Central African Republic - Cotton Area Rural Development Project

Document of The World Bank FILE FOR OFFICIAL USE ONLY Report No. P-3566-CA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT OF SDR 9.7 MILLION TO THE CENTRAL AFRICAN REPUBLIC FOR A COTTON AREA RURAL DEVELOPMENT PROJECT May 11, 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 without World Bank authorization.  CURRENCY EQUIVALENTS Currency Unit = CFA Franc (CFAF) US$1.00 = CFAF 355 1/ CFAF 1 million US$2,820 ABBREVIATIONS AND ACRONYMS ACADOP = Agence Centrafricaine pour le Developpement de l'Ouham Pende/ Central African Agency for the Development of the Ouham Pende Province ANEC = Association National des Eleveurs Centrafricans/National Association of Central African Livestock Owners BADEA = Banque Arabe de D6veloppement Economique en Afrique/ Arab Bank for Economic Development in Africa CAADE = Caisse Autonome d'Amortissement des Dettes de l'Etat/ Autonomous Fund for the Amortization of National Debts CCCE = Caisse Centrale de Cooperation Economique/Central Fund for Economic Cooperation (France) CFDT = Compagnie Frangaise pour le Developpement des Fibres Textiles/ French Company for the Development of Textile Fibers FAC = Fonds d'Aide et de Cooperation/Fund for Aid and Cooperation (France) FED = Fonds Europeen de Developpement/European Development Fund (European Economic Community) IRCT = Institut de Recherches sur le Coton et les Fibres Textiles/ Research Institute for Cotton and Textile Fibers MAE = Ministbre de l'Agriculture et de l'Elevage/Ministry of Agriculture and Livestock SOCADA = Societe Centrafricaine de D&veloppement Agricole/ Central African Agricultural Development Agency FISCAL YEAR Government: January 1 - December 31 SOCADA: November 1 - October 31 1/ The CFA Franc (CFAF) is tied to the French Franc (FF) at the ratio of FF 1 to CFAF 50. The French Franc is presently floating.  FOR OFFICIAL USE ONLY CENTRAL AFRICAN REPUBLIC COTTON AREA RURAL DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: Central African Republic Beneficiary: SOCADA (Central African Agricultural Development Agency) Amount: SDR 9.7 million (US$10.4 million equivalent) Terms: Standard IDA terms Cofinanciers: France (FAC and CCCE), European Development Fund (FED), Arab Bank for Economic Development in Africa (BADEA). Project Objectives: (a) Improve the standard of living of the rural popula- tion in the CAR's cotton zone, (b) rehabilitate production of cotton, (c) increase production of food crops, and (d) assist SOCADA, the CAR's major rural- development institution, to become a more effective and financially sound development agency. Project (a) Strengthening of the agricultural extension service Description: through staff training and provision of technical assist- ance and logistical support; (b) provision of production inputs (fertilizer, insecticides) and agricultural implements; (c) support for applied research and seed multiplication programs; (d) promotion of animal traction through the establishment of training centers and provision of credit to farmers to purchase oxen and ox- drawn equipment; (e) rehabilitation of 950 km and periodic maintenance of 2,300 km of feeder roads; (f) construction of about 150 village water wells; (g) improvement of the country's five cotton ginneries; (h) provision of workshops and equipment to improve the maintenance capacity for SOCADA's agricultural transport fleet; and (i) establishment of a project monitoring and evaluation system. The above-described project will be implemented by SOCADA, the project beneficiary. In addition to the new activities described above, SOCADA will also continue certain activities which are part of its already existing program. Foreign sources will assist in finacing the cost of both the project and the ongoing program. |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.  - ii - Benefits The project's direct benefits would be the expected and Risks: increase in the production of cotton and food crops in the project area. Since cotton is a major export crop, increased production would engender increased foreign- exchange earnings and Government revenues. The project would benefit some 61,000 farm families directly, repre- senting 20 percent of the CAR's rural population, most of them presently in the absolute poverty group. The project would represent a significant beginning in the reversal of past trends of declining agricultural production and rural incomes in the cotton zone. In- direct benefits would also accrue through proposed institutional reforms, notably the strengthening of SOCADA. There are no major technological risks under the proposed project. Sociological risks are relatively low since beneficiary farmers have been selected because of their demonstrated receptivity to recommended technical pack- ages. The major constraint to achieving the project's objectives is the poor quality and inefficiency of SOCADA's extension services, and the possibility of the agency's becoming financially overextended by trying to implement the proposed agricultural development pro- gram. The project includes appropriate measures to counter these risks, particularly (a) reorganization of the extension service, and systematic training of all extension staff in the project area, (b) provision of specialists' services, and (c) advance funding by cofinanciers to minimize SOCADA's cash-flow problems.  Estimated Project and Program Costs: Local Foreign Total ------- US$ million ------- Project Management Unit 0.2 0.3 0.5 Production and Extension Services 3.3 3.1 6.4 Applied Research 1.0 0.9 1.9 Seed Production Unit 0.4 0.3 0.7 Training 0.6 0.7 1.3 Feeder Roads Unit 2.0 2.4 4.4 Monitoring and Evaluation Unit 0.5 0.3 0.8 Animal Traction 0.2 0.2 0.4 Village Water Supply 0.8 0.7 1.5 Ginning Factories 0.1 0.8 0.9 Maintenance Workshop 0.1 0.1 0.2 Supply of Inputs 0.5 1.8 2.3 Total Base Cost 9.7 11.6 21.3 Physical Contingencies 0.4 0.8 1.2 Price Contingencies 5.0 2.2 7.2 Total Project Costs 15.1 14.6 29.7 Non-Incremental Costs: - Salaries and Operating Costs 5.0 0.9 5.9 - Inputs 3.3 8.1 11.4 Financial Rehabilitation SOCADA 4.2 - 4.2 Total Program Costs 27.6 23.6 51.2 of which Taxes 2.7 - 2.7 Net of Taxes 24.9 23.6 48.5  - iv - Financing Plan: Project Program Total Total --- US$ million --- IDA 6.2 10.4 1/ FAC 3.5 3.9 CCCE 4.3 8.5 FED 4.8 5.8 BADEA 3.4 3.4 Subtotal 22.2 32.0 SOCADA 5.0 7.0 Farmers 0.5 5.8 Government 2.0 6.4 TOTAL 29.7 51.2 Estimated Disbursements from the proposed Credit: (US$ millions) Fiscal Year FY84 FY85 FY86 FY87 FY88 Annual 2.1 1/ 2.5 2.6 2.0 1.2 Cumulative 2.1 4.6 7.2 9.2 10.4 Economic Rate of Return: 22% Staff Appraisal Report: Report No. 4187-CA dated May 11, 1983 Map: IBRD 16666R . 1/ Includes refinancing of PPF advance of US$1.0 million equivalent.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE CENTRAL AFRICAN REPUBLIC FOR A COTTON AREA RURAL DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed Devel- opment Credit to the Central African Republic (CAR) for the equivalent of SDR 9.7 million (US$10.4 million), on standard IDA terms, to help finance an Inte- grated Rural Development Project in the Cotton Zone. The proposed project would be cofinanced as follows: France (FAC), $3.9 million equivalent; France (CCCE), $8.5 million equivalent; the European Development Fund (FED), $5.8 million equivalent; and the Arab Bank for Economic Development in Africa (BADEA), $3.4 million equivalent. PART I - THE ECONOMY 1/ 2. The last comprehensive economic report, entitled "The Economy of the Central African Republic" (Report No. AW 16-a), was distributed to the Board on May 22, 1970. During the second half of the 1970s, severe mismanagement and the deteriorating political situation in the country made an economic dia- logue impossible, and the Bank Group's activities in the CAR were reduced to supervision of ongoing projects. After the overthrow of the Bokassa regime in September 1979, the new Government expressed its desire to begin discussing economic matters again with the Bank. The findings of economic missions which visited the country in May 1982 and November 1982 will be presented in a Country Economic Memorandum which is scheduled to be completed in early FY84. Political Situation 3. Following the overthrow of the Bokassa regime, President Dacko formed a new Government. His two-year regime was plagued by political instability, and in September 1981 the army stepped in to stabilize the situation. The new military Government under President Kolingba has begun to address the country's economic difficulties with the assistance of France, other bilateral donors, and international organizations including the Bank Group and the IMF. Economic Potential and Constraints 4. The CAR is a landlocked country of 626,000 km2 with a population of 2.4 million growing at an annual rate of 2.5 percent. About 30 percent of the 1/ Slightly shortened version (since agriculture is discussed in detail in Part III) of Part I of the President's Report on a proposed Second Education Project in the CAR, which was distributed to the Board on April 21, 1983.  - 2 - inhabitants live in urban areas. With a 1980 per capita income of US$298, the CAR is listed by the U.N. as one of the least-developed countries. The CAR is a member of the five-country Central African Customs and Economic Union and uses a common currency, the CFA franc, issued by a regional central bank, the Bank of the Central African States. 5. Agriculture accounts for 35 percent of the CAR's GDP, mining and manufacturing account for 13 percent, utilities and construction for 6 per- cent, and services for 46 percent. High transportation costs in both domestic and international trade and an oversized civil service are responsible for the large part of services in GDP. Cotton and coffee are the most important export crops. Their combined exports have recently accounted for roughly one third of the country's export earnings. Timber and diamonds, the other major export products, have recently accounted for 20-30 percent each of export earnings. Industrial production, accounting for only about 7 percent of GDP, has been limited to consumer goods such as beverages, textiles, soaps, and footwear, and to some processing for export of cotton, timber, coffee, and diamonds. There are indications that the CAR has petroleum resources on the border with Chad, and test drilling is expected to begin at the end of 1983. 6. The CAR's landlocked position, difficult transport conditions, a sparsely populated area, the small size of the domestic market, and a weak human-resource base are the principal constraints to developing the country's potential. Bottlenecks in the river/rail route to the sea through the Congo and the road/rail route through Cameroon substantially raise production and inventory costs and reduce the CAR's export competitiveness. Production costs and prices are also high because capacity utilization is generally low and because there is little competition, a situation which favors monopolistic pricing policies. 7. Import substitution, which should have benefited from natural protec- tion due to the high transportation costs for imports, has been only moder- ately successful. Political instability and financial difficulties in the late 1970s and early 1980s led to stagnating public investments and a decline in agricultural production and discouraged private investment. Years of ra- pidly growing employment in the civil service and in public enterprises have resulted, however, in incomes which enabled the urban population to pay for high-priced imported goods. Import tariffs, which constitute a major source of budgetary resources, have been ineffective in protecting domestic industry, since it is very difficult to control the CAR's borders. Last but not least, the expansion of import substitution has been hampered by a lack of skilled personnel. 8. Structural and institutional deficiencies have led to inefficient management of the country's resources. The oversized public administration, which accounts for roughly 50 percent of all salaried employees, constitutes a drain on financial resources and limits the country's own contribution to capital expenditures.  -3- Recent Performance 9. Under Bokassa, the country was ruled in an erratic manner. A com- bination of declining agricultural production, unsound investments, rapidly increasing budgetary deficits and short-term expensive borrowing led to the economic and political collapse in 1979, when the Bokassa regime was over- thrown. WorLd market prices for cotton had dropped at an average annual rate of almost 12 percent in real terms between 1976 and 1979, and in 1979 coffee prices in constant terms had fallen to two thirds of their high levels in 1976/77. Public investments averaged only some 7 percent of GDP a year during 1976-1979, since foreign-aid disbursements were cut in half and domestic S capital expenditures dropped to their lowest level ever. Consequently, the country's infrastructure dilapidated, which resulted in the breakdown of agri- cultural marketing channels and extension services. At the end of the Bokassa regime, the public administration had virtually ceased to function. 10. The two post-Bokassa governments have made serious attempts to re- establish at least short-term programming and return to financial disci- pline. An emergency reconstruction program for 1980-81, presented in mid-1980 to the international community at a donors' conference, received the general support of the Bank and other donors. But in spite of substantial external assistance, especially from France, the economy continued to decline. During 1980 and 1981, GDP fell by 3 percent a year, on average, and the minimal growth of less than one half of 1 percent estimated for 1982 will lower per capita income still more, by about 2 percent, assuming an annual population growth of 2.5 percent. Declining cotton production, low investments, and inefficient public and parapublic enterprises have been responsible for this poor growth performance. During 1981 and 1982, cotton production dropped more than 30 percent, on average, compared to production levels during the pre- ceding three years. Investments remained at only 8 percent of GDP a year during 1980-82 because most projects presented in the emergency program 1980- 81 required much additional preparation before first disbursements could be made. The Budget and Parapublic Sector 11. Large budgetary deficits have become a major obstacle to making better use of the CAR's resources. Chronically low tax revenue/GDP ratios, which averaged only 12 percent during 1977-1981, and high expenditure levels caused by the oversized civil service (salary payments have in recent years accounted for roughly two thirds of current expenditures) resulted in budget- ary deficits which have averaged 5.5 percent of GDP during 1977-1981. Conse- quently, the domestic contribution to investments has been minimal, debt pay- ment arrears have been building up, and the public administration has at times been crippled, since the Government has been able to purchase office equipment and supplies only irregularly. in 1981, the Government made an effort to reduce the deficit through a financial stabilization program in connection with an IMF stand-by arrangement. Several taxes were raised; tax collection was strengthened; and unjustified customs duty exemptions were reduced. Con- sequently, tax revenues increased by 37 percent in 1982, while current expen- diture growth has been held at 14 percent or stagnant in real terms, reducing the budget deficit in 1982 to about 3 percent of estimated GDP. The budget  - 4 - deficits have been financed by grants from France, loans from the banking system, resources from the IMF and by arrears on debt payments. The Govern- ment and the IMF have reached agreement on an economic and financial program for a 1983 stand-by arrangement which aims at further control of current expenditure; the program was approved by the IMF Board on April 22, 1983. 12. During the 1970s, the Government promoted state ownership in the pro- ductive sector. The CAR's limited managerial capacity resulted, however, in low efficiency and financial losses. Most public enterprises incurred heavy operating deficits, the exact size of which remained unclear since the enter- prises discontinued generally accepted bookkeeping practices. Payments for services to the Government were made irregularly, and enterprises in turn failed to pay taxes and to service their debts. In 1980 in an attempt to remedy the situation, the Government began to convert public enterprises into mixed and private enterprises. A High Commissioner in the Presidency is assisting the parastatals in adopting acceptable accounting principles, pre- paring the legal framework for the participation of the private sector, reviewing price and tariff policy, and reducing staff. Those enterprises that cannot be expected to produce profitably have been or are being closed. With the help of a concessional loan from France, the enterprises' overdue tax liabilities, inter-enterprise debt, and payment arrears by the Government were largely liquidated in 1981. Additional funds will be needed, however, to honor the Government's debt to several public enterprises, to cover losses, and to facilitate the transformation of enterprises into private or mixed companies. Balance of Payments 13. The CAR's balance of payments has recently been experiencing diffi- culties which need to be addressed by appropriate policies. During 1970-1979, merchandise exports rose at a moderate annual rate of 8 percent, though world market prices for cotton, coffee and diamonds rose considerably faster. The trade balance showed, however, general surpluses during the 1970s (with the exception of 1975, when both domestic production and world market prices of cotton were low), since imports also rose only moderately. During 1977-1979, exports fell slightly because (a) cotton production had fallen about 30 per- cent and world market prices 18 percent in real terms, compared to production and price levels in the early 1970s; (b) coffee production rose only margi- nally while world market prices in 1978 and 1979 had declined almost one third in real terms from their high levels in 1976 and 1977; and (c) increased export earnings from timber and diamonds could not compensate for the negative developments in cotton and coffee exports. Imports stagnated during the same period because investments had fallen off, and the demand for consumer foods and petroleum products had declined, due to low incomes in the rural sector and to the breakdown of the domestic transport system. 14. The deterioration of the CAR's balance-of-payments situation during the first three post-Bokassa years is a reflection of the decline of economic activities in recent years in the CAR, in general, the continued fall of cot- ton production, in particular, and also of unfavorable world market prices for the main export crops. Average annual cotton production was 23,000 tons dur- ing 1980-1982, compared to 34,000 tons during 1977-1979, 41,000 tons in 1976,  - 5 - 51,000 tons during 1970-1972, and almost 60,000 tons (the peak) in 1969 (para. 28). Export earnings from diamonds, coffee, and timber rose only marginally as their production increased insignificantly or even fell during 1980-1982. World market prices for cotton, coffee, and timber declined substantially over the same period. The Government's efforts to revive the economy by raising public investment expenditures, and by granting salary increases in the public administration (both financed mainly by external sources) led t^ a strong increase of imports of both project-related equipment and consumer goods. Consequently, the average annual current-account deficit rose from 11 percent of GDP during the second half of the 1970s to 16 percent of GDP during 1980- 1982. Substantial new capital inflows in 1980 and 1981 more than covered the current account deficits, but failure to reach an agreement with the IMF in 1982 resulted in a fall-off in overall capital inflows and a moderate decline in reserves. Net foreign assets have averaged US$27 million a year during the last three years, which is equivalent to approximately six weeks of imports. 15. In recent years, the IMF provided the CAR with ibstantial balance- of-payments support. In 1978, the country received a US$6.9 million equiva- lent Trust Fund loan, and in 1980, balance-of-payments support amounted to US$14.7 million equivalent (US$5.2 million equivalent First Credit Tranche, plus US$9.5 million equivalent Trust Fund loan). In 1981, support from the IMF amounted to US$20.6 million equivalent (US$11.6 million equivalent Compen- satory Financing, plus US$9.0 million equivalent from the remaining First Credit Tranche, the Second Credit Tranche, and part of the Third Credit Tranche). In addition, the country has received a total of US$5.5 million equivalent in SDR allocations since 1977. External Debt 16. As a result of its economic difficulties, the CAR is burdened with a considerable external debt, estimated at about US$240 million at the end of 1981. In recent years the country has been servicing its debt only irregu- larly, and at the end of 1982, arrears were estimated at some US$85 million, or roughly one third of total public borrowing. At a Paris Club meeting in June 1981, participating creditor countries agreed to reschedule both the outstanding arrears and the debt obligations falling due in 1981, leaving a debt-service obligation of US$11.1 million equivalent in 1981 (instead of the US$24 million equivalent which would have fallen due in the absence of debt rescheduling). Delayed bilateral negotiations resulted, however, in actual debt service payments of only US$4.5 million equivalent in 1981, thus adding US$6.6 million to arrears. In 1982, debt-service obligations amounted to US$14 million after further debt renegotiations with France, but arrears in- creased by another US$10 million, since the country could repay only US$4 million. Scheduled debt-service payments amounted to 8.1 percent and 12.6 percent of export earnings in 1981 and 1982, respectively, while actual pay- ments during these two years amounted, on average, to 3.5 percent of export earnings, or 4.7 percent of budget revenues. Further debt-relief negotiations and reduction of arrears are a component of the IMF stand-by arrangement for 1983.  - 6 - Development Priorities and Investment Program 17. The Governments following the Bokassa regime have defined rehabilita- tion of the agricultural sector, reconstruction and maintenance of infrastruc- ture, rehabilitation and improvement of education, and redressing the large financial imbalances as the most urgent development priorities. The Govern- ment's National Action Program for 1982-85 was an important step forward in terms of determining development priorities and making better use of available external financing. Planned investments under the Program reflect the estab- lished priorities by allocating 30 percent to agriculture, 38 percent to infrastructure, 24 percent to mining, manufacturing, small-scale industry and tourism, and 8 percent to urban renovation, health, education, and administra- tive purposes. Total investments, including those from the private sector, would amount to about 12 percent of GDP, on average, in 1983 and 1984, com- pared to about 9 percent in 1981 and 1982. 18. In the National Action Program, average investment expenditures in 1983 and 1984 are 50 percent higher in real terms than those in 1981 and 1982. Investment levels in 1981 and 1982 have been low, and a rather strong increase in investment expenditures over the next two years is anticipated because (a) many projects are expected to reach their implementation stage after two years of preparation, (b) an increased number of projects will be carried out almost exclusively by private contractors, and (c) more than 90 percent of the Government's investment program during 1983-1984 is expected to be financed by external sources, most of which has been secured. Prospects 19. The economy of the CAR, after having stagnated or declined during the last several years, can be expected to show some gradual improvement over the next few years if present reconstruction efforts and reform policies are con- tinued. The implementation of necessary adjustments in the agricultural and public sectors is likely to result in growth rates above the population in- crease only in the second half of the 1980s, however. Cash-crop production is expected to increase in response to higher producer prices for cotton and coffee. Prospects for cotton production are good from 1983 onwards, when the proposed cotton area rural development project would begin to have an effect and when world market prices are expected to recover from their present low levels. Foreign-exchange earnings and budget revenues from the forestry and diamond sectors are expected to increase substantially because of (i) a fore- casted strong rise of world market prices for timber, (ii) expanded production in both sectors, and (iii) improved tax collection. The ongoing road rehabi- litation program will stimulate agricultural exports and facilitate the supply of inputs and imported goods needed for the country's reconstruction. More- over, the apparent return to political stability, the Government's encouraging attitude toward the private sector, and the continued privatization of public enterprises are expected to induce private investors to return to the CAR. The full impact of these changes will not be felt immediately, but they have set the stage for further improvements in the next years. 20. In view of the country's poverty and debt-service problems, the CAR is not creditworthy for conventional borrowing at present. In addition, even  - 7 - assuming exceptional efforts to improve public financial performance, public savings net of debt service are likely to remain negative during the early 1980s. Therefore, the Government's contributions to public investments will remain modest for several years. Foreign donors should be prepared to support the Government's efforts at reform and rehabilitation by continuing their pro- gram aid, assisting new development projects, extending their assistance on highly concessional terms, and financing a high proportion of local costs. PART II - BANK GROUP OPERATIONS IN THE CAR 21. Bank Group commitments in the CAR amount to US$68.7 million and cover four transportation projects, two education projects, one livestock project, and one technical assistance project. Annex II contains a summary statement of IDA Credits as of March 31, 1983, as well as notes on the status of the on- going projects. Project implementation in general has improved considerably over the past three years. As a result, the CAR's most recent disbursement rate (disbursements in relation to the undisbursed balance) compares favorably with that of other countries, averaging 67 percent during the last five years. 22. The level of lending and the sectoral composition of the Bank Group's lending program to the CAR have been largely circumscribed by the country's poor economic performance and limited absorptive capacity. If, however, the present Government continues its efforts to improve its financial and economic performance, IDA is considering lending its support to a second technical assistance project, a further reconstruction/rehabilitation project in the transport sector, and perhaps a small- and medium-scale enterprises project. PART III - THE AGRICULTURAL SECTOR 23. Agriculture (including forestry, livestock, and fisheries) plays a major role in the economy of the CAR, contributing approximately 35 percent of GDP and 40 percent of export earnings, and employing nearly 80 percent of the total labor force. Agricultural production is predominantly based on small- holder farming and is largely subistence oriented. There are some 350,000 farm families, and they cultivate about one tenth of the country's total arable land area. Agricultural production is concentrated mainly in the northwest and in the south-central part of the country; these two areas account for 60 percent of the rural population. 24. In spite of the substantial decline in production (para. 14), cotton is still the most important export crop in terms of area sown (about 10 per- cent of the total) and number of families (over one third of the rural popula- tion). Coffee has overtaken cotton as the most important export crop in terms of earnings; at present, it is second only to diamonds as a source of foreign exchange earnings, accounting for about 25 percent of the total. Tobacco, the third main export crop, is much less important than the other two. Food crops (principally cassava, groundnuts, maize, millet, sorghum, sesame, vegetables, and upland rice) cover 80 percent of the total crop area, and the CAR is largely self-sufficient in food crops.  -8- The Cotton Zone 25. The CAR's cotton zone covers about 30 percent of the total area of the country. Its 860,000 inhabitants (1979 data) represent almost 40 percent of the national population. About 40 percent of the total area is potentially arable, with soils ranging from average to very good fertility. The area is well suited for production of cotton and food crops (which are traditionally grown in rotation with cotton). 26. The cotton zone is served by a road system of about 6,800 km. For lack of maintenance, this road system deteriorated severely during the 1970s, disrupting traffic. The resulting high transport costs have substantially added to the cost of producing and marketing cotton and have led to a break- down in the private network of food-crop marketing. Consequently, the upgrading of this road network was identified as one of the country's top priorities, a task which is being assisted by several external donors (includ- ing IDA, under the Fourth Highway Project, Credit 1258-CA). The assistance of external donors has been concentrated on the primary roads; however, rehabili- tation of secondary roads and further feeder roads is the responsibility of SOCADA (paras. 31 and 32), which has been able to maintain and repair only about one third of such roads. The continuation and expansion of SOCADA's feeder-road rehabilitation activities is therefore essential. 27. Agricultural production in the cotton zone is based on some 190,000 farm units, of which about 80 percent are cotton growers. The average farm consists of 1.5 ha of cultivated land, of which one third is devoted to cotton, almost another third to cassava, and the remaining third to other food crops. Apart from some animal traction, land clearing and cultivation are done by hand. Deficient cultural practices (poor land preparation, little concern for proper seeding densities and for timely planting and weeding) and limited use of inputs (improved seeds, fertilizer, and pesticides) result in low yields. Cotton yields in the CAR remain modest relative to those in other African cotton-producing countries. 28. Since 1969, the overall trend of cotton production has shown a de- cline. Among the factors accounting for this production decline were the following: (a) the so-called "Agrarian Reform" of 1970, which led to the expulsion of most expatriate agricultural staff, a concomitant interruption of cotton research and seed-multiplication activities, and a deterioration of the input-supply, cotton-marketing, and extension systems; (b) declining real p returns to cotton, representing a disincentive to cotton growers (the average producer price of seed cotton only doubled between 1970 and 1980, whereas retail prices of most staple consumer goods more than tripled); and (c) inade- quate budgetary provisions for logistical and support services, including road maintenance and extension. Rural Development Policy 29. The Government's development objectives in agriculture are to (a) in- crease both the output and productivity of export crops; (b) revitalize food production; and (c) develop regional package programs, involving both export and food crops as well as physical and social infrastructure, to raise the  - 9 - incomes and living standards of the rural population. Consistent with these objectives, the Government's policies give special emphasis to cotton and coffee production; the Government's target is to double coffee production by 1985 and restore cotton production to about 50,000 tons. Food production is expected to increase simultaneously by 3-4 percent annually. Major Sectoral Institutions 30. Overall development planning is the responsibility of the recently established High Commission for Planning in the Presidency, while the Ministry of Agriculture and Livestock (MAE) is responsible for directing, implementing, and monitoring agricultural policies. The Government decided in 1980 to en- trust the country's agricultural development to multipurpose regional develop- ment agencies, each responsible for a broad ecological zone. Of these, the two major ones active in the cotton zone are SOCADA and ACADOP. 31. SOCADA (Central African Agricultural Developmen' agency) is jointly owned by the CAR Government (75 percent) and by the CFDT (French Company for the Development of Textile Fibers) (25 percent). It is responsible for devel- oping agriculture (both cotton and food crops) throughout the CAR's cotton zone. Nevertheless, SOCADA has largely emphasized cotton in its extension and other activities. The proposed project would be a first step in promoting the integration of cotton and food crops under a whole-farm development scheme. At present, SOCADA employs about 400 permanent Central African staff and about 500 seasonal workers (to undertake its seed cotton marketing and ginning operations). In addition, the Ministry of Agriculture and Livestock assigns its field staff on a full-time basis to execute SOCADA's extension program and related research activities. 32. Since its establishment in 1980, SOCADA has accumulated large operat- ing losses, estimated at CFAF 2.5 billion or US$7.0 million equivalent. These losses stem from several factors, including (a) the abrupt decline in seed cotton production; (b) the company's high cost structure, due to the poor state of its plants, machinery, vehicles, and road network throughout the cotton zone, and the rapid rise of labor costs resulting from Government- imposed salary adjustments; and (c) the company's increasing reliance on short-term credits from local banks to finance its operation. To redress this situation, the Government and SOCADA have already taken concrete measures during project preparation--in particular, the suspension of all oil extrac- tion operations and the closing of inefficient ginneries, which reduced the total number of ginneries from 18 to 5, the permanent Central African labor force from 930 (January 1981) to 386, and the seasonal labor force from 2,200 * to about 500. Other measures being implemented or under consideration include sub-contracting cotton lint transport to the private sector, hiring an expa- triate accountant, and replacing SOCADA's vehicle fleet. Thus, given the expected increase in seed cotton production and the projected recovery in cotton prices on the world market, it is estimated that SOCADA will generate rising net surpluses from its industrial and commercial operations starting in 1983, thereby being able to provide a sizeable contribution to the financing of its agricultural development activities. However, SOCADA could not achieve full financial solvency until it settled its substantial short-term debts and recovered its initial working capital, which had been fully depleted. Thus,  10 - the financial rehabilitation of SOCADA was a precondition of proceeding with the project. The problem has now been solved, largely through a soft loan from the CCCE, which will enable SOCADA to pay off its short-term debts and carry out its proposed agricultural development program. 33. The other institution involved in agricultural development in the cotton zone is ACADOP (Central African Agency for the Development of the Ouham Pende Province), an autonomous regional agency created in 1977, which was to be responsible for all agricultural development in the Ouham Pende Region (32,000 km2). To date, this program has only covered the Paoua district. In accordance with the ongoing reorganization of the agricultural sector, the Government has decided to streamline ACADOP's activities in the Ouham Pende, allowing it to concentrate on those activities it does best (village water supply, animal traction, feeder road maintenance, rural health, etc.). SOCADA would be responsible for agricultural extension services, including supply of inputs, applied research, seed multiplication, feeder road rehabilitation, and monitoring and evaluation. External Assistance 34. Agricultural development in the cotton zone is assisted by various external donors. Besides its support for applied research, seed multipli- cation and rural road rehabilitation programs, French bilateral aid finances technical assistance to strengthen the extension services in the Kemo Gribingui Province. A FED-financed cotton productivity project covers four districts in the Ouham Province, including provision of technical assistance and agricultural inputs. German bilateral aid is financing an integrated rural development project in the Ouham Pende Province, which provides support for both cotton and food crops as well as for the development of social infra- structure. CCCE also provided a long term loan to finance agricultural inputs for the 1981/1982 growing season, and equipment and operating expenses for the rural road program. Although these projects have been restricted in terms of geographical coverage, they have shown that good prospects exist for the restoration of cotton production. In the areas covered by such projects, post-project cotton yields have generally been higher than the national aver- age (324 kg/ha). Proven technology packages are now available under which considerable cotton yield increases can be achieved using improved cultivation and phytosanitary treatments. On the other hand, these projects have had only a limited impact on food crop production. Extension services have concen- trated mainly on cotton, and improved varieties of food crop seeds are generally in short supply. It is therefore important that food crops be given increased support under the proposed project. Bank Participation in the Agricultural Sector 35. IDA has financed only one agricultural operation in CAR, a five-year livestock development project (Credit 894-CA), effective since July 1980 and designed to promote beef production and to improve the living conditions of one of the poorest segments of the country's rural population, the Mbororo herdsmen. The project is being cofinanced by IFAD, the African Development Fund, and the EEC. To date, physical progress has been slow. The project was plagued by serious financial management difficulties, and the effectiveness of  - 11 - the project has been hampered by the poor quality, inadequate motivation, and continuous turnover of the field staff. Experience indicated that the project would be unable to achieve its objectives if it were to rely exclusively on the official veterinary service. Thus, in September 1982, a joint cofinan- ciers' mission agreed with the Government on a major reorganization of the project. The National Association of Central African Livestock Owners (ANEC) is now playing a key role in the drug-sale program and the provision of animal health services. The proposed rural development project has been designed to avoid repetition of the shortcomings experienced under the livestock project by minimizing its dependence on the central Government services. PART IV - THE PROJECT Background 36. The rehabilitation of cotton and food-crop production is a critical factor in increasing the country's foreign-exchange revenues and in raising the standard of living of the rural population. Thus, following the Govern- ment's request at the donors' conference held in Bangui in June 1980, IDA agreed to take the lead in preparing an integrated rural development project in the cotton zone. This work was carried out in late 1981 by consultants financed under a Technical Assistance Project (Credit 1150-CA). The proposed project was appraised jointly by IDA, FAC, FED, and CCCE in June 1982. An IDA post-appraisal mission visited the CAR in October 1982. An IDA PPF advance of US$1.0 million equivalent was extended on April 8, 1983 to assist in financing inputs for the 1983-84 growing season (with parallel contributions from other project cofinanciers), initial training of extension staff, and start-up acti- vities of a Project Monitoring and Evaluation Unit. FAC, FED, CCCE, and BADEA will cofinance the project with IDA. Cofinancing arrangements were finalized at a cofinanciers' meeting on April 11, 1983. Negotiations were held in Washington on April 12-14, 1983. The Government delegation was led by Mr. Cyriaque Samba-Panza, Assistant to the High Commissioner for International Cooperation. Key events and special conditions of the project are listed in Annex III. The Staff Appraisal Report No. 4187-CA, dated May 5, 1983, is being distributed separately. Project Objectives . 37. The objectives of the proposed project are (i) to improve the stand- ard of living of the population in the cotton zone, (ii) to increase the pro- duction of cotton through improvements in productivity, (iii) to increase food-crop production through the introduction of improved varieties and better cultural practices, and (iv) to assist SOCADA, the CAR's major rural-devel- opment institution, to become a more effective and financially sound development agency. Project Design and Description 38. Given the limited experience and capabilities of the extension ser- vice, and to avoid overextending SOCADA, the proposed project will concentrate  - 12 - on institution-building and a limited part of the CAR's cotton-growing area, with the possibility that benefits can later be extended to the whole of the cotton zone in a possible follow-up project. The proposed project will cover specific areas selected because of their favorable ecological conditions and proximity to SOCADA's ginning, research, and seed multiplication facilities and because local farmers have demonstrated receptivity to the recommended technical packages. Based on available data on farmers and the cotton area, it is estimated that the proposed project will directly reach some 61,000 farm families (i.e., about 40 percent of the cotton zone's total population), cul- tivating some 32,000 ha of cotton and 67,200 ha of food crops. Project Components a 39. The project will include (a) strengthening of the agricultural exten- sion service; (b) providing, through credit or cash, production inputs (fer- tilizer, pesticides) and agricultural implements; (c) supporting and reorgani- zing existing applied research and seed multiplication programs; (d) promoting animal traction; (e) maintaining 2,300 km of feeder roads and rehabilitating 950 km of those roads; (f) constructing about 150 village water wells; (g) improving SOCADA's five cotton ginneries; (h) improving SOCADA's vehicle maintenance capacity; (i) establishing a project monitoring and evaluation system; (j) establishing a project coordination unit; and (k) providing short- term consultancy services for specialized studies and for preparing a possible follow-up project. 40. Applied research on cotton is already being carried out in the CAR by the IRCT (Research Institute for Cotton and Textile Fibers). The agronomic package to be introduced under the project for cotton will be largely based on successful techniques promoted by IRCT and already being practiced by a few progressive farmers. Agronomic packages for food crops will be based on the results of a UNDP/FAO project which operated in the CAR from 1975 until 1982 and on experience gained in neighboring countries. The packages will cover improved crop husbandry (particular attention will be paid to good land pre- paration and timely sowing), plant density, weeding and rotational practices, usage of improved varieties, fertilizing and spraying of cotton, and selective use of pesticides on other crops. 41. The existing agricultural extension service will be improved through reorganization of its structure, staff training, and provision of technical assistance, vehicles, village warehouses, and operating expenditures. The village warehouses will be built with farmers' assistance and will serve as centers for distributing inputs and for organizing marketing and other activi- ties. An intensive training and retraining program will be initiated shortly 0 with financing from the IDA PPF advance. The program will be supported through the provision of two training teams (including two internationally recruited training specialists) and the necessary transport and teaching materials. The financing of operating expenditures will allow an expansion in the total number of extension personnel as well as provision of vehicle operating costs and extension materials and supplies. 42. Seasonal production inputs (fertilizer and pesticides) and agricul- tural implements will be distributed to farmers through the extension system  - 13 - and will be partly financed through a seasonal credit program. All credit will be secured by cotton, and credit recovery will be effected at the time of seed cotton purchasing by SOCADA. 43. The applied research program, successfully initiated under bilateral financing, will be continued under the proposed project by an applied research and seed multiplication division within SOCADA. Given the good results al- ready obtained for improving cotton production, research on cotton will be consolidated, and the emphasis will be shifted towards food crops. The research division will have a cotton section at Bambari, a food-crop section located at Bossangoa, and a phytopathological section (for both cotton and food crops) at Bangui. Research activities will be supported under the project through the provision of technical assistance (three internationally recruited specialists and three Central African researchers), housing and office repairs, support personnel, vehicles and equipment, and fellowships. 44. Seed multiplication (of both cotton and food-crc-) seeds) will be consolidated under the project at four existing experimental stations. Seeds will be distributed and sold to farmers by the extension service. Seed multi- plication will be supported under the project through the provision of build- ings (including housing and seed-drying floors), vehicles, agricultural equip- ment and implements, and operating costs. 45. The promotion of animal traction offers scope for overcoming the pro- blem of labor shortages at peak periods and also for raising yields through a better timing and quality of cultivation. Under the project, an animal traction unit will be established within SOCADA, an existing animal traction center in Bossangoa will be supported, and a new center will be built in Kaga Bandoro. Furthermore, a credit fund for the provision of animals and equip- ment will be established. Since the program is aimed at introducing oxen cultivation in areas with limited experience in animal traction, only 350 pairs of oxen are targeted for purchase by interested farmers under the pro- posed project. 46. Feeder roads are rebuilt and maintained by SOCADA's brigades. Under the proposed project, SOCADA's roads department will be strengthened through the provision of equipment and vehicles, additional workshop accommodations, technical assistance, construction materials, training of local staff, and operating expenditures. SOCADA has confirmed that construction standards would be essentially similar to those already established under ongoing pro- grams. A tentative list of roads to be improved was agreed upon during appraisal. Furthermore, not later than July 1 of each year, SOCADA will pre- * pare and submit to IDA for prior review and comment an annual work program and related budget for feeder roads to be rehabilitated in the project area (Section 2.05(a) of the draft PA). Finally, the Government has confirmed that all equipment presently operated by SOCADA's road brigades will be made available for utilization under the project (Section 2.05(c) of the draft PA). 47. The rural water supply component aims at introducing suitable tech- niques for constructing safe, clean wells and at developing the existing small nucleus of staff of the MAE's rural civil works division into construction teams. It will include a preliminary feasibility study to find the best  - 14 - approach to well construction in the project area, construction of some 150 wells, the purchase and installation of 150 handpumps, technical assistance, and training. 48. The five remaining cotton ginneries will be reinforced under the project to reach a minimum capacity of 650 tons of seed cotton per week, through provision and installation of needed equipment. 49. Two thirds of SOCADA's agricultural transport fleet is at least ten years old and is often out of service being maintained. The existing trans- port maintenance facilities at Bossangoa and Bambari will be improved under the project through the construction of additional sheltered workshop build- ings and the provision of servicing and repair equipment. 50. A Project Monitoring and Evaluation Unit will be established within SOCADA to provide information from the field on progress toward project objec- tives and suggestions on constructive modifications needed during project implementation. In particular, the Unit will measure and evaluate the project's physical progress and effectiveness, examine topics such as farmers' reactions to the proposed technical packages and the effectiveness of support services, and collect and maintain detailed documentary data on the cotton zone's development constraints and potential. Under the proposed project, the Unit will be supported through provision of offices, vehicles, equipment, technical assistance (an internationally recruited monitoring and evaluation specialist), local staff salaries, and other operating costs. The Unit's establishment is a condition of Credit effectiveness (Section 5.01(e) of the draft DCA) and will be financed from the IDA PPF advance, to allow for train- ing of staff and completion of a baseline survey of the cotton zone prior to commencement of project activities. SOCADA has confirmed that a detailed work program for the unit will be submitted to IDA for review within six months of the specialist's arrival in Bangui (Section 2.06 of the draft PA), and that evaluation of data will be summarized in the project's quarterly and annual reports and in special reports to be submitted within three months after com- pletion of each field survey (Section 2.12(c) of the draft PA). 51. A Project Coordination Unit will be created within SOCADA's head- quarters in Bangui which will be responsible for overall coordination of project implementation. The Unit's establishment is a condition of Credit effectiveness (Section 5.01(e) of the draft DCA). An internationally re- cruited project coordinator will be provided under the project to head this unit, as will a small support staff, office and housing accommodations, a vehicle for field visits, and related operating costs. 52. About ten man-months of short-term consultancy services will also be provided under the project, to carry out specialized studies of problems arising during project implementation and to contribute to the preparation of a possible follow-up project. Project Implementation 53. SOCADA will be responsible for overall project supervision and moni- toring, including preparation of annual work programs, budgets, and progress  15 - reports. SOCADA will also implement all project components, except for the rural water supply component, which will be implemented by the MAE's rural water supply division. The Government and SOCADA will enter into a Convention which will determine SOCADA's tasks and responsibilities, including a clear definition of the flow of funds and arrangements for reimbursing SOCADA for its overhead costs incurred while providing financial, accounting and pro- curement services for the project. The draft Convention was reviewed during negotiations and its signing, on terms and conditions satisfactory to IDA, is a condition of effectiveness of the proposed IDA Credit (Section 5.01(a) of the draft DCA). SOCADA is to be managed by a competent Central African General Director, who will be the Project Manager. He will be assisted in * day-to-day supervision and financial control of project activities by a Project Coordinator. The Government has confirmed that for the duration of the project, experienced and qualified staff will be appointed to these two positions on terms and conditions of employment satisfactory to IDA (Section 2.08(b) of the draft PA). To avoid possible duplication of efforts, it is essential that the rzspective responsibilities of SOCADA and ACADOP be formally stated in a Protocole. The draft Protocole was reviewed during negotiations and its signing, on terms and conditions satisfactory to IDA, is a condition of effectiveness of the proposed IDA Credit (Section 5.01(c) of the draft DCA). 54. Reorganization of Extension Services. A serious handicap in the effectiveness of the extension service stems from the fact that all Central African field staff are civil servants of MAE, seconded to SOCADA and ACADOP on a full-time basis, whereas they are being paid directly under the national budget. This separation of salary payment responsibility (Government) from technical supervision over daily work (SOCADA, ACADOP) has proven difficult in two ways. Firstly, frequent delays in the payment of salaries by MAE under- mine staff morale and cause disruption of work. Secondly, the Ministry's practice of reassigning its staff without prior consultation with the imple- menting agency concerned has blurred the lines of authority and has, at times, created disciplinary problems. It is therefore essential to establish a unified structure of the extension service under the full technical, admini- strative and financial control of SOCADA by transferring all MAE's seconded staff to SOCADA's regular labor force. This transfer is already well under- way, but since it must be completed before project inception, to avoid undue delays in starting field activities, it is a condition of effectiveness of the proposed IDA Credit (Section 5.01(d) of the draft DCA). 55. As described in para. 38, project activities will cover only selected areas of the cotton zone in order to avoid overextending SOCADA logistically and financially. However, in order to facilitate the eventual integration of the rest of the cotton zone into a possible follow-up project, SOCADA will continue to provide limited support services to the remaining cotton growing areas. SOCADA has confirmed that, during the project period, (a) no new in- vestments will be undertaken outside the project area without prior approval by IDA; (b) support services provided by SOCADA in these areas will remain at current (1982/83) levels, both in terms of extension coverage and input dis- tribution; and (c) SOCADA will not declare any dividend or distribution of profits (Section 3.04 of the draft PA).  - 16 - 560 Input Subsidy Policy and Cotton Pricing Policy. At present, SOCADA provides cotton farmers with fertilizer and insecticides at prices which are fixed annually by Government decree and have been in the past substantially lower than the economic value of these inputs. In the 1982/83 growing season, the subsidy element amounted to 72 percent on fertilizer and 86 percent on insecticides, giving a weighted average subsidy level of about 80 percent of the cost of these inputs. This subsidy policy has been one of the causes of SOCADA's substantial operating deficit (para. 32). Therefore, over the four- year project period, the Government will reduce subsidies on seasonal inputs for cotton from about 80 percent to about 40 percent by the end of the project (Section 3.06(a) of the draft DCA), with a view to phasing them out totally over a period of about eight years. The Government and the cofinanciers will review annually the subsidy question. At the same time, the producer price of seed cotton will be progressively increased, in coordination with projected yield increases, in such a way as to ensure that farmer returns will increase sufficiently to provide incentives to cotton producers (Section 3.06(a) of the draft DCA). 57. Interest Rate Policy. The Government's policy has heretofore been that farmers should not be charged interest on credit for seasonal inputs and farm equipment. This policy has resulted in a considerable financial burden on SOCADA, which relies on short-term notes with local banks to pre-finance these inputs. The financing of inputs by the external cofinanciers will be used under the project as a vehicle for introducing a change in this policy of interest-free credit. Seasonal inputs (fertilizer and insecticides) will be provided to farmers on short-term credit; SOCADA will introduce a mark-up of 9 percent on the prices to farmers, equivalent to an annual rate of interest of about 13.5 percent. Ox-drawn equipment will be supplied to those farmers owning one pair of oxen on medium-term credit of up to 100 percent of the cost of this equipment, for three years, and carrying an interest rate of 9 percent p.a. (Section 2.07(a) of the draft PA). Since the domestic inflation rate is expected to remain about 13 percent p.a. during the project period, there will still be a subsidy element in the interest rate applied on medium-term credit. However, the 9 percent rate represents a significant improvement over the present policy, and the subsidy element is justified in the context of the Government's efforts to promote animal traction. 58. Staffing and Technical Assistance. The lack of experienced local staff is a major constraint to the implementation of agricultural development projects in the CAR. The Government is aware of this problem and agrees that the critical shortage of technical and middle-management personnel can only be alleviated in the short term by technical assistance. To ensure the success- ful implementation of the proposed project, a number of existing and new key posts will be filled with internationally recruited specialists, for a total of 74 man-years of resident staff. A total of 116 man-months of short-term consultants, including 25 man-months of a hydrologist (for the village water supply component) and 10 man-months (for special studies and the preparation of a possible follow-up project) will also be provided under the project. All consultants and experts will have qualifications, experience, and terms and conditions of employment satisfactory to IDA (Section 2.03(a) of the draft PA). One of the major obligations of the resident expatriate staff will be to  - 17 - provide the in-service training of their Central African deputies, to facili- tate an eventual transfer of responsibility. The signing of satisfactory contracts for the project coordinator, the monitoring and evaluation special- ist, and the director of SOCADA's Production Department is a condition of effectiveness of the proposed IDA Credit (Section 6.01(f) of the draft DCA). Except for local staff for the Project Monitoring and Evaluatic- Unit to be established as a condition of Credit effectiveness, all counterpart staff for the posts foreseen under the project are already employed either by SOCADA or by the MAE. The Government has provided assurances that it will designate all required local staff as official counterparts to the expatriate experts, with qualifications, experience, and terms and conditions of employment acceptable to IDA (Section 2.03(b) of the draft PA). Project Costs 59. The total project cost is US$29.7 million equivilent, of which the foreign-exchange component is 49 percent (US$14.6 millioi: equivalent) and cus- toms duties and identifiable taxes are 7 percent (US$2.0 million equiva- lent). In addition to the total project cost, SOCADA will have other, non- incremental costs over the project period, including (a) US$4.2 million equi- valent for its own financial rehabilitation, (b) US$11.4 million equivalent for non-incremental inputs, and (c) US$5.9 million equivalent for non-incre- mental salaries and operating costs. Thus, the total financing required for SOCADA's program over the four-year period, including incremental (project) costs as well as non-incremental costs, is estimated at US$51.2 million equivalent, with a foreign exchange component of 46 percent (US$23.6 million equivalent) and with customs duties and identifiable taxes of 5 percent (US$2.7 million equivalent). Cost estimates are based on end-1982 prices and include physical contingencies of 10 percent of all costs except local salaries, technical assistance, and consultants' services. Local price contingencies are estimated at the rate of 13 percent per year through 1986. Price contingencies for foreign costs are estimated at 8 percent for 1983, 7.5 percent for 1984, 7 percent for 1985, and 6 percent for 1986. Total contin- gencies are US$13.8 million equivalent, or 28 percent of the total base cost of the program, net of taxes. Price contingencies are US$11.7 million equiva- lent, or 24 percent of the total base cost of the program, net of taxes. 60. Given the country's present difficult budgetary situation and balance-of-payments situation, and in order to support the major policy reforms to be undertaken under the proposed project, foreign sources, includ- ing IDA, will finance a large proportion of the total project cost, as well as part of the non-incremental costs of SOCADA's four-year program. Total external financing will amount to US$32.0 million equivalent, or 66 percent of the net-of-tax total cost of SOCADA's four-year program (US$48.5 million equivalent). Foreign sources, including IDA, will provide US$22.2 million equivalent, or 80 percent of the total project costs net of taxes (US$27.7 million equivalent). The financing plan shown in Annex IV was finalized at the cofinanciers' meeting, and FAC, FED, OCCE, and BADEA have confirmed their contributions as shown. The signing and fulfillment of effectiveness conditions of the agreements with the other cofinanciers are conditions of effectiveness of the proposed IDA Credit (Section 5.01(b) of the draft DCA).  - 18 - 61. The proposed IDA Credit of US$10.4 million equivalent will finance 23 percent of the net-of-tax total cost of the project and 21 percent of the net- of-tax total cost of SOCADA's four-year program (44 percent of foreign costs). The proposed Credit will be used to finance civil works, vehicles, equipment, technical assistance and consulting services, and operating costs (of vehicles) for the following project components: (i) training of the agricultural extension service; (ii) the seed multiplication program; (iii) the project monitoring and evaluation system; (iv) the project coordination unit; and (v) specialized studies and preparation of a possible follow-up project. The proposed Credit will also be used to finance the incremental seasonal inputs (fertilizer, pesticides) and about 37 percent of the non- incremental inputs needed by SOCADA during the four-year period. Both incremental and non-incremental inputs will be financed on a declining basis over the project period. 62. SOCADA will contribute US$7.0 million equivalent (14 percent of the total program cost), representing mainly local staff salaries. Farmers will provide US$5.8 million equivalent (11 percent), representing their contribu- tion for improved seeds and seasonal inputs. The CAR Government will con- tribute US$6.4 million equivalent (13 percent), representing salaries of local personnel and operating costs (US$2.8 million equivalent) and foregone taxes (US$2.7 million equivalent). The non-tax contribution of the Government represents 6 percent of the net-of-tax total cost of SOCADA's four-year program. 63. Because the Government may find it difficult, in its present finan- cial situation, to prefinance expenditures eligible for reimbursement from the IDA Credit and from other cofinanciers, a Special Account of US$1.6 million, advanced from the IDA Credit and by other cofinanciers, will be established in a local bank acceptable to IDA (Section 2.03 of the draft DCA). IDA's share in the Special Account will amount to US$0.1 million, to be deposited in a separate sub-account of the Special Account, and managed so as to clearly identify the use of the IDA-advanced funds. The Special Account's funds will be used for the local procurement of civil works, building materials, spare parts, small equipment, local salaries, and other project operating costs. The remaining items (seasonal inputs, capital costs, technical assistance, and consultants' services) will be financed by the cofinanciers in amounts pro- rata to their respective shares of financing by payments directly to the sup- pliers. The figure of US$1.6 million corresponds to an estimated six months of eligible expenditures. SOCADA will draw from the Special Account to replenish a Project Account in a local commercial bank acceptable to IDA (Section 3.02(d) of the draft DCA); the Government's own contribution to the project would also be deposited in the Project Account. The establishment of the Special Account and the Project Account (with an initial Government deposit of CFAF 120 million) are conditions of Credit effectiveness (Section 5.01(g) of the draft DCA).  - 19 - Procurement 64. Contracts for the minor building construction and renovation to be done under the project will be awarded on the basis of local competitive bidding procedures satisfactory to IDA. Vehicles, farm machinery, office equipment, and seasonal inputs will be procured by international competitive bidding in li,ie with IDA guidelines. Contracts for 15.3 man-years of tech- nical assistance, at an average cost of US$7,550 per man-month, and 24 man- months of consultants' services, averaging about US$10,340 per man-month (including salaries, travel expenses, allowances, and overheads, but not including contingencies), will be awarded in accordance with Bank Group Guide- lines. The award of contracts for project components not financed by IDA will follow the procurement procedures of the respective donors. Disbursement and Reporting 65. The propos-i IDA Credit of US$10.4 million will be disbursed over four and a half years and will cover, for those components listed in para. 61: (i) 66 percent of the contract costs for civil works (US$0.09 million); (ii) 100 percent of the contract costs for vehicles and equipment (US$0.53 million); (iii) 85 percent of operating costs (US$0.84 million); (iv) 100 percent of the costs for technical assistance and consultants' services (US$1.74 million); (v) 50 percent of the contract costs of seasonal inputs (US$7.10 million); (vi) refunding of 100 percent of the withdrawn amount of the PPF advance (US$1.00 million); and (vii) an initial advance of US$0.10 million to the Special Account. Disbursement for vehicles, equipment, tech- nical assistance, consultants' services and seasonal inputs will be against full documentation. Disbursements for civil works, operating costs and local salaries will be against certified statements of expenditures. Full support- ing documentation, showing costs incurred by category, will be retained for review by independent auditors and IDA supervision missions. SOCADA will keep records consistent with sound accounting practices and adequate to reflect both the overall financial situation of the company and the detailed costs of operating the project components (Section 4.01(a) of the draft PA). A condi- tion of Credit effectiveness is submission by SOCADA of its audited 1981/82 financial statements (Section 6.01(h) of the draft DCA). During the project period, SOCADA's accounts will be audited by independent auditors acceptable to IDA (Section 4.02 of the draft PA). SOCADA will submit annual and quar- terly progress reports to IDA (Section 2.12(b)(iii) of the draft PA) and a project completion report within six months after the closing date (Section 2.12(e) of the draft PA). Project Benefits and Justification 66. The project's direct economic benefits will be the expected increase in the production of cotton and food crops in the project area. These bene- fits will accrue to some 61,000 farm families, most of them presently in the absolute poverty group, representing 20 percent of the CAR's rural popula- tion. The project will represent a significant beginning in the reversal of past trends of declining agricultural production and rural incomes in the cotton zone. The expected indirect benefits through institutional reforms are at least equally important: the proposed project will introduce the major  - 20 - operational and financial improvements needed to transform SOCADA into an effective rural development agency capable of gradually expanding its activi- ties to the whole cotton zone. The applied research and seed multiplication components will provide the basis for further increases in productivity. Finally, the water supply component will provide safe, clean water to rural areas, reduce time spent fetching water, and generate significant long-term health benefits. 67. The project's economic rate of return is estimated at 22 percent, based on a comparison of the expected directly quantifiable incremental benefits and the economic costs of project activities, including the applied research and the training components, the benefits of which are difficult to quantify (and therefore not included in the benefit stream). If the costs of the applied research and training components are excluded from the economic costs, the economic rate of return rises to about 32 percent. The project's economic viability is sensitive to variations in costs and benefits. For instance, a 20 percent rise in costs would reduce the economic rate of return to about 12 percent. A simultaneous 10 percent rise in costs and a one-year lag in benefits would yield an economic rate of return of about 10 percent. Risks 68. There are no major technological risks under the proposed project; the proposed production packages for cotton and the improved seed varieties for food crops have been proven in the CAR and in other ecologically similar West African countries, including neighboring Cameroon. Sociological risks are relatively low since beneficiary farmers have been selected because of their demonstrated receptivity to the recommended technical packages. The major risk is the presently limited experience and capabilities of SOCADA's extension services. The project is designed, however, specifically to address this problem, mainly through the provision of training and retraining, tech- nical assistance, and logistical support. Another significant risk is that SOCADA might become financially overextended by trying to implement the pro- posed agricultural development program. Measures have already been taken to streamline and improve the efficiency of the agency's industrial and commer- cial operations. In addition, the Government and SOCADA have agreed not to declare any dividend or distribution of profit during the project period, to limit the scope of SOCADA's activities outside the project area, and to gradually phase out the subsidies on seasonal inputs. A third risk is that production inputs might not be acquired and distributed in a timely fashion. The establishment of the Special Account, financed by advances from the cofinanciers, will reduce this risk by minimizing SOCADA's cash-flow pro- blem. Finally, in view of the relative returns on the various crops, which at present favor food crops, there is a risk that farmers may choose to increase their production of foodcrops at the expense of cotton. It is unlikely, however, that relative returns to food crops will continue to be better than that to cotton, since both the size of the domestic market and export possibi- lities for food crops are quite limited. Furthermore, the progressive increase in the producer price of seed cotton should provide an adequate incentive for cotton production.  - 21 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 69. The draft DCA between the Central African Republic and the Associa- tion, the draft Project Agreement between SOCADA 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 to the Execu- tive Directors separately. 70. Special conditions of the project are listed in Section III of Annex III. Special Conditions of Credit effectiveness would be (a) the estab- lishment of the Project Monitoring and Evaluation Unit and the Project Coordination Unit (paras. 50 and 51); (b) the signature of a satisfactory Convention between the Government and SOCADA (para. 53); (c) the signature of a satisfactory Protocole between SOCADA and ACADOP (para. 53); (d) the trans- fer of all the MAE's extension staff in the cotton zone to SOCADA's regular labor force (para. 54); (e) the signature of a satisfactory contract(s) for the project coordinator, the monitoring and evaluation specialist, and the director of the production department (para. 58); (f) the signing and fulfill- ment of effectiveness conditions of the grant and loan agreements with the other cofinanciers (para. 60); (g) the establishment of a Special Account and a Project Account (with an initial deposit by the Government of CFAF 120 million) (para. 63); and (h) the submission by SOCADA of its audited 1981/82 financial statements (para. 65). 71. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 72. I recommend that the Executive Directors approve the proposed Development Credit. A.W. Clausen President Washington, D.C. May 11, 1983  -22- Page 1 of 6 CENTRAL AFRICAN REP. - SOCIAL INDICATORS DATA SHEET CENTRAL AFRICAN REP. REFERENCE GROUPS (WEIGHTED AVE GES AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE)- TOTAL 623.0 MOST RECENT LOW INCOME MIDDLE INCOME AGRICULTURAL 49.3 1960 lb 1970 /b ESTIMATE lb AFRICA SOUTH OF SAPARA AFRICA SOUTH OF SAHARA GNP PER CAPITA (US$) 100.0 150.0 300.0 250.8 1053.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 29.9 61.1 45.7 66.5 610.1 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUSANDS) 1538.0 1857.0 2294.0 URBAN POPULATION (PERCENT OF TOTAL) 22.7 31.1 40.9 17.8 28.3 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 3.9 STATIONARY POPULATION (MILLIONS) 11.4 YEAR STATIONARY POPULATION IS REACHED 2130 POPULATION DENSITY PER SQ. KM. 2.5 3.0 3.6 27.7 54.7 PER SQ. KM. AGRICULTURAL LAND 32.3 38.4 45.5 86.7 129.9 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 38.7 39.6 40.9 44.8 46.0 15-64 YRS. 57.9 56.7 55.3 52.3 51.1 65 YRS. AND ABOVE 3.5 3.7 3.9 2.9 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 1.0 1.9 2.1 2.7 2.8 URBAN 4.5 5.1 4.8 6.2 5.2 CRUDE BIRTH RATE (PER THOUSAND) 42.6 45.0 44.4 47.3 47.2 CRUDE DEATH BATE (PER THOUSAND) 27.8 24.8 20.8 19.5 15.7 GROSS REPRODUCTION RATE 2.6 2.8 2.9 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) 100.0 100.0 101.0 88.7 90.7 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 94.2 93.3 91.8/c 90.2 93.9 PROTEINS (GRAMS PER DAY) 40.9 41.5 41.4t/c 53.1 54.8 OF WHICH ANIMAL AND PULSE 9.7 10.4 10.57T 18.4 17.0 CHILD (AGES 1-4) MORTALITY RATE 45.8 39.3 32.3 26.7 23.9 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 35.7 39.4 43.8 45.6 51.0 INFANT MORTALITY RATE (PER THOUSAND) 194.7 173.0 148.5 129.9 118.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 16.0/d 23.9 URBAN .. .. 40. 0T 54.9 RURAL .. .. 5.0T 18.5 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 72.0 .. 25.8 URBAN .. 64.0 .. 63.1 RURAL .. 96.0 .. 20.2 POPULATION PER PHYSICIAN 49612.9 44214.3 20273.6/c 32097.3 14185.2 POPULATION PER NURSING tERSON 3276.2 1605.0 1543.87E 3264.6 2213.2 POPULATION PER HOSPITAL BED TOTAL 814.2 535.5 720.4/c 1225.0 1036.4 4 URBAN 697.7 627.9 609.6T7 249.5 430.8 RURAL 856.1 512.1 897.3/c 1712.1 3678.6 ADMISSIONS PER HOSPITAL BED .. 21.9 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 3.9 .. URBAN .. .. RURAL .. .. AVERAGE NUMBER OF PERSONS PER ROOM TOTAL 3.4 .. URBAN .. .. .. RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. .. URBAN .. .. .. RURAL .. .. ..  ANNEX I - 23 - Page 2 of 6 CENTRAL AFRICAN REP. - SOCIAL INDICATORS DATA SHEET CENTRAL AFRICAN REP. REFERENCE GROUPS (WEIGNTED AVE%G?S - MOST RECENT ESTIMATE) MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 32.0 65.0 77.0/c 63.2 83.3 MALE 53.0 91.0 10o.07i 72.7 96.1 FEMALE 12.0 44.0 54.0/c 50.3 80.4 SECONDARY: TOTAL 1.0 4.0 10.0/c 10.2 15.3 MALE 2.0 7.0 16.0/c 13.2 19.4 FEMALE 0.3 2.0 4.07E 6.6 11.3 VOCATIONAL ENROL. (X OF SECONDARY) 10.0 12.1 7.7/f 7.9 4.7 PUPIL-TEACHER RATIO PRIMARY 58.1 63.7 64.7/c 47.4 38.6 SECONDARY 29.7 21.5 .. 26.2 23.4 ADULT LITERACY RATE (PERCENT) 7.4/e .. 38.5 34.0 35.6 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 1.4 3.3 5.2/g 3.0 31.9 RADIO RECEIVERS PER THOUSAND POPULATION 7.8 24.8 49.0 34.8 71.8 TV RECEIVERS PER THOUSAND POPULATION .. .. 0.1 1.7 17.9 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 0.3 0.3 .. 2.9 19.1 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.3 0.3 .. 1.1 0.6 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 928.5 1070.8 1249.7 FEMALE (PERCENT) 49.4 49.0 48.6 34.1 36.5 AGRICULTURE (PERCENT) 94.0 91.0 88.0 78.4 56.5 INDUSTRY (PERCENT) 2.0 3.0 4.0 9.2 17.7 PARTICIPATION RATE (PERCENT) TOTAL 60.4 57.7 54.5 41.4 37.0 MALE 63.2 61.2 58.5 53.9 46.9 FEMALE 57.7 54.4 50.8 29.1 27.2 ECONOMIC DEPENDENCY RATIO 0.7 0.8 0.8 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 (USS PER CAPITA) URRAN .. .. .. 134.3 507.0 RURAL .. .. 49.0 82.9 200.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) U RBAN .. .. .. 96.4 523.9 RIURAL .. .. 91.0 60.4 203.6 ESTIMATED POPULATION BELOW POVERTY INCOME LEVEL (PERCENT) URBAN .. .. .. 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 Recent Estimate, between 1978 and 1980. /c 1977; /d 1976; /e 1962; /f 1975; /g 1974. May, 1982  - 24 - ANNEX I DEFUITMS OFSOCIA IJWIATGMSPage 3 of 6 Noe:Altheogh the data are dla fern sorre gener-lly ledgd the ma tnothaitet- and relIable, it eold aln he eard that thay my sat he inter- natiolly -onarble hbtnos of the l1nk of stadardized defloitoa ead -rPt. nee by different rntr-i-e in relleotiag tha data. The data r, a the1l..ns.. onfol to derribe orders of saaittda. indiate treds, and thareterie terrain major digfereoen hetwea -taneie.. The orf-r.o grapo are (1) the rar.. tooty groop of the sabje.t -ton y ned (2)A a.reetry genop with sm a hIgher average Inom than the ro....ty geap of the nobjer -tooty (orPt for 'High boos oil topoct-rs g-roo abate "laddie trot ilerh Attita ed Middle inst' It hbase bemoan of stranger aooo-olarl tfrlta).It th rfrot groop date the avrgen are ppolatior weighted erlsth-oi ara for oath todit-to ad b-a only ah.r majority at the royrle lafop han dare fee that irdloator. Sit.o the toaoeof r-ntties asg the indl-too dapandn on the -srnibnliiy at dare erd Ia - ro oIfore.. roaior sate he errited Ir coloring average of ore idio.tta to anothe. Thtaoaee-ageaa onl..y osata1 is ooW.atig the sola at ore irdoto- or a line song the --etY and erf-cn- georpe. ARUa (tho-rd aq.la.) Proain e nspitoI god - tal, -. ote ,de tota - Papalation (tata.1 Ttota - TotL. notaeeo -optiaing lard area and irard eaters; 1979 date. arha. ad totl1) divided by rbatt -nstiiw aanha- ot haspltAl bade Agcttrltooo1 - tatineta of ngrrol-r1 are med rerarcorilY or PgtmnetlY avalable In gpblit sod pri-sta generl. ead aparialld hespirgi an re- fI or-P.g. pata.maht and kirohet gardn or to lie fallow; 1979 d.ta. hahilitatilan t Hnaca . Malen -t asetbIn.hants permnetly stff td by at leas.t ore phyaoia. etrblfh-snts providing prizolpally rosta- G7P pf CAPITA (Url) GiNP Par .apit. esLitmtt at toren mothe prite, cl- di,ol tore eta earisolated. eral eepnal.-hevat ireldt health roIte hy o-tnoris-thod an Wocl Hark Atlas (1970-H0 basin); 1960. aed iedloa -enter sot p - tar ly crafted by a plsygicin (hot by OH n 99dta, medial asistant. nam, nidife. err.) ruhth fttar in-pertrioo.t datian end pe-ite a aireId range or nadital faLlitilat. Poe ntatin- tENERY CONSUMPTIONt PER CAPITA - dA-a -onoetin- of tas -olenry (ora "..I pocyass ocha hangis.lo inotle Wm.N pinripal/ga-erl hesyltala. and ilgotto. pecrolen- naool n hY'dco-, -1-ne -ad goachernl ai- and I.oat heapiela. 1o-a at cmal heapitel and edlo-I anW aent rLtoity) it "il.logm oftoi qivaetparta.Plea; 1960, 1970. and 1979 oraorr Spat1.ini d hospitals ore itIrdd only nader total. dora. Atmarn oEr Haspital Had - Tota Iartrc of adnisrion to or distherges eros hrepirals tinted by the toter of bedr. POtULATIONl ADM VITAL STATISTICS Tota ?Popolartar Mid-Yea (thooseodo) - An of Jnly 1; 1960. 1970,. ad 1990 HOUSING data. A-eree oe f Hanehei leecre. per her-ehid) - total. ora, eatmea- Urhan tao -to (peo..nt of total - HR.ir of orhen t.total popolro;Ahrael aaano onpo rllolssesaelvn qnert... difeet ainiri-r of othe nea may offoot tosacabilitry of dat and their male -I.. A boacter or lodger may ormay ret he inoldd In arg oto.tLIet; 1960, 1970. ard 199H data, the h=ahald for atatistlaI pocporos. Patireor rlai Averag rae ofot-o ear con-toa, rohar Ant meal - sweagenon Popoat.la ir -yrao-Z2H00- -froteppoart projattlo. ar bated ot 19tH herofprsn peMoni l orban,Tnd roraI otoopind -oetio-aI trfe1 popolarlor by aE and sax ondthir maaItyadlferiiyrts dealliogs. repetiely 1iogn soclde non-parmanat stotoesed Projerrio paaetr t.Ll fon mctallty loree -tolpt of three laval arsn-oropied parts, leg life e.rper..toy at bioth i-ro...alng with rntnPar taplt. In=o lto..n to lctt t1111Y feeo-t of dwelllga -. total, oche, and total - leral, and famalelfe npeomaty nrohlierg or 77.5 yrarr. The per.- Cor-tlrn-r d-1e.wlgr dcit alotriotep in ljinig qoatters as Peee...t.ge rteaft farrilry .rr 1as hav- thre koala a-onirt deolro Ia of total, oche, and errl1 dnallirgn re-p-ti-sly. fsrtIlltyrtrIng-to teresa level end pate foellY pleating ptrttenanDUATIO E.t tob tyin th-o . iargrad -t of there ritet. nain of Zmartty tliTi an.d fertility treoda for I. prjttion porpore. Ad,aidttlleeHro irat ......ary oooaro-Io taio.ooy popolotio thaco In no growh oioe Primar soool -_ril, solo.end fooln - Cents itta.1 male And femal nabIrth rote It eqo1 to the death eie.L and nlno thn age It-oo-- to- erlm of at1 ages at the primacy leve an parootoges o at.repe.tel eaton.. torsan. Thin Is atbiovd orly at ro fertiiy -otan dat..n to Primary athos-aga pepItineots; -o 11y intlod.n ohildoa aged 6-11 rho coLata=r tor of one rat aprsdottoa rate, oboe oath genertion Y-ao hot adjsred for dfflfore lengths of primary adoration; foe of wes rP,toter itneif a-a-ly, The reLotmacy ppoeto so wonli roa ttthlr erra odratian o-rolet may -ared 199 garrett rstisoted or the hents of the proJeorodthrtenit of the pogolatior store aaepoplnore -oo or boe the offioial hoot aga- in tin yea 2g and the tote of decline of fertility rate to ceplate- Hoodr tbr 1 oa, solo ad tamal - lamentd 00 above; ..at.day so leve. od-tiattosroi-aaa l1-t tsar years of approved primary iratotlost.; yea s-tatloray popolarto Ia reetbhd - The year wha tsetionary pogoletiot po-tdes gentral1, o-tionnI, or tathettrinn instrotions for Ppapla aloe sillbo-rard' osoly of 12 to tl Ye-r of age;toerpgod-nt taces r generaly Poprlorior Deaity etlded. Par ag. a. - Mld-y-a popoIatlto pe sqoaro kiloseter (lii he.ttora) of rotationa- nrisoe(rectat of o....rdnty) - Votationa iatlet.tiors .totni aa;1960. 1970 ond1979 dat, nioetehttl indotltol. or other pog-s hith operate indeped- Pe s. b.arrior ad- Coapsrri aa abov for agiroltocti ladtlyora deporteanr of a_ondaryintrto, ot1y; 1960. 9hnd17 deto, Prol---ote ate-I rri-yro..ad arnay-Ttal adenta oncolld In PorinrtaAgeleoorce(porer Childot- (f-id y-etr). alngae(15- primary nsd saeayl dlldod by otec at -eaber Lo the hiyar) and retired (65 year and ove) an pn-tanrngo of nld-yeor popo- toersponding e-al.. intLot; 1960, 1970, ted 1980 data. Molt ltreiarvoora (geerant) - lterate adr1ta (able to toad and wite) Po Itolotl Growth ar (tlporet, oo Ao,-Is growth rota of total aId- nnporatrnof( toalnilt popolattor god 15 year arM vr yopogrtinto for 950-6g. 190-,nd 1970-80. "Po'tinto tGMt rote (Peroat) - chr- a a groeth tarot of oche popo- CHfiONSPTION lot-oafor 195-0, 1960-70, eod 1970-go." PnsangRI Corn fore thottad poosatno P- P eg-r tact -opit ae Clode Birth rote lper theostd) - a-ol Itva bIrths per rho.sod of nld-yeo.ao atn lass. = c-:tha eigh pe ..n ontldes asbola-t, heorre ned popolation; 1960, 1970, aed 19H8 dote. .itnyvaies clr,dn Dnth Rote (per thoonnd) - Asoo. drohe Per the..tand of aid-year Radio eRre.lvec (roltehoonad popolattas) - All types of -ativar far odin ppoyrat=os;1960, 1970, net loO data. broadtaots toge.era Irpblit per tho~Aoed of papolatiar; eatlde a-- Irot rprdoo to ro- AvataaerAn of doogrer a ona ill b.oe In 1It.r.. enrrrsI ore aad inY-t sh..rginto of rodto hte ormn rprdooriv period if she -rp-rieoer Prenr aga-paifir fec- setn was inefforbt; data fo Ierant yaas soy eat. hotsyaphi tlote ellIry rates;-osol fiv-yea -voget erdiag In 1960, 1970, and 1980. mat -rntrin boise liraning. F nilo Pizning - do roto A... dosa rhtsd) - A-na rater of otteptor TVgterg (per the..t.nd popriotion) - TVcalvn for braedoa.st to ofhrh-ors de-ire -re ntspito of nat ionalfany planIng Ptoea ger-e plitt Per thnreand -prn 1o;enidet snitoodTV rIra-ear realyclaais -00cr petet of srind wmn Per-onege of married in -ntrts and Is y-ao na registratIon of TV sans ea In affar. masof htl d-barig g (1-6yas bh o iribtoo..tro davir.n intlwea Clrtalation (ear theoan gaPsli2E) ,- ih-n the a-erge cIo- all mariod w-s In ta- age gxosp. oss no dal eea inaet renpeper. deined te a periadinal rsli-otloe devoted primarily re ro-ordig ganara ses It Is toaideed F"Ol AND NtUTRITION to h "daily' if it nppearr steas f no tIns a week, 10d- sf Food Prodoorio Per C-pita 1969-7l-1 ) - nero pttpita en 1a CInem A-neal Adttesdanoa r Capita per Tare - Hared on the raber of preatonof .11 foo --aidttis.. P_ndotias a-ldes saed ant feed ead likots sod _ing tha ya,i-olding dnissia.s to dlee-in nine toosleada- year basin. Co.-dlel..oova primary gtods (e.g. sogartan eat mail ia _tonted of gne) whiob are adilh and o.orat.i rorciest (a.g. toffee and te a artlodad) AgHcgalgt prodnotion of oat h -torty Is barod on LArOR tHREr onrlnalaveageproate potto veghtn; 1961-65, 1970 and 1980 dare, Total Lahoc Porte (tha....rdo) - frorosllly ettv- partoso, isrlding Pe atasrp;ly of rlar.ar (peroet of orlceaia-ts) 0- Carpoted fleo aenet fotte art.. nespltyad hot -nloding hotneivet, stadeitt, at. eror,gy eovne of ren ferd sapplies avilable Is -strey per oeplea .toeing gapaltion of oil ages. afLiintl- In antos tonetries are Petday. Aral,ble sapplio tapOa d-net~ pcodtttte., lapecsloo so. t toqarelabI; 1960. 2970 end 19ff dare. e-prrteno ohneg. Intrt. Ore N rppli-o -.lde arinal toe. F-ed,.Pma. frer-t P-1ral labso foore An p-ntterga at total labar fore. q-aein ord It food poeressieg, and looser In Itadtribatto.Hyta gtoeo t -i labor fort --In farmIng, foeratry, hentlng and setorericare by PAt haa..d or physlloltl eds for norma -ttt tib a aoteog of total Lhec forte; 1960. 1970 and 19t0 dare drM tihat h r=ridorlog ovoratltaeao body eightr., ag Irdonrey Iptlerso) - tahoe fort In nirtg noatot fn-ntantoi.g and ntdlri. oriont o~f popaletol-r,no alloing 10l ya r-o rarer at ad le_teiiry otec and gas at peoroeag o. f rtal Ether forte; hooteheld loya; 1I6-6. 1971 and 1977 data. 1060. 1970 a'td1980 data. PnroarPt.n noyply ofIoon(or Ee day) - Pro tab -tore of per t-pita P:tl :at L.Ht ipeort) - tota.1 sale, and fesel - Pertleiprtt o ret sapply of food pe dy. tIenpply of food inrn df d. abate. Ha- atrivity corer are peted no total, male, and fEmale labor fatones qotro=tnr for oil -ootrtt otbaliohed by USDA0 providefor rArls poroaneges of total, sole and female popolotl..of at all eeteapsorivly; al.ooototf 60 g-s of total poenin Per day rd 70 grsof onina ned 1960. 1970. ned l9A0 data. Those te hs...d or ILO's peelairaptlan rates Poise pretmix, of wlh10 icaa ohead he anImal protror. Thon-aa- ref Laring ege-r -.. arotore of the popaleta and long elan toned. A ondrarn 1Iow thastihre..otf 7 lgc of t.tto 1a to-ton-da23gEln of fererintIa---ro feomrationlstrn triani protaio a at avErag for the sorld, propotaf by tAO to the Third ftreit flepedrt-y Ratio -ROnLo of papolarto andat 15 end 65 ardra World Food larvy; 1961-65 19 nd1977 dat.L. dto the total blao fot.- Pero.Pt.yr oco- IatoplyfieaIl andrat- Prrin rPpply of fooddo ctvd ronaratl nd Prio inge e day; 191-5 197 ed 9-idta-d99by2BITfliIO Chil (aas -C)loahrt reronn)-Aosldsb o hradI Pa-teetag or PrIvate born (both In oath and fkrd)-ttevdb rihet age gerop 14 Yea.n, to ohildeor Ir thio age groop;foe soa develping ret 5 p-rtent rirhese 2H pero-t. peoeet 70 peroert. and goarest 40 perret trier dtra derived fton lif t rbles; 1960. 1970 and 1980 data, of hesonha1da. HEALTH POVERTY TARITY GROUPS Life Epretorcy at B itrh (year) - Average tote at year of life -mistig The frlos.ing at-tsta ArercL ppotas re of paveetylva, ar blirth; 1960. 1070 and 198t data. ead ahoold be Itatrprotad irh - aaderable atio.. Irf_aneM lt.elity late fore thonrd) - da-l deaths of isfants nda- ore yea Etiated Alesltr Pert Intan- keel (0591 ec tagira); -laba and total! o:f age e, htadlv brh;.1960. 1970 so If dare bmL.r Pe."t icslvlIn thee inslevl hals, hi a nisint darn SoHt. aerteos f an io - tial sene ea tor1 - oN- rorrltineallyodeqata diIet . gins ..setla1 so-toed raqairesne in eat her of peple (total, arha, ant cora) trthcesahrots ta safe ef.rdabln. sore supply (-inadee treated a -rae atr or ostoattd bat srtoaiemo ted raomtedRltIeP-vee las keel ff( a egt)-ahe a o -i" srratasthat f ro protatrd he-rhles. poinge. asd asiar u) s Csa alr getry Ioo laa in oe-ehld oIaeaeprape perrarages of thet eperl popolaits. in on aehn are a pob1o personal Isoa at the. tstrey. Urban laaI Is darlwd fran the total feontrin or sdposIt bted ret mar that 200S eaters fr a henn may he level with adjemast tee higher nest at lIving he sha ara.. -otad.red no bring wLehir resnble --ne at that h-se 1 ToralSea Etat-mad Peesit1o, salon A soize Penn Isas = wi fstael-ar reaonble atn . mai .d Imply etet the h--ssife or -ia- at the heeheld adMea Par.tne atppIs_a fr sa 1sa) shear "bsLe da ear here te sypd A dplaptaprtoaata peer at the day Is fteehing the ee nA-e Is Dotr ie.-e (Ma-at of poesntLIn) - teta,Ischa, end -ntl Mater. at peagin (total, aehen ad -rea) seod by estee diepee an per-alaga or theft osopativ PpeplsetLa. Hatter dlepee may isinda the nalintian s-r diepeaL, with or iteilt tasra,of ba en-nt art w=nI-eter by water-hers syst- e the -e at pie gria and alt- P2ea1atins roe PEalal - PPagotirla dIilded by tea g-stfiis phyal- Bnnasd enia tiar Malaise rins qehif ldfa matinl. enha at nelveesity Iawa. aonemi tA-lysie and Prejatian Dapeetst ".eaai.. ea ,MranePaea - PaeLattee dIvIde hr 'sbae at gpating Map 1362  - 25 ANNEX I Page 4 of 6 ECONOMIC DEVELOPMENT DATA SHEET (in billions of current CFAF) Estimates Projections 1976 1977 1978 1979 1980 198' 1982 1983 1984 1985 A. National Accounts 1. GDP 107.0 123.5 136.7 150.9 168.4 188.8 216.2 251.4 295.2 348.4 2. Consumption 102.4 121.8 136.2 154.0 191.4 201.3 237.5 256.6 292.4 341.4 3. Gross Investment 12.9 14.4 15.0 14.6 11.8 17.3 18.5 30.5 36.8 38.0 4. Public Investment 8.9 9.2 9.4 11.5 8.5 12.3 13.3 24.7 29.4 30.0 5. Private Investment 4.0 5.2 5.6 3.1 3.3 5.0 5.2 5.8 7.4 8.0 6. Domestic Savings 4.6 1.7 0.5 -3.1 -23.0 -12.5 -21.3 -5.2 2.8 7.0 7. Exports, incl. NFS 25.4 32.5 30.5 30.0 34.3 37.35 39.0 43.7 49.0 55.0 8. Imports, incl. NFS 33.7 45.2 45.0 47.7 69.1 67.1 78.8 79.4 83.0 86.0 9. GDP (in mil. current $) 457.3 502.9 605.9 709.4 797.0 694.9 617.7 718.3 843.4 995.4 10. GDP deflator: Index 90.1 100.0 107.5 122.3 141.9 162.8 185.6 211.6 241.2 275.0 11. GDP at 1977 const. prices 118.7 123.5 127.2 123.4 118.7 116.C 116.5 118.8 122.4 126.7 12. GDP growth per year 3.5 4.0 3.0 -3.0 -3.9 -2.2 0.4 2.0 3.0 3.5 B. Sector Output Value Added 107.0 123.5 136.7 150.9 168.4 188.8 216.2 251.4 295.2 348.4 1. Agriculture 40.6 46.8 49.9 55.8 63.4 70.5 75.6 86.5 100.3 115.4 2. Mining 8.8 9.0 13.2 13.0 13.1 11.5 12.1 12.5 14.3 17.8 3. Manufacturing 6.2 7.6 10.8 11.8 11.4 13.2 16.9 19.9 23.3 28.4 4. Water and Electricity 0.7 0.9 0.8 1.0 1.2 1.9 2.4 3.1 3.7 4.6 5. Construct. & Public Works 4.6 5.4 4.9 6.4 6.1 7.0 9.8 13.0 13.6 14.5 6. Commerce 16.1 18.6 20.1 21.2 24.6 27.3 32.3 37.9 45.3 54.3 7. Transport and Telecomm. 4.9 5.0 4.6 4.4 5.6 6.8 8.5 10.9 14.3 17.9 8. Public services 14.1 16.9 18.0 22.0 25.4 30.9 35.3 37.8 43.3 49.5 9. Private services 5.2 6.1 6.2 7.2 7.7 8.6 9.3 12.6 16.0 20.8 10. Indirect taxes 5.8 7.2 8.1 8.1 9.9 11.1 14.0 17.2 21.1 25.2 (net of subsidies) C. Sectoral Output in Percentages 1. Agriculture 37.9 37.9 36.5 37.0 37.6 37.3 35.0 34.4 34.0 33.1 2. Mining 8.2 7.3 9.7 8.6 7.8 6.1 5.6 5.0 4.8 5.1 3. Manufacturing 5.8 6.2 7.9 7.8 6.8 7.0 7.8 7.9 7.9 8.2 4. Water and Electricity 0.7 0.7 0.6 0.7 0.7 1.0 1.1 1.2 1.3 1.3 5. Construct. & Public Works 4.3 4.4 3.6 4.2 3.6 3.7 4.5 5.2 4.6 4.2 6. Commerce 15.0 15.1 14.7 14.0 14.6 14.5 14.9 15.1 15.3 15.6 7. Transport and Telecomm. 4.6 4.0 3.4 2.9 3.3 3.6 3.9 4.3 4.8 5.1 8. Public services 13.2 13.7 13.2 14.6 15.1 16.4 16.3 15.0 14.7 14.2 9. Private services 4.9 4.9 4.5 4.8 4.6 4.6 4.3 5.0 5.4 6.0 10. Indirect taxes 5.4 5.8 5.9 5.4 5.9 5.9 6.5 6.8 7.1 7.2 (net of subsidies) -Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 February 1983  - 26 - ANNEX I Page 5 of 6 ECONOMIC DEVELOPMENT DATA SHEET - CONTINUED (in billions of current CFAF) Estimated Program 1976 1977 1978 1979 1980 1981 1982 1983 D. Public Finance 1. Budget Revenues 13.6 16.8 16.7 20.2 21.7 24.3 33.5 36.7 Of which: Tax receipts (13.0) (16.0) (16.3) (19.4) (20.9) (22.5) (30.9) (34.4) 2. Current Expenditures 17.5 21.0 22.7 27.6 29.4 32.0 36.4 35.4 Of which: Interest on debt (0.1) (0.3) (0.2) (-) (1.0) (0.7) (0.9) (1.5) 3. Capital Expenditures 1.4 1.9 2.2 0.4 1.9 3.0 3.8 8.9 Of which: Amortization on external debt (0.4) (0.8) (0.8) (0.1) (0.9) (0.7) (0.7) (5.0) 4. Budgetary Deficit -5.3 -6.1 -8.2 -7.8 -9.6 -10.7 -6.7 -7.6 5. Financing 5.3 6.1 8.2 7.8 9.6 10.7 6.7 7.6 Domestic 3.2 3.7 5.5 0.7 1.6 t.3 0.8 3.0 Banking System 0.6 0.5 2.7 0.3 1.4 3.8 1.4 3.0 Central Bank (_) (0.5) (1.2) (0.2) (-) (0-7) (-0.2) (2-7) IMF Facil. & Trust Fund (0.6) (-) (1.5) (0.1) (1.8) (4.1) (0.6) (0.3) Commercial Banks (-) (-) (-) (-) (-0.4) (-1.0) (t.0) (_) Treasury 2.6 2.4 -0.7 -0.2 0.6 0.1 0.4 Arrears - 0.8 3.2 0.8 -0.4 -2.6 -1.0 Other - - 0.3 - - - - - Foreign 2.1 2.4 2.7 8.2 8.0 9.4 5.9 4.6 Grants 1.8 1.6 0.4 5.8 7.4 5.6 5.0 4.5 Loans - - 0.6 1.4 0.6 3.8 0.9 0.1 Arrears 0.3 0.8 1.4 0.8 - - - Other - - 0.3 0.2 - - - - Memorandum Items (external debt) 1. Amortization due 4.8 3.5 4.7 4.7 2. Debt relief - 2.7 1.3 3.2 3. Arrears (net) 3.9 - 2.3 -3.5 E. Monetary Survey 1. Money and Quasi-Money 19.3 20.5 22.5 27.1 36.6 45.3 48.7 54.9 2. Domestic Credit 22.6 25.5 30.2 27.4 37.2 43.1 45.9 52.8 Credit to Public Sector 9.7 10.8 12.0 11.8 (13.7) (18.7) (15.8) (18.8) Credit to Private Sector 12.9 14.7 18.2 15.6 (23.5) (24.4) (30.1) (34-0) 3. Money and Quasi-Money as % of GDP 18.0 16.9 16.9 19.0 21.7 24.0 22.5 21.8 4. Domestic Credit as % of GDP 21.1 21.0 22.7 19.2 22.1 22.8 21.2 21.0 February 1983  - 27 - ANNEX I Page 6 of 6 BALANCE OF PAYMENTS (in millions of US current dollars) Estimates Program 1976 1977 1978 1979 1980 1981 1982 1983 Exports, incl. F'S 108.5 132.3 135.2 141.0 162.3 137.3 111.4 124.9 Imports, incl. NFS -144.0 -184.0 -199.5 -224.3 -327.0 -247.0 -225.1 -226.9 Resource Balance -35.5 -51.7 -64.3 -83.3 -164.7 -109.7 -113.7 -102.0 Factor Services (net) -3.4 -13.4 -1.8 0.0 30.3 37.9 30.5 29.2 Net Investment Income -1.7 -1.6 -5.3 -2.4 -1.4 5.2 5.4 2.9 Interest on Public Debt -0.4 -1.2 -0.9 -0.5 -0-5 -1.8 -2.0 -4-3 Other -1.3 -10.6 4.4 2.9 32.2 34.5 27.1 30.6 Current Transfers (private) -4.3 -0.8 -8.0 -12.2 -18.9 -14.0 -11.7 -12.9 Current Account Balance (excl. public transfers) -43.2 -65.9 -74.1 -95.5 -153.3 -85.8 -94.9 -85.7 Public Transfers (net) 46.2 35.4 51.9 91.2 101.3 82.1 65.1 65.7 Private Capital (net) 19.2 6.9 7.1 35.7 16.1 6.3 3.4 2.9 Public N & L Term Loans (net) 15.4 19.5 20.8 13.2 42.6 23.5 15.7 14.6 Disbursements (17.1) (22.8) (24.4) (13.6) (46.9) (26.1) (17.7) (19.4) Repayments (-1.7) (-3.3) (-3.6) (-0.4) (-4-3) (-2.6) (-2.0) (-4.8) SDR and Trust Fund 1.9 1.8 8.5 1.9 2.4 1.8 - - Short Term Capital -8.5 13.0 -14.6 -1.4 9.0 -4.8 1.7 -2.9 Errors and Omissions -15.2 -5.8 -9.8 -21.6 -5.3 -14.6 4.7 - Overall Balance (Increase in Reserves +) 15.8 4.9 -10.2 23.5 12.8 8.5 -4.3 -5.4 Level of oet foreign assets (end of year) 4.0 -4.6 -10.9 15.3 30.5 33.2 18.6 - Rate of Exchange 234.0 245.6 225.6 212.7 211.3 271.7 350.0 350.0 MERCHANDISE EXPORTS (in millions of US current dollars) Estimates Program 1976 1977 1978 1979 1980 1981 1982 1983 Exports, f.o.b. Diamonds 14.5 22.4 35.0 36.7 38.3 33.1 25.4 28.0 Coffee 18.4 44.0 27.9 29.1 34.1 23.6 24.9 28.3 Timber 18.4 18.7 21.3 26.3 34.1 31.3 20.9 21.1 Cotton 21.4 19.5 11.1 10.3 18.0 18.4 9.4 14.0 Tobacco 5.6 7.7 6.6 4.7 5.2 5.2 3.1 3.4 Other 4.2 4.1 20.8 24.0 25.1 15.5 19.7 20.3 Total 82.5 116.4 122.7 131.1 154.8 127.1 103.4 115-.1 Share in % of Total Diamonds 17.6 19.2 28.5 28.0 24.7 26.0 24.6 24.3 Coffee 22.3 37.8 22.7 22.2 22.0 18.6 24.1 24.6 Timber 22.3 16.1 17.4 20.0 22.0 24.6 20.2 18.3 Cotton 25.9 16.8 9.0 7.9 11.6 14.5 9.1 12.2 Tobacco 6.8 6.6 5.4 3.6 3.4 4.1 3.0 3.0 Other 5.1 3.5 17.0 18.3 16.2 12.2 19.1 17.6 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 EXTERNAL DEBT, December 31 1981 (in millions of US dollars) r Public Debt, incl. guaranteed 239.2 Public Debt, incl. undisbursed 265.7 IBRD/IDA LENDING, December 31, 1982 (in millions of US dollars) Outstanding and Disbursed 35.3 Undisbursed 22.1 Total 57.4 DEBT SERVICE RATIO, 1982 Public Debt, excluding arrears 3.6% Public Debt, including arrears 12.6% February 1983  - 28 - ANNEX II Page 1 of 4 CENTRAL AFRICAN REPUBLIC STATUS OF BANK GROUP OPERATIONS A. Statement of IDA Credits (as of March 31, 1983) 1/ Credit Amount (US$ million) 2/ Number Year Borrower Purpose Total Undisbursed Five Credits have been fully disbursed. 28.7 894-CA 1979 CAR Livestock 2.5 1.6 1074-CA 1980 CAR Third Highway Supl. Financing 4.5 0.2 1150-CA 1981 CAR Technical Ass't. 4.0 1.9 1258-CA 1982 CAR Highways IV 18.0 18.0 TOTAL 57.7 21.7 - of which has been repaid: 0.4 - now outstanding 57.3 B. Statement of IFC Investments Nil. ) 1/ An $11.0 million Credit for a second education project was approved by the Board on May 10, 1983. 2/ Less cancellations.  - 29 ANNEX II Page 2 of 4 C. Projects in Execution 1/ Credit No. 847-CA Highways III Project: US$15.5 Millio7 Credit of November 14, 1978; Effectiveness Date: April 4, 1979; Closing Date: December 31, 1982 (closed). Credit No. 1074-CA Supplementary Financing for Highways III Project: 3.5 Million SDRs (US$4.5 million) Credit of December 24, 1980; Effectiveness Date: October 22, 1981; Closing Date: June 30, 1983. The project consisted of the reconstruction and paving of the Bangui-Bossembele road (145 km), the construction of a two-lane bridge over the M'Bali River, and the provision to the Directorate-General of Public Works of consultants' services for engineering and supervision works. Civil works on the road and the bridge have been completed satisfactorily. Some comple- mentary works remain to be completed. The Supplementary Credit and supple- mentary financing from the Kuwait Fund were needed to make up the shortfall of funds which arose largely because of the currency exchange rate fluctua- tions. The Government has complied substantially with the covenants of the Third Highway agreement. A project completion report has been issued. Credit No. 894-CA Livestock I Project: US$2.5 Million Credit of April 10, 1979; Effectiveness Date: July 15, 1980; Closing Date: September 30, 1985. The project was designed to develop livestock production and improve nutrition and the living conditions of one of the poorest segments of the CAR's population, the M'Bororo herdsmen. It consisted of four main compo- nents: (a) provision of animal health services in the western half of the country; (b) strengthening the Government's Livestock Service; (c) introduc- tion and testing of simple pasture management techniques, based on herdsmen's associations in a pilot zone; and (d) training. After two years of project implementation, the initial approach failed. Despite improved training, better transport facilities, new equipment and the availability of drugs, the veterinary service was not motivated to visit herders and distribute drugs. Topia, the site for the pilot range improvements scheme, proved badly selected because it was atypical and permitted no contact with traditional M'bororo herdsmen. The Bouar College produced veterinary assistants for a civil ser- vice which was already overcrowded and did not need additional staff. In October 1982, the project was redesigned and now has the following components: 1/ This note is designed to inform the Executive Directors about the progress of projects which are being implemented and to report any problems which are being encountered, and the action taken to remedy them. It should be read in this sense and with the understanding that it does not purport to present a balanced evaluation of strengths and weaknesses in project implementation.  - 30 - ANNEX II Page 3 of 4 (a) Animal Health. The National Association of Central African Livestock Producers (ANEC) now sells animal health drugs. The project will strengthen ANEC's administrative capacity through financing a head- quarters building and an expatriate financial controller. (b) Field Training. A mobile training unit will be established to hold simple animal health courses in the field for the sons of livestock owners, enabling them to treat their own animals. (c) Formal Training. Upon acceptance at the Bouar College, students will no longer automatically become Government officials, but they will receive scholarships. They will be employed by the Government's livestock service only if the service needs additional staff. (d) Pasture Improvement. A new site was chosen for the pasture improvement scheme. The Credit Agreement is being amended accordingly. Credit No. 1150-CA Technical Assistance Project: 3.3 Million SDRs (US$4.0 million) Credit of July 16, 1981; Effectiveness Date: October 22, 1981; Closing Date: December 31, 1984 The project consists of (a) project preparation and start-up activi- ties for the Fourth Highway Project and the Integrated Rural Development Project in the Cotton Zone; (b) execution of sector studies in the forestry sector and the diamond sector; (c) four resident technical advisers, including a project coordinator/economic adviser, a legal expert, an external-debt expert, and an agricultural programs coordinator; (d) an organizational review of the civil service; and (e) further studies, training, consultants' ser- vices, and related activities for which a need is identified during project implementation. (a) Project preparation. The preparation of the Fourth Highway Project was begun under an advance from the Project Preparation Facility which was automatically refinanced when the technical assistance project became effective. Project preparation of the Fourth Highway Project continued under the technical assistance project until the Credit for the Fourth Highway Project became effective on January 24, 1983. Field work for a follow-up feasibility study for the Inte- grated Rural Development Project in the Cotton Zone was undertaken in October-November 1981, and the final report was published in April 1982. (b) Sector Studies. Field work for the forestry sector study was undertaken in January-February 1982, and the final report was published in May 1982. A final selection of the consultants to undertake the diamond sector study was made in December 1982, and field work began in March 1983.  - 31 - ANNEX Ii Page 4 of 4 (c) Resident technical advisers. The legal expert arrived in September 1981 and acted as project coordinator until March 1, 1982, when the project coordinator arrived. The agricultural programs coordinator started work in Bangui in early April 1982, and the external-debt expert began work in Bangui in June 1982. (d) Review of the Civil Service. The Canadian Ecole Nationale d'Admini- stration Publique was chosen to carry out this review and undertook field work in the CAR in May-June 1982. Their first-phase report appeared in October 1982. Their second visit to the C.A.R. was in November 1982; the report on that phase is under preparation. Their terms of reference have been modified at the Government's request in order to provide immediate assistance in the task of reducing the size of the civil service. (e) Further studies, training, consultants' services, etc. Studies of the CAR's banking system and public-enterprise system were carried out in May 1982. A study of the major transport corridors from the CAR to the sea was carried out in late 1982. Due to the later-than-expected recruitment of some of the resident experts, the project may not be completed by June 30, 1984, as originally foreseen. Disbursements are somewhat behind schedule, but most of the Credit has been committed. The project appears to be accomplishing its goals; the experts, in particular, have already made substantial contributions to the Government's reconstruction efforts. Credit No. 1258-CA Highways IV Project: US$18.0 Million Credit of July 29, 1982; Effectiveness Date: January 24, 1983; Closing Date: June 30, 1988. The project consists of the rehabilitation of 1,217 km of gravel roads and the reconstruction of two already paved roads (108 km), all part of the priority network, the provision of equipment and buildings to support road maintenance activities, the provision of consultants for construction supervi- sion, maintenance, studies, and planning, and the training of national person- nel. Preparation has been completed (financed first with funds from a PPF advance and then under Credit 1150-CA, the Technical Assistance Project). An international competitive tender has recently been successfully completed to r choose the contractor for the IDA-financed rehabilitation components, and bids for the rehabilitation and reconstruction parts of the project were opened in December 1982. The project is being cofinanced by France (FAC), the Kuwait Fund, the OPEC Fund, the African Development Fund, and the Development Bank of the Central African States (BDEAC).  - 32 - ANNEX III Page 1 of 2 CENTRAL AFRICAN REPUBLIC INTEGRATED RURAL DEVELOPMENT PROJECT SUPPLEMENTARY PROJECT DATA SHEET Section I. Timetable of Key Events (a) Time taken to prepare the project: Two years (b) Project prepared by: Nathan Associates (Consultants, U.S.) (c) Date of first IDA mission to consider the project: June 1980 (d) Date of departure of appraisal mission: June 1982 (e) Negotiations completed: April 14, 1983 (f) Planned date of effectiveness: September 1983 Section II. Special IDA Implementation Actions A PPF advance totalling US$1 million equivalent has been approved to help finance training of rural extension workers, ordering of inputs (insecti- cides and fertilizers) for the 1983/84 crop year, and establishment of a moni- toring and evaluation unit (para. 36). Section III. Special Conditions The Government and SOCADA have provided assurances on the following principal items: (a) experienced and qualifed staff would be appointed to the positions of Project Manager (Director of SOCADA) and Project Coordinator for the duration of the project, on terms and conditions of employment satisfactory to IDA (para. 53); (b) during the project period, no new investments would be undertaken by SOCADA outside the project area without prior approval by IDA; support services provided by SOCADA in these areas would remain at current (1982/83) levels, both in terms of extension coverage and input distribution; and SOCADA would not declare any dividend or distribution of profits during the project period (para. 55); (c) subsidies on seasonal inputs for cotton (fertilizer and pesticides) would be progressively reduced, over the project period, and the producer price of seed cotton would be pro- gressively increased, both according to schedules acceptable to IDA (para. 56); and  - 33 - ANNEX III Page 2 of 2 (d) seasonal inputs would be provided to farmers on short-term credit, with a mark-up of 9 percent on the prices to farmers, and ox-drawn equipment would be provided to farmers on medium-term credit of up to three years and carrying an interest rate of 9 percent p.a. (para. 57). Conditions of effectiveness of the proposed Credit would be: (a) the establishment of the Project Monitoring and Evaluation Unit ( and the Project Coordination Unit (paras. 50 and 51); (b) the signature of a satisfactory Convention between the Government and SOCADA (para. 53); (c) the signature of a satisfactory Protocole B.etween SOCADA and ACADOP (para. 53); (d) the transfer of all the MAE's extension staff in the cotton zone to SOCADA's regular labor force (para. 54); (e) the signature of satisfactory contracts for the project coordinator, the monitoring and evaluation specialist, and the director of the production department (para. 58); (f) the signing and fulfillment of effectiveness conditions of the grant and loan agreements with the other cofinanciers (para. 60); (g) the establishment of a Special Account and a Project Account (with an initial deposit by the Government of CFAF 120 million) (para. 63); and (h) the submission by SOCADA of its audited 1981/82 financial statements (para. 65). f  - 34 - ANNEX IV CENTRAL AFRICAN REPUBLIC COTTON AREA RURAL DEVELOPMENT PROJECT FINANCIXG BY COMPONENT AND EXPENDITURE CATEGORY -------- Total ------- ------------------------------------------------ CFAF Millio - -------------------------------- Comoponet end Expendituro CFAF (=) USS (in Govnmnmenti/ SOCADA Farners IDA FED FAC CCCE bADEA A. Pro ject M.anaFmnnt Unit Vehicles 4.9 0.02 - - - 4.9 Operating Cost 30.4 0.09 1.4 - - 29.0 Local Perconnel 2.3 0.01 0.3 2.0 - TA & Con-ultants e Seoices 189.7 0.52 - - - 199.7 Sub-Total A 227.3 0.64 1.7 2.0 - 223.6 B. Production and Eoteonion Services Buildings 55.2 0.16 17.7 - - - - - 37.5 - Vehicles and Equipment 473.4 1.73 - - - - - - 473.4 Operating Coot 752.7 2.12 99.3 184.3 - - - - 469.1 Local Personnel 2,960.3 8.34 1,671.6 1,288.7 - - Technical Assistance 1,046.5 2.95 - - - - - 526.5 520.0 Sub-Total B 5,288.1 14.90 1,788.6 1,473.0 - - - 526.5 1,500.0 C. Applied Ronearch Buildings 24.7 0.07 7.9 - - _ _ 16.8 - Vehicles and Eqnipnent 27.4 0.08 - - - - - 27.4 Operating Cost 195.7 0.55 17.7 - - - - 178.0 Local Personnel 248.1 0.70 32.2 215.9 - - - _ - _ Technical Assistance 491.5 1.39 - _ - _ 491.5 Sub-Total C 997.4 2.79 57.8 215.9 - - - 713.7 D. Seed Prodsction Unit Buildings 11.3 0.03 3.6 - - 7.7 - _ - Vehicles and Equip-ont 58.4 0.16 - - - 58.4 Operating Cost 130.9 0.37 11.0 - - 119.9 Local Personnel 186.5 0.53 - - 186.5 Sub-Tstal D 387.1 1.09 14.6 - 186.5 186.0 0. Training Vehicles and iquipment 92.8 0.26 - - - 92.8 Operating Coot 154.5 0.44 17.7 - - 136.8 Lecal Personnel 88.5 0.25 10.2 78.3 - TA and Consulta-ts Services 309.5 0.87 - - - 309.5 Sub-Total E 645.3 1.82 27.9 78.3 - 539.1 F. Feeder Reads Coit Buildings 24.3 0.07 7.8 - - - 16.5 Vehicles and Equipment 254.2 0.72 - - - - 254.2 Operating Cent 1,109.1 3.12 147.4 - - - 961.7 LoIal Peosnonel 384.2 1.08 43.1 341.1 - - - - - Technical Ansistance 348.9 0.98 - - - - 348.9 Sub-Total F 2,120.7 5.97 198.3 341.1 -- - 1,581.3 G. M & E Uoit Buildings 34.0 0.10 10.9 - _ 23.1 - - - Vehicles and gquipment 30.2 0.09 - - - 30.2 - Operating Cost 54.6 0.15 7.3 - - 47.3 - Local Personnel 167.5 0.47 19.9 147.t - - Technical Assistance 108.6 0.38 - - - 108.6 - Sub-Total G 394.9 1.11 38.1 147.6 - 209.2 - - - H. Animal Traction Buildings 40.0 0.11 12.8 - - - 27.2 Vehicles and Equipoent 74.7 0.21 - 74.7 Operating Cast 33.0 0.09 2.9 - - - 30.1 Local Personnel 48.1 0.14 5.8 42.7 - - - _ - _ Sub-Tetal E 195.8 0.55 21.5 42.5 - - 132.0 - - I. Village Water SUPPlY Vehicles and Equipment 92.6 0.26 - - - - - - - 92.6 Operating Cost 475.3 1.34 68.6 - - - - _ _ 406.7 Local Personnel 61.9 0.17 61.9 - Consultants Services 181.2 0.51 - - - - - - - 181.2 Sub-Total I 811.0 2.28 130.5 - - - - - - 680.5 J. Ginning Factory Equipnent 441.6 1.24 - - - - - - - 441.6 K. Maintenance W-ombchop Buildings 59.5 0.17 19.0 - - - - - - 40.5 Vehicles aod Equipment 34.8 0.10 - - - - - - - 34.8 Sub-Total K 94.3 0.27 19.0 - - - - - - 75.3 L. Inputs - Increc.eneal 1,044.4 2.94 - - - 1,044.4 - - - Non-Incremenotal 4,044,4 11.39 - 211.0_ 1,860.0 1,482.7 340.7 15O,0 Sub-Total L 5,088.8 14.33 - 211.0 1,860.0 2,527.L 340.7 150.0 - M. Finannial Rehabilitation 5OCADA 1,500.0 4.20 - - - - - _ 1,500.0 - TOTAL COSTS 18,182.3 51.19 2,298.0 2,511.2 2,046.5 3,685.0 2,054.0 1,390.2 3,000.O 1,197.4 US$ THOUSANDS 51,200.0 6,450.0 7,000.0 5,750.0 10,400.0 5,800.0 3,900.0 8,500.0 3,400.0  _____ _ _________ ____--____ _ __ _ __________ ____ ___ __ ____ __ I BR D 16066R - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ B --A 20AR 1g8 CEN FRAL AFRICAN REPUBLIC - - REPUBLIQUE CENTRAFRICA/NE COTTON AREA RURAL DEVELOPMENT PROJECT To. TJDELE ) PRaET DE- D-vELOPPEMENT RUPAL EN ZONE COTONN/ERE N'Ef E D (J ,T, 34 ...do, BAMINGlJI BANGORAN HAUTE KOTTO -y ~ ~ ~ ~ ~ ~ ~ - 0~ ~ ~ ~ ~ ~ ~~~~Rtnoo __ GRIBINGUIL E NOMIQUE ~~ -~ eIAGA AI ORC) ,) ,/ _t B(D~~~NGGA Sooca t~~~~~~~ BURIKA KK>Ds E IreseAss-t-ne Z-oes lb. Z-ons d'Acrtons /trensv . ___________________________________ ___ -- _-' _-- 9- f\ A