Announcement of Ten Million US Dollars Credit for Rural Development in Tanzania on August 8, 1974

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREET, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Preas Release No.74/54 Subject: $10 million credit for August 8, 1974 rural development in Tanzania A credit of $10 million from the International Development Association (IDA), an affiliate of· the World Bank, will help to improve living conditions among extremely poor farm families in the Kigoma region of western Tanzania. The project will provide villages with economic and social infrastructure, together with credit and technical support services for agricultural development. About 1.35 recently settled ujamaa villages -- with some 250,000 people will benefit. Villages will be helped in clearing tsetse infested bush and provided with primary schools, better roads, health clinics and improved water supply systems. Technical assistance for agricultural development will be backed with loans for village warehouses and simple equipment, and with credit for fertilizers and insecti- cides. These loans will be handled by a regional cooperative agency and channeled • through village cooperative societies • Supporting services to be financed under the project include an agricultural experimental and training center, aerial photography of areas to be developed, and a regional radio-telephone hook-up. At present, farm families in Kigoma region work 3-4 acre holdings in relative isolation. Production is almost exclusively of food crops for subsistence consumption. Annual per capita incomes are about $20--among the lowest in the world. Under the project, substantial improvements in the yields of maize, beans, cotton and groundnuts should enable per capita incomes to be doubled over a 12-year period. The project is an experiment of great significance for Tanzania and its success will be watched closely by both the Government and the World Bank. Tanzania has centered its program of rural development around the "ujamaa" village settlement, em- phasizing community self-help and working together. There is a need to develop agricul- tural systems for the new settlements, and it is hoped the project ./ill serve as a model. The project is also an example of the Bank's effort to design a development strategy to benefit the lower 40% of the population in developing countries. The project is scheduled for completion in' 1980. The United Nations Capital Development Fund (UNCDF) is participating in the pt~oj ect and will provide $1.5 million on a grant basis to the Government of Tanzania for finan- cing the water supply and health components of the project. It is the first time that the UNCDF has participated with the World Bank in a project. • The IDA credit to. Tanzania is for a term of SO years, including 10 years of grace • It is interest free, but will carry a service charge of 3/4 of 1% to meet IDA's adminis- trative expenses. Note: Money figures are expressed in US dollar equivalents.  August 8, 1974 PROJECT: JECHNICAL DATA Rural Development • COUNTRY: Tanzania TOTAL COST: $13 million BANK FINANCING: $10 million for a period of 50 years, including 10 years of grace, interest free, service charge of 3/4 of 1% to cover IDA's administrative costs. OTHER FINANCING: Government of Tanzania IMPLEMENTING ORGANIZATION: Regional Administration of Kigoma PROJECT DESCRIPTION: The provision over a five year disbursement period, of agricultural inputs and social and economic infrastructure for about 135 newly established ujamaa villages in Kigoma region. The project's objectives are to lift the annual per capita income of villagers from present levels of $20.0 to about $40.0, and to develop or strengthen marketing, credit, • extension and adaptive research systems in the region also to improve the levels of social services in rural areas. PROCUREMENT: International competitive bidding for fertilizers, pesticides, pumps, radio-telephone equipment and aerial photography where contracts exceed $30,000; local manufacturers would be allowed preferential margin of 15 percent. Contracts for vehicles will be awarded in accordance with the Government's usual procurement procedures. Local competitive bidding or force account for construction of civil works, village water supply and access roads. ESTIMATED COMPLETION DATE: 1980 •