG svA 10.0 8.6 8.0 Ino,kID LENING,lO DECOIERR 31. 1971 (lan. ) Notl 'creigo -eeta -57.3 -58.5 -61.9 IBRD IDA Outstanding and Disb-rsd -9.3 Uudisbared -7.5 3/1966/67-70 Sttiln c.Odsasd-t. 2/ coperativo prics Ldode (..tralled Floss.) ]/Prico indem cooposod of 1frns- narkit prie loden Car dUelt and rice, -nd ...opo-tive pains laden far the rest. Rate of Eanhange US $1.00 -ME511.57 Sate, -ac 20- 1972 I4/Taladiag public sote-price..j..o .1 019 I/Nv-ber 30, 1971. Reopar o 5 . toet: Weetern Afriaa  ANNEX III Page 1 MALI Telecommunications Project Credit and Project Summary Borrower: The Republic of Mali. Beneficiary: Office des Postes et Telecommunications du Mali (OPTM). Amount: US$3.6 million equivalent. Terms: Standard. Relending Terms: 7-1/4 percent annual interest for 20 years including a four-year grace period. Project Description: Rehabilitation of existing switching equipment and replacement of manual equipment by automatic switching equipment; rehabilitation and expansion of existing cable and subscriber distribution networks and construction of a microwave link between Bamako, Segou, San and Mopti; introduction of modern accounting system and financial rehabili- tation of the Telecommunications Department of the Office des Postes et Telecommunications du Mali (OPTM). Estimated Cost: The estimated cost of the project is US$4.3 million equivalent, including a foreign exchange component of US$3.1 million. Details are given below.  ANNEX III Page 2 US$ million Total 11 Foreign Local Local telephone service 0.83 0.62 0.20 Long distance service Transmission equipment 2.35 1.97 0.39 Trunk switching equipment 0.03 0.03 - Buildings 0.37 0.06 0.31 Vehicles, tools, miscellaneous works 0.22 0.04 0.18 Detailed engineering 0.09 0.08 0.01 Management adviser 0.10 0.10 - Accounting consultants 0.02 0.02 - Sub-total /1 4.01 2.91 1.09 Contingencies Physical 0.20 0.15 0.06 Price 0.06 - 0.06 Total /1 4.26 3.06 1.20 Financing Plan: Requirements: US$ million 1972-1975 Project 4.3 Working Capital 0.4 4.7 Sources: Net internal cash generation 1.1 IDA credit 3.6 4.7 /1 Totals may not add up due to roundings  ANNEX III Page 3 Estimated Disbursements: Cumulative Disbursements (US$ '000) Fiscal Year 1972/73 150 1973/74 1,000 1974/75 2,800 1975/76 3,600 Consultants: Consultants will be employed for the reorganization of OPTM's accounts as well as to advise on the preparation of bidding documents and contracts, to assist in bid evaluation and to supervise the execution of the works. Rate of Return: Internal economic rate of return is 13 percent. Appraisal Report: Report No. PU-89a dated May 17, 1972.   12