Upper Volta - Second Telecommunications Project

~. CiRCULATING COPY TO BE RETURNED TO REPORTS DESK DOCUMENT OF INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use FlU E -7 Report No. P-1234a-UV REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF UPPER VOLTA FOR A SECOND TELECOMMUNICATIONS PROJECT June 7, 1973 This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without, Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  CURRENCY EQUIVALENT Unit = Franc CFA (CFAF) US$ 1 = CFAF 230.2 CFAF 1 = US$ .00-4344 CFAF 1,000 = US$ 4.344 CFAF 1,000,000 = US$ 4,344 Fiscal year: 1973  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF UPPER VOLTA FOR A SECOND TELECOMMUNICATIONS PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Republic of Upper Volta for the equivalent of US$4.5 million on standard IDA terms to help finance a project for tele- communications development. PART I - THE ECONOMY 2. The economy of Upper Volta is dealt with in paragraphs 2 to 13 of the President's Report of the same date on a proposed development credit to the Republic of Upper Volta for am Education Project (Report No. P-1234 a-UV7 A country data sheet and a sheet on foreign aid disbursements are attached as Annex I. PART II - BANK GROUP OPERATICNS IN UPPER VOLTA 3. The proposed credit would be IDA's sixth operation in Upper Volta. It would bring the total of IDA funds conmitted to US$19.3 million equivalent. Bank Group lending to Upper Volta has been reviewed in paragraphs lb to 18 of the President's Report of the same date on the proposed Education Project. Annex II contains a summary statement on the status of Bank Group lending in Upper Volta as of May 31, 1973. PART III - THE TELECOMMUNICATIONS SECTOR Background 4. Under the former Federation of French West Africa, Upper Volta's telecommunications were operated as a government service under the authority of the High Commissioner of French West Africa and the governors of the various territories. After dissolution in 1959 of the West Africa Posts and Tele- communications Office, postal and telecommnications services in Upper Volta were incorporated into the general services of the Government, with operations and development being the responsibility of the Ministry of Posts, Telecommuni- cations and Information, and finances and accounting forming part of the national budget under the Ministry of Finance. Under this arrangement operations and development suffered from lack of funds.  - 2 - Following the recommendations of a French Government senior adviser and with the support of IDA, a new autonomous entity, Office des Postes et Te~communi.cations (OPT), was created on January 1, 1969; soon thereafter, in Febru,cary 1969 the first credit for telecommunications (US$0.8 million) was made to Upper Volta to assist OPT's urgently needed rehabilitation and expansion work. OPT took over responsibility for the domestic and regional telecommunica- tifJBs ser-aces in addition to postal services and a nationwide public checking account service8 Tne main international telecommunications facilities continued with .France Cable et. Radio (FOR), which has a 25-year concession signed with the Governaent in 1962. With the exception of the military, civi1 aviation and the rai2'-ay which, as usual in most countries, have their own telecommunications networks, OFT provides a1l domestic telephone, telegraph and telex services in Unper Volta and regional connections to Mali, Niger and Ivory Coast. 0. Policy direction is vested in a 13-member Board of Directors under thse chairmanship of the Minister of Posts and Telecommnnications. The other members are appoted by the Government and represent the various Ministries, the National Assembly, the Economic Council, the Chamber of Commerce and OPT's staff G 7. The Ministry of Posts and Telecommunications is the licensing authority Por the teleconmmunications sector but control is exercised mainly through minis- terial representation on OPT's Board of Directors. Investment in the sector is coordinated within the plan for national econoric development by the Ministry of the Plan, industry and Nines, 8. WItbh only 3,850 telephone stations of all kinds at the end of 1972, TUpper Volta has one of the lowest telephone densities in Africa: 0.08 per 100 population, Over half of these telephones are in government offices; the rest are mostly subscribed by businesses, internatione1 organizations, embassies and other institutionsa Due to lack of adequate facilities both the local and long distance services are extremely poor, transmission quality is low and fault rates are high. Howrever, with the ongoing rehabilitation and expansion of the local distribution networks in Ouagadougou and Bobo-Dioulasso under the first IDA project andX with the microave link to the Ivory Coast border under French bilateral assist- anee, significant improvement in and between these centers is expected in the near futire. There have been delays in completing the IDA-financed project due to problems in organizing and. staffing the new entity and in obtaining key expa- triate advisers tc assist management. The project is now progressing satisfac- torily and is expected to be completed in November 1973.