Central African Empire - Livestock Development Project

Document of The World Bank hE Copr FOR OFFICIAL USE ONLY Repqo No. P-2459-CAE REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE CENTRAL AFRICAN EMPIRE FOR A LIVESTOCK DEVELOPMENT PROJECT March 16, 1979 This docmt ba a muuced diboo ad may be ed by rocilot em_y in the pderfom of their offibl duties. Ib eoatts my t oerwibe be dielsd witdw Wod Duk atorbition.  CURRENCY EQUIVALENTS CURRENCY UNIT CFA Franc (CFAF) US$1 - CFAF 220 1/ CFAF 1,000 = US$4.55 FISCAL YEAR July 1 - June 30 ABBREVIATIONS ADF : African Development Fund ANEC : National Livestock Owners Association (Association Nationale des Eleveurs Centrafricains) IFAD International Fund for Agricultural Development IEMVT : French Institute for Tropical Livestock and Veterinary Medicine RMWA World Bank Regional Mission in Western Africa SEGA : National Abattoir Management Company (Societe d'Etat de Gestion des Abattoirs) 1/ Floating exchange rate.  FOR OFFICIAL USE ONLY CENTRAL AFRICAN EMPIRE LIVESTOCK DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: Central African Empire Amounts: IDA: US$2.5 million EEC Special Action Account: about US$0.5 million Terms: Standard IDA terms Prolect Description: The proposed project is designed to develop livestock production and to improve the nutrition and living conditions of one of the poorest segments of the population in C.A.E: the M'Bororo herdsmen. The project would consist of the following four main components: (i) provision of animal health services in the western half of the country; (ii) strengthening of the Government's Livestock Service; (iii) introduction and testing of simple pasture management techniques, based on herdsmen's associations in pilot zones; and (iv) studies and surveys of animal health problems, pasture resources and sector development strategy, including preparation of a follow-up project. The proposed project would directly benefit the M'Bororo herdsmen whose average per capita cash income, the lowest of all subgroups in C.A.E., would increase from approximately US$120 to some US$150 per year. The value of the increase in the herd would be US$240 per family member. The technical assistance and training provided under the proposed project would also achieve much needed institution building. The project faces the risk associated with the C.A.E.'s difficult public finance situation. However, enforcement safeguards have been designed within the project to mitigate these risks. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Costs US$ million Foreign Local Total A. Animal Health 2.8 4.6 7.4 B. Training 0.6 0.5 1.1 C. Topia Pilot Project 0.9 0.8 1.7 D. Studies 0.7 0.3 1.0 Total Base Cost 5.0 6.2 11.2 Physical contingencies 0.2 0.3 0.5 Price contingencies 0.6 0.7 1.3 Total Project Cost 5.8 7.2 13.0 Taxes - 1.6 1.6 Total Net-of-Tax Cost 5.8 5.6 11.4 Financing Plan: (net of taxes) US$ million Foreign Local Total IDA 1.6 0.9 2.5 EEC Special Action Account 0.4 0.1 0.5 IFAD 1.6 0.9 2.5 ADF 2.2 1.1 3.3 Government/Beneficiaries - 2.6 2.6 Total 5.8 5.6 11.4 Estimated Disbursements: US$ thousands FY80 FY81 FY82 FY83 FY84 IDA Annual 100 660 540 520 680 Cumulative 100 760 1,300 1,820 2,500 EEC Annual 40 460 - - - Cumulative 40 500 Economic Rate of Return: 22 percent on 82 percent of project costs for which benefits have been quantified. Staff Appraisal Report: Report No. 2134 CAE dated March 16, 1979.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE CENTRAL AFRICAN EMPIRE FOR A LIVESTOCK DEVELOPMENT PROJECT 1. I submit the following report and recommendation on two proposed credits to the Central African Empire for the equivalent of US$3.0 million, on standard IDA terms, to help finance a Livestock Development Project. One credit of US$2.5 million would be made from IDA resources. A second credit of about US$0.5 million equivalent would be made from the EEC Special Action Account, administered by the Association in accordance with the terms of the agreement of May 2, 1978 between the Association and the European Economic Community. The International Fund for Agricultural Development (IFAD) and the African Development Fund (ADF) would both contribute to the financing of the proposed project with loans of US$2.5 million and US$3.3 million equivalent respectively, substantially on the same terms as the IDA credit. PART I - THE ECONOMY 2. The last economic report entitled "The Economy of the Central African Republic" (Report No. AW 16-a) was distributed to the Board on May 22, 1970. Since then we have monitored the economy with several short missions and with the help of the IMF. An IMF mission visited the country in October 1978; a Bank external debt mission took place in November 1978. The findings of these missions are incorporated in this report. A Bank economic updating mission is planned for FY80. Economic Potential 3. Ihe Central African Empire (C.A.E.) is a landlocked country of 620,000 km , with a population of only 1.9 million concentrated in the western and southern regions. About 25 percent of the inhabitants live in urban areas. The C.A.E. is listed as one of the 29 least developed countries by the United Nations and, in 1977, had a per capita income of about US$225. 1/ 4. The C.A.E. has a good development potential with a diversified resource base. Soils and climate conditions permit the cultivation of a variety of products including cotton, coffee, tobacco and a number of food- crops. Rich forest reserves in the southwest are being exploited. Alluvial diamonds, uranium, iron ore, limestone, traces of cobalt, nickel and platinum constitute the country's mineral wealth of which only diamonds are exploited. Sedimentary basins along the border with Chad are being explored for possible oil resources. The high cost of transport constitutes a natural barrier to 1/ Latest Bank staff estimates.  competing imports and protects import substitution manufacturing while an extensive system of navigable rivers allows high-valued products, partic- ularly tropical hard woods, to be competitive on international markets. Under prudent management, C.A.E.'s resource base could allow the economy to grow at a moderate but sustained rate well into the end of the century although the country's remoteness from the sea will continue to handicap development. Past Performance 5. In the 1960s, the Government pursued a cautious development stra- tegy, leaving most economic activities to the private sector. Government efforts focussed on providing basic social services and stimulating the produc- tion of cotton to increase exports and provide cash incomes for the majority of farmers. Favorable weather conditions allowed for a steady increase in agricultural production. The investment code stimulated foreign invest- ment in forestry and import substitution manufacturing, while diamond produc- tion increased after extensive alluvial fields were opened up to small-scale operators. Until 1969, a private river transport company provided efficient service along the transequatorial route to the port of Pointe Noire in the Congo. Under these conditions real GDP grew at 4-5 percent per year from 1965 to 1970. 6. The economy was stagnant in the period 1970-75 mainly because of the Government's inadequate economic and financial management, droughts, the recession in industrial countries and international price upheavals. An agricultural reform, undertaken in 1970, resulted in the closing of the regional rural development offices and the departure of expatriate technical assistants working in the sector. The scarcity of trained manpower seriously weakened agricultural institutions, while research came to a standstill. Cotton production declined and coffee production stagnated as smallholders migrated to diamond fields, plantations were not renovated and marketing channels became inadequate. Weaknesses in the Government's marketing agency caused periodic food shortages in urban centers. Agricultural production was also hampered by inadequate producer prices, unfavorable weather since 1973, and deteriorating farm to market and trunk roads. 7. Transport, manufacturing and mining also stagnated. When the Congo nationalized the river-rail-port transport system in 1969, C.A.E. reluctantly followed suit. The new river transport monopoly, the Agence Centrafricaine de Communications Fluviales (ACCF), undertook an ambitious investment program to increase transport capacity in line with the expansion of forestry exports. Management problems, the increased debt burden, poor river conditions and the depressed state of forestry production after 1974 accelerated the deteriora- tion of ACCF's finances, and impeded its ability to provide efficient services. The expansion of manufacturing was hindered by a series of nationalizations in 1974 and the Government's inability to pay its bills as public finances deteriorated. Official diamond production declined after 1970 as a result of the depletion of easily recoverable deposits, intense smuggling activities and uncertainties generated by the precarious relations between the Government and foreign-owned companies.  -3- Recent Improvements in the Economy 8. As of 1976, the Government's management of the economy started to improve. Agricultural producer prices were raised following the betterment of international market conditions. To overcome the persistent institutional weaknesses in the Government's central agricultural services, a number of autonomous agencies were established and charged with the management of new agricultural projects. Under this formula and with the help of foreign finan- cial and technical assistance, a number of important projects were initiated. Cotton productivity programs are being pursued by FAC and FED, which will concentrate extension services in the most viable areas. A new coffee market- ing agency has been established, which, by judiciously selling the 1976-77 crop forward, was able to avert the adverse effects of the decline in coffee prices in the second half of 1977. The country's three stabilization funds for coffee, cotton and foodcrops were consolidated under a general manager and control over their resources was withdrawn from the Treasury. 9. The Government has also made progress in other sectors. It is now initiating a large road maintenance project financed by a consortium of donors, which should help to alleviate internal and external transport con- straints. With Bank assistance, the Bangui-Bossembele road will improve the overland transport link to the sea through Cameroon. The Government is also attempting to interest a private partner in managing the ACCF to improve the efficiency of river transport on the transequatorial route. The investment climate is being restored by recent measures, such as the reactivation of negotiations for the settlement of the 1974 nationalizations, the successful negotiation of new diamond concessions with foreign partners and the recent reaffirmation of the Government's commitment to maintain a vigorous private sector. 10. Led by the recovery of forestry and the coffee price boom, the economy started to grow again in 1976, real GDP rising by about 4 percent per year. Cotton and diamond production also picked up. The improved liquidity of the economy stimulated demand for manufactured products, transport and other services and suppliers in the capital are building up their stocks to avoid the shortages that occurred in 1976 and 1977 owing to interruptions in river transport. The 1976-80 Development Plan 11. The latest version of the 1976-80 Plan calls for expenditures of about CFAF 132 billion. Top priority is accorded to improving transport in- frastructure, particularly C.A.E.'s access to the sea. Since the Government recognizes that the execution of this program will be determined by the avail- ability of external financing, annual reassessments are undertaken to realign the plan to available resources. A mid-term report for 1978 indicates sub- stantial shortfalls in outlays. Should present trends persist, investments in real terms would only be 10 percent above the CFAF 39.0 billion achieved in the 1971-75 Plan. The major reasons for this disappointing result is the lack of realism of the program as initially defined which took little account  of the country's absorptive capacity and the Government's ability to prepare projects. Recent efforts to improve the management of agricultural develop- ment agencies and a number of other vital economic services should increase the country's absorptive capacity and improve its public investment performance. Public Finances 12. The persistence of C.A.E.'s public finance problems constitutes an important constraint to accelerating the growth of the economy. The deterio- ration of the public finance performance was particularly significant during 1970-73, when the rate of growth of government expenditures (11.3 percent per annum) was about double the growth in revenues. The trend was arrested in the following years with the growth of revenues (11 percent) slightly exceeding the growth of expenditures (10 percent). This, however, was not sufficient to restore a more balanced public finance situation. Treasury deficits con- tinued to expand reaching an estimated CFAF 6.7 billion in 1978. Because domestic and foreign financial sources were insufficient to cover the deficits, accumulated arrears amounted to CFAF 13.8 billion in 1978 or 73 percent of revenues for that year. Targets for balancing the budget and reducing arrears agreed to with the IMF at end 1977 as a condition for a Trust Fund loan, have not been met. 13. The growth of revenues in real terms has not been substantial in recent years, and measures to improve revenues have had limited success. Because of the depressed state of the economy and increased smuggling activ- ity, import taxes, which constitute the bulk of revenues, have not increased enough to stabilize finances. An IMF tax survey to identify means of increasing the response of public revenues to economic activity is being examined by the Government. Recently, the Government doubled the excise tax on beer to raise revenues earmarked for the Autonomous Amortization Fund, which is responsible for managing the public debt. 14. Expenditure growth has mainly derived from a sustained increase in civil service employment, and high administrative expenses in 1977; the increase in investment outlays in 1978 is probably due to the recent reactiva- tion of public aid programs in agriculture and other economic services, and the resulting increase in local counterpart contributions. To contain expend- itures and in preparation for a Second Phase Trust Fund program with the IMF, the Government is looking into ways of reducing the size of the civil service. Furthermore, to pave the way for better fiscal management, financial institu- tions are being strengthened. This includes the merging of the Ministry of the Treasury and the Ministry of Finance which had been separate financial authorities since 1974, and the establishment of an auditing directorate to control expenditures. The Government's Treasury accounts are being computer- ized to monitor tax revenues and improve expenditure controls and budgetary planning.  -5- Balance of Payments 15. Generally, imports of goods and services have exceeded exports since the mid-1960s resulting in persistent current account deficits. High transport and distribution costs, up to 40 percent of the c.i.f. value of imports, have been a major drain on the current account. Since net public and private receipts of capital from abroad were insufficient to cover the current deficit, balance of payments deficits prevailed between 1970 and 1975, financed largely through recourse to the short-term facilities of the BEAC (Banque des Etats de l'Afrique Centrale), increases in liabilities to the French postal system, drawings on the IMF gold tranche in 1974, and the IMF oil facilities in 1974 and 1975. In 1976, the current account deficit was sharply reduced owing to the increase in the value of coffee exports. However, in 1977, as a result of the rise in imports and despite a 25 percent increase in export earnings, the current balance deteriorated again. 16. The good performance of exports was due to the coffee boom and caused foreign assets to rise from US$3.8 million in 1975 to about US$20 million in 1976 and 1977, or about 3 months of merchandise imports. Foreign assistance, which rose rapidly from US$10 million in 1971 to about US$40 mil- lion in 1975, has stagnated since then because of delays in project prepara- tion and the lack of project counterpart funds from the Government. The External Debt 17. Concessional assistance predominated before 1972. Thereafter, and particularly during the 1974-76 period, the Government resorted increasingly to commercial borrowing to meet its investment targets and the country's poor debt servicing performance further deteriorated. At the end of 1977, the outstanding external debt amounted to about US$125 million, of which about 75 percent had been disbursed. 18. In 1974, the Government established the "Caisse Autonome D'Amor- tissement des Dettes de l'Etat" to manage part of the public debt, while French budgetary assistance helped meet part of the Government's external obligations. However, owing to institutional weaknesses and financial problems, arrears continued to accumulate after 1974. Responding to a Government request, the Bank recently conducted an external debt survey and proposes to support the authorities with occasional technical assistance to help centralize external debt operations at the "Caisse Autonome d'Amortisse- ment des Dettes de l'Etat" and improve its management. The Government is also holding bilateral talks to reschedule the debt and restore its credit image. Development Issues and Prospects 19. The C.A.E.'s main medium- and long-term development potential lies in a diversified industrial and smallholder agricultural sector. In realizing this potential the promotion of exports should be balanced with improvements in the marketing of foodstuff to the country's growing urban centers. The difficult access to existing forestry reserves will continue to constrain  - 6 - forestry exploitation for some time. Long transport hauls to the nearest sea port constitute the major obstacle to the development of the country's uranium reserves. To ease transport constraints, much of the development effort will need to focus on the rehabilitation of the country's neglected domestic and international road links and the improvement in river transport. To ensure the supply of skilled manpower for the expanding modern sector, in- creasing the access to primary education and qualitative improvements in technical training will remain of major concern. Basically, the acceleration of the pace of development will depend on the Government's ability to restore a healthy public finance position and increase its contribution to finance development projects and recurrent costs. Until this is achieved the C.A.E. will have difficulty in attracting a higher level of development assistance, and the Bank role will of necessity remain limited. 20. It is difficult to restore the confidence of private investors and official development agencies, and the impact of government measures to stimu- late the growth of key economic sectors will not be felt immediately. Even if the Government is able, with the assistance of the IMF, to improve finan- cial administration, the public sector is not likely to generate suEficient internal savings to finance a substantial share of a slowly expandiag public investment program. In view of the cotntry's poverty and uncertain short and medium-term prospects, donors should extend their financial assistance on highly concessional terms and agree to finance a high proportion of total costs of high priority projects including local costs in appropriata cases. PART II - BANK GROUP OPERATIONS IN C.A.E. 21. Bank Group commitments in thc C.A.E. amount to US$27.9 miLlion in four IDA credits to help finance three transportation projects and one education project. The first two highiray projects were completed in 1975 and 1976 respectively, and the Third Highw&y Project is not yet effectire. The Education Project is well under way. lannex II contains a summary statement of IDA credits as of January 31, 1979 aLnd a note on the execution of the Education Project. Although the countiy's difficult financial position and poor administrative performance have caused delays and setbacks in project execution, the Government collaborated with the Association in eventually finding solutions to safeguard the successful implementation of projects: an exception was the Second Highway Project for which only about 15 percent of the proposed maintenance program was achieved for lack of Government counter- part funds. The Government has taken corrective measures under the Third Highway Project, and with the assistance of other external donors, initiated a well-conceived and comprehensive road maintenance program. 22. The level of IDA lending and the sectoral composition of our lending program over the last 15 years were largely circumscribed by the country's poor performance and limited absorptive capacity. The C.A.E. has a good potential in the fields of agriculture, livestock, and forestry, but our past efforts at identifying and preparing agricultural projects were frustrated by  -7- frequent changes in the organization of the agricultural sector. Concentra- tion of past operations in the highway and education sector, however, was also justified by the special characteristics of the C.A.E.'s economic situation. A landlocked country with a small population scattered over a vast territory, the C.A.E.'s depends for its development on the upgrading and adequate main- tenance of its international and domestic transport system. Shortage of trained manpower is particularly critical both in Government services and in the private sector and improvement of the education system should be given high priority. 23. While our highway projects indirectly supported rural development in areas with good agricultural potential, the pioposed Livestock Development Project is the first attempt of the Bank Group to deal directly with the most pressing development needs of the poorest rural areas, in this case, the M'Bororo herdsmen who have the lowest per capita income in the C.A.E. For the future, a wide variety of other projects can be envisaged to develop the cotton producing region, improve coffee production, promote foodcrop and inte- grated rural development, expand timber production, develop technical educa- tion, rehabilitate and upgrade river and other transport infrastructure. But the timing and selection of these operations will essentially depend on the success achieved in implementing both the recently approved Third Highway Project--and the all important highway maintenance program tied to it--and the proposed Livestock Development Project. We are encouraged by the Govern- ment's initial reactions to the type of institution building.arrangements, financial measures and policy changes required for these projects, but this favorable disposition has to be substantiated during project execution before we can formulate our lending program for the next few years. 24. From 1971 to 1975, public investments amounted to about US$160 mil- lion of which domestic resources accounted for 36 percent. The remainder was supplied by official bilateral and multilateral assistance (European Develop- ment Fund: 25 percent, United Nations: 11 percent, Yugoslavia: 10 percent). Outstanding and disbursed IDA credits currently account for 9 percent of the total debt and 1 percent of the debt service burden. These percentages will most likely remain unchanged-or will slightly decrease in the next five years. PART III - THE LIVESTOCK SECTOR 25. The rural sector contributes about 38 percent of GNP and about 80 percent of exports receipts. It also supports about 80 percent of the popu- lation. Cotton, coffee- and tobacco constitute the main cash commodities. Sector priorities were assessed in 1975 by the World Bank Regional Mission in Western Africa (RMWA) and the livestock subsector was judged to have" good potential for development over the medium term and to be a good starting point for Bank support of the rural sector in C.A.E. 26. Livestock is an important resource for the C.A.E. The country has about 900,000 cattle, 700,000 small ruminants, 70,000 pigs and 1.7 million chicken. Herd growth was principally caused by the immigration of pastora- lists from the neighboring countries (Cameroon, Chad and Sudan). The livestock  - 8 - industry is almost completely in the hands of 8,000 pastoralist families of the M'Bororo tribe. After 50 years of transhumance in C.A.E. the livestock producers were recognized as citizens only in the late 1950s, but lack of Government support has frustrated attempts to bring them fully into the economic mainstream. 27. Although these traditional herdsmen possess sizeable capital assets in the form of their cattle herd, they have the lowest average income of all groups in C.A.E. because of their traditional reluctance to treat their cattle as a fully exploitable resource. Among the M'Bororo, a large herd is still a status symbol to be passed on to the next generation. Outright sales for cash are not the main mode of exploitation of the cattle resource and as a result offtake rates are still limited to about 9.3 percent. Sales are generally prompted by the need to raise cash to pay taxes and to meet such elemental needs as the purchase of light equipment, short trips into nearby villages or to conduct traditional ceremonies. Milk production is the primary goal of day-to-day herd management since milk is used as a staple food by the M'Bororo and is an important source of income. The production and marketing of milk is managed by the women, who do the milking, sell the milk in the nearby villages, and use the money earned to support the family. 28. At present, the major technical constraint on livestock development is poor animal health. However, there is scope for substantial improvement since experience shows that in similar circumstances pastoralists have been receptive to advice given by competent and well organized services. Even though some evidence of pasture degradation can be found, it does not consti- tute a serious threat at this point. Nevertheless, if programs are successful and the national herd grows, availability of pastures may eventually become a problem if traditional grazing practices continue to prevail. Hence, it will be necessary to introduce improved methods that will need to be tested for both technical soundness and acceptability to herdsmen. Marketing and Prices 29. Live animals are traditionalLy marketed through local merchants. Animals are collected until the trader has sufficient numbers to justify pay- ing a drover to take them to Bangui, the main trading and consumption center. Prices paid for animals on the hoof currently vary from US$68 equivalent for a male calf to about US$273 equivajent for a well-formed bull or about US$1.00 to 1.15 per kilogram of carcass weight. The retail price structure for meat in Bangui has been studied and the data suggests that traders' and butchers' margins are not excessive. Beef consumption is about 15 kilograms per capita (1976 estimates). Despite the relatively large size of the national herd, social customs have prevented high offtake rates and only some 65 per- cent of the country's beef consumption is met from domestic sources, the rest being imported. The socio-economic study proposed under the project would include an analysis of markets and prices in order to help improve the marketing system and to increase the off-take rates and the flow of cattle from the western region to Bangui. This would include investigating the use of cooperative herdsmen's associations as marketing channels. As these coop- eratives would be organized with the help of traditional leaders (ardos), the  - 9 - necessary changes in social customs might be acceptable to the herdsmen. Furthermore, through improved productivity factors the project is expected to lead to higher survival rate of calves. As the M'Bororos traditionally prefer to keep only heifers and cows and accept to trade away male animals, the increase in male herd is expected to encourage higher offtake rates. Institutions 30. The Ministry of Agriculture and Livestock is responsible for the administration and development of the livestock industry mainly through its Livestock Service. While the Livestock Service is grossly overstaffed it lacks qualified people and managerial capability and is still suffering from the mass exodus of expatriate technicians following the 1970 Agricultural Reform which involved: (i) dissolving the regional and sectoral development agencies, including the livestock agency; (ii) creating a "National Office for Marketing of Agricultural Products"; and (iii) nationalizing the French-operated institute of agronomic and veterinarian research. Most of the C.A.E. veterinarians currently in service are inadequately trained and lack apprcpriate field experience. Fu-thermore, because of the poor working conditions, staff morale is very low: salaries payments are irregular and funds to finance operating expenditures3 are lacking. The rebuilding of an efficient institution to organize and manage the livestock industry is there- fore a prerequisite to any successful aperation in the livestock subsector. This will be a major goal of the propo,ed project. 31. Other external donors are also attempting to improve livestock services. In the eastern region, the iuropean Development Fund (FED) has undertaken a support program that began with two components: a tse-tse eradication campaign and the establishment of a ranch to crossbread trypanosomiasis tolerant cattle; it was due to terminate by end of 1978. The program has been broadened to cover animal health in general and FED has agreed to continue financing this program along the same lines as the health component of the proposed project. In the western region, Bouar, the UNDP has financed a team of three FAO veterinarians who have successfully established the nucleus of an animal health service in the region. The initial FAO-UNDP project covered a 1973-75 campaign against pleuropneumonia. There was no recorded outbreak of this disease in 1976 compared to 25 in 1974, when the project just started. A follow-up project was aimed at delivering animal health services directly to the livestock producers, by supplying veterinary posts with medicines, materials, and means of transport. The vaccines are now sold to the livestock owners and the proceeds of the sale are put into a revolving fund. The experience was well received by the herdsmen and confirms that, with tight administrative control, an animal health program with appro- priate cost recovery can be successful in the C.A.E. 32. In addition to the Livestock Service, the Ministry of Agriculture and Livestock supervises the activities of the Clinical Laboratory at Bouar, the National Livestock Producers Association (ANEC), the National Livestock Technical College at Bouar, and the state owned slaughterhouse corporation, the Societe d'Etat de Gestion des Abattoirs (SEGA). The Clinical Laboratory  - 10 - is a specialized agency which carries out rudimentary tests and examinations, and prepares vaccine doses from the bulk of supplies imported from the French Institute for Tropical Livestock and Veterinary Medicine (IEMVT) Laboratory in N'Djamena, Chad. An FA0-UNDP team is presently managing the laboratory facilities. ANEC was created in 1974 to carry out activities related to animal health, livestock production and the protection of producers' interests. All livestock producers are expected to join ANEC and pay an annual membership fee of about US$16 equivalent. Part of ANEC's resources are used to purchase animal health medicines which are distributed to producers free of charge. ANEC's operations with regard to animal health have been ineffective and its free distribution of veterinary medicines is at variance with the sound practice of cost recovery followed--and proven feasible--in the UNDP project. To correct this inconsistency, the functions of ANEC would be modified, by December 31, 1980. Most of its activities would be directed to the promotion of socially-oriented programs (nutrition, public health and adult education) for its members; the rest of its resources would be used to purchase veterinary products and to finance a marketing officer, but besides these contributions, ANEC would cease to intervene directly in the field of animal health (Section 3.09 of the draft Joint Project Agreement). The National Livestock Technical College in Bouar was established with FED financing in 1969 to train middle level technicians and thereby meet the needs of the Livestock Service. The quality of instruction has been poor since most instructors are themselves recent graduates of this or an equivalent institution. As a result, poorly trained graduates have swelled the ranks of an already overstaffed Livestock Service. 33. All official slaughter in C.A.E. is under the control of SEGA, which will administer a recently constructed modern slaughterhouse in Bangui. The slaughter fee, which is presently about US$4 equivalent, is likely to be increased to US$14 when the facilities become operational. Initial operations of the new slaughterhouse are not expected to cover operating costs even with the proposed increase in fee and the FED has budgeted a subsidy of US$1.8 mil- lion for 1978-80. It is estimated that about 50,000 animals would have to be slaughtered each year (full abattoir capacity) for the slaughterhouse to break even. In 1977, the number of animals slaughtered was estimated at about 44,000. Livestock Development Strategy 34. Until the early 1970s, Government paid little attention to the livestock subsector and the resulting absence of a development strategy and well defined priorities has prevented its considerable production potential from materializing. Government has recently initiated some actions leading to the promotion of the livestock subsector, such as the activation of insti- tutions and programs discussed in paras. 30-33. This appears to be a sign of Government's concern for the economic and social well-being of the livestock producers who are among the poorest members of the C.A.E. society. At present, Government's two most important objectives concerning the livestock subsector are: (i) to satisfy the country's need for meat and milk through increased domestic production; and (ii) to improve the nutrition and living conditions  - 11 - of the livestock producers. To achieve these objectives the following con- straints would have to be removed: (i) the disorganization and inefficiency of the Livestock Service; (ii) the existing poor animal health; and (iii) the trend towards degradation of pasture through overgrazing. The proposed project would aim at alleviating these constraints. PART IV - THE PROJECT 35. The proposed project would be the initial stage of a program to develop the full potential of the livestock subsector by increasing the size and productivity of the national herd, and improving the living conditions of the herdsmen. The project was identified in November 1975 by the Bank's Regional Mission in Western Africa (RMWA), which completed project preparation in November 1977 and discussed it with Government in January 1978. An IDA mission appraised the project in February/March 1978. A Staff Appraisal Report entLtled C.A.E. Livestock Develcpment Project - No. 2134-CAE (March 16, 1979) is being distributed separately. Negotiations for the proposed credit were held in Washington from February 21 to 24 with a delegation from C.A.E., headed by H. E. Jean Pierre Le Bouder, Minister of Planning. Project Objectives and Description 36. The principal objectives of the project are to improve the level of human nutrition by increasing meat and milk production for local consumption, to improve the living conditions of M'Bororo herdsmen and to reverse the trend towards pasture degradation. In order to attain these objectives, the proposed project would: (a) provide equipment and support staffing for the Livestock Service to enable it to carry out an adequate animal health program for the 700,000 head of cattle in the western half of the country; (b) train the staff of the Livestock Service through short-term courses, the upgrading of the National Livestock Technical College at Bouar, and on-the-job training of senior staff working in parallel with expatriate project staff; (c) undertake a pilot project in the Topia Region to introduce and test simple methods of improved pasture management and to establish cooperative herdsmen's associations in pilot zones; and (d) provide 44 man-months of consultant services for studies and surveys of animal health problems, pasture resources and economics of traditional cattle raising in order to develop a long-term strategy for the sector including the preparation of a follow-up project.  - 12 - Implementation 37. The project would be executed by the Ministry of Agriculture and Livestock through its Livestock Service. As the Livestock Service lacks adequately trained personnel to carry out the project, technical assistance personnel would be essential to complement and train existing C.A.E. staff. The following positions would be filled through international recruitment: (i) a veterinarian with livestock development experience in tropical areas who would be project manager and co-director of C.A.E.'s Livestock Service; (ii) a chief accountant/administrative officer responsible for budgeting aad account- ing and (iii) an "inspecteur principal" of the Livestock Service, western region, would assist him in these tasks. The "inspecteur principal" would also supervise the animal health component and would have full responsibility for the management of all livestock activities in the western regio.a including the Livestock Technical College and the Veterinary Laboratory at Bouar and the Topia Pilot Project; (iv) a parasitologist to head the Veterinary Laboratory at Bouar; (v) an experienced range manager to manage the Topia Pilot Project; and (vi) a livestock education specialist to be principal of the Livestock Technical College. The Government has invited consulting firms to submit proposals for the supply of internationally recruited staff. Furthermore, an assistant principal of the Livestock Technical College and a marketing officer would be recruited locally. A condition of effectiveness of the proposed IDA credit would be that the project manager, the manager of the Topia Pilot Project and the chief accountant/administrative officer be employed and in post (Section 5.01 (e) of the draft Development Credit Agreement). The other internationally recruited staff should be appointed by January 31, 1980 at the latest (Section 3.03 of the draft Joint Project Agreement). Project activities would be implemented on the basis of annual programs and budgets to be prepared by the project's management and submitted to IDA for approval at least three months before the start of the fiscal year with the first budget and program being submitted no later than March 31, 1980 (Section 4.02 (a) of the draft Joint Project Agreement). Animal Health and Production 38. As stated in paragraph 28, poor animal health constitutes the most significant technical constraint to herd development in the C.A.E. and can only be corrected by an improved Livestock Service. Therefore, the project would undertake to develop an efficient animal health service in the western region, which would be responsible for the implementation of a comprehensive animal health program. Once properly trained (para. 41), the staff would disseminate information on animal production and marketing to herdsmen. Under the responsibility of the "inspecteur principal", animal health services would be carried out through sixteen veterinary centers, each headed by a health officer who would supervise six to eight veterinary posts. To ensure the protection of the national herd, the service would provide regular treatments against key contagious diseases like pleuropneumonia, blackleg and pasteurel- losis. Treatment against these diseases will prevent spread of infectious diseases and has therefore traditionally been provided free in Africa. Therefore, herdsmen would not be charged for the costs of vaccines and other  - 13 - medicines used to combat such diseases. These services, which should be regar^ded as a social cost, would be borne by Government which would make sufficient funds available in advance to the project management for this purpose (para. 44). 39. All other medicines would be sold at cost to the herdsmen through a revolving fund system similar to what was successfully initiated under the UNDP-financed project. After collecting membership fees from livestock owners, ANEC would deduct its overhead and other costs, and pass on sufficient funds to the Project Account for the purchase of veterinary products. An agreed proportion of membership dues collected by ANEC in each of the four years of project implementation would be allocated to the aforementioned purchase (Section 3.02 of the draft Joint Project Agreement). 40. To protect the national herd against the possible importation of diseases via live animals coming from the neighboring countries (Chad, Sudan and Cameroon), the Inspectorate for the Central Region in charge of control- ling animal movements across the borders and two veterinary centers in the western region would be provided with vaccines, vehicles and trained staff to keep track of cattle entering or lezving the country. Other services in support of animal health and production would also be provided uiader the proposed project. They would include: (a) reequipment of the Veterinary Laboratory at Bouar; (b) reinforcement and reequipment of the regional Meat Inspection Service at Bouar; (c) reactivation of about seven of the existing eleven dipping tanks; and (d) the commencement of marketing and herd manage- ment extension services. To help facilitate this latter provision, a marketing officer's position would be created under the project to help improve marketing information flow to herdsmen and purchasers alike (Section 3.03 of the draft Joint Project Agreement). Training 41. The timely and efficient implementation of the proposed animal health and production program would require reorienting and improving train- ing for livestock technical staff. Training for middle-level technicians would be undertaken at the Livestock Technical College at Bouar under the leadership of the livestock education specialist. Currently, about 45 poorly trained graduates are turned out each year. This output is largely super- fluous to an already overstaffed Livestock Service. It is estimated that in the medium-term the Livestock Service would not need to incorporate more than * about 15 properly trained staff per year. Therefore, assurances have been obtained that the annual output for the four-year cycle for training animal health agents would be limited to 15 trainees (see Section 3.06 of the draft Joint Project Agreement). The mistake would be somewhat higher to foster a competitive spirit among the students and thus raise the quality of the graduates. A systematic program of retraining would be initiated for all existing field staff in the project area. As far as possible the Topia Pilot Project would be used for the field training sessions. The proposed livestock development project would also make provision for training of high-level staff mainly through brief specialized courses in higher institutions in Africa and elsewhere, as for example in the Institute for Tropical Livestock and Veter- inary Medicine, Paris.  - 14 - Topia Pilot Project 42. Due to the degradation of pasture resources in the northwestern region, some herdsmen have become semi-sedentary in areas further south which have abundant year-round grazing but which are frequently tse-tse infested. A pilot project would be carried out in the Topia zone, typical of these areas, aimed at: (a) introducing simple methods of pasture management supported by improvement trials; and (b) testing the feasibility of organizing herdsmen's associations for the proper management of herd and pasture resources. As it is not feasible to have full-fledged cooperative organizations right from the start, the project will begin with pre-cooperative herdsmen's associations which are a more rudimentary form of association. The pilot project would be carried out by an experienced range manager (to be recruited internationally) in cooperation with the traditional chiefs of the herdsmen (ardos) and ANEC. Statutes for the associations and legislation giving them formal recognition, as well as exclusive grazing rights in properly defined areas, would be issued by Government. The enactment of legislation to enable the constitution of the cooperative associations, the delineation of grazing areas, and the allocation for development purposes of these areas to coopera- tive associations would be a condition of disbursement for the Topia Pilot Project (para. 3 of Schedule 1 of the draft Joint Project Agreement). Studies and Surveys 43. The proposed project would include about 44 man-months of consultant services to carry out a series of key studies and surveys on the livestock subsector which are essential to define a development strategy. These include: (a) a study of the incidence of tse-tse and tryponomosiasis and the elabora- tion of a tse-tse eradication program as well as a prophylactic program for trypanosomiasis; (b) a pastoral resources survey by Landsat to identify erosion areas and potential pasture/grazing areas in the western region; (c) review of the cattle production and marketing system as discussed in para. 29; and (d) on the basis of (a) and (b) above and the experience gained through the implementation of this and Dther ongoing livestock projects, preparation of a development strategy f3r the livestock sector and identifi- cation of a follow-up project. Project Costs and Financing 44. The total project cost is estimated at US$13.0 million of which foreign costs amount to US$5.8 million (45 percent). The cost includes excise taxes estimated at US$1.6 million, but excludes duties on all items imported for the project, for which the Government has granted an exemption. It is proposed that an IDA credit of US$2.5 million and an EEC Special Action Credit equivalent to about US$0.5 million be made to the Government on standard IDA terms to cover 26 percent of project costs net of taxes. The International Fund for Agricultural Development (IFAD) and the African Development Fund (ADF) would contribute US$2.5 million and US$3.3 million equivalent respec- tively to be disbursed pari-passu with the IDA credit. The Association would act as Administrator for the EEC Special Action Credit, in accordance with the agreement between the Association and the EEC and its member states of May 2,  - 15 - 1978. The Association would also act as Cooperating Institution for the IFAD lona; accordingly the Association would take all action pertaining to project execution and monitoring except actually disbursing funds which will be done by IFAD on advice from the Association (see Sections 5.01(a) and 2.05(a) and (b) of the draft Joint Project Agreements). Together, IDA, EEC, IFAD and ADF would cover 100 percent of the foreign exchange component (US$5.8 million) and 54 percent of the local costs (US$3.0 million) net of taxes. The remain- ing project costs would be contributed by beneficiaries and Government (US$2.6 million). Government would also cover the cost of excise taxes estimated at US$1.6 million. Government's contribution to local salaries and to the purchase of veterinary products would be deposited in advance into a Project Account to be managed by the co-director of the Livestock Service. Monthly deposits should be made at least five days before the end of the month con- cerned for the payment of salaries of local staff involved in carrying out the project during the month (Section 3.02(ii) of the draft Joint Project Agree- ment). A part of the Project Account would be operated as a revolving fund for purchase of medicines and vaccines. The part of the contributions from herdsmen to ANEC to be used to purchase these items would also be paid into this part of the Project Account (see Section 3.02(ii) of the draft Joint Project Agreement). The establishment of such an account as well as an initial Government deposit therein of CFAF 90 million equivalent to about US$409,000 would be a condition of effectiveness of the IDA Credit (see Section 5.01 (f) of the draft Development Credit Agreement). Cost Recovery 45. Experience with similar projects in the region indicates that in the early stages of development there is limited scope for the recovery of costs from beneficiaries who are mainly traditional pastoralists. This appears to be also true for C.A.E. at the present time. To the extent that herdsmen are beginning to experience tangible results from improved veterinary services, it is judged possible that they would pay for the drugs and medicines needed to treat their herds, save for vaccines against epizootic diseases which would be provided free of charge as is customary. It is not considered appropriate at this stage to attempt recovery of other costs associated with the animal health sub-project. Given the experimental nature of the Topia Pilot sub- project, participating herdsmen would not be charged for the service they receive, save the cost of veterinary drugs as in the rest of the project. Thus, by 1985, after project implementation, the animal health and Topia Pilot sub-projects would generate recurrent costs of about US$1.1 million per year (in 1979 prices). In addition, the Livestock Technical College would also require continued funding by the Government, estimated at about US$123,000 per year. However, the proposed studies would include a review of the entire system of cattle husbandry and marketing in order to identify means by which some of the increase in benefits from the project could be effectively used to help defray recurrent costs. 46. While Government agrees on the principle of cost recovery, it con- siders it might be difficult at this stage to elaborate a detailed timetable of the steps to be taken to implement it. Until all pastoralists are aware of the benefits to be obtained flexibility would be necessary as regards full  - 16 - cost recovery. Assurances have been obtained that, by December 31, 1983, Government would propose a system acceptable to IDA designed to yield revenue aimed inter alia at alleviating the financial burden of maintaining the Livestock Service (Section 4.04 of the draft Joint Project Agreement). This system could include such direct taxes as fees for the use of dipping tanks, charges for the administration of vaccines and taxes on live cattle sales, in addition to general and indirect fiscal instruments. Procurement and Disbursements 47. Except for items specified below, procurement would be through international competitive bidding (ICB) following Bank Group Guidelines. ICB would involve civil works, vehicles and equipment for a total of about US$2.4 million. In evaluating bids for civil works, local contractors would be allowed a 7.5 percent preference. To the extent feasible, purchases of vehicles and equipment would be grouped for purposes of bidding so as to permit bulk procurement. Locally manufactured goods would be allowed a preference of 15 percent or the level of applicable import duty, whichever is lower, when comparing domestic with foreign bids. Contracts for goods and works estimated to cost US$100,000 equLvalent or less, which would not cumu- latively exceed US$0.6 million and would not be large enough to attract inter- national bids, would be awarded on the basis of local competitive bidding and in accordance with procedures acceptabLe to IDA and IFAD. Expatriate staff and consulting services costing about IJS$3.3 million would be obtained according to IDA's Guidelines for Consulting Services. 48. The proceeds of the EEC Special Action Credit would be disbursed against 100 percent of the expatriate staff salaries until fully drawn down. The proceeds of the proposed IDA credit would be disbursed on the following basis (net of taxes): (i) 30 percent of the total cost of civil works for a total of US$210,000; (ii) 30 percent of the total cost of vehicles and equipment for a total of US$330,000; (iii) 30 percent of expenditures for operating costs and maintenance for a total of US$480,000; (iv) 10 percent of the total cost of veterinary products for a total of US$30,000; (v) 30 percent of the balance of expatriate staff salaries (after disbursements of the funds of the EEC Special Action Credit) for a total of US$630,000; (vi) 8 percent of the cost of local staff salaries for a total of US$270,000; and (vii) 30 percent of the total cost of studies and surveys for a total of US$300,000.  - 17 - An amount of US$250,000 would be unallocated. Disbursements against Catego- ries (i), (ii), (iv), (v), (vi) and (vii) would be fully documented. I)is- bursements against Category (iii) would be made against certificates of expenditure, with the supporting documentation retained by the project man- agement and made available for inspection during IDA supervision missions (for special conditions of disbursements, see para. 42). The account of the project (including the above-mentioned certificates of expenditure) and ANEC accounts would be audited by independent auditors acceptable to the Association and IFAD (Section 4.01 of the draft Joint Project Agreement). Benefits and Justification 49. As a result of the project, a significant increase in herd produc- tivity is expected. The offtake and herd growth rates would increase from 9.3 percent and 0.4 percent respectively, to 11.3 percent and 3.4 percent at full development while annual milk production would increase by 15,000 tons. The economic rate of return on the main project components, accounting for 82 percent of the cost (including the Topia Pilot Project, but excluding the cost of the Livestock Technical College and the studies), is estimated at 22 percent. However, the project is also expected to yield substantial benefits, the valu.- of which cannot be quantified. For instance, the increase in meat and milk 5:.oduction would raise nutritional levels among the herdsmen's families, and the surplus would also lead to improved nutrition among urban dwellers. The Topia Pilot Project, if successful, would contribute to the design of rational modes of range management, acceptable to traditional herdsmen, which would make C.A.E.'s pastures more productive, while the studies on tse-tse fly will determine the scope for expansion of the useful pasture base. An important project benefit would be the expected improvement in the organization and functioning of the Livestock Service. Even the partial adoption of the administrative and accounting reforms proposed under this project would lead to greatly increased efficiency in the public adminis- tration whose present weakness is the greatest single constraint to develop- ment in the C.A.E. Finally, formal and informal training would improve the ability of the Livestock Service staff to implement development plans. Beneficiaries 50. The proposed project would directly benefit about 50,000 family members of the M'Bororo herdsmen who have the lowest per capita income in C.A.E. Without the project, net per capita cash income in 1990 for the average M'Bororo family member would be about US$120 in constant 1978 dollars. With the project, this would rise by 25 percent to US$150. This would still be below the 1976 average GNP per capita for C.A.E. The value of the increase in the herd would be about US$240 per family member. Risks 51. Given Government's past overall poor resource mobilization and utilization performance, a risk exists concerning the availability of domestic funds for Government's contribution and for continuation of the program after the project implementation period. To mimimize this risk during project  - 18 - implementation, the Association would request that Government establish a Project Account in which Government's contribution would be deposited monthly and in advance (para. 44). This would also ensure regular pay to field staff at least during the project development period by the end of which it is hoped that a system for improved revenue generation (para. 46) would be ready for implementation alleviating the financial burden on Government finance. More- over, the project includes measures to improve Government's technical ability to manage recurrent activities. A second area of risk relates to the present low level of staff morale and motivation caused by laxity in management prac- tices in the Livestock Service, which has hampered performance. To alleviate this risk, besides providing staff with a clear and stimulating purpose, the proposed project provides appropriate incentives. In particular, Government has agreed to provide staff involved in the Project with: (a) adequate permanent housing to all executive-level personnel both in Bangui and in the field before January 1, 1980; and (b) trek allowances to local personnel at all levels according to existing practices successfully followed by other donors such as UNDP, and the Federal Republic of Germany involved in develop- ment projects (Section 3.07 of the draft Joint Project Agreement). Another risk is that the Topia Pilot Project would not produce timely and replicable results. This occurrence, however regrettable, would not significantly com- promise the success of this project because its short-term benefits, which are substantial, would depend mainly on the success of the animal health com- ponent, which carries no unusual risk. Even though some pasture degradation in localized areas exists, pasture availability is not a present overriding constraint. The failure of the pilot project would mean that C.A.E.'s live- stock industry would eventually have to settle at lower stocking and productive levels than would otherwise be possible. PART V - LEGAL INSTRUMENTS AND AUTHORITY 52. The draft Development Credit Agreement, between C.A.E. and the Association, the draft Special Action Credit Agreement, between the C.A.E. and the Association as Administrator of the EEC Special Action Account estab- lished with funds contributed by EEC member states, the draft Joint Project Agreement between the C.A.E. the Association, and the International Fund for Agricultural Development and the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement are being distributed to the Executive Directors separately. 53. Features of special interest are referred to in Section III of Annex III of this report. 54. Special conditions for effectiveness of the IDA Credit Agreement would be (a) authorization or ratification of the Joint Project Agreement; (b) fulfillment of all conditions precedent to the effectiveness of the EEC Special Action Credit Agreement, IFAD and ADF Loan Agreements, other than effectiveness of the IDA Credit Agreement; and (c) the employment of the project manager, the manager of the Topia Pilot Project and the chief  - 19 - accountant/administrative officer and having them in post; and (d) the estab- lishment of the Project Account and initial deposit therein of CFAF 90 million equivalent to US$409,000 (Section 5.01 of the draft Development Credit Agree- ment). A special condition of effectiveness of the EEC Special Action Credit Agreement would be the fulfillment of all conditions precedent to the effec- tiveness of the IDA Credit Agreement other than the effectiveness of the EEC Special Action Credit Agreement. 55. A condition of disbursement for the Topia Pilot Project would be the enactment of adequate legislation to enable the constitution of cooperative associations of herdsmen and the demarcation of pasture areas and their assign- ment to these associations (para. 3 of Schedule 1 of the draft Joint Project Agreement). 56. I am satisfied that the proposed IDA Credit would comply with the Articles of Agreement of the Association and that the proposed EEC Special Action Credit would be in conformity with the criteria established by the Agreement of May 2, 1978 between the Association and the EEC. PART VI - RECOMMENDATION 57. I recommend that the Executive Directors approve the proposed Development Credit and Special Action Credit. Robert S. McNamara President Attachments Washington, D.C. March 16, 1979  - 20- ANNEX I Page 1 of 5 pages TABLE 3A CENTRAL AFRICAN EMPIRE - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES CENTRAL AFRICAN EMPIRE a - MOST RECENT ESTIMATE) SAME SANE NEXT HIGHER MOST RICER? GEOGRAPHIC INCME INCOME 1960 Lb 1970 lb ESTIMATE /b REGION Le GROUP /d GROUP Le EDUCATION ADJLUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 32.0 69.0 79.0 52.1 62.9 75.8 FEMALE 12.0 45.0 53.0 37.6 45.9 67.9 SECONDARY: TOTAL 1.0 5.0 8.0 8.0 14.4 17.7 FEMALE 0.3 2.0 3.0 5.0 8.8 12.9 VCCATIONAL (PERCENT OP SECONDARY) 10.0 12.0 9.0 7.2 6.6 7.4 PUPIL-TEACHER RATIO PRIMARY 58.0 63.0 69.0 43.2 38.5 34.3 SECONDARY 25.0 22.0 .. 22.8 19.8 23.5 ADULT LITERACY RATE (PERCENT) 15.0 /h .* 20.3 36.7 63.7 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 2.0 4.0 5.0 3.9 3.1 7.2 RADIO RECEIVERS PER THOUSAND POPUIATION 10.0 30.0 41.0 40.1 31.1 71.1 TV RECEIVERS PER THOUSAND POPULATION .. .. .. 2.2 2.8 14.1 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 0.4 0.3 .. 3.9 6.0 16.3 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.3 0.3 *- 1.2 1.4 1.6 EMPLOYMENT TOTAL LABOR FORCE (THOUSANDS) 720.0 820.0 .. FEMALE (PERCEPT) 51.2 50.0 49.3 32.6 24.2 28.0 AGRICULTURE (PERCENT) 94.0 91.0 .. 73.3 60.7 54.1 INDUSTRY (PERCENT) 1.8 2.5 .. PARTICIPATION RATE (PERCENT) TOTAL 57.5 55.8 54.9 42.0 39.8 37.8 MALE 59.5 58.5 57.9 54.8 53.3 50.3 FEMALE 55.7 53.4 52.2 27.3 19.6 20.9 ECONOMIC DEPENDENCY RATIO 0.8 0.9 .. 1.2 1.3 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. .. .. 25.7 20.3 19.5 HIGHEST 20 PERCENT OF HOUSEHOLDS .. .. .. 55.1 45.1 48.9 LOWEST 20 PERCENT OF HOUSEHOLDS .. .. .. 5.8 5.7 5.9 LOWEST 40 PERCENT OF HOUSEHOLDS .. .. .. 14.5 16.8 15.7 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. .. 108.8 88.5 155.9 RURAL .. .. 45.0 74.1 71.9 97.9 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. 124.4 100.8 143.7 RURAL .. .. 60.0 59.6 42.0 87.3 ESTIMATED POPULATION BELOW POVERTY INCOME LEVEL (PERCENT) URBAN .. .. .. 26.8 46.0 22.9 RURAL .. .. 30.0 47.6 48.0 36.7 Not available Not applicable. NOTES /a The adjusted group averages for each indicator are population-weighted geometric means, excluding the extreme values of the indicator and the most populated country in each group. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1973 and 1977. /c Africa South of Sahara; /d Law Income ($280 or less per capita, 1976); /e Lower Middle Income ($281-550 per capita, 1976); /f 1970-75; 1 African population only, excluding 15 percent of population not covered by survey; /h Prior to 1965. September, 1978  ANNEX .' - 21 - Page 2 of S pages TABLE 3A CENTRAL AFRICAN EIFPRE - SOCIAL INDICATORS DATA SHEET REFERENCE GROUPS (ADJUSTED AVERAGES LAND AREA (THOUSAND S0. EM.) CENTRAL AFRICAN ENPIRE - MOST RECENT ESTIMATE) L TOTAL 623.0 SANE SAME NEXT HIGHER AGRICULTURAL 60.0 lDST URCENT GEOGRAPHIC INCOIM INCOME 1960 Lb 1970 Lb ESTIMATE l REGION L GROUP Ld GROUP e GNP PER CAPITA (USS) 120.0 170.0 250.0 223.6 182.9 432.3 ENERGY CONSUMPTION PUR CAPITA (KILOGM OF COAL EQUIVALENT) 37.0 63.0 34.0 86.7 88.9 251.7 POPULATION AND VITAL STATISTICS TOTAL POPULATION, MID-YEAR (MILLIONS) 1.3 1.6 1.9 URBAN POPULATION (PERCENT OF TOTAL) 18.6 30.1 35.9 13.6 15.0 24.2 POPULATION DENSITY PER SQ. EM. 2.0 3.0 3.0 18.4 46.8 42.7 PER SQ. KH. AGRICULTURAL LAD 22.0 27.0 32.0 53.6 254.1 95.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 41.6 42.1 42.0 44.4 43.6 44.9 15-64 YRS. 54.1 54.8 54.9 52.7 53.3 52.8 65 YRS. AND ABOVE 4.3 3.1 3.1 2.8 2.9 3.0 POPULATION GROWTH RATE (PERCENT) TOTAL 2.0 2.2 2.2 /f 2.6 2.4 2.7 URBAN 7.9 7.2 5.9 If 5.8 4.0 8.8 CRUDE BIRTH RATE (PER THOUSAND) 46.2 45.4 43.4 46.9 44.3 42.2 CRUDE DEATH RATE (PER THOUSAND) 30.5 26.4 22.5 20.6 19.7 12.4 GROSS REPRODUCTION RATE 2.5 2.9 2.7 3.1 2.9 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. .. USERS (PERCENT OP MARRIED WOMEN) .. .. .. 2.5 14.6 14.2 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1970-100) 113.4 100.0 96.3 94.2 96.4 104.3 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREHENTS) 96.0 96.0 102.0 90.1 92.3 99.5 PROTEINS (GRAMS PER DAY) 48.0 48.0 .. 55.2 50.0 56.8 OF WEICH ANIMAL AND PULSE .. 22.0 .. 17.1 13.9 17.5 CHILD (AGES 1-4) MORTALITY RATE 27.4 .. .. .. .. 7.5 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 35.0 39.0 41.0 43.7 45.8 53.3 INFANT MORTALITY RATE (PER THOUSAND) 190.0Oa .. .. 138.4 102.7 82.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. .. 22.4 26.4 31.1 URBAN .. .. .. 66.3 63.5 68.5 RURAL .. .. .. 10.4 14.1 18.2 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL *- 72.0 100.0 23.9 16.1 37.5 URBAN .. 64.0 100.0 70.3 65.9 69.5 RURAL *- 96.0 100.0 14.2 3.4 25.4 POPULATION PER PHYSICIAN 37000.0 38330.0 28980.0 21757.5 13432.7 9359.2 POPULATION PER NURSING PERSON 2680.0 1280.0 .. 3473.8 6983.3 2762.5 POPULATION PER HOSPITAL BED TOTAL 670.0 460.0 .. 645.4 1157.6 786.5 URBAN *- 500.0 *- 172.9 183.3 278.4 RURAL .. 450.0 .. 1292.6 1348.8 1358.4 ADMISSIONS PER HOSPITAL BED .. 21.6 .. 19.2 19.5 19.2 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 3.9 .. .. 4.9 5.2 URBAN .. .. .. 5.0 4.8 RURAL .. .. .. 4.7 5.3 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. URBAN 3.4 .. .. .. 1.8 2.3 RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. .. .. 25.9 28.3 URBAN .. .. RURAL .. .. .. .. 8.7 10.3  - 22 - ANNEX I DEFINITIONS Or SOCIAL INDICATORS Page 3 of 5 pages -r ucse acrod gr-up averages for each indicator are population-weighted geometric moans, excluding the extreme values of the indicator and the most poueatef cctre Da each grou p . Coverage of oor.tries among the indicators depends on availability of data and is not uniform. Due to lack of data, group averages .or Capital Sarplus lit Exporters and indicators of access to water and excreta disposal, housing, income distribution and poverty are sir-ie -epslation-weiguted geo.etric means without the exclusion of extreme values. LAND AgRfA ctp-sand sq. k) Population per hospital bed - total, urban. and rural - Population (total, Total - Total surface arca co.rprising land area and inland waters., urban, and rural) divided by their respective number of hospital beds Acrioultural - Most recent estimate of agricultural area used temporarily available in public and private general and specialized hospital and re- or permanently for crops, pastures, market and kitchen gardens or to habilitation centers. Hospitals are establishments permanently staffed by lie fallow. at least one physician. Eitablishments providing principally custodial care are not included. Rural hospitals, however, include health and medi- GNr rER CAPITA (US$) - GNP p-r capita estimates at current market prices, cal casters not permanently staffed by a physielam (but by a medical as- calcaiated by san.e coversion method as World Bank Atlas (1975-77 basis); sistant, nurse, midwife, etc.) which offer in-patient accormodatiom and 1960, 1970, and 1977 data. provide a limited range of medical facilities. Admissions Per hospital bed - Total comber of admissions to or discharges EINERGY CONSUMPTION PER CAPITA - Annual consumption of commercial energy from hospi als divided by the nabner of beds. (cost and lignite, petroleum, natural gas and hydro-, nuclear and geo- rhortual electricity) in kilograms of coal equivalent per capita. HOUSING Average size gf hossehcld (persona per household) - total, urban, and rural- POPI,ATISN Alit VITAL STAIIS-ICS A household consists of a group of individuals who share living quarters Total AN, mIdya (millions) - As of July 1, if not available, and their main meals. A boarder or lodger may or may not be included in average of two end-year estimates; 1960, 1970, and 1977 data. the household for statistical purposes. Statistical definitions of house- Urban population (peroent of total) - Ratio of urban to total popula- hold vary. ties; different definitions oi urban areas may affect comparability Average number of persans per room - total, urban, and rural - Average num- of data among countries. ber of persons per room in all, urban, and rural occupied conventional Population density dwellings, respeotively. Dwellings exclude sno-perma-ent stroctures and Per sq. km, - Mid-year popalation per square kilometer (100 hectares) unoccupied parts. of total area. Access no electricity_(perc ent of dwellings) - total, urban, and rural- Per sq. km. agriculture land - Computed as above Eor agricultural land Conventional dwellings with electiicity in living quarters as percentage only. of total, srban, and rural dwellings respectively. Population age structure (percent) - Children (0-14 years), working-age (15-64 years), and retired (65 years and over) as percentages of mid- EDUCATION year population. Adjusted enrollment ratios Population growth rate (percent) - total, and urban - Compound annual Primary school - total, and female - Total and female enrollment of all ages growth rates of total and urban mid-year pooulations for 1950-60, at the primary level as percentages of respectively primary school-age 1960-70, and 1970-75. populations; normally includes children aged 6-11 years but adjusted for Crude birth rate (per thousand) - Annual live births per thousand of different lengths of primary education; for countries with universal edu- mid-year population; ten-year arithietic averages ending tn 1960 and cation enrollment may exceed 100 percent since some pupils are below or 1970 and five-year average ending in 1975 for most recent estimate. above the official school age. Lrade death rate (per thousand) - Annual deatas per thousand of mid- Secondary school - total, and female - Computed as abovs secondary educe- year population; ten-year arithmetic averages ending in 1960 and 1970 tion requires at least four years of approved primary instruction; pro- and five-year average ending in 1975 for most recent estimate. vides general vocational, or teacher training instructions for pupils Gross reproduotion rare - Average number of daughters a woman will bear usually of 12 to 17 years of age; correspondence courses are generally ir her normal reproductive period if she experiences present age- excluded. stecific fertility rates; usually five-year averages ending in 1960, Vocational enrollment (percent of secondary) - Vocational instltutions in- 1970, and 1975. clude technical, industrial, or other programs which operate independently Familp pl -ncing -aooopnrs, annual (thou.a.ds) - Annual musher of or as departments of serondary institrtioms. acceptors of birth-control devices under auspices of national family Pupil-teacher ratio - primary, and secondary - Total stadents enrolled in planning program. primary and secondary levels divided by numbers of teachers in the corre- Pamily planning - users (percent of married women) - Percentage of sponding levels. .arried women of child-bearing age (15-44 years) who use birth-control Adult literacy rate (percent) - Literate adults (able to read and write) as devices to ail married women in sane age group. a percentage of total adult population aged 15 years and ever. lOD hlt NEITRITTION CONSUMPTION loden cf iood production per caPita (1970100) - Index number of per Passenger cars (Per thousand population) - Passenger cars comprise motor cars capite anrual production of all food comuodities. seating less than eight persons; excludes ambulances, hearses and military Per capita sacoir of calories (percent of reqairements) - Computed from vehicles. ergy eqoiv-lent of net food supplies available in country per capita Radio receivers (per thousand populatlon) - All types of receivers for radio per day. Avail'able supplies cOnprise domestic production, iuparts less broadcasts to general public per thousand of population; excludes unli.ensed exports, and changes in stock. Net supplies exclude animal feed, seeds, receivers in countries and in years when registration of radio sets was in q-ac-irias -sed in food processing, and loases in distribution. Re- effect; data for recent years may not be comparable since most countries -uiremnnts were estimated by FAl based on physiological needs for nor- abolished licensing. val acticity and health considering envirommental temperature, body TV receivers (per thousand population) - TV receivers for broadcast to general w-ighcs, age and sen dintribrtinns of population, and allowing 10 per- public per thousand population; excludes unlicensed TV receivers in coun- cent for waste at household level. tries and in years when registration of TV sets was in effect. Per capita supopl of protein (grass per day) - Prootli e cote-t of per N-wspaper circulation (per th.oa.nd popolatien) - Shows the average cicula- capita net supply of food per day. Net supply of food is defined as tion of "daily general interest newspaper", defined as a periodical publi- abo- - eqoiremenrs for all countries established by USDA provide for cation devoted primarily to recording general news. It is considered to a viu- mu allowance of 60 grams of total protein per day and 20 grams be "daily" if it appears at least four times a week. cf urimal and pulse protein, ot which 10 grams should be animal protein. Cinema annual attendance per capito per year - based on the number of tickets ihese stsudards are lower than those of 75 grans of total protein and sold during the year, including admissions to drive-in cinemas and mobile 23 grams of animal potceis as a- ovorage for the worId, proposed by units. FAD in the Third Ward Fod Slurvey. Per capita protein supply from animal and pulse - Protein supply of food EMPLOYMENT dericec from animals and pulses in grams per day. Total labor force 'thousands) - Econorically active persons, including armed Child (ages I-a) mortality rate (per thoasand) - Annual doaths per thous- forces and unemployed bat excluding houseves, stude-ts, eta. Defini- and in age groap 1-4 years, to childreu in this age group. rions ir various countries are not comparable. Pemale (porcear) - Female labac farce as per-eroage of tOral labor fPro-. HEALTH Agriculture (percent) - Labor force in farming, forestry, hunting and fishing life .enpocray a:t birth yaar( - Avarage sk.ber of years of life as perretstge of total labor force. remaining at birth; usually five-year averages ending in 1960, 1970, Industry (percent) - Labor force in mining, construction, manu.facturing and and 1i75. electricity, water and gas as percentage of total labor force. lefanc mortality rate (per thousand; - Annual deaths of infants under Participation rate (percent) - total, male, and female - Total, male, and one year cf age per thousand live birhts. 'e.ale labor focre as percentages .f their respective populations. Access to safe water (percent of poprulatlon) -ith oreal, ble acdcraa- Tese are r re uOdj-ated particip-tio- rates refltcrio0 cu-son lumber of people (total, urban, and rural) with reaso.nable access to n cracture of the pepaeti-r. and 1- or~ice tred. saef water scpplv (inclodes treated surface waters or untreated bht Economic dependence ratio - Ratio of poplsatior under :5 sad tj and over to -ncoctutltr.uted water such na that from protected boreholes, springs, the labor fire in age group ot 15-6 vyears. and samitary -1ll) as per-enrages of their respective populations. 1n an -rban area a public fountain or standpost located not more INCONE DISTRIBUTION than 211 meters fret a hous.e ay De considered as being within rea- Percentage of private income (both in cash and hind) received by richest 5 vocable acess of that h-ua-. Is rural areas reasonable aces woald percert, riobeot 20 erc-ent, pooreat 20 parceon, and pearoan 40 percent imply rha- thle ho-uewcfg or members of tie household do not hare to of households. spe-d a disproport.l-ate part of the day in fetching the family's -ter -oeos. POVERTY TARGET GROUPS iecess to eecerea dauposal (peccect of population) - otal, urban, aed nEtimated absolute peverty income level (VSS per capita) - arban asc rural - rural - Scoo-er of pe-pl (t'tal, urbaa, and rural) served by .oesa Absolate poverty income level is that Income level below whicl, a minira dIsposal a'- percentages of their respective populations. Escrera -utriviosally adequate diet plus esseatial son-feud requireme- ts is -cc di--rsal >> ..i-elude the c.l Cr-trn as.i disposal, with or without affordablo. retr-Lz-t, Jt ar n c- rtea -od waste-water by water-borne systems _stiar,ted relattve poverty income leve ( p - urban and rurai - ti ,-c J pit pr-ivis and cirilar Rnstaliation. ielative povercy imose lovel ia that incoee levei uss than one-third 2aacu 'o re_ ys1cciac - P'opulatiun divided by number of proorieiag per .apita persona' i come of the couctry. p lysi.r- qai' 'ed frcm a codical scl:i-1 at university level. stinated population belowpovey i-cm level (sercent) - -r_a and rural - 'on.l r ftc oars .1k nersoc Popala-i- dicided by number of P-erent of populatios (urban and meal) who are eith-r "absolute poor" or prat,;ing ad f le graduate rur-s, practicl nurses, and "relative poor" whibheoer is greater. Economic avo Social Data Divicien Economic Analysis aed Projections lepartcent  - 23 - ANNEX I Page 4 of 5 pages ECONOMIC INDICATORS GROSS NATIONAL PRODUCT IN 1977 ANNUAL RATE OF GROWTH (%, constant prices) TJS$ Mln. % 1960-65 1965-70 1970-77 GNP at Market Prices 436.0 100.0 1.6 3.6 1.4 Gross Domestic Investment 51.9 12.0 5.2 1.0 1.0 Gross National Saving 7.8 2.0 28.2 3.2 2.0 Current Account Balance -50.2 -11.5 2.2 0.0 8.2 Export of Goods, NFS 135.5 31.1 10.4 2.1 5.1 Imports of Goods, NFS 179.6 41.2 7.7 1.7 6.3 OUrPUT, LABOR FORCE AND PRODUCTIVITY IN 1976 Value Added Labor Force V.A. Per Worker US$ Mln. L Mln. _ E__ Agriculture 164.5 38.0 Industry 74.2 17.0 Services 197.3 45.0 Unallocated V .. .. Total/Average 436.0 100.0 100.0 100.0 CENTRAL GIOVERNMENT % of GDP FINANCE (Blns CFAF) 1971 1975 1976 1977 1978 2 1977 1971-77 Current Receipts 10.8 13.0 13.6 16.7 18.8 16 14 Current Expenditure 12.3 16.4 17.5 20.9 22.5 20 18 Current Surplus -1.5 -34 -3.9 -.2 3-7 -77- _4 Capital Expenditures 1.4 1.8 1.3 1.9 3.0 2 2 External Assistance (net)/3 0.5 2.6 2.1 2.3 3.6 2 2 MONEY, CREDIT and PRICES 1971 1972 1973 1974 1975 1976 1977 L4 (Billions of CFAF outstanding end perioTd Money and Quasi Money 8,.4 9.8 10.3 13.6 13.7 19.4 20.8 Bank credit to Public Sector 2.2 2.4 4.8 7.5 9.0 9.7 10.8 Bank credit to Private Sector 8.9 4.9 10.2 13.1 13.5 12.9 14.7 (Percentages or Index Numbers) Money and Quasi Money as ,8 of ,DP 13.1 14.5 14.8 15.3 13.1 16.4 Wholesale Price Index (l976=1oo)/5 66.4 70.6 72.8 82.8 95.2 100.0 Annual percentage changes in: Wholesale price index 5.6 6.3 3.1 13.7 15.0 5.0 Bank credit to Public Sector -9.9 9.1 100.0 56.3 20.0 7.8 11.3 Bank credit to Private Sector -20.9 11.2 3.0 28.4 3.1 -4.4 14.0 Not available. . Not aDplicable. Includes indirect taxes. IMF estimates. Consisting of grants ar.d loans from foreign bilateral and multilateral entities and IMF counterparts. g Provisional. G Seneral price index not available. January 1979  ANN.X I - 24 - Page 5 of 5 TRADE PAYMENTS AND CAPITAL FLOWS BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1971-77) 1970 1975 1976 1977 1971 9-1977 (Millions US$) Mln US$ % Mln. US$ Export of Goods, NFS 61.8 86.4 105.9 135.5 Imports of Goods, NFS 77.9 159.8 140.6 179.6 Resource gap (deficit = -)-6.i -73.7 7 -44.1 Diamonds 11.5 36 18.8 23 23 Cotton 7.6 24 7.8 10 15 Interest Payments (net) -2.8 -2.8 -.2 -1.6 Coffee 7.6 24 33.1 41 29 Workers' Remittances 1.0 .6 .9 *- Timber 3.2 10 14.3 18 23 Other Factor Payments (net) - - - - Others 2.1 6 7.6 8 10 Net Transfers -1.8 -2.5 .4 -4.5 32.0 100 T7 71 100 100 Balance on Current Account -19.7 -7.1 -3 -50.2 EXTERNAL DEBT, DECEMBER 31. 1977 /2 Direct Foreign Investment .9 4.2 2.5 -2.9 uS$ Mln. Net MLT Borrowing Disbursements 1.7 .. .. .. Public Debt, incl. guaranteed 64.0 Amortization -1.0 .. .. .N on-Guaranteed Subtotal -.3 145 13.0 6.1 Total outstanding & Disbursed 64.0 Capital Grants 8.2 40.2 40.6 35.5 Other Capital (net) 1.4 15.4 -7.5 11.8 DEBT SERVICE RATIO for 1977 a Other items n.e.i. 6.8 4.7 1. 4.1 i Increase in Reserves (e) -2.7 0.9 16.3 - Public Debt, incl. guaranteed 12.7 Non-Guaranteed Private Debt Gross Reserves (end year) 0.2 3.8 18.8 .. Total outstanding & Disbursed 12.7 Net Reserves (end year) -0.9 -1.9 3.7 Fuel and Related Materials Imports IBRD/IDA LENDING (;anrlary-31 -1979)- (Milli on ;s$) of which: Petroleusi 1J .. .. .. .. ]BRD IDA Exports of which: Petroleum . . . . Outstanding & Disbursed 11.1 Undisbursed . 16.8 RATE OF EXCHANGE27. 1970: 27b -1974: 440 1971: 278 1975: 1 14 1972: 256 1976: c139 1973: 230 1977: s45 1978: 220 Not applicable. Not available. / Staff estimates. / Provisional Staff estimates. / Ratio of Debt Service to Exports of Goods and Non-Factor Services. January 1979  - 25 - ANNEX II Page 1 of 2 THE STATUS OF BANK GROUP OPERATIONS IN CENTRAL AFRICAN EMPIRE (C.A.E.) STATEMENTS OF IDA CREDITS (as of January 31, 1979) Credit Amount (US$ million) Number Year Borrower Purpose IDA Undisbursed Two Credits have been fully disbursed. 8.5 - 308-CA 1972 C.A.E. Education 3.9 1.3 847-CA* 1978 C.A.E. Third Highway 15.5 15.5 Total IDA credits 27.9 16.8 Total undisbursed 16.8 STATEMENT OF IFC INVESTMENTS Nil. * Not yet effective.  - 26 - ANNEX II Page 2 of 2 Project in Execution 1/ Credit No. 308 Education I Project: US$3.9 million Credit of May 26, 1972; Effectiveness Date: January 18, 1973; Closing Date: December 30, 1979 The project originally consisted of: (a) construction and equip- ping of two lower secondary schools; (b) extensions to four lycees and to the technical lycee in Bangui; (c) technical assistance (7 man-years) for project implementation and preparation of a long-term educational development plan, curricula and teacher training plans. The project is about 2-1/2 years behind schedule, due largely to delays in (a) appointing consultants, (b) recruiting a technical adviser to prepare bidding documents, and (c) awarding construction contracts. As a consequence of these delays and by world-wide inflation costs have risen from US$4.3 estimated at appraisal to about US$10.2 million (net of taxes). Government has decided with our agree- ment only to proceed with the extensions to five lycees and the construction of two new lower secondary schools. Construction of the five school extensions is almost complete and equipment has been delivered; contracts have been awarded for the two lower secondary schools and construction has started. The net of tax cost of the reduced project is estimated to be US$4.8 million. Because of Government's financial difficulties IDA had agreed to disburse against 100 percent of net of tax costs of the project (see President's Memorandum to the Board No. IDA/R77-51 of May 2, 1977). Meanwhile Government has obtained assistance from the OPEC Special Fund to provide US$700,000 equivalent to finance the project costs not covered by the Credit. The Credit will therefore finance 81 percent of project costs net of taxes. 1/ This note is designed to inform the Executive Directors about the progress of projects which are being implemented, and to report any problems which are being encountered, and the action taken to remedy them. It should be read in this sense, and with the understanding that it does not purport to present a balanced evaluation of strengths and weaknesses in project implementation.  - 27 - ANNEX III Page 1 of 2 SUPPLEMENTARY PROJECT DATA SHEET Section I: Timetable of Key Events (a) Time taken to prepare project: 2 years and 8 months. (b) Project prepared by: Government and RMWA. (c) First time project submitted to the Association: November, 1975. (d) Departure of Appraisal Mission: February 24, 1978. (e) Negotiations completed: February 24, 1979 (f) Planned date of effectiveness: July 1, 1979 Section II: Special IDA Implementation Actions None Section III: Special Conditions 1. Government would cause ANEC to cease operations in the field of animal health (para. 32). 2. To implement the project, the Government would employ the Project Manager, the Chief Accountant, and the Manager of the Topia Pilot Project prior to credit effectiveness. Other internationally recruited staff should be employed by the 31 January, 1980. The Government would further- more prepare annual budgets and programs, and submit them for approval by the Association, at least three months before the start of the fiscal year (para. 37). 3. Government would limit the annual output of students from the Live- stock Technical College to no more than 15 (para. 41). 4. Government would cause ANEC to contribute an appropriate percentage of members dues to the Project Account for the purchase of veterinary products (para. 39).  - 28 - ANNEX III Page 2 of 2 5. Disbursements against expenditures for the Topia Pilot Project would be conditional upon the enactment of adequate legislation to enable the constitution of cooperative associations of herdsmen and the delineation of grazing areas as well as their allocation to herdsmen for development (condition of disbursement, para. 42). 6. Government would establish a Project Account and deposit therein US$409,000 equivalent (condition of effectiveness). Subsequently Govern- ment would deposit monthly, in advance, its contribution for payment of local salaries into this account (para. 44). 7. Government would, by December 1, 1983, propose a system designed to yield revenue aimed at alleviating the financial burden of maintaining the Livestock Service (para. 46). 8. Government would ensure that (a) adequate housing for all executive- level staff would be provided; and (b) local staff would be given appropriate trek allowances (para. 51).  =' X: -- ,g, ,k,_, g . E Q L . 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