Mauritania - Second Rural Sector Technical Assistance Project

Document of r The World Bank FOR OFFICIAL USE ONLY Report No. P-3370-MAT REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT OF SDR 7.4 MILLION TO THE ISLAMIC REPUBLIC OF MAURITANIA FOR A SECOND RURAL SECTOR TECHNICAL ASSISTANCE PROJEC September 9, 1983 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 withiout World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit Ouguiya (uM) US$1.00 = UM 47.00 UM 1 million = US$22,222 ABBREVIATIONS Control Unit - Management Control Unit DAF - Department of Administration and Finance DT - Technical Department EEC - European Economic Community FAC - Fonds d'Aide et de Cooperation (France) MPAT - Ministry of Planning and Regional Development MIFERMA - Mines de fer de Mauritanie MDR - Ministere du Developpement Rural OMVS - Organisation pour la Mise en Valeur du Fleuve S6negal SNIM - Societe Nationale Industrielle et Miniere SONADER - Societe Nationale pour le Developpement Rural GOVERNMENT FISCAL YEAR January 1 to December 31  FOR OFFICIAL USE ONLY ISLAMIC REPUBLIC OF MAURITANIA SECOND RURAL SECTOR TECHNICAL ASSISTANCE PROJECT CREDIT AND PROJECT SUMMARY Borrower: Islamic Republic of Mauritania Beneficiaries: Proceeds of the Credit would be provided as a grant to SONADER, Mauritania's only rural development institution, and the Ministry of Rural Development (MDR) Amount: SDR 7.4 million (US$8.1 million) Terms: Standard Co-donors: Fonds d'aide et de cooperation (FAC) Project Description: The project consists of a three-year program of technical assistance to SONADER and MDR. It would: (i) reinforce SONADER by assisting its newly created Management Control Unit and training Mauritanian staff for key positions; and, (ii) strengthen MDR's planning and policy-making capability in its newly established Planning Unit. The project would finance eleven long-term advisors for SONADER and MDR; short-term consultant services, including the preparation of final designs and bidding documents for a new SONADER headquarters building; scholarships and on-the-job training; and vehicles, office and laboratory equipment, including operating costs of vehicles acquired under the project. In the spirit of the Bank's Special Action Program (SAP), a revolving fund would be established under the project to expedite disbursements. Benefits and Risks: The project would strengthen SONADER's managerial capability and consolidate the progress attainedL through the previous operation recently completed. Similetrly, MDR is expected to start developing the capabilities needed to formulate an adequate agricultural policy. The project's major uncer- tainties, common to other technical assistance operations, concern mainly the difficulties in recruiting qualified experts as well as in recruiting and training local staff. There is also an uncertainty as to the extent to which the government would follow the policy and program recommenda- tions which would arise from the work of the project, particularly from the MDR component. Although these risks are difficult to eliminate, efforts would be made to limit them by providing assistance in the recruitment of experts, 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 'orld Bank authorization.  - ii - by offering attractive training programs, and by carrying out regular reviews with the authorities concerned on the results of the feasibility studies and recommendations proposed for sector policies and programs. Estimated Costs: Local Foreign Total -----(us$ thousand)------ Long-term advisors (30 my) 1,370 2,560 3,930 Short-term consultants (177 mm) 800 1,650 2,450 Local staff (42 my) 840 - 840 Training 40 160 200 Equipment 160 660 820 Refinancing of PPF advance 350 650 1,000 Base Cost 3,560 5,680 9,240 Price contingencies 490 770 1,260 Total (net of taxes) 4,050 6,450 10,500 Financing Local Foreign Total ------(US$ million)------ IDA 2.60 5.50 8.10 FAC 0.55 0.95 1.50 Government 0.90 - 0.90 Total 4.05 6.45 10.50 Disbursement Schedule: (IDA Credit) FY 84 85 86 87 ------US$ million------- Annual 1.4 1/ 3.0 2.5 1.2 Cumulative 1.4 4.4 6.9 8.1 Rate of Return: N/A Map: IBRD 16405 Chart: 24028 1/ Including refinancing of US$1,000,000 approved as PPF advance.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE ISLAMIC REPUBLIC OF MAURITANIA FOR A SECOND RURAL SECTOR TECHNICAL ASSISTANCE PROJECT 1. I submit the following report and recommendation on a proposed Development Credit to the Islamic Republic of Mauritania for the equivalent of SDR 7.4 million (US$8.1 million) to help finance a Second Rural Sector Tech- nical Assistance Project. The Credit would be on standard IDA terms. Addi- tional financing wi'll be provided by the Fonds d'Aide et de Coop6ration (FAC) of the French Government through a grant of US$1.5 million equivalent. PART I - THE ECONOMY 2. A report entitled "Islamic Republic of Mauritania: Recent Economic Developments and External Capital Requirements" (2479a-MAU) dated June 4, 1979, has been distributed to the Executive Directors. Since then, a number of missions have visited Mauritania to monitor the eccnomic and financial situation and prospects of the economy. Updated country data are given in Annex I. The Land and its People 3. Despite its comparatively high per capita income level on national average (US$465 in 1982), Mauritania bears many of the characteristics of the "Least Developed Countries" in terms of physical and human resources. Two- thirds of the country is desert, where the principal economic activity is livestock herding. Crop farming is generally limited to the sub-Saharan zone in the south, where rainfall is nonetheless sparse and irregular. Pockets of modern economic activity are found in the mining complex of Zouerate, the fishing center of Nouadhibou, and the administrative capital of Nouakchott. These centers are geographically separated from the agricultural zones, and there is little economic interaction between them and the rural sector. 4. The three centers of modern economic activity account for a major share of the country's overall output, while livestock and crop farming, which support as much as 70 percent of the population, account for less than 30 percent of total output. The population as a whole (est. 1.6 million in 1982) suffers from an extremely low standard of living, as reflected in key social indicators: life expectancy at birth is estimated at 44 years, infant mor- tality is 141 per 1,000, only one in every three chilcLren of school-age attends primary school, and less than 20 percent of the population is literate in either Arabic or French.  -2- Past Economic Performance 5. Stimulated by increases in iron ore production and the rapid expan- sion of livestock resources, Mauritania sustained an average annual growth rate of 8 percent during the 1960s. The economy experienced a sharp dece- leration in growth in the mid-1970's, however, and a period of marked finan- cial instability in the latter part of the decade. Following a period of stagnation 1977-80, the economy recovered in 1981 and 1982 with improved performance in the agricultural sector and fisheries. Growth has averaged 6.4 percent over these past two years. Nonetheless, given an annual population growth rate of 2.4 percent, real per capita incomes in 1982 were only about 5 percent higher than they had been ten years earlier. 6. Mauritania's generally poor economic performance in the latter 1970's was due chiefly to reduced world demand for iron ore, on which the country had traditionally been dependent for 70-80 percent of its export earnings, and severe and repeated droughts in the agricultural sector. The effects of these factors were compounded by the prolonged military conflict in the Western Sahara and by a poorly conceived investment policy. 7. The Government's investment program was undertaken with heavy inflows of assistance from abroad, particularly from OPEC sources, as well as borrow- ing from foreign commercial lenders. These resources were used principally to nationalize the mining sector (1974-75) as well as to finance ambitious projects in transport infrastructure and a few large industrial ventures which proved unviable. As a result, external debt service obligations accumulated to a peak of $77.4 million in 1976, as against $12.9 million in 1973, while the capacity of the economy to service these obligations failed to expand. 8. Repercussions of the developments of the 1970's were immediately reflected in exceptional budgetary and balance of payments deficits. By 1977, the Government's current expenditure requirements reached a level nearly double its receipts, producing a treasury deficit on current account alone equivalent to 16 percent of GDP. On external account, despite massive inflows of foreign grants and loans, the country suffered a severe drain of US$41 million in net foreign reserves that same year. The Rehabilitation Plan and Subsequent Stabilization Efforts 9. In mid-1978, the economic and financial situation led the Government, with the assistance of the Bank, to prepare a Financial Rehabilitation Plan which proposed the renegotiaton of $215 million in external debt, more than 40 percent of the disbursed debt outstanding at the time, and called for strict conditions on the Government's future borrowing, tight control of public expenditure and major revisions in public investment priorities. 10. Over the three-year period 1979-81, Mauritania regained a consider- able degree of financial stability, largely through Government adherence to measures recommended under the Rehabilitation Plan and a subsequent IMF Stand- By program. The improvement was facilitated by external debt relief and a  - 3 - continued flow of fresh concessional assistance from abroad. The growth of the Government's current expenditure was curbed: its level has in fact remained constant over the past five years even in nominal terms. The earlier drain on the country's foreign reserves was reversed in each of the three years, 1979 through 1981. Results for 1982, however, indicate a wide drain on reserves and a net increase in payments arrears. The loss of reserves, esti- mated at $90 million, was incurred despite a net inflow of official grants and loans of $200 million. The serious deterioration of Mauritania's external position last year reflects the combined impact of persistently depressed export earnings and debt service obligations of virtually unmanageable proportions. 11. Improvement in the immediate financial situation can yet be made through measures such as further debt renegotiation and rehabilitation of the public enterprises. Over the longer term, financial stability and sustained growth require a reorientation of the public investment program in order to ensure adequate maintenance of existing economic infrastructure and to stimu- late growth in the directly productive sectors. Apart from the Guelbs Pro- ject, which constitutes a replacement of otherwise declining iron mining capa- city, new public investment under the IVth Development Plan (1981-85) is concentrated in those sectors which hold greatest potential as sources of renewable growth, notably irrigated agriculture, livestock and fisheries. Medium-Term Outlook 12. In the medium term, Mauritania will continue to rely heavily on concessional assistance from abroad towards maintenance of existing capital assets as well as for new investment projects. The need is particularly acute given that the mining sector, originally relied upon as the country's princi- pal source of growth through the mid-1980's, continues to show extremely disappointing performance as a result of slack international markets. Produc- tion this year may amount to only 7 million MT, a little more than half the volume anticipated at the time the IVth Development Plan was in preparation, and no major improvement in either volume or real prices is foreseen through at least 1986. While iron ore receipts have stagnated, the fisheries sector has emerged as a significant foreign exchange earner, accounting for as much as 38 percent of total merchandise exports in 1981-82. Although the sector is widely believed to hold considerable long-term growth potential, prospects for its continued expansion in a highly competitive international market remain uncertain. 13. In an effort to tap the growth potential of crop agriculture, the current public investment program gives primary emphasis to irrigation in terms of new investment outside the Guelbs. Climatic vagaries in the major food producing zones of the Senegal River Basin are such that fully controlled irrigation is considered by the Mauritanians to be the most feasible means of narrowing the country's exceptionally wide food deficit with the rest of the world. In a year of normal weather conditions, domestic foodgrain production meets 40 percent of demand. This year, under conditions of extreme drought comparable to those of 1973, domestic production is expected to meet only 20 percent of normal consumption. In order to stabilize and expand production of foodgrains, particularly rice, the Government has launched a major irrigation  - 4 - program under the IVth Plan. Whereas less than 2,000 hectares were under irrigation in 1980 at the opening of the Plan period, the Government aims at bringing an additional 10,000 hectares under irrigation by 1985. Primary responsibility for the execution of the irrigation program rests with SONADER, the Government's principal agent in the rural sector. 14. The Government's irrigation targets are probably well beyond its implementation capacity through the mid-1980's, given the high cost of infra- structure, the paucity of local technical expertise and the very fundamental socio-economic change indicated by irrigation development. The major con- straints are indeed of a technical and institutional character. The extent to which the irrigation program can be realized over the medium term will depend heavily on the availability of technical expertise to assist the Government and SONADER to identify sound projects, to make effective use of external resources and thereby to maximize the potential of irrigated agriculture as a basis of renewable growth. PART II - BANK GROUP OPERATIONS IN MAURITANIA 15. The Bank Group has had 19 operations in Mauritania for a total of US$223.1 million. Of these, two are Bank loans for mining operations (US$66 million for MIFERMA in 1960, and US$60 million to SNIM in 1979 for the Guelbs Iron Ore Project). The sixteen others are IDA credits totalling US$77.1 million. Of the IDA operations, five have been in the transport sector, five in the rural sector, two in the education sector, one in the energy sector, one IDF project, and two technical assistance projects to the Ministry of Planning. Annex II contains a summary statement of Bank Loans and IDA Credits as of March 31, 1983, and notes on the execution of ongoing projects. 16. Implementation of Bank group projects has often been delayed by administrative inefficiencies within the Government. Moreover, project costs have tended to be very high and often to incur large overruns, due to the long distances within the country, the pervasive lack of basic infrastructure, the small number of contractors in operation, and the need to recruit large num- bers of expatriates to implement works and to staff projects. These factors have been aggravated by the exceptional political situation that prevailed in Mauritania throughout the 1970s, and by the effects of high inflation and unfavorable exchange rates. The historical rate of disbursements of IDA funds has remained extremely slow over the years. So much so, that in the mid- 1970s, the Association responded to the clear need for strengthening the implementation and management of ongoing operations by sending more frequent supervision missions to provide support to the Government. Recently, some improvement has been noted in overall project implementation and in the level of Credit disbursements. 17. The Mauritanian authorities are well aware of the many difficulties being encountered in project execution. Some of these will persist for seve- ral years for reasons outside the Government s control, particularly those related to the country's peculiar geographic characteristics and the poor infrastructure base. The lack of skilled manpower starts with inadequte basic  output from the educational system and will take a long time to fully resolve. Nonetheless the Government has been making a major effort to tackle this problem. IDA assistance has been provided under the Second Education Project (FY82) and Second Technical Assistance Project (FY83) and is planned under the proposed project. These projects are all expected to improve the Government's capacity for project preparation and monitoring in key sectors of bhe economy, and help the Government to make prudent investments that fit the particular circumstances of Mauritania. This proposed second Rural Sector Technical Assistance Project would specifically identify ways in which proce- dures within the rural sector administration can be improved, and the traditional bottlenecks in project execution eliminated. 18. The Bank Group presence in Mauritania was fairly substantial in the early 1970s, and in 1970-72 it was the third largest donor (providing about 18 percent of Mauritania s external capital assistance) behind France (21 per- cent) and the EEC (19 percent). Since then, external financial assistance to Mauritania has increased rapidly, and in recent years the Bank Group s share has decreased to about 5 percent. The importance of the Bank s economic and technical advice remains strong, however, and provides the basis for a country development strategy based on: (a) dialogue with the Government on financial and economic issues, in cooperation with the IMF and other external aid donors; (b) technical assistance to help strengthenen national economic management and increase the country s absorptive capacity; and (c) direct project assistance to high-priority sectors, with special emphasis on mobiliz- ing and coordinating the provision of large amounts of external aid from the Arab OPEC countries and from other donor agencies. PART III - THE AGRICULTURE SECTOR Overview 19. Two-thirds of Mauritania lies in the Sahara zone with less than 100 mm of annual rainfall. The rest is in the Sahel with a maximum precipi- tation of only 600 mm. Thus Mauritania has one of the poorest agricultural resource bases of all countries in West Africa. The rural sector provides the livelihood for about 85 percent of the population and contributes about 25 percent of the GDP with some 65 percent of the rural population involved in nomadic herding. Sedentary agriculture is limited to a relatively narrow strip along the Senegal River, a small area (Guidimaka) in the south where local precipitation allows rainfed cropping, some oases in the north, and a few isolated regions where shallow lakes make flood recession cropping possible. Insufficient and erratic rainfall has been the major barrier to this sector's growth, aggravated in the past decade by the recurrence of serious droughts. Livestock 20. Comprising 90 percent of the output of the rural sector and 20 per- cent of the GDP, livestock production represents the largest single contri- bution to Mauritania's GDP, higher than mining. However, the livestock  - 6 - population of cattle, sheep and goats was cut in half by the effects of the droughts of the mid 1970s and at present there are about 1.4 million cattle and 5-6 million sheep and goats. Due to harsh climatic conditions, the survival of livestock depends on the mobility and hardiness of herds, which move to the north in the rainy season following pasture growth, and to the south during the cold and dry season seeking more permanent pastures and crop residues. Lack of watering places and shortage of fodder during the dry season are among the major constraints to livestock development. Cattle are also threatened by diseases. In the late 1960s the Government carried out a successful campaign to eradicate rinderpest, the main animal health hazard. Follow-up of this effort is insufficient and, although occasional outbreaks have been controlled, the threat nonetheless remains latent and requires the continuation of vaccination campaigns. In 1971, IDA financed a livestock development project (Cr. 273-MAU, US$4.15 million), which provided for rehabilitation and construction of wells, construction of firebreaks, and vaccination. It was completed with reasonable success in 1978. Experience during and subsequent to this project suggests that although there is some potential for increasing the herd size the risk of major losses during drought periods also increases. Thus the future for livestock lies more with improved animal health and husbandry practices than herd expansion. Rainfed Agriculture 21. Along the Senegal and the Gorgol Rivers, farmers grow rainfed millet, flood-recession sorghum, and some vegetables. Yields are low due to the extremely difficult climatic conditions which prevent the improvement of traditional cultivation techniques. In favorable years production of sorghum and millet is 45,000 tons which satisfies only 40 percent of domestic consump- tion. In drought years, such as 1973/74 and 1977/78, rainfed production may be reduced by 50 percent. Expansion or improvement of rainfed agriculture is technically, financially and economically non-viable and farmers will not risk investing where there is substantial probability of loss due to drought. Irrigation 22. Irrigation appears to be the only way to overcome Mauritania's climatic constraints, yet its use is presently limited for reasons of cost or practicality. So far, small-scale irrigation has been developed along the Senegal river by means of small pumping schemes financed by bilateral and multilateral agencies and produces about 8,000 tons of rice and maize. Although only about 1,700 ha are now in operation, the potential for this type of project is limited and will be exhausted with the development of another 3,300 ha, as projected in the 1981-85 Plan. Further low-cost irrigation from the Senegal River is largely impractical because: (a) flood levels fluctuate too widely; and (b) few sites on the Mauritanian side of the river are suit- able. 25. Larger scale irrigation development, on the other hand, is complex and costly due to physical difficulties as well as lack of infrastructure, institutions and tradition. A start has been made in medium-size irrigation iiith the Mpourie (1,400 ha) and Kaedi (700 ha) projects that are now opera- tional, and the Boghe (950 ha) and Gorgol (2,000 ha) projects that are now  - 7 - under construction. Although facing many constraints it is hoped that exper- ience from these projects will help develop the necessary skills, know-how and institutions that will reduce unit costs and improve productivity for future irrigation projects. 24. Large scale irrigation may eventually be possible from the two major dams on the Senegal river (Manantali and Diama) that will be constructed by the Senegal River Development Office (OMVS). OMVS is a trinational (Mali, Mauritania and Senegal) entity financially supported by several bilateral and multilateral agencies. Construction of the dams started in 1982 and Diama is expected to be operational by 1986/87. Although the eventual irrigation potential in Mauritania from the reservoirs may be up to 100,000 ha, there are major technical, institutional, economic, financial and sociological problems to be resolved and the development of this resource is considered to be long term with many unanswered questions. Institutions 25. The Ministry of Rural Development (MDR). The MDR is responsible for agriculture, livestock and conservation of natural resources. It has five departments: Administration and Finance, Agriculture, Livestock, National Resources, and Rural Engineering. In addition, it administers five public agencies: the National Center for Agricultural Research, the National Center for Livestock Development, the M'Pourie State Farm, the National School for Training and Extension, and the national rural development agency, Societe-. Nationale du Developpement Rural (SONADER). MDR lacks sufficient qualified national staff, both at the technical and at the policy formulation level, a shortage that (despite the technical assistance now available, largely provided by the French government) constitutes a serious obstacle to the effective development of the agricultural sector. 26. SONADER. In the late 1960s and early 1970s Mauritania's almost non- existent institutional capacity in the rural sector meant that organized development, particularly of irrigation, was virtually impossible. In 1975, Government established SONADER as a state rural development agency with the objectives of identifying, executing, supervising and managing rural develop- ment projects, particularly irrigation projects. While subject to the super- vision of the Ministry of Rural Development (MRD), SONADER's charter gave it a substantial degree of administrative and financial autonomy to free it from the constraints that hamper most governmental institutions in Mauritania. Its operations were to be financed both from external sources for specific projects and by Government counterpart contributions for administrative costs. In practice, SONADER's financial autonomy has been limited because it is not a revenue earning entity, and the Government's contributions have been smaller than needed, due to the State's chronic financial difficulties. SONADER has thus incurred substantial debt to finance recurrent costs, a situation which adversely affects its financial viability. However, the Government recently initiated steps to redress this situation. Moreover, as a condition of effectiveness it has agreed to transfer to SONADER UM40 million as well as all amounts needed to satisfy SONADER's quarterly cash requirements (Section 6.01 of the draft DCA).  - 8 - 27. In 1977, IDA approved a US$3.5 million credit (694-MAU) for a First Technical Assistance Project to SONADER which financed a team of seven expatriates for three years, a short-term consultant budget and related equipment. The project, considered the first stage of a two-phased assistance plan, aimed at building SONADER into a strong development agency capable of carrying out a rational investment program for the rural sector. The project was completed in December 1980. Immediately thereafter an EEC Special Action Credit of US$1.5 million was approved to continue technical assistance. Two PPF advances totalling US$1.0 million equivalent were made in March 1982 and August 1983 respectively to provide bridge financing of the advisors under the first project (para. 35). 28. SONADER has been effective in expanding foreign assistance to the rural sector. Since 1977, projects under its responsibility increased from 9 to 33 and its investment budget from US$2.3 million to US$46.3 million. From a few hundred hectares, it has developed about 1,700 ha under small irrigation schemes, a similar area under two medium-scale irrigation schemes (the Kaedi and Boghe Pilot projects) and is now executing the Gorgol Irrigation project (see para. 23). 29. However, in the absence of any other competent organization, SONADER has become overburdened with tasks which were not initially its responsibil- ity, but became necessary for the general development of the sector and imple- mentation of specific projects. Thus, SONADER was called upon to market produce, provide agricultural credit and extension services, as well as to formulate rural sector policy and establish an annual program of agricultural investment for the Ministry of Rural Development. The proposed project would assist the MDR to formulate a master plan for the development of institutions in the rural sector, and would promote a gradual transfer of some of SONADER's responsibilities to other institutions as they gain experience and become capable of assuming such responsibilities. Meanwhile, Government and donors realize that SONADER will continue to require external technical assistance to carry out its tasks. Constraints to Development 30. Apart from the severe physical conditions several issues constrain development: (i) the weakness of institutions, which stems from the shortage of trained Mauritanians, implies continued reliance on high-cost expatriate assistance for many years to come; (ii) SONADER, although the only reasonably effective institution with potential for development, suffers from a proliferation of respon- sibilities, an unduly centralized structure, and inadequate financing; (iii) current policies on prices and subsidies put severe pressure on Government's budget; and  - 9 - (iv) the cost of irrigation development is high, limiting the economic expansion of irrigated areas. Government's Strategy and Objectives 31. The Government's development strategy calls for a transfer of resources to those activities which constitute a renewable base for economic growth, namely, irrigated agriculture, livestock and fisheries. Thus, with the exception of the Guelbs Iron Ore project and the port of Nouakchott, the Government wishes to shift investment from industry arid transport towards the rural sector with the objectives of maintaining sustainable growth, generating rural employment and reducing Mauritania's heavy reliance on imported food. To resolve the basic problem of manpower, Government is receiving technical and financial assistance from several external sources for training agricultural experts and supporting the sector's public agencies. Both activities will be necessary for an extended period. 32. Although irrigation development will continue to be slow, Government rightly considers it the only feasible agricultural strategy, through improving institutions, making better use of manpower resources, lowering unit costs and increasing yields. In particular, SONADER would be strengthened and, in agreement with both Government and other financing agencies, its role confined to project specific activities (identification through operation). In the context of the proposed project: (i) MDR has established a Planning Unit for formulating and planning sectoral priorities, including manpower planning and public agency development for the rural sector (Section 3.05(i) of the draft Development Credit Agreement (DCA)); (ii) SONADER headquarters has been reorganized (May 1982) to reduce unnecessary or duplicative activities and staff. Planning has been transferred to MDR; a Managing Control Unit has been created to provide better operating and financial control, and three departments have been reduced to two (para 39 and Organization Chart); (iii) SONADER's regional activities are being reorganized to reduce duplication of common project specific activities and staff (e.g. workshops and maintenance services); (iv) Government has agreed to establish and implement a plan to place SONADER onto a sound financial basis; as a first step, earlier this year, the Government transferred to SONADER IJM 55 million. Further, as a condition of effectiveness, the Government has agreed to transfer to SONADER an amount of UM 40 million. In addition, the Government has agreed to provide annual budgetary support to ensure the financial ability of SONADER to carry oul. its tasks. (Sections 4.02(i) and (ii) and 6.01(d) of the draft DCA); and (v) in order to focus SONADER's activities further the Government will review the longer-term organization of agricultural activities and institutions (para. 40(b)) to include:  - 10 - (a) confining Government/public agency activities to sector planning through project execution; and (b) the development of producer groups which would gradually take over the management of infrastructure, equipment maintenance, input distribution and produce marketing. Bank Role 33. The Government has reasonably focussed on irrigated agriculture, livestock and fisheries and we support the simple overall strategy of initial- ly improving current activities in agriculture and livestock. Thus, in irri- gation the Bank has recently appraised a small scale project to develop about 1,600 ha of village irrigation schemes, scheduled for FY85. Price and subsidy policies are being tackled in the context of this project. To assist the livestock sub-sector a PPF advance of US$250,000 was approved in February 1982 to prepare a second livestock project which would improve animal health and husbandry practices and the organization of pastoral groups. In fisheries, government's strategy is to promote joint ventures in private sector which limits the need for major Bank assistance except possibly in reviewing policy issues. 34. Based on past lending experience, our assessment of the country's economic situation and its prospects for attracting foreign aid, we propose to continue pursuing the following objectives, through an active macroeconomic and sector dialogue, and through lending operations where these appear feasi- ble and justified: (a) to help the Government in developing the country's few natural resources so as to broaden the economic base and achieve a modest but sustained growth in the agricultural sector. (b) to improve mechanisms for investment programming and project selection, in order to optimize the allocation of resources and avoid poor investments in the rural sector; (c) to help the Government make the best possible use of foreign assistance; (d) to assist in monitoring macroeconomic performance and in improving the design and execution of the overall development program; and (e) to reduce the heavy budgetary burden created by present financial policies in the agricultural sector. PART IV - THE PROJECT 35. In March 1981, the Mauritanian Government confirmed earlier requests to IDA for assistance with the financing and implementation of a project which  - 11 - would continue technical assistance to the rural sector. Based on the know- ledge gained from the First Technical Assistance Proje!ct to SONADER (para. 27) and on a preparation report prepared in May 1981 by MDR and consultants, a Bank mission appraised the project in November 1981. Two PPF advances total- ling US$1.0 million equivalent were approved in March 1982 and August 1983 to partly finance the continuation of ongoing activities from the First Technical Assistance Project to SONADER until effectiveness of the proposed credit. Negotiations were held from August 31 to September 3, 1982 with a Government delegation led by H.E. Mohamed Ould Amar, Minister of Rural Development. A supplementary project data sheet is presented in Annex III. A separate appraisal report has not been prepared. The Project Objectives and Description 36. The proposed project would continue IDA's participation in a common effort of several donors to build up the much needed capability of Mauritania's rural development capacity. Taking into consideration the present situation and the outlook for the short-term future, this Second Rural Sector Technical Assistance Project will continue serving the double purpose of the preceding operation, which was intended to paliate the shortage of technical staff and -to provide the professional training which is essential to SONADER's institu- tional consolidation. While conceived as a follow-up operation, however, the scope of the proposed project is substantially wider than that of the preced- ing one. It would: (a) strengthen SONADER as a rural development executing agency; and, (b) assist with the development of the Planning Unit of MDR to prepare coherent development policies and strategies to deal with the issues impairing the country's agricultural production and rural development. The project would comprise: (i) strengthening SONADER through a three-year technical assistance program (management, finance, irrigation, agricultural economics, credit - 21 man-years), short-term consultant services (final design and preparation of bidding documents for a new building to establish SONADER's headquarters, feasibility studies, project support - 125 man-months), in-service and formal training and the provision of vehicles, laboratory and office equipment; and (ii) strengthening the Planning Unit of MDR through a three-year technical assistance program (agricultural economics, irrigation, finance - 9 man-years), short-term consultant services (institutional develop- ment, sectoral analysis - 52 man-months), in-service and formal training and provision of vehicles and office equipment. Brief details of the project components are summarized in paras. 37 to 44 below. 37. SONADER. The project would strengthen the newly-created Management and Control Unit (Control Unit) and the two departments of SONADER: the Department of Administration and Finance (DAF), and the Technical Department (DT) (Chart). To fill the position of the manager of the Control Unit, the project would provide an expatriate specialized in management and budgetary control. SONADER has already appointed an acceptable Mauritanian professional  - 12 - as his deputy. The Control Unit would be responsible for supervising the preparation of SONADER's operating plan and financial budget and monitoring its execution (Section 3.04 of the draft Project Agreement (PA)). 38. The DAF would concentrate its activities on personnel and accounting matters. The first project provided DAF with considerable support in the form of assistance from external auditors and through scholarships under which two local staff were successfully trained as a financial analyst and an accountant. A senior financial analyst would be appointed as co-director of DAF, a posi- tion already established under the first project. In addition, the proposed project would provide consultant services to assist DAF in: (a) devising a personnel policy, including a thorough revision of training requirements; (b) establishing the rules and procedures to manage support equipment, stocks and supplies; and (c) continuing to strengthen the accounting service. 39. The former Department of Studies and Works and Department of Develop- ment and Production have been merged into one Technical Department (DT), which now administers three services - Studies, Construction and Agricultural Development. In the first project SONADER employed six expatriate technical specialists for irrigation, design, construction, agricultural engineering, credit and agricultural economics. With only four years of institutional experience and with a growing workload, the services of these six expatriate advisers continue to be required for the new Technical Department. The new organization is expected to eliminate duplication and improve coordination between the construction and production work of SONADER. Continuing the practice established under the first project, the senior irrigation engineer would become co-director of the Technical Department. 40. MDR Planning Unit. The Planning Unit would be responsible for: (a) formulating agricultural and rural development policies, including, inter alia: irrigation; production of food crops and livestock, credit, prices, and marketing; research and training; extension services; use and protection of natural resources; and development of infrastructure and social services for the rural population; (b) reviewing the functions of each MDR department and public agency under its supervision, including assessment of existing technical assistance programs, and identifying the needs for future insti- tutional and manpower development; (c) preparing MDR's annual budget including the allocation of financial resources to cover the recurrent costs and counterpart funds of its development projects; and (d) coordinating activities of MDR, on the one hand, and rural sector related activities of other institutions including public agencies (such as SONADER) under MDR's supervision, other ministries such as the Ministries of Planning and Regional Development (MPAT) Commerce, Transport, and bilateral and multilateral aid agencies, on the other.  - 13 - 41. Three Mauritanian officials would be appointed to the Planning Unit by December 31, 1983 under terms of reference acceptable to the Association (Section 3.05(ii) of DCA). They would form a team withl the three expatriate experts, and would receive on-the-job training, so that after project comple- tion they would be able to take over all responsibilit:ies assumed by expatri- ate experts. The project would also provide the necessary support staff, transportation and office equipment for the Planning Unit (Annex III, Section 4). 42. The Planning Unit would use the 40 man-months of short-term consul- tant services provided by the project to help formulate realistic sector policies, as well as to establish the needs for institutional development of the sector, including the preparation of a training program for MDR. Training 43. In parallel with other donors' participation, the first technical assistance project included an on-the-job training component which has posi- tively contributed to improve the capability of SONADER's staff in administra- tive and accounting practices. However, given the shortage of local staff, the scope for short-term impact of the training component is quantitatively limited and the functions of expatriate staff are primarily to fill the gap derived from that shortage. Taking into account the experience of the first project, on-the-job training would continue to take place through the day-to- day cooperation between expatriate and local staff; the scope of these activi- ties would be further expanded to include in-service training of Mauritanian engineers to work in projects under execution and operation in other countries of North and Sahelian Africa where they would learn from the real experiences of project development under environmental conditions similar to those prevailing in Mauritania. The Bank would assist with the arrangements for these in-service training activities, details of which, as well as of SONADER and MDR training requirements, would be defined by a specialized consultant who would prepare a Training Program acceptable to the Association by June 30, 1984 (Section 3.06 of the draft DCA and Section 2.09 of the draft PA). Consultant Services 44. Two types of consultant activities are foreseen under the project: one would consist of institutional support, similar to that discussed above, in connection with the tasks of SONADER's functional units; the second would embody project-related activities, such as consultant services required for the preparation of new projects, or the execution and operation of on-going projects. The credit would also finance the services of consulting architects for the preparation of final designs and bidding document for the construction of a new building where SONADER central services will be housed. For institu- tional support activities, such as personnel development, organization and methods and the like, consultant services are expected to be obtained period- ically so as to ensure a proper monitoring of the recommendations made. SONADER's consultant services requirements throughout the three-year project period are estimated at 75 man-months for institutional support activities and 50 man-months for project-related activities (Annex III, Section 3).  - 14 - Cost Estimates and Financing Plan 45. The total cost of the proposed project, net of identifiable duties and taxes (of which SONADER and MDR would be exempted) and including refinan- cing of advances under the PPF, is estimated at US$10.5 million of which US$6.5 million or about 62 percent is in foreign exchange. Estimated costs for each project component are given in the project summary. The cost per man-month has been estimated at US$10,600 for long-term advisors and US$13,000 for short-term consultancies, including travel, subsistence, and overhead. Financing for the proposed project would be provided by: (i) an IDA credit of SDR 7.4 million (US$8.1 million equivalent) to the Government, with Credit proceeds passed on to SONADER in the form of a grant, under a Subsidiary Agreement with terms and conditions satisfactory to the Association (Section 3.01(c) of draft DCA); (ii) a FAC grant of US$1.5 million equivalent; and (iii) a Government/SONADER contribution of US$0.9 million equivalent. The IDA credit would finance 84 percent of foreign costs and 65 percent of local costs. The FAC would finance two long-term advisers: the financial analyst of the MRD's Planning Unit and the agroeconomist of SONADER's Technical Department; FAC would also finance the housing, vehicles and related operating costs for these two long-term advisers. Over the three years of the project life, this package would amount to about $1.1 million equivalent. The balance up to the US$1.5 million equivalent to be contributed by FAC would be used to finance short-term consultant services for MRD. The Government and SONADER would finance all local personnel, except the administrative assistant, three secretaries, and one accountant in MRD. Revolving Fund 46. For the MDR component, two revolving funds would be established to facilitate project implementation. The first referred to as the Special Account, would cover all items financed by IDA for MDR, except consultant services and training expenditures (for which direct payment procedure would be used), and salaries and allowances of resident advisors. Opening of the Special Account in a commercial bank, on terms and conditions satisfactory to IDA, would be a condition of effectiveness of the proposed Credit (Section 6.01(b) of the draft DCA). Upon Credit effectiveness, an amount of SDR 60,000 equivalent would be withdrawn from the Credit account for deposit into the Special Account. Further replenishments would be made by IDA on receipt of satisfactory evidence that the funds were used to finance eligible expendi- tures at the percentage rates agreed for each category. However, should any disbursement from the Special Account fail to meet eligibility criteria, the Government would have to deposit the corresponding amount into the account from its own resources (Section 2.02(f) of draft DCA). As an additional condition of Credit effectiveness, the Government would open another account, referred to as the Borrower's Account, at a commercial bank for payment of its own counterpart contributions for MDR component (Sections 3.07 and 6.01(c) of the draft DCA). Procurement 47. (a) Consultants. Foreign staff serving in SONADER under the first Technical Assistance Project are likely to be offered contract extensions  - 15 - acceptable to IDA. For the new positions to be financed by IDA in SONADER and MRD, Bank guidelines would apply. Regardless of the source of financing, detailed terms of reference for each permanent position. would follow the out- lines presented in Annex III, Section 5 and would have to be acceptable to IDA. Individuals or consulting firms selected to carry out permanent or short term assignments would be acceptable to IDA. (b) Laboratory equipment and vehicles financed by IDA, amounting respectively to US$100,000 and US$220,000 equivalent, would be acquired through limited international tender acceptable to IDA; as under the previous project, other equipment would be procured using local competitive bidding procedures, acceptable to IDA. Disbursements 48. Proceeds from the proposed IDA Credit would be disbursed as follows: (a) for resident advisers, short-term consultants and training, 100% of total expenditures (US$5.6 million equivalent); (b) for MDR Planning Unit, one administrative assistant, three secretaries, and one accountant, 89% of total expenditures (US$0.1 million equivalent); (c) for vehicles, office and laboratory equipment, 100% of total expenditures (US$0.32 million equivalent); (d) for operation and maintenance, 54% of total ex]penditures (US$0.22 million equivalent); (e) for the initial deposit in the Special Account, a lump sum of about $65,000 equivalent; and (f) for refinancing the PPF advance, 100% of total amount withdrawn (US$1.0 million equivalent). An amount of US$0.8 million equivalent would remain unallocated. Disburse- ments would be fully documented except for those for operating costs and acquisition of minor items each costing less than $5,000 and not exceeding in the aggregate $100,000 which would be made against certificate of expendi- tures; supporting documentation would be kept by SONADERt and MDR to be reviewed in the course of supervision and annual auditing of accounts (Sections 4.01(c) of draft DCA, 4.01 and 4.02 of the draft PA). The IDA Credit is expected to be disbursed in four years (see Credit and Project Summaries). The expected schedule of disbursements is based on the experience of the First Technical Assistance Project to SONADER. Auditing of Accounts 49. The accounts for the SONADER component would continue to be main- tained by SONADER. For the MDR component, the Planning Unit would establish and maintain project accounts. SONADER accounts are satisfactorily audited by  - 16 - independent auditors as a matter of course under the on-going technical assistance program; this practice would continue under the proposed project (Section 4.02(a) of the draft PA). The expenditures of the Planning Unit of the MDR would be audited under the same principle and arrangements used for SONADER (Section 4.01 of the draft DCA). The audit fee for MDR would be covered by the credit. Benefits and Risks 50. The project would strengthen SONADER's managerial capability and consolidate the progress attained through the previous project. Similarly, MDR is expected to start developing the capabilities needed to formulate an adequate agricultural policy. The major uncertainties encountered in any project of this nature are difficulties in recruiting qualified expatriate experts capable of understanding the country s problems and contributing to the training of Mauritanian professionals as well as in recruiting and train- ing local staff. There is also an uncertainty as to the extent to which the government would follow the policy and program recommendations stemming from the project, particularly for the MDR component. Experience shows that none of these risks can be fully eliminated. Efforts would be made to assist SONADER and the Government in their search for qualified candidates. For SONADER, several advisors who have proved themselves to be competent under the previous project would be retained. For the recruitment and training of local staff, comprehensive training programs including formal and on-the-job train- ing would be provided, not only to train, but also to attract local techni- cians to join SONADER. Nonetheless, the training to be provided is but one element in Government's effort to redress the key issue of the trained man- power shortage (para. 17). Finally, IDA would carry out regular reviews, directly with the authorities concerned, on the results of feasibility studies and recommendations proposed for sector policies and programs, and then to monitor closely the follow-up measures being taken. PART V - LEGAL INSTRUMENTS AND AUTHORITY 51. The draft Development Credit Agreement between the Islamic Republic of Mauritania and the Association, the draft Project Agreement between the Association and SONADER, the Recommendation of the Committee provided for in Article V, Section I (d) of the Articles of Agreement of the Association, are being distributed to the Executive Directors separately. 52. Special conditions of the draft Development Credit Agreement are listed in Section I of Annex III of this report. Special conditions of Credit effectiveness include: (i) opening of the Special Account, (ii) opening of the Borrower's Account (para. 46), (iii) execution of the Subsidiary Agreement between the Borrower and SONADER (para. 45); and (iv) Government transferring to SONADER an amount of UM 40 million, as well as amounts needed to meet SONADER's cash requirements for each quarter (para. 26).  - 17 - 53. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 54. I recommend that the Executive Directors approve the proposed Development Credit. A. W. Clausen President Attachments Washington D.C. September 9, 1983  ANNEX I - 18 - Page 1 T A B L E 3A MAURITANIA - SOCIAL INDICATORS DATA SHEET MAURITANIA REFERENCE GROUPS (WEIGHTED AVERAGES) /a 4MOST (MOST RECENT EStlMATE) /b lb lb RECENT / MIUDDLE INCOME 111ULt INCOtE - 1960- 1970- ESTIMATEL- AFRICA S. OF SAHARA N. AFRICA & MID EAST AREA (THOUSAND SQ. C) TOTAL 1030.7 1030.7 1030.7 AGRICULTURAL 404,0 395.3 394.5 GNP PER CAPITA (US$) 110.0 220.0 460.0 1147.9 1340.0 ER!GY CO3NSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) ta.o 168.0 199.0 724.2 810.4 POPULATION AND VITAL STATISTICS POPULATiON,MID-YEAR (THOUSANDS) 970.0 1214.0 1560.0 URBAN POPULATION (% OF TOTAL) 3.4 12.8 24.4 28.5 47.4 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILL) 2.6 STATIONARY POPULArIoN (MILL) 7.8 YEAR STATIONARY POP. REACHED 2155 PI)PULATIOG DENSITY PER SQ. KM. 0.9 1.2 1.5 56.5 3t.0 PLR SQ. KM. AGRI. LANU 2.4 3.1 3.9 L31.8 449.0 POPULATION AG.E STRUCTURE (7.) 0-14 YES 44.0 45.3 46.Z 45.9 41.9 15-64 YRS 53.3 52 .O 51.0 5.z 52.IS 65 ANiD ABOVE 2.7 2.7 2.7 2.8 3.3 POPULATION GROWTH KATE (E) TOTAL 2.2 2.2 2.3 2.8 2.9 URBAN 16.2 15.5 8.1 5.3 4.4 CUUDE 01RT11 RATE (PER TIIOUS) 50.7 49.9 43.6 47.6 42.5 CRUDE DEATh RATE (PER TitOUS) 27. 1 23.9 20.3 15.2 12.0 GROSS REPRODUcTON RArE 3.4 3.4 2.9 3.2 3.0 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUS) .. .. USERS (4 OF MARRIED WOMEN) .. .. POOD AND NUTRITION INDEX OF FOOD PROS. PER CAPirA (1969-71=100) 107.0 102.0 79.0 95.7 97.5 PEA CAPITA SUPPLY OF CALORIES (7 OF REQUIREMENTS) 93.0 89.0 97.0 97.1 102.3 PROTEINS (GRAtS PER DAY) 80.0 7a.0 75.0 56.0 72.o OF sUCH ANIAAi. AND PULSE Sl. S1.0 44.0/c 17.2 17.8 CGILO (AGES 1-4) DEATH RATE 42.7 36.1 30.0 23.b 15.2 EALITH LIFE EXPECT. AT BIRTH (YEARS) 37.2 4U.3 44.4 S1.9 57.2 IN[ANT MOOT. RAIC (PER TOUS) 184.6 161.9 140.7 117.6 IU4.2 ACCESS TO SAFE WATER (sPOP) TOrAL .. 17.0 .. 25.4 D9.3 [L[AN 98.0 16.0/d 70.5 84.9 RURAL . . 10.0 .1. 2.3 37.5 ACCESS To EXCKErA DISPOSAL (C OF POPULATION) TOTAL .. .. RURAL .. .. POPULATION PER PHYSICIAN 40420.0 17850.0 14350.0/c 12181.6 3536.0 POP. PER NURSING PERSON 5430.3/e 4480.0 2080.077 2292.0 1620.7 POP. PER HOSPITAL BED TOTAL 4738.1 2890.0 26lo.0/c,f 1075.4 643.3 URBAN .. 700.0 I310.Ui,7E 402.3 545.0 RURAL 52E0.0/e,f 5370.0 3710.0Orf 3926.7 24s2.0 AOMISSIOUS PER HOSPITAL BED .. .. .. .. 26.4 HOUSING AVERAGE SIDE OF HOUSEHOLO TOTAL .. .. UKBAN .. .. .. RUSAL .. .. .. AVERAGE SO. OF PERSONS/ROOM TOTAL .. .. UKBAN .. .. RURAL .. .. .. ACCESS ro ELECT. (7. OF DWELLINGS) TOTA. .. .. .. .. 4621 URBAN .. .. .. .. 77.6 RURAL t 6 .1  - 19 - Annex I Page 2 T A B L E 3A MAURITANIA - SOCIAL INDICATORS DATA SHEET MAURITANIA REFERENCE GROUPS (WEIGHTED AVERAGES) /a MOST (MOST RECENT ESTIMATE) /b RECENT MIDDLE INCOME MIDDLE INCOME 1960-k 1970Z-b ESTIMATE- AFRICA S. OF SAHARA N. AFRICA & MID EAST EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 8.0 14.0 33.0 97.2 89.6 MALE 13.0 20.0 43.0 103.L 104.o FEMALE 3.0 8.0 23.0 88.5 72.b SECONDARY: TOTAL 0.4 2.0 10.0 17.2 41.7 MALE 1.0 4.0 16.0 23.; 52.8 FEMALE 0.04 0.4 4.0 14.2 31.2 VOCATIONAL (X OF SECONDARY) .. 12.5 .. 5.2 10.3 PUPIL-TEACHER RATIO PRIMARY 20.0 24.0 41.0 42.9 31.9 SECONDARY 17.0 24.0 25.0/g 23.7 23.3 ADULT LITERACY RATE (%) 5.0/h 10.0 17.0/& 37.1. 43.3 CoNSUNNTION PASSENGER CARS/THOUSAND POP 0.4 3.4 .. 18.S 18.0 RADIO RECEIVERS/THOUSAND POP 12.4 45.3 98.5 97.E 138.1 TV RECEIVERS/THOUSAND POP .. .. .. 18.f, 45.6 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION .. 2.4/i .. 18.2 31.0 CINEMA ANNUAL ATTENDANCE/CAPITA .. .. 0.3/c 0.6 1.7 LABOR FORCE TOTAL LABOR FORCE (THOUS) 299.0 362.0 449.0 FEMALE (PERCENT) 3.8 4.1 4.3 36.1 10.7 AGRICULTURE (PERCENT) 91.0 88.0 69.0 56.8 42.5 INDUSTRY (PERCENT) 3.0 4.0 8.0 17.5 27.8 PARTICIPATION RATE (PERCENT) TOTAL 30.9 29.8 28.8 37.0 25.6 MALE 59.8 57.8 55.0 47.1 45.4 FEMALE 2.3 2.4 2.5 27.0 5.6 ECONOMIC DEPENDENCY RATIO 1.5 1.6 1.7 1.3 1.8 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5% OF HOUSEHOLDS .. HIGHEST 20% OF ROUSEHOLDS ...-- LOWEST 20% OF HOUSEHOLDS .. LOWEST 40% OF HOUSEHOLDS .. POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. .. 534.2 276.1 RURAL .. .. I11.0/g 255.9 177.1 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 330.0/g 491.5 400.0 RURAL .. .. 120.0/g 188.1 283.3 ESTIMATED POP. BELOW ABSOLUTE POVERTY INCOME LEVEL (X) URBAN .. .. .. .. 22.0 RURAL .. .. .. .. 30.8 NOT AVAILABLE NOT APPLICABLE N o T E S /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 ,nd 1961; Dat.a for 1970' between 1969 and 1971; and data for "Most Recent Estimate" between 1979 and 19I1. Revised estimate for 1981: US$433. /c 1977; /d 1976; /e 1962; /f Covernment hospital establishments; /g 1978; /h Prior to 1965; /i 1972. May 1983  - 20 - ~~~~~ANNEX I Page 3 ttroNITIoOS PP SoCIAL IOPDiCAORSt tests: k1h-9o1,heaeaedeo rm ore enrly the thewot-une .aiv and rel table i shud elan be notedthehy ma otb ioteentmnallp reepareble beosase atnt akofsadardited defl fi -Ilneedcocpt .sd bydfentoaoteielltigthdt.Tedtta, noeheles * cufa t decieodrIfsguud Iist. treds, and chauot..el.es ceett eaJ., difto.nente. he tenonne- jftnoell I._O Ine efenenegrou dec the.o. ageI se popla ton1 regI-d riteitohen o egottrd1.idd tEtortd hnL e fy een ajoit ofI the. ot.eete1 i getupbe date for thor indtntel ic t:he :eaeo onre tn ib riatr eede on the ailobility of date oL sntchrt stn uih seernisedienleting eeragne otoeicdlceioroevotber.Thes- ecgte -oopsful inoo-peritgthenalosofo...Iedrsoeteersagh.totty td AREt Ith-ou.and gq,kr.) Peultonte -alia-rv ste dittOed by noher of prgttlinit Teta Toe) ttf ac are coreltetog intd area end inland eaer; 196h0, 1phy1iteeqilid I m- a sediPp.taieto- tiid onees trye tenet. 1971 ecd Sr ae erdeitntttiePesn ooat i ide -rvsbro ratoe AMeicut1urat1 tess f agn1Icuincal are used -,-,raily orpraetymaeedftl grdaetse,assecotes etiato- h for crops palttore, strid and kitchen gardeve or n lie fala;16, usr cotain 197 an E91Data.0 -otaion ret b-iee tntted tota.. uh. und . toa 1- Pep-1attas )trt GNP FE. G - GNP p_ P-P~~~~~~~~~~~~ohe, and- Boe lied ty she it repciv uhtbfb-itlhd lIn pa tny Ile)- nepeccautaee 'ate a crrac aclecruces, nalebs n pblc nd rinc getel sd peosdte hspial55 teclae h ae onetonscode ard oktro )9991hal) rbhltm incetr.-deptl ar eAfalseet phenPteot1 stffd 1960, 1970, en 190d ane.9urbanbasIta 'ndr grog prsia Pgneal epeLe , and core date, from baspinelt divided hy tbt number o -'I.1 edi.: -'efhede. b. y ..i. sco1ou97 c;10 , 90 ed19 dane. gieca.e S.tee of- ueod)rrveIr oehl)-ttl-ohr n aa Poroleniot rtvjttttoo -L bnel neido at,agopo oiool5tn hr tegqatr Pu96 tni er 00-Creteyuatnpuetun e er n190adtermi eaa are e ogrmyo a nrb olddi esausieg roline inft en -ils auur le no Inue 1e6el ae1 eo9a7y0uee tfecnct Itercen c-I duel t-Inge -- ictal, ro,an oa aisrtu - reoiturean . heI cloe nyate etlt.cnsAjae Inhollen ntv dertln na he reteurent tnet u ocinnet epeadtninoate- then Prmr col-ntl aeadfs Le d - Irs aa ml n e frtil icyrae on plocene- -rel chnetevt otecleuenn nuletnpersa t eaa puueea ir ilb reached.f tecedtyh- hocd -. toa, _ae n es -Cmutdasaee;stode te tlanu aae edcatr rqirs t earfor easlcap....ptaryreeat_o Pen o. k, - id-yac ppulaian er qour bllcate 110 hecacee nfprondet enerl, ntatInal,ye.eat..r Ligt og -enrottamffe toalaea IRO,190 ardlol dn.Pop..a osuly _ 10et 17 er, fae oceptectasme Pen so.ho, eanyleura land - Lomuedaf aae for sac_ P__no-atland generulip doc...ed nely; 1960, 1970 and 1990 LY deno. docationalerion rreta evdue ,oainliaiat popblatlco,lh, 191 fn 91dt. Entl-teateI etto - -ert Icy ad ettindunTc tdoeenoldi peer popoPattoc;tlOin,L1970hand 1981 data..Cf10dnllily Crd beahfrele cnsdl. - h dyul eth. e t hc.... o. d o nd-ea EDUATIOeNerCs(prhoadcputn)-ynsnecrerpnes he nml repoueieprcIftevrtcepretaa- pec1lfI lioc adiyReeivrs re Rthostn naait l ypsa ene o ai eggs. 1 iuneaed-decetoery ... isnn- -tenr od t nepl" y1-e he ceieInof rad.Iio v Irth-contro etv ne v toou etotLn pla_tengYcoutris bolishe.d 1'P'"cerallying.d pruras PVtcler erncvadtruaat 70 reeirer far hea tas tn PeRl Paning-cry(ecn ttrre oe ecnaec ccffnelpbi e thoorand peposantb.. th entuntnntunedfOeciA r eAser. vi chl- Hrecpg IlI et'h n b -rb-onru daletfruccr n npaeoe erg2~ tIcuu Cf 0mtsd _u i efee eRgrtdcvyIn totc co.Stcoe ec en nrenuodpnl u l - d On i. ry -utrace POlthu- NUTRTIO rlcvult cddol ineII,ecec espI--deiedg-apeiia frOm ci cu yccduc-tcn pe Capta 19P-ll.idOI P-cu uPpe.r.ln ..h Icn; D unucdrenaly- Ifcurltuteo en t scnie a-nuo 1960lnusnl,a usoilt ruucuacpdneon 1970be "dully'' If t1-ppra-sIc tedso four n-etnuasek. t cr.Itieced feuac 6ih r lee'y. ,dtblt . and nunnaty f cuntena r .d icetsiddcu csya,hnldto dtoin cdrn-nct a cofe n ea1 ens cccl ..ed). cgceve--duclnufechconryiinbieuno Yoae o cachucl fucecage60 producer0prIc ongho Iri9hy1-dh.....1970, andt dt19r811J dvcg. 1.72c~~~~~~~~~~~~~~~~~ 1 r ecoc topats,. sofeuos 6v snuck7, Son 1 moyle enid nsife,ned,rmaol;160 90ad18 ae CradocitOseRused vsu rcsla o loen- chdscebocon,P-nte e rrr Penle lbor .oec anpecntgeo tota labor frce. otitt n 9hat tc9olde li e bctacenta nePento bh-dy efgt fIhig s ecetae ftoa labortI fudc 15 ..lh. 197 cd 18 r at: hoothodlv) 1916, .d1970 ed 1980 CONSUMPTaNdeetIIyaseaadanmenrucpofaalabrac;59 Pet caytta surely ci yr-cdt -ncet er due)h- Proeicronc-d ufPirat. caia.90.u. 91 oe ne sPply P od eidy.hcsplyv 1c960itd1970cdandahuc. P-_ci luaciu toeIecn otl at n aI-etciaire puls proepin, of ich1 preei nyul hocill ren bte- I9_ 17, o 191- dagta Thee-- er _eeIclI' stvpe toae ofe_teul pucte oncrtfrhracl..P eneby"Inoe Red nsomreeounnesoc Thid Oel Food Sovy; lOh-hI, , 190 nd.9..dna...t.i .eea ea tvtt d - fct o Aup lelu oe 5ed6 n eet date. omcoet RtSenItcnoon~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. .d..el Chid lner1-C trth onelyr A 1thousa d) - Accuah deac - pet -hona - inPratg f t outli -bet in clcu_ id -e iteneined brIcf s vtonboo thR-tcbododone ORooc FAt Irt;16,190ad1t dt.eSlh nepe a.ihdunhccdealtotin teet otlityl fat.(y rthosan) e -unu l dch ci ifunn-e-n itn Pate bs lh-t - P pp,ty ine TVe US e capte b-dachen antcro astesppyIlcldnteae ufac aes ruteaeIufttscduta n PneyInveCnt 01yt aig -ohren ae frmahddryb oedrda bigc hneuval ceno than Osn ii-ue ooatnblsAsln Pons-cy I. cos idelloen) _uc l coral-_- Numbr o peoldedIttel Iiten,tad rural nerved-yteret may et;iadePI one -"Itn ' in and ll disosa, vOoirmnc s Ibot C.treaen,n Ico-sc solauil ea id e Yt.e andt-dia iatatttfue aydit  - 21 - ANNEX I Page 4 MAURITANIA ECONOMIC INDICATORS GROSS NATIONAL PRODUCT IN 1982 ANNUAL RATE OF GROWTH (%, in constant prices) US$ Mln. _ 1973-76 (Av.) 1977-80 1981 GNP at Market Prices 683.3 100.0 2.4 - 4.C Gross Domestic Investment 269.9 39.4 9.4 -1.5 2.E Gro3s National Saving 33-9 4.9 Current Account Balance -236.0 34.5 Exports of Goods, NFS 329.7 48.3 -1.7 0.8 -6.4 Imports of Goods, NFS -553.9 81.0 17.8 -12.2 2.4 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1981 Value Added Labor Force V.A. Per Worker US$Mln. _ Thousand % US$ % Agr.culture 177.1 28.1 309.8 69.0 571.7 40.7 InduLstry 106.7 16.9 35.9 8.0 2,972.1 211.4 Services and Unallocated 347.6 55.0 103.3 23.0 3,365.0 239.3 T'otal/Average 631.3 100.0 449.0 100.0 1,406.0 100.0 CENTRAL GOVERNMENT FINANCE UM Mln. Percent of GDP 1982 1982 1979-81 (Av.) Current Receipts 6,293 16.9 19.2 Current Expenditure -8,856 23.7 29.2 Current Balance -2,563 6.9 10.0 Capital Expenditure -7,949 21.3 22.9 Overall Balance -10,512 28.2 32.8 External Assistance (net) 8,731 23.4 28.8 MONEY, CREDIT and PRICES 1980 1981 1982 (Million UM Outstanding end-Period) Money and Quasi- Money 7,080 9,430 9,672 Claias on Public Sector 1,628 2,434 3,170 Claims on Private Sector 10,081 11,263 12,758 (Percentages or Index Numbers) Money and Quasi-Money as % of GDP 23.4 27.8 25.9 General Price Index (1980 = 100) 100.0 119.4 134.3 Annual Percentage Changes in: General Price Index 10.7 19.4 12.4 Claims on Public Sector 12.8 49.5 30.2 Claims on Private Sector 13.4 12.3 13.3 Note: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered.  -22 - ANNEX I Page 5 MAURITANIA TRADE, PAYMENTS AND CAPITAL FLOWS -ALANCE OF PAYMENTS MERCHANDISE EXPORTS (1980-82 Av.) 1973 1977 1981 1982 1/ US$ Mln (Million us$) Iron Ore 155.5 65.6 Fish Products 78.8 33.3 XDorts of Goods, NFS 144.7 178.4 342.8 329.7 All Other Commodities 2.8 1.t emports of Goods NFS -154.8 -373.8 -547.8 -553-9 7esource Gap (deficit = -) -10.1 -195.3 -205.0 -224.2 Total 237.1 100.0 nterest Payments (net) -2.0 -14.6 -3.3 -8.1 -orkers Remittances -14.5 -27.6 -20.6 -23.0 Ither Factor Payments (net) -5.1 3.5 -1.3 -1.0 llet Transfers 31.2 120.4 67.7 20.3 EXTERNAL DEBT, as of December 31, 1982 ualance on Current Account -0.5 -113.6 -IX2W -236.0 US$ Mln ~irect Foreign Investment 10.3 4.4 22.3 17.1 ,et M & L/T Borrowing 8.6 55.4 98.8 148.0 Public Debt, ic. guaranteed 827.0 Disbursements (11.0) (87.5) (134.4) (171.3) Non-guaranteed Private Debt Amortization (-2-4) (-32.1) (35-7) (-23-4) Total Outstanding and Disbursed 827.0 Capital Grants 8.4 13.6 32.9 19.2 ,:ther Capital (net) -14.2 -1.9 Other Items n.i.e. -13.2 0.9 J 2/ fncrease in Reserves (7) 0 .T 4 77 -90.0 DEBT SERVICE RATIO for 1982 - '-roes Reserves (end year) 44.9 77.2 193.9 130.0 Net Reserves (end year) 7.7 -38.4 -27.4 -117.4 Public Debt, incl. Guaranteed 12.0 Non-Guaranteed Private Debt ouel and Related Materials Total Outstanding and Disbursed 12.0 Imports .. of which: Petroleum 9.9 30.6 63.9 67.0 Exports - - - - of which: Petroleum - - - - IBRD/IDA LENDING as of June 30, 1983 US$ Million RNAT OF EXCHANGE IBRD IDA Outstanding and Disbursed 47.1 43.7 US$1.00 = UM 44.54 45.68 48.26 52.15 Undisbursed 12.9 2.6 Outstanding inol. Undisbursed 60.0 46.4 - / Provisional. 2/ Ratio of debt service to exports of goods and non-factor services. August, 1983  - 23 - Annex II Page 1 THE STATUS OF BANK GROUP OPERATIONS IN MAURITANIA A. Statement of Bank Loans and IDA Credits (as of March 31, 1983) Loan or --- US$ million