Liberia - Decoris Oil Palm Project

FILE COPY Document of The World Ban:ik FOR OFFICIAL USE ONLY Report No.P-2628-LBR REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN AND EEC SPECIAL ACTION CREDIT TO THE REPUBLIC OF LIBERIA FOR AN OIL PALM PROJECT October 10, 1979 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 US$1.00 = Lib. $1.00 The official monetary unit is the Liberian dollar, with par value equal to that of the US dollar. Apart from the Liberian dollar, the US dollar is a legal tender in Liberia. GOVERNMENT OF LIBERIA - FISCAL YEAR July 1 - June 30 GLOSSARY OF ABBREVIATIONS ADB - African Development Bank CDC - Commonwealth Development Corporation EEC - European Economic Community LBDI - Liberian Bank for Development and Investment DOPC - Decoris Oil Palm Company UNDP - United Nations Development Program USAID - United States Agency for International Development LPMC - Liberian Produce Marketing Corporation LPPC - Liberian Palm Products Corporation  FOR OFFICIAL USE ONLY LIBERIA OIL PALM PROJECT LOAN, CREDIT AND PROJECT SUMMARY Borrower: Republic of Liberia Beneficiary: Decoris Oil Palm Company (DOPC) Amount: Bank Loan of US$12.0 million equivalent; EEC Special Action Credit of approximately US$2 million equivalent. 1/ Terms: Bank loan for 20 years, including 5 years of grace, at 7.95 percent interest per annum. EEC Special Action Credit on standard IDA terms. Relending Terms: The Government would relend US$7.7 million of the proceeds of the Bank loan to DOPC for 25 years, including 8 years of grace at 10 percent interest and invest US$4.0 million of the proceeds as equity in DOPC; the remaining US$0.3 million would be retained by Government for studies and strengthening Government's monitoring and evaluation system. All the proceeds of the EEC Credit would be invested by Government as equity in DOPC. The foreign exchange risk on the Bank loan would be borne by DOPC. Project Description: The project would help expand and diversify the country's export base, provide employment, increase the income levels of rural families, and strengthen the institutional capability of the country for the development of the oil palm sub-sector. The project would include: establishing and operating a 5,000 ha nucleus estate, providing extension services and credit facilities to develop 2,500 ha of smallholder farms, training DOPC staff and smallholders, constructing an oil mill, establishing a fruit collection system, constructing roads, constructing and installing storage and port facilities, and providing technical assistance and consultant services. The project faces no unusual risks, but the success of the institution building program under the project would depend on the ability of the Government and DOPC to recruit, train and retain competent Liberians. 1/ The EEC Credit is calculated in a basket of currencies. The dollar equivalent is subject to fluctuation. This docunmnt hus a ratricted distribution and may be used by recipients only in the performafnc of their official dutis. Its contents may not otherwise be dibcbsod without World Bank authorizion.  - ii. Estimated Cost: In Million US$ Local Foreign Total NUCLEUS ESTATE Field Establishment 2.3 2.1 4.4 Palm Oil Mill 4.7 8.3 13.0 Harper Port Oil Storage Station 0.4 1.0 1.4 Road Construction 1.3 1.0 2.3 Buildings and Houses 2.1 0.6 2.7 Vehicles, Equipment and Furniture 0.3 1.3 1.6 Staff Salaries, Other Recurrent Costs 1.8 3.0 4.8 and Studies Subtotal: 12.9 17.3 30.2 SMALLHOLDER Field Establishment 0.9 0.5 1.4 Road Construction 0.8 -- 0.8 Buildings and Houses 0.1 0.1 0.2 Vehicles, Equipment and Furniture -- 0.1 0.1 Staff Salaries and Other Recurrent Costs 0.4 0.3 0.7 Subtotal: 2.2 1.0 3.2 BASE COST 15.1 18.3 33.4 CONTINGENCIES Physical 1.2 1.4 2.6 Price 5.8 7.0 12.8 Subtotal: 7.0 8.4 15.4 PROJECT COST 22.1 26.7 48.8 Taxes 0.9 -- 0.9 Project Costs Net of Taxes 21.2 26.7 47.9  - iii - Financing Plan: Expenditures (US$ Million) Local Foreign Total Government 11.8 - 11.8 IBRD - 12.0 12.0 ADB 1.7 6.3 8.0 CDC 6.6 8.4 15.0 EEC (Special Action Account) 2.0 - 2.0 Total 22.1 26.7 48.8 Estimated Disbursements: (US$ Million) Bank FY81 FY82 FY83 FY84 FY85 FY86 FY87 Bank Loan Annual 600 800 1,400 2,200 3,000 2,600 1,400 Cumulative 600 1,400 2,800 5,000 8,000 10,600 12,000 EEC Special Action Credit Annual 700 1,300 Cumulative 700 2,000 Rate of Return: 12 percent. Appraisal Report: Report No. 2526-LBR, dated September 26, 1979. MAP: IBRD 14275   INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN AND EEC SPECIAL ACTION CREDIT TO THE REPUBLIC OF LIBERIA FOR AN OIL PALM PROJECT 1. I submit the following report and recommendation on a proposed loan for the equivalent of US$12.0 million and a proposed EEC Special Action Credit, expressed in the currencies of the nine EEC Member States, for the equivalent of about US$2.0 million 1/ to the Republic of Liberia to help finance an oil palm project. The loan would have a term of 20 years, includ- ing 5 years of grace, with interest at 7.95 percent per annum. The Govern- ment would relend US$7.7 million of the proceeds of the loan to the Decoris Oil Palm Company (DOPC) for 25 years, including 8 years of grace alt 10 percent interest and invest US$4.0 of the proceeds as equity in )OPC; the remaining US$0.3 million would be retained by Government for studies and strengthening the Government's monitoring and evaluation system. The EEC SpeciaL Action Credit would be on standard IDA terms. All the proceeds of the EEC Credit would be invested by Government as equity in DOPC. The project would also be co-financed by a loan of US$8.0 million from the African Development Bank (ADB) and a loan of US$15.0 million from the Commonwealth Development Corpora- tion (CDC). PART I - THE ECONOMY 2. A basic economic mission visited Liberia in March 1973. Its report "Liberia: Growth with Development - A Basic Economic Report" (No. 426a-LBR dated March 1, 1975), was distributed to the Executive Directors. An economic report on the "Current Economic Position and Prospects of Liberia" (No. 1642a-LBR) dated February 28, 1978 has also been distributed to the Executive Directors. An updating economic mission visited Liberia in May 1979 and its report will be circulated to the Executive Directors shortLy. Structural Characteristics 3. The growth of Liberia's economy remains heavily dependent on the performance of the enclave sector consisting mainly of: (a) iron ore mines, (b) rubber plantations, and (c) forestry concessions. These enclaves are the main source of export earnings. Iron ore mining is by far the largest single activity in the enclave sector, accounting for about one-third of gross domestic product at factor cost. There are only limited linkages between the enclaves and the rest of the economy; as a result, the benefits of economic growth have been unevenly distributed. 1/ In accordance with the agreement between the EEC Member States and IDA dated May 2, 1978, standard IDA terms will apply to the EEC Special Action Credit except that a variety of EEC currencies will be used and repaid in the amounts disbursed.  - 2 - 4. Another dimension of structural imbalance is the disparity between traditional agriculture and the (monetized) modern sector. Traditional agri- culture has minimal inter-action with the rest of the economy; however, it supports the majority of the population - as much as 60 percent - who live at or near subsistence level. With a population of about 1.7 million, average per capita GNTD in 1978 is estimated at US$460. While the enclave sector yields a per capita GNP of about US$1,620 compared to US$780 for the rest of the monetized economy, the great majority of the population who live in the traditional non-monetized sector have a per capita income of about US4160 per annum. To help redress these imbalances the Government is trying to increase its earnings from the concessions and use the resources to diversify the economy with increased participation by Liberians. Development Plan 5. The Governnent's Four-Year Development Plan, covering the period July 1, 1976 to June 30, 1980, was prepared with the assistance of a planning team financed jointly by the Bank, the United Nations Development Program (UNDP), the United States Agency for International Development (USAID) and the Government (Reference: President's Memorandum to the Executive Direc- tors, No. R74-61 dated March 25, 1974). The Plan identifies the basic, long-term objectives of Liberia's socio-economic development as: (a) diver- sification of production; (b) dispersion of sustainable socio-economic activities throughout the country; (c) greater involvement of Liberians in development activities; and (d) equitable distribution of the benefits of economic growth. The average annual growth of real GDP during the Plan period was envisaged at around 6.8 percent. However, because of delays in the implementation of expected investments in iron ore mining and slackening in demand for the country's main exports, the recent Bank economic mission has estimated that real growth during the four-year period is unlikely to exceed 1-2 percent. 6. The Government has already embarked on three important agricultural development projects in the Bong, Lofa and Nimba counties which are being assisted by the Bank Group, USAID and the German Government. Other projects in forestry and rubber are under way which will lead to greater participation of Liberians in the development of the country's principal agricultural resources. At the same time, the Government's expanding water supply and electric power utilities in both the urban and rural areas and to improve the -oad network, the inadequacy of which presently constitutes a constraint to growth. However, the shortage of trained manpower at all levels and the lack of adequate domestic resources are major constraints to the Government's efforts to develop and diversify the economy. 7. Total development expenditure in the original plan was projected at US$415 million, of which US$251 million would have been financed from foreign sources and US$164 million domestically. The Plan was revised in early 1978 to take account of developments during the first two years. The revised expenditure target was raised to $585 million to reflect increased costs and  - 3 - to include additional projects. It is estimated that actual development expenditures over the first three years of the Plan have been about: US$400 million, of which about 20 percent has gone to the productive sectors (agriculture and manufacturing), about 39 percent to infrastructure, about 15 percent to social services and about 25 percent to general services and miscellaneous projects. Total expenditure by the end of the Plan period is unlikely to exceed US$520 million, one-fourth of this amount being allocated to facilities and buildings for the OAU conference. 8. The Government has started preparing a second development: plan (1980-84). The objectives of the first plan are still relevant for Liberia and in order to achieve greater progress towards these objectives, Goverrment will need to pay particular attention to increasing domestic resources, to giving greater priority to investments which increase the country's produc- tive potential and raise incomes in the rural areas and to improved plan implementation. Recent Economic Developments 9. During 1973-75 Liberia, like most other developing countries, was hit by higher import prices and international inflation. While strong world demand for Liberia's major export, iron ore, brought large gains in export prices in 1974, subsequent recession in the industrialized countries sig- nificantly reduced the demand for the country's most important export commodities -- iron ore, rubber and timber -- in the 1975-78 period. With growth performance continuing to be largely a function of enclave activities, growth of real GDP -- which averaged about 6.3 percent a year in the 1967-70 and 4.2 percent a year in 1970-74 period has slowed down significantly and is estimated to be about 0.7 percent between 1974 and 1978. 10. Liberia has had a long history of sound fiscal management, and public sector resources did not come under undue pressure during the past decade. A satisfactory growth in government revenues averaging about 13.5 percent per year between 1970-75 enabled the Government to finance increasing expen- ditures. Recurrent expenditures during this period grew by about 10 percent while development expenditures increased nearly fourfold. However, public sector finances have recently come under increased pressure which is likely to continue over the medium term mainly because of an acceleration in the rate of growth of government expenditures coupled with a more moderate rate of growth in revenues. Since 1974, Government has been facing a growing budge- tary deficit. The deficit in 1975 was only about US$4.0 million, but in 1979 it was estimated at US$122 million, or 64 percent of government revenues. In March 1979, the Government concluded a standby arrangement with the! IMF in the first credit tranche in an amount equivalent to SDR 9.25 million. The supporting program included restraint in public expenditure and restrictive credit expansion and external debt policies. Balance of Payments 11. During the 1970-74 period, merchandise exports grew by 14 percent and imports by about 18 percent annually in current prices. Thereafter, during 1974-78, mostly reflecting accelerated international inflation, imports  -4- rose by 14 percent annually, exceeding the 5 percent annual export growth. Oil imports increased from US$15 million in 1973 to US$84 million in 1978. Between 1975 and 1977 the decline in exports was partly offset by favorable movement in the terms of trade but the trade surplus declined from US$110 million in 1974 to a deficit of $16 million in 1977, while the current account deficit, reflecting substantial remittances of capital and other factor income from enclave operations, increased to about US$100 million in 1978 as compared with US$30 million in 1974. The rising current account deficits were financed mostly by private capital transactions, but in the last two years, official capital inflows have risen substantially. Creditworthiness 12. Liberia's external public debt outstanding and disbursed was esti- mated at about US$341 million as of December 1978. The Bank Group share of the public debt outstanding and disbursed is presently about 17 percent and is expected to increase to about 24 percent by 1984. As a proportion of public debt servicing liability, the Bank Group share is expected to remain 14 percent over the same period. Debt service payments as a proportion of exports of goods and non-factor services were estimated at about 6 percent in 1978 as compared to 5.7 and 7.7 percent for 1974 and 1972 respectively. Debt service payments as a percentage of Government revenues (a more meaningful indicator for Liberia which uses the US dollar as a medium of exchange) have also declined from about 24 percent in 1972 and 21 percent in 1974 to 16.5 percent in 1978. A continuation of the recent low rate of growth in public revenues and exports (7 percent and 5 percent per annum, respectively) would lead to an increase in Liberia's debt service ratios to about 27 percent of public revenues and 12 percent of exports by 1983; while high, this debt service burden would remain manageable. However, as explained below, there should be an improvement in the country's economic prospects over the next few years. The growth in export earnings should be higher than in the immedi- ate past as a result of the recent strengthening in the demand for iron ore and an increase in iron ore prices. Also the forecasts for natural rubber prices indicate a consistently upward movement and Liberia may also expect higher yields from the recently replanted acreage and new plantings of rubber. Other on-going agriculture projects (particularly for coffee, cocoa, palm oil) will help diversify the economy and should result in an acceleration in the rate of growth of exports during the next three to four years. Public reve- nues will benefit from these increased export earnings. At the same time, a reduction in the size of the Government budget deficit, restraints on new commercial borrowings, and increased mobilization of Government revenues, may be expected as a result of policy measures being implemented in association with the recent IMF Standby Arrangement. After a sharp increase in external public debt during the last year, much of it in connection with the OAU conference, government is expected to pursue a cautious policy over the next few years with regard to contracting new short term external loans. Given the country's improved export and public finance prospects, Liberia continues to be credit-worthy for Bank lending combined with assistance from IDA.  -5- PART II - BANK GROUP OPERATIONS IN LIBERIA 1/ 13. The Bank has made 18 loans (including one Third Window loan) for projects in Liberia totalling US$118.7 million; there have been 8 IDA credits totalling US$44 million and one technical assistance grant of US$200,000 for development planning. IFC has made two equity investments totalling US$550,000 in the share capital of the Liberian Bank for Development and Investment (LBDI). The Bank Group assistance has been for roads, agriculture, rural development, power, education, water supply, DFC and ports. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of August 31, 1979 and notes on the execution of ongoing projects. 14. The objectives of Bank Group operations are: (a) to help Liberians take greater initiatives in developing their own resources for the benefit of their own people; (b) to support policies and programs leading to a broader distribution of the benefits of economic growth; (c) to help the Government in broadening the economic base and in overcoming infrastructural constraints to growth; and (d) to assist the Government in mobilizing devel- opment resources from other external agencies. In furthering these objec- tives particular attention is being paid to (a) the need to expand thbe supply of trained manpower so as to relieve this constraint to development; and (b) measures to strengthen and improve the operations and finances of the public corporations in Liberia. 15. In line with the priorities established in the Government's Four- Year Development Plan, the Bank plans to give increasing emphasis in its lending program over the next few years to agricultural and rural develop- ment. The Bank Group is co-financing with USAID two agricultural projects currently under implementation in Bong and Lofa Counties. These pro;jects are designed to assist subsistence farmers to diversify their production base and to increase their productivity and income through the provision of support services and infrastructures and to help diversify the country's export and revenue base. The rubber project, which is being implemented with Bank Group and CDC financing, would lead to expanded exports, increased productLvity and incomes for small and medium size farmers through strengthening credit and extension services and promotion of greater Liberian participation in the development of this subsector. The forestry project would strengthen the Government's forest service, initiate an industrial plantation program and help Liberia to better manage and exploit its forestry resources. The pro- posed oil palm project would help expand and diversify the country's export and revenue base, provide employment, increase the income levels of rural families, and strengthen the institutional capability of the country for oil palm development. Further Bank Group assistance to the sector being con- sidered would include a rural development project in the southeastern region of Liberia which would help increase agricultural production, improve physical and social infrastructure in selected low income rural areas and strengthen the local capability for planning and implementation of rural development projects. 1/ Substantially unchanged from the President's Report for Feeder Roads Project dated April 4, 1979 (Report No. P-2462-LBR).  - 6 - 16. In infrastructure, a water supply project was approved in December 1978 which is designed to help rehabilitate and expand the Monrovia water supply system, extend water distribution to lower income groups in the metro- politan areas, and strengthen the management, staffing, and finances of the Liberian Water and Sewer Corporation. The feeder roads project, approved in February 1979, is designed to open up the agricultural hinterland of Liberia in support of the ongoing and proposed agricultural and rural de- velopment programs. A fifth highways project is under preparation to con- struct and improve sections of main roads in the agricultural interio In the power sector, a fourth power project was approved in June 1978 which would expand the Liberia Electricity Corporation's thermal power generating facilities to meet demand until a new hydro-electricity generating facility has been constructed and made operational around 1985. The project also includes management and training assistance to LEC and service connections to about 5,000 urban poor households in Monrovia. 17. In the social sectors, three education projects have been financed by the Bank Group. The first two projects aimed at improving secondary education, education planning and management, as well as extending the educa- tional system to rural areas through the provision of secondary schools and 100 village community schools. The third project emphasizes vocational and technical training. The Bank has recently undertaken a study of the country's education, training and manpower planning needs and ways in which to augment the supply of trained manpower; the results of the study will form the basis for preparing a fourth education project. PART III - THE AGRICULTURAL SECTOR Characteristics 18. Agriculture is the second largest productive sector after mining in Liberia's economy accounting for 25 percent of GDP and 23 percent of export earnings. The rate of growth of agricultural output is estimated at around 5 percent per annum for the period 1976-80, consistently above the rate of growth for the economy as a whole. About 60 percent of the total popula- tion of Liberia earn their livelihood from agriculture. With 15 persons per square kilometer, the average population density is low, ranging from 5 to 20 in the various counties. Thus, land availability is not a constraint to agri- cultural development at present. The upland areas of Liberia are generally unsuitable for permanent cultivation of annual crops due to low soil fertility. For this reason, shifting cultivation is widely practised which has a damaging environmental effect, particularly on the country's forest resources. However, the ecological conditions of Liberia's upland areas are generally suitable for profitable cultivation of tree crops. Liberia is not a major producer of tree crops and its share of world production is negligible (in the case of coffee and cocoa, 0.2 percent) and will continue to be so even after the implementa- tion of the Government's expansion program. 19. The existing farming operations fall into three categories: (a) concession farms consisting of large foreign-owned plantations producing exclusively for exports (rubber, timber) and characterized by the use of  - 7 - trained managerial and technical staff and extensive capital outlay; (b) Liberian-owned commercial farms engaged primarily in rubber production but with secondary interest in coffee, cocoa and oil palm and some poultry and livestock; and (c) traditional subsistence farms consisting of small Earmers producing mainly for home consumption. The latter comprises over 90 percent of all households in agriculture. The traditional sector is largely outside the monetized economy, located in areas with minimal infrastructure and composed of farms where less than two hectares are cultivated each year. It produces mainly subsistence crops such as rice and cassava and some cash crops such as coffee, cocoa and sugarcane. There is little adoption of modern farming technology. Government Objectives and Strategies 20. As noted in Part I, Liberia's economy is heavily dependent on iron ore mining for export earnings and government revenues. Iron ore output is subject to unstable world demand and market prices, and the Government's strategy is to diversify its economic base with particular emphasis oln increas- ing agricultural output in a variety of commodities. Within the agricutural sector, the aim is to diversify and modernize production, increase productivity, improve associated rural economic activities such as marketing and processing, and provide social and other basic infrastructure. The Government aims at achieving a balanced development combining increases in production with a more equitable distribution of the benefits of economic growth, at the same! time promoting the participation of the entire population in their country's development efforts. The National Socio-Economic Development Plan (1976-80) attaches priority to agriculture and rural development and considers the sector as the cornerstone of the country's development strategy. 21. The Government's approach to agricultural development involves: (i) the establishment and operation by public sector corporations of rela- tively large estates with smallholder outgrowers for cash crops such as oil palm, coconuts and sugarcane production; (ii) encouragement of smallholder rubber, coffee and cocoa production; these crops would help diversify exports and increase export earnings and government revenues; and (iii) the implemen- tation of rural development projects to raise the productivity, income level and living conditions of the traditional farmers who represent the vast majority of the rural population. The Government has also implemented a few "special projects", such as the expanded rice program, based on mechanized land clearing and cultivation of cleared areas by smallholders. The devel- opment of plantation and special projects reflects the Government's understandable desire to increase and diversify agricultural output quickly and to offset labor shortages. However, in one or two instances, implemen- tation of large-scale costly mechanized projects, principally for rice production, has led to uneconomic investments and a revision of Government policy regarding "special projects." Constraints 22. A rapid expansion and diversification of the sector in the short and medium term is constrained by a number of factors. The most critical is the shortage of adequately trained manpower, particularly at the managerial and professional levels, to plan and implement an increasing number of development  8- projects. The Government is taking measures to overcome this constraint through the establishment of a manpower planning unit in the Ministry of Planning and Economic Affairs, the creation of an Agricultural and Industrial Training Board and manpower studies with assistance from external multilateral and bilateral agencies such as the Bank and USAID. 23. Another major constraint to the development of the sector has been a lack of adequate institutional capability to plan, prepare and Implement agricultural and rural development projects. The Government's extension ser- vices, input and credit supply system need to be strengthened. The Ministry of Agriculture, despite recent attempts to reorganize and decentralize its activities, needs further strengthening. The recently created Agricultural and Cooperative Development Bank (ACDB) is helping expand and streamline the Government's agricultural credit operation and is serving as a first step in creating a framework for institutional credit for the traditional agricul- tural sector. The Government has also established a Rural Development Task Force which has developed proposals for strengthening institutions at the county level for preparing and implementing rural development projects. The Oil Palm Sub-Sector 24. The oil palm industry in Liberia is still in its early stages of development. Palm products (consisting of palm kernels, palm kernel oil, expeller cake and palm oil) accounted for only 0.8 percent of total exports in 1975. There are about 10,000 ha of cultivated plantations, with only 50 percent in full production. There are about 35,000 ha of wild groves harvested by small farmers for home consumption and village markets. About 80 percent of the cultivated area is in the hands of large farmers and cor- porations ranging in size from 65 ha to 3,000 ha. The remaining 20 percent is operated by small farmers with government technical and financial assist- ance. Present palm oil production is estimated at about 10,000 tons a year. 25. The Government's involvement in the oil palm sub-sector began in 1972 when it started to provide technical and financial assistance to farmers through the Liberian Produce Marketing Corporation (LPMC). There are three smallholder projects being operated by LPMC. These are a 900-ha project at Foya-Solumba, a 300-ha project in Zlehtown and a 270-ha farm in Kpatwee. These projects have been in operation since 1974 and are being financed entirely by the Government. 26. The Government's first attempt to develop a large-scale industrial estate with associated smallholders followed the signing of an agricultural cooperation agreement between the Ivory Coast and Liberia, under which the Ivory Coast agreed to assist Liberia in developing its oil palm and coconut industry. As part of the assistance, the proposed oil palm project at Decoris (Maryland County) was prepared together with two other projects at Buto (Sinoe County) and Dube (Grand Gedeh County) by SODEPAIM in 1976. The Government expects to develop 5,200 ha at Buto (3,100 ha of nucleus estate and 2,100 ha of smallholder farms), 5,200 ha at Dube (4,166 ha of nucleus estate and 1,034 ha of smallholder farms), and the proposed Decoris project. The Buto project is being financed by the European Economic Community (EEC) and the Dube project by the Liberian Bank for Development and Investment (LBDI). At full development, these three projects wuld produce about 50,000-60,000 tons  -9- of palm oil per annum, of which about 75 percent would be for export. This would amount to less than 1 percent of world production and less than 1 percent of the entire amount sold on the world export market. Under an agreement signed in March 1977, SODEPAIM would manage the Buto and '[ube projects for the Liberian Palm Products Corporation (LPPC). 27. At present, oil palm processing capacity is limited in Li'beria. LPMC has been operating a small (1 ton ffb/hour) mill at Totota since 1975. It plans to install another small mill at Foya shortly. There are also three private plants with capacities of 20 tons ffb/hour, 5 tons ffb/hour and 1 ton ffb/hour, respectively. 28. The Liberian Produce Marketing Corporation (LPMC) and the Liberian Palm Products Corporation (LPPC) are the two public institutions which in recent years have been involved with oil palm development in the country. LPMC was established in 1962 and has been charged with overall responsibility for the Government's tree crops program except for rubber. In 1977, the LPPC was established as a subsidiary of L1R4C, mainly for the purpose of carrying out the Buto oil palm project being financed by the EEC. Both of these institutions suffer from inadequate management and lack of experienced tech- nical staff and efficient financial and accounting systems. Because of the weaknesses of these institutions and the need for a study to determine the most suitable institutional framework for the development of the suLb-sector, the Government agreed to set up a separate autonomous entity, the Decoris Oil Palm Company (DOPC), for the implementation of the proposed project. At the same time, provision has been made under the project for financing a proposed institutional study (see para. 42). PART IV - THE PROJECT 29. The proposed project was identified by the Government and prepared by SODEPAIM under a bilateral assistance arrangement with the Government of the Ivory Coast. At the request of the Liberian Government, the project was appraised by the Bank in January/February 1979. A Staff Appraisal Report entitled "Liberia: Decoris Oil Palm Project", No. 2526-LBR, dated September 26, 1979, is being circulated separately to the Executive Directors. NIegotiations took place in Washington from August 27 to August 31, 1979. The Liberian negotiating team was led by Mr. Rudolph Johnson, Deputy Minister of Finance. Project Objectives 30. The project would help the Government in its efforts to expand and diversify the country's export base with a view to reducing the couantry's present heavy dependence on iron ore. The project would provide permanent employment for about 1,000 persons and directly increase the income levels of about 1,000 smallholder farm families through the development of 7,500 ha of high yielding oil palm on a nucleus estate and associated smallholder farms. The project would also help strengthen the institutional capability of the country through provisions for staff training and an organizational study to determine a suitable institutional arrangement for the longer tierm devel- opment of the oil palm sub-sector.  - 10 - Project Area 31. The project would be located in Maryland County about 32 km northwest of Harper and about 750 km southeast of Monrovia. The ecological conditions in the project area are considered suitable for oil palm cultiva- tion. The good climate and soil conditions and the proximity of the project area to an existing port are favorable factors for the viability of the project. Project Scope 32. The project, which would be implemented over a 7-year period (1980-87), would include: establishing and operating a 5,000 ha nucleus estate; providing extension services and credit facilities to develop 2,500 ha of smallholder farms; training DOPC staff and smallholders; constructing an oil mill; establishing a fruit collection system; constructing roads; con- structing and installing storage and port facilities; and providing technical assistance and consultant services. Nucleus Estate Development 33. It is proposed that about 5,000 ha of oil palm plantation be estab- lished on the nucleus estate. Land required for the estate would be acquired by the Government and leased for a period of not less than 50 years to the Decoris Oil Palm Company (DOPC), a statutory corporation which the Government has very recently established (see paras. 48 to 50). In order to ensure timely execution of the estate plantation program, the Government would, as a condition of effectiveness of the Bank loan acquire and lease to the oil palm company about 8,350 ha of land already surveyed (44 percent of which would be planted). The acquisition and transfer of an additional 1,500 ha required for the estate would take place by September 30, 1980. Settlers already cultivating any of the land to be taken over by the estate would be provided with adequate compensation by the Government in accordance with criteria satisfactory to the Bank. The criteria would include provisions for cash payments for structures and value of crops, land of comparable size and quality, as well as community facilities in the areas of resettlement. (Loan Agreement, Sections 3.03 and 6.01). 34. Seeds required for the project would be obtained from IRHO (Institut de Recherches pour les Huiles et Oleagineux) in the Ivory Coast or other suitable suppliers. The planting material to be used would have already been tested and proven suitable for the ecological and soil conditions of the project area. Seed requirements of the project would be provided under arrangements satisfactory to the Bank (Project Agreement, Section 2.04 and Schedule 1, C3). Smallholders 35. The project would help develop smallholder plantations in seven villages adjacent to a road leading to the nucleus estate. The smallholder program would be the responsibility of DOPC which would set up a Smallholders Plantation Division for this purpose. The smallholder participants would be selected in accordance with criteria agreed during negotiations between the Government and the Bank (Project Agreement, Section 2.05). The criteria  - 11 - would include giving preference to people who live in the areas where the plantations are located and are engaged in agriculture as their main source of livelihood. As an incentive to participate in the project, farmers would be paid US$1 cash per day worked and given one bag (100 lbs) of rice per worker per month (one bag of rice costs US$22.50 as of May 31, 1979) during the first four years of plantation development. Credit would be provided in kind (e.g. seedlings and fertilizers) as well as in cash (e.g. for Labor), with repayment over 13 years, including 6 years of grace and interest at 12.5 percent. Although the recent inflation rate in Liberia has been about 14-15 percent (April 1978 to March 1979), the rate is expected to decline over the next two years to around 10 percent per annum, thus resulting in a positive interest rate. The farmers would also have sufficient land and techmical assistance for cultivating food crops. 36. Land currently owned by the Government adjacent to the se/en villages which would be used for the smallholder plantations would be surveyed and demarcated by December 31, 1980 (Loan Agreement, Section 3.04). In the demarcated areas, participating farmers would initially obtain tribil certi- ficates for their holdings, but would subsequently be given title with DOPC technical assistance. Each farm would be allowed to plant food crops on an extra two ha of land outside the oil palm plot. Settlers already cualtivating land where smallholder plantations are to be located would be compensated, if they need to be resettled, according to criteria satisfactory to the Bank (Loan Agreement, Section 3.03). Training 37. Under their management agreement (see para. 50), DOPC management consultants wDuld be required to implement a program for staff training and on-the-job experience that would enable qualified Liberian DOPC staff to fill senior managerial and technical posts at an early stage. Employees selected by DOPC for training for senior managerial and technical positions would be required to agree to work with DOPC for a minimum of two years after complet- ing their training (Project Agreement, Section 2.03(b)). DOPC would be required, by Project Year 2, to select candidates for the mill engineer and mill manager positions since their training would require at least four years of university training plus two years practical work before joining the company. Part of their training would involve visits to companies where the mill equipment is being manufactured, including working with engineers in the construction phase in Liberia. Liberians who are already trained in agricul- ture and engineering would be given on-the-job training and short courses abroad including short working periods on oil palm plantations of other developing countries. They would be initially hired as field superintendents; from among them the estate manager, assistant estate manager, smallholder manager and roads engineer would be selected. Overseers, headmen, laborers (for harvesting) and smallholder farmers would receive on-the-job training. Palm Oil Mill 38. Production of oil palm is scheduled to start in 1986 with about 14,000 tons ffb, building up to an annual production of about 109,COO tons by 1993. To process this, a palm oil mill capable of processing 30 tons ffb per hour would be constructed in two stages. The first stage, to be ccmpleted by  - 12 - 1986, would be capable of processing 20 tons ffb per hour. In the second stage, equipment with an additional capacity of 10 tons ffb per hour would be installed. The completed mill would be in operation by the end of 1987, i.e. at project completion. A maintenance workshop equipped with tools and equip- ment required to keep the mill functioning would be constructed on the mill site. Fruit Collection 39. Both estate and smallholder ffb would be collected from roadside collection points by dump trucks provided under the project. Ffb would be graded by project staff and loaded manually. To maintain quality standards, a simple grading system would be introduced with announced discounts for overripe or badly bruised fruits. Trucks would be weighed at the mill gate (in and out) and the weight of each truckload recorded. The weight of bunches delivered daily by each block plantation would be communicated the next day to smallholders and the corresponding receipt delivered to them by the truck driver. Farmers would be paid in cash at the end of each week. Using the proposed oil palm pricing study under the project, a price formula satis- factory to the Bank will be established to determine prices to be paid to farmers (Loan Agreement, Section 3.07). Project Roads 40. To ensure efficient transportation of project estate and farm products and the distribution of inputs, the project would include a program of constructing, rehabilitating and resurfacing about 47 km of main access roads, constructing 128 km of feeder roads, and constructing 350 km of col- lector tracks with some culverts and bridges. 41. Included in the roads program referred to above are some roads which are estimated to be used about 75 percent of the time for non-project purposes by non-project users. They include 9 km of the Fishtown/Harper road to be rehabilitated, the 5 km of the Plebo/Harper Port road to be resurfaced and 35 km of feeder roads linking smallholder plantations to the estate. That part of the cost of these roads attributable to the project, estimated at US$0.4 million, is included in the total project cost as a part of the Government's contribution. However, the construction of these roads would be the responsibility of the Government (Ministry of Public Works) and would be completed by December 31, 1981 (Loan Agreement, Section 3.06). 42. DOPC would employ consultants to prepare tender documents and final designs for all roads and bridges on the estate and smallholder plantations. All estate roads and feeder roads on the smallholder plantations would be constructed and maintained by DOPC, while the Government would be responsible for maintaining all other roads constructed under the project (Loan Agreement, Section 3.05).  - 13 - Port Improvements 43. About 75 percent of project output consisting of about 24,000 tons of palm oil and 4,300 tons of palm kernels would be for export, and would be shipped through the port of Harper located about 25 km from the proposed oil mill site. To facilitate this, provision is made under the project to construct a palm oil storage depot at Harper comprising two storage tanks with 1,000 tons capacity each and a pumping/boiler room with associated equipment and piping. The port improvement works would also include the construction of a weigh-bridge, a jetty and an oil barge. The required space at the port would be leased to DOPC by the National Port Authority (NPA); NPA would also allow DOPC's electricity, palm oil and water lines to pass through NPA's property to connect the project facilities with public supplies. Consultants Services 44. The project provides for 90 man-months of consultants services estimated to cost US$10,000 per month (including fees, accommodatLon, sub- sistence and transportation). The consultants would: prepare preLiminary designs for the palm oil mill, prepare tender documents, analyze tenders and supervise mill construction; design and supervise construction of port facilities at Harper; design and supervise access and feeder roads financed under the project; conduct an organizational study to help determine the most suitable institutional arrangements for the oil palm sub-sector; prepare a follow-up oil palm project; and help the Government to develop a suitable pricing formula for smallholder fresh fruit bunches. In addition, provision is made for 3 man-years of technical assistance, estimated at about US$50,000 per year (excluding housing), for strengthening the monitoring and evaluation unit of the Ministry of Agriculture. All consultants employed under the project would have qualifications and experience satisfactory to the Bank (Loan Agreement, Section 3.02, Project Agreement, Section 2.02). Project Cost and Financing 45. Total project cost over the 7-year development period 1980/81 to 1986/87 is estimated at US$48.8 million. Of this, US$26.7 million or 55 percent would represent foreign costs. Project costs include an estimated US$0.9 million of identifiable taxes (e.g. on fuel, diesel oil, lubricants and other locally purchased consumables) but exclude all other taxes and duties on items specifically imported for the project which are exempt. The costs include physical contingencies ranging from 5 to 15 percent on various com- ponents and price contingencies of 10 percent per annum for all local costs and between 5 and 7 percent per annum on foreign costs. 46. The proposed Bank loan of US$12.0 million would cover about 27 percent of total project costs net of taxes and duties or about 48 percent of estimated total foreign costs. It would be used to help finance only the foreign costs of the project. The bank loan would be disbursed against the foreign costs of the nucleus and smallholder field establishment, oil mill, port improvements, road construction, and consultants. Co-financing would be  provided by the African Developnent Bank (ADB) in the form of a loan of US$8.0 million equivalent (16 percent of total project costs) which would be dis- bursed against the costs of road construction, project buildings and houses, and vehicles and equipment. The ADB loan would be repayable over 20 years, including 5 years of grace, with interest at 8 percent per annum, including a statutory commission of 1 percent per annum. A loan of US$15.0 million equivalent (31 percent of total costs), to be provided by the Commonwealth Development Corporation (CDC), would be used to finance the nucle- I --te; and smallholder establishments, the oil mill, agricultural equipmenL, and expatriate staff salaries. The CDC loan would be for 20 years, including 7 years of grace, with interest at 7.5 percent per annum. A credit of approxi- mately US$2.0 million (4 percent of total costs) from the European Economic Community under the Special Action Account would be earmarked for local costs of road construction and domestic transportation of equipment. The EEC financing would be on standard IDA terms. The Government of Liberia wotld provide US$11.8 million (24 percent of total cost) towards the local costs of the oil mill, port improvements, roads, local staff salaries, buildings and houses. The Government of Liberia would also assist DOPC in obtaining addi- tional financing of about US$3.0 million required between project development Years 6 and 9 to bring all plantings to maturity and the mill into operation (Loan Agreement, Section 3.01(c)). 47. It is proposed that US$4.0 million of the Bank loan, all of the EEC credit of US$2.0 million, US$5.0 million of the CDC loan and US$2.5 million of the ADB loan as well as US$11.8 million from government resources be transferred to DOPC in the form of equity investment by the Government. US$7.7 million of the proceeds of the Bank loan and the balances of the ADB and CDC loans would be re-lent by the Government to DOPC at 10 percent interest per annum for 25 years, including a grace period of 8 years during which interest would be capitalized. (The balance of US$0.3 million from the Bank loan would be retained by Government for studies and the strengthening of the Ministry of Agriculture's monitoring and evaluation unit.) The foreign exchange risk on the Bank loan would be borne by DOPC. The conclu- sion of arrangements satisfactory to the Bank for making available to DOPC the proceeds of ADB and CDC loans would be a condition of effectiveness of the Bank Loan (Loan Agreement, Section 6.01). Implementation 48. The project would be implemented by the Decoris Oil Palm Company (DOPC) over a 7-year period between 1980 and 1987. DOPC is an autonomous company, with its own Board of Directors, established for the purpose of implementing the proposed project. The establishment of such a new entity was necessitated by the absence of a suitable institution to which the implementation of the project could be entrusted. The existing institutions such as LPMC and LPPC were found inadequate for the purpose (see para. 25). In view of the other ongoing oil palm projects in the country, the broader question of management of the entire oil palm sub-sector needs careful con- sideration. Therefore, the project provides for an institutional/ orga- nizational study to assist the Government in determining suitable  - 15 - institutional arrangements for the development (e.g. production and market- ing) of the oil palm sub-sector. The implementation by Government of any recommendations resulting from the study shall be subject to the Bank's agreement (Loan Agreement, Section 3.02). The company would have ia debt/ equity ratio of 1:1 at project completion with a total government investment in equity of US$25.3 million. While the mill is under construction, the company would experience some cash deficits; but from Year 10 onwards DOPC would show annual cash surpluses after debt service. The financial rate of return to DOPC is estimated at 15 percent. 49. DOPC would consist of five main divisions: Finance and Administra- tion, Estate Planning, Smallholder Plantations, Engineering, and Processing and Marketing. DOPC's senior management staff would be provided by an international management firm selected and operating under a management contract acceptable to the Bank. The signing of the management contract would be a condition of effectiveness for the Bank loan (Loan Agreement, Section 6.01(c)). 50. When the project is fully operational, the senior management staff would comprise: General Manager, Financial Controller, Estate Plantations Manager, Assistant Estate Plantations Manager, Smallholder Plantations Manager, Roads Engineer, Chief Mechanic, Mill Manager, and Mill Engineer. Personnel recruited for senior positions would be acceptable to the Bank; where suitably qualified Liberians are not available, the required expatriate staff would be recruited internationally. The management contract would be for eight years, given the limited local capability at present and the long gestation period of the crop. However, the contract would include a break clause to allow for a mid-term review of the performance of the management team and also a possible change in the status of the company in the light of the recommendations of the proposed institutional study. The contract would also include provisions for training and Liberianization. Procurement 51. Procurement contracts of US$100,000 or more to be financed under the Bank and CDC loans for farm inputs (e.g., fertilizers, chemicals), heavy equipment and vehicles, and barge and port facilities at Harper would be through international competitive bidding in accordance with Bank guide- lines. Such contracts are estimated at about US$5.2 million in tbhe aggregate. Contracts for these same items and contracts for civil works (other than buildings housing the palm oil mill) between US$20,000 and US$100,000 would be procured under local competitive bidding procedures acceptable to the Bank. The aggregate total of such contracts would not exceed US$1.5 million. Contracts of less than US$20,000 would be handled by direct competitive shopping. The aggregate total of such contracts would not exceed US$800,000. Domestically manufactured goods would be allowed a 15 percent preference or the applicable duty, whichever is lower, when comparing domestic bids with those of foreign manufacturers.The turn-key contract for the mill estimated at US$17.1 million, of which US$4.9 million would be financed by the Bank, would be awarded under limited international tendering procedures acceptable to the  - 16 - Bank. Services of expatriate staff, valued at US$1.4 million would be obtained in accordance with procedures satisfactory to the Bank. Contracts for civil works, estimated at US$2.9 million (other than those being financed by the Bank), comprising mainly houses, camps and workshops, and construction, rehabilitation and resurfacing of roads valued at US$2.3 million would be financed and procured by ADB, EEC and Government of Liberia in accordance with their procedures. Remaining project costs (e.g. salaries, operating costs, training and field establishment) amounting to about US$17.6 million, including contingencies, would also be financed by these external agencies and Government according to their own procedures. Disbursements 52. The Bank loan of US$12.0 million would be disbursed over seven years (1980-87) as follows: (a) 100 percent of the foreign costs of directly imported seeds, polybags, fertilizers, tools, and other materials for the field establishment program or 80 percent of local costs if procured locally, totalling US$2.9 million; (b) 50 percent of the foreign costs of the palm oil mill equipment, totalling USS4.8 million; (c) 100 percent of the foreign costs for the barge and port installations at Harper Port, totalling US$1.3 million; (d) 100 percent of the foreign costs of directly imported equipment for the road program or 80 percent of local costs if procured locally, totalling US$0.9 million; (e) 100 percent of the foreign costs or 80 percent of local costs of consultants' services and technical assistance, totalling US$1.1 million; and (f) unallocated estimated at US$1.0 million. The EEC Special Action Credit of about US$2.0 million would be disbursed over a period of less than two years between July 1980 and March 1982 as follows: (a) 85 percent of local expenditures for road construction and domestic transportation for road equipment, totalling US$1.7 million; and (b) unallo- cated, totalling US$300,000. Benefits and Justification 53. The project would help the Government to meet the country's develop- ment objectives of diversifying its export base, increasing foreign exchange earnings, and providing employment for, and improving the income levels of, rural farm families. The principal direct benefit from the project wuld be the additional annual production of 24,000 tons of palm oil and 4,300 tons of palm kernel, of which about 75 percent wuld be exported. By 1993, additional net foreign exchange earnings wuld be about US$11.0 million per year in 1979 constant dollars. The project would have a permanent staff of about  - 17 - 1,060 people drawn from the Decoris area and employ about 1,200 people during the development phase. The project would also increase cash incomes for at least 1,000 farm families (7,000 people). At full development, these families would earn about US$950 per family per annum compared to their present per- family cash income of US$100 per annum. 54. The project would provide training for at least 1,500 Liberians in oil palm production techniques. Access and feeder roads and bridges constructed under the project would provide much needed infrastructure for about 30,000 people residing in the villages in the immediate vicinity of the project areas. The improved infrastructure would improve the access of the people in the area to health, educational and market facilities. 55. The overall economic rate of return of the project is estimated at 12 percent, which is comparable with the return expected from other Bank- financed oil palm projects. Sensitivity analysis indicates that with a one-year delay in full project development and a cost increase of 10 percent, the economic rate of return would be about 9 percent. Risks 56. The project faces no unusual technical risks. It would be managed by an international firm with considerable oil palm experience. The project's technical package has been tested under similar conditions in neighboring Ivory Coast. Climatically and in terms of soil conditions, the project area is considered favorable for oil palm cultivation. The closeness of the area to an existing port facility would facilitate the exporting of project output. The risk of delay in the rate of development of the smallholder plantations should be overcome with assistance from the Decoris Oil Palm Company and close monitoring by the Government. However, the success of the institution build- ing effort to ensure the effective and efficient management of the oil palm sub-sector over the long term would depend to a large degree on the ability of the Government and DOPC to recruit, train and retain competent Liberians. PART V - LEGAL INSTRUMENTS AND AUTHORITY 57. The draft Loan Agreement between the Republic of Liberia and the Bank, the draft Special Action Credit Agreement between the Republic of Liberia and the Association as the Administrator of the Special Action Credit Account, the draft Project Agreement between the Bank, the Administrator and DOPC, and the Report of the Committee provided for in Article III, Section 4(iii), of the Articles of Agreement, are being distributed separately to the Executive Directors. 58. Additional conditions of effectiveness are: the Borrower shall have deposited an amount of not less than US$900,000 into DOPC's bank account; the signing of the Subsidiary Financing Agreement between the Republic of Liberia and DOPC; the conclusion of arrangements for making available to DOPC  - 18 - the proceeds of the CDC loan and ADB loan; the signing of the DOPC Management Agreement; the fulfillment of all conditions precedent to the effectiveness of the CDC Loan Agreement, ADB Loan Agreement and EEC Special Action Credit Agreement; and the acquisition and leasing by Government to DOPC of about 8,350 ha of land required for the nucleus estate (Loan Agreement, Section 6.01). 59. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and that the Special Action Credit would comply with the Agreement between the EEC and the Member States and the Association. PART VI - RECOMMENDATION 60. I recommend that the Executive Directors approve the proposed loan and credit. Robert S. McNamara President Attachments Washington, D.C. October 10, 1979  - 19 - ANEX IL TABLE 3A Page 1 of 5 pages LIBERIA - soIJ.L LNtDCATORS DATA SREET LIBERIA REFERENCE GROUPS (AWSTll"ED AypMGES LAND AREA (TUOUSAND SQ.KMP ) - MOST RECENT ESL ATE) tOTAkL li11. 4 SAKE SAKE NEXT if GlER AGRICULTUAL 6.1 5 IST RECNT GEOCGRAPHIC UiCOKE LNCOME 1960 b 1970 r ESTIMATE L REGION /c GROUP Id GROUP /f GNrP PER CAPITA (US) 160.0 250.0 460.0 306.1 467.5 1097.7 ENZC! CONSUMTION PER CAPITA (RILOGIAS Of COAL EQOIVALDET) 86.0 454.0 418.0 80.6 262.1 730.7 POPULATION AiD VITAL STATISTICS POPULATItON KID-TEA! (MILLIONS) 1.0 1.3 1.7 UUAN POPULATION (PDCEN?T OP TOTAL) 20.5 26.2 29.5 17.1 24.6 49.0 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MLULIONS) 3.0 srATIONAAtL POPtLATION (MILLIONS) 9.0 LA STATLONAIT POPULATION IS BLACNMD 2130 POPUATION DUES rTy PER SQ. KM. 9.0 12.0 15.0 18.4 45.3 44.6 PER SQ. IOL. AGRICULTURAL LAND 163.0 217.0 279.0 50.8 149.0 140.7 POPULATION ACG mUCrE (PRCENT) 0-14 YnS. 40.8 40.7 43.0 44.1 45.2 41.3 15-64 ILS. 56.0 56.0 54.0 52.9 51.9 35.3 65 Yu. AND ABOVE 3.2 3.3 3.0 2.8 2.8 3.5 POPULAIOtN G3OrVE RATE (PUCNrT) TOTAL 2.8 3.1 3.4 2.7 2.7 2.4 UR8AN .. 5.6 5.6 5.7 4.3 4.5 CRUDE RUTh UATE (PDL TEOUSAJD) 51.0 51.0 51.0 46.3 39.4 31.1 CRUDE 014TH RATE (PER TOUSAD) 25.0 20.0 18.0 17.2 11.7 9.2 GROSS UPRODUCTION RATE - 2.6 3.4 3.1 2.7 2.2 PAMILY PLANING ACCPTORS ANNUAL (THOUSANDS) .. .. .. USERS (PELCE8T OF MARRIED WOtEN) .. .. .. .. 13.2 34.7 FOOD AND NUTRITION IDEX OF FOOD PRODUCTIOEE PUIL CAPITA (t969-71-100) 97.6 101.0 109.0 94.3 99.6 104.4 Pu CAPITA SUPPLT OF CALORIES (PURCIENT OF uRQUIRImTS) 86.0 84.0 87.0 89.5 94.7 105.0 PEtOTEINS (GRAMS PER DAY) 35.0 36.1 39.0 55.8 54.3 64.4 OF WILICh ANIMAL AYD PULSE .. 9.6Lz. 17.9 17.4 23.5 C-lLD (ACGS I-4) MEALITT RATE 36.0 29.0 23.0 22.3 11.4 8.6 HEALTH LInt EZECTANCY AT rt7 (YEARS) 40.0 47.0 48.0 47.0 54.7 60.2 IDrANT MORTALITY RATE (PER TIOUSAND) *- 159.0 *- *- 68.1 46.7 ACCESS TO SAFE WATL (PURCENT OF POPJLATIONA) TOTAL .. .. 20.0 20.3 34.4 60.S URSAN .. .. 64.0 53.9 57.9 75.7 RURAL *- *- 6.0 10.1 21.2 40.0 ACCESS TO EICRETA DISPOSAL (PEILCUT OF POPULATION) TOTAL .. .. 11.0 22.5 40.8 46.0 URBAN .. .. 35.0 62.5 71.3 46.0 RURAL *- *- 6.0 13.9 27.7 22.5 POPULATION PER PEYSICI.A 1200O.OLh 11590.0 10050.0 17424.7 6799.4 2262.4 POPULATIEON PER 9UESINC PUSON 5710.OLh 4590.0 3150.0 2506.6 1522.1 1195.4 POPULATION PUR SOSPITAL BED TOTAL 730.0 690.0 .. 502.3 726.5 453.4 URBAN .. .. .. 201.4 272.7 253.1 RURAL *- *- *- 1403.6 1404.4 2732.4 ADMISSIONS PER ROSPITAL BED .. 27.7 .. 23.4 27.5 22.1 HOUSING AVERAGE S IZE OF SOUSEHOLD TOTAL .. .. .. 4.9 5.4 5.3 UR3AN .. .. .. 4.9 5.1 5.2 RUaAL .. .. .. 5.5 5.5 5.4 AVERAGE NcEaD OF PERSONS PD. ROOM TOTAL * 1.9 UR8AN 1-7L .. .. .. .. 1.6 RURAL .. .. .. . .. 2.5 ACCESS TO ELECTRICITT (PERCENT OF DWELLIYCGS) TOTAL .. .. .. .. 28.1 50.0 URBAN .. . .. .. 45.1 71.7 RURAL .. . .. .. 9.9 17.3  - 20 - ANNEX I Page 2 of 5 pages TABLE 3A LXBUIA - SOCIAL INDICATORS DATA SHEET LIBtlIA RZEFERENCE GROUPS (ADJUSTED Ay RACES LIBERIA - MOST RECENT ESTIMATE) - SAtt SAME NEXT HIGHER MOST RECENT GEOGRAPHIC INCOK INCOnE 1960 /b 1970 /b ESTIMATE /b REGION /c GROUP /d GROUP /e EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 31.0 53.0 62.0 59.0 82.7 102.5 MALE 45.0 72.0 79.0 64.2 87.3 108.6 FEMALE 18.0 35.0 44.0 44.2 75.8 97.1 SECONDARY: TOTAL 2.0 9.0 16.0 9.0 21.4 33.5 MALE 3.0 13.0 24.0 12.0 33.0 38.4 FEMALZ 1.0 4.0 8.0 4.4 15.5 30.7 VOCATIONAL ENROL. (2 OF SECONDARY) .. 5.3 3.0 7.0 9.8 11.5 PUPIL-TEACHER RATIO PRIMARY 32.0 36.0 41.0 42.2 34.1 35.8 SECONDARY 12.0 17.0 .. 22.9 23.4 22.9 ADULT LITEACY RATE (PERCENT) 9.0/f 15.0 .. 20.8 54.0 64.0 CONSUMPTION PASSENCER CRS PER TXOUSAND POPULATION 1.0 11.0 8.1 4.0 9.3 13.5 RADIO RECEIVERS PER THOUSAND POPULATION 77.0 132.0 155.0 44.3 76.9 122.7 TV RECEIVEIS PER THOUSAND POPULATION .. 4.3 5.0 2.9 13.5 38.3 NEWSPAPER ("DAILY GNERAL IIrTIREST") CIRCULATION PER THOUSAND POPULATION 0.8 6.0 7.6 5.6 18.3 40.0 CINEMA, ANNUAL ATENDIANCE PER CAPITA 0.6 0.6 .. 0.4 2.5 3.7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 410.0/f 580.0 650.0 FDKALE (PERCENT) 33.5 32.5 32.3 31.9 29.2 25.0 ACRICULTURE (PERCENT) 80.7 75.6 73.0 77.6 62.7 43.5 JNDUSTRY (PERCENT) 9.7 11.6 14.0 7.9 11.9 21.5 PARTICIPATION RATE (PERCENT) TOTAL 42.3 39.8 38.3 40.8 37.1 33.5 KALE 56.6 54.4 52.7 53.9 48.8 48.0 FEMALE 28.1 25.6 24.4 25.6 20.4 16.8 ECONOMIC DEPENDENCY LATIO 1.0/f 1.0 1.1 1.2 1.4 1.4 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF ROUSEHOLDS .. 61.7/ .. .. 15.2 20.8 HIGHEST 20 PERCENT OF HOUSEHOLDS .. 72.6M .. .. 48.2 52.1 LOWEST 20 PERCENT OF HOUSEHOLDS .. 5 3 . .. 6.3 3 9 LOWEST 40 PERCENT OF ROUSEHOLDS .. 109o .. .. 16.3 12.6 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. .. 187.6 241.3 270.0 RURAL .. .. 75.0 96.8 136.6 183.3 ESTIMATED RELATIVE POVERTY INCOME LLVEL (USS PER CAPITA) URBAN .. .. 137.0 138.4 179.7 282.5 RURAL .. .. 125.0 71.0 103.7 248.9 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOtE LEVEL (PERCENT) URBAN . .. 23.0 34.5 24.8 20.5 RURAL .. .. .. 48.7 37.5 35.3 Not available Not applicable. NOTES /a The adjusted group averages for each indicator are population-weighted geometric means, excluding the extreme values of the indicacor and the most populated country in each group. Coverage of countries among che indicators dep4nds on availability of data and is not uniform. Ib Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate. between 1974 and 1977. /c Africa South of Sahara; /d Lower Middle Income (S281-550 per capita, 1976); /e Intermediate Middle Income ($551-1135 per capita, 1976); /f 1962; Li 1965; /b 1964; /i City of Monrovia only; / Population, 1975 Bank Economic Report. Righer Income calculated as residual; includes expatriates. Most Recent Estimate of GNP per capita is for 1978. AuguSt, 1979  -21 - ANNEX I DrMfITI OFOMMCT Page r of 5 pages lotte: Although the data -r droee fri souoecgemlly joudgd the met asthnritati aid reliable, It shoul eI-se he ted that they MaY not Incetee - tIo...lly rops-a-blc becaus of the lek of standardised deinitiona an osmepta case by d12ffrmt coutries In collet hug the data. The hots e.r, ntee useful to descibe order of -qeitude, Weirabe trae.4, ad oherarterts cetain ajor dlfferses beshtemeru- h. Th 6uted szcsaypup for each indicator are Ppeluiato-cighted nmctrho smacas, eIAiuleg the extre,e nine, of the indictor end the -.s populated oouiryiihegnspJTeeto les of data, g-op -eeegm of .11 dindotera fer Capital a-pI.a. Oil aptertr and of tadio-tora of keen to bwaer An 2wreta Diepocal, Haswiag, Incom Msitrhbtioneead ib"rec for sOar cotry g-nsq are ppltwie,l-cetd gosstrte ve,ea dihoest emeimi of the -tre enace ad inleatea a t ta Punssstry and r treoe. mama. LAID ASEA (thousnd oq.km..) Mecca to lomsdapaj peen f otltia otl %T Ttota curfee area -roirhiog land are ad inlnd caters. N r of people(otel uras adrual sredbyscrtsdipma drirs_klt-rl - Ibset -cot esthete of egieultsrcj area need teqerar-ip pacetagee of their repeotive ppiestions, fterets diap.ees eq taslt or pe-aetly for crpe, pastures, tSt and kitham gardens or to the -o11stioa cd diep .sal, sith or cutout tretaeet, of bin -arete his fallow -ad cate-wter by eater-bore cyst-n or the .ee of pit prieics as c-dle ibetellattos.. GNP ER PTA (S4)- GNP per capita catiate st curret market pric... Honultiom see_ibasi4_n Ppolathoe dieddd by cuter of prsticIag pdyahia.ea Maleuatedhby sane -ovrehon sthod s World lack Atlas (1976-78 haste); jJfl1flU7 t- l:al eshool at onhorabty level. 1960, 1970, cod 1978 data. f ~tflctherpaJkepgyceM - Populaion dichdcd by out. Lofpe ite male nel cgiipi WOR CAPITA - Anes-sl ooenatioe of co-rIe -acrg fe1 -4t preti-clonc,adusois hca n ignte yprirle.,naturaL gas and baldro-, maleran. Lo Poeesltion erNnaphte Bed - total obn, adrrl- outd(_a,s therma elvoiheity kin ti egam of coa equhvolet per ..pits; 1960o ad rurl) divIded hi repotIve e _e of hoapital be&acfae Ja 1970, and 1976 data. poblic sod private general nod epeialed hostpital and rehabilitat*o set.ra - Ros~~~~~~~~~~~~~~Epitala are .tbtlkibeente pera- tly teffed by at least oMe Avysian. copoPAtaRt AND IfTAL STATISTICS IettblisBeceta providing principally -utodhal _creno art i-ioldou Rural Total uniston wld-ea (hlioc) - As of July 1; 1960, 1970, and ho-jitala * hevr, tarlde health nod edhoa1 -et-r not preeansetly starred 197 ht.by a fepyioieo (bt by n aedical asahetent, cure, aideife, et-.) aiso ofer rban Popula tion(seeen of total) - h.ieth of urban to total popsaisa in.ptient -coedatice sod provde a lhiitrd csin of mdclfailitiec, different defhite of urba are., may affet o..r.hility if data Ada4gg5pngp rjpip6 e - Tctel oute.r of dialsicos to or diachargc, fe'o ameeg c-utrhee; 1960, 1970, and 1975 hots.. . bop ld, idi j Pseuber of hedj. - C.rret populatie projections or based - Pe8 (1975 ttal *shotionby gs and ce ad their sociality sod fertility Aeeraelc of ushldiercone per Aouaboiu( totl, rba.Ion rMal ratee rjtonooeesfo tlt rtc" ongriePofthree6bhouehol coite cfa gon;c ebiuast hr IIn ,atr leel aeuin life -ecrtoc at birth Ihoore neg sut, coutry-a their main meals. A honodr or lodge eqoreq not be iluded in the per vephia moos leve, and reale life toprottnoy stsiliaheg at houcehld fo otatisti-al Prposec. y7. yeo. The parcastera for f-rtility rate ale hav tires level Avmersa ca rtr Opef perp rob - total, urban, ad rural - Avrerge -cber Issa=o deliee he fertility -oordleg to inoa levl and past odf p_ronsperfroom in ill urban, and rural oecpte -e~d c ...nIoa dwellings, family cleaning perfrean. F.oh coutry he thee asaigsaed one of these repetively. IusdLlinn -solde non-preeanaet oteut-re -d -eccpted ports. dIne o-binatifa oE mortality nod fertility treede for proJetics Ae.- to electrIcity (errat of ee lia -tota,1 urbn, and rura - Con- purposee. - veo~rtricoldellga with stirt i n liigqatr spereenge of stathosry ooesltioo - in. a tathioos pepultios there Ieco groeth total, urban, and rura dwelInigs repectiely. siar the birt rtch equal to the drath rate, and alec the oge strucur revaiso o tentnt. This Is achievd only after fertility rates ELIEATIOLI decline to the replacmet leve of -it net reprodutiPo rate, .en JM-tdhculle59t ioa each genertion of -ee replac- btaelf -tly. The sttiPoary pop-ttl.ml ndfsl -Prlines ltotal, sir and fesale enrol- muon- nic ea estimtetd os the bseic of the PJireted ohoractrictica - of ae atteprmr lvla prreataga of reapertiv- primary of the population in the year 2000, end the rate of decline of fertility scolaepoplation; aoremIly ioludes childea aged (-l y-ar hot rote to replacemet leve. djucted for dIfferrt lengths of primory e&eatise; for countri-t ctb Yea statise eco-latico is reached - The year hn stationery poplation ani-eW ed-rtion enrolment eq asend 100 pareti sinc som pupilo cisc has been reeched. ore avo or shov the offbichl school ag.. Pooo1atioe D-itby Secodar school - oa. aeedfl iatdW soo;soiiec Pe n.h. - md-yea population perpruar kilomter (100 heoirs)o ducation -equbrs t eat foryaso -prvd primary hnst-utcoo; totalet proides gseo'al -octicesl, or tamehr tradoing 1tsotru .h.. for pu,pils Per k. h. agriculturl land - C.npoted us nho- for cgibutural land usualy of 12 to 17 year of age; cropanecu eoare gc--rly Poltbon de tutre( 0rn)-Chbidren (0-it years), kring-ege Voratb Pslerllet(eet o sniui uaonlisiotoobi7"0 (15h prns n eird(Oyaoad ove) as p-roetage of eid-yaur teohnionL, nusril or. other penre ahieb operate idcpndcotly or as populatios; 1960, 1970, and 197i7 data. dcpertmeta of -eoday institutions .. nlation Growth Rate (peruet)t total - Ao-Isalroath rates of total aid- Ppnl-ta rrtio - riMa.en eeday- To,tal sideots -arclld is erpuplatio.e for 19%-0-b, 1960-711, sad 1970-77. pr_r n naaylvl dvide by etrs o- teobe- ho the ore Pouslation Growth Pate (percnt - urban - Asus-a growth rates of urba spending e-el.. populationsfor 1950-60, 1907,ed17-75. Adult lhierme rate (cer-et) - Literate edu1t (sie to sed and -ric.)a Cr.d Birh t.perthsosea) - mAn-1. live births per thousnd of aid- apereetge of total adult posho ged 15 year end over. yea p6Ation IW0, 1 , and 1977 data. Crude teeth late (pee thousad) - Ansesal deatho per th-ucnd c iad-year CiNUMI4PION poultion; 1900, 19170, and 1977 da.Peaar Cars (per thouan Posslto) I- asaeroscorise motr core GRoa eRod_rth baicRt - Avera.ge -uber of hought-r eei cll hens seti .:es thnrgtpro;co-dsa ees,bee-see and milItary heher norma reprod-ctice perIod If ohe e-pricoc-o peeeet ge- vehicles epsoifhi fertilIIty ratee; usualIly fiv-yea --erg-e ending in 1960, P.dic ede petcusdo l.is)-All tywpe of r-crier for radio 5970, nod 1975. b~~~PRoadrouts to geP er tP",sad f pePulatin;soldsuhase eumhi elssing- hoestos. Aesoa (thssnede) - Annual esbee cf reoivresoutrhee ind ayasac rehistw f raiosts In d septor of birth-conro device une -uPices of oations family effect; date for recet year eq art be comarble share ns rouirhe planing prngrs. abolished licening. Pe:aoyPleonbo - Uses -ecet of criedhociare) -iPer-etsgc of earnd TV pece,ivers (cr thoonad pool tin) f recIvrs foe brodcat to gearaa woe f child-bsinz ge(5tbyar)nbnu birth-control devices pulcprtouadpplio;scur nIcend TV r-ce-er he cetriva to all maried ecar he saagr groP. end ho yea obee rrgistr-ti- of TIV aetn ono iseffeot. Indee offo rdoothoo per Capits (1969-71-h00) - ffodec of Per capita devoted primaily to recrdinggera bees. It Is cnahdcred to be "daily' eol production of all fond coidities. Production e-odes seed end hf it aPp_eaeat leat fou time a -e,k feed end is on --dar cen- basis. Conditise cover prirar goodn t Cinem Annua Attendanc Per C spts ocr. hea - Peord -, the outer of tichete (s.. ogaono boted o egur whchncredileendcotol sori(it od during the year, including dsio-o- to driv-is ciii -An mobile (eg offe nod tca are cucded). Aggregatc production of each cotery unIts. Is bta.ed .. netionel average Prod-"e prc ghts. per capit upl f caloies (preto ieur-ets) - Coputed fro. LABOR FOugh onergr cocivaboot of net foo upic aRibnhl ..so...try per capIta Tota laor too ho-nds) - &-noically active peroon, i-cldingerd per day. A-ailable supplie -cpri-S do-t-c production, imports less fore and uneqlYw ho .. cWMoin hou-eive, stedene, et. DsfinjiPPoa e-prto, nod changes in otok. Net ouplicu -oobds anhie feed, seeds, invrIucutrie are_ tot cmprble. quet it-es used is rood pror-ing, and Ioc-csis dibtribotcos. equire- fujr5e( - feal labor force as Peretage oP ita;. labor force 000 ccrti*antod by FAl bnucd on phyeiologia ceds fr. normal 9g~pff.pp )- labor PoesisfnadgI oetry, hit Ing ad cothoity sod icaot cossbdcring -r-vrometnl t-ep-rtu-, body ceights, fihing as perceetug of total labor fore ag nd Lco iobitioo of populatio, nod nll-oiag 10 pc--t for Ieduotry (Per-ent - Labor force iw ling, contrution, anfcurn n aste ot houshold leve. cltcoriciy, eater nod ga.n pecnaeoftl lbor forew. Pe icte sucri o f protcho lnre, per daY) - Proteic cotect of Per Patoipathon Pe.te (;erocti - tota male and femae , Patiiption or capit ocspply of food per dey. act oupply of foo so deficed us ntioityr-teo - computed astotal,=. mae,nd femlemor forc as per- sbov. Peqoir-eeto for all cootr_etablished by USiDA proide for -etngeo of total, tale and fcmalw population of oil egre. repectively; aiinhas ellonoe of 60 gren or tcto1 protein per dey and 20 grin of 1960. 1970, nod 1975 deta. Thes,eare ILE-s perticipathi rates reflecting noisl and pulse protein, of hiob gee- should b.eanimal protein. oge-sesetrutur of thr population, end long tle treod. A fee estimates Tlhese otanduds 1- ose tha th-arof 75 gras of tstal protein and arfetntio... sorce. 23 gonof noialpoensnnere for the oorld, proposed by FAO Rcoeolah L Ps ec Patio- ctico~f popsIiiso under 19 sod t5 and over to ho ith Third World Pc-d Puc-y. th_abrfoc insn group of 15-64 ear.. Per cacits Pro teds oulY fro an-la and pulo - Protein eupply of food derived fros aniasI nod puls n e day. . CPl6 DIBThIUJTIX Chil (ngrs l-41( irtallty Rbae(rtound- Aon1 deaths per thousnd Pretgof PiaeIcm both in cah and kind) - decived by iehest ic age oroip 1-1 ponro, to obihuve theib ago grouP; for yst devel- 5 M_ont ihetP pret, poorest S eon,sdpoett eo 00goo,or- dr d__oc fr i lfe tabio of hou-holdo. HEALTH POVERpTY TARGLT GltOmYs losbP`ot-Yo nO Bidt Eyn.tororcre fyar flf oiated Ab.olote P-verty boom Love (796 per capita) - urban and rura - croolin~g al ocrth; 19P 170, nod 1977. dnts. Absolute po-ertp Incom lee h ha _ ,om eclhe bkamIia infunt AhreiyR pctosn)-..Iccn dratbo of infants under ooritio..ai1y ndcqnts diet Plus tci hlonfodrtienI o y-u of ng Prr tho-od lIce tints~.-afodbe dooco to sfr otcr(perent f pouintoc) tota, orac, od rral intmateIbeEtlocbonn Income hoe-11 e o ia - ie med rura - eobrocple (toal urc and r-ol) s re-calr cootobRnt reltive poc-ty leoe eelS one-third of eveag per capita ..feo-trroupply inc.ludes -rrtid surf. nyc t- or untreated hot peronl 10cr of the -toy. rban 1e-e i derived from nh -rura leve uo-tlai-tc enter ouh no tint fro pr-t-ted horehe-, springs, sits sdjostnet for higher oct of living is urban arena nodo'itay cello) no p-r -tg-i of tbsir respective population, Di Estietd ~Popu,latio delo boolte Povrt Pnoclvl(.rueI ro n -nubannv public f-ntnin or otandpoet booted not are thancr Preeo p ltio uba nob~ rurael) sic T por h- eco rn os ve Ic --niderd -s heig s-thin reaonable ni hooft h..luse I. rura --eo rensonbhi acces -Id ieply tItdr -0c -fe or e-el- of thr house.hold do not love to spend --Ooooo nod dooia1 1sis Diehsii 'diiprtcpcrtLoootc part of tics dy in fetching the faily. noator needs Eoo...ic oA-lyst and Pr,enio... DPeptieent August 5971  - 22 - ANNEX I Page 4 of 5 pages ECONOMIC INDICATORS - LIBERIA GROSS NATIONAL PROIXDCT IN 1978 ANNUAL RATE OF GROWTH (%;1977 CoNSTANT PRICES) US$ Mln. _i 1974-77 1978 GNP at Market Prices 807.8 100.0 2.3 6.7 Gross Domestic Investment 253.0 31.3 13.7 6.8 Gross National Saving 101.7 12.6 -3.9 -9.2 Current Account Balance -100.1 12.4 Exports of Goods, NFS 500.1 61.9 -6.6 8.0 Imports of Goods, NFS 544.6 67.4 4.3 9.9 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1978 Value Added Labor Force/ 7. A. Per Worker US$ Mln. _ %'_ % US S% Agriculture 283.7 35.0 482.2 70.5 588.3 49.6 Industry 2/ 168.8 20.8 30.8 4.5 5480.5 462.8 Services 358.5 44.2 73.8 10.8 4857.7 410.2 Unallocated 92.2 14.2 Total/Average 810.0 100.0 100.0 1184.2 100.0 00VFRNMENT FINANCE General Government Central Government (_ Hln.) % Of 0GF (US$ Min.) IOf NW 197 197z 196 -7 197B-79 197?' 19T4-77 Current Receipts .. .. .. 190.8 23.5 22.5 Current Expenditure .. .. 154.0 19.0 14.4 Current Surplus .. .. .. 36.8 4.5 8.1 Capital Expenditures .. .. .. 159.5 19 7 14.4 External Assistance (net) .. .. .. 60.4 9.4 4.0 JMOYI . CRZDIT and PRICES 974 1975 1976 197T 1978 Tilulion US outstanding end periodT Money and Quasi Money . Bank credit to Public Sector 4.0 2.2 0.9 4.7 9.4 Bank Credit to Private Sector 72.7 76.8 83.1 109.2 132.1 (Percentages or Index Numbers) Money and Quasi Money as % of GDIP General Price Index (1963 - 100) 3/ Annual percentage changes ins General Price Index 19.5 13.6 6.o 5.8 8.6 Bank credit to Public Sector .. -45.0 -59.1 422.2 100.0 Bank credit to Private Sector .- 5.6 8.2 31.4 20.9 NOTE: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. I/ Total labor force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists mainly of unemployed workers seeking their first job. 2/ Over 80% is accounted for by iron ore. 3/ Consumer Price Index (Sept, Nov. 1964=100) not available .hot applicable  - 23 - ANNEX I Page 5 of 5 pages TRADE PAYMENTS AND CAPITAL FWWS BALANCE OF PAYMENTS MEBCHANDISE EXPORTS (AVERAGE 1976-78) 1976 1977 1978 US $ Min % (Millions US $) Exports of Goods, NFS 467.1 458.0 500.1 Iron ore 292.2 62.8 Imports of Goods, NFS -443.5 -490.1 -544.6 Rubber 60.5 13.0 Resource Gap (deficit = -) 351 -32.1 -44.5 Diamonds 22.7 4.9 Logs or Lumber 29.5 6.3 Interest Payments (net) -4.7 -6.7 -10.1 Coffee 25.0 5.3 Workers' Remittances -25.0 -27.5 -30.3 Palm Products 3.7 0.8 Other Factor Payments (net) -80.3 -68.0 -48.0 Cocoa 8.2 1.8 Net Transfers 32.9 30.8 32.8 All other commodities 13.1 2.8 Balance on Current Account -45.7 -104.5 -100.1 Total 464.9 100.0 Direct Foreign Investment 57,3 8.1 -10.5 EXTERNAL DEBT, DECEMBER 31.19783 Net MLT Borrowing 19.4 38.3 58.3 Disbursements 35.4 52.0 70.0 US $ Hln Amortization -14,0 -13.7 -11.7 Subtotal 52,4 -19.8 -41.8 Public Debt, incl. guaranteed 341.5 Capital Grants .. . .7 Non-Guaranteed Private Debt Other Capital (net) -25,2 -35.3 33.7 Total outstanding & Disbursed 341.5 Other items n.e.i 1,5 51.1 5.8 increase in Reserves (+) -28.7 4.0 2.3 DEBT SERVICE RATIO for 1978k/ Gross Reserves (end year) Net Reserves (end year) . .. ,, Public Debt, incl. guaranteed 6.1 Non-Guaranteed Private Debt Puel and Related Materials 59.5 68.8 84.6 Total outstanding & Disbursed 67]T Imports of which: Petroleum Exports of which: Petroleum IBRD/IDA LENDING, (DECEMBER 31, 1978) O(ILLION UsS): IBiD IDA. RATE OF EXCHAINGE Outstanding & Disbursed 43.8 13.1 Throgh 971 Since - 1971 Undisbursod 55.9 22.8 US 1.00 1. 00 Us $ 1.00 1.00 Outstanding incl. Undisbursed 1.00 us $ 1.00o= us$ 1/ Ratio of Debt Service to Exports of Goods and Non-Factor Services. August 1979 . not available . not applicable  - 24 - ANNEX II Page 1 of 7 pages THE STATUS OF BANK GROUP OPERATIONS IN LIBERIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of August 31, 1979) Loan or Amount (US$ Million) Credit less cancellation Number Year Borrower Purpose Bank IDA /a Undisbursed Eight loans and two Credits fully disbursed 26.67 3.8 305 1972 Rep. of Liberia Education 7.2 0.00 /b 1055 1974 Liberian Bank for Second Development Dev. and Investment Finance 4.0 0.24 577 1975 Rep. of Liberia Agriculture 6.0 3.37 700 1977 Rep. of Liberia Agriculture 7.0 5.59 786 1978 Rep. of Liberia Rubber Development 6.0 5.81 839 1978 Rep. of Liberia Forestry 6.0 5.49 Development 859 1978 Rep. of Liberia Monrovia Water 8.0 6.80 supply 1150 1975 Liberia Electric Third Power 1.8 0.52 Corporation 1156 1975 Rep. of Liberia Third Road 27.5 9.71 1266-T 1976 Rep. of Liberia Second Education 4.0 1.65 1323 1976 Liberian Bank for Dev. and Investment Third Development 7.0 4.97 Finance 1417 1977 Rep. of Liberia Education 6.3 5.80 1544 1978 Rep. of Liberia Rubber Development 7.0 7.00 1573 1978 Rep. of Liberia Fourth Highway 13.8 13.13 1600 1978 Liberian Electric Fourth Power 10.0 5.54 Corporation t644 1979 Rep. of Liberia Feeder Roads 10.7 10.70 Total 118.77 44.0 86.32 of which has been repaid 10.14 - Total now outstanding 108.63 44.0 Amounts sold 0.41 of which repaid 0.41 0.0 Total held by Bank and IDA 108.63 44.0 Total undisbursed 59.26 27.06 86.32 /a Prior to exchange adjustments. /b US$4,823.08 remain undisbursed.  - 25 - ANNEX II Page 2 of 7 pages B. STATEMENT OF IFC INVESTMENTS (as of August 31, 1979) (in US$ million) Fiscal Year Obligor Type of Business Loan Equity Total 1966 Liberian Bank for Development Development and Finance Investment Company 0.250 0.250 1977 Liberian Bank for Development Development and Finance Investment Company 0.306 0.306 0.556 0.556 Less Sold 0.001 0.001 Now Held 0.555 0.555  - 26 - ANNEX II Page 3 of 7 pages C. PROJECTS IN EXECUTION 1/ Credit No. 305-LBR First Education Project: US$7.2 Million Credit of May 17, 1972; Effective Date: December 18, 1972; Closing Date: December 31, 1979 After initial delays in awarding civil works contracts, imple- mentation has progressed satisfactorily. All project buildings have been constructed and are in use, although contractors are still at the sites finishing external works. All technical assistance and fellowship programs have been completed. It is expected that all civil works and disbursements will be completed by the closing date of December 31, 1979. Loan No. 1266T-LBR Second Education Project: US$4.0 Million Third Window Loan of June 7, 1976; Effective Date: July 8, 1976; Closing Date: October 31, 1980 The implementation of most project components continues to improve after initial delays in civil works due primarily to shortages of construction materials and unusually long rainy seasons. The extension of the Zorzor Rural Teacher Training Institute has been completed on schedule and within appraisal cost estimates. About one-half of the community school units have also been completed on schedule, although the remaining units will be completed over the next two years. Most technical assistance specialists have completed their assignments. The implementation of the fellowship program is about two years behind schedule, but the pace is improving and about one-half of the fellowships have been awarded. Most of the project elements have been completed; the overall project, however, is expected to be completed about two years behind the original completion date but within appraisal cost estimates. Loan No. 1417-LBR Third Education Project: US$6.3 Million Loan of May 26, 1977; Effective Date: July 13, 1977; Closing Date: December 31, 1981 Construction of the Vocational Training Center (VTC), the Forestry Training Institute and three of four science centers has begun and furniture and equipment have been ordered for the VTC. The technical assistance program is being implemented as planned and the VTC instructors have returned from 1/ 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 action 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.  - 27 - ANNEX II Page 4 of 7 pages fellowship training abroad. Overall project implementation, however,, is about 1 year behind schedule due to the poor quality of supervision by the Division of Education Facilities, the slow pace of the contractor for the VTC and difficulty in placing fellows. The Government has recently taken measures to deal with these constraints to project implementation. Credit No. 577-LBR Agricultural Development (Lofa) Project: US$6 Million Credit of August 1, 1975; Effective Date: May 26, 1976; Closing Date: December 31, 1981 The project is completing its third year and progressing satisfac- torily. Farmer response to the project continues to be good. Swamp rice target of 500 ha for 1979 is expected to be met while a shortfall is likely in upland rice production (900 ha to 1,200 ha) mainly because of a lack of adequate seed. New plantings of coffee are likely to attain 500 ha (appraisal 500 ha) while those of cocoa are estimated at 450 ha (appraisal 300 ha). Training and schistosomiasis surveillance are proceeding satis- factorily and the building program is practically complete. The feeder road program is behind schedule due mainly to the commitment of the Minist:ry of Public Works to other activities related to the OAU conference. The planning and evaluation officer is now on post and is preparing a work prograa. The employment contracts of most expatriate staff have expired this year and have handed over responsibilities to Liberians on schedule. Government fuLnding and support for the project has been generally satisfactory. Credit No. 700-LBR Agricultural Development (Bong) Project: US$7 Million Credit of December 29, 1977; Effective Date: March 15, 1978; Closing Date: December 31, 1983 The project is experiencing initial difficulties and is not likely to attain its crop development targets this year. Swamp rice is being slowly developed, but is hampered by the absence of a swamp development officer, labor shortages and the preference of farmers for farming upland rice. The Training Unit and Schistosomiasis Surveillance Unit have been set up. Building construction is proceeding satisfactorily. Greater publicity of the project is required to increase farmers' response, and the project is preparing a program for th-is purpose. Organization of Cooperative Siervice Units is proceeding slowly and the Ministry of Agriculture has suggested that this activity be coordinated with the office of the Deputy Minister of Agriculture in charge of cooperatives. Government funding and support continue to be good, but it is yet to adjust its policy of distributing free farm inputs in the country. Government is replacing the Project Manager with a former Lofa Staff member.  - 28 - ANNEX II Page 5 of 7 pages Loan No. 1544-LBR Credit No. 786-LBR Rubber Development Project: US$7 Million Loan and US$6 Million Credit, both of April 21, 1978; Effective Date: October 3, 1978; Closing Date: June 30, 1984 The project started off slower than anticipated at appraisal. About 250 acres have been rehabilitated against appraisal targets of 500 acres. The replanting program, is delayed because of poor planning by Project Management. The Project Manager was recently relieved of his position, and the Government has appointed a temporary replacement. The development of the nursery is proceeding satisfactorily and an intensive effort is being made to survey and register potential participants. Staff and farmer training is expected to commence this year. Credit No. 839-LBR Forestry Project: US$6 Million Credit of July 28, 1978; Effective Date: December 20, 1978; Closing Date: June 30, 1984 The project includes strengthening the Forestry Development Authority, establishing a 1,600 ha industrial plantation and technical assistance, studies and training. Project implementation is proceeding satisfactorily. Loan No. 1156-LBR Third Highway Project: US$27.5 Million Loan of August 28, 1975; Effective Date: October 14, 1975; Closing Date: December 31, 1979 The construction of a major bridge and of an urban main road (5.4 mi) in Monrovia is now complete, and the construction of a rural main road (83 mi) is almost complete after delays due to bad weather and dif- ficulties in the supply of materials. The feasibility studies of about 85 miles of main roads and an urban transport study in Monrovia are substantially completed. A feeder road construction unit became operational in January 1977 and is operating in association with the Lofa County Agricultural Development Project (577-LBR). Technical assistance in building up the Planning and Programing Division of the Ministry of Public Works is proving fairly effec- tive. Loan No. 1573-LBR Fourth Highway Project: US$13.8 Million Loan of June 2, 1978; Effective Date: September 11, 1978; Closing Date: December 31, 1982 The project includes reconstruction and Improvement of the Paynesville-Totota and Paynesville-Robertsfield road, technical assistance for road maintenance and preinvestment studies. Reconstruction of the Paynesville-Robertsfield road financed by the Kuwait fund started in Novem- ber 1978. Rehabilitation of Paynesville-Totota road is scheduled to start  - 29 - ANNEX II Page 6 of 7 pages in October 1979. Detailed engineering of Ganta-Sanniquellie and Ganta-Tapeta roads is expected to be completed by April 1980. Contract for the extension of road maintenance advisory services was signed in January 1979. Iechnical assistance positions have been advertised. Loan No. 1664-LBR Feeder Roads Project: US$10.7 Million Loan of April 4, 1979; Effective Date: April 30, 1979; Closing Date: December 31, 1984 The project provides for the construction or improvement and main- tenance of about 700 miles of feeder roads and for the maintenance of a further 200 miles of feeder roads. The work will be undertaken by three brigades operated by the Ministry of Public Works assisted by local con- tractors. The Loan provides for the purchase of equipment and supplies, for the construction of workshops and for technical assistance to assist in planning and executing the works. Project implementation is under way. Loan No. 1055-LBR Second Development Finance Company (LBDI) Project: US$4 Million Loan of December 3, 1974; Effective Date: January 3, 1975; Closing Date: June 30, 1980; and Loan No. 1323-LBR Third Development Finance Company (LBDI) Project: US$7 Million Loan of October 7, 1976; Effective Date: December 17, 1976; Closing Date: December 31, 1982; The Loan 1055-LBR helped LDBI meet its financial requirements through calendar year 1976. LBDI's loan approvals during calendar 1976 surpassed the projected level for the year. Commitments and disbursements were similarly above targets. Disbursement of Bank funds, in particular, had been faster than projected. The loan is fully committed and almost completely disbursed. The Loan 1323-LBR, signed October 7, 1976, together with loans from the African Development bank and the European Investment Bank, were expected to have covered LBDI's foreign resource gap for the period 1977 and through the first half of 1979. However, commitment: of Loan 1323-LBR has been slower than anticipated (by September 1979, 40Z of the loan had been committed) due to clients' reluctance to accept the foreign exchange risk on the non-dollar hard currency disbursements. It is hoped that the Bank's recent introduction of a new policy for DFCs whereby disbursement would be half in dollars and half in a basket of other currencies would permit LBDI to utilize the loan faster. Loan No. 1150-LBR Third Power Project: US$1.8 Million Loan of August 1, 1975; Effective Date: October 20, 1975; Closing Date: June 30, 1980 The project finances technical assistance for establishing a long-range development plan and detailed investment program as well as for strengthening the management of the Liberia Electricity Corporation (LEC) and training its staff. LEC's management continues to need externa]L support  - 30 - ANNEX II Page 7 of 7 pages and the training program needs to be expanded to include practical training for middle-level staff. The financial performance of the utility has deter- iorated and remedial measures are being taken to improve LEC's financial viability, e.g. tariff increases, improved financial control, in connection with the Fourth Power Project. LEC recently engaged a foreign electric power utility (TATA Consulting Engineers) to provide a management support team to replace expatriates who have left at the expiry of their contracts. The LEC consultants, Chas. T. Main (USA), have completed the pre-feasibility study of the hydroelectric development of St. Paul River. Loan No. 1600-LBR Fourth Power Project: US$10.0 Million Loan of July 7, 1978; Effective Date: December 11, 1978; Closing Date: June 30, 1982 The project consists of expansion of thermal generating facilities by 26 MW to meet demand up to 1985, power distribution to urban poor, rural transmission studies and technical assistance for management and training. All contracts for the Bushrod Power Plant extension have been signed and the contractors have proceeded with their respective work. The civil works con- tractor has almost completed the task. Credit No. 859-LBR Water Supply Project: US$8 Million Credit of January 8, 1979; Effective Date: April 2, 1979; Closing Date: December 31, 1982 The project is designed to assist the Government and the Liberia Water and Sewer Corporation in expanding Monrovia's water production and dis- tribution capacity, increasing access to service for the urban poor, improving LWSC's managerial efficiency, planning capacity and financial viability, pro- viding a sector study as a basis for a sector development plan and strategy, and providing effective training opportunities and facilities for LWSC's Liberian staff. The project is progressing satisfactorily. The expatriate management assistance personnel are in post, and Liberian counterparts have been assigned to all five of them. A draft report on the management study has been completed and is currently under review. The sector study is under way.  - 31 - ANNEX III Page 1 of 2 pages REPUBLIC OF LIBERIA Oil Palm Project Supplemental Project Data Sheet Section I: Timetable of Key Events (a) Time taken to prepare project: 1 year (b) Agency which prepared project: SODEPAIM under bilateral assistance from the Goverment of Ivory Coast. (c) Date of first Bank mission to October 1978 consider the project: Cd) Departure of appraisal missiont January 15, 1979 (e) Negotiations completed: August 31, 1979 (f) Planned date of effectiveness: December 31, 1979 Section II Special Bank Implementation Action None Section III: Special Conditions The following special conditions are included in the draft Loan Agreement: (a) Acquisition and transfer by Govermnent of additional 1,500 ha of land required for the estate by September 30, 1980; and settlers already cultivating any of the land to be taken over by the estate to be adequately compensated on the basis of criteria satisfactory to the Bank (para. 33); (b) DOPC to make necessary arrangements for the provision of all seed requirements for the project by IRHO or other suitable suppliers (para. 34);  - 32 - ANNEX III Page 2 of 2 pages (c) Smallholders to be selected in accordance with criteria acceptable to both Government and Bank (para. 35); (d) Land which would be used for anallholder plantations to be surveyed and demarcated by December 31, 1980 (para. 36); (e) Settlers already cultivated land where smallholder plantations are to be locatd will be compensated according to criteria satisfactory to the Bank (para. 36); (f) Farmers to be paid for ffb on the basis of price formula satisfactory to the Bank (para. 39); (g) Non-project roads to be completed by December 31, 1981 (para. 41); (h) Acquisition and leasing by Government to DOPC of about 8,350 ha of land required for the nucleus estate (condi- tion of effectiveness, paras. 33 and 58); (i) Conclusion of arrangements satisfactory to the Bank for making available to DOPC the proceeds of ADB and CDC loans (condition of effectiveness, para. 47); (j) Signing of DOPC managenent contract (condition of effectiveness, para. 49); and (k) Government to deposit an amount of not less than US$0.9 million into DOPC's account to facilitate DOPC's project start-up activities (condition of effectiveness, para. 58).  IBRD2 14275 ,~~ 7 ~ ~ ~ j 030 ~ ~ ~ ~ ~ ~ uo 740 ~~~LIBE RIA I S..kehnI DECORIS OIL PALM PROJECT 1 , ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Moir access roads: -L-AMRLAND' CYUT 20 /, ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.. To be resurfaced To be constructed '7 New E Feeder roeds: ke Existing- -4'40' ~~~~~~~~~~~~~~~~~~~~~~~~~To be resurfoced 4'dC' \. . Henegow Tugloo~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~bke .e To be upgraded To be constructed __ / ~~~~~~~~ ~~~~~~~740 ho\ ( j155 ho.. Nucleus estate boundary- ~~~ Rowo~_ 8.he Si - melheder area boandairies L 1Enlarged estates ~~~~~~~~1i ~ ~ ~ ~ ~ ~ ~ ~ ~~~2 10 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~R,vers or creeks 337 hour - - ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Towns or settlements r 2 1930 H 7 T~~~~~~~~~) T J~~~~~~~~ < I ~~~~FIRETI PLNTATIO 210 (7 07--~~~~~~'\ 50h 450 1,.~~~~~~~~~~I,~~~0O Wil~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ie '4C,eek Wochun .~< ots,roeenossroffeK & I . -t- r.k. 4-30Ooo707o75f777ad7,7 h0 ,lnec,,as7e C-k h k~~~~~~~~~~~fe07set,ssOa.7, h --i.,ssow hn -d- 73 doh.t.-.e7 ,71,7 II 17 35 I I 90 At/anh/c OceanSIRA I 4'25' /~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'5 L I BE RIA IVORY Rock ~~~~~~~~~~~~~~~~~~~~~~COAST ~~~~~~~~Id~~~~~~~~~~~~~ 50 ~~~~~~~~~~~~~~30 4 I I I I I I I I I (~~~~~~~~~~~~~~t I I I I I I I ~~~~~~,45 1 I I I t 40 tp H rp