Announcement of World Bank Provides Forty-Two Million Dollars for Cocoa and Highway Projects in Ghana on December 24, 1975

.World Bank ·1a1s H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 Bank News Release No. 75/104 December 24, 1975 IDA News Release No. 75/76. WORLD BANK PROVIDES $42 MILLION FOR COCOA AND HIGHWAY PROJECTS IN GHANA Ghana's economic development will be assisted by $42 million from the World Bank and its affiliate, the International Development Association, (IDA). The funds are for two projects ·-- $14 million for a second cocoa project and $28 million for a second highway project. The projects will support Ghana's plan to restructure her economy through increased agricultural output and im- proved infrastructure for an expanding economy. The Arab Bank for Economic Development in Africa (ABEDIA), will part"icipate with a loan of $5 million to help finance replanting and rehabilitation of about 10,000 acres in the cocoa project area. • Second Cocoa Project In Ghana, still the world's largest producer of cocoa, about one quarter of the population are directly involved in cocoa farming. But Ghana's share of world production has declined in recent years. Some plantations are over age, and extensive replantation is necessary to maintain production in the Ashanti and Brong-Ahafo regions. The Ashanti region is the largest single cocoa growing area in Ghana. The total cost of the project is estimated at $21.9 million. It is the first phase of a program to revitalize the industry in the regions. Its main components include the provision of credit to smallholder cocoa farmers, farmer training in modern production techniques and equipment for feeder roads maintenence. Cocoa production will be increased by 10,000 tons annually, and about 10,000 families will benefit, involving some 70,000 persons. The loan is for a term of 30 years including 8 years of grace, with interest at 8-1/2% per annum. The Bank loan provides for the relending of about $6 million to farmers, for 18 years including 6 years of grace at an interest rate of not less than 8%. Second Highway Project Ghana's transport sector and construction industry.will be assisted by funds totalling $28 million comprising a Bank loan of $18 million and a credit of $10 million from the International-Development Association . • Note: Money figures are expressed in US dollar equivalents.  - 2 - The country's transport system features a 20,000 mile road network which supports about three quarters of all domestic freight traffic including • the movement of timber, cocua and minerals for export. The construction industry in Ghana also comprises a large sector of the economy. The two-fold project is designed to improve existing roads by implementing the first four-year phase of the Ghana Highway Authority (GHA) eight-year road maintenance program; and help the domestic contracting industry through the Bank for Housing and Construction (BHC). _The project's road maintenance program features equipment procurement, technical assistance, and training for GHA staff, reconstruction of 16 miles of the Achimota-Nsawam road, outside the capital, financial and technical assistance, through BHC, for equipment procurement and the development of local private con- tractors and quarry operators, studies on road-building material, levels of feeder road investment and the labor-equipment mix for optimum feeder road maintenance. The total cost of the project is estimated at $35.8 million. The credit of $10 million is for 50 years with 10 years of grace, with- out interest, but with three quarters of one percent charge for administrative expenses. The Bank loan of $ 18 million is for a period of 25 years including 5 years of grace with interest at 8-1/2%. About $7.5 million of the loan will be relent to BHC to promote domestic construction, at the rate of 10 percent for 25 years including 5 years of grace. The United Nations Development Programme (UNDP), UK and Canada are contributing about $700,000 to the project as technical assistance grants. Chemical Bank, New York, is participating in this loan. - 0 - • • ,,,. • T E CHNI CAL DAT A PROJECT: Second Cocoa Project COUNTRY: Republic of Ghana TOTAL COST: $21.9 million BANK FINANCING: $14.0 million OTHER FINANCING: The Government of Ghana IMPLEMENTING ORGANIZATION: The Project Unit, within the Ministry of Cocoa Affairs, Government of Ghana, Accra, Ghana PROJECT DESCRIPTION: The main components include: (a) Replanting and main- • taining during the project period, of about 30,000 acres of cocoa through provision of credit to cocoa farmers for hiring labor, and in kind as farm in- puts; (b) Training of farmers and project staff in modern cocoa production tech-- niques and practices; (c) Establishment of a project tmit within the Ministry of Cocoa Affairs to plan and manage the project; (d) Provision of equipment for feeder roads and the planning of future feeder roads improvements. PROCUREMENT: Procurement of vehicles and feeder road equipment ($1. 3 million) and spraying machines ($1.1 million) will be through international competitive bidding in accordance with Bank guidelines. A preference of 15 percent, or the applicable level of tariff protection, whichever is lower, will be applied to bids from Ghanaian manufacturers. Insecticides, estimated at $0. 9 million, would be procured by negotiated contract with suppliers. Contracts of less than $20,000 which cannot be bulked for purposes of international competitive bidding would be awarded on the basis of local competition in accordance with procedures sa tis£ ac tory to the Bank. Con tracts worth less than $.5, 000 would be let in accordance with appropriate local competitive bidding procedures. CONSULTANTS: None • ECONOMIC RATE OF RETURN: 21% ESTIMATED COMPLETION DATE: 1982: Project replanting and disbursement over the first three years, and a further four years to maintain all 30,000 acres to maturity. -0-  ' PROJECT: T E CHNI CAL Second Highway Project Republic of Ghana DAT A • COUNTRY: TOTAL COST: $ 35, 8 mill ion BANK AND IDA FINANCING: World Bank loan: $18 million International Development Association, (IDA) credit: $10 million OTHER FINANCING: In US$' 000 Government: $7,100 UNDP: $ 240 CIDA: $ 310 UK: $ 120 IMPLEMENTING ORGANIZATION: The Ghana Highway Authority (GHA) will execute the project a.~d the Bank for Housing Construction (BHC) will assume responsibility for provision of assistance to the contracting industry. Address: Ghana Highway Aut'hority, P.O. Box 1641, Accra, Ghana; Bank for Housing and Construction, Accra, Ghana. PROJECT DESCRIPTION: The project will include: (a) a four-year road maintenance program and training of GHA staff; (b) reconstruction of the Achimota-Nsawam road;. (c) financial and technical assistance to BHC for equipment procurement and for development of private domestic road contractors and quarry owners, and (d) studies in road building materials, optimum feeder road investment and appropriate labor/ equipment mix in maintenance operations. PROCUREMENT: Contracts for the reconstruction of the Achimota-Nsawam road and for procurement of maintenance and workshop equipment will be on the basis of international competitive bidding in accordance with Bank Group guidelines; spare parts for existing equipment (about US$300,000) may be procured on the basis of quotations from agents in Ghana of foreign firms; specialized equipment for the training center and workshops (about US$500,000) will be procured on the basis of offers for similar equipment from at least two suppliers. Retroactive financing of US$50,000 to cover the foreign exchange cost of the services of a training specialist. CONSULTANTS: The project provides for; 120 man-months of consultancy and services to GHA for execution of the road maintenance program, 36 man-months of advisory services to BHC and 9 man-months provided to GHA for highway planning. Consultants not yet appointed. ECONOMIC RATE OF RETURN: 50% for road maintenance ~ 13% for reconstruction of the Achimota-Nsawam road ESTIMATED COMPLETION DATE: 1980 -0-