Togo - Second Rural Development Project in Cotton Areas

WA-552 Document of The World Bank FILE COPY FOR OFFICIAL USE ONLY Report No. P-3398-TO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT IN AN AMOUNT EQUIVALENT TO US$23.5 MILLION TO THE REPUBLIC OF TOGO FOR A SECOND RURAL DEVELOPMENT PROJECT IN COTTON AREAS November 4, 1982 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.  CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1.00 = CFAF 340 CFAF 1,000,000 = US$2,940 WEIGHTS AND MEASURES 1 kilometer = 0.62 miles 1 square kilometer (km2) = 0.39 square miles 1 hectare = 2.47 acres 1 kilogram = 2.2 pounds 1 metric ton (t) = 2,205 pounds ABBREVIATIONS AND ACRONYMS CCCE Caisse Centrale de Cooperation Economique CNCA Caisse Nationale de Credit Agricole DRDR Direction Regionale pour le Developpement Rural FAC Fonds d'Aide et de Cooperation GTZ German Agency for Technical Cooperation IFAD International Fund for Agricultural Development IMF International Monetary Fund IRAT Institut de Recherches Agronomiques Tropicales et Cultures Vivrieres IRCT Institut de Recherches sur le Coton et Textiles MRD Ministry of Rural Development OPAT Office des Produits Agricoles Togolais PY Project Year PROPTA Projet de Promotion de la Traction Animale SOTOCO Societe Togolaise du Coton SRCC Societe pour la Renovation du Cafe et du Cacao au Togo TOGOGRAIN Public food marketing agency of Togo UNDP United Nations Development Program FISCAL YEAR Government and SOTOCO - January 1 to December 31  FOR OFFICIAL USE ONLY REPUBLIC OF TOGO SECOND RURAL DEVELOPMENT PROJECT IN COTTON AREAS Credit and Project Summary Borrower: The Republic of Togo Beneficiary: Soci6t6 Togolaise du Coton (SOTOCO) Amount: SDR 21.7 million (US$23.5 million equivalent) Terms; Standard Co-Lenders: Caisse Centrale de Cooperation Economique (CCCE) Fonds d'Aide et de Cooperation (FAC) Project Description: The project would follow the First Rural Development Project in Cotton Areas and would be executed by the Societe Togolaise du Coton (SOTOCO). The project aims to expand the production of food crops and cotton grown by smallholder farmers. Financing would be provided for: a) strengthening SOTOCO's extension and animal traction services; b) applied research, seed multiplica- tion and seed quality control; c) supply to farmers of incre- mental fertilizers, pesticides, and equipment; d) reconstruction and upgrading of feeder roads; e) tubewells in villages without dry season potable water; f) storage capacity, minor infrastruc- ture for cotton ginneries, trucks, stores, workshops, offices, and housing; g) a project monitoring and evaluation unit; and h) technical assistance support. Benefits and Risks: As a result of the project, by PY5 the average income of participating farmers would increase from about US$412 to US$765. Annual cotton production is expected to increase by 18,400 t and food crop production would increase by 38,000 t. The FOB value of incremental cotton lint and seed would amount to US$11.5 million (in constant 1982 dollars). The farmgate value of incremental food crop production would amount to about US$7 million. In addition to quantifiable benefits, the project would strengthen SOTOCO's management and the extension network. There are no major technological risks. However, the success of the project will depend on the calibre of project management and staff and of the technical assistance team as well as full and timely provision of Government funding. Medium and longer term prospects for the international price of cotton fiber appear to be good. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents rnay not otherwise be disclosed without World Bank authorization.  Estimated Cost Local Foreign Total -----------US$ million------------- Headquarters Services (including 1.1 3.7 4.8 fellowships) Extension Services 2.1 3.6 5.6 Seed Production 0.8 1.1 2.0 Applied Research 0.8 0.7 1.5 Animal Traction 1.1 1.2 2.2 Fertilizers and Pesticides 0.4 3.6 4.0 Feeder Roads 1.8 5.2 7.0 Village Water Supply 1.8 2.5 4.3 Ginning/Storage Investments 0.2 0.2 0.4 Transportation Investments 0.5 2.6 3.1 Monitoring and Evaluation 0.6 0.8 1.3 Study of Follow-up Project - 0.1 0.1 Baseline total 11.0 25.2 36.3 Physical Contingencies 0.5 1.8 2.4 Price Contingencies 3.8 6.3 10.1 TOTAL PROJECT COST (incl. $2.3 15.3 33.4 48.7 million taxes) Non-incremental Expenditures 17.9 50.1 68.0 TOTAL PROGRAM COST (incl. $4.3 33.2 83.5 116.7 million taxes) Financing Plan IDA 5.2 18.3 23.5 CCCE 4.4 11.8 16.2 FAC 1.1 3.3 4.4 Government 4.6 - 4.6 TOTAL PROJECT COST 15.3 33.4 48.7 Farmers/Cotton Bareme 9.8 47.9 57.8 Government 8.1 2.2 10.3 TOTAL PROGRAM COST 33.2 83.5 116.7 Estimated Disbursements ----------------US$Million------------------ FY83 FY84 FY85 FY86 FY87 FY88 FY89 Annual 0.70 3.85 4.30 4.65 4.60 4.00 1.40 Cumulative 0.70 4.55 8.85 13.50 18.10 22.10 23.50 Economic Rate of Return: 21 percent Estimated Completion Date: October 1, 1987 Staff Appraisal Report: Report No. 3920-TO, dated October 21, 1982 Map: IBRD 16296  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF TOGO FOR A SECOND RURAL DEVELOPMENT PROJECT IN COTTON AREAS 1. I submit the following report and recommendation on a proposed Development Credit to the Republic of Togo for SDR 21.7 million (US$23.5 million equivalent) on standard IDA terms to help finance a second rural development project in cotton areas. Cofinancing is expected from the French Caisse Centrale de Cooperation Economique (CCCE) in a loan equivalent to US$16.2 million and from the French Fonds d'Aide et de Cooperation (FAC) in a grant equivalent to US$4.4 million. PART I - THE ECONOMY 2. An economic report entitled "Togo: Country Economic Memorandum" (3416-TO) was circulated to the Executive Directors in January 1982. Its assessment of the country's economic prospects, updated by recent Bank mis- sions, is reflected in the following paragraphs. Annex I contains basic economic data and selected social indicators. Introduction 3. Togo is a small country (56,000 km2) with a population of about 2.5 million and a per capita GNP of US$363 (1980). Phosphate mining is the principal source of foreign exchange earnings, accounting for nearly 40 percent of export revenues in 1979/80, and receipts from phosphates represent about 30 percent of Government revenues. Political stability has prevailed since 1967, when a military Government came to power. General Eyadema remains President, but the Government has gradually become entirely civilian. Togo's external policy, in the spirit of the Lome I and II Conventions, favors regional and international cooperation. Economic Performance 4. Slow growth and increasing financial disequilibria have been the main features of the Togolese economy since the late 1970s. The slow growth represents a deceleration from historical growth trends, and is the result of poor performance by many state enterprises and a persistent stagnation or decline in the prices and quantities of exports. The 1974/75 boom in world phosphate prices contributed to a substantial increase in export earnings and Government revenues, and prompted the Government to adopt an ambitious Devel- opment Plan for 1976-80. Nevertheless, growth in real GDP averaged less than 3 percent per annum during the 1975-80 period, and was negative in 1981. The resource gap widened significantly through 1978 as expenditures outpaced production. Gross domestic investment rose sharply to exceed 50 percent of GDP in 1978, but declined to an estimated 18 percent in 1981, as fiscal constraints necessitated a cutback.  - 2 - 5. The primary sector accounts for about 30 percent of GDP, but employs 80 percent of the labor force. Growth has been limited by inadequate invest- ment, insufficient price incentives, and occasional droughts. (For a more detailed discussion, see paras 17-20 below.) The secondary sector accounts for about 20 percent of GDP, with most industrial development conducted by state enterprises. The recent growth in this sector is attributable to phosphate rock production, which has, however, experienced dramatic swings as a result of the 1974 price increase, a price decrease in 1975/1976, another increase in 1980, and the shifts in demand which accompanied these price changes. Large investments in industrial projects following the 1974/75 boom in phosphate prices have failed to contribute to an increase in GDP, because of the low or occasionally negative value added realized by several of the new industrial units. The tertiary sector accounts for about 50 percent of GDP. Togo has traditionally served as a regional trading center with an open-door policy. Private investors have tended to favor commerce, real estate and financial services over industrial ventures. A rapid increase in public services led to a growth in government employment from 22,500 in 1975 to 37,500 in 1978; however, financial problems necessitated restraint from 1979 on. Public Finance 6. In 1975, current revenues of the Government nearly doubled to CFAF 33 billion as revenue from phosphates tripled from CFAF 4 to 12 billion. In 1976, the first year of the third Five-Year Plan, the Government embarked upon its expansionary program just when the phosphate market weakened. However, while phosphate prices fell, demand and output rose, and -- supplemented by higher import duty receipts -- current revenue continued to rise. Although current expenditure also increased rapidly, mainly due to a rising wage bill, a sizeable surplus was left to finance both investment and debt service until 1978 when debt service obligations became overwhelming. 7. Public investment (in current prices) of the administration, state enterprises and agencies increased from CFAF 30 billion in 1975 to CFAF 88 billion in 1978, and continued at the still high but reduced rate of about CFAF 67 billion in 1980, as disbursements were made on projects being imple- mented. Although the 1976-80 Development Plan had placed more emphasis on rural development than previous plans, during implementation major shortfalls were experienced for this category while more expenditures than planned were devoted to infrastructure, tourism and industry. 8. In recent years, many state enterprises have been unable to pay the debt service on their foreign borrowings, and the Treasury has had to shoulder the responsibility. Arrears have accumulated as payments lagged. In 1979, Togo agreed with the IMF on a financial program, and rescheduled its debt through the Paris Club for 1979-80. A second round of debt rescheduling (for 1981-82) and a second standby arrangement with the IMF were obtained in early 1981. Even after debt rescheduling, the ratio of debt service to current revenues was about 35 percent in 1981. Because of a decline in Government revenues in 1981, a sizeable portion of the rescheduled debt service obliga- tions was not met. The financial program with the IMF was abandoned, and the debt rescheduling for 1982 through the Paris Club has been left in abeyance. The Government is currently trying to meet the preconditions for a new program with the IMF.  - 3 - 9. To ease these severe fiscal restraints, Government has adopted tax and customs reforms, increased the rates charged by some public utilities, limited civil service hiring and salary increases, and reduced extrabudgetary expenditures. In addition, public investments were reduced to about CFAF 35 billion in 1981 and are not expected to exceed CFAF 32 billion in 1982. Structural Adjustment 10. In parallel with efforts to reach an agreement with the IMF on a financial stabilization program and its own budgetary and tax reforms, the Government is pursuing an intensive dialogue with the Bank on the adoption of a structural adjustment program. The main elements of such a program would include: a) rehabilitation of state enterprises, b) promotion and diversifi- cation of exports through stronger incentives in the rural sector and greater value added in mining, and c) improved macro-economic management. Further action on the proposed program is now awaiting agreement between Government and the IMF on short-term stabilization measures. Prospects for the 1982-85 Period 11. In the 1982-85 period, the outlook is for average annual real GDP growth of about 3.4 percent, i.e., an increase in GDP per capita of about one percent per annum. The pursuit of less expansionary policies is expected to lead to a substantially smaller resource gap and higher domestic savings. 12. In agriculture there is a potential for increasing the output of both food and export crops, and growth is projected to be about 3 percent annually, assuming favorable weather conditions. An increase in food crop production could be achieved through wider use of modern production tech- niques. Cotton production is expected to increase at about 16 percent per year with continued IDA support. As a whole, the secondary sector is pro- jected to expand at an average annual rate of 4 percent. Output in mining could increase considerably if transfers of funds from the phosphate mining company to the Treasury are not excessive so that the company can increase its capacity, and if the Bank-supported CIMAO clinker plant is able to overcome its current problems. The outlook for the tertiary sector points to an annual growth rate of 3 percent. Because of the severe financial constraints growth in public services and civil service employment will have to be reduced to a bare minimum. Growth in transport and commerce is, on the contrary, likely to quicken. 13. Notwithstanding the debt rescheduling in 1981, and the possibility of a third round of debt rescheduling in 1983, judicious policies will be required during the next three years if rising debt service obligations are to be met while a minimum development effort is maintained. Except for enclave- type operations, there is no scope for additional borrowing on financial markets, and new investments will be feasible only to the extent that grants and concessionary loans are available. With the restoration of a sounder financial situation, Togo's longer term development prospects remain pro- mising, as there is considerable scope to better exploit the resource base of the economy.  - 4 - PART II - BANK GROUP OPERATIONS IN TOGO 14. Bank Group lending to Togo totals fourteen credits amounting to US$112.3 million, and two loans totaling US$53.0 million, for the CIMAO regional clinker project (a loan of US$3.5 million to Togo, and one of US$49.5 million to CIMAO jointly and severally guaranteed by Ghana, Ivory Coast, and Togo). Annex II contains a summary statement of Bank Group operations as of August 31, 1982, and notes on the execution of ongoing projects. In addition to the CIMAO project, Bank Group lending has included roads; agriculture (cocoa, coffee, cotton and food crops); education; technical assistance to the Ministries of Plan, Rural Development, and Industry and State Enterprises; a regional DFC operation; and feasibility studies for a phosphate fertilizer project and a regional hydroelectric power project. 15. IDA has made four previous agricultural credits, which are described in para 27 below. The four credits in the road sector supported efforts to build up an efficient maintenance service, upgrade the country's main and more heavily trafficked roads, and start a comprehensive transport planning and coordination system. A separate project for feeder road development provides for improvement works and maintenance operations. The objective of the First Technical Assistance Project has been to help the Government formulate sound investment and public finance policies. The Second Project will permit con- tinued technical assistance in support of the implementation of an envisaged structural adjustment program. An Engineering and Technical Assistance Credit will help to determine the technical and economic viability of developing a phosphate fertilizer project in Togo. A similar engineering credit, approved in FY82, will help to assess the viability of the Nangbeto hydroelectric scheme (a regional project being planned jointly with Benin). An ongoing education project finances the construction of teacher training facilities, expansion of existing facilities and fellowships. 16. Togo's performance with respect to project implementation and disbursement is generally satisfactory. The Government is by now quite familiar with the Bank's procurement and disbursement procedures. Delays are sometimes encountered, however, because of the cumbersome administrative regulations used in Togo to award public contracts. The Government is sensi- tive to this problem and is working with the Bank to find appropriate means to simplify the procedures. PART III - THE AGRICULTURE SECTOR 17. The agriculture sector accounts for 80 percent of employment, 30 percent of GDP, and 30 percent of export revenues. Approximately 11 percent of the geographic area is cultivated. An estimated 265,000 families are engaged in agriculture and typically grow food crops or food crops and cotton on about two ha. Food crops: maize, sorghum/millet, cassava, yams, beans, groundnuts, and rice account for 450,000 ha of the cultivated area. Industrial crops: oil palm, coffee, cocoa, and cotton account for about 160,000 hectares.  - 5 - 18. Despite reliance primarily on traditional production techniques, Togo is still largely self-sufficient in food crops, except during serious droughts. Nevertheless, food crop yields are low, and there is considerable scope for growth. The use of fertilizer, insecticides, and improved seeds is negligible, and the effectiveness of extension services is uneven. Both producer and consumer prices of food crops fluctuate dramatically annually, in response to climatic conditions, and seasonally because of limited storage facilities. The basic diet of tubers, cereals, and legumes, supplemented by small amounts of meat is often insufficient in terms of calories as well as protein content. The demand for food in the Togolese urban market and food deficit regions in neighbouring countries (especially Nigeria) is growing and is exerting upward pressure on domestic food prices, thus increasing farmer incentives. The longrun export potential for food crops is promising. 19. Coffee, cocoa, and cotton are the major cash crops. In the past coffee and cocoa production decreased because producer prices were not remunerative enough and the yields of trees were declining due to age. Increases in producer prices and replanting programs should, however, soon begin to have an effect on coffee output. The producer price for cotton is comparatively low, but production is encouraged by the subsidization of fertilizers, although the subsidy was reduced by half for the 1981/82 growing season. Cotton is grown in rotation with food crops, and unlike food crops, is sold by farmers at a guaranteed producer price which may encourage its production over that of food crops. 20. Hitherto, Government has promoted export crops through crop-specific projects and small, area-specific rural development projects. Although the impact of the crop-specific projects has been diminished by Government's restrictive pricing policy, when considered individually they have been relatively successful. However, there has been little or no coordination among the dozen or more area-specific projects, currently in various stages of execution, which have been designed by different donors, and a consistent and coherent strategy has not been developed. Some projects include autonomous extension and other services, an arrangement which may result in duplication and inefficiency. Overall, food crops have been neglected. Government now recognizes the need to promote balanced and coordinated agricultural develop- ment. Actions required in order to achieve this goal include: (i) careful planning and coordination of Togo's rural development strategy, focusing primarily on smallholder farming and diversification of crops; (ii) review and revision of producer prices for export crops and of input prices; (iii) restructuring of institutions, agencies, and projects so as to streamline functions and reduce duplication of efforts; (iv) provision of services to the agricultural sector; and (v) progression towards more effective decen- tralization of development responsibilities to the regions. Over the next two years, technical assistance will be provided to MRD for planning and research coordination, and during the next year an evaluation of all on-going and completed projects will be carried out. These activities, to be financed under the Second Technical Assistance Project, will assist Government to achieve the above mentioned objectives and to improve aid coordination.  -6- Institutional Arrangements 21. A national extension service is organized under the five semi- autonomous "Directions Regionales pour le Developpement Rural" (DRDRs), which come under the Ministry of Rural Development. The DRDRs currently employ about 600 extension agents and are intended to play increasingly the role of regional development agencies but are constrained by the inadequacy of operating funds, trained personnel, and equipment. Extension agents are poorly motivated and do not have the means to make much impact. Agricultural training at the graduate and diploma levels is generally adequate, although the system is handicapped by lack of operating funds. Base level training of extension staff and pilot farmers, particularly under the DRDRs, is less satisfactory. For these reasons, parastatal agencies such as SOTOCO for cotton and food crops, SRCC for cocoa and coffee, and various agricultural development projects have tended to develop their own extension and training services. The possibility of creating an effective national extension service will be addressed by the above mentioned study and technical assistance. 22. Agricultural research is handled by a number of Government agencies and projects and through international agencies such as IRCT for cotton and IRAT for food crops. Greater coordination of such efforts is needed in order to avoid duplication and set appropriate priorities. This problem will be addressed by a research coordination unit to be created within the MRD under the Second Technical Assistance Project. In addition, most agricultural development projects have a seed multiplication component based on foundation seeds provided by their applied research programs. Lack of coordination among these projects often results in duplication of efforts and poor seed quality. The proposed project would provide for a seed quality control unit as well as coordination of seed multiplication. 23. Marketing of export crops is handled by the state marketing enter- prise OPAT. In 1980, OPAT's gross.sales amounted to US$79 million and, due to low farmgate prices, particularly for cocoa and coffee, resulted in profits of US$40 million. OPAT surpluses represent about 8 percent of Government revenues. Food crop marketing is handled primarily by a thriving private network of traders. Although some concern has been expressed by Government that trader operations are monopolistic and involve speculation and excess profits, analysis of these channels suggests that the system is fairly competitive and efficient and that price markups are not excessive. Partly in response to this concern and also in response to the considerable fluctuations in food crop prices both during and between seasons, Government established TOGOGRAIN in the early 1970s for the purpose of stabilizing the market, building up grain reserves, and providing an alternative sales outlet to farmers. Technical and managerial problems have caused TOGOGRAIN to be a costly enterprise with little impact upon the market. 24. SOTOCO was the primary implementing agency of the First Rural Devel- opment Project in Cotton Areas (Credit 741-TO) and would continue in this role under the proposed second project. It is a state enterprise created in 1974 as a national cotton development agency with responsibility for extension work, technical support, and primary marketing of cotton. Its responsibilities were amended under the first project to include food crops cultivated in cotton areas, and it is now increasingly handling cotton processing.  - 7 - Subsidies, Prices and the Cotton Bareme 25. SOTOCO sells to farmers, at full cost, food crop pesticides, improved food crop seeds, and cotton sprayer batteries, which it purchases from Govern- ment's input procurement agency. Fertilizers are sold at 50 percent of cost. Pesticides for cotton are provided free. Under the proposed project, food crop pesticides, food crop seeds and batteries would continue to be sold at full cost and the fertilizer subsidy would be progressively phased out by PY5 (Section 4.02 of Development Credit Agreement). In order to avoid delays associated with ordering through Government's input procurement agency, SOTOCO would be enabled to purchase inputs directly (Section 3.06 of Development Credit Agreement). The financial arrangements ("bareme") between OPAT and SOTOCO are intended to provide reimbursement to SOTOCO of direct costs asso- ciated with cotton production, purchasing, processing, and transportation but have to date not completely covered such costs, with the result that SOTOCO has had to rely on funding from the Treasury budget. Under the proposed project, cotton fertilizer subsidies would be included, during the phase out period, in the cotton bareme. The OPAT-SOTOCO bareme would also be modified to include full coverage of marketing, ginning and other associated costs (Section 3.05 of Development Credit Agreement). 26. Producer prices for seed cotton are below economic producer values and the prices offered in most West African countries, and farmer returns from cotton production in Togo are marginal in comparison to returns from improved food crop production. Under the proposed project prices would be adjusted annually to take account of movements in the international price of cotton, and to compensate for the production cost increase resulting from removal of fertilizer subsidies, general inflation and the price trend of competing food crops. Analysis carried out by the Appraisal Team indicates that an immediate increase in the cotton price from CFAF 65/kg to about CFAF 75/kg would be appropriate. The announcement of prices for the 1983/84 season, with a minimum seed cotton price of CFAF 75/kg and the fertilizer subsidies reduced to 40 percent, would be a condition of credit effectiveness (Section 6.01 of Development Credit Agreement and Supplemental Letter 2). Subsequently, the price analysis and monitoring unit to be established in OPAT under the First Technical Assistance Project would review prices annually. The resulting price recommendations would be discussed annually with IDA, and the agreed cotton price would be announced annually at the same time as input prices are announced for the subsequent growing season. (Sections 4.03 and 4.04 of Development Credit Agreement). IDA Financed Projects in The Rural Sector 27. IDA has financed four rural development projects. Two Cocoa/Coffee Development Projects support the planting of coffee and cocoa and the replanting of cocoa. The first project (Credit 503-TO) began in 1975 and has been satisfactorily completed. In the second project (Credit 945-TO), the coffee component is progressing satisfactorily but the cocoa component is experiencing difficulties. The Maritime Region Rural Development Project (Credit 638-TO) will terminate at end 1982 and has been unsuccessful for a variety of reasons, including difficult ecological conditions and weak  - 8 - technical management. The Rural Development Project in Cotton Areas (Credit 741-TO) was initiated in 1977 and was successfully completed in June 1982; it was the precursor to the project proposed here. The main objectives of this project were to increase national cotton production and the production of food crops grown in rotation with cotton. Cotton production in 1981 reached 20,800 t, compared to a project target for 1981 of 23,900 t, and to an average annual production of 6,700 t prior to the project. The project's impact upon food crop production has, however, been less successful: 4,150 ha of improved food crops at the final development stage (involving improved husbandry, use of fertilizer and improved seed, and rotation with cotton) were planted in 1981 as against a target for that year of 10,100 ha. The accomplishments of the project include initiation of an effective extension service and improvements in financial management. Shortfalls of the project include inadequate attention to animal traction, failure to establish a monitoring and evaluation unit, insufficient recruitment and training of Togolese senior and mid-level staff, inefficient management of cotton trans- portation, and SOTOCO's unsatisfactory financial arrangements with Government and OPAT. Despite these shortcomings, the economic rate of return of the first project is re-estimated at 22 percent, as compared with 32 percent estimated at appraisal, and a technical and managerial basis has been established for the proposed follow-up project. PART IV - THE PROJECT Objectives and Summary Description 28. The proposed project would follow-up and address the weaknesses of the First Rural Development Project in Cotton Areas. As such, it would continue and consolidate the accomplishments of that project, while placing special emphasis on redressing the problems and shortfalls which were encountered. Cotton production would be expanded, but more emphasis would be placed on food crops grown by participating farmers. SOTOCO would continue to be the project executing agency, and its efficiency would be upgraded through vigorous recruitment and training of Togolese personnel and provision of technical assistance. The project would include: (i) strengthening of SOTOCO's extension service; (ii) multiplication of improved seeds for food crops; (iii) promotion of animal traction; (iv) provision to farmers of fertilizer, pesticides and equipment; (v) supportive applied research; (vi) reconstruction and periodic maintenance of essential feeder roads; (vii) provision of tubewells in villages without dry season potable water; (viii) additional storage capacity and minor infrastructure for cotton ginneries, and trucks for transport of cotton and inputs; (ix) field stores, regional offices, workshops, housing, and expansion of the headquarters office; (x) establishment of a project monitoring and evaluation unit; (xi) technical assistance support; and (xii) support to the Ministry of Rural Development for seed quality control and national coordination of food crop seed produc- tion.  - 9- Complementarity with Other IDA Financed Activities 29. Several activities which are being financed under the first and second IDA Technical Assistance Projects (Credits 930-TO and 1270-TO) provide support for the planning and execution of the proposed project. Of particu- lar relevance are the establishment within OPAT of a price analysis and monitoring unit with the objective of formulating a coherent price policy by the end of 1983 (see para 26), and the proposed creation within the Ministry of Rural Development of a unit to coordinate agricultural research. In addition, a study of the role of TOGOGRAIN in the marketing of food crops has been financed directly by the Bank. The project itself would support the goals of the proposed structural adjustment program. The Project Area 30. Given the wide distribution of cotton growing in Togo, the project would entail a geographic coverage comprising, as under the first project, most of Togo's land area in the Savanna, Kara, Central and Plateau Regions as well as the cotton growing area in the northeast of the Maritime Region and the Mo plain in the west of the Central Region (see map). In total, this amounts to a land area of some 46,000 km2 and comprises a rural population of about 1.4 million people or 215,000 families. A goal of the project is to involve 65,500 families by PY5. In areas where other agricultural projects are in progress (including a GTZ project in the Central Region, projects in the north financed by UNDP and others, and a proposed IFAD project in the southeast of the Plateau Region), SOTOCO's intervention would, as previously, be restricted to the supply of cotton inputs, cotton marketing, and advice and training on cotton production techniques. Project Implementation 31. The project would be implemented over five years. As under the first project, SOTOCO would be the implementing agency, either directly or through arrangements between SOTOCO and other specialized agencies. Exceptions to this would be the project component supporting the national seed multiplica- tion program and the study of a possible follow-up project, which would be managed under the General Directorate of Agriculture of the Ministry of Rural Development (MRD). The Project would promote the production of cotton and the main food crops grown by participating farmers. The food crops covered would be maize, sorghum, groundnuts, paddy, and cowpeas. Agronomic packages would be based on techniques proven under the first project and would cover improved crop husbandry with particular attention to timely sowing, plant density, weeding, and rotational practices; use of fertilizers and improved seed varieties; spraying of cotton and selective use of pesticides on other crops; promotion of animal traction; and post-harvest protection. This would be facilitated by a further consolidation and improvement of the extension system that has been successfully initiated under the first project. 32. In the longer term, Government envisages that SOTOCO's role would be reduced to that of a specialized cotton development agency responsible for marketing, processing, input supply and provision of technical advice to the  - 10 - cotton sector, leaving extension and other rural development support activi- ties to a nationally administered extension service under the DRDRs. Never- theless, for at least the five-year project implementation period, Government recognizes that the DRDR's and their extension services are not sufficiently developed to handle these activities and SOTOCO would, therefore, continue to act as a general rural development agency in Togo's cotton areas. Under the project, inefficiency in some ares of SOTOCO's management would be corrected through technical assistance, the addition of an Assistant General Director, and the reorganization of headquarters into four departments: Agricultural Production; Finance and Administration; Industrial; and Marketing. These improvements would create the capacity for SOTOCO's possible restructuring (after PY5) into a separate company with those reduced functions. Similarly, the upgrading and regionalization of SOTOCO's field services could permit the eventual transfer from SOTOCO to the DRDRs of a well-trained, polyvalent extension service as part of the institutional restructuring mentioned in para 20. With this possible future scenario in mind, and in order to reduce the number of activities that SOTOCO (and eventually the DRDRs) must handle and to support the institutional development of other Government agencies, a number of project components would be subcontracted by SOTOCO to specialized Government agencies as described below. Contractual arrangements governing these linkages would be subject to prior approval by IDA (Section 3.01(f) of Development Credit Agreement). 33. For the project's animal traction component, PROPTA (public agency for animal traction) would procure oxen and implements and provide related services. Medium term credit for these items would be provided by CNCA. Seasonal inputs would be provided by SOTOCO on a cash or credit basis for cotton growing farmers and on a cash basis for non-cotton growing farmers. As at present, SOTOCO would recover seasonal credit through reductions on payments to farmers during seed cotton marketing. All loans would be subject to an annual interest rate of 10 percent. This is low in view of inflation rates and administrative costs. However, the distortion caused by fertilizer subsidies is far more important (see para 25), and medium term credit pro- vided by CNCA is extremely small and would not be financed by IDA. Applied agricultural research would, as currently, be sub-contracted by SOTOCO to IRCT (cotton) and IRAT (food crops). Government's food crop seed multiplica- tion program would be supported through establishment of a small seed farm for maintenance of varieties, a seed quality control unit, and a seed multi- plication coordinating committee. Contracts for drilling the project's 400 tubewells in villages without ready access to dry-season water would be arranged by a specialized department in the Ministry of Public Works which would also supervise construction and subsequent maintenance. Beneficiary villages would make in-kind and labor contributions, an arrangement which has been used successfully in Togo. 34. Periodic maintenance of feeder roads would be carried out by SOTOCO's proven feeder roads unit. In addition, 950 km of feeder roads would be recon- structed under the project, but SOTOCO's unit would do only half of the reconstruction work; the remaining 475 km would be subcontracted by SOTOCO to the feeder roads unit in the Ministry of Rural Works. This option has been chosen to provide continued support to the Ministry of Rural Works unit subsequent to completion in 1983 of the IDA supported Feeder Roads Project (Credit 810-TO). If the performance of the Rural Works unit continues to  - 11 - improve, the merging after PY5 of the SOTOCO unit with the Ministry of Rural Works unit could be considered. The project would finance a slight expansion of SOTOCO's truck transport fleet, but to the extent possible, transport would be contracted to private truckers. Ginning capacity would be expanded through the construction of a seed cotton store to prolong the ginning season. Because of a lack of adequate housing in Atakpame (SOTOCO's seat) and in regional centers, ten houses for SOTOCO senior personal would be constructed under the project. 35. The General Director of SOTOCO has been highly competent, and the technical assistance team has performed well. Under the proposed project, more emphasis would be placed on the selection and retention of competent staff at all levels and, where necessary, the replacement of unsatisfactory staff. The positions of General Director, Assistant General Director and Director of the Marketing Department of SOTOCO would be filled by persons whose qualifications are satisfactory to IDA (Section 2.02 of Project Agreement). Internationally recruited staff are expected to be needed for the following technical assistance positions: the directors of the Agricultural Production, Finance and Administration, and Industrial Departments; the heads of the engineering division and the monitoring and evaluation unit; the chief of the extension services; the chief of the farmer groups and credit service, a cost accountant, a seed production agronomist for SOTOCO, an agronomist for the national seed production component, and two workshop managers; a total of 12 positions aggregating 42 man-years. Short-term consultancies and fellowships for Togolese counterparts who would be trained by the expatriate staff would also be provided. The Togolese staff would be expected to gradually take over responsibility during the latter part of the project, at which time the expatriate staff would assume an advisory role. The selection, appointment and elaboration of terms of reference for all technical assistance staff and short-term consultants would be through procedures satisfactory to IDA; the qualifications of such staff would be satisfactory to IDA; and technical assistance arrangements would be reviewed annually in order to identify needs as they occur and to permit maximum flexibility in the transfer of responsi- bilities to Togolese staff (Section 2.02 of Project Agreement and Section 3.01 of Development Credit Agreement). The appointment of a General Director and the signing of a satisfactory contract or contracts for the first six technical assistance positions described above would be conditions of Credit effectiveness (Section 6.01 of Development Credit Agreement). SOTOCO's Finances 36. To build up SOTOCO's capital, farmer repayments against the quanti- ties of fertilizer financed by external sources under the project would be retained by SOTOCO and added to its reserves (Section 3.04 of Development Credit Agreement). This would amount to about US$2.3 million over the five years and would result in a stronger liquidity position for SOTOCO and the build up of SOTOCO's capacity for eventual reinvestment in plant out of its own resources. In addition, the phase-out of fertilizer subsidies and the modifications to the bareme described in para 25 would diminish the size of the Treasury contribution to SOTOCO, particularly in the critical area of input supply, thereby increasing SOTOCO's financial autonomy. While surpluses earned by OPAT through the margin on export revenues would be reduced as a result of these measures, annual OPAT surpluses would remain positive and are  - 12 - expected later on to increase as a result of expected increases in interna- tional prices. Taking OPAT surpluses and expected cotton price increases into account, Government's financial cash flow as a result of the SOTOCO development program would amount to a total of US$44.2 million over the five-year period. Costs and Financing 37. Project costs are estimated at US$48.7 million, including taxes, with a foreign exchange component of US$33.4 million or 69 percent. Physical contingencies of 8 percent for capital costs and 10 percent for operating costs (excluding personnel) and allowances for expected local and interna- tional price increases over the project implementation period (ranging from 6 to 11 percent) have been included. 38. In view of Togo's difficult current and medium-term financial con- straints, it is proposed that external financing should amount to an excep- tionally high proportion - 95 percent - of project costs, or US$44.1 million. External financing would be divided among cofinancers as follows: IDA (US$23.5 million), CCCE (US$16.2 million), and FAC (US$4.4 million). These funds would be channeled through the Central Bank, the Government agency for handling all official foreign financing, and passed on by Government as grants. SOTOCO would receive the bulk (US$42.0 million) of this, the remainder going to CNCA for an animal traction credit fund (US$1.l million) and to MRD for the national seed production component and study of a possible third project (US$1.0 million). Surpluses would be incurred by OPAT rather than SOTOCO and would subsequently be passed on to the Government Treasury. Govern- ment would provide US$4.6 million to the cost of the project and would remain responsible for non-incremental recurrent costs and non-incremental farm inputs (Section 3.01(e) of Development Credit Agreement). Procurement 39. Building, Plant and Equipment. The construction of storage facili- ties, office and laboratory buildings, houses and workshops for SOTOCO head- quarters, field services, and feeder roads (IDA contribution US$2.7 million) would be through local competitive bidding for the larger structures and through arrangements by which farmers would provide labor and SOTOCO would supply materials for simpler structures. International competitive bidding would not be justified in view of the dispersed nature and individually small size of each of the constructions. Tubewell construction (IDA contribution US$3.0 million) would be through international competitive bidding. Tenders for pesticides and sprayers, and for vehicles and equipment for field services and monitoring and evaluation would be grouped as far as possible in appro- priate bidding packages and procured through international competitive bidding (IDA contribution US$4.8 million). Fertilizers and plant and equipment for seed production, research, ox-cultivation, ginning and transportation would be financed by CCCE and FAC and procured according to their guidelines. Services. Contracts for 46 man-years of technical assistance (including studies) valued on average at US$10,100 per man-month, in line with experience in Togo, and with a total value of US$5.0 million (IDA contribution US$2.5 million) would be procured in accordance with IDA and  - 13 - Government procedures for international recruitment. IDA financing of the fellowship program and of the study of a follow-up project would amount to US$0.9 million. Other Expenditures. About US$18.5 million of the project expen- ditures representing operating costs and local salaries (IDA contribution US$9.7 million) would be committed in accordance with established Government procedures satisfactory to IDA. Disbursement 40. The proposed IDA credit would be disbursed to cover: * (a) 12 percent of the cost of buildings, houses and equipment for SOTOCO headquarters; (b) 100 percent of foreign exchange and 95 percent of local costs of buildings and equipment for field services, monitoring and evaluation; (c) 70 percent of the cost of buildings, plant and equipment for periodic maintenance and reconstruction of feeder roads; (d) 75 percent of foreign exchange and 68 percent of local costs of buildings, plant and equipment for water supply; (e) 42 percent of total local personnel and operating costs, excluding ox-cultivation; (f) 50 percent of the cost of expatriate personnel; (g) 100 percent of the cost of studies and fellowships; (h) 21 percent of total pesticide and sprayer costs; About US$2.0 million would be unallocated. US$2.0 million would be available for retroactive financing of expenditures made after September 30, 1982, but before signature of the credit. Disbursements under (a), (c), (d), (e), and (f) would be pari-passu with CCCE and/or FAC. For (b), (g) and (h), IDA would be the only external contributor. Reporting Requirements and Audit 41. In addition to specific reports related to monitoring and evalua- tion and project components subcontracted by SOTOCO to other agencies, a general report covering all of the project activities would be prepared annually and supplemented by brief quarterly progress reports. An annual financial report plus an audit report prepared by independent auditors satisfactory to IDA would also be prepared within four months of the close of each financial year (Section 4.01 of Development Credit Agreement and Section 4.02 of Project Agreement).  - 14 - Project Benefits and Rate of Return 42. The number of participating farmers is expected to increase from the current 42,100 families to 65,500 families representing by PY5 one-third of the farming families in the project area or about 425,000 persons. As a result of yield increases due to adoption of project recommendations, returns per hectare and per man-day would increase significantly, and average income prior to family consumption would increase by 86 percent, providing a strong stimulus to rural growth. By PY5, incremental production of cotton would reach 18,400 t representing an 84 percent increase over current production levels, and food crop production would increase by 38,000 t, the bulk of it representing surpluses over on farm consumption. This would help meet a growing domestic demand for foodstuffs and rapidly expanding demand in such neighboring countries as Nigeria. The FOB value of cotton lint and seed would amount in constant 1982 terms to US$11.5 milion by PY5 which is equiva- lent to 5 percent of Togo's 1980 total exports or 29 percent of export revenues from cocoa and coffee. The farmgate value of incremental food crop production would amount to about US$7 million. 43. In addition to these quantifiable benefits, the project would help strengthen the development institutions involved, in particular, the extension network and the management of the main implementing agency, SOTOCO. This could allow future reorganization of Togo's extension system and the eventual creation of a financially autonomous cotton development agency. Project measures related to applied research, seed multiplication, village water supply and feeder road development would have long range benefits beyond the immediate production impact of the project's field development activities. 44. Taking into account the costs of all project components and the incremental benefits described in para 42, the project's rate of return is estimated at 21 percent. It would fall to about 12 percent with an 11 percent fall in benefits or a 12 percent rise in costs, and to 16 percent if the projected farmer participation levels were to fall by 20 percent. Risks 45. There are no major technological risks under the proposed project. The proposed farm development measures have been well tested in Togo and other ecologically similar West African countries. Furthermore, SOTOCO has proven itself to be a generally capable implementing agency and current weaknesses have been specifically addressed in project design, management reorganiza- tion and supplementary technical assistance. Risks relative to full and timely provision of Government funding and the financial capacity of SOTOCO have been minimized by the measures described in paras 25 and 36. 46. Future market prospects for cotton fiber are good, due to expected demand growth in developing country markets and expected upward price trends for the petrochemical based synthetic textiles. A shortfall in expected participation levels is a possibility, although the success of the first project in expanding cotton production in four years by over 300 percent (despite only moderate price incentives for cotton) demonstrates the viability of cotton production from the farmer's viewpoint. In the past, the develop- ment of improved food crop production has been constrained primarily by  - 15 - SOTOCO's limited capacity for multiplication of improved seed rather than by the farmers' willingness to participate. The assurance relative to the raising and subsequent maintenance of the farmgate price of seed cotton should further stimulate financial incentives for the lead crop in the farm package, and food crop prices are expected to rise in real terms given the current and projected growth of the domestic and regional market. PART V - LEGAL INSTRUMENTS AND AUTHORITY 47. The Development Credit Agreement between the Republic of Togo and the Association, the Project Agreement between SOTOCO and the Association, and the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Association, are being distributed separately to the Executive Directors. 48. Features of the Development Credit Agreement of special interest are listed in Section III of Annex III. Special conditions of credit effec- tiveness would be the appointment of a General Director and the first six of the twelve technical assistance staff listed in para 35, the signing of the FAC Grant and CCCE Credit Agreements, and the announcement of input prices and the seed cotton price for the 1983/84 season. 49. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 50. I recommend that the Executive Directors approve the proposed Credit. A.W. Clausen President Attachments Washington, D.C. November 4, 1982  - 16 - Annex I Page 1 TOGO - SOCIAL INDICATORS DATA SHEET I0GO REFERENCE GROUPS (WEIGHTED AVERAGES AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE) - TOTAL 56.0 MOST RECENT LOW INCOME MIDDLE INCOME AGRICULTURAL 16.2 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA GNP PER CAPITA (055) 90.0 200.0 410.0 250.8 1053.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 21.6 62.7 111.6 66.5 610.1 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUSANDS) 1499.0 1956.0 2503.0 URBAN POPULATION (PERCENT OF TOTAL) 9.8 13.1 20.0 17.8 28.3 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 4.7 STATIONARY POPULATION (MILLIONS) 15.0 YEAR STATIONARY POPULATION IS REACHED 2110 POPULATION DENSITY PER SQ. Bl. 26.8 34.9 43.6 27.7 54.7 PER SQ. KM. AGRICULTURAL LAND 102.3 122.9 150.7 86.7 129.9 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 44.0 45.3 46.4 44.8 46.0 15-64 YRS. 53.4 52.0 50.9 52.3 51.1 65 YRS. AND ABOVE 2.6 2.7 2.7 2.9 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 2.2 2.7 2.5 2.7 2.8 URBAN 5.2 5.6 6.7 6.2 5.2 CRUDE BIRTH RATE (PER THOUSAND) 50.6 48.2 47.8 47.3 47.2 CRUDE DEATH RATE (PER THOUSAND) 26.8 21.8 18.1 19.5 15.7 GROSS REPRODUCTION RATE 3.3 3.2 3.2 3.2 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. .. USERS (PERCENT OF MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-100) 99.0 102.0 78.0 88.7 90.7 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 97.1 94.9 91.9/c 90.2 93.9 PROTEINS (GRAMS PER DAY) 46.0 46.1 48.77! 53.1 54.8 OF WHICH ANIMAL AND PULSE 11.5 11.6 12.7/c 18.4 17.0 CHILD (AGES 1-4) MORTALITY RATE 41.8 28.1 21.1 26.7 23.9 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 37.2 42.2 47.1 45.6 51.0 INFANT MORTALITY RATE (PER THOUSAND) 181.5 134.0 109.0 129.9 118.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. '7.0 16.0/d 23.9 URBAN *- *- 49.07 54.9 RURAL .. 5.0 10.07d 18.5 ACCESS TO EXCRETA. DISPOSAL (PERCENT OF PQPULATION) TOTAL .. 1.0 15.0/d 25.8 URBAN .. 4.0 36.571 63.1 RURAL - 1.0 12.07d 29.2 - POPULATION PER PHYSICIAN 35756.1 27942.9 18164.1/c 32097.3 14185.2 POPULATION PER NURSING PERSON 5341.2/e 4170.6 1735.171 3264.6 2213.2 POPULATION PER HOSPITAL BED TOTAL 777.5 649.3/f 676.3/c 1225.0 1036.4 URBAN 205.0/e 155.5 243.071 249.5 430.8 RURAL 1032.07 1450.2 1151.07 1712.1 3678.6 ADMISSIONS PER HOSPITAL BED .. 18.6/g HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. 5.8 URBAN .. .. RURAL .. .. AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. LRBAN .. .. RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. URBAN .. .. RURAL .. ..  - 17 - Annex I Page 2 TOGO - SOCIAL INDICATORS DATA SHEET TOGO REFERENCE GROUPS (WEIGHTED AV7RAGES - MOST RECENT ESTIMATE)-a MOST RECENT LOW INCOME MIDDLE INCOME 1960 lb 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 44.0 69.0 110.0 63.2 83.3 MALE 63.0 95.0 136.0 72.7 96.1 FEMALE 24.0 42.0 85.0 50.3 80.4 SECONDARY: TOTAL 2.0 7.0 32.0 10.2 15.3 MALE 4.0 11.0 48.0 13.2 19.4 FEMALE 1.0 3.0 15.0 6.6 11.3 VOCATIONAL ENROL. (X OF SECONDARY) 10.1 9.6 7.6 7.9 4.7 PUPIL-TEACHER RATIO PRIMARY 59.8 58.5 54.3 47.4 38.6 SECONDARY .. 25.0 42.0 26.2 23.4 ADULT LITERACY RATE (PERCENT) 10.0/e 15.9 18.0/c 34.0 35.6 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION l.9/g 3.7 6.0/b 3.0 31.4 RADIO RECEIVERS PER THOUSAND POPULATION 3.5 20.4 209.8 34.8 71.8 TV RECEIVERS PER THOUSAND POPULATION .. .. 0.7 1.7 17.9 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 1.3 6.6 2.9 2.9 19.1 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.2/i .. I.O/d 1.1 0.6 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 687.1 836.8 1024.6 FEMALE (PERCENT) 39.2 41.3 40.4 34.1 36.5 AGRICULTURE (PERCENT) 80.0 73.0 67.0 78.4 56.5 INDUSTRY (PERCENT) 8.0 11.0 15.0 9.2 17.7 PARTICIPATION RATE (PERCENT) TOTAL 45.8 43.8 40.9 41.4 37.0 MALE 56.8 52.3 49.5 53.9 46.9 FEMALE 35.3 35.6 32.6 29.1 27.2 ECONOMIC DEPENDENCY RATIO 1.0 1.1 1.2 1.2 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS HIGHEST 20 PERCENT OF HOUSEHOLDS .. LOWEST 20 PERCENT OF HOUSEHOLDS .. LOWEST 40 PERCENT OF HOUSEHOLDS .. POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 243.0 134.3 507.0 RURAL .. .. 118.0 82.9 200.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 121.0 96.4 523.9 RURAL .. .. 121.0 60.4 203.6 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 42.0 39.3 RURAL .. .. .. 69.0 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. 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 Rcent Estimate, between 1978 and 1980. /c 1977; /d 1975; /e 1962; /f Government hospital establishments; /g 1964; /h 1974; /i 1957. May, 1982  - 18 - ~~~~~~Annex I DEIITOSOF SOC1AL 1NDICA109FS Page 3 Son.: "`-uogh c)n data are draw trot sour.e generaly judged tie Soat autoni aty relae,It ucood alc be note that they nay not be IcIer- nticnulir c,anii hnaus of he lack of ttdardited definitions ead concpts sdc ifrn one to clLecIng he data--. The datar. nuns chulese outdo1 to deecrene orders of eageinude indicate mmd.. ond charon cantos contain dalontOttt-stance the toee~e goups ae (1) t. sam couaiy grop of the.u c co -ryad (2) aoutry group ott nu-hn., highor o ieagcco then the county droo.p of thesobiet coutry (ecuptfor 'Hih Ito Oil uprar" rupann 'tiddle bun onAtiaon.ideLa'L chosen becus.. nons enciu-cultr.i affinties>. On the fcnoetc grop data tieteng. -.S ppzo.on.iger n -d.tc an cot etchLc itto ad show onlyat, sjonttyof the ountrie In a goup hasdeco for thee indluanor. SInce the--veag 1 conresaog the dicaicto depecso the -teuianily of data an Lafo nie. ceninte e n-sd to retaing avesgsf o.iciannt anutben. thes ..te.agr. ore only uc. lin cospani.a ths calus of in.tdicooret1- s -sen the! country and nsfse.... grupe dREk lt)houand eqk.(Pnuato e Oanin Bed1 - tonal. 1.na, uod rutni - Popu1laion (tota, TocaI - total -uf-o are copristitg l1ad att end intend atr;1979 data. uno,an ua) dicidd lhy isi -ee-ri-e noss of houpice oto_ A otua-fetCi-an of ag.cunu ...esund -epn-aeilp atpraetyao-ist uicad pri ~l - nete11 geerl n epeciolid h.epi_a ao e foe urps. -otre,aekt ad kitchen gerdsn on to Le talf ;179 dota. bohlitate cetr. opitnle e setb dilteheetepen-Manney tat hy at leas.t one phtye Iulu. Z-tbliebhseta" pr Mii. pr-u aly coto tIRt i EdOOTh, 11.)n-.G ceP.pa c-pite siea a urn -one pelee,ta-dia saantincluded. Rurl huptilel, honaner, luloe dth oindby se onesinmeed as Worta sash axles ai,td tase 1960 en md dituf cetrnttpes l stffed bc a Pnyscint (hut ty 1.970, end 19d0 data. aedLnel ..ee..es.e. nurse n"dif., ec%.) httich ofsr In-ptiet 00 datiot end pennida a lielted ra-so uie f eciliion. For. at, ENERGY tCttOclTcjl PEiL CAPITA - -uaa -ucau Lpto of --nia -cegY (coa cccal puroac ubanhopinale inclake cOdsprtcpa -gtau hoapltalu. -nd lignite. perl..ntra e and hydro-. ulu n eohra l; etc rural hnsit:n" oclo :re honyttala acu adcicl odntr nct) nclogen of coal quin-I.n. pan capita; 1960, 1970. n 1979 cnt ps-hncaise oetu r icued onyIuder toa. data. Adetnuicce roe Onep~~~~~~~~~~~~inol te.d - Total nuee of udaitutun no on dipchungnu frmhsrt inedad hy the tue f bsde. .tota .Pntluctic, Kid-teen (rhoanka - so of Joay i; 1960, 1970, an 1960 HOUSINGi data. men~~~~~~~~~~a-ce STe of gu Ibd (pernI, tee hausehId) - tnal utben and tc-al aseg -nuntree; 1960. 1970, Wa 1960 dat, the h-neehld toe s.tatist ia prl a pouato in .ea 2000 - Cunse ppuiatt praeniani ate ... ee.d on 1980 he_c prosPee., i l rhs.ad Crnloepiedcnecaa totl antnln byae ig e edthi mrtatity and tentilicnte.dadge -epaneirely. Duelling. sanide not-caane- - to aesa tog lIfe eopancaryep a birth lonese fu -conry's a. adaIcm oa to fEctnify (prerCoa of daidlagat - cta., -rban, und rurl- isnel f -. an feml lf npeaeu s.. elt.iligiag at77.5 yea-e lbe pane- Conniotni dlig with eton,irIllt in~ unit q---et as Percenta.ge macen ton fertility nate als horn then 1-ns1 assum..ing Iet-e in oftoa. uret ad rural denliong. e-epeeinely. heb tn-te L. the a..ignad now of'ht.hes ta atntnn f ti'tey ti ls and fetilIty trends for prnje-eda pupaa.idOCendfroienRts ctati-neep roroluete - to. a snniuarylpnpu1l.tn chesi o gnnilr Priare eohonl1 tota.1 noe nod inslol - Cress tutu. nab ucd irnl be hne rat i un tn the death rec, and ae h aesrCtut ne- ennolsn fal- gsa h pimary "e"In ecnoiatenetc son.ostn. Ti is athisne, aely afne fselilly -ass declitn to.niar ecea-geppuatua tamlpIoueetldr sd b-il ch elacemen t s-e of unit nat rerdaeonnn, abet ChZ. eaienraion yeraht odjet.d for differet- -enths offnlarrncto o of -ame nplatee itself en-tty.The atenines.y populataenee ocns iti cteeu knaio.r.lsa tynee 0 -penen netimened on the baste of the pnjtca hrreraieo he % C-p-a-o tiat scm puIs one iso o bonth fficia1 atho- ego. In the year 2000, emd th. eons nf'deilu offetiy Crat to replaus- nenar thul-tce.ml and female- Comp,,ton -a abate;utu tea a-aciemay nouaisis reeoid - The Yaee etta sielnt oplto rnie esa.onotnl r acertaaugtattineltpp ,iol ciii he renche. ualy of 12 tt 7per of. age; oer..n.cecure ...gnc Pen no. km id-peat postulaion pa squan kio 1ne 00O hectorsol odLctoa animn nnet fecnap OnatcalIannteoce tal. area 1960. 197 an 1979 deea. ouetehia, indidtiel, 2a ohbs p-ngnom nhtnh operate ftted- ony;1,I0, ISOad hdte. Papil -aoh,t renti - pi-aty. ond -.tnedary - Tonel Ateno-nta ntlek t Pona1,lottn kg . .eute frrc. n - Childese Id-l4 Yeses). agtgog 15- pear nd _erdar is.-is diVtdsd by outsrs , of ..sahart in the 6yrr.anestre.d 65y.sAk onset ne p-eaetaae of aid-pes popa- ..res. uing -eel. innlon; 1960. 19(0. and 1960 date. udnit .!1iteerut race(rentsnel - Literate adaite (able to nead and onite) pcpnaiin itsniRat (ratee) -note - enuo grwnbnets nftani mi- aapsrentje O toal dul popietca aed 5 yarn nddner year pupaa"in tar 190-0 1 -7,an1970-d0. Poo Ctn deth Rate (rnsn--ura ana VyCth nones of nb.. papu- CONiSUMPTION 1oeion. Enr i950-60. 1960-Pt. and 1970-o PuensDhr (pee che-aaa rouaio.-..atetan cpae a CrudeBirthRate(net houaaul -oaoal line bianh pen thousand of d-pYor Cas eig ls then sight eene etc :t,de ascla_en here Crude teeth Usaetee cbh-sasa - annua deann per abeast of eid-ysar Rai .e.ier (psr t1hnu-d poeclatienl - All tycreo rrteni- cc rout populaton; 190. 197. andI9gf date. iroedcen tn gees tit pert .....na t paaalc ocna n Crane Raersdctio Ret .. Antge tteof d-ughtere 5 oe ill bsseL.1L in..cennd rnies ncutrn it Ysara nisrdltuco frdio her norml -sy-d-nine period if to sptene pe-seeti... eg-ptfoInn snesi affct;dat .io r.rn pests sy notn. crncett tilt ty os;acaI Ieya ......s ncdi.... in 1960. 9Sa. and19 Loa t concnaihed litun..o. of hiJ.-totrs dsniree ut,s.s . epLlss adnf oa fa-Ily planning progra. gIee ubi e thnosond ppcnin ticeu lIcendt nent enn f atd-n..n age 15-t Cvseri) woa ns iit-uneP l nnn n itee. e Ctrula L.c (rert ho-ndnrlncl-teeteaentr oil eurried eonni sm .aegeu. tuMlaion of 'dnillgnrlt oentrppa,ditn e e n ycbli.tnebo daated p,i-arly to. .e.dng. tra ea It in cnidered FOOD ANb unMIvTdN t. he dailyn if it appeae at Iess tone timase k. lae f FcodF rnuio .tnIcst 99-il - udsn of par capino -eta Cinemapp- dota treedenne ant Canito Fr Y- - keen o toe tuc- of p-no-tien of nI on odtse edannine uiudea need ark fend en.i.reeId darin~g the year. inldn dmiai-n to drin- in ci-esa is ow calendar peer beet C. Codities ceas primar gande (e.g. sugt..... and bils unite.. itnsd faoat cib reeible end tonl rst eg. cafee. ad tea ens tnldsd). iggregat prndnnIo of eech ...nr iaY iaabsd on1000PRE nutinnl. annags roogr- price enighte; 1961-65, 19 70 . ad 1990 dena.toa Lbor PFrc ith.unntdel - noo...aleally atis- esna -iui. par dsp. mailable suplis cgeia domettopl prdais eraIe o apa` oh-al. 1960, 1~910s 950 ta i enports, and rhenges in stark. Nt euppil eideaIma tek e-a.Psle (P.rtese) - Fmaeiirfaoa ecntg ftti aefre quantinle and in fond paneesig.t and lase n inrhnin.e.gtr-matulur retnt tahb tortein dumi"g. inretry notig a-d- acne were aeimeted by P hose.d es phpeoulogieli nade for .n.-I -ei- fishing as parceneeg of total inhee fnn...; 19KG. 1970 an.d 1980 data. city ud e hn caa_ aie aona-t1 qtesnm body wegt,aeidos-y (entrt>- tam tort in sinig. cooruta.-mnfoCt-iag an.d en dieeibnnine of pplno.adlowg10pernest for ease atsd eIettricitt, entered ga a ptenoof tata.1 bahoY mete; bac_nIe I ...el; 196-65. 1970 sed 1977 date. 1960. 1979 end 1990 dene. Pen cenina euei o nsnic (eras pee day) - Prona.. L a. sc f Pee -epitu utornn aelptsr oa,ae and feala-eripeneu net eupply attan poe day . s nVPpi of Inod is defined u boe R-aciiynst wtdneon. male, and feal air otsa qatrm-ts f anni aaeniee stoiahed by USD0A prnnide for s.ieimpec-ag o tneo, ale and Femals~P r tpiapt of ol lgs. re tiey aia 6asof,0 SCa of tinI1 prsteto pee day ask 10 gra of a_sl a 1960. 1970. n i980 dat. Then ore bteed'on ItO's nritpainrta I.,e pr%nsia, of aihi 10 gees hteesi be' aI-i protein, mas etand- nfetsuasttonr ttspp.sin n ogeated oaks are ton- b t thom f 75 gea-- of totalPt.. paai end 3 gesm of few Csimanse at fran nationlnrt. anma rntion neeag n the arid. prepesed by FA inLhe Third ftri L asknrkit-Snec popotelos uder 15 aod 65 and oa acrId rood urs11961-65, 1.970 an 1977 oan.ttthtno Iobnn(rs Pen .nnit.a prtein aunni fra atm aad -I sfnta... Leapply of fend de- cited irce anai od pol... to gnom per day; 1961-65, 1970 and 1977 data. INtCOtt DISTRIBiTION to1ild lance 1-4) death R-t (pee aheen-d) - On 1 deaths Per Chb.esand in Percentag of Pie noeboth La cash an kind) - R-cived in rice- age gr,,p 1-4 yeses, en childre in nhie agegrop, to mst isr pingone 5peCent_ rChee Cd perCrr, Pon-,e 10 p....ee, ack poorest 40 psetna craeOne-ained iros life tables; 1960. 1970 oak 1980 date. odfnebls 9toALtH P0OVERTY TARn'r GROUPS anbirth; l96d, 1970 and 100 da. cad ah.adh inerse in osieabetui Inan tnAlItt Rate (net in-n d) - hunul deaths ci Laanta under ons feet Estiatd Aisolat. oenyiom Inl(O per tanS ttIotab- unc .ces otaeSae Irerteat o naaia-ani ra,adrae a-iiioal dqaedityu seta no-fn reqireent- ioca ocr o peope litel. rbma uck onal wiebsasorbi19 ceastnateofiorsite narreu h- lhco96rsedaefna ae. runree httnoemiue ttecnhetaia oetyIoc eelcc`crtoio -I reoedmI ~nsidred o ceng smm roeenblef ocea of th b Coo .. i coalas caine PornLtionBeto cin Luts Pnaetc t-oma 1noel _n not ,i-ne-o dpnbd-1isropn,di--nto utt-ot -1he ey In,ranchig eb- -tir' iaeulc eoatee needs. ~ ~ ~ ~ ~ ~ b .....pbl.i._ flb -ty l, Jy i._ydF h .ncrytcenSa oel-tdencr -Ci orthaciu0 -ltonsl.. uce. f0k1rural thecolecIonno oipslh tin o It.. ot ntsse.b.od nEs th e ..meret-a ..lt-(,b.-dt and ...e-enebyoas--arn eyicen on ib ase of pit pnintea und sie- Porearuo ca Phyucta- Ppelotuo. dinodod by ou-o ciprciao phyal E- icoona .rk hocua1 D-t eroo fans quaLifid tree a adcl -bn Ce anteenity lenel. Ed_nomi dotalpet urd PontosOer P.uait s ugiePro - PopaLaeo diirde by nmb-eufypen-ining haY 1982 maeidrsL 0aunnne.aeitn nms nencn lcdt-"' -naecd  -19 - ANNEXE I Page 4 ECONO'tC INDICATORS GROSS NATIONAL PRODUCT IN 1980 US$ million Annual rate of growth (%, current prices) 1975-80 GNP at market prices 1,008.5 95.5 1U.1 GDP at market prices 1,055.8 100.0 11.0 Grcss domestic inrestments 271.1 25.7 9.4 Gross domestic aavings 141.0 13.4 17.2 Current account balance . -142.0 -13.4 Exports (G + NFS) 430.7 40.8 20.6 Imports (G + MFS) 560.8 52.8 15.0 q OUTPUT, LABOR FORCE AND PRODUCTIVITY Ii; 1980 Value added Labor force Value added Der worker US$ million Thousand 2 US$ 7t of average Agriculture 238.4 26.1 750 79.0 317.9 33.0 Industry, construction and public works 186.8 20.4 24 3.0 7,783.3 809.1 Government 102.4 11.2 39 4.1 2,625.6 272.9 Commerce and transport 308.5 33.8 67 7.0 4,604.5 478.6 Other services 77.8 8.5 70 6.9 1,111.4 120.9 GDP at factor costs 913.9 100.0 950 100.0 962.0 GOVERNI7ENT FI: inCE CFA billion % of GDP 1975 1980 1975 1980 Revenue 2 62.0 24.9 27.8 Tax receipts 31. 52.0 23.7 23.3 Other 1.5 10.0 1.2 4.5 Expenditures 35.0 66.4 26.5 29.8 Current budret 22.6 54.0 * 17.1 24.2 Investment budget 9.1 7.4 6.9 3.3 Other 3.3 5.0 2.5 2.2 Special accounts 0.3 - 0.2 - Annex budgets 0.3 1.0 0.2 0.4 Overall deficits -2.7 -5.4 -2.0 -2.4 1emo item: GDP current prices 132.3 223.1 - - MONEY. CREDIT AND PRICES 1973 1974 1975 1976 1977 1978 1979 1980 1981 (Billion CFAF-outstanding end period) Money and quasi money 15.9 30.5 28.2 41.2 48.0 64.9 69.2 72.5 80.5 Bank credit to oublic sector -1.9 -2.5 1.4 1.2 1.8 6.2 6.6 4.5 8.1 Bank credit to private sector 13.3 16.3 24.6 32.2 44.2 51.0 57.1 64.7 62.0 (Percentage or index number) Money and Quasi money as 4S of GDP 17.5 22.6 21.3 27.8 25.1 32.4 32.6 32.5 - Consumaer price index (1975 =1o00)2 5.1 84.7 100.0 111.6 136.7 137.3 147.6 165.9 197.8 Annual percentage oharge in Consumer price inaex - 12.7 l8.0 11.6 22.4 0.4 7.5 12.4 - Bank credit to public sector - -31.5 - -14.3 50.0 244.4 6.$ -31.8 Bank credit to private sector - 22.5 51.3 29.7 37.3 15.4 12.0 13.3 1 As of end April 1981. Annual average.  - 20 - ANNEX I TRADE PAYMENTS AND CAPITAL FLOWS Pg Page 5 BALANCE OF PAY fUfErTCS 1975 1976 1977 1978 1979 1980 (US$ million) Exports (G f iFFS) 141.2 158.9 195.1 257.5 250.9 430.7 Imports (G + I:FS) -242.9 -212.5 -300.4 -519.9 -524.8 -560.8 Resource gap ('deficit -) -101.7 -53.6 -105.3 -262.4 -273.9 -130.1 Interest payments (net) -1.9 -3.3 -5-7 -24.3 -29.0 -27.6 Workers' rerittances 3.3 5.4 5.3 5.3 7.1 7.1 Other factor Dayments (net) -14.0 -8.4 -13.0 -13.2 -23.8 -20'.0 Net transfers 18.7 16.7 20.3 22.1 28.6 28.6 Balance on current account -95.6 -43.2 -98.4 -272.5 -290.9 -142.0 Direct foreign investments 4.8 6.3 8.1 8.8 10.5 9.5 Net MLT borrowing 50.5 55.6 113.8 246.o 290.0 195.7 Capital grants 19.1 15.0 15.0 25.7 26.2 35.7 Other capital (net) 14.0 -16.7 -32.5 4.o -31.4 -42.8 Other items, n.e.i. 15.4 -15.0 -31.7 4.4 -33.3 -76.1 Change in reserves (increase -) -8.2 -2.0 25.6 -16.4 29.0 20.0 Net reserves (end year) i/ 38.8 58.1 33.7 50.4 28.8 51.4 Petrol imports as % total merch. imports - - 9.0 10.2 11.9 19.2 Petrol exports as ,b total merch. exports - - - 12.0 21.4 23.7 9/ Net foreign assets of the Central Bank MERCrAXCDISE FXPORTS (average 1975-80, recorded) uS$ million da Phosphate 97.1 41.7 Cocoa beans 4o.5 17.4 Coffee 23.3 10.0 All other commodities 71.9 30.9 Total 232.8 100.0 EXTERNAL DE-I, Decemcer 31, 1980 US$ mnillion Public debt (disbursed) ircl. guaranteed 907.2 Non-guaranteed private debt Total outstanding and disbursed 9L72 EXCHANGE RATES (CFAF per USf) DEBT SERVICE RATIO FOR l980 #2' Year Period average End of Deriod % 1973 223 230 Public debt, incl. guaranteed 3/ 10.0 1974 241 222 Non-guaranteed private debt - 1975 214 224 Total outstanding and disbursed - 1976 239- 248 1977 246 235 1978 226 209 2/ Debt service as percent of X (G - NFS) 1979 213 201 3/ After debt rescheduling 1980 211 226 4/ As of November 1981 1981 270 281 4 IBRD/IDA LEICDING, January 31, 1982 (US$ million) IBRD 5/ IDA Outstanding and disbursed 52.9 51.1 Undisbursed - 32.9 Outstarnding including undisbursed 52.9 84.0 5/ $53.0 rmillion of vnich $3.5 million CIMAO loan to ?ogo snd A49.5 lolior FL!I to CIMAO with the guarantee of Ghana, Ivory Coast and Togo.  - 21 - ANNEX II Page 1 STATUS OF BANK GROUP OPERATIONS IN TOGO A. Statement of Bank Loans and IDA Credits (as of August 31, 1982) Amount - US$ Million (Less Cancellations) Bank IDA 1/ Undisbursed Four Credits and One Loan Fully Disbursed 3.50 31.60 - 638-TO 1976 Togo Maritime Region Rur. Dev. 9.40 0.41 693-TO 1977 Togo Third Highway 10.00 0.25 810-TO 1978 Togo Feeder Roads 5.80 2.05 930-To 1979 Togo Technical Assistance 2.20 1.48 945-TO 1979 Togo Cocoa/Coffee Development II 14.00 12.53 1018-TO 1979 Togo First Education 11.00 8.36 1139-TO 1981 Togo Fourth Highway 17.76 17.76 1169-TO 1981 Togo Phosphate Engineering 5.20 4.81 1190-TO 1982 Togo Power Engineering and Technical Assistance 2/ 1.95 1.95 1270-To 1982 Togo Second Technical Assistance 2/ 3.36 3.36 Total 3.50 112.27 52.96 of which has been repaid 0.23 0.17 TOTAL now outstanding 3.27 112.10 Amount Sold 0 0 of which has been repaid 0 0 Total Now Held by Bank and IDA 3.27 112.10 Total Undisbursed 52.96 B. Statement of Bank Loan Guaranteed by Ghana, Ivory Coast and Togo 1295-WAF 1976 CIMAO - CIMAO Regional Clinker 49.5 0 C. Statement of IDA Credit for Regional Projects - Benin, Ivory Coast, Niger, Senegal, Togo, Upper Volta 969-WAF 1980 BOAD Project Preparation Credit 3.0 2.32 1/ Prior to exchange adjustment. 2/ Not yet effective.  - 22 - ANNEX II Page 2 E. Projects in Execution 1/ Credit No. 638 Maritime Region Rural Development Project; US$9.5 million; Credit of June 16, 1976; Effectiveness Date: October 26, 1976; Closing Date: December 31, 1982. The closing date of this credit has been postponed from December 31, 1981 to December 31, 1982. Applied research regarding food crops and coconuts, seed multiplication, monitoring and consultants to study the potential of the region will continue to be financed until the end of 1982, in an amount of $240,000. Following a request from the Government, the remaining part of the credit ($1.7 million) was cancelled in March 1982. Credit No. 693 Third Highway Project; US$10.0 million; Credit of April 1, 1977; Effectiveness Date: September 13, 1977; Closing Date: December 31, 1982. The project provides for the reconstruction of the Aneho-Tabligbo road (45 km), the construction of the Agou-Notse road (51 km), the provision of technical assistance for improving transport planning and road maintenance, and pre-investment studies for a follow-up project. Implementation of the project has been satisfactory and is now practically complete. The implementation of the technical assistance component has been slower than expected. Road mainte- nance, however, has recently begun to suffer from insufficient Government funding. Credit No. 810 Feeder Roads Project; US$5.8 million; Credit of June 28, 1978; Effectiveness Date: March 2, 1979; Closing Date: June 30, 1983. The project consists of a four-year program for the improvement and maintenance of about 1,000 km of feeder roads, technical assistance to establish a Feeder Roads Unit in charge of the program, and consultant services to study a follow-up feeder roads program. The equipment provided to the Feeder Roads Unit is now fully operational. By the end of November 1981, 440 km of feeder roads had been improved. However, since November 1981 the program has been slowing down due to the lack of government counterpart funds. Operations for which the Ministry of Public Works is responsible have been stopped due to a lack of credit to buy spare parts and fuel. In order to resolve this problem, the Development Credit Agreement was amended to increase disbursement percentages during 1982. 1/ These notes are designed to inform the Executive Directors on the progress of projects in execution and, in particular, to report any problems and actions being taken to remedy them. They should be read with the under- standing that they do not present a balanced evaluation of strengths and weaknesses in project execution.  - 23 - ANNEX II Page 3 Credit No. 930 Technical Assistance Project; US$2.2 million; Credit of June 22, 1979; Effectiveness Date: October 23, 1979; Closing Date: February 28, 1986. The project provides for two advisers in the Ministry of Planning for a three-year period each and for short-term consultants to carry out specific project-related and macroeconomic studies. The first adviser is to counsel on general economic and public finance questions, while the second adviser is to assist in selecting major new investments and in finding ways of improving existing large projects. The assignment of the first adviser has been extended for a fourth year until August 1983. The second adviser began his assignment in September 1982. Credit No. 945 Second Cocoa and Coffee Development Project; US$14.0 million; Credit of July 23, 1979; Effectiveness Date: July 11, 1980; Closing Date: December 31, 1985. The project is a continuation of the First Coffee/Cocoa Project. It provides for the planting and maintenance of a further 7,500 ha of coffee and 4,000 ha of cocoa and services, applied research, associated food crop devel- opment, and construction of 300 km of feeder roads. Coffee planting is pro- ceeding satisfactorily. The cocoa program has fallen far behind appraisal targets and there appears to be a general problem of lack of farmers' interest. These problems will be examined shortly by a specialist in cocoa cultivation. Another problem facing the project is the continued poor rate of medium-term credit recovery from participating farmers. New means for facilitating credit recovery at the marketing stage are being examined. Credit No. 969 Project Preparation Credit to Banque Ouest Africaine de Develop- pement; US$3.0 million; Credit of January 25, 1980; Effective- ness Date: April 29, 1980; Closing Date: June 30, 1983 The objective of the project is to finance feasibility and detailed engineering studies by external consultants of regional development projects, which a priori have a high probability of success. The project is proceeding satisfactorily. Credit No. 1018 First Education Project; US$11.0 million; Credit of September 15, 1980; Effectiveness Date: January 27, 1981; Closing Date: June 30, 1985. Construction of training facilities is progressing satisfactorily. Three of the four project institutions are expected to become operational dur- ing the last quarter of 1982, and the fourth by May 1983. Project management continues to perform well, but should focus on the timely implementation of the educational programs, the institutional budget, and the technical assis- tance. Despite an initial lag in disbursements, the project is expected to be completed on schedule.  - 24 - ANNEX II Page 4 Credit No. 1139 Fourth Highway Project; US$20.0 million; Credit of October 28, 1981; Effectiveness Date: September 2, 1982; Closing Date: June 30, 1985. This project provides for a three-year training program for road maintenance personnel; procurement of road maintenance equipment and spare parts; pavement of 157 km of road; pre-investment studies for 57 km of road; and technical assistance to improve transport planning and coordination, as well as railway operations. Credit No. 1169 Phosphate Fertilizer Engineering Project; US$5.7 million; ) Credit of October 28, 1981; Effectiveness Date: May 21, 1982; Closing Date: August 31, 1983. The purpose of this project is to determine the technical and economic viability of developing a phosphate fertilizer project to manufacture for export phosphoric acid and phosphate fertilizers from the Dagbati deposits and from recovered slimes. Credit No. 1190 Power Engineering and Technical Assistance Project; US$2.0 million; Credit of January 21, 1982; Closing Date: December 31, 1983 This project, a joint undertaking involving Togo and Benin, would aim at helping the two Governments complete preparations for the Nangbeto hydro-electric project, assist in improving planning in the power sectors of both countries, provide assistance in institution-building, and strengthen accounting procedures. The Credit has not yet been declared effective. Credit No. 1270 Second Technical Assistance Project; US$3.5 million; Credit of July 2, 1982; Closing Date: June 30, 1986. The project provides a Senior Economic Adviser for three years to replace the present adviser, financed under the First Project, and an Invest- ment Programmer for two years. They will work in the Ministry of Planning along with the Project Adviser financed under the First Project. In addition, a planning unit and an applied research coordination unit will be created in Ministry of Rural Development with the assistance of a planning expert, a research coordinator, and short-term consultants. Three experts will be provided to the Ministry of Industry and State Enterprises to introduce program-contracts and analytical accounting, to define performance criteria, and to guide analytical studies. Additional consultants will be provided on a short-term basis for studies connected with the implementation of economic adjustment and financial stabilization measures. The Investment Programmer has been hired and will begin his assignment in November, 1982. The other experts are being recruited. The credit has not yet been declared effective.  - 25 - ANNEX III Page 1 TOGO SECOND RURAL DEVELOPMENT PROJECT IN COTTON AREAS SUPPLEMENTARY PROJECT DATA Section I: Timetable of Key Events 1. Project initiation: Initiating Project Brief: July 31, 1981 2. Appraisal mission: November-December 1981 3. Negotiations completed: September 1982 4. Credit effectiveness planned: March 1983 Section II: Special IDA Implementation Actions 1. Annual review of cotton prices. 2. Annual review of OPAT/SOTOCO bareme. 3. Annual review of technical assistance arrangements. Section III: Special Conditions 1. Project implementation: a) SOTOCO would procure farm inputs directly (para 25); b) farmer reimbursements against the quantities of farm inputs funded by the cofinancers would be retained by SOTOCO and added to its reserves (para 36); c) farmers would pay the full costs of cotton sprayer batteries, pesti- cides used on food crops, and improved food crop seeds, and fertilizer subsidies would be phased out progressively to zero by not later than October 1, 1987 (para 25); d) the price to be paid farmers for seed cotton would be adjusted annually to take account of movements in the international price of cotton, the reduction of fertilizer subsidies, general inflation and the price trend of competing food crops; and this price would be announced annually at the same time as input prices for the subsequent growing season (para 26);  - 26 - ANNEX III Page 2 f) the OPAT-SOTOCO cotton bareme would be modified to include the full costs incurred by SOTOCO for the production, processing and marketing of cotton; and the draft bareme would be forwarded annually to IDA for comment and approval (para 25). 2. Special conditions of effectiveness: a) Signature of a satisfactory contract or contracts for the first six of the twelve technical assistance staff positions listed in para 35; b) Signing of the FAC Grant and CCCE Credit Agreements (para 1); c) Announcement of input prices (with the fertilizer subsidy reduced to 40 percent) and the seed cotton price (at a minimum of CFAF 75/kg) for the 1983/84 growing season (para 26); and d) Appointment of a General Director of SOTOCO whose qualifications are satisfactory to the Association (para 35).  IBRD 16296 \ ,MARCH, 1982 U P P E R V O L T A MAUL A7NA 11 rKonA _ ) / OK r ' 9 l M A t / ~~~~~~~~~~~~~~N G E R \ I-i' I , i S8O , tSENESAL\f MAt INE N.k,di,o J- - : \ AT TA lCn? G...KO~aOih ~ A V A N N A CI-SR A L, -i ; ') e ,Ngochomb /-gKao CQ"i i; -' r~~~~~~~~~~~~~~~~~~~~~~~- .(d lh/d '\ < ,, - Ce ,' t Nhi OC RC Ale leos 'i \ _ -'oor,nrpiy. Ih ed -l, h. \ / _9