OPY r nn Document of FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2043-TA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON PROPOSED CREDITS TO THE UNITED REPUBLIC OF TANZANIA FOR A PI'RAL DEVELOPMENT PROJECT (TABORA) April 14, 1977 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Tanzania Sh = US$0.12 US$1.00 = TSh 8.30 (As the Tanzania Shilling is officially valued at a fixed rate of 9.66 TSh to the SDR, the US Dollar/Tanzania Shilling exchange rate is subject to change. Con- versions in this report were made at US$1.00 to TSh 8.30 which is close to the short-term average exchange rate.) ABBREVIATIONS CCM - Chama Cha Mapinduzi Government - Government of Tanzania MAJI - Ministry of Water, Energy & Minerals RWE - Regional Water Engineer TANU - Tanganyika African National Union FOR OFFICIAL USE ONLY INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON PROPOSED CREDITS TO THE UNITED REPUBLIC OF TANZANIA FOR A RURAL DEVELOPMENT PROJECT _______ (TABORA) 1. I submit the following Report and Recommendation on two proposed credits to the United Republic of Tanzania totalling the equivalent of US$12 million on standard IDA terms to help finance a Rural Development project. One credit of US$7.2 million would be made from IDA resources; a second credit of Can$5.0 million (US$4.8 million equivalent) would be made from Caradian funds administered by IDA in accordance with the terms of the recently approved Agreement between the Government of Canada and the Association. An expected US$5.6 million equivalent grant from the United Kingdom would also help to finance the project. PART I - THE ECONOMY 2. The last full economic report on Tanzania (AE-26) was distributed to the Executive Directors in 1972. While it has been some four years, therefore, since the last comprehensive economic report was issued, a substantial volume of economic and sector work has been carried out during this period. An agri- cultural sector report was issued in December 1974. A three-volume industry and mining sector report and a special economic study on the fiscal aspects of Tanzania's recent decentralization of Government were distributed in April 1975. In early 1974, at the Government's invitation, Bank personnel participated in a special task force which assessed the impact of the increase in petroleum prices on the Tanzanian economy.: A further analysis of recent economic develop- ments was contained in the Program Loan President's Report (No. P-1517a-TA of November 25, 1974), and the Government's progress in implementing policies and programs designed to close the balance of payments gap was reported in a special memorandum to the Executive Directors (SecM75-687) in September 1975. In March 1976, also at the request of the Government, Bank staff assisted a Government task force in the preparation of a report which analyzed the fiscal implications of the new targets for universal primary education and universal rural water supply. These sector reports and special economic studies have formed the basis for our dialogue on economic policy issues with the Government and for the development of our program of operations. Finally, a basic economic mission was conducted in July-August 1976. The basic economic report is currently under preparation and it will be discussed with the Government in Spring 1977. The updating report on the Tanzanian economy (Annex V to the President's Report on a Proposed Program Credit, No. P-1781a-TA dated February 22, 1977) is based on the findings of the basic mission. This document has a mtrcted distribution and may be used by recipients only in the performance of their officia duties. Its contnts may not otherwis be disclosed without World Bank authorization. -2- 3. Tanzania has experienced a degree of continuity and stability in political structure, leadership and objectives which is virtually unrivaled in Africa. The TANUI/ party, under the leadership of President Nyerere, has been the unifying force in Tanzania's political evolution since the early 1950s. For the past decade, following the Arusha Declaration of early 1967, Tanzania has pursued the objectives of social equality, self-reliance, the eradication of absolute poverty, and economic and social transformation. The fundamental strategy underlying Tanzania's development has emphasized rural development social ownership of the principal means of production, and full participation of all regions and population groups in the development process. Economic growth has been an important objective but the leadership has been willing to forego short-term income gains for longer-term structural change and more equitable distribution. In restructuring the political, economic and social life of the country the leadership has introduced an impressive series of far-reaching institutional reforms. The most important of these measures are well known: most large-scale units in manufacturing, finance and wholesale trade have been nationalized; the Government has sharply increased its share of revenue in GDP through progressive taxation; a significant portion of public expenditure control has been delegated to the regions and districts; and incomes policy has prevented a further widen- ing of the urban-rural gap and has narrowed wage differentials within the formal urban sector. There is also state intervention in market pricing; prices of capital, labor, land, imports, industrial and agricultural products and consumer goods are controlled directly and by indirect methods such as import licensing. 4. With a per capita income of $170 in 1975, Tanzania is classified as one of the least developed countries as defined by the United Nations (country data are provided in Annex I). Between 1967 and 1973 Tanzania's GDP at factor cost was growing at an annual rate of 4.5 percent. With population growing at 2.7 percent per annum per capita output was rising at only 1.8 percent per year on average. Domestic savings reached 18 percent of GDP while gross investment was sustained at between 20 to 25 percent of GDP, extremely high rates for a country at Tanzania's low level of per capita income. The growth rate of GDP was not commensurate with the magnitude of the investment effort, however, in part because of the high proportion of investment which was directed into slow-gestation infrastructure and social services projects such as the transportation links with Zambia, but also because of sluggish growth in the agricultural sector and stagnant or declining productivity in para- statal enterprises. During this period Tanzania's overall balance of payments situation was generally satisfactory, despite the disappointing performance of - TANU (the mainland political party) was merged with the Zanzibar political party (the Afro-Shirazi Party) in February 1977. The new party is now called Chama Cha Mapinduzi (CCM). -3- the export sector. The rapid growth in imports was more than compensated by increasing capital inflows, largely from bilateral sources on soft terms. The overall balance of payments was in surplus in most years during 1969-73, resulting in a modest buildup in net foreign exchange reserves to slightly over $150 million at the end of 1973, the equivalent of almost four months' imports. The Economic Crisis of 1974 5. In 1974 Tanzania was suddenly confronted with a severe economic crisis, caused in part by drought and dramatic import price escalation. Failure of rains in late 1973 and early 1974 caused major declines in pro- duction and marketing of the major foodgrains. In response the Government was compelled during 1974 to import large quantities of grain, particularly maize, on commercial terms in order to alleviate the hardships inflicted by drought. Tanzania's main export crops were also affected by the drought, and the resultant declines in export volumes prevented Tanzania from taking advantage of the commodity price boom during 1974. On the import side, total cost of merchandise imports rose by over 50 percent between 1973 and 1974, despite a slight decline in volume. As a result of these factors the trade deficit widened from $158 million in 1973 to $340 million in 1974 while the overall balance of payments moved from a surplus to a deficit of $140 million.!! Industrial production also stagnated in 1974 due to shortages of imported raw materials resulting from the growing foreign exchange constraint, and to interruptions in power and water supplies. While production declined, domestic demand increased rapidly because of expansionary fiscal, monetary and wage policies. The imbalance between domestic demand and supply, combined with the sharp escalation in import prices, resulted in severe pressure on the domestic price level. 6. Although the severity and suddenness of the crisis were largely the result of forces outside Tanzania's control, many of the problems were foreshadowed by longer-term economic trends which, at least partially, were subject to Tanzanian control. One important adverse trend was in the com- position of growth; the rate of growth of material production had been falling for several years and the overall GDP growth rate had been maintained only by an acceleration in the growth of services, particularly of public administration. Much of the slump in agricultural production was due to poor weather but the average growth rate of agricultural output failed to exceed the rate of growth of population for the six years prior to the harvest failure The overall balance of payments gap was financed largely through drawings from the IMF (gold tranche, first credit tranche and 1974 Oil Facility) and by a rapid depletion of reserves which fell to $60 million (net) at the end of 1974, equivalent to only one month's import requirements. -4- of 1974. The mass villagization program (paragraph 29 below) inevitably caused some disruption in agricultural production, in part because of in- adequate planning and preparation. In the modern sector many enterprises experienced declining labor productivity which has been attributed to lack of incentives, poor discipline and ineffective management. Furthermore, while the ratio of domestic savings to GDP rose during the 1960s, reaching a high of 18 percent in 1970, it had declined to 15 percent by 1973. Public savings were also falling as a share of GDP, mainly due to the slow growth of parastatal enterprises' surpluses and the rapid increase in government recurrent expenditures. The Government's Response to the Economic Crisis 7. Once the extent of the problems facing the country was realized the Government formulated a comprehensive program of policy actions to bring the balance of payments under control while maintaining the pace of the development effort. The principal elements of the program include a re- allocation of investment in favor of directly productive sectors, measures to raise agricultural output, and constraints on wages and on public and private consumption. This program was reviewed with the Bank at the time of appraisal and negotiation of the program loan in late 1974, and approval of that loan was based on the Bank's agreement with and support for the proposed program. The Government has, over the past two years, successfully carried out most of this program, as described below. 8. From mid-1974 the Government tightened import controls, particularly for consumer goods and industrial raw materials. Imports were curtailed drastically and liquor and tobacco imports were banned. Import licensing was further tightened in 1975, leading to sharp volume declines in imports of consumer goods, including textiles, and industrial raw materials and spare parts. In addition, the Government took further politically difficult steps toslow down the rate of growth of private consumption demand. Retail prices of basic foodstuffs were raised sharply in late 1974. Indirect taxes on textiles, beer and cigarettes have been progressively increased since 1975 to absorb excess consumer demand for these items. User charges for water and electricity have also been raised. An extremely restrictive wage and salary policy has also been followed since May 1974. 9. On the production side, the Government has taken a number of steps to stimulate agricultural production. The share of Government development expenditure allocated to the agricultural sector has increased from 16 percent in 1973/74 to 23 percent in 1976/77. During late 1974 and 1975 the Government urged farmers to grow more food under the campaign "farming as a matter of life and death." The Government also announced substantial increases in agricultural producer prices in May and November 1974 and established an agricultural price review unit in the Ministry of Agriculture. Producer prices were again increased in 1975 and 1976. -5- 10. The Government has also made significant progress during the last three fiscalyears in reallocating public investment in favor of the directly productive sectors of agriculture (cited above), industry and mining.L/ This fundamental restructuring of public investment necessarily means that relatively less investment resources are available for other sectors, in particular for primary education and rural water supply. In recognition of this fact, and also because the recurrent and capital cost requirements of these targets would be entirely unmanageable even under normal economic cir- cumstances if they were to be implemented using past methods, the Government is stressing the need for local self-help, particularly in village school construction, lower cost delivery systems based on lower design standards, and cost recovery. Economic Performance in 1975 and 1976 11. The major macroeconomic indicators have generally improved since 1974, reflecting both improved weather and the effects of the policy measures which were introduced to deal with the crisis. Agricultural production increased by 6.6 percent in 1975 compared to a decline of 3.3 percent in 1974, while total GDP grew by 4.6 percent compared with only 2.2 percent in 1974. This was despite the fact that during 1975 production of cotton and some other cash crops still suffered from disorganization due to villagiza- tion. In 1976, some of the problems of villagization were being rectified through "operation correction" and since rains were once again favorable agricultural production was generally good. Preliminary estimates are that both agricultural production and total GDP inrreased by about 5 percent in 1976. However, output in the modern sectors Qf industry and construction has remained at a depressed level, in part due to shortages of building supplies, raw materials and spare parts occasioned by the severe import restrictions which have been imposed to conserve scarce foreign exchange. 12. The goods and services account of the balance of payments continued to deteriorate in 1975 due to continuing production difficulties, declines in some agricultural export prices and the continuing need to import food for part of the year. As a result of these trends the trade deficit increased from $340 million in 1974 to $400 million in 1975, and even after allowing for a high level of project-related capital inflows and a huge increase in grant assistance and concessional food aid, there was a residual deficit of almost $75 million. Whereas the 1974 residual deficit was filled almost entirely through a combination of IMF assistance and reserve depletion, the 1975 deficit was met through foreign assistance from a wide variety of sources, including a $30 million program loan from the World Bank. In 1976 The Bank Group has supported:this effort by significantly increasing the proportion of our own lending to these sectors over the past three years. See Part II for details. -6- the balance of payments picture improved. The trade deficit declined due to strong export performance, especially for coffee and cotton, and to a slight fall in the value of imports occasioned by a greatly lessened need for foodgrain imports and continuing tight restrictions on all other categories of imports. The overall balance of payments is expected to show a surplus of about $35 million for the year and net foreign exchange reserves have increased to $115 million which is equivalent to two month's import requirements at the 1976 level, a modest improvement over end-1975 but still an inadequate level. Because of the very concessional terms on which aid has been given to Tanzania, and the Government's refusal to use higher cost commercial loans and suppliers' credits, the overall debt service ratio has remained low -- including a notional 40 percent share of the debt of the East African Community Corporations it was less than 8 percent in 1975. Despite Tanzania's impressive overall domestic savings performance, a continued capital inflow in excess of the foreign exchange component of high priority projects will also be required. Major Issues for the Future 13. Although the general thrust of the Government's policy framework is correct and those initiatives already undertaken represent a commendable effort to confront the economic crisis, the Government recognizes that further adjustments are required to deal with the severe constraints to growth which still remain. Declining labor productivity, especially in the parastatal sector and low capacity utilization have contributed to the slow growth of material production. The emergence of underutilized capacity is largely due to the shortage of foreign exchange for spare parts and materials and can only be alleviated in the short run by increased external aid providing quick-disbursing, freely-usable foreign exchange. In this connection a Program Credit of $15 million was recently approved by the Executive Directors. The longer-term problem of low labor productivity and parastatal inefficiency is, however, more complex. Although the Government is now fully conscious of these issues it has so far only been able to initiate steps to deal with these issues. Another major problem which has become apparent in recent months is the difficulty the Treasury is having in keeping expenditure within budgeted limits and avoiding over commitment. The Treasury, however is begin- ning to take steps to institute controls and there are hopeful signs that expenditure priorities are being sorted out. In addition, the Government is searching for new delivery systems for social services and is taking self- help and cost recovery more seriously. Reflecting this Bank technical assistance was requested earlier this year to look at the universal primary education and the fiscal implications of universal rural water supply. Another problem area which was highlighted by the economic crisis is the poor per- formance of exports. Since the economic crisis the Government's attitude has changed and some measures to stimulate exports have been taken. Further efforts, however, are required over the medium and long-term. -7- East African Community (EAC) 14. The 1967 Treaty for East African Cooperation made provisions for far-reaching and comprehensive economic cooperation arrangements among Kenya, Tanzania and Uganda. In its initial years, the EAC had set up institutions, policies, and procedures for operating the common market and the large infra- structure services, and encouraging progress was achieved. It has been followed, however, by a period of tension and mutual suspicion concerning the distribution of net benefits derived from the Community. The infra- structure services were hampered by restrictive tariff policies; services declined, and Partner States subventions were required for the Railways from time to time to keep the services running. The poor performance of the common services in transport and communications also impaired trade and general movement of goods within the countries, affecting the general economic development program. These difficulties were aggravated by the severe budgetary and balance of payments constraints faced by all three Partner States in the past few years. As a consequence, there has been a continuous diminution in the authority of the Community institutions. Failure to agree on arrangements for transfer of funds between the Regional Offices and the service Headquarters have often paralyzed the operation of the Headquarters, affected their morale and on a number of occasions led to delays in meeting their external obligations. 15. In 1975 the Partner States recognized that their fundamental poli- tical and economic differences had so affected the working of the Community that a review of the 1967 Treaty was called for. A Commission was appointed for this purpose in November 1975 but adjourned sine die in November 1976 without being able to make agreed recommendations regarding the future structure of the EAC. Meanwhile, although no dejure action has been taken, further deterioration in Community relationships has led to a further dis- mantling of the Corporations. The Railways Headquarters has in effect been disbanded and the nationals working in the Headquarters have joined their respective Reginnal Offices. Recently, the East African Airways Corporation (EAA) collapsed in part due to the lack of effective mechanism for interstate transfer of funds. The Headquarters of the East African Harbours Corporation has existed in name only for at least a year with the ports authorities in Mombasa and Dar es Salaam functioning autonomously. The East African Posts and Telecommunications Corporation has so far functioned with a semblance of Headquarters responsibilities but is now fast delegating its headquarters functions to its regional offices. The respective regional branches provide the service, and domestic development programs in this sector are not likely to be impaired. 16. The difficulties facing the EAC and the common services have affected the Bank's lending to the Community. Because of failure to meet debt service obligations, the Bank suspended disbursements last year for -8- about a month. Except for a second line of credit to the EADB in March 1976, the other corporations have received no new loans from the Bank since 1973. The Bank has continued to disburse on its five ongoing loans to the Corporations and as of March 31, 1977, $37.9 million remain to be disbursed. PART II - BANK GROUP OPERATIONS IN TANZANIA 17. Tanzania joined the Bank, IDA and IFC in 1962. Beginning with an IDA credit for education in 1962, 26 IDA credits, 12 Bank loans and two Third Window laansamounting to $456.8 million have so far been approved for Tanzania. In addition, Tanzania has been a beneficiary of 10 loans totalling $244.8 million which have been extended for the development of the common services and development bank operated regionally by Tanzania, Kenya and Uganda through their association in the East African Community. The only IFC investments in Tanzania to date, totalling $4.7 million, were made to the Kilombero Sugar Company in 1960 and 1964. This Company encountered financial difficulties and in 1969 IFC and other investors sold their interest in the Company to the Government. Annex II contains summary statements of Bank loans and IDA credits to Tanzania and the East African Community organi- zations as of March 31, 1977 and notes on the execution of ongoing projects. 18. In keeping with Tanzania's overall development strategy Bank lending operations are increasingly focusing on the rural sector and directly productive projects. Up to the end of FY72, 10 out of 14 loans and credits made individually to Tanzania had been for infrastructure. Of the 23 Tanza- nian projects approved since then all but seven were for directly pro- ductive projects. In general the infrastructure projects which have been approved in recent years have been designed to support specific directly productive activities. For example, the Urban Water Supply Project (Loan No. 1354-TA) approved in January 1977, will support the recently approved Industrial Complex Project in Morogoro. The directly productive projects are supporting both the agricultural and industrial sectors, including the Kigoma Integrated Rural Development Project (Credit No. 508-TA), the National Maize Project (Credit No. 606-TA), the Fisheries Development Project (Credit No. 658-TA), the Tanzania Investment Bank Project (Loan No. 1172-TA), the Mwanza Textile Project (Loan No. 1128-TA), and the Morogoro Industrial Complex Pro- ject. The first Bank Group assisted project in the forestry sector, the Sao Rill FQrestry Project (Loan No. 1307-TA), was recently approved. 19. It is intended that future Bank projects should continue to focus on the directly productive sectors and in this connection projects in an advanced stage of preparation include a Rural Development Project in Mwanza and Shinyanga Regions, a National Agricultural Development Project, a Second Cashewnut -9- Processing Project, a third line of credit to the Tanzania Investment Bank and a second Textile Project. A Pulp and Paper Project which will be based, in part, on the raw material to be provided by the recently approved Forestry Project (Loan No. 1307-TA) is expected to be appraised in the field later this year. A Trucking Project, which will focus on a particular development bottleneck which has become apparent in recent years,is currently being appraised. In keeping with the Bank's recent strategy, economic and social infrastructure projects are expected to become increasingly selective. In this connection, a proposed Second Urban Project has been recently appraised and projects in the highway and rural education sectors will be identified later this year. PART III - THE RURAL AND AGRICULTURAL SECTOR General Background 20. Agriculture and related activities constitute the largest single sector in the Tanzanian economy. Roughly 40 percent of GDP is derived from the sector of which 50 percent constitutes subsistence production. Agricultural exports,which account for 80 percent of total exports, include mainly sisal, cotton, cashewnuts and coffee. About 94 percent of the population live in rural areas and 90 percent of the economically active people are engaged in agriculture. 21. Most production is from smallholdings using family labor. Large-scale agriculture is represented by a small number of private estates and some state farms producing sisal, coffee, tea, wheat, rice and livestock. Estate production had diminished in importance and the state farm program remains small. Tanzania's national herd, the second largest in Africa, is grazed extensively over the 40 percent of the country which is free from tsetse fly infestation. It is largely managed along traditional lines. There is limited use of oxen for cultivation, mainly in the western cotton areas. Major food crops in Tanzania are maize, millet, sorghum, paddy, potatotes, cassava, bananas and beans. These are produced predominantly by smallholders who use most of their production for subsistence. Agricultural output has stagnated in recent years. Food crop production failed to keep pace with the expanding population, and Tanzania became increasingly dependent on imports of maize, rice and wheat. The deteriorating food balance position was seriously aggravated by the poor, drought affected harvests of 1973, and 1974. Nonetheless, as a result of improved weather and the effects of policy changes (paragraph 22), agricultural production increased in the last two years. Agricultural Development Strategy 22. The Government recognizes that agriculture will continue to be the main source of employment and has been trying to devise a strategy which will bring about improvement in output, incomes and the living conditions of the agricultural population. The major aim is to make - 10 - significant progress towards socialist organization of rural activity, based on village cooperatives and maximization of the use of labor. State farms fill a need for large-scale production units, but the approach to mechanization is cautious. 23. Until recently priority was given to the expansion of selected export activities including cotton, livestock, flue-cured tobacco, and cahsewnuts as well as import substitution activities such as sugar and dairy production. However, within an overall policy framework of according greater emphasis to the productivity of the agriculture sector and as a response to the drought and food crisis of 1974 the Government has given highest priority to self-sufficiency in food production. The Government and TANU Party have mounted a massive effort to mobilize peasants to grow more food under the campaign slogan "farming as a matter of life and death", and the Government is now directing much attention to pricing policy. Producer prices have been increased significantly in the last three years. Although there is some evidence that the inadequate supply of mass consumer goods in the rural areas has limited farmer response to higher producer prices, the increases in these prices since 1974 appear to have at least been partially responsible for the increases in 1975 and 1976 agricultural outputs. This new approach to pricing policy, supported by the formation of a permanent Agricultural Price Review Commission constitutes a major rationalization of production incentives in agriculture. 24. In its attempt to boost food production, the Government initiated a Maize Program in 1973. Under the program, production inputs were provided free since most participating farmers had only very limited financial resources and all previous attempts to institute a credit system for small-scale food crop production had failed. Support for a subsidy scheme was a major recommendation of the Bank Agriculture Sector Report on Tanzania issued in December 1974. Although the Government had increased the producer price of maize considerably, it was concluded that additional financial incentives were required if traditional farmers were to be encouraged to adopt new input packages in the initial stages. Furthermore, given the manpower and institutional constraints in Tanzania, it was not considered possible to assist a significant number of farmers, and hence obtain a large production response, if inputs were provided through institutional credit. For these reasons, the National Maize Project (Credit No. 606-TA) approved in December, 1975 to support the Government maize program,made provision for subsidization of production inputs. Under the proposed Project, inputs would be similarly subsidized. 25. In order to ensure that subsidized inputs were not wasted or extravagantly used by participating farmers, the Government fixed the level of subsidies for the 1975/76 cropping season at 75 percent of total cost rather than at 100 percent as was the case in the previous two years. - 11 - The level of subsidy was reduced to 50 percent in the 1976/77 cropping season. Although this requirement for cash payment means that some farmers will inevitably be excluded, this procedure is considered essential to ensure the efficient use of fertilizers. In addition, while continued subsidization of certain farm inputs remains justified, subsidy levels and methods of cost recovery have to be reviewed with the objective of gradually reducing the cost to the Treasury and eventually eliminating the subsidies. The recent increase in the cash payments required by farmers for part of the cost of inputs therefore represents a step in that direction. The Government intends to review the level of subsidies each year with a view to gradually phasing them out as farmers realize the potential of the new input packages and their incomes grow. 26. In the light of the critical economic difficulties facing the country, and in an attempt to generate quick production response, the Government is placing greater emphasis on production rather than social aspects of new rural development projects. Provisions for infrastructure in these projects are encouraged to the extent that they have production impact. Emphasis is also being shifted from single crop to more broadly based rural development schemes. In line with this, the last agriculture sector report (paragraph 2 above) called for the National Agricultural Development Program (NADP) which will concentrate on selected areas of high agricultural potential and on the provision of essential inputs for raising production. The Government is also attempting to alleviate con- straints which are inhibiting the distribution of production inputs and the marketing of crops. In 1975, it abolished the Regional Co-operative Unions which had in general been very inefficient and made crop authorities or parastatals responsible for collection of crops. It is too early to judge whether this policy will result in significant production response. However, there is evidence that the move was poorly planned and implemented in a too hurried fashion. 27. Project implementation has been a continuing problem in the agriculture and rural development sector in Tanzania. The Government is focusing considerable attention on this problem area and has generally responded well to advice on improving implementation. A special project implementation unit has been established within the Ministry of Agriculture and a substantial amount of technical assistance is now being utilized in the sector. However, in spite of these efforts the overall implementation performance in the sector remains mixed. Rural Organization 28. In order to improve the implementation of and local involvement in rural development projects, the Government decentralized the administra- tive structure in 1972. The Regions and districts now have a high degree Or autonomy in their administration, as well as primary responsibility in - 12 - promoting and coordinating development activities within their juris- dictions. The Central Ministries in Dar es Salaam have the principal function of providing technical advice and services, including research and staff training to regions. The regional political head is the Regional Commissioner who has the rank of Cabinet Minister and is also the regional Party (TANU)I/ secretary. The head of the regional civil service is the Regional Development Director (RDD) who has the equivalent rank of a Principal Secretary in a Central Ministry. He is assisted by a Regional Planning Officer (RPO) and the heads of the 10 regional functional depart- ments. At the district level, there is a similar structure under the Area Cumuibbiuner wno is aiso tne 'arty District Secretary. 29. The Arusha Declaration of 1967 identified the Ujamaa village as a means of effecting self-reliance and community approach to develop- ment. However, emphasis has shifted to the formation of planned or development villages as an intermediate step towards full ujamaa (collec- tive) status. The pace of villagization was rapidly increased in 1974 and it is estimated that about 75 percent of the rural population now live in registered villages. In these villages, "block farming" with individual families retaining rights to the produce from the land which they work is being emphasized. Under the Villages and Ujamaa Villages (Registration, Designation and Administration) Act of 1975 ("the Village Act"), the elected village council has been given substantial powers to direct and control development, and the village now provides the basic framework for agricultural production and marketing. Each council owns all heavy agricultural machinery and other capital goods, and can borrow and establish a capital fund for development purposes. The Government believes that only by concentrating the rural population into villages can the social and economic services which it regards as the necessary prerequisite for meaningful development be efficiently provided. Because of its essentially long term focus, it is still too early to assess the villagization effort. However, one immediate result is that several of the larger villages in some areas are experiencing oressure on land and the introduction of intensive agriculture threatens to lead to early exhaustion of cultivated soils. The Bank is discussing the 1;roblem with the Government particularly in relation to the Geita Project (Credit No. 454-TA). One possible solution to the problem of land pressure may be the formation of satellite villages. Previous Rural Development Projects The Kigoma Rural Development Project (Credit No. 508-TA) approved in November 20, 1974 was the first IDA supported comprehensive rural develop- ment project in Tanzania. The project consists of investments in village social infrastructure such as water supply, education and health facilities, 1/ Now CCM paragraph 3 above. - 13 - as well as loans for agricultural inputs, transport and storage facilities. Technical assistance to support the regional planning and implementation structure is also being provided. After two of the scheduled five years of operations, disbursements on this project were under 30% of appraisal expectations, with delays particularly attributed to bottlenecks in the delivery of critical supplies and inputs, and to the central Government's and region's limited implementation capacity, especially in the water supply sector. Initial farmer participation rates in agriculture were high and more recently, there has been impressive progress with construction of village infrastructure and with villagers' self-help contributions and the project is clearly making a positive impact in the region. However, res- ponses to the project's agricultural packages remain uncertain and proposed village-level trials have not yet begun. Little progress has been made with the smaller project components, including feeder roads and livestock develop- ment; agricultural credit recovery is running at only 35% of loans; and no audit of project accounts has yet taken place. In the face of these problems, it is proposed to cQnsolidate implementation in FY78 on the 50 (out of a target of 135) villages so far incorporated in the project and it is expected that the Association's heavy supervision input will be continued. Although it is now apparent-that the initial implementation schedule was too optimistic and that project implementation has been mixed, villagers response to the project has been positive and implementation now appears to be picking up. 31. The proposed Tabora Project would be the second rural development project in Tanzania. To the extent that the Kigoma and Tabora regions are similar, the design of the Tabora Project was influenced by experiences from the Kigoma Project. The Kigoma Project brings out the crucial need for a pilot period in the development of technical packages at the village level, and a gradual build-up of project implementation. These requirements were considered in the design of the Tabora Project. The Kigoma Project also brings out the crucial need for strong, imaginative management and in-depth technical expertise and for this reason considerable technical assistance is proposed in the Tabora Project. However, because of the complexities of agriculture and rural development projects, it must be expected that implementation problems will continue to be a fact of life. Preparation of a third rural development project for the Mwanza and Shinyanga Regions is presently being finalized and plans to prepare a fourth rural development project in the Mara Region are being developed. Tabora Region 32. Tabora Region, the location for the proposed rural development Project, is the largest region in the country and covers 70,000 km2 or 9 percent of the land area of mainland Tanzania (map attached). The Region has four districts viz Nzega, Igunga, Tabora and Urambo Districts. It has a population of about 780,000 or about 5 percent of the Tanzanian population. The town of Tabora, the regional center, has a population of 50,000 and is on the central railway from Dar es Salaam to Kigoma, at its junction with - 14 - the Mwanza line. Rainfall in the region is markedly seasonal, mainly falling between November and May, and reduces progressively in total from about 1,000 mm a year in the west of the region to under 700 mm in the east, where rainfall reliability is also significantly lower. The major economic activity of the region is smallholder farming, in which some 91 percent of the population is engaged. Agriculture, agro-industries, livestock, forestry and fishing account for nearly 90 percent of the gross marketed product of the region, valued at US$27 million. The average per capita income of US$75 per head is below the national average. Tabora is responsible for 55 percent of the national production of tobacco, 30 percent of harvested groundnuts, 20 percent of paddy, 17 percent of cotton and 11 percent of maize. However, the production of maize, paddy, groundnuts and sorghum has been declining and the region has recently been importing maize, meat and rice. The region also has one million livestock, about 7 percent of the national herd. These are under traditional grazing. With 55 percent of the land area tsetse infested, the herd is concentrated in the tsetse fly-free northeast. PART IV - THE PROJECT 33. The Tabora Rural Development Project arose from a request by Government following preparation of the Tanzania Kigoma Rural Development Project (Credit No. 508-TA), and was prepared by the Government with the assistance of the Bank's Resident Mission in East Africa. The proposed Project will initiate a 5-year region-wide rural development program of high priority activities. It will supplement and complement ongoing develop- ments in the region, some of which are IDA funded, and develop the capacity of the region to handle further developments. Negotiations for the proposed credit were held in Washington in March 1977. The Tanzanian delegation was headed by Mr. George Neema, Principal Secretary, Prime Minister's Office. 34. An appraisal report entitled Tabora Rural Development Project, No. 1360-TA, dated April 8, 1977 is being circulated separately to the Executive Directors. A Credit and Project Summary is provided as Annex III to this report. The Project comprises: (a) pilot approaches to intensified crop and livestock production in about 42 newly-formed villages not already included in other programs, principally in the Nzega and Igunga Districts. (b) provision of capacity to carry out an immediate low-cost water supply program, Region-wide, and funding for a Water Master Plan; (c) provision of equipment and workshops to increase capacity to maintain and improve access and network roads throughout the Region; - 15 - (d) a pilot reafforestation program based on villages in the old established tobacco areas, primarily in Tabora and Urambo Districts; (e) production of a Land Use/Capability map which, with the Water Master Plan, a tsetse survey, and strengthening of the village planning team, would provide a framework for further investments in the Region; (f) provision of specialist personnel and equipment to strengthen the capacity of the Region to implement the Project, monitor progress and evaluate impact, and assist in the formulation and planning of further developments in the Region. Crop Development 35. The crop development program in some 30 selected villages in the Nzega and Igunga Districts would seek to (a) establish means of increasing production (principally from higher yields) of cotton, paddy, sorghum and groundnuts by the provision of inputs and improving agricultural extension and related services, and (b) carry out crop demonstrations-cum-trial under farmers' field conditions using improved, largely extensive, practices derived from other agro-economic zones in order to provide a basis for extending the program to other villages in the Region . Provisions would be made for a mobile extension van and village storage facilities, and the Project would also provide personnel and laboratory equipment for the newly completed tobacco research center at Tumbi. This project component is expected to directly affect some 6,000 smallholder families. The choice of the Nzega and Igunga Districts for the crop development component was made because the two districts are relatively densely populated and have so far received little attention for agricultural development except for a minor component of the Bank Group-financed Second Livestock Project (Credit No. 382-TA). Livestock Development 36. Under the livestock component an attempt would be made to introduce sedentary and commercial production practices in approximately six villages in the tsetse-free Nzega and Igunga Districts, and in about six more villages probably from those included in crop development, a pilot stall fattening enterprise would be introduced. In approximately six additional villages in the Miombo forest areas with light tsetse infestation the project would - 16 - introduce livestock production with appropriate protection. This project component would affect about 3,500 - 4,500 families. It would provide appropriate transport facilities, veterinary centers, dips and other capital investments including weigh-bridges. It would also make provision for livestock development planning and a limited tsetse survey and control program. Water Supply Program 37. The low-cost water supply program would probably supply 140,000 - 160,000 persons in approximately 75 - 100 villages. The design and con- struction capacity of departments under the Regional Water Engineer would be strengthened by providing professinnal manpower, transport, equipment and other facilities. Priority in water supply development would be given to shallow wells pumped by handpumps, or failing that, to boreholes with handpumps or engines. The Association would be consulted before commit- ment or construction of any major water scheme estimated to cost in excess of $125,000 equivalent (Section 3.06, draft Development Credit Agreement). Selection of the villages would be by the Regional Administration and on the basis of cost, production impact, need and, in order to help ensure commitment of villagers to the proper operation and maintenance of the water supply systems, on the willingness of the villages to contri- bute in cash or in kind to the construction and maintenance of the water supply facilities (Section 3.06, draft Development Credit Agreement). From time to time the Government would consult and review with the Association on the selection process and the selection criteria being used (Section 3.06, draft Development Credit Agreement). The water supply program would be developed on the basis of existing knowledge of water resources. In order to provide the foundation for longer-term water supply development, however, a Water Master Plan for the Region would be conducted under the Project. Reafforestation 38.t This component is to establish a pilot program in which villages would establish and manage plantations, under the supervision of the Forest Division of the Regional Natural Resources Office, to supply fuelwood for tobacco curing and domestic use. Except for full ujamaa villages, individual families would cultivate their own areas in these plantations. Three nurseries would be established or expanded under the Project and would grow and deliver seedlings to some 15 estab- lished tobacco villages for planting about 50 ha per village a year. The success of the reafforestation program vould be critically dependent on the elimination of present incentives that encourage farmers to exploit natural forest rather than establish fuelwood plantations. In particular, - 17 - the present policy of subsidizing fuelwood transport for some tobacco growers encourages natural forest exploitation and discourages fuelwood plantation. The Government has, therefore, agreed to eliminate the trans- port cost subsidies on fuelwood for tobacco curing on or before June 30, 1982 (Section 3.08, draft Development Credit Agreement). Roads 39. The Project would provide for both improved routine road main- tenance of the region's network (or main) roads, and reconstruction of the network and village access roads. For the network roads, priority would be given to maintenance. The Project would provide equipment, technical and managerial assistance, training and workshop equipment. Network road reconstruction would concentrate on the repair and upgrading of identified bad spots which are presently largely impassable in bad weather and would be by a single unit which can reconstruct about 75 km of road a year. Access roads reconstruction would be three units employing labor- intensive technology capable of improving 400 km of access roads for 200 villages during the project period. Land-Use Planning 40. The Project includes provision for preparation of a land-use and land-capability master plan for the Tabora Region. Provision is also made for enlarging and strengthening the Village Planning Unit of the Regional Agricultural Development Officer in order for the Unit to assist village councils and village production and marketing committees to provide contoured village layouts and production plans. Proj-ect Implementation 41. Project implementation will be through the existing Regional administration with the Regional Development Director having overall responsibility for the Project. The Regional Agricultural Development Officer, the Livestock Development Officer, the Natural Resources Officer (Forest Division), the Regional Road Engineer and the Regional Water Engineer (RWE) would have responsibility for implementing the relevant parts of the Project. The Water Master Plan would be carried out by consultants under the supervision of the RWE. The Land-Use Plan would be carried out by the Land Resources Division of ODM (UK). 42. Provision has been made for a Project Coordinator who would be appointed in the Regional Planning Office. He would coordinate the activities of functional managers in the Regional and District organi- zation involved in the Project. The Project Coordinator would be supported by a Financial Controller who', in cooperation with the reeional authorities, - 18 - would manage and control Project funds and be responsible for procurement activities. The Project Coordinator would also be supported by an Evaluation Officer who would monitor the Project and ensure that the lessons of ex- perience from Project implementation are identified. It would be a condition of Credit effectiveness that these personnel had been appointed (Section 6.01(e), draft Development Credit Agreement). The qualifications, experience and terms and conditions of employment of successful candidates for the positions would be satisfactory to the Association (Section 3.02, draft Development Credit Agreement). Additionally, provision has been made for a Project Expeditor (who would be established under the Prime Minister's Office) to assist in the procurement and dispatch of Project materials and provide liaison between the Project and concerned functional ministries and parastatals in Dar es Salaam. He would serve a similar function for the Kigoma Rural Development Project (Credit No. 508-TA). The Project Expeditor would be appointed in consultation with the Association (Section 3.02(b), draft Development Credit Agreement). Because of the complexity of the Project, and in an attempt to ensure success- ful implementation, provision has also been made to recruit nine other senior personnel internationally to provide technical support to the crop, livestock and water supply components of the Project. The Government has agreed to recruit these personnel by March 1, 1978 (Section 3.03,draft Development Credit Agreement). Although it is expected that qualified Tanzanians would be available for some of these positions, the bulk are expected to be recruited abroad and sufficient funds have been included in the Project. In the event that suitably qualified Tanzanians are available and/or the Govern- ment is able to secure bilateral technical assistance for some of these positions, savings from the proposed credit would be cancelled unless the Association agrees to reallocate these funds (Paragraph 6 of Schedule 1, draft Development Credit Agreement). 43. The village would be the basic development unit of much of the Project and it is the intention to secure the fullest participation of the villages (through their committees established under the Village Act) in planning and implementation of Project components. The accounts of each village receiving assistance under the Project would be audited by the Government each fiscal year and the audited accounts would be furnished to the Association upon request (Section 3.07, draft Development Credit Agreement). To assess Project implementation and impact, the Government would, in con- sultation with the Association, prepare a report evaluating the Project and submit it to the Association within six months from the completion of dis- bursements of Project funds (Section 4.04, draft Development Credit Agreement). Cost and Financing 44. The total cost of the Project is estimated at US$23.5 million net of identifiable taxes. The est ntated foreign exchange component is US$15.9 million, or 68 percent of total cost. Physical contingencies of 10 percent were included on all Project costs except expatriate staff costs where 15 percent was added because of large variances depending on source and specialization. Price contingencies totaling 26 percent of baseline cost were included, based on the appraisal mission's best judgment of future price changes in Tanzania. Details of Project costs are included in Annex III. -19- 45. The proposed IDA credit of US$7.2 million together with the proposed IDA administered credit of Can$5,0 million (US$4.8 million) would finance 51 percent of project cost. The two credits would cover the foreign exchange cost and $1.4 million of the local cost of the project components supported by the two credits. The IDA administered credit would be in accordance with the terms of an agreement between the Government of Canada and the Association which was approved by the Board on April 12, 1977 and pursuant to a Development Credit Agreement between the United Republic of Tanzania and the Association acting as administrator on behalf of the Government of Canada. A US$5.6 million equivalent grant from the United Kingdom overseas Development Programme to the Government would finance 24 percent of the project cost. It would be applied to the Roads and Land-Use Planning components, and would cover 76 percent of the costs of these components. A condition of IDA credit effectiveness would be the fulfilment of all conditions for initial disbursement of the U.K. grant and the effectiveness of the IDA administered credit, (Section 6.01(a) and (b), draft Development Credit Agreement). A special condition of effective- ness of the IDA administered credit would be the effectiveness of the IDA credit. The Government would contribute the equivalent of US$5.26 million or 22 percent of the project cost. The Government has agteed to make timely and adequate annual provisions of funds to the project on the basis of annual budgets prepared by the project management and approved by the Regional Development Director (Section 3.01 and 3,02(a), draft Development Credit Agreement). The participating villages in Tabora Region would finance the remaining 3 percent of the project cost (US$0.64 million) representing payment for incremental farm inputs. The villagers would also provide unpaid labor for the access roads and re-afforestation component, which is not costed and contribute in cash or kind to the water supply compo- nent. In order to ensure that project-financed goods and works are kept in good condition, the Government has agreed to continue to make available adequate funds for their efficient operation and maintenance after the project period (Section 4.03, draft Development Credit Agreement). Procurement 46. Procurement for vehicles, equipment, materials and production inputs financed by the IDA and IDA administered credit would be bulked as far as practicable and order of US$100,000 or more would be procured through international competitive bidding in accordance with Bank Group guidelines. In the evaluation of bids, local manufacturers would be allowed a pre- ference of 15 percent or the existing rate of duty, whichever is lower. Orders below US$100,000 are unlikely to attract international interest and would be handled in accordance with the Government's applicable procedures which are satisfactory (Section B.1, Schedule 3, draft Development Credit Agreement). Civil works (other than for water supply and those financed by the U.K.) would be executed by contractors selected following international competitive bidding in accordance with Bank Group guidelines (Section A, Schedule 3, draft Development Credit Agreement)."> In the evaluation of bids for civil works, local contractors would have a 7-1/2 - 20 - percent preference margin. Civil works contracts of less than US$100,000 would also be made in accordance with the Borrower's applicable procurement procedures (Section B.1 Schedule 3, draft Development Credit Agreement). Construction of the water supplies may be by force account (Section B.2, Schedule 3, draft Development Credit Agreement). Technical assistance personnel and consultants (other than those financed by the U.K.) are expected to be recruited internationally. For the U. K. financed compo- nents, procurement and recruitment of technical assistance personnel would be in accordance with the U. K.'s guidelines. Disbursement 47. For those Project items financed by the IDA and IDA administered credits, the Association would disburse 50 percent of total expenditures for civil works; 100 percent of foreign exchange expenditures and 85 percent of local expenditures for purchase of vehicles, equipment, materials and spare parts; 100 percent of foreign expenditures and 85 percent of local expenditures for incremental cost of seasonal inputs; and 100 percent of foreign expenditures and 75 percent of local cost of technical assistance and consulting services (other than those financed by the U.K.). The IDA and IDA administered credits would be disbursed in the ratio of 7:5. Disbursements from the U.K. grant would be administered directly by the U.K. In order to expedite project implementation by the opening of the 1977/78 crop season retroactive financing of up to US$200,000 is recommended. Benefits 48. The greatest potential of the Project is the development of the capacity of the Region to handle further investments, and the acquisition of knowledge in the application of improved practices by farmers in North- east Tabora to enable replication elsewhere in the area. The overall rate of return of the Project excluding the water supply and master plan and land- use planning components (36 percent of Project cost) is estimated at 17 percent. The rates of return for the individual Project components are estimated at 18 percent for crop agriculture (16 percent of Project cost), 20 percent for livestock development (11 percent of Project cost:), 21 per- cent for road maintenance (20 percent of Project cost), and 40 percent for fuelwood plantation (1 percent of Project cost). The Project would increase production of cotton, groundnuts, paddy, sorghum and beef. The direct pro- duction benefits would be partly for consumption by the participating farmers and would partly go to increase their cash income. About 6,000 and 3,000 farmers are expected to benefit from the crop and livestock components of the Project, respectively. It is estimated that average per capita incomes on Project farms would at least double from the present US$40 a year level in five years. The total incremental output resulting from the Project is small because of its essentially pilot nature. The road component would provide savings in vehicle operating costs on existing traffic and agricultural production benefits from assured year-round provision of inputs and services and decreased crop spoilage. Unquantified benefits likely to arise from the roads component include savings on induced traffic, and improved access to social and administrative facilities. The water supply component would provide improved supplies to 140,000 - 160,000 rural people by 1981, bringing the proportion of Tabora's rural population supplied with water (now at 23 percent) to nearly one third. Furthermore, and perhaps more importantly, - 21 - the provision of adequate water is expected to help stabilize villages and thus encourage longer-term agricultural investment and production in the villages. The Project is expected to generate positive ecological effects. Risks 49. The Project faces a number of risks. Since several of the components are pilot in nature there are risks that production expectations will not be attained due to the uncertain reaction of traditional farmers to modern inputs and new production methods. Lack of experience in imple- menting comprehensive development programs may also be an inhibiting factor. Therefore, a substantial amount of technical assistance including coordination and evaluation expertise would be provided to the regional authorities. Additional uncertainty arises due to the limited experience to date with operation of the new village system. Village grouping could lead to serious soil depletion and erosion and difficulties in economically securing fuelwood for curing tobacco. The monitoring and evaluation components will-be particularly important in dealing with these sources of uncertainty and potential problems. In view of the multi-sectoral rature of the Project, and the flexible nature of several components, the Project will require close supervision, especially in the start-up period. PART V - LEGAL INSTRUMENTS AND AUTHORITY 50. The draft Development Credit Agreement between the United Republic of Tanzania and the Association, the draft Development Credit Agreement between the United Republic of Tanzania and the Association as administrator on behalf of the Government of Canada, the Report 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 credit are being distributed to the Executive Directors separately. 51. Special conditions of the Project are listed in Section III of Annex IV. Special conditions of effectiveness for the IDA credit include fulfillment of all conditions for initial disbursement of the U.K. grant, effectiveness of the IDA administered credit (Section 6.01(a) and (b), draft Development Credit Agreement), and the appointment of the.Project Coordinator, Financial Controller, Project Expeditor and Evaluation Officer (Section 6.01(c) draft Development Credit Agreement). A special condition of effectiveness of the IDA administered credit would be the effectiveness of the IDA credit. -22- 52. I am satisfied that the proposed IDA credit would comply with the Articles of Agreement of the Association and that the IDA administered credit would comply with the criteria established by the recently approved agreement between the Government of Canada and the Association. PART VI - RECOMMENDATION 53. I recommend that the Executive Directors approve the proposed credits. Robert S. McNamara President Attachments Washington, D. C. April 14, 1977 Page 1 Of 4 pagea tAKLE 3* TANZANIA -SOCIAL IU@tCATORS gAlA SNEET LAMD AREA (ThOU KN2t .............. ; ~~~~TANZANIA REFERtENCE COUNTRtIES (1970) TDTAL 9'5. 1 MOST RECENT AGRIC. 1. 960 1970 ESTIMATE KENYA KOREA,, RIP. OP MALAYSIA- G,MP PER CAP ITA (USS) 70.0 j. 7. 4. 7. 4. P'OPULATION ARM VITAL STAtISTICS POPULATION IMIDTYR. MILLION) 9.6 18 i.9 Ai 14.7 /8 11.2 31 .4 -1. POPULATION DENSITY PER SQUARE KM. 10.0 14.0 16.Q 19.0 319.0 32.0 PEN SQUARE RNM. AORIC. LAND 23.0 /a 23.0 ... 1320.0 291.0 VITAL STATISTICS CRUDE BIRTH NATE PER THOUSAND 51.5 50.5 50.2 49.0 35.0 42.2 CRUDE DEATH RtATE PER THOUSAND 27.1 23.0 20.1 17.0 11.4 12.9 INFANT MORTALITY RATE 0/THOU) 190.0 160.0 / A4.557.7 46.7 A LIFE EXPECTANCY AT BIRTH CYRS) 36.7 41.8 44.5 5. 5. GROSS REPRODUCTION RATE S . 2 3. 2 3. 4 2. 6 2.6 /a POPULATION GROWTH RATE (Z)26 TITAL 2.1 I/a 3. 0 /a t.7 /a 1.1 2.3 26 URBAN 5.0 5.6 5.7 6.5 6.436 URBAN POPULATION (I OF TOTAL) 4.6 *. 0 6.8 9.9 tIC 27.8 AGE STRUCTURE (PERCENT) 0 TO 14 TEARS 12.5 La, k 44. 4 / ..46.41 42. 1 44.7 /a 15 TO 64 TEARS 55.5 eak 33.0 / ..4.0 54.6 52.1 7 45 TEARS AND OVER 2.0 /ab 2. 6 / ..3.46 3.:3 3.227. AGE DEPENDENCY RATIO G.M' 49_ 0. /b I. 1. 08 0. a ECONOMIC DEPENDENCT RATIO 1. 8j 1. 2 4t .. 1.1/. 1416/ FAMILY PLANNIHG- ACCEPTORS (CUMLILATIVyE. THOU) . .. 66.1 . 222.2 /a USERS (1 OF MARRIED WOMEN)...... 42.0 8.07a EMPLOYVENY TOTAL LABOR FORCE (THOUSAND) 4 900.0 560.0 /ajj 6300.0 /b 5 100.08 10400 2900.0I LABOR FORCE ON AGRICULTURE (Z) 960L 91.0 Za8/8 .. 900 ' 0. a 30 : UNEMPLOYED (Z OF LABOR FORCE) ...-.. 5.0 6.0ab INCOME DISTRIBUTION I OF PRIVATE IN4COME REC)D BY- HIGHEST 51 OF HOUSUOiOLDS .. 33.5 .. 2.2/d 17.1 28. 3 HIGHEST 201 OF HOUSEHOLDS .. 63. 3 .52.6 & 44.5 56.0 LOWEST 201 OF HOUSEHOLDS .. 2.3 ..3.9 d 7. 3. 5 LOWEST 401 OF HOUSEHOLDS ?. .a .. 1.? 17.7 11.2 OISTRIOUTION OF LAND OWNERSHIP Z OWNED BT TOP 101 OF OWNERS ...... 28.0 1 OWNED MY SMALLEST 101 OWNERS...... 2.0 HEALTH AN) NUTRITION POPULATION PER PHYSICIAN 20000.0 /g421Z5?0.0/a 21450.0 Lb 78 30./ 2210. /8. /a POPULATION PER NURSING PERSON 89OO.O` 4:gh4890.0/ I10 /A17008 14. / 000/. POPULATION PER HOSPITAL RED 530.0 /ad 70./8 . iD.) 1920. 0 270.0 /a. PER CAPITA SUPPLY OF- CALORIES (Z OF REQUIREMENTS) 69.0 73.0 9.0t/o 10. 13.0 94. 0f d PROTEIN (GRARS PER DAY) 20 4. 3.0/ 710 6. -OF WHICH ANINAL AND PULSE 22.01a 2 3.0 . 29. 0 0 9.0 20. aLt DEATH RANTE C/THOU) AGES 1-4 - .. .. 5.5 EDUCATION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL -24.0t 36.0/ 43.0 64.o.Lt 104.0 8./ SECONDARY SCHOOL 2.:04. 3.0 3.00 9.0 41.0 34. 0 /.a. TEARS OF SCHOOLING PROVIDED (FIRST AND SECOND LEVEL) 113.0 1 3. 0 1 3. 0 1 3.0 12.0 13S.0/a VOCArIONAL ENRO-LMENT (Z OF SECONDARY) 23:.0 to.0/d, . 2.0/8 16.0 3.o /a ADULT LITERACY RATE Cl) 17.0 49.0/b 3 0.0 87.0 77.0 /8 HOUSI1MG P'ERSONS PER ROOM (AVERAGE) 1.Ia. .. 2.? 2. 3 OCCUPIED DWELLINGS WITHOUTL. PIPED WATER (Z) 3.01q.0. d 6. ACCESS TO ELECtRICITY . 3 0/j -.. BOLZ 50 (Z OF ALL OWEJ.LINGS)...... 50.0 43J.0 RURAL DWELLINGS CONNECTED TO ELECTRICITY (I) --- *- 0.0 30.0 CONSUMPTION RADIO RECEIVERS (PER THOU POP) 2.0 11.0 16.0 48.0 126.0 41.0 PASSENGER CARS (PER THOU POP) 3.0Aj 3.0 3. 0 9.0 2.0 2.01 ELECTRICITY (KWH/YR PER CAP) 13.0 I 31.0 /a 37.0 /a 68.0 307.0 382.7 NEWSPRINT (MG/YR PER CAP) 0.01 010.3.404 SEE NOTES AND DEFINITIONS ON REVERSE Page 2 of 4 pages NCOrES nls otherwise noted, data for 1960 refer to any yearbewn 1959 and 1961, for 197f between 1968 and 1970, and for Most Recan.t fatfeate between 1973 and 1975 a- a,_,laysiahas basnee lattad asa bje.ctIn tuntry hao--s its popolatfon Is tesparable feats. and fts snt eonn Is sa-r-1 steps ahead of ransanla TANiZANIA 196f0 I Mainland TanoanLa, lb 1957, Afti.an populatIon, In .tda of pep.latlon onder 15 and 65 and east to tota labor fote d 1962 7 1961-63, _I 956, Eane.lbar: ,jj 1963, /b Intludfng nidwi-e and anic wth midwifery qulfotoa*registered, not all practIinig in the country, /i 6-12 and 13-18 years of age r-apett-ly. 1970 Ia ialelnd Ta..nisnl lb 1967, Ic HouSehelda I d 1965; Ia Urban osly. /f 7-13 and 14-19 years of age MOST RECENT RSTIKATE I Mainland Tanasnis, lb 1972' It 1969-71 averge, /d 7-13 and 14-19 yeare of age -ep-ttlv1y anENY 1970 /a ggiatered only, /b Ratio of population onder 15 and 65 and ovr to labot forte age 15-59 yeats; It Labor forte age 15-59.years. Id Urban households, /n Regietared, cot all pro,tlcing in tbe country, /f 5-IS years of age La Ttal stonry includes tsather tangat tbe third leve. KORE, RE. OF 1970 / As parcentage of enPInysn.t lb Registered. Ic Riagistorod, sat all practicleg in tha county. Id Piped watar Inside. MALAYSIA 1970 /s ..a, Malaysia, lb Registered applic..cto for work, It Goven,net only: /d 1964-66; Ia 12-18 years of age. 7?f 1967, La Piped water inside. R9, August 19, 1976 DEFINMTORS OP SOCIAL INDRICATORS Total Ar- Total kuft rs ae ln a2 n)slu ae Poalstion ter nursing preron - Population divded by noober of practl- T.t.1 I.. .fc e - cinig tlnr. . ntn g n an female graduor sres "trained" or "certified" nurses. Ani.-Most recent etimate of ngric1tara1 area used tnpvrarily or pain- and sullayprsnelwt traIIge.meine va-1y for craps, pascre, market kiblthen gardens or 10 lie fallow. Population nor bosptolta had - Population divided by nuobr of honpita1 beds ailable in publit and priv-ts gnere and epecilalled hospItal TS1P Pot t5 Rit fIll) -GIPpe tapra "nlmte st correni market prices, and rehbibtarion tent ersl.. Isldes nursing hone and eatsblslnh.ents te lae y at toneraa rto s ol R tls(97-5bai) for custodial ad prevetive tare. 1960, 19/f and 1975 data. Prce aayo clries fI of rasiltonects) - Cpoted fron Ponolat ion oed vital statIst Its va.pits per day. avaIlble soppl lee tapelse dc.aalprednuion, Popolclan old-y. olion). - A0 of Ily fIrtL' If not available, inporta less espocte, and changs is stock, net aupplilas -orlde averageof twoend-yea necimte, 1960, 197 end 191daa ania feed, seeds, qmantitlen -ed in food processing and ic..e in diutribution; raqoirenetc were astimated by PAO base.d on phyai- ologlca1 nee ds for norml activty end health considering envro- Paalaprce- dtstlry-peraauf c a - Old-year population per square kilo- nental tonpacarore, body siRhta, age and sac distributions of popo- otter flIt bectaree) of local~~~~~~ aras talon, and aloIng 1% for wasta at h.-.bnh leel Poonlalia densIty- e quare k= of aeric. land - Capored as above for Per ..pit. sanely of eeel eeepr day) - rteecnntof per agiclurlladony,cpiaee upl offood per ~day; net supply of fnod Is defined a above, rqieon for all coutries established hy 0100 Ecaon-ic Via tsaistica Research Servite pravide for a m.inte alawanca of 60 rson of teca1 frdbrh rare Pcr thousand. vraaioAl-. live births pe r thous-an protniehper day,ad20 gron efanimal and pulse protein, of hbIth 10 of mid-year populaIoni, Icc-year at -=tueerugBe. endIng io 1960 ond gron ebauld hab ia rtec h tandrda are lower than, thesa,. 17,adfv-year averge ending in 1975 for none reecre- cntait. of 75 gras ef totalp1ro.tein andt73 grau faia rta a s vr Cinds death raic par thoosad, averageAnnual deaths par thousan.d of old- age nt the w-rId, preposed by PAO in tb. Tbird World Fod Surv-y yea pPu1atillc; ic-year aritheeatic ave-gan ending In 1960 and 1970 and Per capit proteI supy fro anma and poIse - Proteic supply of food fieyeravrg encding in 1931 for oot Irecent as Wmte. dale ro nnLa ad pla in gramspr day tcfa- -ortifly rate f/thou) - A7coo deatha of infants under one year Rstb rare f/thou) ages 1-4 - Actual deaths par thesaod In aga group 1-4 of age per thousand live brtht. years, to children in this age grccp, soggestad as an indcator of oaR- Itfero.pecta..cY-a birth (yin) - Averge somber of ye.ar of Ilfe remain- entritcin. fag at birt h, usual,ly fv-yaa averages endi.g in 1960, 1970 ad 1975 fvr developIng -outri-a Edaustion Crvas r-erdu-tion rate-Overage nbhr of Ive. daughters oa ilAlae nrlen aI rnr ecjjl -Ecroleen of. aI gsa hear inhacolr eroduciv perd If she pepslence pre...ot age- peteaee piaye o-aepplto, nlldec hbildren age apecifl forcilcy rate; etoaly fIveYea aegsetlg In960 6-11 years hut adjasted for different legtc fprinaryadocacoo; 1977 ovA 1975 for developIng countrIes, for coutries with univarsa eduction, enrell1ant nay anteed 100% acu~latIon growt rate f% - total - Conpo..ed a...cal grouch rates of old- slnccesme pupilo are baby or bh- thr official school age. Tsrppuainfor 1950-60, 1960-70 a-d 1970.75. Adiosted entatlloan1t.ratia- secodar schooll - Conpoted00oe, errond- PaoaiaouchraeC)- crbac - Conputed like growth rat of tal -ry edoctinrqra atlen le Year of approved prmay otrot- papulatice; diffzeret d.flciioc of orhbc rea a affeccaa doe, poId.sgnrl.vctoa ot teacher training i-strution for hiil of dat amongconnirl. pupils of 12 to 17 years cf age; correapondenva taras are g..nerelly irhan eanulation ft of total;1 - Ratio of orhan tc total pep latiton, occlded. differevt deficitions of orhs areas mey affect vonparability f data er.fohoispoie frtadscn ees va er off Aga t-rac lure . (e te) -Children (0-14 years), working aga (15-64 years), or toupletely noclod.d. - .pt.l and retired (65 yeasad over) Ba percentages of mid-year popolation. V eaioa ..r.l n 1 C" cf secodar) v oatlt-1 inaritsti... include gas d.e.edency ratio aI fpplio n 5ad6 n vrt -technical industr'ialo ete rrn hich operate independently chose odfage 15thogh 4. oandpeproes or f,ncondary institutios iconalc dnasdeecv rrla - RatI of popoltlon under 15 and 65 and over Adult litsrc rate C - Literate adots (ale1 read and write) a cc the 'lb,r forte in age group af 15-64 yer- percentage of total adlt Ppslation aged 15 yeats and over. Pally clansing - acte2tara cnuaiv thou; - Cwclative nahbr of accepicra of birth toctrol device under ou.spicas of natIonalfonily H... Ing Planing progro since inception. Persons nert ca (urban) - Overage nober of person per te in occupied bely len in sr o ffmarieddwne) Parc tage~ ci malrried.. conventionalI duIin.gs in urban areas; dwellings enclodeno-rae cant of child-bearing age (5-A years) wh one hItch-con trol deice tructorsa asd un-cpied pa rts. to all married wone in sn age groop. Occunied dwlino wt ctindwcri)-Occupied conventionaltdwell- ings in urban and meal area without inside orotside pipd aser Emclovmset , d)- .o-ielyfactlities as percentage of all oneupied dwellings. Toa lb r forte(boad -Eonlal active parsons, including Acces in elcricity 'I, aldwlins - Convelctiona dwellings with aened force sod onsoplayed hot eocloding housewIves, students, etc.; electocity inlvn oreea ete f total dwellings in nrbo deiIt-n cvri... countries are cot caparehla. sad meal1 aren.. Labr forc in ORritolture (T) - Agriccltora1 labor focce (in farmIng, Rural dwll.ings1 connected In electricity(. Caputed as abnve for ruts1 forstr,hstig end fishing) as percentage of teta1 labor force. delng ny linmelvedf% f lborfore) - eployed are na ally defined an peron aaaeabl.enad willing to tabs A Jab, out of a Job on a given day,,Cnata remained out ofaob, and seeking work foe a specified JiinnRdorearr prtoues i ypso e vr_frrdobod period nor .neeeding one weak; nay anot be cauparable betwee cosntries cass-t geera pulicpe thuad opulatIon; f. eco .di.nbtat- doe te different definitions ef unoployad and oorc f data, .,g. , lic..ensd, greceliv-rs in countries and in years when registration of onPloy,et office staltitics.... saPle soves tspulsry unapleynset rad seswsin affect; dots get recen.t yeurs nay not be conparable lasorante. sints~~~~~~~~~~~~ noel.. countries abolished licensing. Passensar an( t1'.,houhear -.Pssnn " ;cars captien notr etcrs seat- inton diatribclon- P-rconcaga ef private Inc- (bath is cash and la ls tha eigh asn;scue noats ere n hind) racaived by rinbet 5%. riohest 20%, poorest 20%, and poar.eo milIftary rehicies..u. 1% .en 40% of households. Electricity (kwh/yr per cap) - Anueml consaption oi Industrial caster- cia1, public and private electricIty in kilowatt hours per capita; Diltriboto e%,f land -ernhia'-Pere tsgee of lend owecd by wealIth- gene.rally baaed on pr:duction data, without allowance for-Icsi ins t 1% endpareat 10% of lend nrs. grids hat allowing far imports ad ..Pnrt. of electricity. i N.ewprint (kg/" per can) -Per caPita a---I centoptle in bilegro gelt ndanriio etimated fra d-stit production plus net imports ef newsprint. Poultion ear phy icise - Papulatian dieidad by mashr of practieleg physiicns qualified fins a edical echeol at weiv-rity level. ECONOMIC DEIEIl DATA Page 3 of 4 pages (Amounta in millions of U.. dolLars) Actual Projected 1967- 1973 - 1975 - 1975 - 1973 1975 1980 1973 19f74: 1975 1976 1977 1960 IC)72 197.5 1977 l980 NATIONAL ACCOUNTS __ At 1973 Prices & Exchange Rat6s Ave~rage Annual Growth Rates As Percent of CDY Gross Domestic Product 186-6.4' 191 7.6 1966.7 2065.1 2168.3 2510.1 6.0 2.7 5.0 5.0 100.0 102.0 101.0 Gains from Terms of Trade ()___ -20.5 --38.4 +19.7 -5.0 -24.9 -2.0 -1.0 G,ross Domestic Income 1866.4 1897-.1 1 928.3 2084.8 -2-163.3 -2-8- 5.0 1.6 5.9 5.2 100.0 100.0 100.0 Import (incl. NFS) 545.1 508.4 474.6 427.4 464.1 549.1 7.4 -6.7 -1.1 3.0 29.2 24.6 22.1 Exports (import capacity) 417.2 304.1 275.5 328.2 324.1 436.8 2.7 -18.7 8.5 9.7 22.4 14.3 17.6 Resource Gap 127.9 204.3 199.1 T99.2 140.0 E 12.3 6.9 10.3 4.5 Consumption Expenditures 1588.8 1654.2 1669.1 1719.0 1829.1 2062.5 5.5 2.5 4.7 4.3 85.1 86.6 83.0 Investment (incl. stocks) 405.5 4.47.2 458.3 465.0 474.2 535.0 9.7 6.3 1.7 3.1 21.7 23.8 21.5 Domestic Savings 277.6 242.9 259.2 365.8 334.2 422.7 2.5 -3.3 13.5 10.3 14.9 13.4 17.0 National Savings 27 1. 3 269.5 309.7 402.1 375.1 447.5 3.2 6.8 10.0 7 .6 14.5 16.1 18.0 MERCHANDISE TRA.DE Annual Data at Current Prices As Percent of Total 1973 1974 1975- Imports Capital goods 116.0 149.6 199.8 309.4 23.9 20.8 27.3 Tntermediate goods (mLfuels) 180.7 228.7 213.7 455.9 37.2 31.8 29.2 Fuels and related materials 41.8 74.8 87.8 156.2 8.6 10.4 12.0 of which: Petroleum (41.8) (74.8) (87.8) (156.2) (8.6) (10.4) (12.0) Consumption goods 147.2 266.0 230.5 279.5 ..-3fl. ...2... J.L.5. Total Merch. Imnports (cif) 4973T 7=~ 731.9 6'92.1 835.0 1200.9 100.0 100.0 100.0 Exports Prrmary products ~=l fuels) 261.3 304.9 259.4 581.6 7 9. 7 80.1 79.0 Fuels and related materials 12.5 18.3 18.1 36.0 3.8 4.8 5.5 of which: Petroleum (12.5) (18.3) (18.1) (36.0) (3.8) (4.8) (5.5) Manufactured goods 54.1 57.5 50.9 132.9 16.5 L Total Merch. Excports (fob) M7T 397T 3T2NT4 43-T-3 48.I50510. I0. 100.0 Tourism and Border Tranle .. . Merchandise Trade Indices Average 1973 - -10 Export Price Index 100.0 145.5 142.0 189.1 187.9 218.6 Import Price Index 100.0 159.0 168.4 178.6 195.3 239.7 Terms of Trade Index 100.0 91.5 84.3 105.9 96.2 91.2 Exports Volume Index 100.0 79.8 70.5 70.7 77.9 104.3 VALUJE ADDED BY SECTOR Annual Data at 1973 - Prices and Excharnge Rates Average AnnuaLl Growth Rates As Percent of Total 1967-72 1973-75 1975-80 1973 1975 1980 AgricuLlture 645.1 624.1 666.7 700.0 724.5 808.4 2.6 1.5 3. 9 39.4 38.1l 356.-2 Industry and Mining 306.2 306.2 299.2 314.2 329.9 395.3 5.0 -1.2 5.7 18.7 17.1 17.7 Serv-ice 686.1 742.8 783.9 823.f 874.7 1029.5 6.1 6.8 5.6 _.A_9 ..4-. ..AL.1 Total 1637.4 1673.1 1749.78 1837.2 1929.1 2233.2 4.5 3.2 5.0 100.0 100.0 100.0 __________________ ____ AsPercen_of_tD PUBLIC FINAN~CE FY 73 FY 74 FY 75 FY 76 As Percent of GDP__ (Cen-tral Government) 1973 1974 1975 Current Receipts 2284 3022 3900 3994 20.1 2-1.8 21-.2 CuLrrent Expenditures 2066 2695 3991 3630 18.1 21.1 20.5 Budgetary Savings 2T18 3T27- -91 -3- 2T.1 0.T7 1.-4 Other Public Sector 564 754 ... 3.9 4.7 Pablic Sector Investment 956 1642 2352 2309 9.9 12.6 12.5 CURRENT EXPENDITURE DETAILS Actual Prelim. Est. As % Total Current Expend. FY1972 FY1974 FY1975 FY1976 Education T"T =~7 TST. Y7T Other SocialI Services 14.5 15.5 12.2 14.4 Agriculture 8.9 12.1 13.3 7.0 Other Economic Services 12.4 12.2 10.3 9.2 Administration and Defense 36.2 35.1 30.9 31.9 Other 10.3 7.9 18.3 20.4 Total Current Expenditures 100.0 100.0 10. 100.0io- SELECTED INDICATORS 1965- 1973- 1975- 1975- (Calculated from 3-year averaged data) 1972 1975 1977 1978 Average ICOR TT T - rT 77 Import Elasticity 1.6 -2.5 -0.2 0.6 ?.brginal Domestic Savings Rate 0.1 -0.2 0.4 0.3 Marginal National Savings Rate 0.2 0.6 0.3 0.2 LABOR FORCE AND Total Labor Force Value Added Per Worker (Current Prices) OUTPUT PER WORKER In Millions of Total In U.S.Dollars 'Pe-rcent of Aver~ge 1971 1911 1971 1971 Agriculture 5.3 91 98 43 Industry 0.1 2 1590 694 Service 0.4 7 2170 948 Total 5~.8 100o=9 0 not applicable - nil or negligilF-e not available -- less than half the smallest unit shown EA CPIA February 1977 Page 4 Of 4 Pages BAL.ANCE OF PAYMENTS, EXTERNAL ASSISTANCE AND DEFT -tamounts in millimsa of U.S. dol rar at current pr-ices)7 Avg. Annual Actual Estimated Projected arowth Rate 1973 1974 1975 1976 19 77 1978 1979 1980 1973-198 SUMMARY BALANCE OF PAYMENJTS Expiorts (mnci. NFS) 417.2 465.9 461.0 576.0 621.7 809.8 915.2 1029.6 13.8 Import L1cl. NFS) 545.1 779.1 794.2 750.1 890.2 1035.3 1158.5 1294.1 13.1 RsucBaante ~X-M) -12-7 .9 .3'S13.2 -333.2 fl7UT 2i5 -nrr -n =7 S39 10.9 Tnterest (net) -3.9 0 -2.1 -15.8 -17.9 -21.3 -28.1 -36.6 38.0 Direct Invesusnent Income -7.4 -4.0 -7.3 -3.8 -3.6 -5.0 -5.0 -5.0 Workers' Remittance - - - - - - - - CTetTransfer ne)5.0 45.3 93.0 83.3 100.0 100.0 100.0 100.0 55.0 BalaEinconCuriiiUitolunts -134.2 -2 71. 9 -249.6 -110.4 _-190.0- -151.8 -17-6.4 -206.16. Private Direct Investsnxrt 9.9 6.3 5.6 6.0 6.0 6.0 6.0 6.0 Official Capital GIrants Public MALT Loans Disbursements 98.7 138.0-1' 229.4-2! 8.8 234.4 282.9 328.7 364.7 21.0 -RZgV s __ -16.4 -14.1 -15.0 -21.6 -23.2 -23.9 -25.8 -34.2 10.5 NtDsusesants 82.3 123.9 214.4 flTT fr Er5r- 302.9 330.5 22.0 Other M< Loans Disbursements -Rpernts ActuEl Estimated Capital TransactionB n.e.i. 72.6 56.92'/ 20.42' -3.9 1.972 1273 1974 1975 1976 Change in Net Reserves -30.6 84.8 9.2 -58.9 DEFT ANDeBTSEVICE P;ub.lic etOt Disbursed 359.91 460.2 611.1 7$7.5 787.5 CDRANT AND LOAN 0MTMITENTS Official Grants & Grant-like 58.5 65.8 96.8 123.7 Interest on Public Debt 6.6 8.2 8.6 11.2 12.8 Repayments on Public Debt 29.1 16.4 14.1 15.0 21.6 Public M< Loans Total Public Debt Service 35.7 24.7 22.7 26.2 34.5 IBRD ~ ~ ~~~~~~- 65.0 30.0 Other Debt Service (net) .. IDA 22.6 61.2 10.0 Total Debt Serv-ice (net) .. Other 1.8 7.1 7.1 Other Multilateral - --Buirden en Export Earnings() Governments 82.8 127.1 91.3 Suppliers - - - Public Debt Service 9.0 5.9 4.9 5.7 6.0 Financial Institutions - --Total Debt Service.. . Bonds - -FDS054Direct Invest. Inc. 10.1 7.7' 5.7 7.3' 6.6 Public Loans n.e.i. - - - Total. Public !MALT TOan 17.1 26 04 138.4 Average Terms of PubliLc Debt EXTERNAL DB Actual Debt Outstanding on Da. 31. 1975 Int. as % Prior Year DDAD 2.3 2.3 1.9 1.8 1.6 Disbursed OnlyPercent Amort. as % Prior Tear Dyy,D 10.2 4.6 3.1 2.5 2.7 World Bank 60.4 IDA 60.8 10.3 IBRD Debt Out. & Disbuirsed Other Multilateral 19 0 2.4' as % Public Debt 04D 6.7 7.1 6.7 10.2 10.1 Governments 557.6 70.8 'as % Public Debt Service4' 3.3 8.9 12.5 18.4 20.4 surnllerv 23.8 3.0 Financial Institutions 12.3 1.6 IDA Debt Out. & Disbursed Bonds 4.2 0.5 "as 9 Public Debt O&Dd 13.7 12.5 10.4 10.3 12.0 P'ublic Debts n.e.i 9.4 1 2 as 9 Public Debt Service11 1.2 1.7 2.9 2.8 2.6 Total Public M< Debt TO7-100.0 Other M< Debts Short-term Debt (disb. only) not applicable e staff estirmate l/ Includes drawis8 on Arab Fund for Africa (97.1 m) ..not available -earteynil or negligible 2 licludes bilateral and multilateral program assistance not avinlabledi totala~ - less than half the 3/I Includes uae of IMF' reaources but included in total ~~~~~~~~~~smallest unit shown 4/ TEED and IDA debt aervice as 7. of public debt aervice ZA CPI,A February 1977 ANNEX II Page 1 of 13 A. STATEMENT OF BANK LOANS AND IDA CREDITS TO TANZANIA AS OF MARCH 31, 1977 (US$ million) Amount less cancellations No. Year Borrower Purpose Bank-" IDAY Undisbursed Four loans and eight credits fully disbursed 70.2 57.0 586-TA 1969 Tanzania Roads 7.0 1.4 217-TA 1970 " Tobacco 9.0 0.4 232-TA 1970 " Education 3.3 0.7 265-TA 1972 " Roads 6.5 0.8 287-TA 1972 Smallholder Tea 10.8 3.2 371-TA 1973 Education 10.2 8.8 382-TA 1973 Livestock 18.5 8.6 454-TA 1974 Cotton 17.5 14.7 460-TA 1974 Tanzania Investment Bank 6.0 1.9 1014-TA 1974 Cashewnut 21.0 11.6 495-TA 1975 Sites and Services 8.5 4.5 507-TA 1975 Highway Maintenance 10.2 8,0 508-TA 1975 Rural Development 10.0 8.9 1041-TA 1975 " Sugar 9.0 4,8 580-TA 1975 Dairy 10.0 8.7 1128-TA 1975 Textile 15.0 12.3 1172-TA 1975 Tanzania Investment Bank 15.0 11.3 601-TA 1976 Technical Assistance 6.0 6.0 606-TA 1976 National Maize Program 18.0 16.3 607-TA 1976 Education 11.0 10.7 1306-T TA 1976 Power 30.0 30.0 1307-TA 1976 Forestry 7.0 6.9 652-TA 1976 Fisheries 9.0 8.9 658-TA 1976 Tobacco Processing 8.0 8.0 1354-TA 1976 " Urban Water Supply 15.0 15.0 688-TA" 1976 Program Credit 15.0 15.0 Total 189.2 244.6 227.4 of which has been repaid 2.1 4.8 187.1 239.4 Amount sold 0.1 of which has been repaid 0.1 Total now outstanding-3/ 187.1 239.4 Total undisbursed 93.3 134.1 1/ A Program Credit of $15.0 million and a Third Window Loan of US$11.5 million and a Bank Loan of US$11.5 million for the Morogoro Industrial Complex Project were arproved by the Executive Directors on March 15 and March 29, 1977, respectively. The Program Credit and the Industrial Complex Project are not yet effective. 2/ Includes Norwegian participation of $6.2 million of which $2.3 is undistursed. 3/ Net of exchange adjustments. ANNEX II Page 2 of 13 B. SUMMARY STATEMENT OF BANK LOANS FOR COMMON SERVICES GUARANTEED BY KENYA, TANZANIA AND UGANDA AS OF MARCH 31, 1977 (US$ million) Amount less cancelleation No. Year Borrower Purpose Bank Undisbursed Five loans fully disbursed 93.4 638-EA 1969 EAHC Harbours 35.0 1.7 674-EA 1970 EARC Railways 42.4 9.2 865-EA 1972 EAHC Harbours 26.5 5.5 914-EA 1973 EAPTC Telecommunications 32.5 6.7 1204-EA 1976 EADB Development Finance 15.0 14.8 Total 244.8 37.9 of which has been repaid 37.1 Total now outstanding 207.7 Amount sold 24.4 of which has been repaid 24.4 0 Total now held by Bank2' 207.7 Total undisbursed 37.9 1/ $8,481.87 remains undisbursed in the 1970 Loan 675-EA to the East African Post and Telecommunications Corporation. 2/ Net of exchange adjustments. ANNEX II Page 3 of 13 C. PROJECTS IN EXECUTION 1/ (As of March 1, 1977) There are currently 24 projects under execution in Tanzania. AGRICULTURAL SECTOR Credit No. 217-TA - Tobacco Project: $9.0 million Credit of October 9, 1970; Date of Effectiveness - February 1_ 1971; Closing Date - December 30l 1977 Project infrastructure investments are 95% complete, all 15 complexes and 114 villages are established and water development has improved with 54 villages having permanent water supplies, 50 temporary water and the remaining 10 are being surveyed for water. Only 314 km of roads have been established compared with appraisal estimates of 1,104 km. The reduced road construction program is however considered sufficient for present production. A total of 10,700 farmers, about 70% of appraisal target have been recruited and total production of wet leaf from the project is estimated to have increased from 675,000 kg in 1974-75 to about 1.2 million kg in 1975-76. Measures to enforce minimum tobacco acreages per family are expected to contribute to increased tobacco production. However, yields per hectare and quality of leaf have been below anticipated levels. Improvements are required to strengthen the extension and cooperative services. Credit No. 287-TA - SmalLholder Tea Project: $10.8 million credit of March 3, 1972; Date of Effectiveness - July 26, 1972; Closing Date - December 31, 1977 After initial serious management problems the Tanzania Tea Authority (TTA) has now finally reached a satisfactory level of senior staffing and this has had a clear impact on the working of TTA and an improve- ment in the control over the field activities. A recent supervision mission ----------------------------------- These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered, and the actions being taken to remedy them. They should be read in this sense, and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution. ANNEX II Page 4 of 13 estimated that 5,734 hectares had been planted by the end of 1975/76 season, i.e. 69% of the target of 8,300 ha which should have been achieved by June 1974. Yields are lower than expected due to competi- tion from coffee and/or maize in some areas and lack of labor and poor soil conditions elsewhere. This may adversely affect the viability of TTA which is already seriously overstaffed and depends on factory profits for its revenue. TTA has prepared an initiaL proposal for a second phase project but before proceeding considerable examination of existing problems will be needed. Credit No. 382-TA - Second Livestock Development Project: $18.5 million Credit of May 23, 1973; Date of Effectiveness - September 28, 1973; Closing Date - December 31, 1977 Project implementation has been extremely slow and disbursements thus far have been a fraction of the appraisal forecast. This reflects the size and complexity of the project and delays encountered in recruiting staff and concluding contracts for the construction of abattoirs and supply of heavy earth moving machinery. Project implementation is expected to pick up momentum now that scme of these prQbLemn have been resolved. However, a number of post-appraisal developments such as marked reduction in the world market price of bully beaf and meat products, escalation of project costs, the availability of adequate beef supplies, delays in project imple- mentation and the weak financial position of the implementing organization have adversely affected viability of the project. Because of this an indepth review is being undertaken by the Bank staff and consultants. Credit No. 454-TA - Geita Cotton Project: $17.5 million Credit of January 17, 1974; Date of Effectiveness - April 5, 1974; Closing Date - December 31, 1982 This project continues to face severe operational difficulties although progress has been made during the year in the consolidation of scattered holdings into village block farm areas. There have been continu- ing difficulties in effectively using technical assistance and in properly integrating project management with the regional authorities. More important, recent analysis of research data by RMEA and the Bank-financed project pre- paration team in Mwanza has raised questions about the technical package originally recommended for this project. This matter is presently under close examination by the Government and the Bank and various options are being considered. A Bank technical review mission is scheduled to visit Tanzania in March. ANNEX II Page 5 of 13 Loan No. 1014-TA - Cashewnut Development Project: $21.0 million Loan of June 24, 1974; Date of Effectiveness - September 2e 1974; Closing Date - December 31 41981 The project has been progressing satisfactorily with materials for civil works either on site or in transit. Original completion target dates are likely to be achieved in spite of an initial delay of about two months. The Cashewnut Authority's take-over of the industry and consoli- dation of its activities are proceeding slowly. Its Finance and Accounting Department needs strengthening to speed up the establishment of meaningful financiaL and physical control over the Authority's activities. Recruit- ment of senior staff at departmental head level needs to be intensified in order to develop capacity for growth resulting from the project's con- struction of five additional cashewnut processing factories. Credit No. 508-TA - Kigoma Rural Development Project: $10.0 million Credit of August 21, 1974; Date of Effectiveness - November 20L 1974; Closing Date - December 31 1980 The rate of construction of most village infrastructure during the past six months has been impressive. The vilLagers' self-help con- tribution is extremely positive, and the organization of Government services has considerably improved, although the supply of critical materials still presents a bottleneck. The construction of classrooms and godowns are going on very well but performance on health facilities and on water supply systems is disappointing, the latter due to limited implementation capacity of the Regional Water Engineer's Office. Agricul- tural performance is mixed. Last year's crop seems to show sizeable in- creases in the regional production but yield levels are low. Moreover, farmer commitment to the present season's crop seems mixed with late planting and limited interest in procuring inputs. Proposed Government programs of vilLage-Level trials and improved agricultural extension have not yet begun. Delivery of part of the present season's inputs has been delayed by the unavailability of train wagons in Dar es Salaam. Marketing of last season's crops proceeded cgenerally satisfactorily, although problems of cash advances continue to arise and credit payment is only about 35%. Training of village bookkeepers and extension workers is going according to schedule. Little progress has yet been made on the minor project com- ponents of fisheries, feeder roads and livestock. The baseline survey for project evaluation is virtually completed and promises interesting results. ANNEX II Page 6 o i3 Credit No. 513-TA and Loan No. 1041-TA - Kilombero Sugar Development Project: $9.0 million Credit and $9.0 million Loan of September 27, 1974; Date of Effectiveness - February 24, 1975; Closing Date - December 31, 1979 Estate and outgrower development continues satisfactorily and ahead of schedule. Project management is confident that all clearing and planting could be completed one year earlier than forecast. The new factory was opened by the President of Tanzania on August 3, 1976 and commenced milling on September 10, 1976. Initial teething problems have hampered output and attempts are being made to sort these out. The housing construction program has improved and completion will only be slightly behind target. There continues to be difficulties in the provision of adequate project funds from the Government and the lack of a clear policy for cane growing by estate, outgrowers, and ujamaa vilLages is likely to affect future supplies. Credit No. 580-TA Dairy Development Project: $10.0 million Credit of August 15, 1975; Date of Effectiveness - November 28, 1975; Closing Date - April 30? 1981 Progress on the development of the Large farms has been generally satisfactory although they are facing difficulties owing to a lack of ade- quate working capital. The Government and Project entities are currently exploring ways to deal with this problem. Sub-projects for the ujamaa component are presently being identified. The Dairy processing component is in general progressing well. Credit No. 606-TA - National Maize Project: $18.0 million Credit o' January 29, 1976; Date of Effectiveness - May 28, 12Z96-Closing_Date - June 30L 1980 Although the National Maize Oroject has had a satisfactory start it is now beset by a number of problems. The deficiencies of support services, the lack of extension field staff, shortages of transportation and the in- stability of regional supervisory staff are limiting the effective and systematic transmission of innovations to farmers. Contribution of farmers to the financing of project inputs for the 1975/76 season have been disappointing but do re- present, however, a significant improvement over the previous year's performance. Deficiencies in coordination between the central ministry responsible for the overall project and the regional authorities in charge of local implementation have caused difficulties but the Government is taking specific steps to address these issues. The recent disbandment of cooperative unions has created a serious gap in the maize marketing system which the National Maize Corporation (NMC) has difficulties to fill. ANNEX II Page 7 of 13 Loan No. 1307-TA - Sao HiLL Forestry Project: $8.0 million Loan of July 12, 1976; Date of Effectiveness - October 12, 1976; Closing Date - June 30, 1982 Progress achieved during the 1975/76 planting season was satis- factory. For the next year's planting program -- the first project year -- it is envisaged that 2,000 ha would be planted compared with 1,500 ha in the appraisal estimate. The Project Director, the Silviculturalist/Forest Economist and Financial Controller have been recruited. The Roads/MechanicaL Engineer is still not recruited. The fire hazard in the area is particularly serious this year as the dry period started two months earlier than normaL. Credit No. 652-TA - Fisheries DeveLopment Project: $9.0 million Credit of July 12, 1976; Date of Effectiveness - October 12_ 1976; Closing Date - December 31_ 1981 So far, project implementation is satisfactory particularly the components under the direct management of the Ministry of Natural Resources. However, Tanzania Fisheries Corporation (TAFICO) is experiencing difficulty in reaching agreements with the District Development Corporations for the establishment of the commercial fishing centers. The DDCs appear to be reluctant to enter into joint ventures as minority shareholders with TAFICO. As a result of the delay in project approval, there has been some delay in project implementation. The project Coordinating Committee therefore proposed a new implementation schedule to the November/December 1976 supervision mission which was endorsed by all parties involved. Credit No. 658-TA - Tobacco Processing Project: $8.0 million Credit of September 16, 1976; Date of Effectiveness -February 15, 1977_ CLosin. Date - December 31 1981 . This project was declared effective on February 15, 1977. ANNEX II Page 8 of 13 EDUCATION SECTOR Credit No. 232-TA - Third Education Project: $3.3 million Credit of February 5, 1971; Date of Effectiveness - May 10, 1971; Closing Date - December 31, 1977 The Closing Date for this project has been extended 12 months to December 31, 1977 to provide ample time for its completion. All civil works,furniture and equipment contracts have been awarded. Civil works are about 80% complete and are expected to be completed before the current Closing Date. Ineffective project unit management, currently under-staffed because of budgetary problems and shortage of qualified personnel, has limited follow-up activities and delayed correction of deficiencies. A number of changes in programs and management of the institutions involved in this project have been discussed with the Government. Credit No. 371-TA - Fourth Education Project: $10.3 million Credit of April 13, 1973; Date of Effectiveness - July 2, 1973; Closing Date - June 30, 1978 Estimates of project cost overruns are now reduced to about 25% over appraisal estimates as a result of curtailments of the project (deletion of three secondary schools) and more favorable than anticipated bids on civil works. Out of 18 project institutions, construction works have started on 10 sites. Disbursements are only 15% of appraisal estimates. Time lost in design and tendering is being made up, but project completion is likely to be about 12 months behind schedule. A medical health consultant has given impetus to the lagging medical health components of the project. The experimental self-help construction project item (eight Community Education Centers) requires special attention in future to help overcome problems of supply, distribution and control of building materials and supervision of construction standards. Disbursements are not a good criterion of the progress of implementation, which is now satisfactory. Credit No. 607-TA - Fifth Education Project: $11.0 million Credit of January 29, 1976; Date of Effectiveness - March 23, 1976; Closing Date - December 31, 1981 A good start has been made with respect to the Village Management Technicians (VMT) Training Program. All five Rural Training Centers have been rehabilitated and instructional staff trained. VMT courses commenced ANNEX II Page 9 of 13 at three of the five Centers. Budgetary constraints are likely to impose a reduction in the level of training activity in the coming year. The Project Executive is adequately staffed. Also, the program has been handicapped by slow procurement of vehicles and equipment and delays in the construction of houwing. Planning and tendering for schools in the secondary schools component is progressing well. TRANSPORTATION SECTOR Credit No. 265-TA - Third Highway Project:- $6.5 million Credit of August 6, 1971, Date of Effectiveness - October 12, 1971; Closing Date - December 31
Groupe de la Banque mondiale · Memorandum & Recommendation of the President
Tanzania - Tabora Rural Development Project
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Memorandum & Recommendation of the President
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Banque mondiale