Liberia - Second Lofa County Agricultural Development Project

Document of The World Bank ~~~~ FOR OFFICIAL USE ONLY Report No P-3266-LBI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF LIBERIA FOR A SECOND LOFA COUNTY AGRICULTURAL DEVELOPMENT PROJECT April 12, 1982 This document has a restricted distribution and may be used by recipients only in the performace Of their official dutes. Is contents may not otherwise be dLsclosed without World Bank _utbonain  CURRENCY EQUIVALENTS The official monetary unit is the Liberian dollar with a par value equal to the US dollar. The US dollar is a legal tender in Liberia FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS ACDB - Agricultural and Cooperative Development Bank ADB - African Development Bank ADF - African Development Fund CDA - Cooperative Development Agency LPMC - Liberia Produce Marketing Corporation M&E - Monitoring and Evaluation TCU - Town Cooperative Unit(s) T&V - Training and visit, a form of agricultural extension service  FOR OFFICIAL USE ONLY LIBERIA - SECOND LOFA COUNTY AGRICULTURAL DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Liberia Amount: SDRs 13.3 million (US$15.5 million) Terms: Standard Onlending Terms: Up to SDR 4.3 million (US$5.0 million) would be onlent to farmers through the cooperative system to help finance farm inputs. Interest charges to final borrowers would be 15 percent per annum for seasonal loans and 12 percent for development loans. Project Description: The project aims at increasing food production and farm incomes by extending the assistance to smallholder farmers initiated under the first project (Cr. 577-LBR) to the whole of upper Lofa County. Support to develop upland rice, coffee and cocoa as well as cassava, would be pro- vided to farmers in the upper Lofa area not reached by the first project. The project would include: the supply of agricultural inputs, such as fertilizers, on credit; extension services; improvements in an agricultural produce marketing corporation and in the operations of agricultural cooperatives; construction of feeder roads, farm access tracks, farmer subcenters, and village wells and latrines; schistosomiasis surveillance services; as well as monitor- ing and evaluation and technical assistance. Up to 8,000 farm families are expected to benefit directly from this project, bringing the total number of families who would benefit from both phases to about 16,000; such families would earn significantly higher incomes. Improvement in agricultural services, roads and wells introduced under both phases would benefit more than 60 percent of the rural families in the region. Most of the institutional risks associated with integrated agricultural development projects would be reduced because the organizational structure is in place, farmer response has been tested, and the techniques to be introduced are simple and have been proven under the first phase. The main risks are of difficulties in streng- thening input, credit and marketing services through cooperatives and in improving the performance of the marketing corporation. To minimize these risks, respon- sibilities would only be handed over to the cooperatives after they had been improved and technical assistance would be provided to the marketing corporation. On the whole, the project presents a moderate level of risk. 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 IFC aut,hbrization.  - ii - Estimated Cost 1/ US$ Million Local Foreign Total Administration 0.8 0.7 1.5 Agricultural Extension 2.1 1.1 3.2 Training 0.5 0.5 1.0 Plant Protection and Research 1.5 0.4 1.9 Cooperatives & Commercial Services 2.2 1.8 4.0 Farm Inputs 1.5 2.4 3.9 Schistosomiasis Control Unit 0.2 0.2 0.4 Roads, Wells and Latrines 0.7 1.5 2.2 Land Planning 0.3 0.3 0.6 Central Monitoring & Evaluation Unit 0.6 0.5 1.1 Project Monitoring & Evaluation Unit 0.4 0.2 0.6 Consultancy & Technical Assistance 0.2 0.4 0.6 Project Preparation Facility 0.0 0.1 0.1 Total Base Cost 11.0 10.1 21.1 Physical Contingency 0.1 0.5 0.6 Price Contingency 3.2 3.1 6.3 TOTAL 14.3 13.7 28.0 Financing Plan IDA 6.8 8.7 15.5 African Development Fund 4.6 5.0 9.6 Government 2.9 - 2.9 TOTAL 14.3 13.7 28.0 Estimated Disbursements: US$ Million IDA FY 83 84 85 86 87 Annual 1.3 3.5 4.9 4.5 1.3 Cumulative 1.3 4.8 9.7 14.2 15.5 Rate of Return: 17 percent Staff Appraisal Report: Report No. 3677-LBR, April 5, 1982 Map: IBRD No. 15550 1/ Net of taxes and duties, from which the project is exempt.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF LIBERIA FOR A SECOND LOFA COUNTY AGRICULTURAL DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed credit to the Republic of Liberia for the equivalent of SDR13.3 million (US$15.5 million equivalent) on standard IDA terms to help finance a second Lofa County agricultural development project. Up to SDR4.3 million (US$5.0 million) of the credit would be onlent to farmers through the cooperative system; interest charges to final borrowers would be 15 percent per annum for seasonal loans and 12 percent for development loans; repayment of the former would be made over 10-12 months and of the latter over 10-12 years including five of grace. The project would be cofinanced by the African Development Fund which would provide a loan equivalent to about US$9.6 million. PART I - THE ECONOMY 1/ 2. An economic report, entitled "Liberia: Current Economic Situation and Prospects" (No. 2662-LBR), was distributed to the Executive Directors on December 28, 1979. An economic mission visited Liberia in October 1981 to review the current economic situation and its report is in preparation; its principal findings are included in the following paragraphs. Country data are shown in Annex I. Structural Characteristics 3. The growth of Liberia's economy remains heavily dependent on the performance of the enclave sector, consisting mainly of: (a) iron ore mines, (b) rubber plantations, and (c) forestry concessions. These enclaves are the main source of export earnings. Iron ore mining is by far the largest single activity in the enclave sector, accounting for about one-third of gross domestic product at factor cost. There are only limited linkages between the enclaves and the rest of the economy; as a result, the benefits of economic growth have been unevenly distributed. 4. The income disparities between traditional agriculture and the (monetized) modern sector are a manifestation of structural imbalance in the economy. Traditional agriculture has minimal interaction with the rest of the economy; however, it supports the majority of the population - as much as 60 percent - who live at, or near, subsistence level. With a population of about 1.7 million, average per capita GNP in 1979 is estimated at US$500. While the enclave sector yields a per capita GNP of about US$1,620 compared to US$780 for the rest of the monetized economy, the great majority of the population who live in the traditional non-monetized sector have a per capita income of about US$185 per annum. 1/ This sector is substantially unchanged from the President's Report for the Monrovia Urban Development Project (P-3239-LBR) of March 11, 1982.  - 2 - Development Plan and General Economic Policy 5. After completing its first four-year Development Plan, Liberia has embarked upon preparation of a Second Plan. The first Plan was intended as the first of a series of multi-year investment programs aimed at meeting the basic, long-term objectives of Liberia's socio-economic development. These are: (a) diversification of production; (b) dispersion of sustainable socio-economic activities throughout the country; (c) greater involvement of Liberians in development activities; and (d) equitable distribution of the benefits of economic growth. Performance under the first Plan fell short of expectations. Investment in the productive sectors was below the original target, while one-fourth of total expenditure during the Plan period was for facilities and buildings for the Organization of African Unity (OAU) confer- ence, which had not been included in the original Plan. 6. The new Government which assumed power in April 1980, reaffirmed the broad objectives of the First Plan. Work had been initiated under the former Government on the preparation of the Second Plan (FY82-86) which is scheduled for completion shortly. The general economic policy statement issued by the Government of the People's Redemption Council on June 5, 1980 sets out the broad objectives of the new regime. The main thrust of the economic policy is to expand the country's productive capacity, especially in agriculture, and to ensure that benefits from economic growth and development are enjoyed by an increasing number of Liberians. To achieve this end, the Government intends to encourage local and foreign private investment and give priority to labor intensive investments. Significant measures taken by the new Government since its assumption of office include decisions: (a) to retain the Liberian dollar at par with the US dollar, which remains legal tender in Liberia; (b) to honor all existing contractual agreements with foreign private investors and to change such agreements only through negotia- tions with all parties concerned; (c) to permit the free flow of capital, goods and services; and (d) to regulate labor relations by full protection of the rights of both workers and management. Recent Economic Developments 7. While strong world demand for Liberia's major export, iron ore, brought large gains from exports up to 1974, the subsequent recession in industrialized countries significantly reduced demand for the country's most important export commodities--iron ore, rubber and timber. With growth performance continuing to be largely a function of enclave activities, growth of real GDP--which averaged about 6.3 percent a year in the 1967-70 period and 4.2 percent a year in the 1970-74 period--has slowed down significantly and is estimated to have been about 0.7 percent a year between 1974 and 1980. Economic performance in 1979 and the first quarter of 1980 had taken a turn for the better, but following the change in Government in April 1980 there was a setback in growth because of loss of confidence in the private sector and, according to the preliminary estimates, real GDP declined by 3.8 percent in 1980.  - 3 - 8. During 1974-78, mostly reflecting accelerated international infla- tion, imports rose by 14 percent annually, exceeding the 5 percent annual export growth rate. However, a temporary resurgence in world prices of iron ore, timber and rubber helped Liberia to expand its exports by 10 percent in 1979 and 14 percent in 1980. Oil imports increased from US$15 million in 1973 to US$152 million in 1980, or 28 percent of the country's total imports. But higher prices for Liberia's major exports helped achieve a trade surplus of US$66.1 million in 1980; the growth in imports has been relatively lower in the last 18 months due to the general slack in economic activities following the change in Government. The current account deficit, reflecting substantial remittances of capital and other factor income from enclave operations, increased to about US$104 million in 1980, or 10 percent of GDP, as compared to US$30 million in 1974, or 5 percent of GDP. Rising current account deficits were financed mostly by private capital transactions, but in the last two years official capital inflows have risen substantially. 9. Liberia has had a long history of sound fiscal management and public sector resources did not come under undue pressure until the mid-1970s. Since 1974, the Government has been facing growing budgetary deficits. The deficit in 1975 was only about US$4.0 million, but by FY1980 it had reached US$111 million, or 62 percent of government revenues. The strain on public sector finances intensified during 1979-80 and assumed serious proportions in the aftermath of the change in Government. The decline in public revenues, coupled with a decision to increase the salaries of low-paid military personnel from $100 to $250 per month and the payment of pending bills from the OAU Conference, increased the overall budgetary deficit to $136 million in FY1981 (13 percent of GDP). The shortfall in revenues was caused largely by lower import duty collection in the last quarter. The doubling of salaries of the lowest grade civilian employees from July 1, 1980 aggravated the budgetary deficit for FY1981 and the Government was faced with a serious liquidity crisis when it approached the IMF in May 1980 for further assistance. Relations with the IMF 10. In July 1980 the new Government introduced a two-year stabilization program to be supported by a standby arrangement with the IMF. Major elements in the stabilization program included tighter fiscal policies and stricter control of the financial operations of the public corporations, increased X mobilization of domestic revenues, rationalisation of energy pricing policies, a freeze on wages and salaries of Government employees and elimination of consumer subsidies. Limits were placed on new borrowings with a maturity of one to twelve years and on credit to the Government and the public sector from the banking system. 11.. By early 1981, the Government had introduced the necessary measures to revise tax rates and levy import surcharges. However, the overall deficit in FY81 was $136 million (62 percent of Government revenues), or $61 million higher than the original budget estimates. While revenue collection was higher by 8 percent as compared to the previous year, it fell short of the  - 4 - expected yields as a result of a decline in customs duties. There was also some increase in recurrent expenditures beyond budget estimates. This budgetary imbalance, lack of strict control on the operations of public corporations, and the consumer subsidy on rice were some of the major issues addressed in the context of the second year of the stabilisation program. To address them, the Government announced elimination of the consumer subsidy on rice; a new progressive national reconstruction tax on wages, salaries and self-employed income, and increased excise taxes on beer and gasoline. The Government also proposes to improve the financial viability of the public corporations. The IMF Board approved the program in August 1981 and made available SDR 55 million for the second year of the Standby Arrangement. 12. Monthly payments for oil imports continue to create a serious liquidity problem on public sector finances as receipts generated abroad are not sufficient to meet oil payments and service the public sector's external debt. U.S. Government grants from the Economic Support Fund have upto now helped to ease the situation. Creditworthiness 13. Liberia's external public debt outstanding and disbursed was estimated at about US$537 million as of December 1980. The Bank Group share of the public debt outstanding and disbursed is presently about 15 percent and is expected to increase to about 24 percent by 1984. As a proportion of public debt servicing liability, the Bank Group's share is expected to increase from 14 percent to 18 percent over the same period. Debt service payments as a proportion of exports of goods and non-factor services were estimated at about 7 percent in 1980 as compared to 5.7 and 7.7 percent for 1972 and 1974 respectively. Public debt service payments as a percentage of Government revenues (a more meaningful indicator for Liberia which uses the US dollar as a medium of exchange) declined from about 24 percent in 1972 and 21 percent in 1974 to 16.5 percent in 1978, but has again gone up to 23 per- cent in 1980. This upsurge in the debt service ratio has occurred primarily as a result of short-maturity loans contracted by Liberia in the last few years to finance OAU-related expenditures and to meet the growing budgetary deficits. This increase in debt servicing obligations created severe pressures on Liberia's public finances. The Government therefore sought and obtained the assistance of the Paris Club in rescheduling its external public sector debt of US$32 million maturing during the period July 1980 to December 1981; the rescheduled debt is to be repaid over 9 years, including four years of grace. In December 1981 further relief was requested and Liberia obtained an 18 month extension, with extension from October 1, 1982 to June 30, 1983 subject to renewal of the standby agreement with the IMF when it expires in September 1982. 14. Assuming a continuation of the recent rate of growth in public revenues and exports (10 percent and 5 percent per annum, respectively) Liberia's debt service ratio is estimated to increase to about 33 percent of public revenues and 12 percent of exports by 1985; should there be an improvement in the country-s economic prospects over the next few years, the debt service ratio would be somewhat lower (around 29 percent) by 1985.  Although the movement in world prices of Liberia's main export commodities in 1981 was not particularly favorable, the growth in export earnings is projected to be higher in subsequent years as a result of the likely strengthening in demand for iron ore and an increase in iron ore prices. Forecasts for natural rubber prices also indicate a consistently upward movement, and Liberia may expect higher yields from the recently replanted acreage and new planting of rubber. Other ongoing agriculture projects (particularly for coffee, cocoa, palm oil), and successful exploration and development of other mining resources, including gold and barite, will help diversify the economy and should result in an acceleration in the rate of growth of exports during the next three to four years. Public revenues will benefit from these increased export earnings. However, these prospects are clearly contingent upon a number of policy measures which the Government has to initiate and sustain over the next years, e.g., a reduction in the size of the Government budget deficit, restraint on new commercial borrowings and public sector credit expansion, increased mobilization of public savings, maintenance of the traditional openness of the economy, appropriate pricing and tariff policies, revival of investor confidence, inflow of new private investment and improvement in the coordina- tion of overall economic management. Although Liberia has acute short-term liquidity problems, restoration of growth and stability is feasible, provided the Government is able and willing to pursue the right course. 15. In recent years Bank group lending to Liberia has been a blend of IDA credits and Bank loans; in view of the country's relatively low per capita income and high public debt service liability, continued IDA assistance is justified. PART II - BANK GROUP OPERATIONS IN LIBERIA 1/ 16. As of January 31, 1982 the Bank had approved 21 loans (including one Third Window loan) for projects in Liberia totalling US$155.77 million; there have been 9 IDA credits totalling US$47.9 million, and one technical assistance grant of US$200,000 for development planning. IFC has made two equity investments totalling US$550,000 in the share capital of the Liberian Bank for Development and Investment (LBDI). The Bank Group assistance has financed roads, agriculture, rural development, power, education, water supply, industry and mining, small enterprises, and petroleum pre-exploration. Annex II contains a summary statement of Bank loans, IDA credits, and IFC investments as of January 31, 1982 and notes on the execution of ongoing projects as of December 31, 1981. 17. Bank Group disbursements for projects in Liberia increased steadily from FY78 to FY81 when disbursements were equivalent to 26 percent of credits and loans outstanding at the beginning of that fiscal year. This performance was made possible by close coordination with the budgetary authorities, which consistently earmarked sufficient counterpart resources to Bank Group supported 1/ This section is substantially unchanged from the President's Report for the Monrovia Urban Development Project (P-3239-LBR) of March 11, 1982.  - 6 - projects in Liberia. In spite of its continued commitment to such projects, the Government is now experiencing some difficulty in providing counterpart resources because of the sharp deterioration in public finances discussed in Part I of this report. Close monitoring of project implementation and continued coordination with the budgetary authorities should avoid excessive delays in implementation due to lack of counterpart resources. However, the Government's present resource position is being taken into account in struc- turing new projects: their size is being limited to essentials and as much foreign financing as possible is being provided so as to reduce the need for Government contributions. 18. The objectives of Bank Group operations are: (a) to help Liberians take greater initiative in developing their own resources for the benefit of their people; (b) to support policies and programs leading to a broader distribution of the benefits of economic growth; (c) to help the Government broaden the economic base and overcome infrastructural constraints to growth; and (d) to assist the Government in mobilizing development resources from other external agencies. In furthering these objectives, particular attention is being paid to (a) the need to expand the supply of trained manpower and (b) measures to strengthen and improve the operations and finances of the public corporations in Liberia. 19. In support of the objectives of raising the standard of living of lower income groups and broadening the productive base, the Bank Group lending program emphasizes agriculture and rural development. The Bank Group is currently cofinancing with USAID two agricultural projects in Bong and Lofa Counties. These projects are designed to (a) assist subsistence farmers to expand their production base and to increase their productivity and income through the provision of support services and infrastructure, and (b) to help diversify the country's export and revenue base. A rubber project, co-financed with the Commonwealth Development Corporation (CDC), is aimed at expanding exports and increasing the productivity and incomes of small and medium size farmers. A forestry project which the Bank is co-financing with the African Development Bank (ADB) and the German Agency for Technical Cooperation, is aimed at strengthening the Government-s forest service, initiating an industrial plantation program, and helping Liberia better manage and exploit its forestry resources. An oil palm project, cofinanced by the ADB and the CDC, would help expand and diversify the country's export and revenue base, provide employment, increase the income level of rural families, and strengthen the institutional capability in the country for oil palm development. 20. In addition to its support for agriculture, the Bank Group is also assisting the Government in its diversification efforts through credits to LBDI for the manufacturing sector. A small and medium scale enterprises project, approved in November 1980, seeks to stimulate economic activity and employment by providing credit and technical assistance. While reinforcing the Government's efforts to become less dependent on mining, the Bank has granted loans for a project to rehabilitate a mine operated by the National  - 7 - Iron Ore Company, which would help maintain employment, increase Government revenues and prepare the way for an orderly transition from mining to other economic activities in the area. The objective of the petroleum exploration promotion project, approved in October 1980, is to establish Liberia's hydro- carbon potential by attracting oil companies to take oil exploration permits in Liberia. 21. Given Liberia's pressing needs for physical infrastructure, the Bank Group continues to play a leading role in financing development and maintenance of roads and water supply and power facilities. A water supply project for which a Credit was granted in 1978 is designed to help rehabi- litate and expand the Monrovia water supply system, extend water distribution to lower income groups in metropolitan areas, and strengthen the management, staffing, and finances of the Liberia Water and Sewer Corporation (LWSC). The feeder roads project for which a Bank loan was approved in 1979 is designed to open up the agricultural hinterland of Liberia to support ongoing and proposed agricultural and rural development programs. The nearly completed fourth highway project has, like earlier Bank-financed projects, expanded the country's limited basic road network. A fifth highway project to improve the country's road maintenance capability is being considered. In the power sector, a nearly completed fourth power project has expanded the Liberia Electricity Corporation's (LEC) thermal generating facilities to meet current demand, strengthened LEC's management, and extended connections to poor urban households in Monrovia. Bank Group assistance would also be considered to meet Liberia's longer term electricity needs through hydropower development. 22. Since the lack of trained manpower is a major constraint to develop- ment in Liberia, the Bank Group has financed three education projects and is currently financing preparation of a fourth project through an advance from the PPF. The proposed project would emphasize manpower training and upgrade primary education. PART III - THE AGRICULTURAL SECTOR Characteristics 23. Agriculture is the largest productive sector in Liberia's economy, accounting for 35 percent of GDP. The rate of growth of agriculture is estimated at 4.1 percent per annum for the period 1976 to 1980. About 60 percent of the total population of Liberia earn a livelihood from agricul- ture. With 15 persons per square kilometer, Liberia's average population density is low and moreover there is a wide range (5 to 80 people per square kilometer) in various parts of the country. Thus, land is not a constraint to agricultural development. Rice is the main staple, and is largely grown on the upland areas under a traditional system of shifting cultivation which provides a relatively fertile environment to produce a yearly crop. Upland areas are also used to produce tree crops.  24. Farming operations fall into three categories in Liberia: (a) con- cessions consisting of large foreign-owned plantations producing exclusively for export (e.g. rubber and timber) employing trained managerial and technical staff and capital-intensive methods; (b) Liberian-owned commercial farms engaged primarily in rubber production, but with secondary interests in other activities such as coffee, oil palm, cocoa, and some poultry and pig produc- tion; and (c) traditional subsistence farming by which small farmers produce mainly for home consumption. Some 90 percent of all households engaged in agriculture are in the last category. Except for those associated with agricultural development projects, most farmers in the traditional sector are largely outside the monetized economy; they have access to minimal infra- structure and cultivate less than 2 hectares per year of subsistence crops, mainly rice and cassava, with some cash crops such as coffee, cocoa and sugar cane. Thus, there is a considerable untapped potential for developing agri- culture in Liberia. Government Objectives, Strategy and Constraints 25. The Government gives high priority to agricultural and rural development, particularly for the benefit of smallholders. Allocations for agriculture increased from about 4 percent of the public sector development budget in FY70 to about 21 percent in FY80. In the FY81 development budget, the largest sectoral allocation (30 percent) was for agriculture. The Govern- ment-s objective is to improve traditional farming by increasing on-farm productivity and supporting marketing and processing, as well as related social and other infrastructure. 26. The Government's strategy for agricultural development consists of: (a) encouragement of smallholder production of rubber, coffee, cocoa and oil palm crops which help diversify agricultural production and increase export earnings; (b) implementation of projects designed to raise the income level and living conditions of traditional farmers, which represent the vast majority of the rural population; and (c) improvement of agricultural services to traditional farmers, particularly extension and research but also programs such as the improved rice seed supply service. The Government has abandoned its earlier strategy of promoting large-scale and mechanized rice projects, principally because of their costliness and uneconomic results. 27. Though the above strategy has begun to have an impact, there are still a number of constraints on agricultural development. These include inadequate feeder roads, and transport, storage and marketing facilities. Input availability and distribution, as well as agricultural support services, are also inadequate. There is a shortage of qualified and experienced agricultural officers and crop specialists, and the extension staff in contact with farmers is inadequately trained, ill equipped, and poorly supervised. Farmers- organizations, particularly cooperatives, are still in the early stages of development and only play a limited role in development. Despite a reorganization, the Ministry of Agriculture has not yet equipped itself for policy-making, sectoral planning, and project preparation and implementation.  - 9 - Budgetary constraints prevent the Ministry from providing adequate logistical support to its field staff. Such constraints also affect institutions such as the Agricultural and Cooperative Development Bank (ACDB) and the Liberia Produce Marketing Corporation (LPMC), both of which play an important role in supporting smallholder agriculture. The ACDB has been unable to provide credit to the traditional farmers, while LPMC's buying services have been adversely affected by liquidity problems, and, more recently, by the decline in world prices for coffee and cocoa which has exposed the weaknesses of its marketing operations. Bank Group Lending 28. Bank Group lending for agriculture supports the Government's objec- tives of diversifying production and increasing smallholder participation in development. Bank Group support, for a total of US$45.6 million has been provided for six projects in the sector. The first operation (Cr. 306-LBR of US$1.6 million - 1972) was for a pilot rubber development study and technical assistance to help prepare projects, and led to Bank Group involvement in the Phase I Lofa County Agricultural Development Project (Cr. 577-LBR of US$6 million), the Bong County Agricultural Development Project (Cr. 700-LBR of US$7 million), and the Rubber Development Project (Cr. 786-LBR of US$6 million and Ln 1544-LBR of US$7 million). A Forestry Development Project (Cr. 839-LBR of US$6 million) and an Oil Palm Project (Ln. 1765-LBR for US$12 million) have since been added. 29. The first phase Lofa County Agricultural Development Project is being cofinanced by USAID, IDA and the Government of Liberia. The IDA Credit became effective in May 1976. The project aims at increasing the productivity of smallholder farms in a limited area in upper Lofa County. It includes training for extension workers so that they, in turn, may motivate farmers to improve farming techniques; feeder roads and well construction; the devel- opment of cooperatives; the supply of agricultural inputs and credit, and the monitoring of, and protection against, schistosomiasis. Farmers have become aware of the benefits to be derived from these improvements and there has been considerable enthusiasm in upper Lofa for the project; improvements in agri- culture are evident. While performance on the whole has been satisfactory it was found advisable to modify the project as experience was gained during implementation. Thus, one component (cocoa rehabilitation) was dropped * because it proved uneconomic, another was added (latrine construction) and another modified (upland rice) because farmers did not respond well to the use of fertilizers. It was also found that response to the swamp rice component was weak in areas of low population density. Since this project was Liberia's first integrated agricultural development project, these changes in some of its components can be considered to be normal. These experiences have been taken into account in structuring the proposed project. To date, some 600 km of newly constructed and reconditioned feeder roads have been finished as well as 195 village wells, 80 latrines, 27 farmer and staff training centres, one vehicle workshop and four district offices. These works have been completed with self-help participation in most cases. The project aims at increasing the production of rice, the traditional food crop, while developing new cash crops, coffee and cocoa. Farmers have responded well to the introduction of water control and other improvements in swamp rice production, and have  - 10 - attained 98 percent the appraisal production target. Ninety-three percent of the upland rice target was also attained, while cocoa and coffee targets were 78 and 50 percent attained, respectively. The cocoa and coffee project components experienced unforeseen shortages of seedlings, and all components were adversely affected in 1980 by disruptions during the change of Government. 30. Project management was in the hands of a team of expatriates to begin with; this team worked closely with its Liberian counterparts and handed over management to Liberians in 1979. The Liberian Management has run the project satisfactorily since then. The project has succeeded in developing an enthusiastic and well motivated staff, in making farmers receptive to project activities, and in establishing a physical infrastruc- ture which makes a significant contribution to the development of the area. However, a longer association between extension staff and farmers is necessary to sustain the application of improved techniques and to extend benefits to farmers not affected by the first phase project. An eventual merging of Ministry of Agriculture and project staff in the County is desirable in the interest of rationalizing extension and related services, thus reducing costs to the Government. An effort to strengthen the cooperatives is also required so that they take over responsibilities for farm input supply, credit and marketing. LPMC's pricing mechanism and purchasing arrangements for farmer produce (particularly coffee and cocoa) must also be improved to obtain greater efficiency in marketing. All these issues would be addressed by the proposed project. 31. A summary discussion of the progress made in carrying out the remaining Bank Group supported projects in the agricultural sector may be found in Annex II. In general, progress has been satisfactory; though the Government has been extremely short of resources for investment, it has provided sufficient counterpart funds for all Bank Group assisted projects in the sector, demonstrating the high priority given to agricultural develop- ment. PART IV - THE PROJECT 32. The project would be the second phase of the Lofa County Agricul- tural Development Project, the first phase of which is being financed by IDA under Credit 577-LBR (see paras 29, 30 and Annex II). In view of good progress being made under the first project, the Government requested in mid-1979 that IDA consider a second. The project was prepared during 1980 by the Ministry of Agriculture with IDA assistance and a project report was concluded in January 1981. IDA appraised the project in May-June 1981 and negotiations were held in Washington in January 1982. The Liberian Delegation was headed by Mr. Alfred Fromayan, Minister of Agriculture, and included officials from his Ministry as well as from the Ministries of Finance and of Justice. The ADF was represented at these negotiations and appraised the project in February 1982.  - 11 - Project Objectives 33. The proposed project would consolidate the experiences and achieve- ments of the first Lofa County Agricultural Development Project and extend agricultural services to that part of the upper Lofa County not covered by the first project. An additional 8,000 farm households are expected to benefit directly from the proposed project, bringing the total number of families affected by both projects to some 16,000. The proposed project would aim at increasing production of rice (upland and swamp) and cassava by improved farm management; new plantings of coffee and cocoa would be carried out and there would be some rehabilitation of existing smallholder coffee farms. The project would also seek to reorganize and strengthen cooperatives to make it possible for them to take over input distribution, credit, and primary produce marketing functions; it would also start the integration of project staff with the Ministry of Agriculture and seek to improve the operations of LPMC. Special assistance would also be provided to women-farmers. Project Area 34. The project area would be extended to include the whole of the upper part of Lofa County. It is situated in northern Liberia and borders with Sierra Leone in the west, and with Guinea in the north and east. Upper Lofa consists of an area of about 8,000 sq. km; high ground soils are generally well suited to coffee and cocoa growing while lowland soils are suitable for rice and vegetable growing. The area has good potential for agricultural production and contains an estimated population of 185,000 people, of which some 90 percent, or 166,500, are engaged in agriculture. The most heavily populated part of Lofa County is in the project area, and four of Lofa-s six administrative districts are in the project area. The County is administered by a County Superintendent who is appointed by the Head of State. Project Description 35. The Project would include the following components: (i) the supply on credit of agricultural inputs, such as fertilizers, to improve production of upland and swamp rice, cassava, coffee and cocoa; (ii) expansion and improvement of extension services using the Training and Visit (T & V) system with female extension workers * to reach women-farmers; (iii) staff training to improve the extension program and cooperatives; (iv) production of improved cocoa and coffee seedlings and cassava setts, and adaptive research into upland cropping systems; (v) improvement of cooperatives to enable them to take over res- ponsibility for input supply, credit and marketing;  - 12 - (vi) improvements in the marketing operations of the LPMC; (vii) schistosomiasis monitoring and control in swamp rice areas; (viii) construction, upgrading and maintainance of feeder roads and farm tracks, village wells and latrines; and (ix) the establishment of a central monitoring and evaluation section of the Ministry of Agriculture and funding for evaluation studies. 36. Agricultural Services. A modified form of the T & V extension system was introduced in the first project, and was well received by both extension staff and farmers. The project would build on this experience, and improve the extension service through closer supervision and coordination and by periodic reviews to be introduced with the help of experienced con- sultants. The present training program for extension workers would be expanded to cover the project's agricultural program (6,300 ha of upland rice, 1,100 ha of swamp rice, 3,590 ha of coffee, 1,940 ha of cocoa and 600 ha of cassava); it would also provide special training to farmers using existing training facilities. Extension services would be provided to farmers' wives and to female-farmers through female home extension workers. Extension staff would work in close cooperation with the Project Unit's Adaptive Research Section, which would serve as the county's clearing house for local research on exist- ing and new crops. The project would promote the participation of farmers as much as possible in agricultural development activities, and would so seek to make them responsible for managing their development affairs. The use of village level cooperative units, group meetings under the T & V system and other group activities are expected to result in heightened levels of commit- ment and responsibility. By project completion, farmers should provide some 60 percent of their own coffee and cocoa seedling requirements from collective or town nurseries, and responsibility for providing inputs, credit and marketing should have been taken over by cooperatives. 37. Cooperatives, Credit Inputs, and Marketing. The project would give major emphasis to the development of existing cooperative societies in the project area and their affiliated Town Cooperative Units (TCUs). The Govern- ment's newly established Cooperative Development Agency (CDA) would carry out a plan of action agreed upon with IDA and based on a recent consultant's report to improve the performance of cooperatives. CDA and the ACDB would provide supervisory and training support while a cooperative specialist would be provided under the project to help reorganize and improve the operations of these societies. The CDA would also ensure that the Cooperative Societies Act's requirements with regard to accounting, auditing and elections of office bearers in the cooperatives are enforced. The project would include the construction of four subcenters for farmers to be operated by cooperatives. While these improvements are being instituted, the Project Unit would continue to procure, transport, store and distribute inputs of fertilizers, chemicals and tools on behalf of the societies. The Government would prepare by October 31, 1982 a plan of action satisfactory to IDA to improve the cooperatives and then carry out such a plan by June 30, 1983. It would also provide such resources as needed by the CDA to carry out this program and employ by December 31, 1982 a person with suitable experience in cooperatives for Lofa  - 13 - County. The Government and IDA would review progress in improving cooperatives by August 31, 1985 and the Government would take the measures which might emerge from the review (Section 3.03 of the draft Development Credit Agreement). 38. Inputs would be supplied to farmers on credit for both seasonal (seeds, fertilizers, chemicals) and development (new farms and farm rehabili- tation) requirements. Experience gained under the first project suggests that credit recovery would be satisfactory. Farmers would be required to provide at least 5 percent of investment costs in cash or labor, and credit would be provided for the balance. Except for the labor costs of development projects, the value of loans would be provided in kind, e.g., fertilizers, pesticides etc. Interest charges to farmers would be 15 percent per annum for seasonal loans and 12 percent for development loans, which is in accordance with interest rates prevailing in Liberia. Consumer prices increased 13.5 percent in 1980 but the rate of price increases has probably declined since then as a result of restricted liquidity in the country. Repayment would be over 10-12 months in the case of seasonal loans and up to 12 years, including five years of grace, in the case of development loans. The value of all loans for farm inputs, totalling up to SDR4.3 million (US$5.0 million), would be considered by the cooperatives as an equity contribution by the ACDB, and the Government, in turn, would consider this amount as an equity investment in the ACDB. The Government has provided assurances that it would enter into a financial agreement with ACDB for the transfer of project resources and that these would be transferred to, and repaid by, cooperatives and farmers at specified terms and conditions (Section 3.04 and Schedule 4 of the draft Development Credit Agreement). As bankers for, and shareholders in, coopera- tive societies, the ACDB would maintain close working relations with them and would provide guidance and assistance to improve operations. 39. LPMC sets prices, with Government approval, for the most important farm produce and makes purchases through a system of licensed buying agents. However, farmers sometimes receive prices below the announced ones from these agents. The LPMC has been unprofitable for the last two or three years. The Government removed a large subsidy element in LPMC's price for rice to con- sumers and this should reduce LPMC's financial losses. However, the Government is requesting a detailed study of LPMC's overall operations by consultants with funding provided under a US$100,000 Project Preparation Facility granted in February 1982. The study will recommend measures to improve LPMC's effi- ciency which would enable LPMC to offer more attractive prices to farmers. The Government would present a plan of action to improve LPMC before September 30, 1982 and carry out the plan of action not later than June 30, m 1984 (Section 3.05 of the draft Development Credit Agreement). Technical assistance would be provided under the project to assist in the implementation of these measures. 40. Schistosomiasis, Wells, Latrines and Roads. The Schistosomiasis Surveillance Unit established under the first project would continue to monitor the disease in swamp areas where rice is planted under the project. Staff, replacement vehicles and equipment, and operating costs including drugs for treatment of the disease, would be provided. About 160 village wells and about 100 latrines would be constructed under the project.  - 14 - 41. A good network of feeder roads and access tracks was established under the first project. A modest program of some 170 km of feeder roads and 60 km of farm-access tracks would be constructed in the new project area. Fuel, lubricants and machine spare parts would be provided under the project; only minor equipment would be provided since road building machinery is already available. Road construction receives considerable support from local communities, and self-help labor is often freely provided. This approach would be used for both construction and maintenance of roads. 42. Monitoring and Evaluation. The existing Monitoring and Evaluation (M & E) Unit would continue its activities under the project. However, assistance would also be provided to the Government to establish a Central Monitoring and Evaluation Unit in the Ministry of Agriculture, which would train, coordinate, and supervise the present and planned M & E Units in regional agricultural development projects such as the ones in Lofa and Bong Counties. Technical assistance would be provided under the project to help establish and operate this unit. Project Implementation 43. The Ministry of Agriculture would have overall responsibility for project implementation, and would delegate operating responsibility to the Project Manager providing support through its technical and administrative units. The present Liberian project management staff would be reinforced by two specialized support positions--one for monitoring and evaluation and the other to strengthen cooperatives--which would be recruited internationally. The appointments, and terms and conditions of employment would be acceptable to IDA (Section 3.02 of the draft Development Credit Agreement). The Govern- ment intends to appoint the Project Manager as Lofa County Agricultural Officer; he would thus be in charge of all agricultural support activities in the County. Appointment of this officer and the principal management positions in the project unit would be satisfactory to IDA (Section 3.06 of the draft Development Credit Agreement). The Government plans to decentralize the Ministry of Agriculture's staff and to integrate it with the administra- tive structures of regional development projects. During negotiations, the Government agreed to review with IDA proposals to reorganize the services of the Ministry of Agriculture in the project area and to ensure that its staff is used efficiently (Section 4.02 of the draft Development Credit Agreement). Project Cost and Financing 44. Total project costs, net of identifiable taxes and duties, are estimated at US$28.0 million of which US$13.7 million, or 49 percent, are foreign exchange costs. A summary breakdown of costs is shown in the Credit and Project Summary at the beginning of this report. Cost estimates are based on mid-1981 prices. Cost estimates for civil works are based on the experience under the first project. Local staff salaries and emoluments reflect prevailing costs. The cost of internationally recruited staff is based on an estimated cost of US$80,000 per man-year, which is in accord with prevailing conditions. Physical contingencies have been calculated at 10 percent for buildings, and 5 percent for civil works, equipment, non-labor  - 15 - farm inputs and operational costs. Price contingencies are based on annual local cost increases of 7 percent for personnel and 10 percent for civil works and operational costs. Price contingencies for foreign costs are based on assumed price increases of 7.8 percent in 1982, 8 percent in 1983, 7.5 percent in 1984, 7.0 percent in 1985 and 6 percent in 1986. 45. The proposed IDA Credit and the African Development Fund (ADF) loan equivalent to US$9.6 million would together cover 90 percent of total costs. The Government's contribution of US$2.9 million would cover mostly local personnel and operating costs. The IDA credit would finance 55 percent of total project costs, including the equivalent of US$6.8 million of local costs. Local cost financing is recommended because the Government is facing severe budgetary constraints and is short of resources for investment. The ADB has indicated that it is prepared to grant an ADF loan equivalent to US$9.6 million, which would include the equivalent of US$4.6 million to finance local costs. A condition of effectiveness of the IDA credit would be that all conditions precedent to the effectiveness of the ADF loan be fulfilled (Section 6.01 of the draft Development Credit Agreement). 46. As discussed in Part I of this report, the Government faces severe financial constraints which would make it difficult for it to provide the working capital required for project execution. In view of this, it is recommended that SDR170,000 (US$200,000) from the IDA credit be deposited immediately after Credit effectiveness in a special account which the Govern- ment would open at the National Bank of Liberia. The account would be re- plenished upon receipt of disbursement requests supported by appropriate documentation (Section 2.02(c) to (g) of the draft Development Credit Agree- ment). Procurement 47. Goods and services financed under the credit would be procured according to IDA guidelines. Individual contracts for goods valued at US$75,000 or more would be procured through international competitive bidding. Purchases would be grouped into packages of at least US$75,000 whenever possible. Domestically manufactured goods would be allowed a margin of preference of 15 percent, or the level of applicable import duty, whichever is lower. Contracts for civil works and contracts for equipment, vehicles and fertilizers valued at less than US$75,000 but at more than $10,000, would be procured through local competitive bidding or limited international bidding procedures which have been reviewed by, and are acceptable to, IDA. Contracts valued at less than US$10,000 for small items would be procured by negotiated purchase after soliciting at least three quotations. Contracts for civil works would probably not be attractive to foreign contractors due to their small sizes and dispersed locations and would, therefore, be awarded after local competitive bidding according to procedures which have been found satisfactory to IDA. The services of internationally recruited consultants would be obtained according to IDA guidelines. Labor and local personnel hired for the project would be obtained from local markets according to Government procedures. Goods and services financed by the ADF loan would be procured according to procedures acceptable to the ADB.  - 16 - Disbursements 48. Disbursement of the IDA credit would be on the following basis: for agricultural inputs, 100 percent of foreign expenditures or 90 percent of local expenditures; for civil works, 100 percent of foreign expenditures or 70 percent of local expenditures; for vehicles and equipment, 100 percent of foreign expenditures or 90 percent of local expenditures; for consultant services, 100 percent of foreign expenditures or 85 percent of local expendi- tures; for staff costs, 90 percent of salaries of the Project Unit to enable it to carry out the credit and cooperative, extension and monitoring and evaluation components, and, for other operating expenses, 100 percent of foreign expenditures or 90 percent of local expenditures for the credit and cooperatives components. 49. Disbursements for vehicles and equipment, civil works, salaries and allowances of internationally recruited consultants, production inputs, fuel and spare parts would be made against full documentation submitted to IDA. In the case of incremental local staff salaries and minor, miscellaneous, operational expenditures, disbursements would be made against certificates of expenditure which would be checked in the course of project supervision. Auditing 50. The Government would have the accounts for the project audited yearly by independent auditors acceptable to IDA. The audit reports would be in a form acceptable to IDA and would include a separate opinion on the Special Account and on the records in support of statements of expenditure (Section 4.01 of the draft Development Credit Agreement). Project Benefits and Risks 51. Between 7,000 and 8,000 farm families would benefit from the crop improvement and credit programs under the project. At full development of their respective crops, and after repaying all development loans, families would earn incomes 2.5 to 3.5 times greater than their present average income of about US$350 per annum. Differences in incremental incomes would result from the choice of different crop combinations. 52. Improvements in the road network, and construction of village wells and latrines, would benefit a larger proportion of the rural population than that affected by the crop improvement and credit programs. In addition, employment would be created by the increased business activity induced by the project in other sectors, such as trading, processing, construction, and transportation. About half of the rural families in the County could benefit in some way from the project. The training programs and institutional improve- ments to be introduced would facilitate planning and implementation of future agricultural development programs. 53. While incremental revenues to the Government from indirect taxes on increased production and business activity in Lofa County resulting from the project would not permit full recovery of project costs, they would be suffi- cient to cover the recurrent costs of agricultural development administration  - 17 - and road maintenance in the County once the project is completed. Incomplete cost recovery is justified by the low level of family incomes in the project area. 54. As Liberia is a net importer of food, the incremental food pro- duction would be readily absorbed by the local market and represent a for- eign expenditure saving. By 1990, the incremental annual output of rice would be worth, at border prices, about US$3.2 million (at 1981 prices), net of the foreign cost of farm inputs. Coffee and cocoa are mainly export crops and incremental production from the project would add to foreign earnings. It is not expected that Liberia would face any problem in marketing additional output since this would be a small proportion of world supply. Liberia is a member of the International Coffee Organization and its current quota (8,000 tons) is higher than domestic production (6,500 tons); it is not a signatory to the International Cocoa Agreement. Incremental net annual foreign earnings from export crops could reach US$7.4 million by 1992. 55. The project's economic rate of return is estimated at 17 percent taking into account project development costs and recurrent costs incurred by the Government after project completion as well as incremental production costs incurred by farmers. The benefits are based on the expected incremental value of crops. Sensitivity analyses indicate that the project is fairly resilient and would remain viable even if benefits should fall by 20 percent. 56. Since the project would be the second phase of an integrated agri- cultural development program in Lofa County and would build upon the institu- tions and experience of the first project, many of the risks normally asso- ciated with projects of this nature would be minimized. However, two risks would be: (a) delays in strengthening and expanding the marketing and credit services through the cooperative network; and (b) delays in, or failure to, improve the efficiency of the LPMC. To minimize these risks, transfer of credit and marketing functions to the cooperatives would be done gradually and only after providing appropriate management training and other support assistance. A suitable plan of action for improving LPMC's operations, based on a study being carried out by consultants, would likewise address the second risk. On the whole, the project presents a moderate level of risk. PART V - LEGAL INSTRUMENTS AND AUTHORITY * 57. The Draft Development Credit Agreement between the Republic of Liberia and IDA as well as the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement are being distributed to the Executive Directors separately.  - 18 - 58. In addition to the features of the Development Credit Agreement which are referred to in the text and listed in Section III of Annex III, special conditions of Credit effectiveness would be: (a) execution and delivery of a subsidiary agreement, satisfactory to IDA, between the Govern- ment and ACDB, (b) opening of the special account in the National Bank of Liberia, and (c) fulfillment of the conditions of effectiveness of the ADF Credit. 59. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 60. I recommend that the Executive Directors of the Association approve the proposed credit. A. W. Clausen President Attachments Washington D. C. April 12, 1982 1  - 19 - ANNEX I TABLE 3A Page 1 LIBERIA - SOCIAL INDICATORS DATA SHEET LIBERIA REFERENCE GROUPS (WEIGHTED AVERAGE5 LAND AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE)- TOTAL 111.4 MOST RECENT MIDDLE INCOME MIDDLE INCOME AGRICULTURAL 6.1 1960 lb 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA LATIN AMERICA & CARIBBEAN GNP PER CAPITA (US$) 160.0 260.0 500.0 794.2 1616.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 87.5 558.8 448.2 707.5 1324.1 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUSANDS) 978.0 1335.0 1797.0 URBAN POPULATION (PERCENT OF TOTAL) 20.5 26.2 32.3 27.7 64.2 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 3.7 STATIONARY POPULATION (MILLIONS) 11.0 YEAR STATIONARY POPULATION IS REACHED 2095 POPULATION DENSITY PER SQ. KM. 8.8 12.0 16.1 55.0 34.3 PER SQ. KM. AGRICULTURAL LAND 163.0 217.0 284.6 130.7 94.5 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 45.4 46.7 47.6 46.0 40.7 15-64 YRS. 52.0 50.8 50.0 51.2 55.3 65 YRS. AND ABOVE 2.6 2.5 2.4 2.8 4.0 POPULATION GROWTH RATE (PERCENT) TOTAL 2.8 3.1 3.3 2.8 2.4 URBAN 5.4 5.7 5.6 5.1 3.7 CRUDE BIRTH RATE (PER THOUSAND) 50.2 49.3 48.1 46.9 31.4 CRUDE DEATH RATE (PER THOUSAND) 20.3 16.3 13.6 15.8 8.4 GROSS REPRODUCTION RATE 3.4 3.4 3.4 3.2 2.3 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) .. .. USERS (PERCENT OF MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71=100) 96.0 101.0 100.0 89.9 108.3 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 95.0 97.0 104.0 92.3 107.6 PROTEINS (GRAMS PER DAY) 38.0 41.0 42.0 52.8 65.8 OF WHICH ANIMAL AND PULSE 9.0 11.0 10.0 16.1 34.0 CHILD (AGES 1-4) MORTALITY RATE 29.3 21.9 16.4 20.2 7.6 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 44.4 49.4 53.5 50.8 64.1 INFANT MORTALITY RATE (PER THOUSAND) .. .. .. .. 70.9 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 20.0 27.4 65.7 URBAN .. .. 64.0 74.3 79.7 RURAL .. .. 6.0 12.6 43.9 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. 11.0 .. 59.9 URBAN .. .. 35.0 .. 75.7 RURAL .. .. 6.0 .. 30.4 POPULATION PER PHYSICIAN 12600.0/c 11754.5 9259.0 13844.1 1728.2 POPULATION PER NURSING PERSON 5810.1/c 4651.1 2904.0 2898.6 1288.2 POPULATION PER HOSPITAL BED TOTAL 711.8 592.0 623.0 1028.4 471.2 URBAN 181.3 194.4 .. 423.0 558.0 RURAL .. .. .. 3543.2 ADMISSIONS PER HOSPITAL BED .. 27.7 1OL'S ING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. URBAN 3.9 .. RURAL .. .. AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. URBAN 1.7/d .. .. RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. .. URBAN .. .. .. RURAL .. .. ..  - 20 - ANNEX I TABLE 3A Page 2 LIBERIA - SOCIAL INDICATORS DATA SHEET LIBERIA REFERENCE GROUPS (WEIGHTED AVERAGES - MOST RECENT ESTIMATE)- MOST RECENT MIDDLE INCOME MIDDLE INCOME 1960 /b 1970 lb ESTIMATE /b AFRICA SOUTH OF SAHARA LATIN AMERICA & CARIBBEAN EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TMTAL 31.0 53.0 64.0 73.7 101.7 MALE 45.0 71.0 80.0 96.8 103.0 FEMALE 18.0 35.0 48.0 79.0 101.5 SECONDARY: TOTAL 2.0 9.0 20.0 16.2 35.3 MALE 3.0 15.0 29.0 25.3 34.9 FEMALE 1.0 4.0 11.0 14.8 35.6 VOCATIONAL ENROL. (I OF SECONDARY) .. 5.3 3.0 5.3 30.1 PUPIL-TEACHER RATIO PRIMARY 32.0 36.0 42.0 36.2 29.6 SECONDARY 12.0 17.0 .. 23.6 15.7 ADULT LITERACY RATE (PERCENT) 8.9/e 15.0 30.0 .. 80.0 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 1.0 11.1 8.1 32.3 42.6 RADIO RECEIVERS PER THOUSAND POPULATION 102.2 116.1 162.8 69.0 215.0 TV RECEIVERS PER THOUSAND POPULATION 1.5 4.9 5.9 8.0 b9.0 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 0.8 5.2 4.9 20.2 62.8 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.6 0.6 1.1 0.7 3.2 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 379.8 480.4 605.8 FEMALE (PERCENT) 34.1 32.8 32.1 36.7 22.6 AGRICULTURE (PERCENT) 80.0 75.6 70.5 56.6 35.0 INDUSTRY (PERCENT) 10.D 11.6 13.7 17.5 23.2 PARTICIPATION RATE (PERCENT) TOTAL 38.8 36.0 33.7 37.2 31.8 MALE 51.9 49.0 46.3 47.1 49.0 FEMALE 26.1 23.3 21.4 27.5 14.6 ECONOMIC DEPENDENCY RATIO 1.2 1.4 1.5 1.3 1.4 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. 61.7/f HIGHEST 20 PERCENT OF HOUSEHOLDS .. 72.6/f LOWEST 20 PERCENT OF HOUSEHOLDS .. 5.37 . LOWEST 40 PERCENT OF HOUSEHOLDS .. 10.97 . POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. 381.2 RURAL .. .. 75.0 156.2 187.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 137.0 334.3 513.9 RURAL .. .. 125.0 137.6 362.2 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 23.0 RURAL .. Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted 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 Estimate, between 1976 and 1979. /c 1964; /d City of Monrovia only; /e 1962; /f Population, higher income calculated as residual; includes expatriates. Hay, 1981  - 21-- ANNEX I Page 3 DiFifINIIONS OP SOCIAL INDICATOiS totest Alahoogh hth data -r fdaso fet .sea..e. generay judged the tatnth tetend reliable, no should alto be notd that they way ant he itee- earlnahl nusarah ....a.e of the lank ofaadaied.def......a Ied ntt i ed.by dijffet-et mat tsOInletu tedt. The data ant ........ thelma ... nn.Eal to deenrlh order of nogolude, Sdlaetreeds, I teoh annrie naet eaI ifrne haetanrh The eeeongay urI h oecutygopo h ojnt, -noney and (2)I ano-nap g,noy oath s--th- higher aneage Innate that the onu..tay group atsetale ..anr fenaynfo "Coatal -apl_ OIl Etyatea" ouo uhene "ddle Intone On-t Alaimo ted mOddle Oust" Be ohaen b-o...e of strt.ter snooi-not-Ia afflotne.) - In the _efaena anno data _ the averagesiar yanoaa eighted onbihatah near foe tank Ondiant- nd thon only abet najarfY of sheI ounonri-s iana8rap has data got th., le a.Sitan the --erge of nunrIsstn the acaa dryards on the a-alability ef data and Is toat noif_em, nantlan -ts he eneraisd It teel ntages of tone idiottur en athtIe. TIh..a. rae ore. onl-y usful On nampartag the -1-a nO ate i.di.ee- ateI eta. eeong the -antoy and ref-tato goPe. LANtD ABEA thouadsa )Payn-aia per Ho-yi,.l Sad - total, -ah-, an.d auraS - Poyalate teal Toa ne ufn rantrsa la ratdilouta.ubn n aul) ivided by thie resynotOne anher af hospitlbd aNy r~ CAfTA (SIS -itP yt ca tta esine at noma maIn yaes IaIdalna pore othu laded futa ht pial,hasvr,inlie elob, nu"asd by a'll --i-aSo me1ohd -e World Bank Ata.. (1977-79 hostel); 1960, atM medlani on..tee e t_pertnoal staffed by a physitat- (has bya 1970,oand 1979 dan.-diral aei-ot, eate, edldufe, r.-) hiob offer in-patdeeeaeemI datine end r-ode a lirited range of aedioal f-nillitis. P.. tstnie- ENtRil CONSUMP0TION yER iAPIOTA - dAoo-l ot-t...yttnn ~f n-tnealo-tagy lanai tine1 porpos..s -bh- b-siteals itoh-de HOtI yrinai pallgnn-a haspitaha, aed Itgnite, ptroleum, e-t-a tan tad hydra- ... a..ear-od g-h-bomo the- and road h.aioglnlo ua hanyitala atf e-ital ttd materity tal'ffy) In Afilograra of coa eqar-l-non yeaoft.; 1960, i970, and 1979 ___an Sytnialled hoapIt ace nolded only nader easel. data. Adm"i...ne one Htepitel Bed - Total nuber at dminei... te - diseb-g-s fang h.spitelt divided by the vanher af beda. POPtLATION eAN 01T1 Sf.nTSTIti nTelI Pepalotin,Mdta ahtnd)- As of July 1; 1960, 1970, and 19ff HofOshNc fnaI. Are... SIen tonanul~,;d (opnson tea hoo-nbldf- note, aran ed a- irhbn Pua -- pecn of aurl) - Rtit at -bh- to tota paynlaniun; A hanEhaldV .. nniats fsgru f ld_loaaIbae oing ueer ditferen.t duftoltioe. of ...bse . te onmy aftfat -p-braility at dune eel their oo em A boarder rldger may ar nay se he iteudad Is aeaaoteie 1960, 1971, and 1979 data, the haunebhld S tua lt lfufns Puoulutlon froj-usbonaAseg _uske af..n...oesya-om toal .h, nd ntalI - Av-esge e fupoltionit far 1000 - Current paynlanlas p-a7etlnas ear hose on 1980 her of fernoes Per rantSn lljuban, aed rural onPi"f aetenItte toad populacl. by age nod urn and theta notaiy ad tiiatyrer dt -sga -rsynir-y. InIlagneIaladeutpeeseteIesre s fjetoa yamte.. t enoty rtes nasyrta of alter level assne- -nn-pied Pares. lag litfi et tc nhattcesu nich n tynPer atpi-t monshoes t el-ariatey for-an-t ofdanitnf tal aer n ra level, an-I ml lif p-oec-ny -tbtiniai.g at ~77.5.year. The fate- C'noteinn..l d-11isoeu~ithbeIettrinity it ljivig _atateta peertag ttrfoteritY rot alto hae chatI level issni deaianI in total, rhan, tad aural d-liegsrsettey inattlltyocuding en loa-se leve and pose family plauatig perfure_sng. -h c..niry is thee -nsge-d as at thes ientialn f mnsip IOAIf ead eraiory orend for nalenoI fryee.Adjusted nEo-l-meantaidn Snttaoypouaia n btinr ppltieaethaa greeh stnt alIay sheal - tutol, tale sad femal - I..s total, male ted feml male nonneatn Thati beedol after fertilitY -eutnedenlina se primaY-ethua-as1 avlena ntmly ne -dsotilde- age h-l the relarsn mr funtaereedntn et,ae ea esrsn eashg ejse fur d-iffrn legh tptlmdny eh!dunaIang 9r uf aun nelace tnel mody. TheataOasro upuacin sns ueannnalsmib nlvesaledtatia etaimengso easedlitparea eaiu ol the basin of the projenand corietsin t Itepplte in esppasoeblno hr h intl a helae inthe Year 7000 and cheeses of d_nIise at _tettjl y rt ne la-Onnaynhu aa,ml n eae-Cs scue enfr _tt J_ta t level. rS-doatiye-hqa-t-sa leas fear perf fepne-riaytsr is Year h-atonay po2n1ci- in reached - The yea then tatio...ny pupalatla avfa esrl.aatna.a ete staiing iatrutas9e aO s...its ban beenI ...ted.nllY of 12 en 17 yeasofes;ctbtteneueeetres t gener l.ip fonaunio9flteOtyteltdd Pers 96ha. ,ad-yurpoplaio peIqushlmea 10hnen)o Pen 1ns -arile- (n-reen at sen-day)- Tesitl ntigatinm natal. earn 190 90ad11 oa tld ebia,lfsro,nther peuem shieD spe.tar lsdapsed Pea s. ha.agrinlsarl land - Caspurd as bhuo fan againol-ua ln nyIta depart, metsofs- anee issruita ugy;16 1970 a-d 197t dasa Pui-scbnal rese ..ad seohueP-Totlsase anldi 64 alatn Astntetr argee Oldnnf0-in years S. nurbg-age (15- petmary end s...ndery Ilevls divided hyte-bItI .t_teemts is the 61yer),ad a9enirad (ho yenta and ave) at4eroYcTee f md-yarpop- arre-a1ingdevLs lanno aSk 1900, and 197 dta. . -- f dy. .. Adult liter-r ay fees)-Literat dfolts (blseratdwi) .parolsala -rnth RttfrenS- 1nu -Adenu1 grunt hastes at ntal sid- Ieap-enentge at steal adal pepulstine eged iS yast a dsyc year papolatiena for 195.-hO, 190-7 0, and 1907-79. I funana -hnth Bans f-a...ut) - _rha- Ane-1 grocab rtse ft -ab- papa- CONSUMIfPTION latlass foe 1950-60, 1961fI e 90-7 9. .dPassense- Care fpeebhn.....d pupalatine) - Passsger ease aeptiar mater Crude BithROat torh...noAdl - &ontua Ive biatha Per thb..s..d at eid-yeaarsatn Iles that light p-....t; secu.desabaane hears. and CPayn1atina; 1960, 1970, oaf 1979 dan-mltr sils leDs-eah Boef- ochnna)- P-a enh eaanaadua sdyerRai ecie> pe bessdrAneOa--l ypeatenevesfe ai GtPpaynletio; 1960. 90 n 17 ot broadcast ens.. eel Jbli pe tbunsetd.aty f.. peoein aLademf. a-d hertasa r Radniveprot f h eiecspees g-p-ti e-te A-"''t' in effete; date.fa ...ee d yer mp.p net -eemtebd ss tilyrse;anly tar-year a-eoge ending In 1960, 1970, sed 1979. asrntitoaehfiesig family lannin-Annepnaa, Anual (hoasAp -hanl ume IoferpsrsT Bef-vrsfre t;dtft shnaiarltian)-t - Y T t reeier ta edosrt tee of" chl-b s ptrin Agefl-Sl year) u.a.d ass l hia _-ne_a dele nNefae iraetsfeteesn eeltn)- bs aeaett toobimarried h,oern So seer _ge ga I. oafti..at"dilyg.nraIisfres ewsspe,defnedasspeiednt pulistenaeaed pamail sErsuda eerlsa.IEi emdt Inden atPoed - rduins perCaie 5199- _0 Indth at dprcpitn anCInem ...oa Atedance pet Caiape er-edasSenabr Pea npina upplyus noerienfeernna _a teni dmnts - tapa,tedt. _ ttrum erred tenant ten ,P-,.yrd hut : ennidin hussene,kadse,C stingy equvoirse of et toed suplies avaIbld nnafy e nain PieigptoaintOalee. gediis toe-u eere r ( aed see-t..P- d dnaihtin ati- p -uaighn, and a_6ea 9g 00 percet9fa dtast at tef Lnbate-nity h aste ed: 3-5Easperneage u _ intllbt ere 9 householdqlevl; 1961-65, 976. and 1977dafa. 1970_sd 1979 . dt...p set.suppy. o udprfy e upyo edi eis sess t annivity ra .tes see ou.tde tti ae adfml artrsa ellonone afhI grms attotalPriotipe day te.pd.20ti_ Ps et anmlad160t 90 n 19070 fate.Thes ens9 hosed an lIt's p ttrieien It5s pet paer,o bla -lligamo shel beaimlpesi. hst eed tfeeie ae-etitnone to thedi. p hp -.-in,and len tis .trn. A Buald fond Survey; 196-65 197 nsf 1977dat. ..nfebe rsteal laborfarce Pe hapt pa1thinnaylJ fot aimlg edBaer-_euei supplyf-of fund de- riel rty rsl n palate .. in gnnepu _dy 96-_, 1970 sad197 dssi . Bti:fhIBTRIttI..tO0 fttl -- -- 90 90 . 99d Chld feats 1if tsetsall Rte pee etui ead - anua de ie ht pe gheosufdi Pe tnss ofPiaeBnm hthi ahadhn)-Ie rfb ibm age . holdn ,1- J years ,, i ..ls Is d hin 1-sin gr u te fevlpn Itat peneP ri...tes 0beane. une2 per-est, an pefrrt prcn trie fate dented fans lae ale;100 17lad199daata uneais h tOe Pl - inenoav d D -t (lyears) - ,l Avrg nube.t ersod lf reaiin9Te ule -n eimtreaevr prniaeesue f oet ee anhrs;100 17 t etf 1979 faot e,- oafblihsnbydSDheI interpre ted i- tausaderelenandif.-j .tt,t. Inac-oraltfBreIta- fhoed -.. daotoalP deasb oftid Bfenr under ace tor.asmted b ee Poet AcuTlee BNye tBis -ahsje ma Adntss BaeWae prne th paoanuf- IIt taoe,uderl e-Bt-ftininn Ill aeute fin tlua essnniltio un-fed I teqitemrtas e bee atpepl (toal __hgn and tah) -rith prtetb tassio-atIIfaaA rarer eupl~' (Onoudes treted tattos caret or . durr yened baa 'h.asnoThistmad IIeltivfe Pur ts ..a. evl B9 etInI -ara td ere fu itai artsyaelcae2otmt-ta 00nnc ~ -l t- . ~ . ,tra at a epsssllnm tth ttt rs level i derve fans d tts a nasfend as -1 beIng l iiba attna - aces ef, than 5 b 'Plc In rura dra eedit:dutat a ihratea Olginubaes orthousaM --' d-hl -t th ....td and itte-l -fetra epoosi h (urba ted d enol nba l. are "a is h.t dn n.. have e spend at dhildrationaIceh. port ofP the day in teething the poor"b. LifnEgpaea....eet BinthnYe_al -as -rine at paulatof-cyas. oaaf l sf. curlti -RT ARE GI Balt1her a 60 peopl f -nel u1979 tdl tr- evdb mre ipsla lea instelletiote. Boy~~~~~-1 .dr ..Yr d ..db.II Z- P9D fepulasia put ebyanas d)--op Ais ..e diI ded oy nunh f at ci-lg pysi casqaIfe frdolia mbiatth taboohea siritii--evel of nultiancr Semiie 'etsdn-ferula-aa fiattd by-nuser of (USsican tal and- feaegeda Peer. preatiwal gutere end assisant srest  -22 - ANNEX I Page 4 ECONOMIC INDICATORS - LIBERIA GROSS DOMESTIC PRODUCT IN 1979 ANNUAL RATE OF GROWTH (% 1971 CONSTANT PRICES)-/ US$ Mln. 2 1974-78 1979 GDP at Market Prices 890.0 100.0 1.6 4.8 Gross Domestic Investment 218.6 24.6 11.5 20.5 Gross Domestic Saving .. 12.6 Current Account Balance -113.2 12.7 Exports of Goods, NFS 551.6 61.9 -7.5 -1.3 Imports of Goods, NFS 536.6 60.2 4.8 -11.8 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1979 Value Added Labor Force-/ V. A. Per Worker US$ Mln. '000 X USS X Agricultuye 328.0 35.0 324.8 47.5 1009.8 73.4 Industry- 217.0 23.0 39.6 5.8 5480.0 398.8 Services 395.0 42.0 73.5 10.7 5374.0 391.1 Unallocated 246.1 36.0 _ _ Total/Average 940.0 100.0 684.0 100.0 1374.2 100.0 GOVERN5IENT FINANCE General Government Central Government Mln.) % of GDP (US$ Mln.) %of GDP 197 197 196 - 7 1980-814/ 1980-815/ _i76-8056 Current Receipts .. .. .. 220.0 20.8 20.4 Current Expenditures .. .. .. 220.5 20.8 15.4 Current Surplus .. .. .. -0.5 .. 3.5 Capital Expenditure .. .. .. 126.0 12.0 12.8 External Assistance (net) .. .. .. 45.0 4.3 6.1 MONEY, CREDIT AND PRICES 1974 1975 1976 1977 1978 1979 (Million US$ Outstanding End Period) Money and Quasi Money . Bank Credit to Public Sector 4.0 2.2 0.9 4.7 9.4 61.7 Bank Credit to Private Sector 72.7 76.8 83.1 109.2 132.1 146.3 (Percentages or Index Numbers) Money and Quasi Money as % of GDP . . General Price Index (1963 - 100)3/ Annual Percentage Changes in: General Price Index 19.5 13.6 6.0 5.8 8.6 11.6 Bank Credit to Public Sector .. -45.0 -59.1 422.2 100.0 656.0 Bank Credit to Private Sector .. 5.6 8.2 31.4 20.9 10.7 Note: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ Total labor force; unemployed are allocated to sector of their normal occupation. 'UNallocated" consists mainly of unermployed workers seeking their first job. " Over 80 percent is accounted for by iron ore. Consumer Price Index (September, November 1964 - 100). . 1980-81 budget estimates. 5/ GDP estimates for 1979 are preliminary and subject to change. F/ Fiscal years 1976 to 1980 Not applicable. Not available. June 1981  ANNEX I -23 - Page 5 TRADE PAYMENTS AND CAPITAL FLOWS BALANCE OF PAYMENTS MERCRANDISE EXPORTS (AVERAGE 1978-80) 1977 1978 1979 US$ Mln. 2 (Millions US$) Exports of Goods, NFS 458.0 500.1 551.6 Iron Ore 291.3 53.8 Imports of Goods, NFS -490.1 -535.6 566.7 Rubber 86.4 15.9 Resource Gap (deficit - -) -32.1 -44.5 -35.5 Diamonds 34.5 6.4 Logs or Lumber 62.0 11.4 Interest Payments (net) -6.7 -10.8 -22.0 Coffee 28.5 5.2 Workers' Remittances -27.5 -32.5 -35.0 Palm Products 3.0 0.5 Other Factor Payments (net) -68.0 -92.8 -78.8 Cocoa 12.0 2.2 Net Transfers 30.8 32.2 37.7 All Other Cosmodities 23.5 4.4 Balance on Current Account -104.5 -139.4 -113.2 Total 541.2 100.0 Direct Foreign Investmentl/ 8.1 -10.5 -58.4 EXTERNAL DEBT, JUNE 30, 1980 Net MLT Borrowing 38.3 64.5 123.6 Disbursements 50.0 78.7 178.0 UrS$ Mln. Amortization -13.7 -14.2 -54.4 Sub-Total -19.8 -54.0 65.2 Public Debt, Incl. Guaranteed 533.3 Capital Grants .. .. .. Non-Guaranteed Private Debt - - Other Capital (net) -35.3 79.6 .. Total Outstanding and Disbursed 533.3 Other Items n.e.i. 51.1 . .2/ Increase in Reserves (+) 4.0 25.1 -48.0 DEBT SERVICE RATIO FOR 1980- Gross Reserves (end year) .. .. .. % Net Reserves (end year) Public Debt, Incl. Guaranteed 7.9 Fr-' and Related Materials Non-Cuaranteed Private Debt - orts Total Outstanding and Disbursed 7.9 of which: Petroleum 103.2 68.8 84.6 Exports 1BRD/IDA LENDING, (JUNE 30, 1980) (MILLION US$): of wbich: Petroleum IBRD IDA RATE OF EXCHANGE Outstanding and Disbursed 53.6 18.0 Through - 1971 Since Undisbursed 66.3 25.9 US$1.00 - 1.00 US$1.00 = 1.00 Outstanding Incl. Undisbursed 119.9 43.9 1.00 = us$ 1.00 - USS 1/ Includes errors and omissions. 2/ Ratio of debt service to exports of goods and non-factor services Not applicable. Not available. June 1981  - 24 - ANNEX II Page 1 THE STATUS OF BANK GROUP OPERATIONS IN LIBERIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of January 31, 1982) Loan or Amount (US$ Million) Credit less cancellation Number Year Borrower Purpose Bank IDA /a Undisbursed Eight loans and three credits fully disbursed 28.47 10.96 1055 1974 Liberian Bank for Second Development Dev. and Investment Finance 4.0 0.04 577 1975 Rep. of Liberia Agriculture 6.0 0.65 1156 1975 Rep. of Liberia Third Road 27.5 1.32 1266T 1976 Rep. of Liberia Second Education 4.0 0.38 1323 1976 Liberian Bank for Third Development Deve. and Investment Finance 7.0 3.54 1417 1977 Rep. of Liberia Education 6.3 1.82 700 1977 Rep. of Liberia Agriculture 7.0 2.73 786 1978 Rep. of Liberia Rubber Development 6.0 4.26 839 1978 Rep. of Liberia Forestry 6.0 4.33 Development 859 1978 Rep. of Liberia Monrovia Water 8.0 3.22 Supply 1544 1978 Rep. of Liberia Rubber Development 7.0 7.00 1573 1978 Rep. of Liberia Fourth Highway 13.8 0.36 1600 1978 Liberian Electric Fourth Power 10.0 0.16 Corporation 1644 1979 Rep. of Liberia Feeder Roads 10.7 8.43 1765 1979 Rep. of Liberia Decoris Oil Palm 12.0 11.29 1076 1980 Rep. of Liberia Small & Med.-Scale Enterprises - 4.0 3.20 1907 1980 Rep. of Liberia Petroleum Explo. 5.0 - 0.71 2080/81 1981 Rep. of Liberia/NIOC Mining 20.0 20.0 Total 155.77 47.86 73.44 of which has been repaid 16.16 - Total now outstanding 139.61 47.86 Amounts sold 0.41 of which repaid 0.41 0.0 Total held by Bank and IDA 139.61 47.86 Total undisbursed 55.04 18.40 73.44 /a Prior to exchange adjustments.  - 25 - ANNEX II Page 2 B. STATEMENT OF IFC INVESTMENTS (as of January 31, 1982) Fiscal Year Obligator Type of Busienss Loan Equity Total 1966 Liberian Bank for Development Development and Finance Company Investment 0.250 0.250 1977 Liberian Bank for Development Development and Finance Company Investment 0.306 0.306 0.556 0.556 Less Sold 0.001 0.001 Now Held by IFC 0.555 0.555  - 26 - ANNEX II Page 3 C. PROJECTS IN EXECUTION 1/ (Status as of December 31, 1981) Loan No. 1266T-LBR Second Education Project: US$4.0 Million Third Window Loan of June 7, 1976;. Effective Date: July 8, 1976; Closing Date: August 31, 1982 Physical implementation of the project is nearing completion after delays due to shortages of construction materials and unusually long rainy seasons. The extension of a teacher training institute was completed on schedule and within appraisal cost estimates. Eighty-five of the one hundred planned primary school units have been completed. The technical assistance program has been completed and most of the fellowships have been awarded. The only major activity which is outstanding is the educational publications component. The overall project is expected to be completed in mid 1982, about two years behind the original target date. Loan No. 1417-LBR Third Education Project: US$6.3 Million Loan of May 26, 1977; Effective Date: July 13, 1977; Closing Date: December 31, 1983 Overall, project implementation is about two years behind schedule due to poor contractor performance, site changes, and delays in placing fellows. The Vocational Training Center/Agricultural and Industrial Training Board, the Forestry Training Institute and three of the four Science and Tech- nology Centers should begin operation soon. The construction of the fourth Science and Technology Center will begin soon. The technical assistance program is being implemented as planned. The fellowship program for the Vocational Training Center is being implemented satisfactorily but the remainder of the fellowship program is about two years behind schedule. The project is expected to be completed about two years behind the original completion date but close to appraisal cost estimates. Credit No. 577-LBR Agricultural Development (Lofa) Project: US$6 Million Credit of August 1, 1975; Effective Date: May 26. 1976; Closing Date: December 31, 1981 Project performance continues to be satisfactory in swamp and upland rice development with 98 percent and 93 percent of their respective targets to date achieved. About 78 percent of the cocoa targets and 50 per- cent of coffee targets were met. The main reason for these shortfalls were the temporary disturbances in field operations in May and June 1980 following 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered and the action being taken to remedy them. They should be read in this sense, and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  - 27 - ANNEX II Page 4 the 1980 change of government and shortage of planting materials. The performance of the completely Liberianised Senior Staff continues to be satisfactory although the Cooperative and Agricultural field staff needs strengthening. Credit No. 700-LBR Agricultural Development (Bong) Project: US$7 Million Credit of December 29, 1977; Effective Date: March 15, 1978; Closing Date: December 31, 1983 Project performance continues to be satisfactory. About 100 percent of upland rice targets, 13 percent of swamp rice targets, 100 percent of cocoa targets and 85 percent of coffee targets, have been achieved. The project continues to face difficulties in getting farmers to develop swamp rice. Project management is adjusting to recent staff changes. Credit No. 786/ Rubber Development Project: US$7 Million Loan and Loan No. 1544-LBR US$6 Million Credit, both of April 21, 1978; Effective Date: October 3, 1978; Closing Date: June 30, 1984 After a number of initial management difficulties, satisfactory progress is now being made. However, improving smallholders involvement in the full range of rubber activities is progressing slowly. A new Training Officer is being appointed and training of staff, farmers and tappers should soon commence. The Bank is considering amendments to the project scope and design, to include processing facilities and marketing services which should make it possible to offer smallholders a higher price for their output. These changes are expected to improve farmer response to the project. Credit No. 839-LBR Forestry Project: US$6 Million Credit of July 28, 1978; Effective Date: December 20, 1978; Closing Date: June 30, 1984 There has been a perceptible improvement in staff morale since the new Managing Director was appointed. Progress is being made in the building program and the development of the trial industrial plantation site. The reduced effectiveness of the Forest Development Authority and of the Ministry of Finance in collecting forest taxes has resulted in considerable arrears from concessions. This has limited the Authority's role in the sector and the plantation program has also suffered. Planting is now expected to reach only 63 percent of appraisal targets. The fellowship and training program is proceeding satisfactorily.  - 28 - ANNEX II Page 5 Loan No. 1765-LBR Special Action Credit No. 35-LBR Decoris Oil Palm Project: US$12.0 Million Loan and US$2.0 Million EEC Credit, both of December 21, 1979: Effective Date: February 23, 1981; Closing Date: December 31, 1987 Project performance is satisfactory, and land development is almost on target with some 1225 ha of nucleus and smallholders land cleared. Pro- cedures for compensating farmers for land obtained for the nucleus estate are being developed. Although funding is at times difficult, Project Management continues to make reasonably good progress. Loan No. 1156-LBR Third Highway Project: US$27.5 Million Loan of August 28, 1975; Effective Date: October 14, 1975; Closing Date: March 31, 1982 The construction of a major bridge and an urban main road (5.4 m) in Monrovia was completed in 1979, and the main trunk road (83 m) was substan- tially completed in May 1981 after delays due to bad weather, difficulties in the supply of materials and disturbances associated with the change of govern- ment in 1980. The feasibility studies of about 98 miles of main roads and an urban transport study of Monrovia have been completed. The Lofa County Feeder Road Unit, which became operational in January 1977, has been transferred to the Feeder Road Project (1664-LBR) after completion of the three-year construc- tion program. Technical assistance in developing the Planning and Programming Division of the Ministry of Public Works has been reasonably effective. Loan 1573-LBR Fourth Highway Project: US$13.8 Million Loan of June 2, 1978; Effective Date: September 11, 1978; Closing Date: December 31, 1982 The project includes reconstruction and improvement of the Pay- nesville-Totota and Paynesville-Robertsfield road, road maintenance, technical assistance and preinvestment studies. Reconstruction of the Paynesville- Robertsfield road, financed by the Kuwait Fund, was completed in October 1980. Rehabilitation of the Paynesville-Totota road was resumed in September 1980 after disruptions caused by the change of government, and is now about 65 per- cent completed. Detailed engineering of the Ganta-Sanniquellie and Ganta-Tapeta roads, delayed temporarily, was substantially completed in December 1980. Due to a shortage of funds and changes in government personnel assigned to mainte- nance operations, technical assistance for maintenance has not been effective. During the last six months of their contract, the road maintenance advisory team assisted the Ministry of Public Works to prepare a study for a follow-up maintenance project. A project cost overrun of about US$9.5 million is now expected as a consequence of implementation delays and higher than expected construction costs due to faster deterioration than foreseen at appraisal of the Paynesville-Totota road; the Government is exploring other sources of funding to complete the works.  - 29 - ANNEX II Page 6 Loan No. 1664-LBR Feeder Roads Project: US$10.7 Million Loan of April 4, 1979: Effective Date: April 30, 1979; Closing Date: December 31, 1984 The project provides for the construction or improvement and main- tenance of about 700 miles of feeder roads and for the maintenance of a further 200 miles of feeder roads. The work is being undertaken by three brigades operated by the Ministry of Public Works. While some of the equip- ment has been delivered, the project has been adversely affected by the unsettled situation since the 1980 change of government and, more recently, by a shortage of counterpart resources. Loan No. 1055-LBR Second Development Finance Company (LBDI) Project: US$4 Million Loan of December 3, 1974; Effective Date: January 3, 1975; Closing Date: December 31, 1980; and Loan No. 1323-LBR Third Development Finance Company (LBDI) Project: US$7 Million Loan of October 7, 1976; Effective Date: December 17, 1976; Closing Date: December 31, 1982 Loan 1055-LBR is fully committed. Commitment of Loan 1323-LBR has been slower than anticipated (50 percent of the loan has been committed) owing to depressed economic activity in Liberia and a downturn in business invest- ment. Following the 1980 political changes and subsequent general economic difficulties, the quality of LBDI's portfolio and its financial position have deteriorated considerably. LBDI is now concentrating its efforts on project follow-up and loan recovery. Loan No. 1076-LBR Small and Medium-Scale Enterprise Project: US$4 million Credit of January 9, 1981; Effective Date: September 14, 1981; Closing Date: June 30, 1984 Credit effectiveness and initial project implementation have been delayed by weak management in the implementing agency (NIC). The consultant study on industrial incentives and revision of the investment code is underway. The first of three technical experts will join NIC soon. Minor disbursements have been made for technical assistance only. Loan No. 1600-LBR Fourth Power Project: US$10.0 Million Loan of July 7, 1978; Effective Date: December 11, 1978; Closing Date: June 30, 1982 The project consists of expansion of thermal generating facilities by 26 MW to meet demand up to 1985, power distribution to urban poor, rural transmission studies and technical assistance for management and training. Construction of the power plant has been completed, and the two diesel units are in operation. LEC's financial performance has been severely affected by  - 30 - ANNEX II Page 7 low operating efficiency. A five-man management support team started work at LEC in July 1978 as a part of the Management Improvement Program instituted under this loan. Progress of this team has been satisfactory but loan funds for this component were exhausted in June 1981. LEC is funding a one year extension from meager resources; additional funding is needed to keep the team in place after June 1982. Credit No. 859-LBR Water Supply Project: US$8 Million Credit of January 8, 1979; Effective Date: April 2, 1979; Closing Date: December 31, 1982 Project costs have escalated from $16.1 million at appraisal to $23.2 million. The Government successfully approached the Finnish Aid Agency (FINIDA) for funds to finance the local component. Construction works are now progressing according to plan, except for the raw water intake and pipeline which are pending resolution of a LEC claim for compensation. The installa- tion of standpipes in Monrovia's urban poor quarters has been completed. Unaccounted-for water remains at a high level, almost 50%. Serious revenue shortfalls continue to plague LWSC but billing and collection are slowly improving. Government funding of LWSC remains irregular and Government has been requested to introduce new funding arrangements based on LWSC's actual cash needs. The Management Improvement and Technical Assistance Program has not yielded expected results due to changes in top management, shortages in counterpart funds and financial constraints. The German Government is funding a continuation of the program through GTZ. Loan No. 1907-LBR Petroleum Exploration Promotion Project; US$5.0 Million Loan of November 21, 1980; Effective Date: January 9, 1981; Closing Date: December 31, 1983. The project seeks to promote Liberia's offshore petroleum potential by financing a seismic survey; processing, interpreting and integrating seis- mic data; consulting services for the promotion, auction and negotiation of new exploration permits and technical assistance to the Bureau of Hydrocarbons and for energy planning. Project implementation is proceeding satisfactorily. The seismic survey was initiated on March 4, 1981 and has now been completed. Availability of counterpart financing may constitute a problem in the future for the implementation of the project. Loans 2080/2081-LBR NIOC Iron Ore Rehabilitation Project: US$ 20 Million Loans of February 26, 1982; Effective Date: March 18, 1982; Closing Date: December 31, 1984 All cofinanciers have made their loans effective and project execution has been initiated.  - 31 - ANNEX III LIBERIA SECOND LOFA COUNTY AGRICULTURAL DEVELOPMENT PROJECT SUPPLEMENTARY PROJECT DATA Section I: Timetable of Key Events (a) Time taken to prepare project: 5 months (b) Agency which prepared project: Ministry of Agriculture with IDA assistance (c) Date of first Bank mission to consider the project: November 1979 (d) Date of appraisal mission: May/June 1981 (e) Date of completion of negotiations: January 22, 1982 (f) Planned date of Effectiveness: August, 1982 Section II: Special IDA Implementation Action Deposit of SDR 170,000 from the proposed Credit in the Special Account (para. 46). Section III: Special Conditions (a) The Government would prepare a plan of action satisfactory to IDA to improve the operations of cooperatives and thereafter carry out such a plan; results would be reviewed jointly (para 37); (b) The Government to consider farm inputs procured under the project and distributed through the cooperatives as its equity contribution to ACDB, and ACDB, in turn, would invest similar amounts in the equities of the cooperatives. Credit to farmers to be provided at specified interest rates and repayment terms (para. 38); (c) The Government to carry out a plan of action to improve the opera- tions of LPMC (para. 39); (d) The appointment of special advisers to the project unit and the management positions in the project unit, to be acceptable to IDA (para. 43); (e) The Government would review with IDA proposals for changing the administrative structure of the Ministry of Agriculture in the project area and would ensure that such staff is employed effi- ciently (para 43); and (f) Project accounts to be audited annually by independent auditors acceptable to IDA with a separate opinion on the Special Account and statement of expenditure records (para. 50).   IBRO 1555I0 , I NOVEMBER 1981 J ~~r' ,'<"Uv; LIBEU RIA -~=rICA- /,