Announcement of IDA Provides Eight Million Dollars Credit to Somalia for a Livestock Project on May 14, 1979

'. 'fOR IMMEDIATE RELEASE, N ., 1 " ~ •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. •Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 79/72 May 14, 1979 IDA PROVIDES $8 MILLION CREDIT TO SOMALIA FOR A LIVESTOCK PROJECT The International Development Association (IOA), the Worid Bank!s affiliate for concessionary lending, has approved an $8 million credit to support the Central Rangelands project in Somalia. Over a six-year period, this project will help to consolidate and improve rangelands and livestock production in an area covering 149,000 square kilometers, increase incomes of pastoralists through the introduc- tion of a system of range utilization, and pave the way for the formation of pastoral communities which will make the provision of social services easier. Aerial and land surveys of the rangelands, including their live- • stock and human populqtion; wi Ii be conducted and a vegetation map prepared • Veterinary services will also be improved. In addition, nurseries, town shelter belts, and water and soi1 conservation activities, including ex- perimental grazing cooperatives, will be set up. The people in the pro- ject area will receive formal and non-formal education. The National Range Agency, established in 1976 as an autonomous agency to design and implement a national range development strategy, wi 11 be strengthened. The Agency will serve as the projec~'s executing agency. Livestock production is Somalia's most important economic activity. Over two-thirds of the population is engaged in this activity and about 75%-80% of the foreign exchange earnings are derived from the export of live animals and animal products. But the rangelands are under pressure, droughts occur every five years and the pastoralists are forced to fall back on scarce stockwater points resulting in overgrazing of vegetation in the surrounding area. The pastoralists are compelled to compete with one another for the available forage and water. Without the introduction of management of the rangelands and livestock, the forage resource will deteriorate and livestock numbers will decrease. The government's development strategy is to: improve the resource base of the livestock industry through range management; alleviate the constraints on livestock productivity by providing better veterinary • services; and achieve a gradual concentration of pastoral communities so that pastoralists' living standard may be improved through the pro- vision of health and education services. The cooperation of the pasta- / ... NOTE: Money figures are expressed in U. S. dollar equivalents.  • - 2 - ralists is essential ahd they must themselves recognize the usefulness of the proposed range management system. Some experience has been gained with the Northern Rangelands Development Project which is still under way. It was appraised by IDA in 1975 and financed by the Kuwait Fund. The main beneficiaries of the Central Rangelands project will be the 400,000 pastoralists living in the project area, who will reach a higher subsistence level. Their average per capita income is expected to increase by 17% in real terms, from about $83 in year five to $98 in year 15 after the start up of the project. At full development, in about 15 years, the annual increase in livestock production is estimated to be: 115,000 sheep and goats, 4,000 cattle, and 2,400 camels valued at $7:5 million~ The incomes of pastoral ists wi 11 b'ecome more stable than before, herd and flock losses will be reduced, and market and price fluctuations are expected to be less pronounced. Range management will have a positive ecological im- pact especially in range areas adjacent to farms and villages which are now denuded and subject to erosion. Co-financing for this project, the total cost of which is $46.3 million, is expected to be provided by: the lnternationa~ Fund for Agri- cultural Development as a $9 million loan; the U. s. Agency for Interna- • tional Development as a $15 million grant; the U. K. Overseas Development Ministry as a $4 million grant; and the U. N. World Food Programme as a $4.3 million grant in food. The Government of Somalia is providing $6 million towards the project costs. The IDA credit of $8 million to Somalia is for 50 years with 10 years of grace. It is interest free but will carry a 3/4 of 1% charge to cover IDA's administrative costs. • FORM NO. 1121 (5-76) T EC HN I CAL DA T A • PROJECT: COUNTRY: TOTAL COST: Central Rangelands Development Republic of Somalia $46.3 mi 11 ion IDA FINANCING: $8 million, standard lDA terms OTHER FINANCING: International Fund for Agricultural Development (IFAD), $9 mill ion loan; U.K. Overseas Development Ministry (ODM), $4 mill ion grant; U.N. World Food Programme (WFP), $4.3 million grant; U.S. Agency for internationai Deveiopment (USAioj, $15 mill ion grant; Government of Somalia, $6 mi 11 ion. IMPLEMENTING ORGANIZATION: National Range Agency Mogadishu, Somalia PROJECT DESCRIPTION: The project will consolidate and improve rangelands and livestock production in a project area covering 149,000 square miles, over a six-year period. It will also introduce a system of range util iza- • tion and make way for the gradual concentration of pastoral communities. Veterinary services will be Improved, and formal and non-formal education will be strengthened. Nurseries, town shelter beltst and water and soil conservation activities will be initiated. PROCUREMENT: Procurement under the joint IDA credit and !FAD loan wil 1 follow World Bank procurement guidelines. Except for advance procurement of vehicles, equipment, and furniture ($0.25 million) needed during the first project year and where international or local shopping will be used, procurement of vehicles, equipment, and furniture as well as the construction program ($4.S million), will be subject to international competitive bidding. Tenders will be bulked to the maximum extent possible to attract major international and/or local contractors and suppliers. During bid evaluation, goods manufactured in Somalia may be granted a margin of preference of 15% of the c. i.f. bid price or the amount of customs duties and other import taxes, whichever is lower, over imported foreign goods. USAID, ODM, and WFP will follow their own procurement guidelines. CONSULTANTS: The project will require about 100 man-years of inter- nationally recruited staff for about 30 posts in various stages of project implementation during a six-year period . • ECONOMIC RATE OF RETURN: 15%, calculated on 60% of total project costs. ESTIMATED COMPLETION DATE: 1986 - 0 -