Mali - Forestry Project

Document of The Worid Bank FOR OFFICIAL USE ONLY ILE COPy Report No. P-2463-MLI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALI FOR A FORESTRY PROJECT February 13, 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 Currency Unit = Malian Franc (MF) US$1 M HF 440 MF 1,000 = US$2.273 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES metric system 1 stere of fuelwood (st) = 1 stacked m3 of fuelwood 1 m3 (r) = 1 solid cubic meter of round wood 1/ 1 m3 (s) = 1 solid cubic meter of sawn wood 1 stere of natural forest fuelwood = 0.50 m3 (r) = 225 kg 1 stere of plantation fuelwood (Gmelina Arborea) = 0.60 m3 (r) = 350 kg 1 m3 (r) of natural forest fuelwood = 2.00 st = 450 kg 1 m3 (r) of plantation fuelwood (Gmelina Arborea) = 1.60 st = 560 kg 1/ Quantities of wood, when expressed in cubic meter (m3) in the report, correspond to solid cubic meters of roundwood (m3 r). LIST OF ABBREVIATIONS CCCE Caisse Centrale de Cooperation Economique CILSS Comite Inter-Etats de Lutte Contre la Secheresse au Sahel FAC Fonds d'Aide et de Cooperation FED Fonds Europeen de Developpement IER Institut d'Economie Rurale IPR Institut Polytechnique Rural OAPF Operation Amenagement et Productions Forestieres OPM Operation Peche MOPTI OPNBB Operation Parc National de la Boucle du Baoule  FOR OFFICIAL USE ONLY MALI FORESTRY PROJECT Credit and Project Summary Borrower: Republic of Mali Beneficiary: Operation Amenagement et Productions Forestieres (OAPF) Amount: US$4.5 million Terms: Standard Project The project would support a five-year program aimed at increas- Description: ing fuelwood and building pole supplies especially for urban areas, and at strengthening the Forestry Department of the Ministry of Rural Development. The project would (a) establish 3,400 ha of industrial rainfed tree plantations near Bamako; (b) establish on a trial basis 60 ha of rainfed tree planta- tions near Segou and 70 ha of partially irrigated tree planta- tions near Mopti; (c) apply modern forest management techniques on a trial basis; (d) establish three rural forestry nurseries and rehabilitate an existing one; and (e) execute studies to investigate more efficient wood uses, to examine possibilities to set up rural forestry activities that would generate partici- pation by the local population and to examine the scope of a follow-up project. There are no apparent technical risks of an exceptional character in the tree plantation component. The results of the pilot plantations are inherently uncertain, given their experi- mental nature. This document has a restricted distribution and may be used by recipients only in the performance of their omcial duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Costs: US$ 1,000 Local Foreign Total Bamako Tree Plantations 1.8 2.6 4.4 Pilot Tree Plantations 0.1 0.1 0.2 Natural Forest Plantations 0.2 0.1 0.3 Rural Forest Nurseries - 0.1 0.1 Expatriate Staff, Consultants, Audit and Training 0.1 1.8 1.9 Total Base Costs 2.2 4.7 6.9 Contingencies 0.8 1.7 2.5 Total Project Costs 3.0 6.4 9.4 Financing Plan: US$ million Total IDA FAC CCCE GVT Tree Plantation, Forest Management and Rural 5.0 2.4 - 1.0 1.6 Forest Nurseries Expatriate Staff 1.5 0.4 1.1 - Consultants, Audit, Training 0.4 0.4 - - Contingencies 2.5 1.3 0.2 0.4 0.6 Total 9.4 4.5 1.3 1.4 2.2 Estimated Disbursements: US$1,000 FY80 FY81 FY82 FY83 FY84 Annual 1,270 1,000 660 820 750 Cumulative 1,270 2,270 2,930 3,750 4,500 Rate of Return: The estimated internal rate of return on the Bamako tree plantation component is 11 percent. Calculations were made only on this component in view of the experimental nature of the other project components. Appraisal Report: No. 2148a MLI , January 10, 1979.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IDA TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALI FOR A FORESTRY PROJECT 1. I submit the following report and recommendation on a proposed credit for the equivalent of US$4.5 million on standard IDA terms to the Republic of Mali to help finance a proposed Forestry project. The Caisse Centrale de Cooperation Economique (CCCE) and the Fonds d'Aide et de Cooperation (FAC) will participate in the financing of the proposed project with US$1.4 million and US$1.3 million, respectively. The proceeds of the Credit and the CCCE loan would be passed on to Operation Amenagement et Productions Forestieres (OAPF) as contributions to its capital. The terms of the CCCE loan are to be defined in agreement with Government. FAC would finance the salaries of expatriate personnel at no cost to Government. PART I - THE ECONOMY 1/ 2. A report entitled an "Economic Memorandum on Mali" (1134a-MLI) was distributed to the Executive Directors on January 5, 1978. Its conclusions are reflected in the following paragraphs. Country data are contained in Annex I. 3. With a population of about 6.3 million and a per capita GNP of US$103 in 1976 Mali is one of the poorest countries of Africa and among the 29 least developed countries identified by the United Nations. It is handicapped by serious obstacles to development. The extreme variability of rainfall causes sharp fluctuations in crop and livestock production. Access to foreign markets is made difficult by its landlocked position and the long distances - more than 1000 km - to the nearest seaports, Abidjan and Dakar. Development is also constrained by the substantial internal distances (the country covers an area oi 1.24 million km2) and by the shortage of skilled manpower and the narrow doraestic market for industrial products. About 90 percent of the popu- lation depends for a livelihood on crop farming, animal husbandry, forestry and fishing. Exports consist almost entirely of agricultural commodities and livestock. The relative contribution of the primary sector to GDP declined from 43 percent in 1972 to 37 percent in 1977. 4. Over the fifteen years following independence economic growth has barely kept ahead of the growth of population. During the 1960s GDP in real terms, increased at an average annual rate of 2.8 percent. During the drought of the early seventies, GDP declined and Mali's problems were further aggra- vated by international inflation, excessive credit expansion and growing 1/ Substantially unchanged from the President's Report for the Office du Niger Technical Assistance/Engineering Project (Report No. P-2387-MLI).  - 2 - budget and balance of payments deficits. The Government has initiated action to redress major financial imbalances through credit restraint, through some reduction of the subsidy element in the prices of essential consumer goods, fertilizers and agricultural equipment, and through improved tax collection. Good crop seasons in 1975, 1976 and 1977 facilitated the implementation of these measures. However, these efforts were upset by a poor harvest in 1977/78, brought about by another drought. The Drought Years: 1972-1974 5. All economic sectors were in varying degrees affected by the drought of 1972-1974, and the recovery of these sectors is following different pat- terns. The full extent of loss of human life resulting from the drought is not known but it was particularly severe among nomadic groups and espe- cially the young and elderly. With respect to the cattle herd, estimated 5.5 million head in 1971, it was reduced by 15 to 20 percent. 6. In an effort to keep essential supplies at a sufficient level and retail prices for basic goods low, especially in urban centers, the government resorted to large imports of cereals, only partly financed by external aid, and to consumption subsidies. Thus cereal imports shot up from 64,000 tons in 1972 to 235,000 tons in 1974, and the resource gap widened to nearly one-third of GDP in 1974. To finance losses incurred by state enter- prises in charge of imports and sales of subsidized goods, growing amounts of bank credit were used. The GDP deflator, reflecting subsidization through officially controlled prices, increased at an annual rate of only around 5-6 percent between 1970 and 1974, although prices in the open market had risen more steeply after the onset of the drought. Because supplies of exports were affected by the drought, export receipts did not increse as much as the favorable world prices would have permitted and the policy of price containment and subsidization translated into very large external deficits. These years, apart from imposing appalling human suffering on important segments of the Malian population, left an unfortunate legacy on Mali's public finances. Uneven Recovery: 1975-1977 7. Normal rainfall resumed in 1975 and primary production--cereals, as well as cotton and groundnuts--increased by more than 22 percent and total real GDP by an estimated 12.7 percent. Recovery of physical production, however, was accompanied by a sharp rise in the GDP deflator of about 18 percent in 1975 owing to a substantial reduction in Government subsidies and increases in the official producer prices of the major crops - ranging from 33 to 60 percent. While the resource gap was reduced it remained high, repre- senting about 20 percent of GDP and foreign assets declined further to minus MF 88 billion (US$184 million). Public dissaving continued to increase as growth of revenues lagged behind rapidly rising expenditures, particularly expenditure on personnel. The wage bill increased rapidly because of cost of  living adjustments and the policy of government to serve as employer of last resort of nationals who complete secondary or higher education. Current revenues did increase significantly as a result of efforts to improve tax collection, but not enough to keep pace with rapidly growing expenditures. The current budget deficit widened from 5.1 billion MF in 1972 to 10.5 billion MF in 1975, or about 36 percent of total current revenues. 8. In 1976, real growth of GDP was 5 percent. In 1977 the situation continued to improve, largely as a result of a good harvest, and because of continued growth in the secondary sector (particularly on the Selingue dam), so that GDP grew by about 7 percent in that year. However, a drought-induced downturn in agricultural production in 1978 may mean a zero or negative growth rate in that year. 9. Credit expansion was reduced sharply from 1975 levels, with an overall increase in outstanding indebtedness of the economy to deposit banks amounting to about 20 percent in 1976, as compared with 47 percent growth rate in 1975. However, it must be recognized that much of what is included under "credit to the economy" in effect finances operating losses of public enter- prises. (Whlen substantial improvements in indebtedness have taken place, such as in 1976/77, they have largely been attributable to the export earnings of SOMIEX, the state export monopoly.) At the beginning of 1975 the Central Bank discount rate was raised from 3.5 to 6.0 percent with corresponding increases in the whole set of borrowing and lending rates of deposit banks. And a new banking law, providing for legal minimum cash reserve and liquidity ratios has recently been promulgated. This took place within the framework of a new monetary agreement with France in mid-1977. This agreement aims at bringing about the conditions requisite for Mali's membership in the West Africa Moneitary Union by 1981, imposing a very restrictive credit policy on the operations of the Central Bank, notably in establishing more stringent conditions on rediscount facilities, thereby precluding the financing of operating losses of state enterprises, one of the most persistent drains on Mali's economy. 10. T'he balance of payments deficit in 1976 is provisionally estimated to have declined by US$21 million to US$33.6 million. As in the past much of the deficit was largely financed through drawings on the "operations account" with the French Treasury. The improvement in the balance of payments is attributable essentially to higher volume and prices of cash crop exports, exports of foodgrains, some debt rescheduling and larger capital inflows and higher transfer receipts. Despite this, Mali's net foreign assets have somewhat further decreased, and at the end of 1976 were minus MF 98 billion (US$205 million). The overall budget deficit for 1976 and 1977 was still uncomfortably large (MF 10 billion in 1976, MF 9 billion in 1977); for 1978 a MF 5 billion is aimed at by the Government. Given particularly that export earnings were likely to fall during 1978, this improvement does not appear likely.  -4- Foreign capital and debt 11. Public investment is mainly financed by foreign aid. During most of the sixties the USSR and the People's Republic of China were the most important aid donors. At the end of 1975, they held in roughly equal propor- tions nearly 57 percent of Mali's external public debt disbursed and out- standing. Gross disbursements (grants and loans) from DAC sources increased from US$24 million in 1969 to US$108 million in 1974. Roughly 60 percent came from bilateral sources (mainly France, United States, Germany and Canada). Since the early seventies the amount of public aid received by Mali has increased very rapidly and grants account for most of the increase. The average annual gross inflow of aid was less than US$20 million in early 1970-71, reached US$50 million during the first years of the drought (1972- 73), peaked at US$112 million in 1974 and has decreased only marginally since then. Four-fifths of total aids since 1970 has been in the form of grants. 12. Mali's external public debt outstanding at the end of 1975 (exclud- ing drawings on the operations account with the French treasury) was US$471.0 million, including an undisbursed amount of US$144.0 million. IDA's share in the total amount disbursed and outstanding was 18.6 percent. Repayments of principal and interest due in 1975 would have claimed more than a quarter of foreign exchange earnings, but actual debt service payments have been small (2.8 percent in 1974, 3.1 percent in 1975) owing to the rescheduling since 1970 of Chinese, Russian and some other debts. However, projections indicate that the actual debt service ratio may go up to about 19 percent by 1980 unless some further rescheduling of debt takes place. Mali received five stand-by credits from the IMF between 1964 and 1971 which have been repaid. Apart from the stand-by credits Mali drew SDR 5.0 million under the 1974 oil facility and obtained another credit of SDR 3.99 million (in March 1976) under the 1975 oil facility. In addition, Mali borrowed US$4.6 million from the IMF trust fund facility in January 1978. Development prospects 13. The return of more normal weather conditions in 1975 strengthened the economy's short run position, at least through 1977. However, the poor harvest of 1977/78 may represent a set-back in Mali's development prospects (especially if the drought continues during the current year) and may retard necessary improvements in Mali's economic management. In particular, over the medium and long term, the government must address two sets of interrelated objectives. The first is to correct the profound financial imbalances that have developed over the years, especially since the early seventies; the second is to accelerate the pace of economic growth against a background of minimal improvement in per capita income since 1960. 14. The Government began in 1975 to tackle some of its financial prob- lems and has been relatively successful in readjusting some key prices to more realistic levels. Thus, incentives to agricultural production are stronger, consumer prices more closely reflect economic costs, the burden of subsidies has been somewhat alleviated and credit expansion has slowed  - 5 - since official prices to producers and consumers have failed to keep pace with rising costs. Reform of public enterprises is being undertaken but is unavoidably a very gradual task and much remains to be done, particularly in the area of cereals marketing. The budget is still basically unbalanced but the government is now seriously reconsidering its employment policy with a view to make it more selective so as to check the growth of current expendi- ture; yet this is clearly a longer-term project. Any reconstitution of external reserves will take some time, and in the process the Government should progressively wean itself from using the French-financed operations account to finance current deficits. 15. E'rospects for real long-term growth are probably better than in most other Sahelian countries. Agriculture has considerable potential for expansion both in the South where rainfed agriculture meets relatively favor- able conditions and in the vast inland delta of the Niger river. T'he river also offers much potential for power development, particularly for industry. Planned investment in new capacity for cotton seed oil extraction, cotton textiles for export, and in sugar production, together with increasing crop and livestock production, will eventually strengthen the balance of' payments. Mineral resources (iron ore, phosphates) remain at present unexploited but may offer interesting longer term development possibilities. 16. 'Che Five-Year Social and Economic Development Plan (1974-1978) gave high lpriority to agriculture, water and power development, industries processing agricultural materials, and road transport. The pattern of invest- ment was well conceived, but the overall size of the investment program, most lately estimated at HF 826 billion (about US$1.8 billion), is proving to be over-am'bitious. Although MF 427 billion of this total was expected to be realized during the plan period, at the end of 1976, total investments realized amnounted to only MF 122 billion. The problem is more one of imple- mentation than financing; with continuing delays being encountered in project preparation and execution, particularly in the beginning. Thus it is likely that the overall implementation of the plan will be delayed for several years, although no new terminal date has been set by the Mali government. Project financing, on the other hand, is reasonably well advanced, with MF 359 billion having been received or firmly committed, and with preliminary agree- ments obtained on another MF 100 billion. With regard to investments being undertaken under the revised plan (revisions having been made in 1976 and 1977), priority is currently being given to food crops, while in the longer run, greater emphasis is expected to be placed on export crops, animal hus- bandry, minor irrigation works and more efficient manufacturing activities. 17. The prospects for the Malian economy have improved following the substantial increase in output over 1975-1977 and the stabilization measures taken by the Government. Nevertheless, sustained and viable growth in the longer run depends crucially on investments and policy measures that will strengthen the economy's export base, particularly in cash crops. Mali's capacity to finance new investment, however, is severely constrained by the limited savings potential resulting from the extremely low per capita income  - 6 - level, a situation reflected in the government's budget and further compli- cated by serious financial difficulties particularly in the public enterprise sector. Borrowing on conventional terms would add considerably to the burden of servicing an already sizeable external debt. External aid, accordingly, should be on soft terms and should finance, besides foreign exchange outlays, a significant proportion of local currency costs. PART II - WORLD BANK GROUP OPERATIONS IN MALI 18. The proposed credit would be the Association's seventeenth operation in Mali, which would bring total commitments of IDA funds to US$153.2 million. US$78.9 million had been disbursed as of December 31, 1978. Of the sixteen credits already approved, six have been for transport, seven for agriculture, two for education and one for telecommunications. Agriculture represents the largest share (46 percent) of past commitments followed by transportation (42 percent). Experience with ongoing operations has in general been satisfactory. Notes on the execution of ongoing projects are set out in Annex II. 19. The main objectives of Bank Group lending in Mali are: (a) to promote agricultural and rural development; (b) to strengthen infrastructure facili- ties; and (c) to mobilize resources from other donors through co-financing. These overall objectives are in line with the priorities established in the Government's Five-Year Development Plan. The Bank Group will also continue the ongoing dialogue with Government on economic policy issues and options in the framework of economic and sector work. In this context Government has recently asked that the Bank study the activities of the Office of Price Stabilization and to provide assistance in formulating policies for employment generation. 20. Major agricultural and rural development projects that the Bank Group has undertaken cover most of the country's cultivable area and benefit the majority of farm families, who constitute 90 percent of Mali's population. Long-term objectives aim at increasing cash crop and livestock production, particularly for export, at increasing and stabilizing food crop production, at achieving a redistribution of income in favor of agricultural producers, at helping the country attain some degree of food self-sufficiency as well as generate adequate supplies of agricultural materials for processing industries and exports. Operations in the sector have assisted Mali in developing rice production on the Niger flood plains for domestic consumption, groundnuts, cotton, kenaf, rainfed cereals and livestock production. Integrated with the agricultural aims are improvements in human health conditions, farmers' education and training of young farmers and rural artisans. In addition, three of the six projects financed in the transportation sector are directly related to the rural sector.  PART III - THE FORESTRY SUBSECTOR Resources 21. Mali's natural vegetation consists of 6 percent Guinean savannah, 27 percent Soudanian savannah, 16 percent Sahelian steppe, 21 percent tropical sub-desert steppe and 30 percent desert. The forest and fauna reserves and parks cover some four million hectares and represent about 3 percent of Mali's total area. Man-made forests cover some 1,500 ha, planted mainly in Gmnelina arborea, Teak, Neem (Azadarichta indica) and Eucalyptus. 22. The forestry sub-sector accounted for only 1.9 percent of GDP in 1976 and 5.2 percent of exports in 1975 (mainly sheanuts, sheanut butter and oil, and gumt arabic). However, natural forest savannah and bush also play an important economic role in providing fuelwood, building poles and minor forest products. Total fuelwood requirements are estimated at 1.7 million tons per annum of which 17 percent are used by the urban population - nearly 80(),000 inhabitants. Building poles represent some 10 percent of total consumption. Moreover the natural forest provides fruits, tree fodder and dry weather grazing reserves for livestock, protects the soil against erosion, and - as bush fallow - regenerates soil fertility under the traditional shi.fting cultivation system. 23. Due to the size of the country and relatively low population densities, the cutting of fuelwood in rural areas has not generally led to a decline in the forest cover and fuelwood is still sufficient. There are, however, two areas in Mali where the situation is fundamentally different. 24. First, there is an accelerating decline in the natural forest cover around the capital city of Bamako. Rapid population growth has 'Led to a similar growth in fuelwood consumption, at present estimated at 200,0)00 tons annually and expected to rise to 500,000 tons by 1990. This compares with a theoretical wood yield of 250,000 tons per year in the Bamako area but, due to distance and difficulty of access, only about 50 percent of this is actually being exploited. As a result, distances are getting longer, wood transport to the city is becoming more costly, and fuelwood prices have been rising by 15% each year on average over the past five years. 25. Seccind, there is a noticeable decline in the natural forest * cover east of the Inner Delta of the Niger River; the decline is mostly concentrated aLround the towns of Segou and Mopti and adjacent rural areas. Although urban population levels are considerably lower here than in and around Bamako, urban growth rates are about as rapid while fuelwood supplies are more precarious; most of the Inner Delta is seasonally flooded and has only a sparse forest and bush cover, and, in areas where the forest cover is still in ex;istence, sustained wood yields are small due to slow forest regrowth because of low rainfall (700 mm annually at Segou, and 500 mm annually at Mopti). Moreover, the traditional fish smoking industry in the Niger Delta area is an important additional consumer of fuelwood.  -8- Institutions 26. The Forestry Department under the Ministry of Rural Development has overall responsibility for forest protection, forest products, inland fishing, fauna conservation and wildlife management. The Ministry has, however, delegated important functions in the forestry sector to so-called Operations de Developpement, institutions charged to carry out specific projects, mostly assisted by foreign aid and enjoying a considerable amount of financial and managerial autonomy. Three such "operations" presently exist in this sub-sector: the Forestry Management and Production Agency (OAPF), the Mopti Fisheries Development Agency (OPM), and the Baoule Park Wildlife Manage- ment Agency (OPNBB). 27. OAPF was established in 1972 to set up some 18,000 ha of tree plantations over a 30-year period to satisfy the fuel and construction wood requirements of the main urban centers. Since then, it has rehabilitated some 300 ha of old plantations and has planted about 400 ha, mostly with a fast growing species of Gmelina, in two forest reserves close to Bamako. Another 900 ha will be established during 1979 and 1980. Overall planting quality has been satisfactory, and about 95 percent of all plantings have been successful. All forest operations have been carried out by local personnel (it has a permanent staff of about 50 employees); foreign technical assistance to date has been minimal, limited to equipment maintenance and accounting. 28. OAPF is at present entering a phase of rapid expansion: it is building a small sawmill in Bamako; it has obtained financing from Swiss bilateral aid to establish two tree plantations and two further sawmills, and to manage natural forests in Southern Mali; and it would be entrusted with the execution of the proposed project. The additional activities would require strengthening of the organization, especially in management and administration (see para. 44). 29. Forestry education is provided by the Katibougou Polytechnic Institute, which delivers university trained graduates ("ingenieurs des eaux et forets") and specialized undergraduates ("ingenieurs des travaux forestiers"). The institute is the only forestry training school in the Sahelian countries and, as a result, Mali has a large reservoir of well trained forestry staff. Forestry training for field agents is provided at the OAPF-managed Tabacoro Training Center near Bamako. The quality of training is on the whole sufficient especially in the technical field. For key personnel in the forestry services, however, additional training in administrative and financial management would be beneficial. 30. Forestry research is formally linked to the Rural Economic Institute (IER) but has its headquarters at Katibougou. Research is presently limited to small scale trials and its most important component, tree growing under irrigated conditions in the inner Niger delta, has so far had unsatisfactory results.  -9- Objectives and Strategies 31. The immediate priority in Mali's forestry sector is to increase the supply of ftLelwood and building poles with regard to the main urban centers by establishing tree plantations. This should help (a) to contain the rapid rise in fuelwood prices, which would directly benefit lower income urban groups; and (b) to contain and, eventually, remedy the decline of the natural forest cover around the towns, thus preventing further environmental destruction. Experience indicates that rainfall around Bamako (averaging 1,100 mri annually) is sufficient to provide satisfactory wood yields for selected species under rainfed conditions (Gmelina and Eucalyptus yielding about 9.5 m3/ha/year). No such experience, however, exists elsewhere in the country; while rainfed plantations are still thought to be possible around Segou, it is believed that around Mopti tree plantations would have to be irrigated at least dturing the first years after planting. Pilot plantations would therefore have to be started to obtain further data on these areas. 32. A second priority is to devise appropriate actions in the rural forestry field. Although the natural forest cover outside the urban areas is not yet dec:Lining, it is expected that within ten to fifteen years, with increased population pressures, a disequilibrium between demand and natural supplies wi:Ll arise in more regions than has hitherto been the case., It is therefore imperative to start testing rural forestry actions aimed at increas- ing the supply of fuelwood and wood products close to villages, and this with the active participation of the rural population. Activities carried out in this fie:Ld in the past, notably the establishment of village woocl lots and the prevention of bush fires, have been largely unsuccessful because of disinterest on the part of the local population. Therefore such act:ions would have to be reformulated with a view to provide sufficient incentive to the population to participate. 33. A third priority is the introduction of modern management techniques in the forest reserves. The application of known techniques would have three distinct advantages: it would substantially improve wood production while still maintaining the forest cover; it would increase the efficiency' of for- estry staff; and it could be expected to produce revenue from sale of wood and wood products at least equal to the management costs. 34. The proposed project includes components dealing with all three of the above objectives and, in particular, emphasizes improved wood production near the urban centers. PART IV. THE PROJECT 35. Following a request by Government, a Bank/FAO Cooperative Program mission identified the project in February 1977 and a feasibility st:udy was submitted to the Bank in March 1978. A joint IDA/CCCE mission appraised the  - 10 - project in liaison with FAC in April-May 1978. Negotiations were held in January 1979. The Malian delegation was led by the Minister of Rural Develop- ment, N'Fagnanama Kone. Annex III contains supplementary project data. A Staff Appraisal Report, "Mali Forestry Project" (No. 2148a-MLI) is being circulated separately to the Executive Directors. Project Objectives 36. The proposed project, which would be the first Bank Group financed action in Mali's forestry subsector, would help Government to meet its main forestry objectives: (a) improve the supply of fuelwood and building poles to urban areas by establishing tree plantations (see para. 31); (b) promotion of forestry techniques among the rural population (see para. 32); and (c) management of natural forest reserves (see para. 33). Project Description 37. The project would be carried out over five years (1980 to 1984). It would consist of five principal elements: (a) the establishment of 3,400 ha of rainfed tree plantations in two forest reserves near Bamako; (b) the application of modern management techniques on a trial basis over 1,000 ha of natural forest near Bamako, and 200 ha of natural forest near Segou; (c) the establishment, on a trial basis, of 60 ha of rainfed tree planta- tions near Segou and of 70 ha of partially irrigated tree planta- tions near Mopti; (d) the establishment of three forestry nurseries at Bamako, Segou and Mopti, and the rehabilitation of an existing one at San to provide trees to villagers through established extension services; and (e) the execution of studies to investigate more efficient wood uses, to examine the set up of rural forestry activities that would provide sufficient incentives for the population to participate and a study to examine the scope of a possible follow-up project. Detailed Features 38. Bamako Rainfed Tree Plantations. A total of 3,400 ha would be planted mostly with Gmelina Arborea, a tropical hardwood that can be used both for fuel and construction purposes. Works, which would be carried out on force account by OAPF with its own equipment as well as equipment provided under the project, include the establishment of three nurseries of 1.5 ha each, clear felling of the natural forest followed by full destumping, harrowing and subsoil ripping to improve the water holding capacity of the  - 11 - soil. According to the plantation production program, one average ha of planted Gmelina would produce a mean annual increment (m.a.i.) of 9.6 m of wood (fuelwood and timber), which is in line with wood yields from existing plantations. Total production 3from the Bamako rainfed plantations would range from a total oi 90,000 m of wood for the 1981-85 period to a maximum of 180,000 m for the period 2001-05. 39. Natural Forest Management. Natural forest management would be undertaken near Bamako and Segou. It would consist of protective measures against encroachments and bushfires, intermediate and regeneration cuttings, complementary seeding, harrowing and weeding. Promising results have been obtained with these techniques in Nigeria, in areas of similar rainfall volum5 and intensity as3around Bamako, with sustained yields increasing from 0.5 m /ha/year to 1.0 m /ha/year; similar results could thus be reached around BamaLko. No experience exists yet in areas with lower rainfall, such as Segou, a,nd provisions are made for a careful follow up on the results 3of both trials. However, tentative estimates would give an m.a.i. of 0.7 m per ha around Segou. 40. Rainfed and Irrigated Plantation Trials. For the 60 ha pilot rainfed pleLntation near Segou, the same techniques would be used as described in para. 3E8. In view of the absence of planting experience and marginal rainfall conditions in this area, three different species would be tried: Gmelina Arborea, Eucalyptus Camaldulensis and Azadarichta Indica (Neem). Each species would occupy about 20 ha. if managed correctly, a tentative m.a.i. estimate could be between 3 and 4 m per ha. The 70 ha tree plantation trials near Mopti would draw upon previous experience in the inner Niger delta. In view of low rainfall locally, plantings would be irrigated during the first two years to enable tree roots to reach the groundwater table. Again, only tentative production estimates can be made, and the m.a.i. would vary between 6 and 15 m per ha. 41. Rural Forestry Nurseries. One existing rural forestry nursery (at San) would be rehabilitated and three new ones (at Bamako, Segou and Mopti) would be established together with the project plantation nurseries. Each would be designed for a capacity of 50,000 to 100,000 seedlings per year. A detailed survey would be undertaken on rural forestry possibilities (para. 42) and the results of this survey would be taken into account in project implementation. Field training would be provided for extension workers on rural afforestation techniques and possible approaches to encouraging the participation of rural people. 42. Studies and Surveys. The project includes three studies: (a) on better uses of wood through preservative treatment and the use of wood burning stoves and charcoal, and cost comparisons would be made between the various alternatives and present methods; (b) on rural forestry possibilities: a survey would be made in a number of villages on wood and wood product require- ments, and on the villagers' motivation to participate in projects that would  - 12 - satisfy such need; this studv would make proposals regarding practical actions to be taken to promote rural forestry schemes; and (c) a feasibility study would be made in 1983 tG examine the scope of a follow-up project from the data gathered by a OAPF monitoring and evaluation system which would be in- troduced under the project. It is expected that 12 man-months of consultant services at an average cost of US$8,900 per month including contingencies (of which salary and related benefits total US$6,300) would be needed to implement the above studies. Implementation 43. The project would be implemented by OAPF under the supervision of the Forestry Department, and the Director of OAPF would be Project Director (Section 3.01 and 4.05 of the Credit Agreement). Ten additional forestry engineers, graduates from the Katibougou Polytechnic Institute, would be recruited by OAPF, most of whom would fill the positions of field sector and subsector chiefs. Given the availability of Katibougou graduates in the country, no difficulties are foreseen for their recruitment. The pilot opera- tions at Segou and Mopti would be managed by OAPF field agents under the administrative supervision of the Forestry District Inspector of the Forestry Department at Segou and Mopti. The design and technical supervision of the pilot operations would however be carried out with the help of consultants (para. 46). Similarly, the rural forestry nurseries at Segou, San and Mopti would be managed by OAPF field agents and supervised by the Forestry District Inspector in these towns, while the nursery near Bamako would be fully under OAPF authority. 44. The Project Director would be responsible for introducing a project monitoring and reporting system with the assistance of consultants. Govern- ment would prepare a completion report promptly after the project completion date. Any organizational changes in OAPF during project implementation should be submitted to the Association for approval (Sections 3.04(b) and (c), and 4.06 of the Credit Agreement.) Expatriate Staff 45. A Financial Director for OAPF would be appointed to provide OAPF with financial management and accounting information and to strengthen the administration and finance division as well as provide in-service training to its members. Two mechanics would be employed to manage the central OAPF workshop at Bamako and two equipment maintenance units that would be estab- lished in the field. As persons with the desired qualifications for these three positions are not available in the country, they would be recruited internationally and serve over the full five years of the implementation period at a total cost, excluding contingencies, of US$9,500 per working month for the Financial Director (of which salary and related benefits are US$5,700) and US$7,700 for the mechanics (of which salary and related benefits are US$4,000).  - 13 - Consultant Services 46. In addition to the 12 man-months of consultant services needed to implement the studies indicated in para. 42, provisions have been. made under the project for 27 man-months of consultant services at an average cost of US$8,900 per month excluding contingencies to implement other components of the project (salary and related benefits are US$6,300). Of these 27 man- months, 12 man-months, ranging from two to four man-months per year over four years, are necessary to design and supervise the irrigated pilot plantation at Mopti; the supervision would include in the last project year (1984) an in-depth analysis of the results obtained. The remaining fifteen man-months have been retained (1) to monitor the tree plantation and natural forest management techniques that will be applied in the forest reserves close to Bamako and Segou; (2) to examine the feasibility of using different tree species for planting; and (3) to set up a monitoring and evaluation program and supervise its initial implementation by the field works division of OAPF. (Section 3.02 of the Credit Agreement.) Training 47. As specialized training in forestry techniques is already provided at Katibougou, and a Swiss aid project includes a large component for training forestry field agents at the Tabacoro Center, training under the proposed project would be limited to practical in-service training by the OAPF expa- triate staff in equipment maintenance and financial management, and by consultants in tree plantation techniques and natural forest management. Furthermore, US$57,000, excluding contingencies, has been included in the project to provide complementary training for OAPF key personnel. Cost Estimates 48. Total project costs over the five-year period are estimated at US$9.4 million net of taxes, of which the foreign exchange component would be US$6.4 million or 68 percent. Government has decided to waive any identi- fiable taxes and duties. Cost estimates are based on prices and quotes obtained during appraisal and include physical contingencies amounting to 10 percent of base cost estimates on all categories except personnel costs. Expected price increases which are being applied range from 6 percent to 7.5 percent p.a. per category over the project implementation period. Project costs are summarized in the Credit and Project Summary, page (ii) above. Financing. Plan 49. The proposed IDA credit of US$4.5 million would cover 48 percent of total project cost. FAC and CCCE have indicated their agreement l:o partici- pate in the financing of the proposed project. FAC would contribute US$1.3 million and CCCE US$1.4 million, while the Government of Mali would cover the remaining cost of US$2.2 million. Of this amount MF 180 million (US$0.4 mil- lion) would be directly appropriated from the national budget to pay the  - 14 - salaries of civil service staff seconded to OAPF and the remainder would come from revenue accruing to OAPF from wood sales, which derive from the clearing of forest areas in preparation of plantation establishment. OAPF would deposit all such revenues into a separate account. FAC would finance the salaries of expatriate personnel at no cost to Government. The CCCE loan, the terms of which are to be defined between Government and CCCE, and the IDA credit would be added by Government to the present OAPF capital. Fulfillment of conditions preceding initial disbursement of the CCCE loan and assignment of expatriate personnel for the first two years of project exe- cution by FAC, and the conclusion of a financial agreement satisfactory to the Association between Government and OAPF would be conditions of effectiveness. (Sections 4.04 and 6.01(b)-(d) of the Credit Agreement.) Establishment of a revolving fund 50. Expenditures to be financed in the first project year (1980) would total some MF 825 million (about US$1.9 million) including contingencies. Assuming a lag of four months between the time the expenditure is incurred and the time it is reimbursed, and taking into account that machinery and equipment will probably be financed by direct payments to the supplier or by letters of credit, the interim financing requirements would be MF 110 million (US$0.25 million). OAPF and Government would be unable to provide such timely advance financing. Therefore, the Association and CCCE will make a joint initial disbursement of US$0.25 million immediately after effectiveness of the respective credit and loan agreements into the special account. The opening of the special account would be a condition of effectiveness of the Credit. The advance would serve to set up a revolving fund which would finance project expenditures and would be replenished upon satisfactory evidence that such expenditures were eligible for financing out of the pro- ceeds of the credit. The respective contributions of IDA and CCCE to the revolving fund would be 70 percent and 30 percent. (Sections 2.02(b) and (c), and 6.01(a) of the Credit Agreement.) Accounts and Audit 51. Although OAPF keeps its regular revenue and expenditure accounts up to date, management has little knowledge of its financial position through the year. To remedy the situation, FAC has agreed to a request from OAPF to send two financial assistance missions which would help (1) to review OAPF's accounting system; (2) to prepare a balance sheet and profit and loss state- ment for the agency as of December 31, 1978; and (3) to prepare a budget for the agency for 1979. It would be a condition of effectiveness of the proposed credit that the final report is satisfactory to the Association, and that it has been approved by the Board of OAPF. OAPF would maintain separate project accounts; project accounts as well as the accounts of OAPF as a whole would be audited annually by independent auditors acceptable to the Association; and the audited statements would be submitted to the Association within six months after the end of the financial year. The employment of independent auditors would be financed out of the proceeds of the IDA Credit. (Sections 4.01, 4.02(a) and (b), 6.01(e) of the Credit Agreement).  - 15 - 52. Contracts for machinery and vehicles (US$1.6 million excluding contingencies), to be financed jointly by the Association and CCCE would be awarded oni the basis of international competitive bidding in accordance with the AssociLation guidelines. Domestically manufactured goods would be allowed a preference of 15 percent or the level of import duties, whichevetr is lower. Contracts for the construction of houses, offices and workshops (ULS$0.6 million exccluding contingencies) would not be attractive to interrLational contractors, and would be awarded on the basis of competitive bidding adver- tised locially in accordance with local procedures acceptable to the Associa- tion. For contracts of less than US$20,000, local shopping on the basis of several quotations would be acceptable. Disbursements 53. The IDA credit would be disbursed during 1980-1984 as follows: (a) 60 percent of total costs of plantation establishment, forest management and rural nurseries (US$3.0 million); (b) 100 percent of total costs of consultant services, expert services (except salaries), audits andl training (US$0.8 million); and (c) an initial disbursement of US$0.2 million and an unallocatied sum of US$0.5 million. Benefits and Risks 54. Applications for credit withdrawal would be fully documented for vehicles and equipment as well as for expatriate staff, consultants and training, and certificates of expenditures would be required for other expendi- tures related to plantation establishment, forest management and rural nur- series. In the latter case, accounts would be kept and controlled by the Financial Director who would retain documentation supporting these certificates of expenditure for inspection by supervision missions and externa:L audits. 55. The project would generate direct benefits through increased planta- tion wood production. It would also lay the groundwork for future investment decisions in the forestry sector as it would: (1) provide information on sus- tained wood yields and introducing irrigation trials as a means to accelerate tree growth in dryer areas; (2) provide tree plants to villagers and carry out studies that should lead to appropriate actions in the rural forestry field; and (3) introduce natural forest management techniques which if applied successfully would increase wood yields from the natural forest and, at the same time, provide much needed revenue for the Forestry Department. 56. The impact of the project on the environment would be substantial. It is expected that fuelwood production from the 3,400 ha of Bamako rainfed * tree plantations would be sufficient to forego the cutting of some 10,000 ha of bush fallow at the beginning of production to some 30,000 ha in later years. This would (a) help to prevent soil erosion and (b) lengtlhen the time that land would remain under bush fallow, thus increasing fertility regenera- tion. Under the traditional shifting cutlivation system still common in Mali, which depends heavily on natural fertility generation through long fallow period rather than fertilizer applications, longer bush fallows represent an important benefit to farmers.  - 16 - 57. The estimated economic rate of return of the Bamako rainfed tree plantation component (85 percent of total project costs) is 11 percent including benefits due to longer bush fallow periods and 9 percent excluding these benefits. Calculations were made only on this component in view of the experimental nature of the other project components. The figure does not, however, fully reflect the project's importance to Mali's forestry sector; it excludes value to be derived from the trials and experiments; it does not reflect the strengthening of OAPF through better financial management and increased revenues; nor does it account fully for the environmental impact the project would have, notably the prevention of soil erosion which in the area around Bamako is shown to have strong desertification effects. 58. There are no known exceptional technical risks for the Bamako plantations component as the Gmelina species has proved itself to be well adapted to local conditions and to give satisfactory yields. The results of the pilot plantations are uncertain, given their experimental nature. PART V - LEGAL INSTRUMENTS AND AUTHORITY 59. The draft Development Credit Agreement between the Republic of Mali and the Association and the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Associa- tion are being distributed to the Executive Directors separately. 60. Special conditions of the project are listed in Section III of Annex III. Conditions of effectiveness are: (a) the opening of a special account (Section 6.01(a) of the Credit Agreement and para. 50 above); (b) fulfillment of conditions preceding disbursement of the CCCE loan and assignment of expatriate personnel for the first two years of the project by FAC, and signing of the financing agreement between OAPF and Government (Section 6.01(b), (c) and (d) of the Credit Agreement and para. 49 above); and (c) a report, satisfactory to the Association, on the financial position of OAPF as at December 31, 1978, has been approved by the Board of Directors of OAPF (Section 6.01 (e) of the Credit Agreement and para. 51 above). 61. I am satisfied that the proposed Development Credit would comply with the Articles of Agreement of the Association.  - 17 - PART VI - RECOMMENDATION 62. I recommend that the Executive Directors approve the proposed Development Credit. Robert S. McNamara President February 13, 1979   ANNEX I Page I TABLE 3A MALI. . - SOCIAL INDICATORS DATA SHEET LAND,AREA.tTHOU KM2) MALI REFERENCE COUNTFIES (19701 TOTAL 1240.0 MOST RECENT CENTRAL AnRICAN AGRIC. 417.2 #6 . . . 1C70 ESTIMATE. NIGER SENEGAL** GNP.PER CAPITA (USS) 40.0* 70.0* 100.0* 100.0* 170.0* 270.0* POPULATION AND VITAL STATISTICS _____________________________,_ POPULATION (MID-YR. MILION) 4.1 5.0 5.8 4.0 1.6 4.4 POPULATION DENSITY PER SOUARE KM. 3.0 4.0 5.0 3.0 3.0 22.0 PER SO. KM. AGRICULTURAL LAND 11.0 12.0 14.0 22.0 27.0 55.0 VITAL STATISTICS CRUDE BIRTH RATE (/THOU. AV) 50.1 49.8 50.1 52.3 45.4 47.6 CRUDE OEATH RATE (/THOU.AV) 32.4 27.8 25.9 25.7 26.4 24.4 INFANT MORTALITY RATE (/THOU). 123.0 120.0 *- - LIFE EXPECTANCY AT BIRTH tYRS) 34.7. 37.2 38.1 38.5 39.0 40.0 GROSS REPRODUCTION RATE 3.8 3.3 3.3 3.5 2.9 3.0 POPULATION GROWTH RATE (%I TOTAL 1.9 2.2 2.5 2.8 2.2 2.6 URBAN 2.B 4.3 4.5 6.3 7.2 6.0 URBAN POPULATION (t Of TOTAL) 9.9 12.1 13.4 8.2 30.1 29.0 AGE. STRUCTURE (PERCENT) 0 TO 14 YEARS 42.2 49.1 .. 4q.5 42.1 41.2 15 TO f4 YEARS 54.5 49.3 *- 52.6 54.8 54.9 65 YEARS AND OVER 3.3 1.6 .. 2.9 3.1 3.9 AGE DEPFNOENCY RATIO 0 8 .0 .. 0.9 0.8 0.8 ECONOMIC DEPENDENCY RATIO O.B/* 0.9/a *- 1.0/a 0,9/a 1.2/a FAMILY PLANNING ACCEPTORS (CUMULATIVE. THOU) .. .. .. .. USERS (X OF MARRIED WOMEN} .. . .. ... EMPLOYMENT TOTAL LABOR FORCE (THOUSANOi 2300.0 2900.0 3200.0 1900.0 820.0 1600.0 LABOR FORCE IN AGRICULTURE EX 94.0 91.0 88.7 91 .0 91.0 73.0 UNEMPLOYED (K OF LABOR FORCE) .. .. . .. .. 7.0 INCOME. DISTRIBUTION K OF PRIVATE INCOME REC O BY- HIGHEST 5X OF HOUSEHOLDS .. .. .. HIGHEST 20X OF HOUSEHOLDS .. .. .. LOWEST 20X OF HOUSEHOLDS .. .. .. LOWEST 40S OF HOUSEHOLDS .. .. .. DISTIIBUTION Or LAND OWNERSMIP 'A OWNED BY TOP 10X OF.OWNERS .. .. .. - OWNEO BY SMALLEST 10% OWNERS .. .. .. .. MEALTH.AND. NUTRITION _____________________ POPULATION PER PHYSICIAN 3 9,0@000 41490 0 37670 0/a 58200.0 38330.0 6640.0 POPULATION FER NURSING PERSON 4658.0 7Jy3660.0 2Eoo.o/i. 7D40.0 1280.0 2610.0/b POPULATION PER HOSPITAL BEO 1490.0 i 1390.0/b 1380.0 2230.0 460.0 810.0/C PER CAPITA SUPPLY OF - CALORIES (% OF REGUIREMENTS) 90.0 88.0 75.0 83.0 96.0 91.0 PROTEIN (GkAMS PER DAY) 66.0 69.0 64.0 7z!.0 48.0 64.0 -OF WHICH ANIMAL ANO PULSE .. 23.0/C *- 24.0/b 22.0 28.0/d DEATH RATE (/THOU) AGES 1-4 .. .. .. .. EDUCATION ADUUSTED ENROLLMENT RATIO PRIMARY SCHOOL 7,0 20.0 22.0 14.0 69.0 43.0 SECONDARY SCHOOL 2.0 3.0 3.0 1.0 5.0 10.0 YEARS OF SCHOOLING PROVIDED CFIRST AND SECOND LEVELl 12.0 12.0 12.0 13.0 10r12 13.0 VOCATIONAL ENROLLMENT (K OF SECONDARY) 15.0/6 40.0 25.0 3.0 12.0 9.0 ADULT LITERACY RATE (K) 5.0 .. 10.0 . 10.0 HOUSING PERSONS PER FIOOM (URBAN) .. .. .. .. OCCUPIED DWELLINGS WITHOUT PIPED WATEFI (X .. . .f..... ACCESS TO ELECTRICITY. (t OF ALL DWELLINGS) .. .. .. .. RURAL DWELLINGS CONNECTED TO ELECTRICITY (K) . .. .. .. CONSUMPTION RADIO RECEIVERS (PER THOU POP) 2.0 12.0 13.0 36.0 30.0 69.0 PASSENGER CARS (PER THOU POP) 2.0 2.3 3.0 1.0 4.0 9.0 ELECTRICITY IKWH/YR PER CAP) 4.0 11.0 17.0 10.0 29.0 73.0 NEWSPRINT (HG/YR PER CAP) . 0.02 .. . 0.1 -e .1- ..CM-?mTTTnwc MN- QEUCrC  A~NNEX I Page. NOTES (mIre otter-vote not d. dat for 1960 refer to any year hcree 1956 and I9NI for ;470 -etee !96b and 11.and for Moat Recan.t Ete -tat between GPper -apita data ar bsc nn World Bac Atla -thnrbdologY (l9Tu-76 hash~: 5enegl h., beer nelented as aobjeclinecorr e;nre ite 711P per capita (1970~ to abou th-re tlaa that of Mail, sntt ing en abhtloo. hot noat nrai tbi argt. Both ..nounorbo lie to the SehoLo- oono. Senegal being Kalias -c-rr -ighbor. bee itnilar produr tlon patterns, with ground- u-to placing rajc .-l; o-d atalar a. --ray -a-raoge...- with F-one. Their population are roughly copara.ble. 71011 1~~~~~~~960 is RatIo of population order 15 arid 65 and -cer to total labor farte; /b 1962; /n Gouernment p.reoneel. Ionluoiog aidei-n ad ..e.noa- euna /d Co-r-ao- hoapital eetahlfeh-ete onlyl /. Not including pri-va-te . coatc -rhoola. 1970 Re tair of ppalatioc aode- 11 aad 65 end ...er to itona labor fcre lb Goneritet haspita1 .tatblihebmeta; It lbbO66. MCST ~RECENT E STIMOT~TE. : ai9A,2 / 1972, govera-o o.ly. ilnold-g aael fet-t rce 011 R 19710 ,. Rati.oif population under 15 and 65 and ovr tc total labor force; hb 1964-66. CENTRAL AIRMANl ~EWGSRE 1970 I.Ratio of population nader 1.5 and h5 and over to total labor force; /b Including nidiwive end aaaletaet SENEGAoL 1970 I Ratio of population under 15 and 65 and over to total labor farce; lb Iacloding ansiatant Berate; /c Oornoent boapital eet.bliabmenme only; /d 1M64-hb. B7, March 24. 1978 DezrTNITISOeS Or SOCiAL. INDICATOSS area rbao moc~~~~~} Potularfor er~~~~r n-iran prera - Popo,lation divided by ocebar of practicing Tcal - fc -u ae canpniofog lavA area and tnland nenra.taeand f-Irae greduarrnur-e, trai-ad or oartIifd" naree.., and M.nc .ce -eior e-tIto re vgrino lu-ra are. uad romporarily or patin- a-iIiar p.rrenee aith ..raining cepr . m.ie.- Ye-c . ron,paooe, ca.e 0 kiroher gardenc or on lie falln PapaBanter rpt homital bed - Population Atided by eaber of he.plral bode araib~lei In pubic and privat cea-r -I andcptiOe-d beapiral and oby er ait 5'- SP per5 cayF te,i ...a.e a, c.r-re. tacker pricer cehaIlntn nenter ranldee earaing home and eatabliaNmor for calulte ivsae oonreornehod oe rd Boo n'ilee 19 73-75 hanLe); ;caoi adpeetv ae 196O; 19(7 cod 19'5 data. Per can'~. auvlo fC lre of ofrCtann 7-tapored Pets. enrgy fuca< rd viral orarinrin avial!uptet:piedeetnpoara,, eat naeporra , and Pooclactoc ntl .crar -Ither) oa f (olyfit ifont -nmifaie -.roraf ebanees in 00k: err euppli ore amlde ria fendi, eneda, iaatirima-d of cedyaeraea;1 60, 1970T and1979 dat. in food pronaea lag mod I-a.. in dietribotion; reqatrnnte -er eati-tead by FAE beard -n phycialogi-aI nmade Pa an moiiyad haslth cereld- yaoaicdar Ic rraoreh Mi-parppaatrrpe qaae iRmte rtng evrc ta taparatare, body eigbta, age end ma ditrrIhatnn_ o 710heire of total area pa polate a,nd aelar ltfar -.mta at haoaabhold leve. Porulation Aenetty-para Iuar onf aeri c. land - Canputed aa bhav for Per _arita eu",J, of proar Cera-e ear dvyj - orrlr arnt atf pee na pita agriat.eal laInd onl. nerr mopply of fcood par day; Mat eupply of faod d.f de-nd ae above; ro mnra" for all ooiatries eatabliabmd by USDA tE.-cra Ra.Mearb Barelne, Vital enatiation Provide fec a ati.ia ai11nenc of 60 gre.s of ntal1 protein par day, end tC-de birth rate oar rhoeand, neee-annual liva birt1b pee thoomard of 20 grina of animal and paler protein, of biohb 10 - geeshouald be animal aId-year popultion, ten-pear arltfale.. avrage:. mdlg int 1860 med 1970, proei; theae . dardeed are l r than thoa of 75 gene ef total protain ard lic-p ear, a-rage endirg in 197 fr ee recent neiae.ad23gn of aimal pro tein ac an average far tine nenld, propesed by PA5 tradedearh rat e re thouaend. aoraae-tnnoa I..deab pa t -amd of aId-yer In rh. Third Warld Food Survy. populatIon; teo-yrarertntiiaeagmenigin lNh and 19P an .d five- Pe miaretl anr rnaia an.d role. - Pretein eapply of food ye r9aeeeedn o MSfrnmtenntansae derive fr-nanm an an uaai eepar day. Infant)araI ae(rol- Onn-l deetbe of iofants under on year of age Datb rate 5oh-up ,acm 1-b - onnual deatha par tbocsand in age greap 1-4 par thauannd Icebith.. yaars, to childre. n lehn. aga groupl eaggacred as an indinanar at Life enp-otancy at birth Imp.) - Overage euber of yace. of lif. ei mciring ct_ na1ntrition. birth;.- uaIpy fine-year -oragea ending in INMS, 1970 and 1975 for devaop log Eceai. du-tion Gr...erpnradonri-ren -oAorege amber of live d.ughtere me. er . tr.ill bear Adjusted enomn ed nmr acnlt -trmeto l ga_.pr in her ranel reproducoine period if h. cprenc pree.e rt age-aprofir ,nenag f rnayeno-g poprolti; iorlodee othidrac gd -l,nr fetl r rene; oally five-ea avragam coding in 1960, 1970 and 1975 hoc ' ad td for diffeen l-athe ofpr ry education; fo nntri oath for denelpiog oruntria.. oorad I . odeioo, enrollmet nay enceed 1100% .inea en pupils are bel1n Pouoto r_ter rae (0 ) - rota1 - Canpomnd annual gronth ratoa of old-year or above the orfioa1 echeo1 age. populaton for 950-OS,1900-7OS end 1912,75. Adjoand enrollmn rai endeeabe Canpuredam above aaaar Pvlrngrowth rate It) - ochan - Caputod hits growth rate of iaL.1I eoatn reqoiraa ea er er of ap,roved renepiarrcin po.palanlo.n; different defi.Litian of orb. en rea ma yffeoc canparability of providea gene.ral, coranioi or, teaher training inatr-ctlons, for pupile Ann eeo noaric.- of 12ft. 17 years of ago; .ror perad-c r--ce era generliy a-ludad. Urban poruIntion-(0 of total) - Ratio at arhac to total papilacion; differen-eaao enheolbn reid.d (firat and ma.nnd leone.) - Total year. of definitieans of urban areaa may affetr oap.paebiliry of data anong iountriae. Yerheoligorerdrylv,vutenlntnainmy aptaly r nanpILeey a.nilded. Oa orntr -Ietet~ -nthl1deen (0-14 yearn), wokn-g 15-64 yearn), coatnlrrlirt (71 of -onodary) - tooioa- iaiution nc ada and ret fred (61 year.and ovr ap onae fnd-yea oooin te.nhica I,inutr or other pregra7 hbich operarn ldependelyena oar Aeendoonv re On - lae of poplation nder 15 and h65ead oneenor h..n depart-o- of enond-ry meitor ena of agra 15 throogh hO. Ado,lf itero- rte (0.) -Lire-aneedu1ta (able ro road and writ.) a. pa- Econoic eeodnnr ri-tatli of popalIrton under 15 end 65 r,d over to etge of total adult population aged 15 yearn and over. hrh labor force in age grop of 15-ba ye-r Fondly cianoioo-accee1rore nmeolrlor.1P yrouth-" Cuouari- ounr of ain-prore TH..iotg ofhrhnotra dei aesode aoo pie f oatmal fanilo planrn program Pe1-rsoaprrv (urban) - A-erge cante of porcona per roa in oncapiad ainre inoeprion. co~~~~~~~~~~~~-1nverria_a d-ani nge in urban are.;. do11ngloae lo.de -on-pasann Fantli pl-anineoan(.ofaridwnel-P orcgco rid om o to ui nduncpid ar. thSld-earlv age 15-44 ear.)abc bi hir-crro droir oalarid Onn..e doeldidan withutnedeae Oc) - P pied -omomtion.al dwlllge ten Inmn ageroup. in orb-c end rura areae irhour -inede or -.raid. piprd astr facilitiea MPorI vo-t Anea 1t-eetricion (0 of all dteiite - Can-etiana1 dn.lling with Total laborfot (thocoand) Et- R aina11y ateprov,icuIgarmed elirnitity in Ilieig quartera am p.arne of taral derelling inoban and Pce end neplaynd hut a1nldiog hon loa ardnte e dr f de itiane r raaen :cnrceootria1 are ret comparable. ORa-I derllina-t cnnected to .1ntreittry (0) - Cap~turd aabove fan -one L.h.ab fort incio m 07-ortoltoral leber forte inefring, (cerr. dnefling only. hutlgadfibn)a protagn of 1tona iabor rotor Soelnd(7 of abofoce U- Snp Zyd.f, -reoeollcd deind nopron b onnuortic are able end rilliog C. take o,nt fa(ho a glcetJ" n1 day, -l, pnie ou RadIo re-J.c. (err thou roe) - "ll togeofrrevr f orrdobroadomace aS e 0, ...an king work Our a epaniPied tlnbno period nor e.. do. atc enrlpbli e th.u..nd of poplno;eoae alone n vr meek; ay norbe nunara te betwen coutriredoe to differner defivirtine tno tihai-r er ebnrglra o o.ai rata in affet; of uomy ove an narte f dre. .g. orplono otie t,taia. aol dat for rneo yer. -ay nor he nanpareblaon at ear onotriam abo1iabed P hnenoe iar (pr-o nl-Peagecre -price motor raremarn arcnedinrbuio- yrr...a.. orlnat :intan )bocb ic. .a. mod kiod lor lhnedgh peeoa ;rocud. anbaar,bae.od ailitecy - ofd on clihin 50. rihe 70.pori 00,alp-cr- (-% of h-no- heicl-n moo p-or-ce 7 ITTf laod onr.log for nport. aodeo.pert ocicriiy. Newarrant ku/yr pe.r.car) - Perc pit nu , anaipcon Ln kblagreas H-al* and -rir _o aintdfran danera production plua ne import. of naceprir.t Peua "o a pryalia - PoPolerion dicided by rin-len of prac1ticin pbyeiria- qua1ifiad fran a nedina1 anhool at -t-nnfY level.  ANNEX I Page 3 of 4 pages ECONOMIC INDICATORS GROr S DOMESTIC PRODUCT IN 1976 ANNUAL RATE OF GROWTH (%, constant prices) us$ Mn. % 1969-76 19 76 GDP at Market Prices a/ 602.5 100.0 4.3 4.8 Gross Domestic Investment a/ 111.7 18.5 4.9 7.0 rGross Domestic Saving a/ 46.4 7.7 b/ . b/ Current Account Balance -80.6 -13.9 Exports of Goods, NFS c/ 121.6 20.2 19.0 d/ 46.4 d/ Imports of Goods, NFS c/ 219.1 31.0 15.1 L/ -2.4 d/ OUTPUT LABOR FORCE AND PRODUCTIVITY IN 1975 Value Added e! USt Mm. %m- Agriculture 230.8 38.3 Industry and Construction 99.8 16.6 Services 272.0 45.1 Unallocated - - 602.6 100.0 OVERNMENT FINANCE General Government (Billion MF) % of GDP 1975 1976 1973-75 Current Receipts 36.7 12.7 11.7 Current Expenditure 44.5 15.5 15.6 Current Surplus -7 - 2.7 - 3.9 Capital Expenditure f/ 2.3 0.7 t .4 Ixternal Assistance g/ 6.2 2.2 3.8 MONEY, CREDIT ANE PRICES 1971 1972 1973 1974 1975 1976 1977 h/ (Billions of Mali Francs) Money and Quasi Money 31.2 35.0 39.1 57.7 68.3 78.8 93.5 Credit to Government 40.8 41.1 43.1 46.o 45.2 45.5 4b.3 Credit to Economy 27.7 34.1 43.3 69.7 102.2 122.6 123.1 Credit to State Enterprises 18.1 20.6 28.4 46.6 68.7 86.0 73.1 Money and Quasi Money as % of GDP 18.7 19.8 21.4 29.5 26.4 27.4 n.a. Annual percentage changes: GDP deflator 5.1 1.4 5.8 6.2 17.6 6.1 n.a. Credit to Government 0.7 0.7 4.9 6.7 -1.7 0.1 1.8 Credit to Economy 18.4 23.1 27.0 61.0 46.6 20.0 0.0 of which: Credit to State Enterprises 20.7 13.8 37.9 64.1 47.4 25.2 -115.0 NOTE:All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ Total labcr force; unemployed are allocated to sector of their normal occupation. "Unallocated" consists mainly of unemployed workers seekingtheir first job. . not applicable a/ Staff estimates for 1973, 1974, 1975 and 1976. b/ Trend growth rate is not significant; domestic savings were negative in 1973, 1974 and 197'. c/ Includes estimates of unrecorded trade. d/ At current prices. S:' Staff estimates. f/ Excluding capital expenditures financed out of foreign aid which do not figure in the budget. F/ 7Wyeit-rnal official hudret grants. h/ Estimates. June 30, 1978  ANNEX I Page 4 of 4 pages TRADE PAYMENTS AND CAPITAL FLOWS BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1972-76) 1972 1973 1974 1975 1976 US$ Mln. % TU7S$ million) Merchandise Exports FOB 2/ 45.0 52.3 64.0 71.9 94.4 Cotton 30.3 37.4 Import of Goods FOB 63.4 106.2 129.1 131.3 111.3 Live Animals 14.3 17.7 Net Imports NFS 21.2 27.8 79-0 84.4 63.0 Groundnuts and Products 12.1 14.9 Merchandise Imports c.i.f. 78.5 126.4 179.0 175.9 154.2 Fish (dried and smoked) 2.0 2,5 Food 22.6 65.6 101.7 44.1 25.1 All other Goods 2.3 ?7_5 (Cereals) ( 6.5) (36.8) (72.8) (14.0) ( .. ) Total Recorded Exports 81.0 100.0 Petroleum Products 8.1 11.0 15.8 23.3 22.0 Unrecorded Exports 3/ 18.9 Other Merchandise 47.8 49.8 61.5 1o8.5 107.1 Resource Gap 9/ -28.2 -70.3 -129.7 -113.6 - 65.3 Total Merchandise Exports 89.9 Invest-ent Income Payments (net) -5.4 -7.6 _8.5 -21.7 -16,5 EXTERNAL DEBT. DECEMBER 31, 197 5 Net Private Transfers 6/ 11.3 7.6 10.0 19.6 15.9 Net Official Transfers 21.0 48.7 100.2 82.1 35.8 US$ Mln. Official Capital (net) 12.1 11.0 16.6 22.2 36.4 SDR Allocation 2.6 - - - - Public Debt, Disbursed and Outstanding 327.0 Use of IMF Oil Facility - - 4.6 1.2 4.8 Public Debt, Undisbursed 144 o Errors and Ommissions (net) -5.6 8.5 o.4 -3.7 - Total Public Debt Outstanding 4/ 471-0 Change in Reser es (increase -) 5.2 23.3 30.1 60.7 33.1 5/ Net Negative Reserves (end of DEBT SERVICE RATIO FOR 1975 period) 7/ -7