Senegal - Investment Promotion (Second SOFISEDIT) Project

COPY ~~~~~~Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-1890a-SE REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO SOCIETE FINANCIERE SENEGALAISE POUR LE DEVELOPPEMENT DE L'INDUSTRIE ET DU TOURISME WITH THE GUARANTEE OF THE REPUBLIC OF SENEGAL September 7, 1976 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) EXCHANGE RATES Currency Unit Official Floating as of December 31, 1974 US$1 CFAF 230.21 CFAF 225.00 CFAF 1,000 US$4.20 US$4.44 CFAF 1,000,000 US$4,200 US$4,444 The CFA Franc is officially valued at the equivalent of FF 0.02. As the French franc is now floating relative to the US dollar, the US dollar/ CFAF exchange rate is subject to change. The exchange rate on December 31, 1974 of US$1 CFAF 225 was retained for conversions made in this report. ABBREVIATIONS AfDB African Development Bank BCEAO Banque Centrale des Etats de l'Afrique de l'Ouest BNDS Banque Nationale de Developpement du Senegal CCCE Caisse Centrale de Cooperation Economique IFC International Finance Corporation KfW Kreditanstalt fur Wiederaufbau SOFISEDIT Societe Financiere Senegalaise pour le Developpement de l'Industrie et du Tourisme SONEPI Societe Nationale d'Etudes et de Promotion Industrielle Fiscal Year of SOFISEDIT October 1 - September 30  FOR OFFICIAL USE ONLY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO SOCIETE FINANCIERE SENEGALAISE POUR LE DEVELOPPEMENT DE L'INDUSTRIE ET DU TOURISME WITH THE GUARANTEE OF THE REPUBLIC OF SENEGAL 1. I submit the following report and recommendation on a proposed loan of US$4.2 million to the Societe Financiere Senegalaise pour le Develop- pement de l'Industrie et du Tourisme (SOFISEDIT) with the guarantee of the Republic of Senegal. US$4 million of the Loan amount would help meet SOFISEDIT's requirements for financing the foreign exchange component of approved industrial and tourism projects through December 1978; the remaining US$200,000 would be passed on to the Societe Nationale d'Etudes et de Promotion Industrielle (SONEPI) to help develop an integrated scheme for providing assistance to small-scale Senegalese entrepreneurs. Amortization of the proposed Loan would conform substantially to the aggregate of the amorti- zation schedules applicable to the specific investment projects financed, which would not exceed 18 years. Interest on the loan would be 8.90 percent per annum. PART I: THE ECONOMY 2. A report entitled "The Economy of Senegal" (212-SE) was distri- buted to the Executive Directors on September 10, 1973. Since then, special missions visited Senegal to improve the macroeconomic data base, to study migration flows, and to review the financial situation of the public sector. The following paragraphs reflect the findings of these missions, whose con- clusions will be included in a basic economic report to be prepared later this year. Updated country data appear in Annex I. Economic Structure and Past Developments 3. Senegal is situated at the extreme western part of the African con- tinent. In the interior, the mainstay of the economy is millet cultivation and nomadic cattle-raising for domestic consumption, and groundnut cultiva- tion for exports. Soils are generally poor, and variations in rainfall periodically cause severe food shortages in the months between the sowing and harvesting of the next crop. The large river basins -- some of them fed in the tropical rain zone -- have so far been exploited only marginally. Land distribution is fairly even. In the western part of the country arable land is becoming scarce, but in the extreme south-east some good land is still available. The modern sector of the economy is concentrated in Dakar, a well organized city of about 1 million inhabitants. The economic base of Dakar consists of excellent port facilities, an industry which is turning 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.  -2- gradually toward exports, and a small but fast-growing tourist sector. Senegal's per capita GNP for 1975 was estimated at $370, but average in- come in Dakar is roughly five times as high as in the countryside. 4. During the 1960s, the Senegalese economy experienced virtual stag- nation as real output increased less rapidly than population, and per capita GNP declined. Two factors were responsible for this situation. First, with independence, Senegal lost its privileged position as the center of French West Africa, and therefore had to adjust to reduced economic, administrative and political circumstances. Secondly, in the latter part of the decade, groundnut production fell due to unfavorable weather and declining export prices. In the 1970s, a new stage in Senegal's development set in, charac- terized by a higher rate of private and public investment. Private invest- ments, which had hovered around 4 percent of GDP in the late 1960s, rose to 8 percent during the period 1970-75. Until 1972, public investments stayed at around 5.5 percent of GDP, but increased to 7 percent in 1975. However, the nation's output and income continued to be determined primarily by weather conditions and the level of world market prices. 5. The year 1972 brought the Sahel's most severe drought in this cen- tury, and GDP declined. Emergency food operations were needed to avoid wide- spread starvation in the countryside. But the modern sector in Dakar main- tained its high level of investments, and output and exports of industrial goods increased. Only in 1973 did industrial production experience a signi- ficant decline due especially to lack of raw materials in the important groundnut processing industry. After 1973, when weather conditions improved and purchasing power of the rural population was restored, both agricultural and industrial production shot up. The long-standing Government program to modernize rainfed agriculture proved to be very successful in years with better rains. In 1975/76 the groundnut crop reached a historical record of 1.45 million tons, more than double the average for the 1968-73 period; manufacturing industry grew by aboutll percent per year between 1973 and 1975. Total production increased in real terms by 5 percent in 1974 and 7 percent in 1975, and the outlook for 1976 is for continued growth at the 1975 rate. 6. Strong price increases for Senegal's major exports helped to bring about the economic recovery. Groundnut prices tripled between 1969 and 1974, and phosphate prices quintupled during the same period, both pro- viding strong incentives to production. However, since prices of imported oil and food also increased at high rates, the gains in real income from the rise in export prices were limited. Moreover, in 1975 international prices for Senegal's exports began to fall again. These wide international price fluctuations had serious consequences on domestic prices, public fi- nance, and balance of payments. Public Finance and Pricing Policies 7. The Government responded with considerable flexibility in the adoption of economic policies. In 1974, the Government initially tried to maintain stable domestic prices in the face of the skyrocketing food import  - 3 - prices. By end-1974, it became clear that the costs of this policy were becoming excessive and that changes would need to be made, even though trans- fers to the public sector resulting from improved groundnut production and prices were much higher than in the preceding year. To reduce subsidies and put public finances on a sounder footing, the Government raised the prices for rice, sugar and groundnut oil by 40 to 90 percent, although sub- sidies on flour have been continued. To compensate for the rapid increase in basic food prices, Government salaries were raised on average by 16 per- cent, with actual increases ranging from 60 percent for the lower grades to 3 percent for the higher ones. Average consumer prices rose by some 20 per- cent in four months' time, but the Government managed to stabilize prices almost completely thereafter. At the same time the Government also in- creased producer prices for groundnuts to bring them closer to world prices which were particularly high. The cost to the Treasury of this latter step was expected to be compensated in large part by additional revenues from the extremely profitable phosphate mine in which the Govern- ment increased its participation while levying a 100 percent tax on the ex- cess profits accruing from the price rise on the world market. In recent years, Government revenues from phosphates have amounted to roughly $45 million a year. 8. These steps led to an increase in public savings from a yearly average of US$27 million during fiscal years 1970 to 1973, to US$64 million during fiscal years 1974 to 1976. The higher level of public savings was doubtless an important factor in stimulating the Government to increase its expenditure on new investments from a yearly average of US$24 million to US$69 million during the same two periods. In addition to the rise in investment, average yearly participation and lending to domestic enterprises by the Government increased from US$5 million to US$45 million, mainly be- cause of the participation in the phosphate mine and the acquisition of two foreign-owned public utility companies. The combined capital outlays of the Government were thus substantially in excess of public savings, and were financed in large part through foreign bank loans. As a consequence, foreign debt service carried by the Central Government increased from $7 million in FY73 to $18 million in FY75, representing about 5 percent of Central Government revenues. Balance of Payments 9. The balance of payments came under heavy pressure in 1973 because of low groundnut exports and increasing imports of equipment goods, and net foreign reserves fell to minus US$31 million. In the following years the deficit on current transactions was brought back to satisfactory proportions, but the outflows of private capital related to the acquisition of foreign enterprises continued, and net foreign reserves reached a level of minus US$62 million at the end of 1975. This was financed by US$30 million in IMF oil facilities, and the rest by increasing indebtedness of the mostly for- eign-owned commercial banks with their parent companies. Senegal's member- ship in the West African Monetary Union lessens the risks usually associated with such low foreign reserves.  10. During the current year, 1976, the balance of payments will remain under pressure. The state marketing board has purchased the large groundnut crop from the farmers at the favorable prices established in 1974, injecting massive purchasing power into the economy. Investments and economic activity are therefore likely to continue their fast growth, and will substantially increase the demand for imports. However, export revenues are expected to stagnate, since groundnut prices are 40 percent below the 1974 peak, and phosphate prices are down by 50 percent. Price declines of the same order of magnitude have already taken place in some of Senegal's food imports, but the net effect on the terms of trade is likely to be negative. If the Government is to maintain investment and growth, foreign capital aid from traditional sources is likely to be about US$25 million short of filling the financial gap. 11. The drop in export prices also creates a considerable problem in public finance. The losses on groundnut transactions in the stabilization fund will probably be compensated to a large extent by gains on the domestic sales of rice and sugar imports, but revenues from excess profits on phos- phate operations will disappear, and the dividend payment will be substan- tially reduced. Even with substantial reductions in new capital participa- tion, public savings may not suffice to support the present level of capital expenditures. To replace the loss in phosphate revenues, the Government has already decided to increase duties on imports from the EEC, and is actively considering further tax increases in the framework of the general tax reform. So far the Government has shown no inclination to solve its problems by re- imposing a tax burden on the groundnut farmer, but is looking for ways to increase its revenues from the modern sector and the wealthier segment of the urban population. Prospects and Creditworthiness 12. The Government's long-range development strategy remains based on promotion of agriculture and export-oriented activities. The agricultural program calls for development of areas less affected by rainfall fluctua- tions (Casamance and Eastern Senegal) where cash crops other than ground- nuts can be grown. Irrigated cereal production is being developed in the arid northern part of the country along the Senegal River. This policy will make the country less dependent on the uncertainties of its climate and world market prices. But since the majority of the rural poor are involved in groundnut farming, the Government continues its efforts to promote animal traction, treated seeds, fertilizer use, and crop rotation to raise the productivity of farmers. 13. Government's strategy will also gradually improve the structure of the balance of payments. Tourism, some new export industries, and an important expansion of phosphate rock mining will provide additional for- eign resources, and the implementation of existing irrigation plans will progressively diminish the need for large food imports for urban centers. These prospects, combined with a favorable long-term outlook for groundnut production, should result in a healthier trade balance in the early 1980's.  -5- The favorable long-term prospects remain contingent on execution of the investment program, most of which will have to be financed from abroad at a rate of about US$125 million annually largely on concessionary terms. Traditional sources of aid will probably not suffice, and it will take time before new aid flows are developed. Part of the expected balance of payments deficits over the next two or three years could be financed through access to the expanded IMF facilities; but additional foreign exchange resources over and above foreseeable project aid at a rate of about $25 million a year will probably be needed. Assuming that additional borrowing to cover the gap is done on Eurodollar terms, debt service would increase from 6 percent of exports of goods and non-factor services in 1975, to roughly 10 percent by the end of the 1970s. In view of Senegal's prospects for long-term diversification and growth, the relatively light debt service burden, its access to short-term financing facilities, and membership in the West African Monetary Union, the country remains creditworthy for IBRD lending. PART II: BANK GROUP OPERATIONS IN SENEGAL 14. The Bank Group has had 28 operations in Senegal to date. Total outstanding lending amounts to US$151.06 million, including sixteen IDA credits, eight Bank loans, two blends of Bank and IDA funds, three IFC opera- tions, and one blend of Bank and IFC funds. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of July 31, 1976, and notes on the execution of ongoing projects. 15. Execution of these projects, apart from the Railway Project, is progressing without exceptional delays. The procurement for the Railway Project has been slow due to time-consuming contract approval procedures, but most components have now been received or ordered. Two agricultural credits (140-SE and 404-SE) provided for technical assistance designed to facilitate reorganization of the Office National de Cooperation et d'Assis- tance au Developpement (ONCAD), the national marketing agency, but the pro- grams did not achieve the anticipated results. The Government took steps in early 1975 to strengthen ONCAD's management and financial operations, but its overall performance has not improved (see Annex II). 16. In view of Senegal's need for substantially higher capital inflows, the scale of Bank Group lending is expected to increase significantly in the future. The Bank Group share of foreign aid disbursements (including grants) is expected to increase from about 6 percent in 1970/71 to 24 percent over the 1974-80 period, making it by that time Senegal's largest aid donor. The Bank Group's share of the outstanding and disbursed debt will increase from 12 percent at the end of 1973 to about 25 percent by 1980. The Bank/IDA share in public debt service is expected to increase from 2.2 percent in 1973 to about 8 percent by 1980.  17. The objectives of Bank Group project lending in Senegal fall under four main headings. Priority is being given to rural development, including development of irrigation in the Senegal River Valley Region (e.g., the ongoing River Polders project, and the proposed Debi Lampsar Irrigation Development project), intensification of groundnut production and diversifica- tion into new crops and new regions (e.g., the Sine Saloum, Terres Neuves and Livestock projects, and the Second Sedhiou project in Casamance); as in the past, we would expect our agricultural lending over the next few years to exceed one-third of the total. Secondly, we have supported diversification of the economy by lending to the growing industrial sector through SOFISEDIT, a development finance company established with Bank Group assistance in 1974; this diversification objective is being further assisted by the proposed second SOFISEDIT project presented in this report, and by a proposed project for the development of tourism infrastructure on the Petite Cote which we appraised in December 1975. Thirdly, we have encouraged modernization and expansion of the country's infrastructure through lending for highways, feeder roads, railways, and the Port of Dakar; we propose to pursue this effort through a second Dakar Port project appraised earlier this year. Finally, Government has asked us to help re-orient and expand the country's education system, and we are in the process of identifying a follow-up oper- ation to our Second Education Project. PART III: INDUSTRY, TOURISM, AND BANKING The Industrial Sector 18. In the years following independence, industrial enterprises in Senegal faced problems of excess capacity due to the loss of the West African market for manufactured products as local industries developed in the newly independent nations. Despite this handicap, growth of the sector has been steady, and its contribution to GDP increased from 13 percent in 1960 to 17 percent in 1970 and 20 percent in 1974; manufacturing accounted for about 12 percent of total GDP in 1974, and for almost 60 percent of value added in the industrial sector. Overall economic growth in the country since the early 1960s is largely attributable to the dynamic role of the industrial sector (defined to include manufacturing as well as mining, energy, and production of construction materials) which has grown at about 5-6 percent annually. 19. The growth of industry is largely explained by the textile/leather and mechanical/electrical subsectors which accounted for almost 60 percent of the recent increase in value, while foodstuffs and chemical industries represented another 25 percent of the total increase. Over the next five years, development in the manufacturing sector is expected to focus on activities in textiles, construction materials, and fish canning.  20. Of the estimated 350 enterprises in the modern sector, less than 10 percent are owned by Senegalese; in 1972, about 85 percent of all industrial assets were owned by French investors, and about 80 percent of executives and senior technicians were Europeans. The Government itself has made several equity investments in industrial companies, and is buying participation in key industries such as phosphate mines and groundnut oil mills. It encourages foreign investment, but also seeks opportunities for Senegalese-owned enterprises and joint Senegalese/foreign ventures. 21. Government support for Senegalese entrepreneurship led to its creating in 1969 the Societe Nationale d'Etudes et de Promotion Industrielle (SONEPI), a predominantly public corporation which assists the development of local enterprises, particularly small- and medium-scale companies, by providing technical assistance, management training, and some financial assistance. 22. Later, to help meet the financial needs particularly of medium- sized industries, SOFISEDIT was created in 1974 with assistance by the Bank and IFC to provide term capital for industrial and tourism projects. In cooperation with SONEPI, SOFISEDIT has started to provide financial assis- tance to some small-scale Senegalese enterprises, and it is expected that about 10-15 percent of SOFISEDIT's future lending will be to companies oper- ating in this sector. However, since SOFISEDIT is not principally oriented toward the small-scale sector, any involvement in this respect will have to be undertaken in continued cooperation with SONEPI. 23. The Government's strategy for future industrial development is essentially as follows: (i) stimulation of export-oriented industries particularly through measures such as (a) the restructured Investment Code which guarantees to foreign investors the free repatriation of their invested capital and earnings, and which also extends the benefits of various fiscal and customs advantages to enter- prises of differing sizes and in several sectors; and (b) an industrial Duty-Free Zone now being established and for which several enterprises have already been accepted; (ii) Government participation in the development of large agro- industrial and mining projects; (iii) increased Senegalese participation in management and owner- ship, to which end industrial concerns are now required to present plans to train local staff and place them in manage- ment positions by 1981; and (iv) provision of technical assistance and financial support for small- and medium-sized industries through SONEPI and SOFISEDIT.  -8- 24. Government strategy is also aimed at decentralizing industry as much as possible away from Dakar and the Cap Vert region to achieve a more balanced geographic development of the sector. Encouragement for such de- centralization has been provided under the Investment Code, but it is never- theless not likely to occur on any significant scale in the near future because of the very limited infrastructure in the interior of the country, and the difficulty in finding skilled manpower in these regions. 25. Particularly in view of all the activities and efforts as discussed above, development of the industrial sector is expected to continue over the period 1975-80 at about 7 percent annually. 26. Bank Group involvement in the industrial sector has so far concen- trated on improving manpower training through an industrial upgrading school financed under the ongoing Second Education Project, and on making long-term credit available through a combination Bank Loan/IFC investment in SOFISEDIT. The Tourism Sector 27. Tourism is one of the few modern sectors in which a country like Senegal with relatively few natural resources can hope to expand in the future. Tourism assets include a pleasant climate for most of the year (particularly during the European winter), attractive beaches, and a rich folklore. With its excellent international airport and strategic location on the Europe-North Africa-America air routes, the country has begun to realize its potential for growth in this sector. Tourism is now the third major source of foreign exchange, after groundnuts and phosphates. 28. Prior to 1973, hotel capacity was concentrated in the Dakar area and other urban centers, and accommodation consisted chiefly of small estab- lishments catering almost exclusively to business traffic. Since then, however, following the Government's decision to give priority to tourism development, hotel capacity tripled over 1973-75; two-thirds of this addi- tional capacity was in large hotels in Dakar, with the remainder in vaca- tion villages on the Petite Cote and Casamance beach areas to the south. Most of the hotels are of high standard, and luxury establishments account for over half of total capacity. Only a few of the smaller hotels, however, are managed by Senegalese. 29. About one-half of the new hotel capacity added since 1973 has been financed by the Government, and the remainder about equally by local and foreign private investors. Privately-owned hotels have been financed by short- and medium-term loans which were readily available from local commer- cial banks, and by long-term credit which, until the establishment of SOFISEDIT in late 1974, had to be found abroad. Long-term funds for hotel construction are also available from the Banque Senegalo-Koweitienne, though on terms slightly less attractive than those of SOFISEDIT. 30. Concurrent with the expansion and diversification of hotel capacity, visitor arrivals doubled and registered bed-nights tripled over the period  -9 - 1972-74; traffic in 1974 was 14% higher than in the previous year compared with a 3% decrease worldwide. 31. The rapid growth in visitor arrivals during 1972-74 is reflected in increased gross foreign exchange receipts from tourists which more than tripled over the period; in 1974 they represented an estimated 7 percent of total export earnings, and present forecasts indicate that by 1980 this proportion would increase to almost 20 percent. Net foreign exchange revenues from tourism are estimated at about 60 percent of gross receipts. About 2,800 Senegalese are employed directly in the hotel industry; a further 5,500 jobs indirectly attributable to the tourism sector involve the produc- tion and sale of handicrafts, as well as services in agriculture, construc- tion, and transport. 32. The Government has only recently recognized the potential benefits of tourism, and the 1973-77 Five-Year Plan for the first time accorded high priority to development of the sector. Manifestations of this new priority included restructuring of the Investment Code to provide special incentives for hotel investors, active Government participation in financing hotel construction, and creation of a special agency (reporting directly to the Prime Minister) which is responsible for the general promotion of tourism. 33. As further evidence of this new priority, the Five-Year Plan includes an investment program of about US$90 million equivalent for hotel construction providing a total capacity of about 10,000 beds; the emphasis in this development was to be directed to three areas, Cap Vert, Petite Cote, and Casamance. Although only about half of this ambitious target will be achieved, hotel capacity will have increased almost three-fold by the end of the Plan period in 1977, largely because of the improved investment climate and the Government's own participation in the sector. 34. The Bank Group has appraised a project to develop infrastructure for the 2,250-bed first phase of a tourism center on the Petite Cote south of Dakar; the project will also include construction of a 250-bed pilot hotel, restoration of Goree Island near the Port of Dakar as a historical and tourist attraction, and technical assistance to help plan and coordi- nate Government investments in the sector. Banking Institutions 35. Senegal is a member of the West African Monetary Union established in 1962 and composed of six countries with a common central bank, the Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO). Other established finan- cial institutions in the country include four commercial banks and seven specialized institutions. 36. The commercial banks have used their short-term deposits predom- inantly for short-term lending; medium-term lending has been financed by the small amount of term deposits, and more generally by rediscounting at  -9 - 1972-74; traffic in 1974 was 14% higher than in the previous year compared with a 3% decrease worldwide. 31. The rapid growth in visitor arrivals during 1972-74 is reflected in increased gross foreign exchange receipts from tourists which more than tripled over the period; in 1974 they represented an estimated 7 percent of total export earnings, and present forecasts indicate that by 1980 this proportion would increase to almost 20 percent. Net foreign exchange revenues from tourism are estimated at about 60 percent of gross receipts. About 2,800 Senegalese are employed directly in the hotel industry; a further 5,500 jobs indirectly attributable to the tourism sector involve the produc- tion and sale of handicrafts, as well as services in agriculture, construc- tion, and transport. 32. The Government has only recently recognized the potential benefits of tourism, and the 1973-77 Five-Year Plan for the first time accorded high priority to development of the sector. Manifestations of this new priority included restructuring of the Investment Code to provide special incentives for hotel investors, active Government participation in financing hotel construction, and creation of a special agency (reporting directly to the Prime Minister) which is responsible for the general promotion of tourism. 33. As further evidence of this new priority, the Five-Year Plan includes an investment program of about US$90 million equivalent for hotel construction providing a total capacity of about 10,000 beds; the emphasis in this development was to be directed to three areas, Cap Vert, Petite Cote, and Casamance. Although only about half of this ambitious target will be achieved, hotel capacity will have increased almost three-fold by the end of the Plan period in 1977, largely because of the improved investment climate and the Government's own participation in the sector. 34. The Bank Group has appraised a project to develop infrastructure for the 2,250-bed first phase of a tourism center on the Petite Cote south of Dakar; the project will also include construction of a 250-bed pilot hotel, restoration of Goree Island near the Port of Dakar as a historical and tourist attraction, and technical assistance to help plan and coordi- nate Government investments in the sector. Banking Institutions 35. Senegal is a member of the West African Monetary Union established in 1962 and composed of six countries with a common central bank, the Banque Centrale des Etats de l'Afrique de l'Ouest (BCEAO). Other established finan- cial institutions in the country include four commercial banks and seven specialized institutions. 36. The commercial banks have used their short-term deposits predom- inantly for short-term lending; medium-term lending has been financed by the small amount of term deposits, and more generally by rediscounting at  - 11 - 39. The Societe Nationale de Garantie et d'Assistance au Commerce (SONAGA) gives accounting assistance and manages a guarantee fund for loans to Senegalese-owned commercial and transport enterprises. The Societe Nationale de Promotion de Tourisme (SNTP) manages the portfolio of Govern- ment's minority participations in hotel companies, and undertakes feasibility studies of hotel projects. Credit Policy 40. Credit distribution and interest rates charged by banks on short- and medium-term lending are controlled by BCEAO through the discount system; banks charge clients varying spreads over the discount rate depending on the risk involved. Since July 1975 BCEAO has offered a priority discount rate of 5.5 percent for agricultural short-term financing, national small-scale enterprises (with outstanding borrowings below CFAF 20 million), and loans to individuals for housing; the discount rate was increased from 5.5 to 8 percent for all other operations. The maximum term of discounts was increased from seven to ten years. The on-lending rates for long-term loans from development banks and long-term finance institutions which operate on their own resources are indirectly influenced by BCEAO through its membership on the boards, although the cost of their external sources is normally the major determinant of the on-lending rate. A tax is charged by Government on internal income at a rate of 9.29 percent, and is collected by the banks; SOFISEDIT's loans are exempted from this tax until 1980. 41. Prior to January 1, 1976, BCEAO determined an annual discount ceiling for each country within the Monetary Union, and then allocated dis- count ceilings to individual banks and enterprises. BCEAO has now introduced a revised system whereby the individual discount ceilings to banks will be withdrawn; instead, in agreement with Governments of each member country, priority sectors for discounting will be determined, and a BCEAO review committee will evaluate the suitability of a given project against these priorities. Discounts to banks by BCEAO will not be automatic, and BCEAO may offer only partial discounts in both term and amount depending on the sectoral priorities of projects. BCEAO discounting limits for medium-term loans, which are generally used to finance local costs and cover the import component of an investment where external finance is not available, will continue at existing levels, i.e., up to 90 percent of project cost for national small-scale enterprises, 65 percent for industrial enterprises, and 50 percent for other projects. There will also be a further requirement that banks must utilize their own liquid resources for investments before seeking discounts at BCEAO. 42. The effects of these changes in the BCEAO discounting procedures are not yet apparent; however, it is likely that in the absence of automatic discounts, the commercial banks will be hesitant to propose projects requiring discountable funds for 7-10 years in case BCEAO refuses their application and they have to use their own short-term deposits to finance the projects. This may result in financial institutions with medium/long-term resources receiving an increased demand for their funds. Institutions like SOFISEDIT with strong evaluation and appraisal capability should be able to demonstrate through  - 12 - their analyses why their projects are of high economic priority to Senegal, thereby increasing the likelihood of their receiving discountable funds from BCEAO. PART IV: THE PROJECT 43. The Government of Senegal has requested Bank assistance to help meet SOFISEDIT's requirements for term financing of the foreign exchange component of approved industrial and tourism projects through December 1978. The present project was appraised in December 1975, and negotiations were held in Washington in July 1976 with a Senegalese delegation headed by Mr. Tidiane N'Diaye, Director of Finance in the Ministry of Planning. The appraisal report (No. 1152a-SE) is being circulated separately to the Execu- tive Directors. A loan and project summary is provided in Annex III. Background 44. SOFISEDIT was established by the Government in 1974 to meet an urgent need for an independent institution specialized in long-term financing of industrial and tourism projects. In this capacity, and also as a national institution with international contacts, SOFISEDIT should become an important promotional channel for foreign investors to contribute to the development of industry and tourism in Senegal. 45. The Government asked the Bank Group in 1972 to assist in the estab- lishment and financing of SOFISEDIT. Its formation, operating policies, management and staffing requirements, and appraisal procedures, were pre- pared by a Working Group which included representatives of its prospective shareholders and of SONEPI. In November 1973, a Bank/IFC mission carried out an appraisal in close collaboration with this Working Group, and in May 1974 the Executive Directors approved a Loan of US$3 million and an IFC equity investment of US$230,000. It is expected that the first Loan will be fully committed by the end of 1976, at which time the proceeds of the proposed second Loan would be needed to permit further development of SOFISEDIT's operations. Capital and Shareholders 46. SOFISEDIT was incorporated in March 1974 as a "societe anonyme" under the Senegal Commercial Code and as a financing institution subject to the banking legislation of BCEAO. It has an authorized share capital of CFAF 650 million (about US$3 million equivalent) subscribed by the Gov- ernment and by Senegalese public sector institutions (34 percent), BCEAO (12 percent), three private commercial banks operating in Senegal (7.7 per- cent each), the Caisse Centrale de Cooperation Economique (CCCE), Deutsche Entwicklungsgesellschaft (DEG), and IFC (7.7 percent each), private Senegalese investors (6 percent), and the Fidelity International Bank of Philadelphia (1.5 percent).  - 13 - Board of Directors, Management, and Staff 47. The Board consists of 12 members, including the Chairman, Mr. Ibrahima N'Diaye, who is also SOFISEDIT's President and Director- General. Directors represent the Central Bank, the Mlinistries of Finance and of Planning, the four commercial banks, and BNDS, CCCE, DEG, and IFC. The Board meets four times a year and reviews all projects. 48. The Deputy Director-General of SOFISEDIT is a member of the Bank's DFC Department seconded originally for a two-year assignment; the Director of Investments was also recruitecl by the Bank for a two-year term. The Bank has agreed to a request by the Government and SOFISEDIT that these two experts remain for a third year (until mid-1977) to complete training and development of local staff. The Government will pay 80 percent of the cost of these additional services, and SOFISEDIT the remainder. 49. SOFISEDIT's organization includes an Investment Department respon- sible for project appraisal, implementation and follow-up, and an Administra- tive Services/Accounting Department supervised by the Deputy Director-General. Total staff at June 30, 1976 was 21 persons, of whom three are managers and six other professionals. The existing organization and staffing is considered adequate for SOFISEDIT's current and expected level of operations, and no additional professional staff are expected to be hired until about 1979. Operating Policies and Procedures 50. Rates charged by SOFISEDIT on loans for industry and tourism projects vary between 11 and 13 percent for medium-term loans (up to and including ten years). For long-term loans, the rate was 10.5 percent until June 1976 when it was increased to 12 percent, a level more consistent with prevailing short- and medium-term lending rates in the country, and which is competitive with other long-term sources of funds, and would improve profitability. SOFISEDIT applies an additional commitment charge of 0.85 percent on the undisbursed portion of all loans. SOFISEDIT charges an in- terest rate of 11 percent for long-term funds to small-scale Senegalese enterprises, in line with Central Bank policy of granting lower discount rates on short- and medium-term loans in this sector. 51. The first Bank Loan to SOFISEDIT has been its only foreign borrow- ing to date, and the Government had assumed the foreign exchange risk on all sub-loans made from the proceeds of that Loan. This same arrangement will apply under the proposed second Loan, in view of the very limited ex- perience of industrial investors regarding the risks involved in borrowing foreign exchange, and also to counter the possible adverse influence on SOFISEDIT's operations of passing on to its borrowers the risk on Bank funds. 52. SOFISEDIT's procedures for project appraisal, -procurement and disbursement, and for internal accounting are considered adequate. Proce- dures for project follow-up are now under preparation; at present, SOFISEDIT  - 14 - makes periodic visits to its projects under construction, and the promoter is required to keep the company informed of the status of project implementation. With particular reference to the project appraisal done so far, there is already recognition of the very good quality of this work, and SOFISEDIT is seen as a sound institution by both the Senegalese Government and the banking and business community. 53. SOFISEDIT's accounts are presently being reviewed and audited by Fiduciaire France-Afrique, a leading audit firm in Senegal. The quality of the first audit of the accounts as of September 30, 1975 is satisfactory. Current and Future Operations 54. From its inception through June 30, 1976, SOFISEDIT approved 19 loans totalling CFAF 1.4 billion and five equity investments totalling CFAF 86.5 million. The projects range in size from total costs of CFAF 9 million to about CFAF 725 million. Thirteen of the 19 projects approved are new operations, five are for expansion of existing facilities, and one for moder- nization. As regards the sectoral distribution of these enterprises, ten are in industry, seven in tourism, one in fisheries, and one in mining. It is estimated that these projects will create about 1,130 new jobs, and will generate value added in production of about CFAF 2.2 billion per annum, and an annual net gain in foreign exchange of about CFAF 1.8 billion. 55. Under the first US$3 million Bank Loan, five projects have so far been approved for a total amount of US$1,852,000. These included opera- tions in manufacturingchemical plaster, for expansion of a brewery and soft drink factory and of a textile company using locally produced cotton, and for a new 50 double-room hotel; all show very satisfactory financial and economic rates of return. Another project in the hotel sector (about US$530,000) is currently under review in the Bank. 56. For 1976 and 1977, SOFISEDIT has a pipeline of 20 projects with total investment requirements of CFAF 6.1 billion (about US$27 million equiv- alent); the potential SOFISEDIT investment in these projects amounts to CFAF 1.5 billion (US$6.7 million) in medium- and long-term loans, and CFAF 96 million (US$0.4 million) in equity investments. Fifteen of the projects will have Senegalese majority ownership; four are in the small- and medium- scale range requiring individual total investments of less than CFAF 100 million (US$0.4 million). SOFISEDIT financial assistance to small-scale entrepreneurs is being provided in cooperation with SONEPI, and it has prepared and submitted to the Bank a program outlining its strategy and the promotional activities it proposes to undertake to stimulate develop- ment of the small-scale sector. 57. Over the longer period from 1977-80, there are now 34 projects in the pipeline with a total estimated investment of CFAF 14.6 billion  - 15 - (US$65 million), of which SOFIDESIT's financing is forecast at about CFAF 3.0 billion (US$13.3 million) in loans and CFAF 200 million (US$0.9 mil- lion) in equity investments. With such a project pipeline, SOFISEDIT con- tinues to develop as a major source of term-financing for the industrial and tourism sectors in Senegal. The Company's operations are expected to increase substantially over the next five years, primarily because (i) its fixed interest rate of 12 percent for long-term finance (above ten years) should be competitive over the life of the proposed loan with other insti- tutions which offer floating Eurodollar based rates: (ii) its superior project appraisal capability will enhance the probability of its projects receiving medium-term rediscounted funds from the Central Bank under the new procedures; and (iii) the demand on SOFISEDIT for term funds will increase should commercial banks become deterred from considering projects for redis- counted term-financing of up to ten years. 58. For its first 18 months' operation to September 30, 1975, SOFISEDIT accounts showed a small loss of CFAF 2.5 million, due primarily to high personnel and administrative costs and low revenues as a result of the slow development of initial projects. There was also some loss of potential earnings in short-term investments due to delays in payment of equity subscrip- tions. For the period October 1, 1975 to June 30, 1976, the accounts show a further loss of CFAF 15 million. Income from loans increased significantly during that time, and accounted for 55 percent of total income as against 4 percent during the preceding 18-month period. Although due to high initial overheads, SOFISEDIT is not expected to become profitable until 1977, the institution is financially sound and creditworthy, and its earnings potential is attractive. Net working capital at June 30, 1976 was approximately CFAF 342 million (about US$1.5 million equivalent). The forecast profitability of SOFISEDIT through 1978 will be lower than envisaged at appraisal of the first project, mainly due to administrative expenses which in 1976 represented a very high 8.7 percent of average total assets, but which are forecast to decline to about 1.8 percent by 1980. 59. Present projections of SOFISEDIT's financial performance indicate that the Company will exhaust its debt capacity in FY 78, under the existing debt/equity limit of 3:1, at a time when it will have only just become profit- able. In order for SOFISEDIT to continue to expand its operations thereafter, either its paid-in share capital will have to be increased or its debt/ equity limit raised. If the shareholders, in particular the Senegalese Government, are ready to finance a share capital increase in FY 78, it will not be necessary to increase the debt limit at that time. However, the projections in the Appraisal Report conservatively assume that share- holders will require SOFISEDIT to operate profitably for two successive years (FY77 and 78) before subscribing to a major share capital increase. This issue has been discussed with SOFISEDIT's management, and the Bank has agreed to temporarily raise the Company's debt/equity limit to 4:1 between October 1, 1977 and June 30, 1979 to allow expansion of operations. SOFISEDIT's management has agreed to the principle of a share capital in- crease, the amount and timing of which would be determined on the basis of the FY78 accounts.  - 15 - (US$65 million), of which SOFIDESIT's financing is forecast at about CFAF 3.0 billion (US$13.3 million) in loans and CFAF 200 million (US$0.9 mil- lion) in equity investments. With such a project pipeline, SOFISEDIT con- tinues to develop as a major source of term-financing for the industrial and tourism sectors in Senegal. The Company's operations are expected to increase substantially over the next five years, primarily because (i) its fixed interest rate of 12 percent for long-term finance (above ten years) should be competitive over the life of the proposed loan with other insti- tutions which offer floating Eurodollar based rates: (ii) its superior project appraisal capability will enhance the probability of its projects receiving medium-term rediscounted funds from the Central Bank under the new procedures; and (iii) the demand on SOFISEDIT for term funds will increase should commercial banks become deterred from considering projects for redis- counted term-financing of up to ten years. 58. For its first 18 months' operation to September 30, 1975, SOFISEDIT accounts showed a small loss of CFAF 2.5 million, due primarily to high personnel and administrative costs and low revenues as a result of the slow development of initial projects. There was also some loss of potential earnings in short-term investments due to delays in payment of equity subscrip- tions. For the period October 1, 1975 to June 30, 1976, the accounts show a further loss of CFAF 15 million. Income from loans increased significantly during that time, and accounted for 55 percent of total income as against 4 percent during the preceding 18-month period. Although due to high initial overheads, SOFISEDIT is not expected to become profitable until 1977, the institution is financially sound and creditworthy, and its earnings potential is attractive. Net working capital at June 30, 1976 was approximately CFAF 342 million (about US$1.5 million equivalent). The forecast profitability of SOFISEDIT through 1978 will be lower than envisaged at appraisal of the first project, mainly due to administrative expenses which in 1976 represented a very high 8.7 percent of average total assets, but which are forecast to decline to about 1.8 percent by 1980. 59. Present projections of SOFISEDIT's financial performance indicate that the Company will exhaust its debt capacity in FY 78, under the existing debt/equity limit of 3:1, at a time when it will have only just become profit- able. In order for SOFISEDIT to continue to expand its operations thereafter, either its paid-in share capital will have to be increased or its debt/ equity limit raised. If the shareholders, in particular the Senegalese Government, are ready to finance a share capital increase in FY 78, it will not be necessary to increase the debt limit at that time. However, the projections in the Appraisal Report conservatively assume that share- holders will require SOFISEDIT to operate profitably for two successive years (FY77 and 78) before subscribing to a major share capital increase. This issue has been discussed with SOFISEDIT's management, and the Bank has agreed to temporarily raise the Company's debt/equity limit to 4:1 between October 1, 1977 and June 30, 1979 to allow expansion of operations. SOFISEDIT's management has agreed to the principle of a share capital in- crease, the amount and timing of which would be determined on the basis of the FY78 accounts.  - 17 - Senegalese entrepreneurs; this assistance is being provided in recognition of the need to increase knowledge about ways to help the small-scale sector in Senegal, in particular enterprises in the informal artisanal sub-sector. With advice and assistance from the Bank, SONEPI will be expected to use the funds to do the following: (i) consolidate and evaluate the results of ongoing statistical studies of the small-scale sector now being carried out by the Government and the International Labor Office; (ii) define alterna- tive methods to meet the financial and technical assistance needs of local entrepreneurs; and (iii) design and test a small pilot project to apply the necessary inputs in a controlled environment. Given the work already in progress in the country as stated in item (i) above, the Bank and SONEPI estimate that a study/pilot project could be executed over two years at a cost of about CFAF 60 million (approximately US$267,000). The Bank will finance about three-quarters of this amount (about US$200,000 equivalent) as proposed, with the remaining CFAF 15 million provided by the Government. The Bank's contribution will be made available to SOFISEDIT from the pro- posed $4.2 million Loan, and will be on-lent to SONEPI with the Government responsible for the commitment fee, and for the repayment of principal and interest. Details of the above arrangements have been agreed with all par- ties concerned. Project Benefits and Risks 66. The proposed project is expected to produce important benefits particularly in generating foreign exchange revenue and creating employment in projects financed by SOFISEDIT; also, the proposed study/pilot project opera- tion through SONEPI will extend our knowledge of enterprises in the urban artisanal sub-sector where we hope to have a project in the future. The proposed Loan will enable SOFISEDIT to continue to develop as a major source of term-financing for Senegalese entrepreneurs who have so far not had suffi- cient access to adequate financing, especially in the industry and tourism sectors in which SOFISEDIT specializes. More generally, the project will allow continuation of the important institution-building effort to develop SOFISEDIT. Project risks are no greater than can normally be expected with operations of this type undertaken by a relatively young and expanding institution. PART V: LEGAL INSTRUMENTS AND AUTHORITY 67. The draft Loan Agreement between the Bank and SOFISEDIT, the draft Guarantee Agreement between the Republic of Senegal and the Bank, the Report of the Committee provided in Article III, Section 4 (iii) of the Articles of Agreement of the Bank, and the text of a Resolution approving the proposed Loan are being distributed separately. The draft agreements conform generally to the normal pattern for loans to develop- ment finance companies. 68. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank.  - 18 - PART VI: RECOMMENDATION 69. I recommend that the Executive Directors approve the proposed Loan. Robert S. McNamara President Attachments: Washington, D.C. September 7, 1976  Page I of 1. pages TABLE DA LAID AREA C THOU AMO) ~~~SENEGAL- SOCIAL INDICATORS DATA SHEET - - - - - - - - - - - - - -SE4rGAL REFERENCE CO1TORIES (19r0 TOTAL 1 96. 2 MOST TECENT AGRIE.C . 19 60 1 970 7ST14ATE GHANA IVRYA CCAST TUNISIA - CNFP PER CAPITA (USA) 220.0 -----2b00 3-70.0- 340.0 3640. 0 370O. 0 PTPULATI)N ANT VITAL STATISTICS PJP'JLATI0A ER10-YR. MILLION) .3.4 4. 4 5.0 S. . 4 5.1I POPULATION DENSITT PER SDUARE KM. 1f7.0 2 2. 0 25.0 3 6 .0 16.0 3 1. 0 PEq S3. K". ASAICULTURAL LAND* 39.0 ..0.0 30.0 VITAL STATISTICS CRuDE V I THI RATE PE0 THOUSOAD 48.0 47.6 47.6 49.8 66.1 66.7 CRUDE DEATH NATE 'E- TROUSAST1 27.5 24.4 23.9 24.6 23.1 16.9 INFAN4T I3RTALITY RATE C/THOU) . 1 5 6.0 (5 0. 0 15 6.0 .. 125.0 LIFE EX-E:TANC0 AT RIRT9 CTRS) 35. 9 6 0.0 4 0 .0 41. 5 4 1.0 5 1.46 GROSS REP90OUCTI0N RATE 3. .0 0.0 3.2 0.1 3.4 PJPJLATION1 GROWTH PATS (l) TOTAL Z.j1 2.6 2 .7 2 .6 A: 4 aS2 309 A49 3. 5 6. 0 . .1 3696A1 'OPULA TItN CO i F TO TAL) 22. 7 2 9.0 ..28.1. 29. 0 4 0. 0 /b AGE STRUCTURE (Pc.RCE%T) ITO 14 YEARS 4Z.6 41.2 4. 6.9 42.5 66.3 /b 15 03 6'. TEAQS 5 3. 6 54.94 9.. 5 5i.6 S0. ? /b 65 TEARS AND OVER 3 . 3.9S.9 3.6 2.' 9 .5 Zi aGE DE-ENOEN4CT -RAT'IO 0. 9 0. 8 I.10 2.8 1.0 /b, E:0IOMIC OEPENADENCY 3ATI13 1.2 L . 2 /a 1 .4 0.N/ 1.3~' FAMILY PLANNING ACCEPTORS (CUMULATIVE, THOU) ... . 0.9 . 112.2 USERS( COr0 HARRIET) WORTH) ... .2 .0 ..10. EMLAP PENT TOTAL LAVOR FORCE (THOUSANO) 1900.0 (600.0 .. - 300.0 2&O0.0 1000.0 /b LABOR 'ORCE IN AGRICULTURE (%) . 7 3. 0 . 56. 0 82. 0 5 7.0 lb JI4ERPLI TED C207- LABIR FO RCE). 7. 0 ..5.0 /a 6. 0 10.0 /b INCiME 0I50N19'JTI3N o Or PRIVATE INCORE NEC'S A3- HIGHE ST 51 Z O HOUSEHOLDS 16.8 /b .. 2 3. 5 HIGHEST 201 OF HOUSEHOLDS 6 7? . . .. 5554 L3WEST 201 Or HOUSEHOLDS )2 ~ . .. .42i LOwESt 600 OF HOUSEHOLDS .47- I....7. 1. 3ISVIRIUTIOt DOF LAND OWNERSHIP t OCAE) 3Y TOP 151 OF OWNERS ... ... 51. . O Z OWA4EO 30 SMALLEST 1X01 DWNERS .. . .. ..a H.EALT-4 AND NUTRITION -)PULATIO'C 'ER PHYSICIAN 22100.0 /c 166L.0.0 1651o.0o /a 12 950.0 A6 1140.0 5 950. 0 0JPULAT ION PER NURSING PERSON ..- 2680.0 2260. i 1o70o 7_ 2680.0o /d 730.0 it PJPIJLATIaN PEA R USPI TAL RED 830.0 /d 010.0 /A 840o00 Ia.) 76 0 .0 6900 6 10. 0 /g 'C5 CA'ITA SUPPLY OR CALONIES (Z OF RCQJIREHENTS) 91.0 97.0 100.0/c 96.3 103.0 96.0 PROTEIN (GQHMS PER DAY) 66 .0 64. 0 6 5 .0/c 4 6 .0 6 0. 0 564. 0 .0' WHiICH ANIMAL AND PULSE . 28.0 /c I. 0. 0 Ic 19.0 A 1 4.-0 /h OCAYN 1ATE C/THRU) AGES 1-4 .. . . A.. Eli CA 7105 ADJUJSTED ENROLLMENT RATIO PR [MARy SC'HOOL .. 38. 0 /d 403.0 /d 56.0 /d 7 6. 0 1 07. 0 SECODAORT SCHOOL .. s95. Ia. e 9.0 d 1.0 ot 2 0. 0 YEARS OF SCHOOLING PRORIOED (IIRST AN) SECOND LEVEL) 13 .0 1 3.9 1 3.0 15.0 1 3. 0 11S. 0 VJCATIONAL ENROLLMENT C?t OF SE CON4D A R Y) . 7. 0 ..25.0 7. 36. 0 AGdLT LITERACY RATE (Z) .. 10. 0 1.o /d 2 5.0 2 :0.0 PESOS PER ROOM CAERGE .5 /e.f 2. .... b OCCUPIED 3WELLINGS WITHOUT PIPEO WATERI (Z) 12.0 /1. . ..... 60. 0 ACCESS tO ELECTRICITY CI OF ALL DkELL1NGS) 96 .0 If . .... 264-0 /b RURAL DWELLINGS CONNECTED TO ELECTRICITY Cl) . .. RADIo RECEIVERS (PER THOU POP) 67.0 69. 0 6 7. 0 78.0 17.0 77.0 PASSENGER CARS (PER tHOU POP) 6.0 9. 0 8 .a 5.0 0 0. 0 1 3. 0 ELECYRICITY CRAM/YR PER CAP) 41 .0 FO.-0 9 2 .0 33 8 .0 120.0 1 5 5.0 NEWSPRINT 1KG/YR PER CAP) 0.1 0.1 0.1 0.4 0.2 0.1 SEE NOTES AND DEFINITIONS ON REVERSE  7302 ot 4 pages NOTES mines therwse noed. dta fo 1960 re fer to ann year be twee 1959 end 1961 , for 19 70 boto-en 1968 and 1970l. and for 'lost Reron F--rt-ttoe tunisa ha beenseleied a an bjentive teunry b-nause of eon s,n1tarity Of lie non-y oilth uhe Sengalsntoon. otluding favorble psnO tefr b deveOpMent of fisheries and tuorten SENEGAL 1960 eRai of pnpiatio under1 .IIn 65 and O0cr to total lborfrs Pplte. / 1963. /d 1962, goon.. et_ hosital eerb1ish--st, n TIncal, urban andrua /f1915. data ar for tonniun of Iakar only and refer to RuE-pean type doellinge,, La Inside -1-e 1970 I Ratio of pupattion under1 -ISn 69 and eve tO tota labor forte lb C-ornoent hnepital nstabltnluhn-t /c 1964-66, Id Lnedjuntd, In berseederY lev- NIOSE RECENT ESTIMATE- /n 19725 /b C-o-eaen heaplual ee;abliuho.tet It 1969-71 a-erge , /d 1971 GHANA 01970 I Rnsiaterd only; lb Registsend, not all pratt,itig In the -nutry, In 1966-68, /d 6-15 and 16-21 -ear of a ge tospattivcly. IVORY COAST 1975 I Due to insigrt.ien, grewe rate Is higher ha raeIf -a-rl Innrea... /b 1965-79; It Ratio fpplto under 15 and 61 and ever to tersi tue ore d Ceo-runet only, Ia1964-66, /f 12-18 year Of g 0Ui74l1i1970 Is1956-66, /6 1966, Ic Ratio of pepola-ls under lb and 65 aed ever Re total labor fer-. IdInoero- pie.t, I Eoeig4.5 mullen hno....es f pioae Iaud, neuleding 0.8 nillion h-rrrn In publIc oiorn-h,ip. and 21 nilianheotres f -leotio, land: If Pe-rsonnl In gBnesteet e-rlte only. La Coor-oo hospitaletahiulsse- onl~y; / 194-6 Ti Registerd only. i ustenraon gotb tsnlvr than rate of nature1 I_ in.ra.. RS Sug-n 10. 1976 DEPrN0TIDNS OF 3961k!, IDIfDCATRS 1,,d Are! Ith,, k,-, ~~~~~~~~~~~Peeslation Zpea-nurin peron Population divided by norh-r f pruo~ti- Totul.1 u se-fesnna Dn!nprsg lend -raad tanJend inher.. . nn esedflasgeet nurse, 0tund re tfidoure, ARrto M.-otreI nte luae -faglulea ara ad_tea 'niy er pera- and auxfinry pera-ne with 'rtngosnrisnon. noncIn fortuI nsuu n-ko ti bihn- garden ern t aln sslin c eptlbd-Pplto ividd by -brhr of hoepstol- bed. snsi~ale Snp -lnsd 7ru-te 0n slad s-eialied hospitll GEN? mr Ca-It a(f05 -fp eraph IS e t .ste as torren nak-t prisa .d rshbill tat_ one . er; -onldes nuring hess ond -stbli.sheote raloulatod hr ea.n .utrt v-1he n ol lank otn (1973-75 haie) . fresollan rosisor 190) 19-0 and 1975 data. Par caItanpan fclre 0o sornun Cernpa'.d frost Popolautin aod vital sntietto o"pit. per day; evilable -paples -stlre den,entiopocur roonutin lndmr. oilliun - is of July firn If ne"I alabe isprte I... np-rts, u-d ohenges in stunk; net sapplon nooudo --orgo f w ot-y-ar 1c run 960, 1973 and 0 975dat. outnal fend, sed,q-anitteo..cd tn food pr..OOalgudlue ds dltribetion; rqsrsteecte were estostod by FAT Io.ssd on, pls- eloginl nenda fee n Isa untietty and hesith oundertu nouh-en- fauv snuy -prs re r M