Announcement of IDA Credit to Basutoland on February 4, 1966

• INTERNATIONAL DEVELOPMENT ASSOCIATION 1818 H STREr::T, N.W., WASHINGTON D. C. 20433 TELEPHONE: EXECUTIVE 3-6360 IDA Press Release No. 66/4 Subject: IDA Credit to Basutoland February 4, 1966 The International Development Association (IDA), an affiliate of the World Bank, has approved a credit equivalent to $4.1 million to Basutoland, a United King- dom dependency in southern Africa. This is the first operation in Basutoland by one of the World Bank Group of institutions. The credit will be used for the imp:-ove- ment of a 76-mile section of the main north-south road and of a 17-mile connecting feeder road. Better roads will reduce transport and road maintenance costs and will assist the Government's efforts to improve economic conditions by converting sub- • sistence agriculture to a cash basis • Basutoland is landlocked within the Republic of South Africa. It has a popu- lation of 930,000, of which approximately one-fifth normally work in South Africa. It has few resources and a very low per capita income. The main activities are animal husbandry (sheep and goats) and subsistence agriculture. The territory is extremely mountainous; the lowest part is a narrow strip on the western border, with an average altitude of 5,000 feet, which comprises most of the arable land. Basutoland is almost entirely dependent on its roads for internal transport and for access to the road and rail system of South Africa. The most important road is the main north-south artery which extends over the full length of the western strip. Branches from this road extend westward to connect with the South African road system and eastward into the plateaus, foothii'ls and mounta.ins, where the bulk of the population lives. Most roads are merely graded tracks; drainage is inadequate • and the many low-level bridges cannot be crossed when the rivers rise. Road main- tenance and vehicle operating costs are high and will continue to be until the standards of the roads are upgrad·ed. A United Kingdom economic survey mission,  - 2 - organized in consultation with the World Bank, visited Basutoland in 1959 and gavE~ the highest priority to raising to fully graveled, all-weather standards the most heavy traveled main roads. In order to obtain the full benefit of better main roads, however, feeder roads must also be improved. • The 76-mile section of the main north-south road, to be improved with the assistance of the tDA credit, runs from Matsieng Turnoff through Maseru, the capi- tal, to Leribe near the extreme north of the territory, and the 17-mile feeder road extends from Leribe to Pitseng, providing access into the foothills and mountains to the east. The main road will require some reconstruction and realignment, con- struction of a number of small bridges and paving over most of it. Work on the feeder road will include reconstruction, minc,r relocation, construction of several small bridges and gravel surfacing. The agricultural area affected by the roads is estimated at about 450,000 • acres, somewhat less than half Basutoland's arable acreage. Yields are relatively low, and to improve them the Government is providing extension services and tech- nical training, and has set up a "progressive farmers 0 movement to demonstrate the benefits of improved techniques. Better road connections and reduced transport costs will be important in providing farmers and livestock owners with easier ac- cess to markets, and will help to stimulate the transition from subsistence to market agriculture. The cost of the project is estimated to be the equivalent of U.S. $5.4 million. Of this total, $4.1 million will come from the IDA credit and the remainder will be provided by the Government ?f Basutoland from its own budget, from a United Kingdom Exchequer loan, and from United Kingdom Colonial Development and Welfare funds. The IDA credit is for a term of 50 years. Repayment of the principal will be- gin on January 1, 1976, after a 10-year period of grace. Thereafter, 11 of the principal will b~ ~~payable annually for 10 years and 31. will be repayable annually • for the final 30 years. The credit is free of interest, but a service charge of 3./4 of 1% per annum on the amount withdrawn and outstanding will be made to meet 1DA 1 s administrative costs. • BASUTOLAND HIGHWAY SYSTEM EXIST! NG ROA - DS MAIN ALTITUDE IN FEET ~-~ DISTRICT a FF.EDEfl 5,ooo - 7,ooo r--..--, ACCESS TRACKS ROADS OUTSI DE BASUTOLAND RAILWAYS : :~:~~. .,r~~ 7,000 -9,000 ;---.~-..,.i - - - - - PROJECT ROADS • ,~- To Durban IBRD 132! R •