Somalia - Drought Rehabilitation Program Project

Document of FILE COPY The World BaK FOR OFFICIAL USE ONLY Report No. P-175 lb-SO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE 'DIRECTORS ON A PROPOSED CREDIT TO THE SOMALI DEMOCRATIC REPUBLIC FOR A DROUGHT REHABILITATION PROGRAM JUBA-SHEBELLI AREA EMERGENCY SETTLEMENT SCHEME March 31, 1976 This document has a restricted distribution and may be used by reciplents only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. EQUIVALENTS Currency Unit - Somali Shilling (So. Sh.) US$ = So. Sh. 6.30 So. Sh. 1 = US$0.1587 So. Sh. 1 m = US$158,730 Government of Somalia Fiscal Year January 1 - December 31 FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE SOMALI DEMOCRATIC REPUBLIC FOR THE DROUGHT REHABILITATION PROGRAM JUBA-SHEBELLI AREA EMERGENCY SETTLENENT SCHEME 1. I submit the following report and recommendation on a proposed development credit to the Somali Democratic Republic for the equivalent of US$8.0 million on standard IDA terms to help finance development of rainfed crop production in the Juba-Shebelli Area Emergency Settlement Scheme which is part of a comprehensive drought rehabilitation program. The Arab Fund for Eco- nomic and Social Development (Arab Fund)and the African Development Fund would also help finance the settlement scheme in the amount of 6.4 million Kuwaiti Dinars (about US$22.4 million) and 5.0 million African Development Fund Units of Account (about US$5.5 million), respectively. The Kuwait Fund for Arab Economic Development (Kuwait Fund) would finance the Northern Rangelands Rehabilitation - Project, which is part of the comprehensive Drought Rehabilitation Program in an amount equivalent to 6.0 million Kuwaiti Dinars (about US$21.0 million). PART I -- THE ECONOMY 2. A Bank Economic Mission visited Somalia in November/December 1974 and its report entitled "Somalia: Recent Economic Developments and Current Prospects" was distributed to the Executive Directors on August 20, 1975. Country Data Sheets are attached as Annex I. 3. The Somali Democratic Republic was formed in 1960 by a merger of the former Italian Trust Territory of Somalia and the British Protectorate of Somaliland. Following a decade of parliamentary rule, the Government was taken over by the military in 1969. The Supreme Revolutionary Council, consisting of army and police officers, is the highest decision-making body. 4. In 1970 the Government announced its adherence to a program of scientific socialism, emphasizing egalitarianism and social justice, develop- ment through the public sector, nationalization of certain foreign enter- prises, and the formation of cooperatives. This policy was at first associated with a negative attitude toward private investment, but the Government now appears to be taking a more favorable but still limited view of the role of private initiative. In general, the Government's development efforts have been characterized by austerity and self-reliance. Somalia joined the Arab League in February 1974. This step has significantly improved the country's foreign assistance prospects. 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 - 5. Somalia is located on the Horn of Africa with three thousand kilometers of coastline on the Gulf of Aden on the north and the Indian Ocean on the east. It has an area of 637,000 square kilometers. The topography varies from a hot and arid coastal plain, which gives way to sparsely wooded savannah, to rugged mountains, agricultural plateaus and lowlands of varying fertility and rainfall. Much of the country is arid; water supplies are scattered and often 'anreliable, and periodic droughts bring great hardship to both the people and their livestock. Only a small proportion of the land is arable. While geology suggests mineral resources, exploration is still in the early stages. Lacking other known resources, development plans center on agricultural and livestock develop- ment. However, progress in the development of stock-raising and agriculture will depend upon careful management of scarce land and water resources. 6. With an estimated per capita income in the order of US$80 Somalia is classified by the UN as one of the 25 least developed countries of the world. Of the total population of approximately three million, about two- thirds are nomads, who depend on livestock for their livelihood, and about 20-25% are farmers cultivating land along the Juba and Shebelli Rivers and in the northwest region. The small monetary sector of the economy provides only limited opportunities for employment. Apart from the traditional export of livestock, commercial agriculture is mainly cen- tered on the production of bananas for export, in which Italian concession holders are still important, and the production of sugar for the domestic market. Manufacturing and other sectors of the economy are restricted in their potential by the small size of the market, poor infrastructure, and the shortage of capital and entrepreneurial experience. No income distri- bution data exist, but about 70% of the population live at subsistence levels. Social services are still very inadequate; the school enrollment ratio is among the lowest in the world, barely reaching 16% of the elementary school age population. Recent Economic Performance 7. There is little economic data on Somalia. Even basic figures such as GNP, population, number of livestock, or output of major agricultural crops are only rough estimates. Therefore, it is extremely difficult to measure economic performance. 8. Performance in mobilizing and investing resources sharply improved during 1969-72 but it has been adversely affected by the drought of 1973 and 1974. The drought affected the entire central and northeastern parts of the country involving a large part of the population, mostly nomads. The Government moved quickly to respond to the situation and began to set up relief camps in November 1974. Relief camp population peaked at about 270,000 in late May and early June 1975. While the Government's foodgrain reserves were almost totally exhausted by the end of 1974, food aid was received in sufficient volume to cope with the immediate problem of hunger. However, despite prompt action by the Government and the response of foreign -3- aid donors, the loss of human lives reached 19,000 by the end of summer 1975. Given the size of the disaster, this was a relatively low figure and is an indicator of the growing effectiveness of the Government. However, there was extensive loss of livestock estimated at 25 to 30 percent of the national herd. As a result of the drought, exports of livestock and bananas, the two largest earners of foreign exchange, were reduced and large imports of maize, sorghum, rice and sugar were required. 9. The May-September rainy season in 1975 alleviated the drought considerably and the relief camps have since been disbanded. About 104,000 people from the relief camps have been relocated in the three agricultural settlements of the interriverine area and 14,000 settled in coastal fisheries; the remainder have returned to their nomadic life. 10. Somalia's manufacturing sector consists of a few relatively large- scale publicly owned enterprises and some small private enterprises. Out of an estimated value added in industry of US$20.1 million in 1973, about 80% was in the public sector. Most of the industries are agro-based, depending upon locally produced raw material. Food processing accounted for over 58% of value added in industry during 1973. After making strong progress in the period 1968-70, a period of relative stagnation started in 1971 and lasted until 1973. Indications are that industrial activity may have picked up in 1974-75. 11. Somalia's recent fiscal performance has been most encouraging and it reflects the Government's emphasis on self-reliance. Current revenues have increased from US$38.1 million in 1969 to an estimated US$90.5 million in 1974 and the current account position has changed from a net deficit of US$2.0 million in 1969 to a surplus of US$11.6 million in 1973. The rising trend in public savings was not sustained in 1974; against projected savings of US$19.7 million only about US$11.1 million is estimated to have been realized. A diversion of resources to the crash literacy program for the rural areas is responsible for part of the shortfall.. Other factors ad- versely affecting public savings were the more-than-doubling of budgeted police and defense expenditures over this five-year period, the failure of public enterprises to generate planned surpluses and the emergency expenditures incurred for drought relief in 1974. 12. Government recurrent expenditures, which already account for slightly more than one-fourth of estimated GNP, are likely to grow more in the next few years than in the past because of the continued burden of displaced population and the implications for recurrent expenditures resulting from the increasing level of development outlays. New sources of revenue may be required since a substantial increase in rates of exist- ing taxes may not be possible. Taxation should be reviewed with particular attention paid to the potential role of public enterprises in mobilizing resources for development. 13. Somalia's balance of trade has been in deficit since independence. In recent years, the trade gap has groun from US$13.7 million in 1970 to US$101.7 million in 1974. Exports jumped from US$31.9 million in 1970 to US$56.5 million in 1972, but then declined by 9% in 1973. Although export volumes continued to decline, export earnings in 1974 are estimated to have been slightly higher than in 1973 due to better prices for livestock and meat products. The drought has caused reductions in the production of live- stock, meat products, and bananas, which together account for about 90% of Somalia's exports. Imports, on the other hand, have been rising steadily, from US$56.8 million in 1971 to an estimated US$166.0 million in 1974. While the rate of growth of imports appears high, some attempt has been made to constrain food imports, at the cost of shortages during 1974 of sugar, edible oil and foodgrains, and the proportion of development imports appears to have increased from around 25% of the total in 1971 to about 40% in 1974. 14. Somalia's trade deficits have, until recently, been offset by transfer receipts and capital inflows which together averaged about US$28.0 million per year in the period 1968-72. In 1973 and 1974, however, transfers and foreign borrowing, despite an increase to over US$79.0 million per year were insufficient to cover the trade gap. The overall balance of payments deficits were US$7.2 million in 1973 and US$9.0 million in 1974 and were financed by an outflow of reserves. 15. Foreign aid has played and will continue to play a crucial role in Somalia's economic development. The level of foreign capital inflows has increased from an average of US$39 million per yezr (62% grants) in 1960-69 to US$59 million (approximately 50% grants) in 1973 with the result that on a per capita basis, Somalia receives substantially more aid than most other developing countries. In the 1960's the main contributors were Italy, the United States, the European Economic Community, Germany and the USSR. More recently, China and North Korea have become important lenders; China is now financing the largest single-aided project, the Belet Wein-Burao Road, which will link the southern and northern parts of the country. However, this pattern of foreign aid now appears to be shifting -- the Arab oil-producing countries are becoming a major source of development assistance. The Bank Group has played a relatively modest role; IDA credits accounted for only about 10% of gross capital inflows during 1970-73. 16. Most of the assistance to Somalia has been on soft terms. In mid- 1974, the disbursed part of Somalia's foreign debt amounted to about US$145 million. Major sources of external capital were the USSR with 38%; Saudi Arabia, Qatar, Libya and Iraq together accounted for a further 16%; the Peoples' Republic of China for 9%; while the Federal Republic of Germany and IDA each accounted for about 11%. Although a large share of this debt is interest-free or at very low rates (2-3% per annum), the ratio of debt service to exports has been rising, from 3.4% in 1972 to 5.8% in 1974 and about 10% in 1975. It is expected to remain at that level until 1980. In view of the poor resource endowment, uncertain export prospects and a public and private savings performance still in its infancy, Somalia should exercise - 5 - caution in taking on external debt on commercial terms. Somalia should continue to make every effort to obtain external aid on conces!.ionary terms. Development Planning 17. In 1971, the Somali Government launched a three-year development program which called for public investment of US$143.0 million. The main sectors of investment were transport and communications (36%), water resources (12%), agriculture (11%), industry (9%), livestock (6%) and irrigation (4%). It is estimated that about two thirds of the planned investment was achieved, The 1971-73 development program was followed by a five-year program (1974-78) calling for public investment of about US$620.0 million. A little less than one-third is to be financed from domstic resources. The sectoral allocations are: agriculture, including irrigation (29%), transport and communications (24.5%), industry (15%), and livestock and range improvement (5%). Roads account for most of the investment in transport and communications though they have received less priority than in the previous plan. The most signi- ficant feature of the current program is the sharp rise in planned investment, from an actual level of about US$53.0 million in 1973 to an average of over US$122 million per year in 1974-78 and the increased amount of domestic financial participation. The current plan is also more oriented towards directly productive investments. 18. Since the bulk of the population is engaged in herding or in sub- sistence farming, a development strategy for Somalia must start with agri- culture and livestock as a base. The major development goals of the Somali Government include self-sufficiency in foodgrains, the partial substitution of other food imports (oils, rice), and a concerted effort to improve the lot of the traditional nomadic herdsmen and eventually to settle some of them permanently. These essentially production-oriented goals are reflected in the eight-fold increase in annual investment in agriculture and irrigation and four-fold increase in annual investment in industry (as compared to the 1971-73 plan). The current plan's emphasis on irrigated agriculture is meant to make the country less dependent on the erratic pattern of rainfall, and assure relatively stable and predictable increases in output. Some at- tention is continuing to be paid to projects in rainfed agriculture (mainly through the Crash Program,the proposed North West Region Agriculture Project and part of the proposed settlement project) which focus on how to make the best use of the limited amount of rainfall. The plan continues to base its development of industry on the processing of domestic raw materials to produce products mainly for import substitution. 19. As it stands, the new five-year plan is probably overly ambitious and its implementation as originally conceived has been rendered even more difficult, because of last year's disastrous drought which forced the Govern- ment to concentrate resources on measures to save the drought stricken popu- lation. While the drought impact on the plan is likely to mean a lower-than- anticipated domestic financial participation because of large requirements of public funds for use in emergency relief and rehabilitation, its long term impact will not be entirely adverse. Implementation of the Drought Rehabili- tation Program is in fact accelerating development of the agricultural sector and is resulting in a larger inflow of foreign funds than originally anticipated. - 6 - PART II - BANK GROUP OPERATIONS IN SOMALIA 20. Starting in 1965, IDA has made nine credits totalling US$58.1 million, about 60% of which has been made for transportation development including construction of two trunk roads (Afgoi-Baidoa in the central region and Hargeisa-Berbera in the northern region), and a new deepwater port at Mogadiscio. IDA credits were also made for education in FY71 and livestock development in FY74. In FY75 a credit of US$8 million was approved for a Second Education Project. No Bank loans or IFC investments has been made to Somalia. IDA-credits accounted for 20% of Somalia's outstanding debt at the end of October 197;. Debt service payments on existing IDA credits in 1980 are projected at 9% of Somalia's total debt service payments. 21. Annex II contains a summary statement of IDA credits as of February 1976, and notes on the execution of ongoing projects. Performance on ongoing projects has been satisfactory, except for some initial delays. 22. We plan to concentrate our efforts on the country's directly productive sectors, agriculture and livestock, and also on education and transportation. While agriculture and livestock offer potential for develop- ment, most rural development activities are only at the beginning stage. Moreover, agricultural development in Somalia is particularly difficult because most of the people in the rural areas are nomadic. Our first effort in livestock was the Trans-Juba Livestock Project, approved in FY74. The proposed project would be our first agricultural project in Somalia. 23. The country's transportation facilities are inadequate and the Government plans to continue transportation development in the next few years. The Second Highway Credit now under implementation provides for feasibility studies and detailed engineering for the improvement of the Hargeisa-Borama Road in the northern region. The studies will provide the basis for a project which IDA might assist in financing in association with other external lenders. 24. Recently there has been a marked increase in resource inflow into Somalia from the oil-exporting Arab countries. The Government expects this trend to continue, but the lack of projects is a constraint. We are now exploring various possibilities of assisting the Government in identifying and preparing projects to relieve this constraint. 25. As stated earlier, a severe drought struck Somalia in 1974. The emergency relief phase has been completed and the Government has now embarked on rehabilitation; it requested IDA assistance in January 1975 to take a leading role in the preparation and financing of the rehabilitation program. The proposed project (as well as several other projects) was prepared in response. IDA's role has been a catalyst for attracting other external funds for drought rehabilitation (paras 37 and 38). -7- PART III - AGRICULTURE AND LIVESTOCK IN SOMALIA 26. Somalia is heavily dependent on the agricultural sector for its economic development. However, with the exception of commercially produced bananas and sugarcane, production is mainly for subsistence. About 70% of the population are pastoralists, some of whom engage in subsistence cultivation; an additional 15% are engaged in settled agriculture, fishing and forestry. Of the total land area, 32% is too arid for any form of agri- culture, 55% is suitable for grazing and 13% or 8 million hectares are available for settled agriculture. Only about 600,000 hectares of the 8 million hectares of potentially arable land dre now cropped. All land belongs to the State. 27. Rainfed sorghum, the most important food crop, is grown on about 350,000 ha., and total annual production ranges from 100,000 to 150,000 tons depending on the rainfall. Dryland maize is the next staple food crop; the area planted fluctuates between 50,000 and 80,000 hectares with annual pro- duction averaging between 30,000 and 50,000 tons of grain. Bananas, sugar- cane, rice, vegetables and fruits (mainly citrus) are grown under irrigation. Some groundnuts, sesame, cotton and pulses are also cultivated. Development of rainfed agriculture has been constrained by low and erratic rainfall, poor cultural practices, inadequate extension services, poor seed quality, severe soil erosion, lack of agricultural credit, and inadequate and uneven distri- bution of water facilities for both human and livestock consumption. 28. The national livestock herd consisted, before the drought, of an estimated 3 million cattle, 14 million sheep and goats and 2.5 million camels, owned almost exclusively by nomads. As most of Somalia's land area is suit- able only for extensive livestock production, these herds represent the country's most readily exploitable economic resource, and provide a basic livelihood to the majority of the population. However, constraints impeding efforts to increase and improve livestock production include the deteriorating condition of the ranges due to droughts and disease and lack of properly distributed animal watering facilities. Somalia has a well established traditional livestock marketing system. Most towns or villages have a cattle market where buyers (traders, butchers) and sellers (stock-breeders, farmers, nomads) gather daily. In more remote areas, traders use trucks or camels to visit the nomads. 29. The Government provides a wide range of services to the agricul- tural sector through the Ministry of Agriculture, the Ministry of Livestock, Forestry and Range, the Agricultural Development Corporation, the Water Development Agency and the Somali Development Bank. The Ministry of Agri- culture suffers generally from a lack of funds, a shortage of trained staff, and insufficient transport facilities. The Ministry has a total staff of - 8 - about 670, of whom 60 are extension staff with some training in their field, but the quality of training is variable. The overall situation is expected to improve, however, as agricultural graduates from the University of Somalia and graduates from the Vocational Agricultural Secondary School become available from 1976/77, and as additional agricultural extension agents are trained under the Project. 30. The Livestock Development Agency (LDA) was established in 1966 as an autonomous government agency to coordinate and promote livestock develop- ment as well as the marketing and export of livestock and livestock products. Beginning in 1969 LDA started to supply the Kismayu Meat Factory with live cattle and to organize the export of live animals from the North; its trading operations have since expanded rapidly. 31. The Agricultural Development Corporation (ADC), an autonomous agency of the Ministry of Agriculture, was set up in July 1971 with monopoly powers for the purchase of all marketable surpluses of sorghum, maize, oilseeds and cotton from farmers, procurement of sorghum and maize from abroad (when necessary), and the sale of grain to the regional government authorities and municipalities at prices fixed by Government. The regional government- authorities and municipalities in turn sell grain at a Government-fixed price which covers their operating costs. The National Tractor Hiring Agency (ONAT) operated by ADC until 1972, provides tractor hire services for farm operations. ONAT's operations are dispersed over a wide area and its management experienced in handling large-scale activities. The Water Development Agency (WDA) is an autonomous agency within the Ministry of Mineral and Water Resources which designs and undertakes the siting, drilling and equipping of boreholes for municipal and rural water supply and the excavation and maintenance of arti- ficial reservoirs for livestock. It has some 25 drill rigs and other auxiliary equipment and its staff includes qualified hydrologists. 32. The Somali Development Bank (SDB), a Government banking institution, provides medium and long term loans to both industry and agriculture. In 1972 SDB extended loans of US$1.6 million for industrial development and US$0.8 million for agriculture -- mainly to large-scale and commercial enterprises. 33. Since this Government came to power in 1969 one of its major goals has been to settle the nomadic population while at the same time developing the rangelands. In keeping with these goals the 1974-78 National Development Plan concentrates on expansion and development of the agricultural sector in order to raise farm incomes, provide employment opportunities for nomads, attain self-sufficiency in basic food and cash crops and increasing exportable production. This strategy is reflected in the Plan which emphasizes programs for irrigation development in the area of the Juba-Shebelli Rivers; soil and water conservation in other parts of the country and livestock development. Action towards achievement of settling nomads as well as improving the range- lands have been accelerated by the drought through initiation of a major - 9 - settlement scheme in the Juba-Shebelli area in the South (proposed for financing by the Arab Fund for Economic and Social Development, the African Development Fund and the Association) and the Northern Rangelands Rehabili- tation Project (proposed for financing by the Kuwait Fund for Arab Economic Development). PART IV - THE DROUGHT REHABILITATION PROGRAM 34. Following the drought relief operations (para. 8) the Government initiated follow-up programs of rehabilitation in 1975 with a view to assist- ing the destitute nomads through (i) establishment of three settlements in agricultural areas in the southern part of the country; (ii) establishment of fisheries settlements along the coastal areas; and (iii) initiating measures to arrest deterioration of its rangelands and strengthening of veterinary services through preparation of a Northern Rangelands Develop- ment Project. 35. About 115,000 - 120,000 nomads were moved from the drought relief centers in Northern Somalia to the three agricultural settlements in the southern part of the country and several fishing communities along the coast. They were transported to the new communities with the assistance of the Government of the USSR which provided aircraft and trucks for this purpose. 36. In addition to transporting the nomads the Government of the USSR is providing substantial assistance to the Somali fishing industry. The UNDP is also providing technical assistance for training nomads to be fishermen. 37. The Government of Somalia requested assistance for Drought Rehabi- litation from the Association in January 1975. In order to assist Government to formulate proposals which would be suitable for consideration by IDA and other donors, four IDA missions visited Somalia between March and November 1975. These missions identified, prepared and in certain cases appraised a package of Drought Rehabilitation Schemes which included: (i) the Northern Rangeland Development Project; (ii) the settlement scheme in the southern part of the country; and (iii) three model projects in fisheries, forestry and agricultural development. The Government requested that we concentrate on the emergency settlement scheme in the south and the Northern Rangeland Rehabilitation Project. - 10 - 38. During the Bank's Annual Meeting in September 1975 commitments to finance these two projects were informally obtained from the Arab Fund (US$20.0 million), the Kuwait Fund (US$20.0 million), and the African Development Fund (US$5.5 millicn). Delegations from IDA, the Arab Fund, Kuwait Fund and ADF visited Somalia in November 1975 for pre-negotiation discussions. During these discussions it was agreed that the Kuwait Fund would consider financing the Rangeland Rehabilitation Project in its entirety and that the other donors would consider financing of the settle- ment scheme with the Arab Fund concentrating on irrigated crop development, ADF on health services, and IDA on start-up crop production under rainfed conditions. In addition, assistance for permanent housing, food and other supplies required by settlers is being explored and discussed by the Govern- ment with other donors. 39. The conventional approach to the settlement scheme would have been to undertake studies for selecting sites, preparing development plans for them, and then carrying out preparation works before moving settlers gradually into the selected areas. However, the Government, under pressure of the drought emergency, moved the settlers into the settlement areas and simultaneously began to take all of the steps (land c.earance, providing shelter and medical facilities, etc.) which should normally have been done before bringing in the settlers. By the time the financing proposals were worked out, work toward establishing the settlements was already well underway by the Government with the aim of making about 20,000 destitute nomadic families into productive farm families as soon as possible, thereby reducing the burden of relief expenditure on Government resources which is running at the rate of about $1.5 million per month. These special circumstances have had to be taken into account in formu- lating the present project. 40. The Government made it clear during the discussions that it wished to irrigate as much of the cropped area as was possible, and indeed, con- struction of irrigation canals was already well underway. Since the identi- fication mission had assumed that the majority of the area would be developed for rainfed cultivation and that only a small area would be irrigated on a trial basis, it became evident that the project would have to be revised. IDA and the Arab Fund therefore prepared a revised scheme which included the development of both rainfed and irrigated agriculture along with the provision of technical assistance and health services. The Arab Fund and ADF will submit separate proposals to their respective Boards of Directors for the irrigated develop- ment and for the health services components. - 11 - 41. The highlights of the projects to be financed by the co-financiers are indicated below. Northern Rangeland Development Project 42. The project would be financed by the Kuwait Fund (based on an IDA appraisal report) and provides for a comprehensive range development program for northern Somalia which would include: (A) the establishment of grazing and drought reserves; (B) the establishment of 20 fodder production units utilizing water from flash floods or run-off from bare slopes by means of water harvesting techniques; (C) stock water development, the formation of grazing associations; the institution of non-formal educational activities at all levels to facilitate soil conservation and range management programs; and (D) expanded veterinary extension services. Total project cost is estimated at US$21.0 million and the Kuwait Fund is expected to finance the Project in its entirety. The loan will be made at an interest rate of 1 percent annual interest plus an administrative charge of 0.5 percent p.a. with repayment over 38 years including grace period of 8 years. Contracts for all items procured exceeding US$50,000 will be awarded on the basis of international competitive bidding and dis- bursement of the credit would cover 100 percent of goods and services required for the project against appropriate documentation. The project would result in substantial increase of total and marketed number of animals and also increase the live weight of animals marketed. At the end of the project period, offtake from all livestock would increase by about US$30 million. The project would be the first comprehensive effort aimed at the rehabilitation of Somalia's rangelands. It is directed particularly to subsistence level pastoralists seriously affected by the recent drought and would be a technically simple intervention designed to protect the re- generation potential of the rangelands through the introduction of grazing and drought reserves, establishment of border protection units and strate- gically placed stock water development and the provision of veterinary services. It would be systematically monitored and evaluated and the re- sults as a basis for the development of future rangeland projects. The overall economic rate of return for the project is estimated at 18 percent and it is highly insensitive to changes in the basic parameters. - 12 - Juba-Shebelli Area Emergency Settlement Scheme 43. Irrigated Crop Production in the settlement areas will be financed by the Arab Fund. Irrigated farming will be developed on a total area of 15,000 hectares in the three settlements in the interriverine area. Nine thousand hectares will be developed at Dujuma on the eastern bank of the Juba river with 3,000 hectares each at Sablale and Kurtum Warey on the south and north banks respectively of the Shebelli River. Irrigation will be pro- vided either by pumping or diversion of the river flows or both. The works would include: (A) assisting the Government in improving and completing the works it has initiated on 7,000 hectares at the three settlements during 1975; (B) the opening up of another 8,000 hectares and their full development for irrigated farming; (C) provision of crawlers, tractors, pumps and a full comple- ment of other agricultural machinery required by the project; and (D) construction of offices, stores and workshop. The execution schedule envisages completion in three years. Internationally recruited consultant services would provide support to project management and offer practical training opportunities to selected members of its staff. The total cost of the irrigated crop production component of the Settlement Scheme is estimated at US$25 million. At year 4 of the project's life the works would enable production of about 5,000 tons each of corn and rice, 11,000 tons of vegetables and about 4,000 tons of cotton seed. At full production the project is expected to produce 12,000 tons of corn, 11,000 tons of rice, 15,000 tons of vegetables and 7,000 tons of cotton annually. The economic and financial rates of return are estimated by Arab Fund staff at 57 percent and 20 percent respectively. The Arab Fund loan of $22.4 million equivalent would finance about 90 percent of project costs. The loan would be at 4 percent interest with repayments spread over 25 years including a five year grace period. 44. The African Development Fund would finance the construction of three hospitals with necessary equipment and furnishings -- one for each of the settlements. The costs are estimated to be around US$5.5 million. 45. The component proposed for IDA financing is described in Part V of this report. - 13 - PART V - THE PROJECT 46. In view of the emergency nature of the Drought Rehabilitation Program and in order to save processing time, a separate appraisal report is not being circulated. A credit and project summary is attached as Annex III to this report. Negotiations for the proposed credit were held in Kuwait in February 1976. The Somali delegation was led by Mr. A. Herzi, Secretary of State for Finance. 47. The project would be an integral part of the Government's emergency settlement scheme in the Juba-Shebelli area. It would concentrate on the development of start-up production under rainfed conditions on some 15,000 hectares within the three settlements (Dujuma, Sablale and Kurtum Warey). It would be a low cost and technically simple intervention that would provide a sound base for the later intensification of production in the same area. It is estimated that cereal production resulting from the project in year 4 would provide the basic food requirements of some 7,000 families or about 35,000 persons. 48. The Project would develop an additional 15,000 hectares in the Juba-Shebelli settlement areas, including 9,000 hectares of crop cultivation in Dujuma and 3,000 each in Sablale and Kurtum Warey over a three-year period and would include provision for: (a) 25 crawler tractors for bush clearing on 15,000 hectares; (b) 100 tractors with attachments to be used for ploughing; (c) 8 four-wheel drive vehicles; (d) 6 mobile workshops and 3 office buildings; (e) technical assistance; (f) project monitoring, evaluation and preparation; and (g) local staff. Detailed Features 49. Bush Clearing. About one-third of the bush in Dujumna would be heavy forest cover necessitating the use of heavier equipment and a higher manual labor component, while the remainder would be medium or light bush. The required investments would therefore include five 200 to 220 hp crawler tractors with rippers, and twenty 140 to 160 hp crawlers; additional items would include ancillary equipment, spares and operating costs over three years. The bush clearing would be carried out over a three-year period, with approximately one-third of the total area cleared in each year. - 14 - 50. Agricultural Machinery. Two types of wheel tractors would be provided to carry out the ploughing and cultivation of-the 15,000 hectares; these would include 20 tractors of 90 to 100 hp and 80 tractors of 60 to 70 hp. The smaller tractors would also be used for transport during that time they were not required in the fields. A lump sum equal to 20 percent of the tractor cost was included in the cost estimates for the purchase of tractor attachments including ploughs, harrows, toolbars, furrowmakers, etc. Other investments would include a 15 percent allowance for spare parts, 50 trailers (1 for each 2 tractors), handtools and fifty stationary threshers. Operating costs would be supported for the three-year development period. A lump sum of US$10 per hectare was allowed for the purchase of seed for start-up pro- duction, and it was assumed that the seed would be purchased locally. 51. Workshops, Office Buildings and Vehicles. Six mobile workshops would be provided to help service the vehicles, equipment and agricultural machinery. Two mobile units would be set up in each of the settlements under the control of a master mechanic to be provided under technical assistance. A central office building of simple structures would be constructed in each of the three settlements and a limited amount of office equipment and furnish- ings would also be provided. In addition, eight 4-wheel drive vehicles would be provided for use of project administrative staff. 52. Technical Assistance, including project monitoring, evaluation and preparation would be an important aspect of the Settlement Scheme. (i) Monitoring and Evaluation: The irrigated and rainfed components of the Settlement Scheme would be continuously monitored and evaluated durirng implementation. To this end, an Evaluation and Monitoring Unit (Unit) se- parated from the day-to-day activities of the projects is proposed. The Unit would concern itself with costs, benefits, changes in socio-economic patterns, etc. (ii) Preparation: The future project preparation would include: (a) review and updating of the physical resources data contained in past studies; (b) the preparation of land use maps combining soil classification, crop ecology, climatic data and the status of water availability including underground water supplies to provide a basis for future development; and (c) the formulation of an agricultural development plan or plans with objectives in the medium and long term including crops, livestock, forestry, watershed conservation, agro-industries and agricultural infrastructure. This work would take into account data obtained from the ongoing irrigated and rainfed projects and would form the basis for iden- tification of future projects and their preparation for international financing. (iii) Technical assistance required to assist Somali personnel in organizing agricultural production in the 3 settlements would be provided by a single firm. - 15 - As some of the technical consultants would be shared by both the Arab Fund and IDA supported project, an estimate was made of the total assistance re- quired and staff time apportioned between each. A total of 11 internationally recruited specialists for a total of 31 man-years would be required for a three- year period, as well as 3 man-years for short-term consultancies. Of this total, 4 internationally recruited specialists for a total of 12 man-years have been auportioned to the proposed IDA project. As the technical services component is considered essential for the successful start of the project, agreement has been reached with Government that the firm of consultants would be selected and that the procurement advisor would be in post within four months from the signing of the Credit Agreement (Section 3,,02(a) of the Development Credit Agreement). 53. The study(ies) to be undertaken by the Government of Somalia for consolidating and further developing the settlements and preparing future pro- jects in the Juba/Shebelli interriverine area, would be financed by the Arab Fund. The terms of reference and appointment of consultants, both for the technical assistance required for organizing agricultural production on the three settlements and the study(ies), would be mutually agreed upon between the Government, the Arab Fund and the Association. The Arab Fund and the Association will closely cooperate in the supervision of the consultants and the review of the study(ies) to be prepared by thea. 54. Local Staff. A large number of local staff will be required and Government will be responsible for providing the staff and paying their salaries. Organization of Production 55. Initially the major emphasis of the settlement would be on land clearing and preparation, crop production, and the process of adapting the nomadic pastoralists to a settled agricultural existence. The realization of crop production targets is essential in the short-term; large quantities of food grains will be needed to feed the people living in the area, and the import of these grains now constitutes a serious drain on the foreign exchange resources of the Somali Government. For the present, therefore, the cropping program would be carried out on a centralized and consolidated basis in order to make the most efficient use of equipment, labor and other limited resources. At a later stage, Government will most likely consider a number of options as to the organization of the crop areas. One alternative for therainfed crop area which has beenmentioned is that the area should be divided into plcts of about 400 hectares, which would then be cooperatively cultivated by groups of 100 families. Division on this scale would allow a reasonably intensive supervision -- an essential factor until such time as the new settlers gain the necessary experience in agricultural techniques. In any case, whatever production system should be adopted, the settlement management would for a long time be required to provide common services and inputs such as land preparation, improved seed, fertilizer, crop protection chemicals, - 16 - storage, marketing and extension services. The farmers would perform most of the other production operations including seeding, spraying, harvesting etc. Project Organization and Management 56. Overall responsibility for the direction and coordination of the settlement would be assumed by the National Rehabilitation Committee of the Supreme Revolutionary Council. The Committee would operate through a Settlement Development Agency, a new autonomous body which the Government has agreed to create for this purpose (Section 3.01 (b) of Development Credit-Agreement). Its establishment would be a condition of effectiveness. The Settlement Development Agency would be based in Mogadiscio, and have full operational authority over all development being carried out within the three settlements. 57. The three settlements would be under the direct authority of a General Manager, who along with certain other administrative staff (personnel, legal, accounting, etc.) would be located in Mogadiscio. In addition to these a large number of staff would be required in the settlements (571 in Dujuma and 225 each in Sablale and Kurtum Warey). Each settlement would be under the day- to-day control of a Settlement Manager, who together with a Deputy Manager would be responsible for all Project activities. The manager would operate through three field divisions -- administration, services and production. The latter division would be the largest, and would itself be divided into three branches: (a) a specialist branch including agronomists, horticulturalists, livestock officers, etc.; (b) a field operations branch providing such services as land preparation, irrigation, and irrigated and rainfed crop protection; and (c) a production branch composed of field operators/extension agents dealing with day-to-day crop development activities. These staff would serve both the Arab Fund and IDA supported components of the scheme. Project Cost and Financing 58. Total project costs (excluding taxes and duties of US$1.0 million equivalent) are estimated at US$9.8 million, of which US$8.0 million or about 81% reperesents foreign exchange requirements. Project costs are based on actual and estimated prices prevailing in November 1975. A physical contingency of 5% on crawlers, tractors and vehicles and 10% on all other items has been included. In addition overall price contin- gencies of about 14% have been included on all investment costs to allow for expected increase in foreign exchange and local costs. - 17 - 59. The proposed IDA credit of US$8.0 million would finance the foreign exchange cost. To finance local costs, the Government would contribute (net of duties and taxes) about US$1.8 million equivalent or 19% of the total project costs. 60. In order to control Project expenditures, the Government has agreed to open a special Drought Rehabilitation Project (DRP) account in the Somali National Bank (the Central Bank) (Section 2.02(b) of the Development Credit Agreement). The Government's contribution to the cost of the Project and the amounts withdrawn from the proposed credit (except those payments made by IDA directly to the suppliers of goods and services for the Project) would pass through the special DRP account. As a condition of effectiveness of the proposed credit, the Government would establish the DRP account with the Somali National Bank. It would be essential to prefinance Project expenditures for working capital purposes; otherwise, delays would likely occur. In order to provide working capital and to avoid delays, immediately after credit effectiveness, Government would make an initial deposit of US$100,000 equivalent into the account. Procurement 61. Procurement of crawlers and wheel tractors (both with spare parts), agricultural machinery, trailers, mobile workshops and vehicles (US$4.8 million) in orders exceeding US$50,000 would be by international competitive bidding in accordance with IDA guidelines; orders would be bulked whenever possible. Contracts for small buildings (US$110,000 excluding contingencies) which because of their size and location would not attract international competitive bidding would be awarded on the basis of competitive bidding advertised locally and in accordance with local procedures, which are satis- factory to IDA. Comparative shopping or purchase of stock items off-shelf would be applied in procuring the remainder of goods and/or services. Disbursements 62. The proceeds of the Credit would be disbursed over three years on the basis of: (a) 100% of the foreign exchange cost of: (i) imported equipment, machinery and materials; (ii) consulting services; (b) 65% of operating costs (excluding local salaries); and (c) 70% of imported equipment procured locally. 63. Disbursements against (a) and (c) above would be fully documented. Disbursements against (b) would be against statements of expenditure - 18 - certified by the Financial Controller, the documentation of which would not be submitted for review; such documents would be retained by the Settlement Development Agency and would be available for inspection in the course of supervision missions. Benefits and Justification 64. Benefits have to be evaluated in terms of the contribution of the project and the total program towards meeting Government's immediate objective of rehabilitating drought-affected nomads and the longer run national objective of settling its nomadic population in more sedentary and productive pursuits. Alternative income-earning opportunities for the destitute nomads from the North are to be found only in the southern settlement areas, and the problem should be viewed in the context of the fact that Government would have to continue to feed, house and clothe the settlers. Government expenditures for these purposes have been running at more than US$1.5 million per month excluding foreign relief donations. Thus, settling people as productive farmers will relieve a very substantial drain on the Government budget and also result in saving the foreign exchange that would have to be spent on food unless external relief assistance .were provided for an indefinite period. 65. The entire Drought Rehabilitation Program addresses the immediate objective of rehabilitation. However, only the rangelands and irrigated part of the Settlement Scheme have been studied in the context of a long- term development pattern. In the case of the rainfed part of the Settlement Scheme which is proposed for IDA financing, the elaboration of a long-term agricultural development strategy depends on experience gained in the implementation of the project and the outcome of further studies, which will be carried out as part of the project. It therefore would not be meaningful to attempt to calculate an internal rate of return for this part of the Settlement Scheme at present. 66. The three main components of the Drought Rehabilitation Program (rehabilitation of the northern rangelands, irrigated cultivation and rainfed cultivation in the settlement scheme) are all complementary within a balanced and speedy rehabilitation efforts. In addition to the benefits mentioned in paragraph 64, the benefits will include: (a) the first comprehensive effort aimed at rehabilitating about 140,000 km2 of rangelands in the North, representing about one third of the country's total rangeland areas and the consequent expansion and more efficient utilization of total livestock population owned by subsistence level pastoralists who have been seriously afflicted by the recent drought. - 19 - The transfer of more than 100,000 nomads relieves the population pressure in the North, which is a prerequisite to the rehabilitation of the Northern rangelands which will be financed by the Kuwait Fund for Arab Economic Development. As a result of that project, it is hoped that the ranges would increasingly become more resistant to droughts; (b) interim emergency food production within four years, on an area of some 30,000 hectares, half of which would be under rainfed and the other half under irrigated conditions on previously unutilized agricultural land in the settlement areas. In year Four, output from the rainfed project is estimated to contribute about 7,000 tons of corn and sorghum and the irrigated portion about 5,500 tons of corn, 5,000 tons of rice, 11,000 tons of vegetables and 4,000 tons of cottonseed. The estimated production from both the rainfed and irrigated areas would satisfy the basic food needs of the 100,000 nomadic settlers relocated from the North into the Juba/Shebelli area in the South; (c) assisting the Government in formulating medium- and long-term agricultural development plans for the interriverine area to be implemented at subsequent stages of the project. These plans would be based on the results of monitoring and .evaluation of the proposed project as' well as results of other studies to be undertaken during implementation of the project. 67. The interriverine plain with a total area of about five million hectares is considered -- due to climate and soil conditions -- to have the highest potential for rainfed crop production in the country and it is in this area that the proposed project is located. The proposed project area of 15,000 hectares represents only 0.3 percent of the five million hectares estimated to be suitable for cultivation in the area. The higher- than-usual risks involved in the start-up production in an as yet under- utilized area and the environmental impact of the project as well as the problems involved in adapting nomads to a new way of life are fully realized. However, the project would assist in determining the pattern and feasibility of future development of the five million hectares. It must, however, be recognized that the benefits to be realized from dryland farming in Somalia are likely to be modest. There are nevertheless possibilities for improve- ments in soil conservation, rational water development, and expansion and improvement of crop farming leading to a gradually increasing mixed livestock and crop production. -20 - 68. While there are substantial risks involved in the proposed strategy, the potential benefits from implementation of the proposed program and of the project as an essential part of the program, combined with the fact that the benefits will accrue to destitute people for whom no alternative means of livelihood exist, justify taking these risks. This belief is reinforced by the outstanding performance already shown by the Government which has demonstrated its efficiency and dedication in organizing and launching successfully this ambitious drought rehabilitation program. Legal Instruments and Authority 69. The draft Development Credit Agreement between the Somali Democratic Republic and the Association, the recommendation of the Committee provided for under Article V, Section I(d) of the Articles of Agreement of the Association' and the text of a draft resolution approving the proposed development credit are being distributed tc the Executive Directors separately. 70. Features of special interest are referred to in paragraphs 56 and 60 of this report. Establishment of the Settlement Development Agency and opening of the Drought Rehabilitation Project account have been made additional conditions of effectiveness of the Credit (Section 5.01). 71. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 72. I recommend that the Executive Directors approve the proposed development credit. Robert S. McNamara President Attachments Washington, D.C. March 31, 1976 ANNE( 1 Page 1 TABLE 3A SOMALIA - SOCIAL INDICATORS DATA SHEET LAND AREA (THOU KJ2) - - SOMALIA REFERENCE COUNTRIES (19731 TOTAL 637.7 MnST RECENT ARABLE 83.3 1960 1970 ESTIMATF ETHIOPI4 TANLANIA SENEGiL GNP PER CAPITA JUS$l 60.0 70.0 80.0 70.0 110.0 200.0 POPULATION AND VITAL STATISTICS POPULATIUN (MID-YR. MILLTIUNI 2.2 2.8 3.0 24.6 12.9 3.8 POPULATInN DENSITY PFR SQUARF KM. 3.0 4.0 5.0 20.0 14.3 20.0 PER SQUARE KM. ARABLE LAND .. .. 36.0 .. 147.0 VITAL STATISTICS CRUDE BIRTH RATE PEW THOUSAND .. 46.0 50.0 44.0 47.0 a 44.0 CRUDE DEATH RATE PEP THOUSAND .. 24.0 22.0 25.0 22.0 / 22.0 INFANT MORTALITY RATE (/THOUI .. .. .. .. 160.0 156.0 LIFE EXPECTANCY AT BIRTH (YRS) .. 39.0 41.0 39.0 43.0 41.0 GROSS REPRODUCTION FATE .. 3.0 3.0 2.9 3.2 3.0 POPULATION GROWTH RATE It) TOTAL 2.3 ?.4 2.4 2.2 3.0 2.i URBAN .. .. .. 4.0 5.0 /&,b 4.0 URBAN POPULATION It OF TOTALI * ** .. 13.0 6.0L/ 29.0 AGE STRUCTURE IPERCENTI 0 fE 14 YEARS 44.0 46.0 45.0 4r.0 44.3 a 42.0 15 TO 64 YEARS 53.0 52.0 53.0 51.0/a 53.0 54.0 65 YEARS AND OVER 3.0 2.0 2.0 4.0 / 3.0 a 4.0 AGE DFPENDENCY RATIO 0.9 0.9 0.9 1.0 0.9 0.9 FCONOMIC DFPENDENCY RATIO 1.5 1.5 1.3 L.1 l.2 1.1 FAMItY PLANNING- ACCEPTORS (CUMULATIVF, THOU) .. .. USERS It OF MARRIED WOMENI .. .. .. EMPLOYMENT TOTAL LABOR FORCE ITHOUSAND) 930.0 110.0 1250.0 L133.:) 5600.3 ab 1600.0 LABOR FORCE IN AGRICULTUPE (1I 8s.0L 82.0 .. 85.0 91.0 ab 73.0 UNEMPLOYED It OF LABOR FORCE) .. 20.0 .. .. .. 7.0 INCOME nISTRIBUTION T OF PRIVATE INCOME REC'0 BY- HIGHEST 5t OF POPULATION 63 3 HIGHFST 202 OF POPULATION 63.3 c LOWSET 20t OF POPULATION 2 3 LOWFST 40% OF POPULATION PISTP]RUTION OF LAND OWNERSHIP t OWNF BY TOP 10% OF OWNERS I lWNFO BY SMALLEST 10 OWNERS HEALTH AND NJTRITION POPULATIUN PER PHYSICIAN 30000.0 21140.0 15540.0 74550.0 21570.03 14940.0 POPULATION PER NURSING PERSON 3780.0 3690.0 .. 24400.0 4890.0 2410.0 POPULATION PFR HOSPITAL RED 570.j 570.3 .. 3030.0 700.0 730.0 / PEP CAPITA SUPPLY OF - CALOR IFS [I OF REQUIREMENTS) 77.0 77.0 79.0 102.0 73.0 97.0 PROYFIN (GRAMS PFR DAYI 57.0 57.0 56.0 19.0 43.0 64.0 -IF WHICH ANIMAL AND PULSE 19.0el 27.0 .. 5.0 23.0 28.0 La DFATH RATE I/THOU) AGES 1-4 .. .. EDUCAT ON AOJUSTED ENROLLMENT RATIO PRIMARY SCHOOL 9.0 10.0 1.0 a 16.0 37.0 38.3 /d SECONDARY SCHOOL 1.0 4.0 9.0 b 4.0 3.3 15.0 YEARS (IF SCHOOLING PROVIDED IFIRST AND SFCOND LFVELI 12.0 L2.0 12.0 12.0 13.0 13.0 VOCAT IONAL FNROLLMENT It OF SFCONDARYI .. 5.0 L 5.0 5.0 4.0 7.3 ADULT LITFRACY RATE I) .. .. 5.0 L 7.0 .. 10.0 HOUSING PERSONS PER ROOM IAVERAGEl OCCUPIFD OWFLLINGS WITHOUT P[PcD WATER (1 30.0 /ad ACCESS TO ELECTRICITY (t OF ALL DWELLINGS) RURAL qWELLINGS CONNECTED TO ELECTRICITY I ) CONSUMPTION AADI(1 RECEIVERS IPER THOU PfOPI 12.0 18.0 72.0 .0 11.0 69.0 PASSENGER CARS IPER THOU POP) 2.oL 2.0 3.0 2.3 3.0 11.0 ELECTRICITY IKWH/YR PER CAPI 5.0 10.0 14.0 21.0 29.0k 84.0 NFWSPRINT (KG/YR PER CAPI .. 0.2 0.1 o.oh 0.1 0.1 SEF NOTFS AND DEFINITIONS ON REVERSE NOTES Unless otherwtse noted, data for 1960 refer to 1959-1961, for 1970 to 1969-1970, and for M4oc Recent EL-sa to 1971-1973. ~ Senegal bas been selected as an objectve country because of tro different socio-ecnomic struciure and st.filar aemi-arid ecology and popuation si,e. S_MALiA 1960 /a 1963; Jb 1961-63. 1970 la Urban only; /6 1964-66; /c Public educarion only. MOST RECENT ESTDATE: la 6-13 years; 16 L-17 years, [ncludes vocatibnal e-ucation; /c Recent estcste for 1973-7 is mch hsigher. ETHILP[A 1970 /a 15-59 years; /b 60 years and over; fr RatIo of population under 15 and 60 and over to total labor force. TANZA14IA 1970 La 1967; /h Tanganyka only; /c Households; -d Urban oniy. SENEGAL 1970 la Ratio of population unider 15 and 65 and over to Laber force ege 15-59, 'b overnen hospital estabtlishents; 7_. 1964-66; M Unadjusted; lo Lener secondory 1evel. 15 Jana-y 28, L976 DEFDIroNS OF SOCOIL INDICATORS kand lAres Lthntoukm Pnlation per nursing peron - Population divided by -tober of practico; Total-Total srface area comprising land area and inland vaters. M le and femate graduate rses, 'tralned"I or certified" nurses, and Arable - lost rerent estimate of land area used temporarily nr cerranently auxiltary persoinel viti training or experLence. for cultivalion, pastures, marmt and kitchen gardens or to lie fallov. Population ner hosoital bed - Population divided by nuiber of hospital bts avollel in public and private general and specalized hospital and G? ner cap,:a (US$) - lNP per capita estimates at market prices, calcu- rehabilitaton centern; excludes nursing homes and estabi'shmentn for lated by same conversior method as World Bank Atlas (1972-7l basis). c-lodial and nreventlve care. Per caita spoely of calortes ( of s-cirements) - Conpused f-m energy Poulation and ital statistics epivalent of net fod o_uplias available in country per ,cpita per tiy; Population (eld-nr. mllior As of July firast; i£ not available, avrage svallable CoplIe orprise r>mstic production, inposrtn less esporsa, of two en3year estimatea . and ohanges en tck; net cpplies exolud. aniraal feed, eeds, quanti- ties osed in food procesing and losses In distritition; requirementn Popflaon densiy-.per gsara kos - lid-year population per square kilo- were estimated ty FA0 tised on physiological needs for norral artivity meter (i00 hectares) of ttal ar-ea. and health considering enironmntal temperature, body weights, age and Pooulatton desity - per square km of arable land - Coimputed as abve for sex distributinr.s of paolation, and allowing 10% for waste at hcusehold arable lard orly. leseL Per capita suonyn rf protein (cans per day) - Protein content of per VItal statintics capita ne supply of food per day; net oupply of food is defned is Crudeortrate per thousand - Anrual live births per thousand of mid- above; requirels.ts for all countries established by USDA Econoric year population; us ually fie-year avorages ending in 1960, 1970 and Research Servi:es provSie for a minimun allowance of 60 granm of total 1775 for developing countries. protein per day, and 20 gra of animal and pulse protein, of Jich 2f Gr-dn death r2äatper thousand - Annual deaths per iousand of sd-year gram= should be anital protein; these stand-rds are lower than those of populatonr; usually frive-year averages ending In 1960, 1970 ard 1975 75 grs of total protein and 23 grann of artml protein sa an average for develcping countries. fr the world, praposed by IAO to the Third Word Food ouey. Infant mortality rate (/thou) - Annual daaths of infants under one ysar Per capita pro mupoly Tron animal and pulse - Protein nupply of fond af age per ohousand liva bir-tho, tdred tron anias oro pulsea :n grams per day. Life exectancy at birth (5rs) - Average notber of years of lite remain- Death rats (thoi) ages l-à - Annual deaths per thousand in age group 1-4 ing at ith; usually iva-year averages ending tn I96O, 1970 and -years. to childen on thIs age group; suggestod as an in.iator of ml- 1975 for deselopirg countries. nutrition. Grass reproduction rate - Average number of liva daughtern a ocean oill bear ln her sarmal reproductive period if she experierecas present age- Educaton specific fertility rates; usually fiv-year averagen ending in 1960, Adusted ollmant ratis - primary school - Enrollment of all ages an per- 1970 and 1975 for developing countries. centaga of priary schooi-age population; includes children aged 6-11 Population growhs rate (9) - total - Compound annual grouth rates of mid- years but adjusted fnr different lengths of primary educatlon; for con- year populatin for 195640, 150-70, and 1960 to most recet year. tries vith universal edlucation, enrollment may exceed 100% since some Ppulation groath rate (9) - wrban - Computed like growth rate of total pupils are beloo or above the official school age. population; different definitions of srban area3 may affect cripara- Adjusted enrollment ratia - seondary school - Computed as above; zecond- tility of data among countries, aVy oducaticn roquires at leastour years of approved primary instrac- fron nolation (% ; total) - Batio of urban to total populattion: di- tlon; provJdes general, voeational or teacher tralning instructdons tor res-en; definitons o:- urban areas ray affect comparability of data pupils of 12 to 17 years of age; correspondence courses are genrsrlly .uong ~ountries. excluded. surr-e (pernc.) - Children (0-l years), orking-oge (15-64 years), Iears of sLchoii orovided (rst -ond seond leels) - Total yeare of years and over) as percentages of mid-year population. sohooling; st secondary lwel, voat.onal instruction may no partially Age deoendency ratio - RatIn of population under 15 and 65 and over to or orpletely cluded. those of oges 1 to-ugh 64. Voctonal en-ollment (9 of seo 7) - Vccatioral institutions rnlute Econoni, deendennv ratia - Ratin sf population under 15 and 65 and or technical, indussrial or other programs which operte indenendntly or to hlabor forne tn age group of 15-a years. as departments of secondary Institotions. Fami y rlanning - acoentors (cumulative. thou) - Cunulative number of Adult liteany rate (9) - Literate adults (able to read and write) as per- aeceptors of birth-control devices under auspices of national family centago of total adlt population aged 15 years r.d over. pl,insing program since Inception. Faily plonnng user (1 of nrried women) - Percentagen of marrted Houltsin woen of chi bö ring age (15-a7 years) o usa birth-contrl da- Persons Ier room averone) - Average number of persons per room in occupied v-icen to all wearried omen in same age group. conoetiona dollinga in urban areas; dwellings exclude non-permanent structures and unoccupied atrts. Employment Occupled dwellings without oped water (9) - Occupied conventional dwell- Total la oR force (thousand) - Economically stive persons, including inEs in urban and rural areas vithout inside or outside piped vater armed forces and oyed but excluding housesives, stud~'s, etc.I facilities es percantage of all accupled dvellings. deflinitions in various countries are not comparahle. Access to elericit4 ý of 'll dwellings) - ConventIonal dwellingo with Labor force in agrtulturc (9) - Agriltural laber force (tn farming, electricity in lving qarters a3 percent of total fwellings in urban forestr. huntng an d flahing) as porcatage of total labor force and ruraI areas Ureplyed (6 ef labor force) - Unemployed are usually defined as per- Rt-al dwellina, caneoted to electricip (9) .. Cor:puted as above for rs- son who are a ul and tlling to take a job, out of a job on a given dvellirgs only. ty. remaidned "ut of a job, and seking work for a spectfied minimum period not xceeeding one week; may not be compc.rable between coun- Consurption tries due to different definitions of unenployed and source of data, Radio receivers ýpr thou pov) - All types of receivers 'br radie broa- e.g., empl,ysent office statistis, sample surveyns, compulsory unee- cast to general puDlic per thousand of population excludes unlicenseJ plyment insuranre. receivers in coun*rles and in years when regiatration of radio sets was in atfect; data for recent years may not be comparable since most coun- Income distrboution - Percentage of private inecme (both in cash and tries abolished licensing. kindi receiv by richest 5%, richest 20%, poorest 2P,%.A poorest Psg ca (etho pop - Passenger cars cromprise motor cars seating LX' of Dopulation. leos th ight persons: excludes ambulances, hearses and military vehicles. Distribution of land ownerhip - Percentages of land owned by wealthiest Electrict (h/ per can) - Annual cosumption of industriel, commercial, 1 and poorest 7T of land owe~rs. public ad Ivte eletricity in kiloatt hours per capita; generally based on prodution data, without allowance for losses In grids but allow- HtIth and Nutrition ing for irports and exports of alectricity. Foillatjo wr phtyslcian - Population divided by number of practicing New-sprint (kg/yr per can) - Per capita annual coreuption in kIlogram phyelians qualifiled from a medical school at niverity Ievel. estimetatd fsrom datic production plus net ports of re~sprint. ANNEX) I Page 2 SOMAL LA ECONOMIC INDICATORS GROSS NATIONAL PRODUCT ANNUAL KATE OF CROWT (7., L1Lant pric-) US$ Mn. 7. 1961 - 69 1969 - 73 1974 GNP at Market Prices (1974) 260.0 100.0 Gross Domestic Investment Cross National Saving Current Account Balance (1973) -69.1 Exports of Goods, NFS (1973) 71.1 Imports of Goods, NFS (1973) 140.2 OUTPUT, LABOR FORCE AND PRODUCTIVITY Value Addod ar.1 F1r_- V.A. Fr orke USS Min. . 2n. Agriculture Industry Services Unallocated Total/Average 100.0 1'J'J0 100.0 GOVERNMENT FINANCE General Government Central Government (So.ShM1n.) . of GDP (So. Sh :11n. Z of GDP 1973 1973 1969-73 197 1973 1969-73 Current Receipts 497.8 .. ..446. Current Expenditure 414.7 374.8 .. .. Current Surplus 83.1 .. .. 11.6 Capital Expenditures 327.0 .. .. 327.0 .. . External Assistance (net) 247.0 .. .. 247.0 . MONEY, CREDIT and PRICES 1965 1970 1971 1972 1973 1974 (Million SoSh outstanding end period) Money and Quasi Money 220 466 391 518 608 783 Bank credit to Public Sector 38 100 72 13 5 2.4 Bank Credit to Private Secto12 315 622 916 (Percentages of Index Numbers) Money and Quasi Money as 7. of CDP .. .. General Price Index (1963 - 100) 127.7 136.6 135.8 131.8 140.3 165.8 Annual percentage changes in: General Price Index 12.7 0.9 -0.6 -2.9 6.5 18.2 Bank credit to Public Sector .. 61.8 -28.0 -81.9 -61.5 -52.0 Bank credit to Private Secto2 10.0 27.1 -14.5 24.0 50.2 47.3 :OTE, All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists wainly of unemployed workers seeking thUir fi-t job. not available not applicable 2/ Private sector here includes decentralized, government-owned enterprises. Country Progr. I, FAN December 23, 1975 ANNEX L Page 3 SCALIA TRADE PAYMENTS AND CkPITAL FLOWS BALANCE OF PAYMEifTS MERCHANDISE EXPORTS (AVERAGE 1971-73) 1971 1972 1973 1974 US $HMn 7 (Millions US $) Exports of Goods, NFS 48.3 66.3 71.1 55.07 Live Animals 26.0 56.0 Imports of Goods, NFS 66.3 90.9 140.2 157.421 Bananas 10.8 23.3 Resource Gap (deficit - -) -18.0 -24.6 -69,1 -102.4-/ Meat & meat products 4.0 8.6 Hides and skin 2.9 6.3 Interest Payments (net) -0.4 0.2 1.4 1.9 Workers' Remittances - - - -16.6!5 Other Factor Payments (net) Net Transfers 19.2 17.2 28.8 44.9 All other commodities 2.7 5.8 Balance on Current Account 0.8 -7.2 -38.9 -72.2 Total 46.4 100.0 Direct Foreign Investment 2.9 7.8 4.7 5.6 EXTERNAL DEBT, OCTOBER 1. 1975 Net MLT Borrowing Disbursements .. .. .. ..in Amortization . .. . ..8/ Subtotal 3.3 14.5 27.2 55.7 Public Debt, incl. guaranteed- 360.7 Capital Grants - - - - Non-Guaranteed Private Debt Other Capital (net) - - - - Total outstanding & Disbursed Other items n.e.i -1.0 -0.8 - 6/ Increase in Reserves (+) 8 8.1- -7.0 -10.8 DEBT SERVICE RATIO for 1974- a/ Includes allocation of SDR 2.0 million 7 Gross Reserves (er-d year) Net Reserves (ead year) Public Debt, incl. guaranteed 5.6 Non-Guaranteed Private Debt Fuel and Related Materials Total outstanding & Disbursed Imports 2.7 3.6 of which: Petroleum 2.7 3.6 Exports - - - of which: Petroleum - - - IBRD/IDA LENDING, (AUGUST 31, 1975) (Million US 9): RATE OF EXCHANGE IBRD IDA Outstanding & Disbursed - 26.7 Through - 1971 Since April 1973 Disbursed - 27.5 US $ 1.00 - So.Sh 7.143 US $ 1.00 - So.Sh 6.295-' Outstanding incl. Undisbursed - 54.2 SoSh 1.00 - US $ 0.140 Sosh 1.00 - US $ 0.160 1/ Estimated 2/ Exports f.o.b. 1/ Imports c.i.f. 4/ Trade balance 5/ Net non-factor services 6/ Ratio of Debt Service to Exports of . . not available Goods and Non-Factor Services (estimate) 7/ Central Rate (Somalia avails itself of . not applicable wider margins). The Trade conversion factor used by Iff is 6.233 So.Sh./US$. 8/ A $33 million dollar loan from the USSR (not included in this figure) has been publicized. It was made for fisheries, development (in conjunction with a grant for resettlement); terms and conditions are not known. Country Programs I, EAN December 23, 1975 ANNEX II Page 3 Cr. No. 295 Highways II (Hargeisa-Berbera); $9.6 .million Credit of March 30, 1972; Date of Effectiveness: May 11, 1972; Closing Date: originally December 31, 1975 and postponed to December 31,1976. The construction of the Hargeisa-Berbera road has been completed and opened to traffic. The road is still under contractor maintenance. The feasibility and detailed engineering studies financed under this credit for the proposed Hargeisa-Borama (third highways) project have been completed, and the proposed project is currently being appraised. Cr. No. 359 Port of Mogadiscio; $12.95 million Credit of March 15, 1973; Date of Effectiveness: September 10, 1973; Closing Date: June 30, 1977. The physical execution of the civil works is going well after a slow start. The Contractor is working three 8 hour shifts and 95% comple- tion is expected in January 1977, nine months behind the original schedule. However, of the nine months, the Contractor has been granted three months extension, since additional works, financed under Credit 586-SO, will take four to five months and have to be completed before the original works can be completed. A settlement between the Government and the contractor of the latter's claims for exchange loss compensation and price escalation has been reached and has been agreed to by the Association. Funds available for port operations equipment are sufficient only for a used 700-800 HP tug. Likely sources for such a tug are being contacted for particulars and quotations. Consultants for SPA management, port operations and accounting services are expected to commence field work shortly. Cr. No. 462 Livestock (Trans-Juba) Project; $10 million Credit of February 20, 1974; Date of Effectiveness: October 29, 1974; Closing Date: June 30, 1980. The Project Director began work in early February 1975. Up to now, he has been recruiting staff, planning project implementation, preparing tender documents for procurement of machinery and equipment and construction of buildings and boreholes, and finalizing systems for monitoring the project and keeping project accounts. Physical execution of the project is expected to begin in the first half of 1976 with the arrival of machinery and equipment and the start of the construction program. Cr. No. 511 Second Education Project; $8 million Credit of September 19, 1974; Date of Effectiveness: December 19, 1974; Closing Date: June 30, 1980. Project implementation is proceeding satisfactorily. Civil works tendering for most of the secondary schools, the Academy of Somali Studies ANNEX II Page 4 and the Elementary Teacher Training College is currently taking place and construction is planned to start later this year. Equipment contracts are about to be awarded,furniture lists are under preparation and tenders are scheduled to be invited later this year. Contracts for some nomadic train- ing centers have been awarded to local authorities and construction is expected to start by mid-1976. Although the project is proceeding on schedule, the current estimate of final project cost is US$2 million above the appraisal estimate including contingencies. Some of the cost overrun may be offset by Local Government/self-help construction of nomad centers. The Government is about to review and evaluate information leading to the formulation of programs basic for implementing the Fishery and Marine Institute component. Cr. No. 586 Mogadiscio Port Extension Project; $5.2 million Credit of October 15, 1975; Date of Effectiveness: January 15, 1976; Closing Date: December 31, 1977. The casting of concrete blocks for the additional berth as well as the breakwater extension, necessary for completion of the civil works financed under Credit 359-SO, has begun. ANNEX III Page 1 SOMALIA - DROUGHT REHABILITATION PROGRAM JUBA-SHEBELLI AREA EMERGENCY SETTLEMENT SCHEME CREDIT AND PROJECT SUMMARY BORROWER: Somalia AMOUNT: US$8.0 million equivalent TERMS: Standard PURPOSE: To assist settlement of drought stricken nomads in three new agricultural settlements along the Juba-Shebelli rivers. PROJECT DESCRIPTION: The proposedProject would support the development of 15,000 hectares of start-up crop production within the three newly established settlements in the Juba-Shebelli area in the southern part of Somalia. It would form part of,an emergency agricultural settlement project supported by IDA, the Arab Fund for Economic and Social Development (Arab Fund), and the African Development Fund. The Arab Fund would provide support for the development of 15,000 hectares of irrigated cultivation and the African Development Fund would assist in the establishment of three hospitals for settlement populations. The Project would develop 9,000 hectares in Dujuma and 3,000 each in Sablale and Kurtum Warey Settlement over a three-year period and would include provision for: (a) 25 crawler tractors for bush clearing on 15,000 hectares; (b) 100 tractors with attachment to be used for ploughing and cultivation as well as for transport within the settlements; (c) 8 four-wheel drive vehicles; (d) 6 mobile workshops and 3 office buildings; (e) local staff; (f) project monitoring, evaluationand preparation; and (g) technical assistance. ANNEX III Page 2 ESTIMATED COST: Total Project cost is estimated at US$10.8 million with a foreign exchange components of US$8.0 million or 74%. Taxes and duties on Project items are estimated at US$1.0 million. FINANCING: US$ Million % IDA 8.0 81 Government 1.8 19 Total 9.8 100 ESTIMATED DISBURSEMENTS: (US$ Million) Fiscal Year Annual Cumulative 1977 2.2 2.2 1978 3.5 5.7 1979 1.7 7.4 1980 0.6 8.0 PROCUREMENT ARRANGEMENTS: Contracts for all items exceeding US$50,000 would be awarded on the basis of international competitive bidding (ICB) in accordance with IDA guidelines; orders would be bulked when- ever possible. Total procurement under ICB would be valued at about US$4.8 million exclud- ing contingencies and would include: 25 crawlers with spare parts, 100 tractors with spare parts, agricultural machinery, 50 trailers, 6 mobile workshops, 8 four-wheel drive vehicles. Contracts for small buildings (US$110,000 excluding con- tingencies) which because of their size and location would not attract ICB would be awarded on the basis of competitive bidding advertised locally and in accordance with local procedures that are satisfactory to IDA. Comparative shopping or purchase of stock items off-shelf would be applied in procuring the remainder of goods and/ or services. TECHNICAL ASSISTANCE: Four internationally recruited experts for a total of 12 man-years. ANNEX III Page 3 PROJECT COST ESTIMATE (US$ millions) Foreign Local Foreign Total Exchange Bush Clearing (Crawlers, Equipment Spares and Operating Cost) Total 0.8 2.9 3.7 79 Agricultural Machinery (Tractors, Attachments Spares and Operating Cost) Total 0.8 2.8 3.6 78 1/ 0.2 0.2 90 Office Building 0.1 1/ 0.1 10 Vehicles Purchase and Operating Cost 0.1 0.1 0.2 57 Technical Assistance - 0.6 0.6 100 Local Salaries 0.5 - 0.5 - Sundries 1/ 0.1 0.1 75 Total 2.3 6.7 9.0 74 Physical Contingencies 0.2 0.5 0.7 - Price Contingencies 0.3 0.8 1.1 - Sub-total 0.5 1.3 1.8 - GRAND TOTAL 2.8 8.0 10.8 74 Taxes and Duties Total 1.0 - 1.0 - Project Cost less Taxes and Duties 1.8 8.0 9.8 81 1/ Negligible.  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