Announcement of Upper Volta Receives 9.4 Million Dollars IDA Credit for Rural Development on June 10, 1976

• V /arid Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 IDA NEWS RELEASE NO. 76/31 June 10 , 19 76 UPPER VOLTA RECEIVES $9.4 MILLION IDA CREDIT FOR RURAL DEVELOPMENT Some 120,000 people living in 600 villages in Upper Volta will benefit from a rural development project being financed by a $9.4 million credit from the International Development Assodation (IDA), an affiliate of the World Bank. Upper Volta has a traditional and overwhelmingly rural economy; most of the labor force is composed of self-employed farmers and pastoralists. Productivity is very low, due to erratic rainfall, prolonged dry seasons, poor and shallow soi ls and a farming system still based on shifting cultivation, with little use of cash inputs. While agriculture, mainly crop farming and livestock cultivation, provides a livelihood for 96% of the population, this sector generates less than 45% of the country's gross domestic product. In 1974 average GDP per capita was about $80. The Second Rural Development Fund -- a continuation of the First, established in 1972 by a $2.2 million IDA credit will help finance small- • scale agricultural and rural subprojects, mainly in the Massi Central Plateau region, one of the most densely populated and least fertile areas of the country. The Five-Year $16.2 million project is designed to increase crop pro- duction (rice, cereals, groundnuts, cotton) and to improve the quantity and quality of village water supplies. It will benefit some 15,000 farm families (120,000 people). The project includes the development of 2,700 hectares (ha.) of bottomland; the establishment of erosion control works for 9,200 ha. of land; the construction of 520 wells and 180 tubewel1s; the construction of 400 village warehouses and 20 village teaching centers; the provision of $1.5 mill ion medium- term credit for agricultural equipment; also the preparation of studies for the economic development of areas that have been freed from the prevalent river- blindness disease. The Banque Arabe pour le Developpement Economique en Afrique (BADEA) is contributing $4.5 million to the project. Technical assistance will be pro- vided on a grant basis by the Fonds d'Aide et de Cooperation (FAC); the Nether- lands; and the United Nations Development Programme. The IDA credit to Upper Volta is for fifty years, including ten years of grace. The credit is interest- free, except for a service charge of 3/4 of 1% to meet IDA's administrative expenses. To date, IDA has extended ten credits to Upper Volta totaling $47. 2 mi 11 i on . • NOTE: Money figures are expressed in U.S. dollar equivalents.  T ECHN I CAL DA T A PROJECT: COUNTRY: TOTAL COST: Second Rural Development Fund Upper Volta $ 16 . 2 mi 1 l i on • I DA FI NANC I NG: $9.5 million, standard IDA terms OTHER FINANCING: Banque Arabe pour le D~veloppement Economique en Afrique (BADEA); Fonds d'Aide et de Cooperation (FAC); the Dutch Government; and UNDP IMPLEMENTING ORGANIZATION: The Rural Development Fund, P.O. Box 148, Ouagadougou, Upper Volta. PROJECT DESCRIPTION: The project consists of: bottomland development (2,700 hectares (ha.)); erosion control works (9,200 ha.); small-scale irrigation and improved bottomland development (500 ha.); construction of 520 wells, 180 tubewells, 400 village ware- houses and 20 village centers; provision of medium-term credit for agricultural equipment, $0~ million equivalent; and provision for unidentified projects. In addition, studies for economi~ development of areas freed fran onchocerciasis wi 11 also be financed under the project. PROCUREMENT: The Bank loan wi 11 finance vehicles, tractors, other equipment and supplies such as cement and steel, valued at $2 mill ion; these items will be obtained through international competitive bidding in accordance with IDA guidelines for contracts over $50,000, and through competitive bidding in accordance with local procedures acceptable to the Association in the case of contracts of less than $50,000. For contracts under $10,000, direct comparative purchasing will be employed. Domestically manufactured goods will be allowed a 15% preference or the applicable import duty, whichever is lower. ECONOMIC RATE OF RETURN: 16% ,ESTIMATED COMPLETION DATE: 1980 - 0 - •