Lesotho - Second Highway Project

Document of FILE COP Y The World Bank FOR OFFICIAL USE ONLY CIRCUJLATING COPY TO BE RETURNED TO REPORTS DESK Reort No. P-17 35a-LSO REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE KINGDOM OF LESOTHO FOR A SECOND HIGHWAY PROJECT February 17, 1976 This document bas a resticted disibution ad may be used by recipients only In the perfornnce of their odcial duties. Its contents may nt otherwise be disclosed without Worli Bank authortion.  CURRENCY EQUIVALENTS US$1 = Rand 0.86 (R) Rl = US$1.16 ABBREVIATIONS CMW and PP - Central Mechanical Workshop and Plant Pool, Ministry of Works LCU - Labor-Intensive Construction Unit LNDC - Lesotho National Development Corporation MW - Ministry of Works NDP - Lesotho's National Development Plan 0DM - United Kingdom Overseas Development Ministry RB - Roads Branch, Ministry of Works  FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE KINGDOM OF LESOTHO FOR A SECOND HIGHWAY PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Kingdom of Lesotho for the equivalent of US$5.5 million on standard terms to help finance improvement and reconstruction of a road and for establishment and initial operation of a labor-int:ensive construction unit. The United Kingdom Ministry of Overseas Development (ODM) will participate in the co-financing with a grant of US$1.5 million equivalent. WART I - THE ECONOMY 2. The most recent economic report entitled "The Economy of Iesotho" (331a-LSO) was distributed to the Executive Directors on June 25, 1974. An updating economic mission visited Lesotho during November 1975 and is expected to issue its report shortly. The findings of the mission are summarized below. The most recent country economic data are given in Annex I. 3. Lesotho is among the 25 countries designated as "least developed" by the United Nations. Landlocked within the Republic of South Africa, it is mountainous, with few natural resources, and wit' less than 15 percent of the total land area suitable for crop production. Per capita income was estimated at $100 in 1973/74. The general shortage of skilled manpower is one of the main constraints to development and is aggravated by the continuing migration of workers for employment in South Africa. Of a total population of about 1.2 million,approximately 175,000 Basotho-men (60 percent of the country's male labor force) and 25,000 women are employed as migrant workers in South Africa mainly in the mining and agriculture sectors. This contrasts with only 16,000 Basotho men at work in Lesotho's modern sector. Over the last six years, the number of Basotho men employed by South African mines has increased by some 40,000, while wage employment in Lesotho grew by approximateLy 2,000. In 1974, net earnings of migrant workers reached an estimated $75 mi'tlion, almost the level of the country's own GDP. For the foreseeable future approxi- mately 80 percent of the natural increase in Lesotho's labor force well look for employment in South Africa due to the higher wages in South Africa and the small absorptive capacity of Lesotho's economy. 4. The migrant labor force is thus of critical economic importance to Lesotho. There are, however, certain disadvantages. The absence of much of the able-bodied population aggravates the shortage of both unskilled and semi-skilled manpower, and renders difficult the implementation of long term programs for the economic development of the country. Furthermcre, the country is now extremely vulnerable to conditions in South Africa over which the Lesotho Government has no control. This was brought home sharply in the beginning of 1974 when, because of disorders at some South African mines, between 10,000 and 15,000 migrant workers suddenly returned to Lesotho. Al- though the emergency situation was resolved and most of the migrant %.orkers f This document has a restricted distribution and may be used by recipients only in the performfance of their official duties. Its contents may not otherwise be disclosed without World Bank authotization.  -2- returned to employment in South Africa, the risk of similar occurrences, which might be of longer duration, remains real. Also, mechanization in the South African mines may in the future lead to a slackening in the demand for migrant labor. Because of the uncertainties facing Basotho laborers in the South African labor market, the Lesotho Government had detided to investigate the use of labor-intensive techniques in the execution of public works. The Government hopes that developing the capability to utilize labor-intensive techniques will enable it to cope with future emergency employment situations, as well as provide a long term strategy in the event that employment opportu- nities for Basotho in South Africa level off. 5. Agriculture, mostly subsistence in nature, provides the major source of economic activity for about 85 percent of the resident population and con- tributes about 50 percent of GDP. The sector is characterized by traditional methods of cultivation, low productivity and serious problems of soil erosion; production of the main crops (maize, sorghum, wheat) is inadequate to meet domestic food needs. The most recent agricultural census indicates an in- crease in production of almost 50 percent between 1969/70 and 1973/74, but this is due largely to the vagaries of climatic conditions rather than to a long term trend in agricultural output. In fact, crop production in 1973/74 was only 13 percent higher than in 1960/61, implying a long term growth slower than the 2.2 percent per annum increase in the population. In recent years, the Government has implemented a program of rural development which offers some prospects for improving agricultural productivity and arresting the deteriorating soil conditions. 6. Manufacturing, mining, construction and public utilities together contribute less than 5 percent of GDP. A recent agreement with the DeBeers mining group provides for an investment of $40 million in diamond production and the creation of about 500 jobs; production is scheduled to begia in 1977. Manufacturing and industrial production has been limited by the smaLl size of the domestic market and the relative unavailability of low-cost Local labor due to the migrant situation. There are, however, some prospects for developing small scale industries, particularly in the fields of handicrafts, construction materials and light manufacturing. 7. In recent years, there has been a rapid development in tourism; the number of visitors staying in hotels increased from about 4,000 in L969 to an estimated 75,000 in 1974. The Government has recently established a Tourist Development Authority to promote the industry. A luxury hotel is presently under construction in the capital, Maseru, and plans are in hand to broaden the base for tourism development by opening up the country's scenic mountain region. 8. Lesotho, together with South Africa, Botswana and Swaziland, be- longs to the Southern Africa Customs Union. Merchandise trade which is carried on mainly with the Republic, shows an increase in recorded Lmports from $32 million in 1970 to $116 million in 1974 as against a corresponding rise in the value of exports from $6 million to $14 million. So far these deficits have been more than offset by migrant remittances and transfers to the Government as well as to the private sector. The Customs Union is the source of about 60 percent of government revenue which increased from $16  -3- million in 1969/70 to $42 million in 1974/75. Recurrent expenditure in the same period rose from $16 million to $27 million. IJK grants in support of the current budget were discontinued in 1973/74 when a surplus of S8 million was realized; in 1974/75 the current surpltus was $15 million. Over the next few years, the Government should be in a position to finance a small portion of its capital investment program. However, this will depend to a large extent on thie outrome of cuirrent negotiations to amend the Customs Union Agreement in order to reverse the present slowdown in the growth of the revenues from the Uillon pool. 9. The Government is currently preparing its second National Develop- ment Plan (NDP) for 1976-80. Provisional data indicate that during the period 1969/70 to 1973/74 GDP grew at about 6 percent annually in real terms; progress was made in improving the educational system, the chronic budgetary deficit was eliminated; and the Covernmeent's financial and implemen.-ation capacity improved considerably. The growtlh of domestic employment has not, however, kept pace with the increase in thle labor force. 1(1. Che guiidelines for the second NUP indicate an investment program of about $100 million, of which about one-third would be directed towards agricul ture and rural development (as compared to 23 percent in the first plan) . Domestic employment creation would be emphasized by strengtlhening the role of the T.esotho National Development Corporation (LNDC). In the past, a serious constraint to development has been the country's low absorp- tLive capacity. However, in recent years the Government has increased its capacity to identifv investment opportunities. The results of a nunber of pre-investment studies which have been carried out in various sectors of thle econony are now available (transportation, tourism, power, m-Lnerals, telecommunications) and should enlhance the specific project content of th-ie second NDP. A substantial program of technical assistance is operal:ing an(d ediucation, training and governiment adminiistration are continuing to improve. As a result, we expect the country's overall implementation capacitLl to continue improving. ll. - Debt service is presently at a lows level; in 1974, service paynments on external public debt came to under $0.5 million, which represents only about 2 percont of currenlt revenue. Since Lesotho likely will cont nue to receive most of its -apital assistance as grants or concessionary credits, the servicing (of external public debt will probably not exceed 2 pe-(cent of governmiient revenues over the next several years. 1 2. ,esotho's lack of natural resources and tihe constraints imposed by the' miigrant lahor siI-u;ation under line its difficult task of developi,ent. Current revenue is critically dependent on the Customs Union, and it is un- certain whether revenue from thiis source will continue to grow in tl,e future. Ont the other hand, thie recent revision in civil service salaries, the first since 1964, will cause current expenditures to rise, placing limits on the amnount whichi can be transferred to the capital budget. As a consequence, donor agencies should be prepared to continue financing in most projects not only all the foreign costs, but also a part of the local costs. .  -4- PART II - BANK GROUP OPERATIONS IN LESOTHO 13. To date Lesotho has received IDA credits for three projects total- ing $13.7 million . The first, in FY66, was a $4.1 million credit for the First Highway Project which provided for paving a section of the main north- south road; the project was successfully completed in 1969. The second was a $5.6 million credit, approved in FY73, for the Thaba Bosiu Rural Develop- ment Scheme. This project is currently meeting its targeted obj-ctives of providing 12,000 rural families with a minimum package of inpul's, credit <:w d extensioni services in order to increase their incomes and the productivity of their land. The third, a $4.0 million credit for an Education Project, was approved in FY75. The project has made a promising start on expanding Lesotho's vocational and commercial training capacity, and improving the country's rural educational program. At the end of 1974, IDA's share of Lesotho's total external debt (disbursed and undisbursed) was 87 percent (due to the fact that most external aid in the past has been provided on grant terms). Servicing of IDA credits accounted for only 11 percent of total debt service. Annex II contains a summary statement of IDA credits and notes on the execution of the two ongoing projects. 14. In our proposed operations we are aiming to support the stated objectives of the Government's draft second NDP which are: (i) creating new employment opportunities in both the modern and traditional sectors; (ii) in- creasing agricultural productivity and introducing erosion control neasures; (iii) improving the quality of education and expanding vocational training and educational opportunities in rural areas; and (iv) improving communica- tions among regions within the country. 15. Preparatory work is now underway on several potential projects. We are helping the Government to prepare a follow-up project to the current Thaba Bosiu Rural Development Scheme to distribute basic agricultural inputs to the rest of Lesotho's lowland and foothill areas. We also expect to make a loan to the Lesotho National Development Corporation for industrial and commercial subprojects. In addition, we propose to continue assisting Lesotho's educ- ational system and expanding the transport network. PART III - THE TRANSPORT SECTOR 16. Transportation facilities in Lesotho are limited. At present the country's transportation network consists of roads (mostly tracks), a short rail connection to the South African border and 31 small airfields. Only two of Lesotho's airfields are paved and only one has navigation/communica- tion equipment. All the others have grass or gravel surfaces and are re- stricted to small aircraft. Given the expense of air transport, the country depends almost entirely on roads for internal communications and for access to South Africa's extensive transport system, which carries all of lesotho's international trade.  -5- 17. The road network comprises about 2,700 km and is concentrated in the western lowlands where the bulk of the population lives. Eighty percent are tracks, generally below standard and consequently difficult to maintain. On the other hand, the 200 km of bituminous roads are well built and satis- factorily maintained. The heaviest trafficked nonurban road section carries about 850 vehicles per day (vpd). Some gravel roads handle 100 vpd while most, particularly in the mountains, have considerably less traffic. Pack animals handle much of the short-haul regional transportation in the mountain areas. 18. The Ministry of Works (MW) oversees all roads other than low grade roads constructed under the food-aid program and administered by the Community and Rural Development Office. Various branches within the MW control different aspects of road administration: (i) The Roads Branch (RB) plans, designs and maintains the roads and also maintains Lesotho's airfields; (ii) The Central Mechanical Workshop and Plant Pool (CMW and PP) provides equipment for hire to government agencies and maintains the equipment; (iii) The MW Technicians Training School provides training facilities for technicians, including road maintenance personnel; and (iv) The MW Planning Unit prepares and evaluates capital projects, coordinates projects within the ministry, frames annual capital expenditure estimates and monitors the physical and financial progress of projects. At present the Planning Unit staff consists of one expatriate economist on short term contract. The Borrower has agreed to appoint a suitably quali- fied Basotho econbmist to the Planning Unit (Section 4.04, Development Credit Agreement). 19. The RB maintains Lesotho's roads and gravel tracks. Over the next five years, the RB will assume responsibility for maintaining 1100 km of earth tracks from the Community and Rural Development Office. The Government intends to decentralize the RB to improve its operational capa- bility. The RB will have'three district offices, each initially under the control of a senior technical officer, and ultimately under a district engineer. 20. The RB has had difficulty in maintaining the country's road net- work, primarily because equipment and mechanics were not available as required. This is largely a result of operational problems within the CMW & PP. The Borrower proposes to review CMW & PP procedures with ODM. The Borrower agreed to submit to the Association by December 31, 1976, a plan for improving the CMW & PP (Section 4.05, Development Credit Agreement).  -6- 21. Because of limited design and construction capacity, the RB under- takes only minor works using its own equipment-intensive units. There are two units now; a third will be set up soon under UK Crown Agents assistance. A few small local building construction firms exist, but they are not equipped for road works due to a shortage of engineers anL supervisors. Consequently, all major works are executed by expatriate construction firms. After examining the possibilities for stimulating a local road construction industry, we have concluded that the first step is to expand the supply of skilled manpower. The First Education Project began this task by providing support for the KW Technicians Training School, The project will cbntinue this assistance b- adding an instructor to the school. 22. A team of British consultants completed a national transportation study for Lesotho in 1974. The study's proposed work program aims to open up the country by upgrading rural roads in the lowlands and constructing gravel roads and tracks in the mountainous areas. The preliminary alloca- tion for roads in the second NDP is $17 million, a significant increase above the estimated $4 million expended during the first plan period. The Govern- ment expects external sources to finance a large proportion of the total road budget. 23. Road users in Lesotho pay fees in several forms: (i) vehicle registration fees; (ii) an excise tax on fuel and lubricants; (iii) customs, excise duties and sales taxes on motor vehicles and components. Due to Lesotho's participation in the Southern Africa Customs Union, customs and sales duties on goods imported into the common customs area, as well as excise and sales duties on goods produced within the area, are paid into a central revenue pool. Total transport-related revenue for the last few years has substantially exceeded road administration and maintenance ex- penditures. PART IV - THE PROJECT 24. The project consists of two separate components: the improvement and reconstruction of a road and the establishment and operation of a labor- intensive construction unit (LCU). Although these components are unrelated in origin and scope, we have combined them into one project to facilitate their administration. 25. The road component was identified in mid-1974 on the basis of the study mentioned in para. 22. Improvement of this road initially was to be part of a larger Mountain Area Rural Development Project which was prepared under the FAO/IBRD Cooperative Program and included livestock and crop production components. Subsequently, the Canadian International Development Association agreed to finance the agricultural component as a separate project and the Association, the road component. British consultants financed by ODM completed the detailed engineering in early 1975. The Association reviewed and commented upon the engineering studies before appraising the proposed project in April 1975. ODM agreed to participate in the project on the basis of the Associa- tion's appraisal.  - 7 - 26. The LCU component is the result of a Bank-led mission which the Lesotho Government requested in early 1974 to provide emergency advice on absorbing Basotho migrant workers returning suddenly from the Republic of South Africa (paras. 3 and 4 describe problems of migrant workers). The mis- sion recommended creation of a LCIJ to gain familiarity with labor-intensive methods and to provide a basis for coping with future emergencies (Report of the Migrant Workers Re-employment Mission, No. 614a-LSO). A mission visited Lesotho in October 1975 to discuss LCU's administrative and financial arrange- ments. The mission recommended that the Government create a smaller LCU than proposed by the Employment Mission to be more consistent with the availability of skilled and semi-skilled local staff in Lesotho. The mission also recom- mended that the project provide technical assistance to the Labor Commis- sioner's office to recommend and implement improved procedures for the collection of labor information. 27. An Appraisal Report entitled "Appraisal of a Second Highway Project, Lesotho" (Report No. 952a-LSO) is being circulated separately. A credit and project summary is provided as Annex III. The proposed credit was negotiated in Washington, D.C. in January 1976. The Government's negotiating team was led by tHr. A. M. Monyake, Permanent Secretary, Ministry of Planning and Statistics. Description 28. The project's two components would provide for the following: (i) The improvement of the gravel road between St. Michaels and Mantsonyane (95 km) and reconstruction of the earth track between Mantsonyane and Thaba Tseka (52 km). Funds are also included for (a) consultant services to finalize the construction documents and supervise the work, (b) road maintenance equipment and facilities along the project road, and (c) technical assistance to strengthen MW. These two road sections would substantially improve the transportation link between Thaba Tseka, the commercial center of the central mountain region, and Maseru, the country's capital and economic center. (ii) The establishment and operation of a LCU for a three-year period and the provision of technical assistance to strengthen the Labor Commissioner's office. Through its ongoing operations the LCU would prepare Lesotho to cope with a sudden return of migrant laborers as well as in- vestigate the merits of using labor-intensive methods as a long term employment strategy. The LCU's work program would be relatively small (employing about 200 laborers), but the LCU would be capable of quickly expanding its activities in the event of an employment emergency. The LCU's objectives would be: (a) to train supervisory staff in labor management techniques; (b) to gain experience by carrying out labor-intensive construction work; (c) to formulate administrative procedures for large scale adoption of labor-intensive techniques; and (d) to develop an inventory of appropriately designed projects.  -8- Cost and Financing 29. The total net project cost (road and LCU) is estimated at $8.6 mil- lion, of which $6.6 million or 76 percent would be for expenditures on goods and services outside Lesotho. A detailed breakdown of costs is given in Annex III. Donors would provide at least $7.0 million, 81 percent of total cost, although possible additional co-financing could raise the total to $7.7 million, 91 percent of total cost. The cost sharing arrangements for the project components would be as follows: (i) Road Improvement/Reconstruction - IDA to provide $5.0 million to finance the foreign cost and a substantial portion of the local costs of the construction contract and the costs for revising the construction documents; 1/ - ODM to provide $1.5 million to cover the total costs of the maintenance buildings and equipment, technical assistance to MW and consultants' costs of supervising the construction contract; - Government to provide $390,000 for local costs. (ii) LCU - IDA to provide $500,000 for the total costs of the engineering consultants; - Government to provide $1.2 million for equipment, fuel and labor costs of the LCU and the costs of strengthening the Labor Commissioner's office. 2/ / The Lesotho Government is negotiating with the Arab Bank for Economic Development in Africa (BADEA) for a loan of approximately $2.5 million to assist with the co-financing of the road improvement/reconstruction contract. If BADEA and the Lesotho Government agree on the terms and conditions of a loan, then an equal amount of the IDA credit would be cancelled. 2/ The Lesotho Government is negotiating with Sweden and UNDP for grants totaling $700,000 to substitute for part of the Government's con- tribution to operating the LCU and assisting the Labor Commissioner's office. If negotiations are successful Sweden would provide $500,000 towards the costs of operating the LCU for a three-year period; UNDP would provide $200,000 for two years of technical assistance for the Labor Commissioner's office and associated local costs. In the event SIDA and UNDP assistance should not materialize, the Government is able and willing to provide the necessary finance.  -9- Project Execution 30. The Roads Branch would implement the road improvement component of the project. Engineering consultants, employed on terms and conditions satisfactory to the Association and ODM, would supervise the actual work (Section 3.02, Development Credit Agreement). Employment of these consult- ants has been made a condition of credit effectiveness (Section 6.01 (b), Development Credit Agreement). The RB expects to award the contract by September 1976 and complete work by the end of 1978. The appraisal mission considered improving the project road using labor intensive construction, but concluded that this was not feasible due to the heavy earth works com- ponent and the area's remoteness and harsh conditions. 31. A Coordinating Committee would make LCU's policy decisions and approve its work program. The Senior Permanent Secretary would chair the Coordinating Committee which would comprise senior representatives of the relevant ministries (MW, Commerce and Industry, Agriculture, Finance, Plan- ning and Statistics, Community and Rural Development Office), the Labor Com- missioner and the Senior Engineer in charge of the LCU. The Borrower agreed to establish by September 30, 1976, the Coordinating Committee on terms agreeable to the Association (Section 3.07(a), Development Credit Agreement). 32. A team of three engineering consultants, employed on terms and con- ditions satisfactory to the Association, would direct LCU's operations during the initial three-year period. During their first four months, the con- sultants would set up the administrative apparatus of the LCU, select the estimated 35 permanent Basotho staff in conjunction with MW, and draft a proposed work program of labor-intensive projects to submit to the Coordinat- ing Committee for approval. By the completion of its second year of opera- tion, the LCU would submit a preliminary evaluation report documenting its operational costs and making recommendations on future operations. The LCU would submit a final report on completion of its initial three-year operation period (Section 3.07(b), Development Credit Agreement). Procurement and Disbursement 33. The road improvement/reconstruction contract would be awarded on the basis of international competitive bidding in accordance with Bank Group guidelines. Contractors were prequalified in November 1975, and bids would be called for in April or May 1976. The tender documents did not in- clude a preferential margin for domestic contractors since there are none who qualify. Construction of maintenance buildings and procurement of mainte- nance equipment would follow normal ODM procedures; procurement of equipment for the LCU would follow normal government tender procedures. 34. Disbursements of the IDA credit proceeds would be made as follows: (a) 86 percent of the total expenditures (net of taxes/duties) of the road improvement/reconstruction;  - 10 - (b) 100 percent of foreign expenditures for the consultants to revise construction documents (this amount - approxi- mately $13,000 that has been spent after October 1, 1975 - would be financed retroactively); (c) 100 percent of the total expenditures (net of taxes) of the consultants employed by the LCU. Benefits and Justification 35. Benefits from the improvement/reconstruction of the St. Michaels- Thaba Tseka road would accrue largely to the 56,000 people living in the immediate area of the road's influence in the form of savings from reduced transport costs and increased net value of agricultural production. Improv- ing the St. Michaels-Mantsonyane section is expected to reduce sufficiently the cost of transport for existing and generated traffic to justify that portion of the road. Reconstructing the M4antsonyane-Thaba Tseka road is justified as part of a total regional development package. Thaba Tseka has just been named the headquarters of Lesotho's Tenth District. It is also the center of a $8.0 million Mountain Area Rural Development Project (see para. 25). The Mountain Area Project aims at increasing crop and livestock production and improving living conditions through infrastructure investments. The improved road should enable farmers to improve livestock production and to switch from subsistence maize production to wheat, for which con(litions are much more suitable. A major unquantified benefit is the increased access that the people in the remote Thaba Tseka region and the mountain areas would have to Maseru, the nation's capital, and the social services available in the more developed lowlands. 36. The rate of return, assuming a 15 year economic life, is -3 percent for the St. Michaels-Mantsonyane section and 11 percent for the Mant:sonyane- Thaba Tseka section (calculated in conjunction with the Mountain Area Develop- ment Project and assuming Phase 2 begins in 1980). If construction costs increase by 10 percent or if traffic growth is half of that anticipated, the rate of return for the St. Michaels-Mantsonyane section would be 12 and 11 per- cent respectively. If the Mountain Area Rural Development Project is not extended in a second phase, the Mantsonyane-Thaba Tseka rate of return would be 10 percent. 37. Although not quantifiable, several benefits of the LCU can be iden- tified. Primarily, the LCU would give Lesotho a potential capacity to handle large numbers of returning laborers, should the need arise. As mentioned in paragraph 4, South Africa has annouinced its intention to further mechanize its mining sector and reduce dependence on migrant labor. Thus, the possi- bility of Lesotho's having to absorb large numbers of workers sometime in the futuire is real. Without contingency plans, such a development would cause severe economic and financial dislocations in the country. The LCU would also train local staff as supervisors. In addition, the evaluation of LCU's operations would help judge the feasibility of labor-intensive operations in Lesotho's circumstances irrespective of an emergency reoccurring.  - 11 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 38. The draft Development Credit Agreement between the Kingdon of Lesotho and the Association, the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement and the text of a resolution approving the proposed development credit, are being distributed to the Executive Directors separately. 39. The draft Development Credit Agreement conforms substantially to the pattern of recent agreements used for highway projects. Special features are referred to in paragraphs 18, 20, 30, 31 and 32 of this report. 40. An additional condition of effectiveness is that the ODM Grant Agreement between the Lesotho Government and ODM has, or will concurrently with the Development Credit Agreement, become fully effective (Section 6.01(a), Development Credit Agreement). 41. 1 am satisfied that the proposed Development Credit Agreement would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 42. 1 recommend that the Executive Directors approve the proposed developrnent credit. Robert S. McNamara President by J. Burke Knapp Attachment February 17, 1976   ANNEX I TABLE IA LESOIHO - SOCIAL INDICATORS DATA SHEET LA ND AREA (T9O0U ---E)HZ - -- ----- ---------- 0LESOTH REFERLNEE CU'TNTRES I19J)J T '31L Sd. 540ST RECENT ARALE 19 160 1911 E S0I MATE ETHIOPIA CAMER9 ON SWAZILAND ,3p ? _ R CAP I Tt 1U S40-0 90.0 IC.O ro .0 z2 C.2 2 30.0 * POPULATIO'N Nl VITAL STATISTICS POPJLITArIN .[4(:YR. 0ILLION) 0.8 O3.9/a 1.0/I 74.6 5.a ).4 POP JILA ION3 NSSIT Y PRP 5JUAP1 il4. 26.0 10.0s 353.O,a 70.0 12.90 ZS.) 'R S1UARE ARN. ARAA3I .. .. ..L. SB. VI A lLSTA4rlSTIICS CRUDE 9IRTH 'STE PER THOUSANO .. 39.0 42.0 46.U 4S.0 5?.0 A401 DEATH 'A3E PER THUUSAiA .. ZL.O JD.O 25.0 2'.2 24.0 I VF A NT MOPIAL I I Y RAT 3* t THOU ) I S . a /a .. 11 . 0 LIFE EXPE-TANCY AT Q1RTH (YRS) .. 44.0 46.0 39.0 41.0 41.0 ,JJSS REP9O4DCTIUC N 1 RATE* 2.5 2.5 2.9 2.7 3.5 P3-'JLATIOY GROWTH QAIE (1: I31TAL 2.J 2.2 2.? 7.2 2.4 2.9 i19AN 2.0 4.0 .. 5.0 6.C 1C..0 Ji R AN 'I PJt 1TON It gr T4 IL.) 0.8 1.0 .. 1).l J.1 1 . ) A G ,T1UCTU`I4 (PERCENT) Fr 14 rE44s5 46.04 ' 45..0 40.0 45.0 4S3. '.,.0 Ii TO 64 YEARS 4?7 - 51 . 0 -.S 51 .4 la 4.0 7 5 YES'S 4oD 9OER a 6.0 4.) 4. 7F 3.1 5.0 A. IE P - N O C Y R A ./a 1 . .. J O.* I. ErC.)RIIL ) 'P NJ iLY 010Y 0 .. I.D 'b,c 1.1/a 1.l/c 1.2 1 . i AH I, Y "144 NI4G A-CEPIORS (CUO4-L I V1, THOU .. ..I J3S P ( X I- MA43R I I 4 Y9EI) .. .. .. C -P . Y HE Nt 103T1. LAllR 1R11 (tHfluSANOSI .. 440.0 /b 45C.0;b IlS00.d ,H0C.0 I ' 9U 5> 109 FO.RCf I 4,EICULtURE (1) .. 09.0 .. B5.0 '5. '1., 34 N45F .1 J Yc D I23F LA HOR FJRCE) .. .. .. . ) I / i 43 T '34 YI ) - It 0141 YAT 425-4, R, CID 0T '-,I d,H IX 1 P LAtI'3 .. .. .. I I .. '.3,101 351. '1 PiPO) 0110h .. . . .. . .. 1-341 St 1J3 A41 PO.4AII44 I )'.N 3, S4A;ft ,T 10 Tlo .. 0.. .. .. 7. It :I IY 13 40141T3 PlI'J1AT3 34 ',4 I~~1,314N . 26290.0 1440. 5',0.0 05960.3 i 1,-.) '31.JLATI . '~'. '.3"514- PL.OA4N 3140 0/d e 3900.0 5?10.0 2440tA.21 3'.T4. I I 14.3 . . A _ I_ 1j 4 . I_, P IA 4 5. 4 73.0 _ 0.0 1 0 . _ 0 4 . 0.a 20.__ 341 I1 35PI 0'1YI1)- A L3V1 Tj I Jr 0 D /4'c10 .. r. , . .. ..-.4 A3 '1 IF^s D.' 1Y S44.5 iF )TIX ' HE . .C .. .. .. 6.. IT I 1/C +1A 3 A,.E 0 1Y T I I I1)M341 3D 9J03 93.0 45.'- 27 14.0 70.0 94.5 ,_ 3JN9) RY S1cQ_ 5.0 5 .0 6.3 4.1 4. )1 .1 fA 34 iOF 01.0003143 PR,1,1D4,5 I FIRJo AN) 5EJ.' LEVEL) 12.0 14 .0 0.. 5001.4 1 4 . r 10 0VIATI ONA1 I NROL Lm4 'T 13 1' 3)00 R4 I a1 2. .0 .. 20 3.0 A L) 111095E.1 RA I 0 .. .. 0. 6.0 t. .00 OCCUPIED DW-LL1.I445 WrTIOUT _I/I 3! Sl3H,J4 N0Pt5 .. ....2.O3. ,. 412)- TI f) ELEZ1RI01ET1Y (t JF ALL DWELLING3S1) .. .. .. .. .. 9.. LU 4 C{ I T Yf RA')Il) R11 IVERS (PER IOO0 POPP 6.0 10.0 10. 0 6.0 36.0 24.0 (ASSF4GEP CARS (PER 1'300 POP) 1.0 f 2.0 .0 12.0 61.0 d11.0 ELt'J: 1905T (K3WDAIYR PER C.0) 8.0 - V1.0 200.0 128.0 NF4PIAJ t(5G "E C .. .. .. .. o1h S 9Q40LTC0 ANO EFI N r 9 N 1 ON RE9SC  Page 2 of 3 pages 'rioa oheriseout d, dta for 1960 refer to 1969-1961, for 1970 to 1968-1970, and for Most Recen.t FEtboato to 1971-1973. tooiland ion be- selected as am objective country for Lesotho in order to provide costparative dato to respect of a cootrsy of a stellar~ slo whil- is lIc'!'i noed hoc~ atahigher level of dev-lope.st. ,F1OTH)00 Iii 'a0 1956: 'it Popels.tios 15-59 years; Ic Populatios 60 years and over; i'd 1962: Is Inlading assistant sursec a-d nfdoivs: If 965. 19: -incldes absentee workers; lb Ratio oi populstion under 15 sod 65 sod over to total labor force; Ic 1966' Id lAh.,,le a-rd 'laid ceder tradlriosal teesre ara..gegsenta. 'lsiRECEN? tITIllATE: fa Eaclodes absentee workers amoonting to 20 percent of total popolation; /6 Total lahor force which ieeode- ah1-ti 200.000 pora.oT employed tem,porarily is Sooth Africa. Diiftil'i 1970 'a 15-59 yea.rs: /b 60 years and over; Ic Ratio of poPoILaion a-der 15 and 60 asd over to total labor torte. CAMfO'tt110'1 19 '0 /a 964-66' lb 13 yeara For RE.t Caisroos . i'hhiV-lA ihll :97;0 'a 1956-it; /1 1966; /c African popolation only; Id Ratio of popsaiotfo onder 15 and 65 asd ...er to rtotl T.!n- l.-- 95 Felteo-. I DEFINI'TIONS Os- SOCIAL INDICATORS I A________ - fopuistisonrhootsn person - Pepuotiho die ,V1ioly Tcn 'oa cv-_ eae cemsrising land area end inland waters. maesAfml rout toe,"'ocoi o ct le, -Icelo IV'o-'rerr- f iced area need le-porarly or p.ernsetly poPlc -p esonn-1 with tochnieg or pesric-, loo"-I nv-ti , osturee, marke and kitchlen gardaen or to lie fallow. Popuai.iope ho,_pital bed - Populallon dicidod ly i,N-, 'o oilbein phibii and prlvoie generol fmd Opt-iai'toedroi GNPi per vapiila eslimatee ut marcket prices, colon- rnhabilita,rioc casters; eccio,dei nursing hiine. I ~,d l~ o- ct-cisc method as World Root Atlas (1972-74 basis). cuotodial and p-oeitivo vitro Per capita supply of calories (% of requiro-ei:r:-l - veepwot e Ir i'l'ol I On -o ~~~Ialtice eqoivalect of net. feed supplies aoailab", i, ivypi q 7"7 il:ioso) - A, of -'tiy firer; if set available, avocage available oupp:ies ceomprise dtrestic prole' tic,, "rpeil" It';! 'lenten. me~~~~~~~~~~~~~~~~~~~~~~~~~~~~~d changes in ovcl,k; net, euppliss occlude o,ri-o i - to "re-i: i, ties need it~ feed peneessiog end losec in~ di,tr Iel,i 'len;t- -,p lo p i lv - I ' -per sqa.re lee - Mi~d-year population per sqitaer kilo- were eotii,atad by PilO based on phwsielogiosl ste o Ir 'rcon -cc, or no-c- of st,aT a-ea. and health cosidering encl,oentrial te,,e-t,r-Llte I -96 -ietd -pee 't tor i- of,. arahle len d - Coipsoted as ahove for oe. dictriborioro of pepol-otion, end aioooga'% 'e - Per capita supoly ' of proteis, (grams per day) - ?oeven' -oo"rt e-pita net supply of feed per day: neet soupply creeod in do' i , -"vice, 'I it--li-'o-md - At,-n] live births per thousand of mid- eheve; roqoir-eletts for all osvtt.rles en5ohlinte'l by USDA 9', proc -spy o tin ' 'ioly _ye-ve -veragee ending in 1960, 1970 and Researob Services pmttide fer a inmticoc all-wa-e a inv~- 'gli "-,t-iess, protein per day, sod 20 grass of atiotl oat-i p0-nvis p-s.tir'' -~' 'en -In ' em'' 1rr I htusond - Att,ual dearhe, per ctesmand of mtid-year g7ron should .e soiial protein; thece bsta2dardo are 'tot-. n'z 'r -' 7o--"m- -aorgse ending ir, 't960, 19715 wad 1915 '0grate e0 It' protein and 7~ groan of scion-I J-,TOn'- fcr the nec-id pepensed by PlO in tise Third tatnol 'e- o vI-eu A ,-.te-o 'deabsi of n-can-s n-Am- n year e eia)rti 'ml rmmie sApae r o ',pp, p- ''a em-'e' 'vi " a -~I:(ye') - Averae "or -f"arn of life remir- De,,alt ra's (Itheti, ages I-t-Anrua:l deathv ~ Ie't'o I - '- _ ''a- o' ccii -n-'1"'uve-mear ovorges et:.Iiog in 1960. 1970 and years, to chhMFe, is'isae rornlt; no~gite- "' in. ''I-u 0ev ',, ' to' 'etc, net-hoc. ec~~~~~~~tritios. r'0C e'vo -tA race 'itnier of 11-s daea'hterc s woman a-ill 'iy -r_ir- - eprcd',-ti-e perird if sir experhennes presenr age- Euucation Pi' tv -, - u sually five-year avnragee ending in 1960, Ad'usted enrltni ai piaysheo -E,tril-,r t o i tgoc-s - ~~~~~ ~~~~le-chp, tig -vi-uries. cotgeo priteoy"school-age FpepnlatHe; ivl-ie itla-e sged r - ow-l -- ~e ey ttal Compound annual growth rates of mid- years bit ad~justed for differeent lengthsy--' Pt i.uo d-t e; 'v''y your pn1p',lo' o,,', 190 4 lIb- 7., and 1960, to most recent year. tiens with etniversal edueotie, enrollmenit soy cxce,- 'P o t- giua 000' iclet I) - utlaia- Coeputed like growth rate of total. pupilo a- helew cc obos else ffiotal e-hecia, p'ca t -m'-'v00r' de'-netche- vi obrbs; orean cay affect comprar- Adjusted mrcollment ratio - secondary scheoli - heo,,-s't ' I -vc-o esa. ary elnoatien coyciron at, least feour yercr or Ierir ,i 7i~o,: 00,,aav'urbo- lc total population; dl"- 'ten; p-oidee general, --ctiocal cr toatihec c-i~~~iicci ir5 Ocanr cup af, c- - mvnnrahillcy of data repilo of 12 t, 17 yeroav v age; onrreoiictidt-'- -" e rooludad. _______ bc--in ' i C~~~hild-c ()-i-I ay-)0, working-age (15-Si yearc), Loot of ecolppeie firs,t and oFece le-u a"~-r 1n 0000 05 ferosotof-,es of old-year populatioi. nohcoelng; at secondacy level, ,oeationoll i,ccie ty bt f 'i A 4' econ-it"-- o a 'apl.H. -Ite,e It med 65 and -er to cvepeei oldd ,j7,h th. j~~~~~~~~~~~~ocational enreil~eot by of eveondaryl - 'Io-ti et-a -ti" it' 'ie o' i-jo,,, to 'net-dci--ca'no car4~ f s pnpulotii,c onder 15f and 65 and over tehia, irdentro. r tewper hc aici-)c v tdp'00II- Ole I00 0oc i, ago gtwcj tio25-61i yours. aso deparimeots of seecedary7 iootitutonss. 00' ~ "lore''c-s'' entes l'um-tlatvr hn - OCtulatise sumber of Adult literacy rate Ly-iticrate adults julie t road and weite) 00 ec-- ii' 'ieb-"nlrcl ds-hoe coder s,:pi,ee of natisonal family -s,ntage of tetel adult popolarlot: oged 15 yearo and or o tonoog tesce b Pi' 'trried women) - 'cc'vstageoa of mtarried .'Iusi ng '<"'te v-vhll-4 atrieg age y1-I..7o) who "so tes-sn do- 6fffhonep-