Chad - Livestock Development Project

CIRCULATING COPY RESTRICTED TO BE RETURNED TO REPORTS DESK Report No. P-1023 F IL E 't ;'GP 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 It may not be published, quoted or cited without Bank Group authorization.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 CHAD FOR A LIVESTOCK DEVELOPMENT PROJECT February 2, 1972  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOIOTENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF CHAD FOR A LIVESTOCK DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Republic of Chad for the equivalent of US$2.2 million on standard IDA terms to help finance a livestock development project. 2. The livestock project was originally appraised in the fall of 1968 and negotiation for IDA financing substantially concluded in July, 1969. As explained in paragraph 8 below, submission to the Executive Direc- tors was deferred because security conditions in Chad at that time would not have allowed the project to go forward, The proposed credit would be the first Bank Group assistance to Chad for agriculture and the fourth IDA operation in Chad. Present commitments, amounting to $8.1 million, cover three projects - one for transport and two for education. In keeping with the findings of the 1969 economic mission (updated in September 1970) and subsequent discussions with the Government, Bank Group operations in Chad over the coming few years are likely to be concentrated in agriculture and transport. In agriculture, particularly good potential exists in livestock and in the production of cotton - the country's two most important foreign exchange earners. However, Chad is a land-locked country and improvement in transport is essential if it is to realize its export and production potential. The Bank Group is assisting the Government to prepare several projects in agriculture and transportation. 3. Annex I contains a summary statement of the existing IDA credits to Chad as of December 31, 1971, showing thab a large part remains undis- bursed, reflecting the considerable delays encountered in the implementation of all three projects. These delays arise mainly from problems of internal administration. A Highway Maintenance credit of US$4-l million, signed in August 1968 and made effective in February 1969, is about eighteen months behind schedule, mainly because of the delay in the procurement of mainte- nance equipment and consideration will have to be given in due course to postponing the closing date for the credit, presently December 31, 1973. The two on-going education projects (US$1.8 million and $2.2 million) for which the credits were signed in August 1968 and June 1971, respectively, are also behind schedule. The main reasons are, again, administrative problems; there is need for more flexible governmental procedures and closer coordi- nation between government departments involved, as mentioned in Ny Report and Recommendation on a Credit for an Education project dated April 6, 1971 (IDA/R71_16). The closing date for the first project, presently March 1, 1972, will have to be postponed for two years to M{arch 1974. I am intensify- ing supervision of these projects. A supervision mission has just returned from Chad and reports that implementation of the education projects is now improving.  PART II - THE ECONONY 4. The most recent economic report entitled "The Current Economic Situation and Prospects of Chad" (No. AVI-24a))was distributed to the Executive Directors on April 9, 1971, and was based on an economic mission which visited the country in March/April, 1969, and on an updating mission of September 1970. An economic mission will visit Chad in March 1972. A Country Data Sheet is attached as Annex II. 5. Chad is the largest land-locked country in Africa; its main centers of activity are 1,000 - 1,500 km from the sea. Its population of approximately 3.7 million comprises two main ethnic groups - the Arabic speaking IMhslims, who are largely nomadic pastoralists north of the Chari River, and the predominantly Christian negroids south of the river, who engage in crop cultivation. About 90% of the population works in agricul- ture wJhich generates over 80o of exports and contributes about 40% of national income. Per capita GDP (including subsistence) was estimated at $76 in 1970. Absence of reliable statistics makes it difficult to assess the growth of the economy. However, tentative estimates show that GDP has grown in real terms at a rate of about 2 - 3% per year over the last decade. The growth rate of sectors, other than subsistence and animal husbandry is estimated to have been 2.5 - 4%. 6. Compared with other African countries of its size, Chad has severely limited development opportunities, Its predominantly agricultural economy is almost entirely dependent on cotton exports by peasant farmers in the South, and the raising of livestock, for both export and subsistence consumption, in the central and northern parts of the country. In addition, gum arabic is grown as a cash crop in the North; other crops, such as groundnuts, wheat, maize, and rice are grown mainly for subsistence con- sumption in other areas. Some fishing is carried out in the rivers and also on Lake Chad. The extrerme North of the country is mainly desert and is of little agricultural value. 7. The existence of good transport routes to the sea is an important factor in development, and, in particular, in the expansion of cotton and livestock exports. At the moment, lack of adequate outlets - to outside markets is a great handicap and slows down the country's de- velopment *0< )o Another handicap is the inadequacy of trained manpower necessary to plan and execute development projects. The Bank Group's two on-going projects in this sector, which include the provision of teacher training facilities and the training of agricultural technicians, are designed to help solve this problem. The country relies heavily on technical assistance provided by France. 8. Chad has recently undergone a difficult period in its development effort associated with internal unrest. An extremely tight financial situation has severely curtailed the Government's ability to generate public savings and improve the standard of living. The Government received French assistance in 1969 to help re-establish order in the troubled areas through military operations as well as administrative, budgetary, and fiscal reforms. The miuest resulted from the northerners' resentment of the predominant role of the generally more educated  - 3- southerners in almost all spheres of economic and administrative activities. Opposition to paying taxes on livestock - the main source of livelihood in the North - was also a factor in the revolt. The country's deteriorating security situation made it virtually impossible for the Government to pro- ceed with its improvement efforts in the livestock industry. Following the return of some regional administrative responsibilities to the northern sultanates (such as taxation and judicial powers), the subsequent release of political prisoners, and the-inclusion of more northerners in the Govern- ment, calm has largely returned. 9. The Governmentts financial position is tight - another immediate obstacle to development - as a result of several factors. These include heavy expenditure on security, Chad's withdrawal from the Central African Customs and Economic Union (UDEAC), the decline in tax revenue from the livestock sub-sector, and the slow growth of the tax base caused by the slow expansion of the economny. Since 1966, the budget has been in deficit on - current account.and commercial and debt service arrears have accumulated. There are virtually no public funds for investment and the Government will find it difficult to bear the additional current expenditure generated by externally financed projects. 10. Even with improved tax collection and more austere current expenditure policies, the public sector is likely to be in deficit for-at least the next two or three years, In 1970 a current deficit of CFAF 1.6 billion was recorded. The overall deficit was CFAF 2.3 billion, or some 18% of current revenues. The deficit was slightly higher in 1969 because of higher investment outlays in that year. A continued large overall deficit is forecast for 1971. External assistance therefore, may be needed to finance current deficits, including the liquidation of arrears, as well as to cover capital spending. It is difficult to estimate foreign assistance requirements on the basis of present information. The Government has decided to implement the program of fiscal reforms which had been recommended by the Bank's 1969 economic mission. The forthcoming economic mission will continue discussions on the overall financial situation. 11. It is to be hoped that there will be sufficient improvement in the security situation and in the implementation of administrative and economic reforms to make possible a cut-back on military expen diture,- thus permitting limited resources to be saved for development projects. Military expen ditures account for about a third of the budget. Assuming that local funds will eventually become available, the country's absorptive capacity should be able to increase due to new investment possibilities, notably in cotton and livestock. The 1970 economic mission considered it most unlikely that total public investment over the five-year period 1971 - 1975,for wihich the Government is preparing a development plan, would exceed CFAF 30 - 35 billion (US$118 - 137 million) compared to CFAF 20 billion ($80 million) in the previous five years. The plan has not yet been worked out in detail, and does not yet constitute a basis for government action. As evidence of its commitment to developmenti, however, the Government last year was reportedly introducing a special levy of one twelfth of incomes to finance development. The levy was expected to yield some CFAF 2 billion.  - 4 - 122 There was an increase in foreign assistance to Chad through 1969. FED assistance increased from CFA? 1.0 billion in 1966 to CFAF 2.0 billion in 1969. French assistance appears to have risen by CFAF 2.3 billion over the same period, including provision for military expenditure. In 1969 about 38% of foreign assistance was directed to development projects, and 36% represented technical assistance personnel engaged on development pro- jects. Budget subsidies and the provision of goods and services to meet current expenditure amounted to 26% of total aid. French budgetary subsidies in 1970 amounted to CFAF 2.3 billion which was close to the size of the overall deficit. Data on more recent commitments are not available. 13. Chad's balance of payments has always been in deficit on trade and on nearly all services. This has been covered largely by foreign assistance grants and private transfers, as well as, but to a lesser extent, by capital inflow, In 1969 the current account deficit amounted to CFAF 8 billion, equivalent to 13% of GDP. Changes in foreign exchange reserves reveal a persistent deficit in the overall position since 1965. The position improved somewhat in 1969 as a result of an MCF drawing of $3.8 million. It appears that the decline in reserves has resulted mainly from the trade deficits. In 1970, despite a 30,4 rise in imports, a slight overall balance of payments surplus was reported, mainly as a result of higher world market prices for cotton and a rise in French Govermnent and Common Market trans- fers, The balance of payments is highly vulnerable to changes in cotton prices and the high elasticity of demand for imports. 14. Chad's external indebtedness has been rising and amounted to $67.5 million on Decenber 31, 1970. The debt service ratio in 2970 amounted to 13% of export eaxnings. In view of the country's poverty and the virtual absence of public or private savings, foreign aid should cover a large proportion of projects costs (in many cases close to 100%) including a large share of local costs. Further, the limited prospects for the.7balAnce of paymnts and the tight budgetary situation make it desirable that aid to Chad be on concessionary terms. 15. As mentioned earlier, the basic priorities of Chad's economy require concentration on the development of agriculture and transportation. In agriculture the best opportunities lie in cotton and livestock,which are the mainstays for the vast majority of the population. Investments in transport and conunnication would be next in importance, in order to reduce transport costs to ocean ports. It is important to improve the effectiveness of local administration as well as to facilitate agricultural marketing, particularly for livestock. PAR' III - THE PROJECT 16. Chad relies almost entirel-y on agriculture for exports, empioy- ment and subsistence, In 1969, agricultural crops and livestock products comprised nearly 80% of export earnings. The principal items were cotton, live animals, meat and hides and skins, Agriculture, including subsistence production, accounts for about 50% of the gross domestic product, about- 25% of which is from livestock, mainly cattle, meat and animal productsp 17. In 1969, recorded exports of livestock and animal products amounted to the equivalent of US$3.1 million (nearly 90% of which was cattle  and beef). These probably account for only 30% of the total earnings from this sector, the other 70% being unrecorded exports of livestock on hoof. The export of livestock and animal products may therefore have been as high as US$10 million, or 28% of total export earnings, coming second only to cotton exports (US$24 million). 18. Cattle are traded commercially through well-organized tradi- tional local markets which, however, lack modern facilities (auction floors, weighing scales, etc). The main flow of cattle is towrards the west to Fort Lamr for local consumption, processing or export on hoof to Nigeria. A second. route is from the northwest to the south for slaughter at Fort Archambault, or for export to the Central African Republic (see map attached) 19. Chad has an estimated cattle population of 4.5 million, of - which about 70% is in the Sahelian belt. In addition, there are approxi- mately 1.5 million sheep, 2.8 million goats, 400, 000 camels, 500,000 horses and a few thousand pigs. Mainly as a result of the establishment of modern abattoirs, the export of dressed meat has increased nearly threefold over the past four years to reach 12,000 tons of which 11,000 tons is beef. 20. Chad has great potential to expand production of its livestock industry, but in the main cattle areas of Sahelian Chad, permanent water is limited. The rains open up extensive grazing areas, but these can be used only for a short period. The widely practiced traditional form of animal husbandry is based on annual movement of herds in search of water and pas- ture. Large areas of good pasture that could be opened up for stock grazing lie idle because of lack of permanent water facilities. Substantial increases are also possible in areas that already have permanent water if cattle owners would use better methods of range and animal management. These include con- trol of grass fires, treatment against parasites, sale of immature cattle for fattening, etc. In addition, improved marketing facilities are also necessary. 21. The recently established (May 1971) Ministry of Livestock is responsible for the administration and development of the livestock industryt The Ministry's staff is occupied almost entirely with disease control and no section deals specifically with animal husbandry, range management or mar- keting. There is also no livestock extension service. The veterinary ser- vices are well served by the Fareka Research Laboratory in Fort Lamy which produces a wide range of vaccines. The laboratory forms part of the Institut d'Elevage et de MWdecine Vet4rinaire de Pays Tropicaux in Paris, financed by France and other participating countries. 22. Several bilateral and multilateral aid agencies are financing- extensive programs of technical assistance in Chad's livestock sub-sector. The European Development Fund (FED) has financed the construction of 318 wells in the Chari Baguirmi, Batha and Ouaddai districts. Both the French Fonds d'Aide et de Cooperation (FAC), and FED have provided watering points in Chad for the past 12 years which have resulted in the opening up of additional grazing land. In addition, FAC provides technical assistance for the livestock services, mainly for animal health.  23. The proposed project would supplement the above-mentioned programs and further stimulate the expansion of the livestock industry. It was identified by the Government, with the assistance of the FAO/IBRD Cooperative Program, in 1966/67 and appraised by an IDA mission in September/ October 1968. Negotiations were held with representatives of the Government in July 1969. It was agreed, however, that, in view of security problems, particularly in the project area, further action on the credit should be postponed until the situation had improved. It was nevertheless considered desirable that the consultants should continue work on detailed surveys and well siting, as well as the preparation of tender documents for wvell construction and repair work. Following their review by the Association, tender documents were issued early in 1971 to ascertain contractor interest and firm up cost estimatese These bids were received by July 1971, the lowest from a locally based firm. 24. In September 1971, a mission visited Chad to revise the cost estimates in the light of the bids received and up-to-date information on local costso During the visit, confirmation was obtained from the Government on the main project components on which agreement had been reached during the 1969 negotiations, and on certain revisions in detail that are now considered desirable. 25. A report entitled "Chad - Appraisal of Livestock Development Project"',dated January 24, 1972, is-being distributed separately. A Credit and Project Summary is in Annex III. The project comprises: (a) construction of 38 new wells; (b) repair of 102 existing wells (c) establishment of two units to maintain 821 wells in the main livestock producing areas; and (d) strengthening of the Livestock Development Unit established by UNDP in 1969. The total estimated cost of the project, taking into-account the 8.5% in- crease in the US$ equivalent of the CFA Franc, is 4Q3.4 million equivalent and would be financed by the proposed IDA credit, a grant from UNDP and a Government contribution on the following basis: (In thousands of US$) IDA UNDP Government Total _ount % Amount % Amount % Amount New wells 788 70 - - 337 30 1,125 Well repair & renovation 415 70 - _ 178 30 593 Maintenance Units 762 80 - - 191 20 953 Livestock Development Unit 190 25 530 69 48 6 768 Total 2,155 63 530 15 754 22 3,439  - 7 - 26. The cost estimates for new well construction and repair include turnovrer taxes payable by the contractor and import duties on equipment and materials, totalling about $412,000. This amount is included both in the total cost shown above and in the amount to be contributed by the' Government, which will collect the taxes over the construction period. The Governrnnt's net of tax contribution would-thus be $342,000 equivalent, that is about 11% of project cost, net of taxes. 27. In January 1972 the Governing Council of UNDP approved the Country Program for Chad which includes assistance for the Livestock De- velopment Unit. UNDP has indicated informally that this wlould include the salaries and related costs of 4 experts. 28. G4nie Rural, a department in the Ministry of Rural Development responsible for ruiral water supplies, will also be responsible for the supervision of new well construction, repair, renovation and maintenance. For this purpose, the Government has requested technical assistance from France. Should such assistance not be forthcoming, the Government has agreed to engage a consultant and the cost of consultant servrices has been included in the proposed credit. 29. The design of the 38 new wzells to be constructed will be based on experience gained under local conditions. *Iater would be drawn by traditional methods aided by rollers and troughs. The drawing rate of this method would be about one litre/sec per well wihich would be adequate to provide water for l,500 cattle daily. Construction of the new wells is expected to take two years, allowing for time lost during the rainy seasons when no construction can be done. The well sites were determined by the consultants, SAUTI, to minutes of longitude and latitude, and account was taken of grazing conditions and expected depth and quality of the water. The expected life of each well is 30 years. 30. The 102 wells which would be repaired and renovated under the project were built in 1955 in the southern part of Batha district. Defects in these wells were detected as early as 1966. By 1969, 21 of them had already been abandoned and the rest, although still in use, needed repair, In 1969 a surveywiias carried out by SAUTI to determine the extent of the required repairse The work would take 18 months to complete, including stoppages during two rainy seasons, 31. The two well maintenance units to be provided under the project would be responsible for a total of 821 wells, including those to be con- structed and repaired under this project. Because of lack of funds; the Goverrment has not been able to carry out regular well maintenance. The credit would finance the acquisition of maintenance equipment as wqell as the maintenance units' operating costs. The IDA credit would cover the total cost of maintenance in the first year, and half in the second year. Thereafter, the Government would take over the cost of the units. 32. The Livestock Development Unit would be responsible for drawing up a comprehensive developnent plan, as well as for preparing subsequent livestock projects. On the postponement of the project In 1969, the financing of the LIDU was taken over by UNDP,-ihich set it up as a UNDP/FAO project ard provided an expatriate officer. When the updating mission visited Chad  - 8 - in 1971, it was found that the IZU had been functioning on somewhat different lines from those originally envisaged by the Association. Agree- anet has been reached with the Government on terms of reference. In addition to the head of the unit (a livestock specialist), the LDU would be manned by an animal production officer, a range ecologist and an agriculturaP economist all of whom would, initially at least, be internationally recruited. A Ghadian veterinarian would be attached to the unit to obtain experience in planning and project preparation. The unit wxould be financed by UNDP for a period of three years. The salaries of the livestock specialist, the animal production officer, and the range ecologist would be funded for three years, and that of the agricultural economist, for two years. In addition, UlfDP would finance the cost of office accommcdation, the purchase and operating costs of transport and fellowships for training. IDA would finance the foreign exchange costs of special studies to be carried out for the Unit by consultants on short-term contracts. 33. The work of the Livestock Development Unit would be reviewed every three months by an inter-ministerial cormittee comprising the Ministry of Livestock, the NTinistry-of Finance, the High Commission for Planning and the G4nie Rural department. They would ensure that the Unit operates in accordance with the terms of reference agre6d with the Association. The Government has also agreed that-the LDU would submit progress reports to UiDP and MIA every three months. 34. As mentioned in para 23 the contract for well construction and repair was put to international tender and the local firm of Dijckmans, which submitted the lowest bid, won the contract. Two thirds of the total project-cost, excluding the LDU, was subject to international competitive bidding. A few vehicles and a small amount of ancillary equipment, amounting to about $371,000C, would be purchased through-regular government tender procedures, which are considered satisfactory. A number of international manufacturers of vehicles and equipment have local agents wiho would bid for government purchases. 35. The Government has expressed concern that if project construction does not start in February, it iwill have to be postponed to November, 1972, because of the rainy season. The present low bid for the well repair and maintenance contract would no longer be valid and there is a danger that - new bids would be higher. The Association has accordingly approved the con- tract and, if the credit is approved, the amount of retroactive financing required would be about 4003,000. 36. The estimated foreign exchange cost of the project (see Annex III) is about $2 million, of which the proposed total credit would finance about $1.6 million and the UNDP about $0.4 million. The IDA would in addition finance about $0.6 million of local costs, The proposed credit would be disbursed against 70% of the cost of well construction and repair and So% of the cost of equipment and spare parts for the two maintenance units, this percentage reflecting the net of tax costs; 100% of expatriate salaries for the maintenance units; 100% of the remaining costs of the maintenance units for the first year and 50% for the second year; 75% being the-estimjated foreign exchange cost of consultants for special studies by the LDU.  - 9 - 37. The project would play a very important part in the Governmentfs efforts to boost its livestock industry and, thereby, increase its foreign exchange earnings. It would increase the purchasing 7power of the stock owners while, at the same time, increase government revenues through live- stock taxes. It would increase foreign exchange earnings by about $1.3 million per year, increase employment opportunities, and add about $195,000 a year to government revenues from livestock taxes. It would bring into productive use an additional 600,000 ha of grazing land with a carrying capacity of 80,000 cattle and about 70,000 sheep and goats. It would also prevent the continuing decline and possible collapse of 102 existing wells which serve an area of over 2.0 million ha, supporting about 210,000 cattle and 180,000 sheep and goats. In addition, 821 wells, including those to be constructed and repaired under the project, would be assured of regular repair and maintenance. Studies to be carried out by the LDU would lead to the identification and preparation of further projects designed to bring about a more systematic development of the country's livestock industry. 38. It is estimated that, as a result of additional grazing land which would be made available following the implementation of the project, herd sizes would grow by 190,000 cattle and 160,000 sheep and goats to reach totals of some 800,000 and 700,000 animals, respectively. The regular repair and maintenance of the wells would prevent their deterioration and a consequent reduction in their carrying capacity. Assuming an off-take of 11.5 percent after full stocking, annual off-take in the Batha district would be higher by 50,000 cattle and almost 100,000 sheep and goats under the project than without it. At 1970 prices, this would represent an added annual value of $2.3 million. The project's average rate of return to the econony discounted over the estimated 30 year life of the wells, would be about 11%. 39. Apart from the quantifiable benefits, the project would provide additional subsistence food for about 15,000 - 20,000 people, as well as increased returns from a number of secondary products, such as skins, hides, butter, and hair. 40. No charges are levied at present for the use of government stock wells and none are proposed for the wells to be constructed under the present project. PART IV - LEGAL INSTRUMENTS AND AUTHORITY 41. The draft Development Credit Agreement between the Republic of Chad and the Association, the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement of the Associa- tion, and the text of a resolution approving the proposed credit are being distributed to the Executive Directors separately. 42. The draft Development Credit Agreement conforms to the normal pattern in credits of this kind. 43. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association.  - 10 - PART V - RECOMMENDATION 44. I recommend that the Executive Directors approve the proposed credit, Robert S. McNamara President By J. Burke Knapp Attachment Washington D.C. February 2, 1972  ANNEX I SUMMhARY OF IDA CREDITS TO CHAD AS OF DECEMBER 31, 1971 Credit Fiscal Borrower Purpose Amount (US$ million) Number Year Credit Undisbursed 125-CD 1969 Chad Highway 4.1 2.4 Maintenance 126-CD 1969 Chad Education 1.8 1.7 251-CD 1972 Chad Education 2.2 2.2 Total IDA credits 8.1 Total undisbursed 6.3  ANNEX II COUNTRY DATA Area: 1,284,000 sq. km Political Status: Independent republic since Augast 11, 1960. Population: 3.7 million (estimate 1970) Rate of growth: 2.3 percent per year Density per sq. km: 2.9 Gross Domestic Product: OFAF 59,6 bilaion (1967) Per capita: CFAF 17,250 ($70) at 1967 exchange rate Growth rate, real terms (1960-69): 2 - 3 percent per year Government Finance: (in billions of CFAF) 1) 1967 1968 1969 1970 1971 Domestic revenue 10.1 9.4 11.2 12.6 13.4 Current expenditure 10.7 114. 12.8 l41 13.4 Current deficit (-) -0.6 -2.0 -1.6 -1.5 - Investment expenditure -0.2 -0.6 -1.1 -0.8 1.9 Total deficit -0.7 -2.5 -2.7 _2.3 == ==- -=== ~=:== French subsidies 0.4 0.5 0.3 2.3 1.5 Drawings on liquid re- serves and accumulation of arrears 0.3 2.0 2.4 0.07 Money and Credit: Chad is a member of the Banque Centrale des Etats de l'Afrique Equatoriale et du Cameroun (BCBABO) and as such uses the OFAF. 1) Budget estimates  -2 - 1967 1968 1969 1970 1971 Dec. Dec. Dec., June Dec. June Money supply 6.51 7.24 7.60 8.13 8.4 8.97 Domestic Credit -9.52 jo.86 12.56 12.72 12.60 12.59 Foreign assets -1.61 -2.01 -2.88 -2.41 -1.52 -0.83 (net) Balance of Payments: (in billions of CFAF) 1968 1969 1970 Exports f.o.b. 10.2 9.1 12.7 Imports f.o.b. 10.9 10.1 14.1 Trade deficit -0.7 -1.0 1.4 Services (net) -4.2 -5.8 Current account deficit -4.9 -6.9 not available Transfers (net) 4.6 5.1 Capital -0.1 0.5 Errors and omissions - 0.4 Monetary movements 0.4 0.9 0.8 Commodity Concentration of Exports: Average 1967 - 1969 Cotton 64, Livestock and meat 28% External Public Debt: In millions of dollars Disbursed Including Undisbursed Total outstanding as of Dec. 31, 1970 52.9 67.5 Total debt ser- vice (1971) 6.4 Debt service ratio (goods),1970 13% Exchange Rate: before December 15, 1971 - 278 after December 15, 1971 - 255.8  - 3 - IMF Position (July 1970): Quota: $10.0 million Drawings: $3.8 million  CHAD CREDIT AND PROJECT SUMMARY Borrower: Government of Chad. Amount: US$2.2 million equivalent Terms and conditions: Repayable in 50 years, including 10 years of grace by semi-annual installments of 1/2 of 1% from June 1, 1982, to December 1, 1991, and 1 1/2%-of principal from June 1, 1992 to December 1, 2021. Service charge: 3/4 of 1% per annum. Project: Livestock Development Project (a) construction of 38 new stock wells and repair of 102 existing wells in main livestock producing areas; (b) establishment of two well maintenance units to repair and maintain 821 wells; (c) establishment of a Livestock Development Unit to plan overall livestock development and prepare further project Cost of project: Component Local Foreign Total (US$ thousands) New wells 519 606 1,125 Well repair and renovation 283 310 593 Maintenance Units 429 524 953 Livestock Development Unit 154 614 768 1,385 2,054 3,439 Financing: Local Foreign Total (US$ thousands) IDA Credit 525 1,630 2,155 UMTDP Grant 106 424 530 Government 754 - 754 1,385 2,054 3,439  -2 ANNEX III Procurement: WrJell construction and repair contract awarded to lowest bidder on the basis of international competi- tive bidding. Vehicles for LDU to be purchased - locally under regular Government tender procedures. Disbursements: IDA Fiscal Year Cumulative Disbursements and Quarter at end of Quarter (US-$ I000) 1972 June 30 370 1973 September 30 870 December 31 990 March 31 1,370 June 30 1,740 1974 Teniember 30 1,990 December 31 2,160 Consultants: A suitably qualified and experienced Italian firm- of consultants, SAUTI, was retained for the prepa- ration of bids for well construction and repair. Supervision of the execution of the project will be carried out by Genie Rural assisted by technical assistance personnel or consultants. Rate of Return: The average rate of return to the econorm discounted over 30 years is 11%. Appraisal Report: Report No. Agriculture Projects Department.