Togo - Second Technical Assistance Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-3345-TO REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF TOGO FOR A SECOND TECHNICAL ASSISTANCE PROJECT May 28, 1982 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 - CFA franc (CFAF) US$1.00 CFAF 300 CFAF 1 million - US$3,333 SYSTEM OF WEIGHTS AND MEASURES: METRIC Metric US Equivalents 1 meter (m) - 3,28 feet (ft) 1 square meter (m2) - 10.76 square feet (sq ft) 1 cubic meter (m3) - 35.30 cubic feet (cu ft) 1 kilometer (km) - 0.62 mile (mi) 1 square kilometer (km2) - 0.39 square miles (sq mi) 1 hectare (ha) - 2.47 acres 1 metric ton (t) - 2.205 pounds (b) ABBREVIATIONS AN'D ACRONYMS CCCE - Caisse Centrale de Cooperation Econo17 ique EDF - European Development Fund FAC - Fonds d'Aide et de Cooperation FAO - Food and Agriculture Organization GTZ - Deutsche Gesellschaft for Technische Zusammenarbeit IFAD - International Fund for Agritultural Development IMF - International Monetary Fund KfW - Kreditanstalt fur Wiederaufbau UNDP - United Nations Development Program FISCAL YEAR January 1 - December 31 FOR OFFICIAL USE ONLY REPUBLIC OF TOGO SECOND TECHNICAL ASSISTANCE PROJECT Credit and Project Summary Borrower: The Republic of Togo Amount: SDR3.1 million (US$3.5 million equivalent) Terms: Standard Project Description: The proposed project aims to further the technical assistance effort begun under the First Project by providing assistance in key ministries. The project would provide for: a) a Senior Economic Adviser for three years, to replace the present incumbent financed under the First Project, and an investment programmer for two years in the Ministry of Plan; b) creation of a planning unit and an applied research coor- dination unit in the Ministry of Rural Development with the assistance of a planning expert for 24 months, a research coordinator for 18 months, and additional con- sultants for a total of 18 months; c) experts to introduce program-contracts and analytical accounting in the Ministry of Industry and State Enter- prises for a total of 22 months, as well as an expert for a total of 14 months to define performance criteria and to guide analytical studies; d) additional consultants' funds (US$1.1 million equivalent) for various studies connected with the implementation of economic adjustment and financial stabilization measures; and e) fellowships and salary supplements for counterpart and support staff; training of counterparts; office equipment and supplies; and vehicles. . Benefits and Risks: Benefits would accrue to Togo over many years as the advice and training provided under the second project extend and expand the technical assistance provided by the first project, and lead to an increased Government capacity to conceive and implement sound, comprehensive, and consistent macro-economic policies, and to pursue adjustment policies in crucial areas such as rural development, state enterprises, and public investment programming. The main risks of the project derive from the difficulties in finding expatriate personnel who are both highly qualified and sufficiently adaptable to gain and This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - 11 - retain the confidence of the Government, without which the effectiveness of the resident experts would be greatly reduced. The Government's awareness of the need for technical assistance and the need for economic adjustment and financial stabiliza- tion measures is reflected in its support for the first project and in its firm commitment to the program supported by the proposed second project. Estimated Cost (exclusive of taxes, from ------------US$ million----------- which the project is exempt) Local Foreign Total Long-term advisers in Ministry of Plan 0.230 0.466 0.696 Assistance to Ministry of Rural Development 0.258 0.523 0.781 Planning Unit (0.160) (0.326) (0.486) Research Coordination Unit (0.098) (0.197) (0.295) Assistance to Ministry of Industry and State Enterprises 0.143 0.289 0.432 Short-term Consultants 0.163 0.925 1.088 Junior Economists, Secretaries, and other Support Services 0.300 - 0.300 Contingencies 0.167 0.336 0.503 Total 1.261 2.539 3.800 Financing Plan ------------US$ million------------ Local Foreign Total IDA 0.961 2.539 3.500 Government 0.300 - 0.300 Total 1.261 2.539 3.800 Estimated Disbursements --------------US$ million------------- FY83 FY84 FY85 FY86 Annual 1.200 1.200 0.900 0.200 Cumulative 1.200 2.400 3.300 3.500 Estimated Completion Date: December 1985 Staff Appraisal Report: There is no separate appraisal report. Map: IBRD 13601R INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF TOGO FOR A SECOND TECHNICAL ASSISTANCE PROJECT 1. I submit the following report and recommendation on a proposed Development Credit to the Republic of Togo for SDR 3.1 million (US$3.5 million equivalent on standard IDA terms to help finance a Second Technical Assistance project. PART I - THE ECONOMY 2. An economic report entitled "Togo: Country Economic Memorandum" (3416-TO) was circulated to the Executive Directors in January 1982. Its assessment of the country's economic prospects, updated by recent Bank mis- sions, is reflected in the following paragraphs. Annex I contains basic economic data and selected social indicators. Introduction 3. Togo is a small country (56,000 km2) with a population of about 2.5 million and a per capita GNP of US$363 (1980). Phosphate mining has been the principal source of foreign exchange earnings, accounting for nearly 40 percent of export revenues in 1979/80, and receipts from phosphates represent about 30 percent of Government revenues. Political stability has prevailed since 1967, when a military Government came to power. General Eyadema remains President, but the Government has gradually become entirely civilian. Togo's external policy, in the spirit of the Lome I and II Conventions, favors regional and international cooperation. Economic Performance 4. Slow growth and increasing financial disequilibria are the main features of the Togolese economy since the late 1970s. The slow growth represents a deceleration from historical growth-trends, and is the result of poor performance by many state enterprises and a persistent stagnation or decline in the production of export crops. The 1974/75 boom in world phos- phate prices contributed to a substantial increase in export earnings and Government revenues, and prompted the Government to adopt an ambitious Devel- opment Plan for 1976-80. 5. Growth in real GDP averaged less than 3 percent-per annum during the 1975-80 period, and was negative in 1981. Gross domestic expenditures outpaced production, with the result that the resource gap widened signifi- cantly through 1978. Due to the rapid increase in public investment, gross domestic investment rose sharply to exceed 50 percent of GDP in 1978, but declined to an estimated 18 percent in 1981, as growing fiscal constraints necessitated a cutback. - 2 - 6. The primary sector accounts for about 30 percent of GDP, but employs 80 percent of the labor force. Growth has been limited by inadequate invest- ment, insufficient price incentives, and occasional droughts. Despite slow growth and reliance primarily on traditional production techniques, Togo is still largely self-sufficient in food crops, except during serious droughts. Nevertheless, food crop yields are low, and there is considerable scope for growth. The use of fertilizer, insecticides, and improved seeds is negligi- ble, and extension services are generally ineffective. Both producer and consumer prices of food crops fluctuate dramatically annually, in response to climatic conditions, and seasonally because of limited storage facilities. Coffee, cocoa, and cotton are the major cash crops. Cotton is grown in rotation with food crops. Producer prices are still not overly remunerative and the declining yields of aging trees have led to decreases in coffee and cocoa production. Replanting programs should, however, soon begin to have an effect on output. The producer price for cotton is comparatively low, but production is encouraged by the subsidization of fertilizers, although the subsidy was reduced by half for the 1981/82 growing season. 7. The secondary sector accounts for about 20 percent of GDP, with most industrial development conducted by state enterprises. The recent growth in this sector is attributable to phosphate rock production, which has, how- ever, experienced dramatic swings as a result of the 1974 price increase, a price decrease in 1975/1976, another increase in 1980, and the shifts in demand which accompanied these price changes. Massive investments in indus- trial projects following the 1974/75 boom in phosphate prices have failed to contribute to an increase in GDP, because of the low or occasionally negative value added realized by several of the new industrial units. Construction went through boom and bust as output doubled between 1975 and 1978, because of greatly stepped up investment, and subsequently declined to the 1975 volume. From a peak of 10,000 in 1978, employment in construction was cut to 4,000 in 1980. The capital-intensive nature of recent investments led to an increase in demand for energy, most of which has been met through imports of petroleum products and electricity. 8. The tertiary sector accounts for about 50 percent of GDP. Togo has traditionally served as a regional trading center with an open-door policy. Private investors have tended to favor commerce, real estate and financial services over industrial ventures. During the 1975-80 period, financial services expanded rapidly, whereas activity in private commerce and transport grew more in line with the rest of the economy. A rapid increase in public services led to a growth in government employment from 22,500 in 1975 to 37,500 in 1978; however, financial problems necessitated restraint from 1979 on. Public Finance 9. In 1975, current revenues of the Government nearly doubled to CFAF 33 billion as revenue from phosphates tripled from CFAF 4 to 12 billion. In 1976, the first year of the third Five-Year Plan, the Government embarked,upon - 3 - its expansionary program just when the phosphate market weakened. However, while phosphate prices fell, demand and output rose, and -- supplemented by higher import duty receipts -- current revenue continued to rise. Although current expenditure also increased rapidly, mainly due to a rising wage bill, a sizeable surplus was left to finance both investment and debt service until 1978 when debt service obligations increased sharply. 10. Public investment (in current prices) of the Administration, state enterprises and agencies increased from CFAF 30 billion in 1975 to CFAF 88 billion in 1978, and continued at the still high but reduced rate of about CFAF 67 billion in 1980, as disbursements were made on projects being implemented. In part because of the heavy reliance on foreign financing, which was often project-tied, the investments undertaken differed greatly from those foreseen in the 1976-80, Development Plan. Compared to previous plans, the Plan had placed more emphasis on rural development. However, during implementation major shortfalls were experienced for this category, while more expenditures than planned were devoted to infrastructure, tourism and industry. 11. Many state enterprises were unable to pay the debt service on their foreign borrowings, and the Treasury had to shoulder the responsibility. Arrears began to accumulate as payments lagged. In 1979, Togo agreed with the IMF on a financial program, and rescheduled its debt through the Paris Club for 1979/80. Even after debt rescheduling, 15 percent of current revenues had to be allocated to debt service in 1980. Without debt rescheduling, the ratio would have been over 50 percent in 1981. Therefore, a second round of debt rescheduling (for 1981/82) and a second standby arrangement with the IMF were sought and obtained in early 1981, leading to a ratio of debt service to current revenues of about 35 percent in 1981. 12. A decline in Government revenues in 1981, caused in part by a drop in the volume of phosphate exports, led to an accumulation of Treasury payment arrears as a sizeable portion of the rescheduled debt service obligations was not met. The financial program with the IMF was abandoned. A new program has yet to be negotiated, and the debt rescheduling for 1982 through the Paris Club is in the meantime left in abeyance. The Government is currently trying to meet the pre-conditions laid down by the IMF, especially regarding debt payments and arrears. 13. The Government has taken several steps to ease these severe fis- cal constraints. On the one hand, tax and customs reforms have been adopted to increase Government revenue, and the rates charged by some public utilities have been raised. On the other hand, the growth in Government expenditures has been limited by constraints on civil service hiring and salary increases, and a reduction in extrabudgetary expenditures. In addition, public invest- ments were reduced to about CFAF 35 billion in 1981 and are not expected to exceed CFAF 32 billion in 1982. Most of the 1982 investments will be allocated to the continuation and completion of on-going projects. The large majority of these investments (66 percent) and all new investments are being financed by grants and concessionary loans. -4- Structural Adjustment 14. In parallel with efforts to reach an agreement with the IMF on a Financial Stabilization Program and its own budgetary and tax reforms, the Government is intensively pursuing a dialogue with the Bank aiming toward the definition of a Structural Adjustment Program. The main elements of the Program would include: a) rehabilitation of state enterprises, including privatization where feasible, and closure or liquidation of unprofitable enterprises, b) promotion and diversification of exports through stronger incentives in the rural sector and greater value added in mining, and c) improved macro-economic management, including the adoption of a realistic, high-quality investment program. Prospects 15. In the 1982-85 period, the outlook is for average annual real GDP growth of about 3.4 percent, i.e., an increase in GDP per capita of about one percent per annum. Growth is expected to become more evenly spread among the sectors, but still remain highest in the secondary sector due to expand- ing mining operations. The modest improvement in projected growth will not relieve unemployment which will be aggravated by the number of new entrants into the labor market. The pursuit of less expansionary policies is expected to lead to higher -domestic savings. The current account deficit in the balance of payments will nevertheless remain sizeable, because of large interest payments of foreign debt. 16. In agriculture there is a potential for increasing the output of both food and export crops, and growth is projected to be about 3 percent annually between 1982 and 1985, assuming favorable weather conditions. An increase in food crop production could be achieved through wider use of mod- ern production techniques. Steady growth of coffee and cocoa production is expected to begin in 1981/82, as IDA-sponsored replanting schemes begin to have an impact. Cotton production is expected to increase at about 16 per- cent per year during 1982-1985 with continued IDA support. 17. The outlook for growth in the secondary sector between 1982 and 1985 is mixed. As a whole, the sector is projected to expand at an average annual rate of 4 percent. Assuming transfers of funds from the phosphate mining company to the Treasury will not be excessive, thus enabling the company to increase its capacity, output in mining could increase considerably. This assumes, furthermore, that the Bank-supported CIMAO clinker plant is able to overcome its current technical problems and approach full capacity uti- lization. In industry, the Government intends to adopt remedial policies to overcome the difficulties of state enterprises, which will require a broad range of adjustment measures. Growth in construction will be modest because of financial constraints, while expansion in energy will be encouraged by policies aimed at reducing the reliance on imported energy by increasing domestic production of hydroelectricity; this, however, will have no impact on production before 1985. -5- 18. The outlook for the tertiary sector points to an annual growth rate of 3 percent between 1982 and 1985. Because of the severe financial con- straints facing the Government, output of public services will be practically stagnant. Recruitment to the civil service will have to be reduced to a bare minimum. Growth in transport and commerce is, on the contrary, expected to continue on the assumptions that Togo will be able to better organize its transit trade to benefit from existing infrastructure, and that - as in the past - Government intervention will be minimal. 19. Notwithstanding the possible continuation of ongoing debt re- scheduling efforts, judicious policies will be required during the next four years if rising debt service obligations are to be met while a minimum development effort is maintained. Except for enclave-type operations, there is no scope for additional borrowing on financial markets, and new investments will be feasible only to the extent that grants and concessionary loans are available. Government finances will continue to be extremely tight, requiring austerity in current expenditure and highly selective investments as well as a high percentage of project costs, including local costs, financed from foreign concessionary sources. Toward the end of the period,<rising revenues from phosphates and a moderate acceleration in economic growth will slowly begin to ease the financial constraint, although large debt service payments will put pressure on the balance of payments, requiring further recourse to balance of payments assistance. With the restoration of a sounder financial situation, Togo's longer-term development prospects remain promising, as there is con- siderable scope to better exploit the resource base of the economy. PART II - BANK GROUP OPERATIONS IN TOGO 20. Bank Group lending to Togo totals twelve credits amounting to US$96.3 million, and two loans totaling US$53.0 million, for the CIMAO regional clinker project (a loan of US$3.5 million to Togo, and one of US$49.5 million to CIMAO jointly and severally guaranteed by Togo, Ivory Coast, and Ghana). Annex II contains a summary statement of Bank Group operations as of March 31, 1982, and notes on the execution of ongoing projects. In addition to the CIMAO project, Bank Group lending has included roads, agriculture.(cocoa, coffee, cotton, and food crops), education, technical assistance to the Ministry of Plan, a regional DFC operation, and * feasibility studies for a phosphate fertilizer project and a regional hydro- electric power project. * 21. Four of the credits were in the road sector, with efforts directed to building up an efficient maintenance service, upgrading the country's main and more heavily trafficked roads, and starting a comprehensive transport planning and coordination system. A separate project for feeder road develop- ment provides for improvement works and maintenance operations. - 6 - 22. The objectives of the four agricultural projects partly financed by IDA credits are to stimulate food crop production and to increase farm incomes through development of cash crops such as cocoa, coffee, and cotton. In December 1981, a large-scale cotton and food crop project was appraised, and is scheduled for Board presentation during the first half of FY83. This project is designed to help overcome the slow growth of output and incomes in the rural sector, by putting greater emphasis on improved cultivation tech- niques and increased food production. 23. An important objective of Bank Group lending to Togo is also to strengthen institutions in the main economic sectors, to tap the large mining potential to increase foreign exchange earning capabilities, to develop local energy sources, and to support the training and education system. The First Technical Assistance Project in the Ministry of Plan, aimed at helping the Government formulate sound investment and public finance policies, is pro- gressing well. The proposed Second Project would permit continued technical assistance in support of the implementation of an envisaged structural adjust- ment program. An Engineering and Technical Assistance Credit will help to determine the technical and economic viability of developing a phosphate fertilizer project in Togo. A similar Engineering Credit, approved in FY82, will help to assess the viability of the Nangbeto hydroelectric scheme (a regional project being planned jointly with Benin). An ongoing Education project finances the construction of teacher training facilities, expansion of existing facilities and fellowships. 24. Togo's performance with respect to project implementation and dis- bursement is generally satisfactory. The Government is by now quite familiar with the Bank's procurement and disbursement procedures. Delays are sometimes encountered, however, because of the cumbersome administrative regulations used in Togo to award public contracts. The Government is sensitive to this problem and is working with the Bank to find appropriate means to simplify the procedures. PART III - THE NEED FOR TECHNICAL ASSISTANCE 25. In the past, technical assistance to Togo has usually been limited to technical ministries and public agencies, and to directly operational positions in managerial and technical fields. Recently, however, the Govern- ment has shown increasing interest in extending the use of technical assist- ance to the provision of policy advice, so far mainly with respect to economic planning. This change in attitude can be explained in part by events during and after the phosphate boom, which had far-reaching repercussions, and which suddenly presented Government policy makers with a much more difficult task. In the more difficult economic and financial situation which prevailed after 1978, the shortcomings of Government economic planning in general, and project preparation and analysis in particular, became apparent, not least to the Government itself. These circumstances have made the Government more favorably - 7 - disposed to policy-oriented technical assistance furnished by expatriates, provided, however, that such assistance also includes substantial provision for training of local counterpart personnel in order to produce lasting effects in Togo, and to warrant the high cost involved. 26. The difficulties encountered in implementing the ambitious 1976-80 Development Plan pointed to the priority areas in which a need for more com- prehensive technical assistance had emerged: on the macro level, investment planning and monitoring; and on the micro level, project selection and imple- mentation. Deficiencies in these areas had resulted in the implementation of a Development Plan that differed significantly from original forecasts. Not only were the projects selected different from those planned, but they were often chosen without sufficient analysis of their economic and financial soundness. Cost overruns and delays in execution were frequent. Partly as a consequence of inadequate preparation, the financial obligations of many projects were so great that these operations were unable to generate suffi- cient revenues to service their debt. The Ministry of Plan has not been able to exercise adequate influence on investment decisions and their implementa- tion, and despite having a sizeable staff (most of which is poorly trained), the Ministry is not equipped to define and implement policies appropriate to the present situation, and to devise a selective and productive investment program to cover the next few years of financial stringency. If the develop- ment effort in Togo is not to be hindered by the burden of heavy debt service obligations, it is particularly important that the Ministry of Plan should develop and sustain its capability to carry out these activities effectively, and to play a critical role in the process of improving the quality of the investment program. 27. An improving dialogue with the Bank and the growing need for techni- cal assistance in the Ministry of Plan prompted the Government to request technical assistance in late 1978. In 1979 the Executive Directors approved a First Technical Assistance Credit for Togo with the following basic features: a) a senior economic adviser for three years, whose main tasks were to assist in investment programming, debt management, and to help bring about improved coordination between the budget and the plan; b) a senior project adviser for three years, whose main tasks were to assist in project preparation and selection, and to find ways to improve the performance of recently completed projects, notably state enterprises; c) short-term consultants for 130 man- months to undertake project-related and more general studies; d) training of junior economists; and e) support services. 28. Under the First Technical Assistance Project, a senior economic adviser has served in the Ministry of Plan since late 1979, and this has facilitated the deepening and broadening policy dialogue with the Government. Nevertheless, because of the shortage of skilled staff in the Ministry and their general unfamiliarity with macro-economic concepts, the senior economic -8- adviser has become primarily a project adviser, especially in view of the delays experienced in recruiting the senior project adviser (see para. 29). In this role, the senior economic adviser has on several occasions exercised significant influence in improving the quality of project selection. He has also been used directly by the Minister for a series of ad hoc assignments. As a result, the time allocated to the training of junior economists has so far been limited, both because of pressure on the senior economic adviser from other assignments, and because of the perceived limited growth potential of several of the candidates proposed. At the request of the Government, the assignment of the present senior economic adviser has been extended for a fourth year, until August 1983. 29. The position of senior project adviser remained vacant for a long time, owing to the considerable difficulties in finding a person with the requisite broad range of skills who was willing to assume a three-year assign- ment in Lome. A good candidate, interested in the position, and available from September 1982, has recently been identified by the Bank, and will shortly be recommended to the Government. Appointment of a senior project adviser should enable the present senior economic adviser and his replacement under the proposed project to focus on economic policy issues, rather than project matters. 30. The First Technical Assistance Project has been a useful vehicle for providing a wide range of consultants' services to meet specific needs promptly. Consultants have been financed to prepare the Phosphate Engineering and Technical Assistance Project and the Second Rural Development Project. Consultants have also examined the prospects of selected state enterprises, and provided short-term policy assistance to the badly understaffed Ministry of Industry and State Enterprises. Prospects for development of small- and medium-scale private industry were recently studied by consultants. In addition, consultants will shortly assist in making operational a price analy- sis and monitoring unit for cash crops. The unit is scheduled to elaborate by end-1982 a medium-term price policy for cash crops. Finally, consultants are being financed to assist in preparing a consolidated analysis of public sector finances, both for recording and programming purposes, which is necessary for the conclusion of a new stand-by arrangement with the IMF. 31. As a result of the increased provision of expertise to the Ministry of Plan and the expanding use of consultants, especially in connection with the preparation of a structural adjustment program, commitments under the ongoing project have risen significantly, and now total US$1.7 million out of US$2.4 million available to the project (IDA US$2.2 million, Government US$0.2 million). Including identified near-term requirements, total commitments would be US$2.3 million, or practically the total amount provided for under the First Project. 32. The need for further technical assistance in a variety of fields persists. The services of consultants and of the senior economic adviser in helping the Government cope with its difficult financial and economic situa- tion are essential. The Ministry of Plan will continue to need a senior -9- economic adviser following the departure of the incumbent in August 1983. Specialized consultants and an investment programmer are important elements in the elaboration of a selective investment plan. The Ministry of Industry and State Enterprises cannot devise and implement a recovery program for state enterprises without technical assistance. The Ministry of Rural Devel- opment needs assistance in planning, project preparation and monitoring, and coordination of applied research, to rekindle growth in agriculture and to tap the considerable potential of the sector. Finally, the Ministries of Plan and Finance need assistance in establishing a system of monthly macro-economic indicators, to improve monitoring, to make forecasts on the basis of reliable and recent data, and to be able to take corrective policy action when need be, and much more quickly than is presently the case. Other important factors to consider are the need to prepare a structural adjustment program, and the technical and managerial difficulties encountered by Government in imple- menting a financial stabilization program with the IMF. 33. In addition, through its dialogue with the Bank and the IMF, the Government has become convinced of the need for corrective economic and financial policies. The Government is now committed to the implementation of such policies in order to adjust the structure of the economy to the evolving international environment, and to re-establish financial stability. The intention of the Government is to make the economy less vulnerable to external shocks by-promoting and diversifying production and exports. This commitment cannot be translated into successful implementation of adjustment and stabilization policies without sufficient expertise in key technical and managerial areas. Bank-financed technical assistance would concentrate on areas in which little other foreign expertise is made available or sought. Close cooperation will be maintained with other possible sources of technical assistance, which is provided mainly for technical positions in Government ministries and agencies. PART IV - THE PROJECT 34. The proposed Second Technical Assistance Project was appraised in March 1982. A summary is provided at the beginning of the report. Annex III contains supplementary project data and Annex IV an implementation sched- ule. There is no separate Staff Appraisal Report. Negotiations were held in Lome, from May 11 to May 13, 1982 with representatives from the Ministries of Plan, Finance, and Industry and State Enterprises. Project Description 35. The proposed Project is planned to meet the technical assistance needs that have emerged since the First Project began in 1979, especially with respect to structural adjustment and sector work, and to expand and continue the technical assistance effort begun under the First Project. Technical assistance would be provided to various key ministries for periods ranging from a few weeks to up to three years to strengthen the Government's capacity to develop and implement coherent macro-economic policies, and to - 10 - study crucial sector issues. To ensure that the work of the expatriate advisers has a lasting and tangible impact, and in view of the importance attached to training by the Togolese Government (para. 25), the terms of reference of consultants selected will contain explicit provisions for separate advisory and training functions. Systematic training of counter- parts will be a substantial component of the work programs of expatriate advisers, and their selection will be based both on their expertise as advisers and on their suitability to perform such training. Within three months of their arrival, the experts will submit to the Government and IDA training programs for each counterpart. Progress in training of counterparts will be reviewed by the Association and Government every six months. The overall objective of training would be the gradual replacement of experts by counterparts. 36. In the Ministry of Plan, the present Senior Economic Adviser, financed under the First Technical Assistance Project, is scheduled to leave by August 1983, and the proposed project envisages a three-year replacement. The appointment of a Senior Project Adviser for three years, also financed under the First Project, to work on project selection and preparation of a forthcoming Investment Plan, will enable the Senior Economic Adviser to concentrate on policy issues. In view of the importance of careful investment programming under present and prospective conditions of financial stringency, an investment programmer will be recruited for two years to work on a com- prehensive system of investment recording/programming, to assist in debt management, and to follow up on the implementation of a system of monthly macro-economic indicators. The expanded team in the Ministry of Plan will necessitate additional local junior economists and secretarial support, for whom salary supplements equivalent to about 25 percent of base salary are foreseen. While the Government will pay for base salaries, the salary supple- ments would be paid by the Association. Given the financial difficulties of the Government, it would be hard to find competent and motivated staff without offering a salary supplement. The project would in addition provide for local travel and subsistence costs for experts, consultants, and counterparts. The resident experts would report directly to the Minister of Plan. 37. The assistance foreseen to the Ministry of Rural Development would be directed to: i) a new planning unit, and ii) a new research coordination unit for applied agricultural research. These units would be established by March 31, 1983 (Section 3.04 of the draft Development Credit Agreement). The planning unit would be responsible for: a) formulating a long-term strategy of rural development, b) studying problems and prospects for the sector as a whole, c) preparing projects, and d) monitoring and evaluation. The project would provide for an expert in agricultural planning over 24 months, consul- tants for a total of 12 months, supplies and vehicles, salary supplements and fellowships for counterparts. Before implementation, the fellowship program would be reviewed by the Association. The research coordination unit would be responsible for: a) improving the coordination between research programs scattered throughout Togo; and b) intensifying contacts with international organizations doing research on technical problems similar to those prevailing in Togo. The project would provide for a research coordinator for 18 months, consultants for a total of 6 months, supplies, and salary supplements for counterparts. The resident experts would report to the Director of Rural Development. - 11 - 38. The assistance foreseen to the Ministry of Industry and State Enterprises would consist of the provision of short- and medium-term expa- triate expertise to enable the Ministry to elaborate and implement an appro- priate Government policy with respect to state enterprises, characterized by clear objectives, priorities and performance criteria. The project would provide for: a) a consultant for 3 months to introduce analytical accounting, b) a resident expert for 14 months to assist in defining performance criteria and in guiding analytical studies of enterprises not already examined, and c) a resident expert for 19 months to assist in preparing, introducing, and implementing program-contracts, initially for a small manageable sample of representative state enterprises, and subsequently for all state enterprises whose operations and objectives make program-contracts a useful instrument for guidance and control. Each expert, and the consultant, would work closely with a team of local counterparts drawn from the staff of the Ministry, and, where relevant, from other ministries and key state enterprises. The resident experts would report directly to the Minister of Industry and State Enterprises. 39. In order to enable the Government to meet a wide variety of tech- nical assistance needs (some of which cannot be foreseen far in advance), the proposed project provides for a significant short-term consultants' budget (US$1.1 million equivalent). This budget would be used for, inter alia, preparation and review of a future investment plan, economic studies of private sector incentives in industry, elaboration of a system of monthly macro-economic indicators, and various analyses related to the implementation of national policies for economic adjustment and financial stabilization. Overall, the consultants would carry out high-priority studies defined by the Minister of Plan, which would be selected in accordance with criteria agreed upon between the Government and the Association; these criteria concern, primarily, relevance, benefits to be derived, and promotion of production and exports in key sectors (Section 3.03 of draft Development Credit Agreement). 40. Togolese counterparts, with qualifications acceptable to the Associa- tion, would be employed to work closely with the resident experts (Section 3.02(c)) of the draft Development Credit Agreement). Salary supplements and the cost of office equipment and supplies are included in the project, as are transport costs for survey work in the Ministry of Rural Development. Responsibility for execution of each part of the project rests with the Ministry concerned. However, overall responsibility for project execution remains with the Ministry of Plan. Project Cost and Financing 41. The cost, net of taxes, of the proposed Second Technical Assistance Project is estimated at US$3.8 million, including a foreign exchange component of about 67 percent. The proposed IDA contribution of SDR3.1 million (US$3.5 million equivalent) would cover the entire foreign cost element and 76 percent of local costs. IDA financing of this proportion of local costs is justified by the Government's difficult financial situation. The Government would con- tribute $0.3 million equivalent in the form of base salaries of counterparts, rental of office space, and costs of communications. Contingencies of about 15 percent have been included based on expected annual inflation rates of 8 - 12 - percent in 1982, 8 percent in 1983 and 7.5 percent in 1984. The cost of consultants is estimated at US$12,000 per man-month, including salaries, housing and other allowances, travel and cost of recruitment. Procurement and Disbursement 42. The selection, qualifications, experience and terms of employment for all resident experts and consultants would be subject to approval by the Association (Section 3.02 of the draft Development Credit Agreement). The entire cost of the resident experts would be financed out of the proceeds of the Credit. Separate accounts would be maintained by the Government for all project activities, and would be audited each year by auditors acceptable to the Association. All disbursements from the Credit account would be fully documented except for salary supplements, which would be disbursed against certified statements of expenditure. The total amount of disbursements against statements of expenditure is expected to be about US$33,000. Copies of supporting documentation would be held by the Borrower and made available for review by IDA supervision missions. Statements of expenditure would be audited by independent auditors. Equipment and office supplies (totalling US$60,000) would be procured according to local procedures, satisfactory to the Association. 43. Proceeds of the IDA Credit would be disbursed against: i) 100 percent of the total cost of the resident experts, short- term consultants, and fellowships, SDR 2,600,000 (US$2,937,000 equivalent); and ii) 100 percent of the total cost of office equipment and supplies, salary supplements to counterparts and secretaries, and vehicles, SDR 93,000 (US$105,000 equivalent). SDR407,000 would remain unallocated (US$460,000 equivalent). Benefits and Risks 44. The benefits that would accrue to Togo under the proposed Second Technical Assistance Project would be an increased capacity to conceive and implement sound, comprehensive, and consistent macro-economic policies, and to pursue adjustment policies in crucial areas such as rural development, state enterprises, and public investment programming. In addition, the project would allow for a continuation and an expansion of the technical assistance effort begun by the first project. The main risks of the project derive from the a difficulties in finding expatriate personnel who are both highly qualified and sufficiently adaptable to gain and retain the confidence of the Government, without which the effectiveness of the resident experts would be greatly reduced. The Government's awareness of the need for technical assistance and the need for economic adjustment and financial stabilization measures is reflected in its support for the first project, and in its firm commitment to the technical assistance effort. - 13 - PART V - LEGAL INSTRUMENTS AND AUTHORITY 45. The draft Development Credit Agreement between the Republic of Togo and the Association, and the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Association, are being distributed separately to the Executive Directors. 46. Features of the Development Credit Agreement of special interest are listed in Section III of Annex III. 47. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 48. I recommend that the Executive Directors approve the proposed Credit. A.W. Clausen President Attachments Washington, D.C. May 28, 1982 - 14 - ANNEX 1 TABLE 3A TOGO - SOCIAL INDICATORS DATA SHEET TOGO REFERENCE GROUPS (WEIGHTED AVERA9ES LAND AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE) - TOTAL 56.8 MOST RECENT LOW INCOME MIDDLE INCOME AGRICULTURAL 16.2 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA GNP PER CAPITA (US$) 80.0 160.0 350.0 238.3 794.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 23.0 66.3 117.4 70.5 707.5 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUSANDS) 1499.0 1956.0 2420.0 URBAN POPULATION (PERCENT OF TOTAL) 9.8 13.1 19.2 17.5 27.7 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 4.5 STATIONARY POPULATION (MILLIONS) 13.0 YEAR STATIONARY POPULATION IS REACHED 2110 POPULATION DENSITY PER SQ. 1M. 26.4 34.4 42.6 27.7 55.0 PER SQ. KM. AGRICULTURAL LAND 116.2 117.8 145.7 73.7 130.7 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 44.0 45.3 46.2 44.8 46.0 15-64 YRS. 53.4 52.0 51.1 52.4 51.2 65 YRS. AND ABOVE 2.6 2.7 2.7 2.9 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 2.2 2.7 2.4 2.6 2.8 URBAN 5.2 5.6 6.6 6.5 5.1 CRUDE BIRTH RATE (PER THOUSAND) 50.5 48.1 47.8 46.9 46.9 CRUDE DEATH RATE (PER THOUSAND) 26.5 21.6 18.3 19.3 15.8 GROSS REPRODUCTION RATE 3.3 3.2 3.2 3.1 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) USERS (PERCENT OF MARRIED WOMEN) .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71=100) 99.0 102.0 80.0 89.5 89.9 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 93.0 95.0 90.0 90.2 92.3 PROTEINS (GRAMS PER DAY) 44.0 46.0 48.0 52.7 52.8 OF WHICH ANIMAL AND PULSE 11.0 12.0 13.0 17.8 16.1 CHILD (AGES 1-4) MORTALITY RATE 41.0 31.3 25.4 27.3 20.2 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 37.2 42.5 46.9 45.8 50.8 INFANT MORTALITY RATE (PER THOUSAND) .. ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. 17.0 16.0 23.9 27.4 URBAN .. .. 49.0 55.0 74.3 RURAL .. 5.0 10.0 18.5 12.6 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 1.0 15.0 26.2 URBAN .. 4.0 36.0 63.5 RURAL .. 1.0 12.0 20.3 POPULATION PER PHYSICIAN 35756.1 27942.9 17984.4 31911.8 13844.1 POPULATION PER NURSING PERSON 5341.0/c 4170.6 1996.5 3674.9 2898.6 POPULATION PER HOSPITAL BED TOTAL 598.0/c 643.5/d 669.6 1238.8 1028.4 URBAN 111.0/c 155.2/d 240.7 272.8 423.0 RURAL 1166.0 1435.5Td 1139.5 1745.2 3543.2 ADMISSIONS PER HOSPITAL BED .. 24.3 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. URBAN .. RURAL .. .. 5.8 AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. 5.8 UREAN .. .. RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. URBAN .. .. RURAL .. .. - 15 -AM 1 -15-ANNEX 1 TABLE 3A TOGO - INDICATORS DATA SHEET TOO REFERENCE GROUPS (WEIGHTED AVfAGES - MOST RECENT ESTIMATE-t MOST RECENT LOWINCOMS MIDDLE INCCHE 1960 L 1970 jL ESTIMATE Lb AFRICA SOUTH Of SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUITED ENROLLMENT RATIOS PRIMARY; TOTAL 44.0 69.0 102.0 56.4 73,7 MALE 63.0 95.0 129.0 70.7 96.8 FEMALE 24.0 42.0 75.0 50.1 79.0 SECONDARYz TOTAL 2.0 7.0 25.0 10.0 16.2 MALE 4.0 11.0 39.0 13.6 25.3 FEMALE 1.0 3.0 12.0 6.6 14.8 VOCATIONAL ENROL. (2 OF SECONDARY) 10.0L4 10.0 8.0 8.0 5.3 PUPIL-TEACHER RATIO PRIMARY 63.0 58.0 58.0 46.5 36.2 SECONDARY .. 25.0 41.0 25.5 23.6 ADULT LITERACY RATE (PERCENT) 1O.OL 15.9 18.0 25.5 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 0.3 3.7 6.0 2.9 32.3 RADIO RECEIVERS PER THOUSAND POPULATION 3.5 20.4 195.5 32.6 69.0 TV RECEIVERS PER THOUSAND POPULATION .. .. 3.0 1.9 8.0 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 2.0 7.0 3.1 2.8 20.2 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.2 .. 1.0 1.2 0.7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 687.1 856.7 996.5 FEMALE (PERCENT) 39.2 41.3 40.5 34.1 36.7 AGRICULTURE (PERCENT) 79.5 73.3 67.6 80.0 56.6 INDUSTRY (PERCENT) 8.1 10.9 14.5 8.6 17.5 PARTICIPATION RATE (PERCENT) TOTAL 45.8 43.8 41.2 41.7 37.2 MALE 56.8 52.3 49.8 54.3 47.1 FEMALE 35.3 35.6 32.8 29.2 27.5 ECONOMIC DEPENDENCY RATIO 1.0 1.1 1.2 1.2 1.3 INOE DISTRIBUIO INCCE RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. HIGHEST 20 PERCENT OF HOUSEHOLDS .. .. LOWEST 20 PERCENT OF HOUSEHOLDS .. .. .. .. LOWEST 40 PERCENT OF HOUSEHOLDS .. .. POVERTY TARGET GROUPS ESTIMATED AbSOLUTE POVERTY INCCHE LEVEL (US$ PER CAPITA) URBAN .. .. 243.0 136.0 381.2 RURAL .. .. 118.0 64.5 156.2 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 121.0 99.1 334.3 RURAL .. .. 121.0 61.2 137.6 a ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN ., .. 42.0 39.7 RURAL .. .. .* 68.8 Not available Not applicable. NOTES a The group averages for each indicator are population-veiShted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971, and for Most Recent Eotimate, between 1976 and 1979. /c 1962; /d Government hospital establishments; L. Including teacher training. May, 1981 ,，〕’}！〕〕！〕〕〕〕！〕〕〕〕〕〕〕！！〕〕！〕〕：- 心 17 - A=X I Page 4 ECONONU INDICATORS GROSS NATIONAL PRODUCT -IN 1980 US$ million 1 Annual rate of growth,(%, current prices) 12 80 GNP at market prices 1,008.5 95.5 i;--.i GDP at market prices 1,055.8 100.0 11.0 Gross domestic investments 271.1 25.7 9.4 Gross domestic savings 141.0 13.4 17.2 Current account balance -142.0 -13.4 - Exports (G + NFS) 430.7 40.8 20.6 Imports (G + XFS) 560.8 52.8 15.0 OUTPUT, LABOR FORCE VID PRODUCTIVITY IN 1980 Value added Labor force Value added Per worker US$ million .11. Thousand M Z'cf average Agriculture 238.4 26.1 750 79.0 317.9 33.0 Industry, construction and public works 186.8 2o.4 24 3.0 7,783.3 809.1 Government 102.4 11.2 39 4.1 2,625.6 272.9 Commerce and transport 308.5 33.8 67 7,0 4,604.5 478.6 Other services 77.8 8.5 70 6.9 1,111.4 120.9 GDP at factor costs 913.9 100.0 930 100.0 962.0 GOVERNMENT F1711INCE CFA billion % of GDP M O -'975 J-960 Revenue 32.9 62.0 24.9 27.8 Tax,receipts 317 52.0 23.7 23.3 Other 1.5 10.0 1.2 4.5 Expenditures 35.0 66.4 L6. 5 29.8 Current budget 2 o 34.0 17.1 2 .2 Investment budget 9.1 7.4 6.9 3.3 Other 3.3 510 2.5 2.2 Special accounts 0.3 0.2 - Annex budgets 0.3 1.0 0.2 o.4 Overall deficits -2.7 -5.4 -2.0 -2.4 Memo item GDP current prices 132.3 223.1 - - MONEY, CREDIT AND PRICES 1973 1974 1975 1976 1977 1978 1979 980 198111 (Billion CFAF outstanding end pe-ri-od) Money and quasi money 15.9 30.5 28.2 4 1.2 48.0 64.9 69.2 72.5 80.5 Bank credit to public sector -1.9 -2.5 1.4 1.2 1.8 6.2 6.6 4.5 8.1 Bank credit to private sector 13.3 A-3 24.6 32.2 44.2 51.0 57.1 64.7 62.0 (Percentage or index number) Money and Quasi money as % of GDP 17.5 22.6 21.3 27.8 25.1 32.4 32.6 32.5 - 84 100.0 iu.6 136.7 137.3 147.6 165.9 197.8 Consumer price index (1975 z 10OW 7 5.1 .7 Annual percentage change in : Consumer price index 12.7 18.0 il.6 22.4 o.4 7.5 12.4 - Bank credit to public sector -31.5 - -14-3 50.0 44.4 6.4 -31.8 Bank credit to private sector 22.5 51.3 29.7 37.3 15.4 12.0 13.3 l/ As of end April 1981. Annual average. - 18 - ANNEX I TRADE PAYMENTS AND CAPITAL FLOWS Page 5 BALANCE OF PAYMNTS 175 197 1979 190 Exports (, + NFS) 141.2 158.9 195.1 257.5 250.9 430.7 Imports (3 + NFS) -242.9 -212.5 -300.4 -519.9 -524.8 -560.8 Resource gap (deficit -) -101.7 -53.6 -105.3 -262.4 -273.9 -130.1 Interest payments (net) -1.9 -3.3 .-5.7 -24.3 -29.0 -27.6 Workers' remittances 3.3 5.4 5.3 5.3 7.1 7.1 Other factor payments (net) -14.0 -8.4 -13.0 -13.2 -23.8 -20.0 Net transfers 18.7 16.7 20.3 22.1 28.6 28.6 Balance on current account -95.6 -43.2 -98.4 -272.5 -290.9 -142.0 Direct foreign investments 4.8 6.3 8.1 8.8 10.5 9.5 Net MT borrowing 50.5 55.6 113.8 246.0 290.0 195.7 Capital grants 19.1 15.0 15.0 25.7 26.2 35.7 Other capital. (net) 14.0 -16.7 -32.5 4.0 -31.4 -42.8 Other items, n.e.i. 15.4 -15.0 -31.7 4.4 -33.3 -76.1 Change in reserves (increase -) -8.2 -2.0 25.6 -16.4 29.0 20.0 Net reserves (end year) 1/ 38.8 58.1 33.7 5o.4 28.8 51.4 Petrol imports as e total merch. imports - - 9.0 10.2 11.9 19.2 Petrol exports as % total merch. exports - - - 12.0 21.4 23.7 1 Net foreign assets of the Central Bank NERCHADISE EXPORTS (average 1975-80, recorded) US$ million Phosphate 97.1 41.7 Cocoa beans 40.5 17.4 Coffee 23.3 10.0 All other commodities 71.9 30.9 Total 232.8 100.0 EXTERNAL DEBT, December 31, 1980 US$ million Public debt (disbursed) incl. guaranteed 907.2 Non-guaranteed private debt Total outstanding and disbursed EXCHANGE RATES (CFAF per US$) DEBT SERV'ICE RATIO FOR 1980 ear Period average End of Deriod 1973 223 230 Public debt, incl. guaranteed 3/ 10.0 1974 241 222 Non-guaranteed private debt - 1975 214 224 Total outstanding and disbursed - 1976 239- 248 1977 246 235 1978 226 209 2/ Debt service as percent of X (G - NFS) 1979 213 201 3/ After debt rescheduling 1980 211 226 4/ As of November 1981 1981 270 281 - IBRD/IDA LEN1DING, Jinuary 31, 1982 (US$ million) IBRD .5/ IDA Outstanding and disbursed 52.9 51.1 Undisbursed - 32.9 Outstanding including undisbursed 52.9 84.0 / $53.0 million of which t3.5 million CIMAO loan to Togo and $49.5 million loan to CIMAO with the guarantee of Ghana, Ivory Coast and Togo. -19 - ~xI ANNEX II Page 1 STATUS OF BANK GROUP OPERATIONS IN TOGO A. Statement of Bank Loans and IDA Credits (as of March 31, 1982) Amount - US$ Million (Less Cancellations) Bank IDA 1/ Undisbursed Three Credits and One Loan Fully Disbursed 3.50 18.40 - 638-TO 1976 Togo Maritime Region Rur. Dev. 9.40 0.88 693-TO 1977 Togo Third Highway 10.00 0.45 741-TO 1977 Togo Rural Development in Cotton Areas 13.20 0.66 810-TO 1978 Togo Feeder Roads 5.80 2.36 930-TO 1979 Togo Technical Assistance 2.20 1.82 945-TO 1979 Togo Cocoa/Coffee Development II 14.00 13.27 1018-TO 1979 Togo First Education 11.00 9.62 1139-TO 1981 Togo Fourth Highway 2/ 20.00 20.00 1169-TO 1981 Togo Phosphate Engineering 5.70 5.70 1190-TO 1982 Togo Power Engineering and Technical Assistance 2/ 2.00 2.00 Total 3.50 111.70 56.76 of which has been repaid 0.15 0.10 TOTAL now outstanding 3.35 111.60 Amount Sold 0 0 of which has been repaid 0 0 Total Now Held by Bank and IDA 3.35 111.60 Total Undisbursed 56.76 Total Not Yet Effective 22.20 B. Statement of Bank Loan Guaranteed by Ghana, Ivory Coast and Togo 1295-WAF 1976 CIMAO - CIMAO Regional Clinker 49.5 0 C. Statement of IDA Credit for Regional Projects - Benin, Ivory Coast, Niger, Senegal, Togo, Upper Volta 969-WAF 1980 BOAD Project Preparation Credit 3.0 2.7 1/ Prior to exchange adjustment. 2/ Not yet effective. - 20 - ANNEX II Page 2 E. Projects in Execution 1/ Credit No. 638 Maritime Region Rural Development Project; US$9.5 million; Credit of June 16, 1976; Effectiveness Date: October 26, 1976; Closing Date: December 31, 1982. The closing date of this credit has been postponed from December 31, 1981 to December 31, 1982. Applied research regarding food crops and coconuts, seed multiplication, monitoring and consultants to study the potential of the region will continue to be financed until the end of 1982, in an amount of $240,000. Following a request from the Government, the remaining part of the credit ($1.7 million) was cancelled in March 1982. Credit No. 693 Third Highway Project; US$10.0 million; Credit of April 1, 1977; Effectiveness Date: September 13, 1977; Closing Date: December 31, 1982. The project provides for the reconstruction of the Aneho-Tabligbo road (45 km), the construction of the Agou-Notse road (51 km), the provision of technical assistance for improving transport planning and road maintenance, and pre-investment studies for a follow-up project. Implementation of the project has been satisfactory and is now practically complete. The implementation of the technical assistance component has been slower than expected. Road mainte- nance, however, has recently begun to suffer from insufficient Government funding. Credit No. 741 Rural Development Project in Cotton Areas; US$14.0 million; Credit of October 5, 1977; Effectiveness Date: March 17, 1978; Closing Date: December 31, 1982. The goals of the project are to increase the production of cotton from 7,000 tons to 29,000 tons and of food crops grown in rotation with cotton from 40,000 tons to 50,000 tons; and to strengthen SOTOCO, the agency in charge of the project. Progress has been satisfactory. Over 44,000 farmers are now involved with the project. Cotton production averaged 21,000 tons in the third and fourth years of the project and the area planted to improved food crops has reached 23,000 ha. The feeder roads development program and seed multiplication components of the project are progressing well, and both the extension service and the general and financial management have improved considerably. A follow- up project is under preparation. 1/ These notes are designed to inform the Executive Directors on the progress of projects in execution and, in particular, to report any problems and actions being taken to remedy them. They should be read with the under- standing that they do not present a balanced evaluation of strengths and weaknesses in project execution. ANNEX II - 21 - Page 3 Credit No. 810 Feeder Roads Project; US$5.8 million; Credit of June 28, 1978; Effectiveness Date: March 2, 1979; Closing Date: June 30, 1983. The project consists of a four-year program for the improvement and maintenance of about 1,000 km of feeder roads, technical assistance to establish a Feeder Roads Unit in charge of the program, and consultant services to study a follow-up feeder roads program. The equipment provided to the Feeder Roads Unit is now fully operational. By the end of November 1981, 440 km of feeder roads had been improved. However, since November 1981 the program has been slowing down due to the lack of government counterpart funds. Operations for which the Ministry of Public Works is responsible have been stopped due to a lack of credit to buy spare parts and fuel. * Credit No. 930 Technical Assistance Project; US$2.2 million; Credit of June 22, 1979; Effectiveness Date: October 23, 1979; Closing Date: June 30, 1983. The project provides for two advisers in the Ministry of Planning for a three-year period each and for short-term consultants to carry out specific project-related and macroeconomic studies. The first adviser is to counsel on general economic and public finance questions, while the second adviser is to assist in selecting major new investments and in finding ways of improving existing large projects. The assignment of the first adviser has been extended for a fourth year until August 1983. A three-year replacement is scheduled to be financed under the proposed credit. The second adviser will begin his assignment in September 1982. Credit No. 945 Second Cocoa and Coffee Development Project; US$14.0 million; Credit of July 23, 1979; Effectiveness Date: July 11, 1980; Closing Date: December 31, 1985. The project is a continuation of the First Coffee/Cocoa Project. It provides for the planting and maintenance of a further 7,500 ha of coffee and 4,000 ha of cocoa and services, applied research, associated food crop devel- opment, and construction of 300 km of feeder roads. Coffee planting is pro- ceeding satisfactorily. The cocoa program has fallen far behind appraisal targets and there appears to be a general problem of lack of farmers' interest. These problems will be examined shortly by a specialist in cocoa cultivation. Another problem facing the project is the continued poor rate of medium-term credit recovery from participating farmers. New means for facilitating credit recovery at the marketing stage are being examined. Credit No. 969 Project Preparation Credit to Banque Ouest Africaine de Develop- pement; US$3.0 million; Credit of January 25, 1980; Effective- ness Date: April 29, 1980; Closing Date: June 30, 1983 The objective of the project is to finance feasibility and detailed engineering studies by external consultants of regional development projects, which a priori have a high probability of success. The project is proceeding satisfactorily. - 22 - ANNEX II Page 4 Credit No. 1018 First Education Project; US$11.0 million; Credit of September 15, 1980; Effectiveness Date: January 27, 1981; Closing Date: June 30, 1985. Construction of training facilities is progressing satisfactorily. Three of the four project institutions are expected to become operational dur- ing the last quarter of 1982, and the fourth by May 1983. Project management continues to perform well, but should focus on the timely implementation of the educational programs, the institutional budget, and the technical assis- tance. Despite an initial lag in disbursements, the project is expected to be completed on schedule. Credit No. 1139 Fourth Highway Project; US$20.0 million; Credit of October 28, 1981; Closing Date: June 30, 1985. This project provides for a three-year training program for road maintenance personnel; procurement of road maintenance equipment and spare parts; pavement of 157 km of road; pre-investment studies for 57 km of road; and technical assistance to improve transport planning and coordination, as well as railway operations. This credit has not yet been declared effective. Credit No. 1169 Phosphate Fertilizer Engineering Project; US$5.7 million; Credit of October 28, 1981; Effectiveness Date: May 21, 1982; Closing Date: August 31, 1983. The purpose of this project is to determine the technical and economic viability of developing a phosphate fertilizer project to manufacture for export phosphoric acid and phosphate fertilizers from the Dagbati deposits and from recovered slimes. Credit No. 1190 Power Engineering and Technical Assistance Project; US$2.0 million; Credit of January 21, 1982; Closing Date: December 31, 1983 This project, a joint undertaking involving Togo and Benin, would aim at helping the two Governments complete preparations for the Nangbeto hydro-electric project, assist in improving planning in the power sectors of both countries, provide assistance in institution-building, and strengthen accounting procedures. The Credit has not yet been declared effective. - 23 - ANNEX III TOGO EXTENSION OF TECHNICAL ASSISTANCE PROJECT Supplementary Project Data Section I: Timetable of Key Events 1. Project initiation: Government request for second project December 1981 2. Appraisal mission March 1982 3. Negotiations completed May 1982 4. Credit effectiveness planned September 1982 Section II: Special IDA Implementation Action 1. IDA assistance in recruiting resident experts; and 2. IDA's close monitoring of resident experts' and consultants' activities to help assure effective utilization of their services. Section III: Special Conditions The Government would: a) select high-priority studies in accordance with criteria agreed upon between the Government and the Association in support of current and long-term economic management (para. 39); b) provide the resident experts with appropriate numbers of qualified Togolese counterparts, secretaries and other support staff as and when needed (para. 40); and c) establish the Planning Unit and the Research Coordination Unit in the Ministry of Rural Development by March 31, 1983 (para. 37). ANNEX IV TOGO SECOND TECHNICAL ASSISTANCE PROJECT Project Implementation Schedule 1/ 1982 1983 1984 1985 9 10 11 121 2 3 4 5 6 7 8 9 10 11 12' 1 2 3 4 5 6 7 8 9 10 11 L 1 2 3 4 5 6 7 8 9 Ministryof Plan 1) Senior Economic Adviser 2) Investment Programmer Ministry of Rural Development 1) Planning Expert 2) Research Coordinator Ministry of Industry and State Enterprises 1) Economic and Financial Analyst 2) Program - contract expert 3) Performance criteria and analytical studies expert 1/ Experts to be supplemented by short-term consultants according to specified criteria. West Africa Programs II May 1982 】BRD 136이R 。기