Guinea - Conakry Port Project

Document ofD The World Barnk ' J FOR OFFICIAL USE ONLY Report No. P-3578-GUI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT AS'SOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR12.1 MILLION TO THE REVOLUTIONARY PEOPLE'S REPUBL:[C OF GUINEA FOR A CONAKRY PORT PROJECT May 18, 1983 This document has a restricted distribution and may be used by recipients only in the perormance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY AND EQUIVALENTS The official monetary unit is the Syli Syli 1 = US$0.05 US$1 = Syli 23 ABBREVIATIONS AND ACRONYMS AfDB - African Development Bank ENTRAT - Entreprise Nationale de Transit et de Transport (Transit Company) GTZ - Deutsche Gesellschaft fUr Technische Zusammenarbeit (German Technical Cooperation Agency) KfW - Kreditanstalt fUr Wiederaufbau (German Aid Agency) PAC - Port Authority of Conakry PPF - Project Preparation Facility SNG - Societe Navale Guineenne (Maritime Agency) FISCAL YEAR January 1 - December 31  FOR OFFICIAL USE ONLY REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA CONAKRY PORT PROJECT CREDIT AND PROJECT SUMMARY Borrower: Revolutionary People's Republic of Guinea Beneficiary: Port Authority of Conmkry (PAC) Amount: SDR12.1 million (US$1-.0 million equivalent) Terms: Standard Relending Terms: 13 percent over 20 years including a four-year grace period. Project Description: The project would rehabilitate and replace existing port infrastructure and equipment and help strengthen the autonomous and weLl-organized port authority at Conakry, thus removing constraints making the port a bottleneck to Guinea's economic development. It provides rehabilitation and repair of quays, port buildings, and transport and navigation equipment, and management, accounting and planning technical assistance to PAC. Benefits and Risks: The project would improve the port's productivity and financial and managemi3nt performance, reduce cargo losses through pilferage and poor handling and reduce ocean freight costs o:n Guinea's imports and exports. The project faces the risks that cargo traffic may not develop as projected, and its financial viability depends on the phased and timely implementation of necessary tariff increases and close adherence to revenue covenants. a~~ This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  - ii - Estimated Project Cost: 1/ --------US$ million-------- Local Foreign Total Civil Works 1.5 13.5 15.0 Equipment and Spare parts - 8.6 8.6 Data Processing 0.3 0.3 Technical Assistance - 2.8 2.8 Consulting Services 0.2 2.1 2.3 Base Cost 1.7 27.3 29.0 Physical Contingencies 0.2 3.2 3.4 Price Contingencies 0.4 4.6 5.0 Refinancing of PPF Advance - 0.6 0.6 Total Project Cost 2.3 35.7 38.0 Interest during construction 5.7 - 5.7 Increase in working capital/cash 10.4 - 10.4 Tota:L Financing required 18.4 35.7 54.1 Financing Plan ------US$ million------- Local Foreign Total IDA - 13.0 13.0 AfDB - 14.0 14.0 Germany KfW - 6.0 6.0 GTZ - 2.7 2.7 Total External Sources - 35.7 35.7 PAC Cash Generation 15.2 - 15.2 Government (equity) 3.3 - 3.3 Total 18.4 35.7 54.1 Estimated IDA Credit Disbursements: ----------------US$ million----------------- FY84 FY85 FY86 FY87 FY88 Annual 1.5 5.1 2.7 3.4 0.3 Cumulative 1.5 6.6 9-3 12.7 13.0 f Economic Rate of Return: 36 percent Staff Appraisal Report: Report No.4160-GUI, dated 1983. Maps: IBRD No. 16680, 16681 and 16682 1/ Net of identifiable taxes and duties, from which the project will be exempt. Totals may not add because of rounding.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REVOLUTIONARY PEOPLE'S ItEPUBLIC OF GUINEA FOR A CONAKRY PORT PRIOJECT 1. I submit the following report and recommendation on a proposed Devel- opment Credit to the Revolutionary People's Republic of Guinea for SDR12.1 million (US$13.0 million equivalent) on standard IDA terms to help finance a Port Project in Conakry. Additional financings for the project would be pro- vided by the African Development Bank (AfDB) cnd the Federal Republic of Germany (KfW and GTZ), in amounts equivalent t;o US$14.0 million and US$8.7 million respectively. PART I - THE ECONObIY 1/ 2. An Economic Memorandum was discussed with the Government in June 1981 and distributed to the Board in August 1981. This section summmarizes the contents of that Memorandum, and focuses on changes in Guinea's economic situ- ation and policies over recent years. 3. Despite its mineral and agricultural potential, Guinea saw declining economic performance from Independence in 1958 until about 1973-74. Economic activity, with a stimulus from mining, grew rapidly between 1973-76, but again at a slower pace since then. At present, mosl; of Guinea's 5.5 million inha- bitants live at the margin of poverty. With a per capita income of about US$300 in 1981, Guinea belongs among the least developed countries as classi- fied by the United Nations. Life expectancy is only 44 years, infant morta- lity is about 17 percent, 90 percent of population has no access to safe water, and 80 percent of adult population is illiterate. 4. Since 1976, and particularly since 1979, Guinea has been re-examining its development policies, institutions, and relations with the outside world. It has recently announced significant policy reforms, some of which the pro- posed project would support. Important first steps have been taken towards improved economic management and decentralization of the economy: excessive money supply was gradually reduced; more expl-cit performance criteria and greater autonomy of public enterprises are bei.ng introduced, sectoral public holding companies have been dismantled, and a reform of the banking sector has been initiated; there is greater acceptance of technical assistance for plan- ning, investment programming, and project preparation; there is increased recognition of the need for economic pricing of resources (e.g., interest rates have been doubled and electricity tarif.fs increased); private trade has been legalized, state retail trade has been d'-scontinued, and most price 1/ Parts I and II are substantially the same as the President's Report for the Second Education Project, (P-3478-GUI) dated March 8, 1983.  - 2 - controls have been permitted to lapse, thus liberalizing and encouraging the agricultural sector; private investment, small and medium-scale enterprises, foreign direct investment, and the return of expatriate Guinean capital are being encouraged, and some private enterprises have been allowed to import and export most goods and to borrow and hold foreign exchange; enrollments in higher education have been reduced and more students are being directed to vocational training; manpower planning is being introduced, and the guarantee of state employment to school graduates is being reappraised, with a view to curtailing the increase in public employment. These steps reflect a signifi- cant and broadly based attempt to address Guinea's deep-seated problems and poor economic performance, and represent fundamental changes from past policies. Recent Performance 5. Despite some progress made since 1974, Guinea's economic development is hampered by structural problems. The economy is stagnating and the balance of payments faces chronic deficits. Foreign exchange supply cannot satisfy domestic consumption, service external debt, and finance capital and recurrent costs of existing and new projects. Limited absorptive capacity hampers in- vestment and the inflow of foreign capital. The overvaluation of domestic currency perpetuates distorted prices and wages and creates an unattractive environment for producers and investors (both domestic and foreign), affecting output and export performance. The main productive sector - agriculture - produces well below potential because of inadequate producer incentives, input delivery, extension services, infrastructure and marketing facilities. Guinea's current pace of economic development permits neither an increase in the standard of living of the population nor the generation of domestic savings for self--sustained growth and development. 6. Increased domestic output especially for exports, a stricter control of aggregate demand, as well as quantitative import restrictions, allowed Guinea to record a balance of merchandise trade surplus of about US$66 million per year on the average between 1979-81. This resulted in a reduction in the current account deficit to 3.4 percent of GDP from 6-7 percent of GDP in pre- vious years. However, the capital account remains in difficulty because of Guinea's inability to attract higher capital inflows while facing important amortization obligations. Overall balance of payments deficits have thus represented 5.5 percent of GDP between 1979-81 (about US$90 million per year), and they have been financed in equal proportion through an accumulation of debt arrears and by a decrease in gross foreign exchange reserves. In mid- 1982 foreign reserves covered about two weeks of merchandise imports. 7. Government's current revenues (about 33 percent of GDP, largely dependent on mining exports), increased at a rate of 9.6 percent per annum in 1977-81, while at the same time current expenditures advanced at an annual rate of I12.9 percent, mainly on account of expanding Government bills for wages and salaries and of growing interest obligations. At the same time, the state en-terprise sector has absorbed heavy subsidies not only on current account but also in the form of capital transfers and indirectly through the intermediation of the state banking system. In total, the parastatal sector received about GS 20 billion (US$1 billion equivalent) of financial support, or 13 percent of GDP annually over the 1977-81 period. The overall deficit of  the Government reached US$3.6 billion equivalent (10 percent of GDP) in 1S981. In an attempt to curb the growth of current expenditure on wages and salaries, the Government has enforced a decline in university enrollments from 20,700 students in 1978/79 to 12,100 students in 1981/82, and has terminated automatic recruitment of new graduates into the public sector. 8,1 Other than the enclave mining projects, most productive investment in Guinea is of a public and parapublic nature. During the last development plan (October 1973 to December 1978), public investment reached US$478 million (55 percent of planned expenditure) averaging 10 percent of GDP. Total investment was modest at 15 percent of GDP on the average. Two-thirds of public invest- ment was financed by foreign assistance. The ongoing plan (1981-85) projects much higher investments of US$1.6 billion (in 1980 prices), favoring agricul- ture (31 percent) and industry (14 percent). Many of the proposed projects are, however, in preliminary stages of preparation, and their financing is not yet sure. It appears unlikely that the proposed investment targets could be reached. During the 1979-81 period, public and parapublic investment repre- sented about US$164 million per year in current terms, remaining at about the same level as the previous plan exercise in terms of GNP. 9. Recognizing the need to maintain and use existing capital assets better, Government has increased the proportion of its recurrent budget for maintenance and repair. It is also undertaking a serious examination of the viability of state enterprises and has closed some. The least successful ones (including the entire network of retail trade enterprises outside Conakry) have been closed down, while others have embarked on rehabilitation programs, mostly with external assistance. Recent poli3ies in the parapublic sector aim at making parastatals financially self-sufficient, more responsive to market mechanisms, and more receptive to technical a3sistance. Prospects 10. Guinea's long-term development possibilities are substantial, based on its agricultural, mineral and hydroelectric potential. However, with 80 percent of the population in the rural sector, and with modest national savings (about 9.5 percent of GDP in 1980) combined with an acute shortage of foreign exchange, the exploitation of this potential hinges on the country's ability to provide incentives to agricultural producers and to attract foreign capital for investment in mining and ore-processing. 11. It will not be easy during the 1980's to overcome Guinea's basic foreign exchange constraint. Present mining capacity for export is unlikely to expand significantly, and while new large-scale projects (bauxite, iron ore) are on the drawing board, they are unlikely to reach fruition very soon. In the meantime, the trend for agricultural exports to disappear has been reversed only outside official transactions, and with existing price distortions linked to the over-valued exchange rate, the mounting volume of food imports -- together with the debt service burden -- has significantly displaced possibilities of non-food consumer goods imports. The lack of such possibilities, together with producer price disincentives, has contributed to discourage rural production above subsistence.  - 4 - 12. Guinea's best prospects for economic development in the medium term lie in efforts to induce growth, particularly in agriculture, by further liberalizing the environment to provide incentives to production, increaslng the efficiency of the public sector, and improving resource management and project preparation. Such policies could significantly alter the country's development outlook and offer new investment opportunities for external assistance. The Bank is assisting the Government in this area through project and sector work. A major Agricultural Sector Review organized by the Bank with the support of several other agencies (CIDA, USAID, CCCE, IFAD, UNESCO) took place in November/December 1982, and its output is hoped to be a signi- ficant step in assisting Government to bring about policy reforms and to expand possibilities for agricultural lending. However, during most of the 1980s, Guinea would face a difficult transition period when increased foreign assistance, especially on concessional terms, would be needed to ease the balance of payments difficulties and contribute to a gradual realization of the country's considerable development potential. Particularly crucial will be Government's success in correcting price and exchange rate distortions, improving the agricultural incentives structure, and ensuring rational pro- gramming of public investments. Foreign Assistance and External Debt 13. Since 1975-76, Guinea has been diversifying its sources of foreign assistance through renewed ties with the Western industrialized countries, and expanded relations with Arab countries and with multilateral sources. Guinea has qualified for drawings under the IMF first credit tranche and trust fund facilities, and it has successfully negotiated access to second and third credit tranches. 14. The accumulation of foreign debt to finance investments in infra- structure and public enterprises, as well as consumer goods, has resulted in a burden of foreign obligations which is, and will remain for years, a major problem. Guinea's external outstanding public and private debt guaranteed reached US$1.6 billion as of December 31, 1981, of which US$1.25 billion (81 percent of GNP) was disbursed. Service obligations on this debt are projected at US$137 million per annum over 1982-86. Foreign exchange shortages have hindered the payment of debt service, and outstanding arrears totalled US$144 million at the end of 1981. The ratio of public and publicly guaranteed debt service obligations to gross export earnings in 1981 was about 28 percent. Actual service payments on this debt amounted to about 17 percent of export receipts. Debt service on private non-guaranteed debt represented about 10 percent of the 1981 export earnings. 15. Although Guinea's debt service coverage has shown some improvement, accumulated arrears are likely to increase in absolute terms unless there is new debt rescheduling or major changes in the present allocation of foreign exchange. The Government has addressed the problem through debt rescheduling negotiated bilaterally with some creditors, and measures to improve debt mana- gement via the newly established External Debt Department in the Central Bank, to which the Bank has provided technical advice as part of its economic work. Government has also undertaken both a stricter control of investments financed by external credits and a more judicious official import program. The  - 5 - pressure on imports was somewhat relieved in recent years by official tolera- tion of some private exports at the free rate outside official foreign ex- change circuits. However successful these operations may be, Guinea will have to rely on substantial amounts of foreign assistance on concessional terms during the next few years. This will be needed not only for investment pur- poses but also to provide foreign exchange for intermediate and consumer good imports which are vital to stimulate economic activity and relieve supply con- straints, particularly in the rural sector. Furthermore, net public savings after debt service will be inadequate until at least the late 1980s, and local cost and recurrent expenditure financing by eKternal sources will be needed. PART II - BANK GROUP OPERATIONS IN GUINEA 16. The first Bank Group operation in Guinea comprised two loans in FY68 and FY71 for the very successful bauxite mining project at Boke. This project was followed by IDA credits in the mid-1970's for pineapple production and the rehabilitation of roads. Encouraged by the first results of these projects, the Bank Group began to diversify and expand its lending program, based upon broad priorities agreed with Government: (i) rehabilitation and maintenance of basic infrastructure; (ii) improvement of human resources; (iii) mining development; and (iv) development of the rural sector. Bank operations in each of these areas have been approved, with particular emphasis on sectoral planning, institution building and training. Thus, the Power Engineering project and subsequent First Power project (FYs79,81) are rehabilitating the Conakry power system and a Water Supply project (FY79) is providing similar assistance. Although the Second Highway project (FY80) continues and extends the successful first, its performance has only recently recovered following a period of misuse of equipment and lack of fuel. The Government took firm action to remove the problems and a Third Highway Project has been appraised. Implementation of the Industrial Rehabilitation and Promotion Project (FY82), initiated through PPF financing, has started well. A first IFC operation, to the AREDOR diamond mining company, has also nade a good start. The FY79 First Education Project has been very satisfactorily implemented, and has provided a sound basis for efficient preparation and execution of the Second Education Project, which was recently approved. 17. It is in the rural sector that the Government has experienced the greatest difficulty in harnessing its development potential. Logistical support for the rural sector, financial incentives, access to modern tech- nology and applied agricultural research, have been almost nonexistent. To deal with these fundamental problems, two projects are providing direct intervention in sub-sectors with substantial growth potential. The Rice Development Project (FY80) stresses national institution-building and intro- duces pilot low-cost improved rice production methods in an area with high potential. A study of agricultural prices and rural incentives has been completed and Government has accepted the need for improved incentives. As part of the intensive dialogue between the Bank Group and the Government, a major Agricultural Sector Plission (para 12) will provide a focus for new directions for agricultural development and policy formulation. The Livestock  - 6 - Development Project (FY81), which aims at strengthening the national institu- tions responsible for day-to-day field operations, sectoral planning and analysis, improving animal health and productivity and training livestock sector staff, has had substantial problems due to the continuation of enforced Government cattle purchase. Intensive discussions are in progress to resolve this problem. 18. Bank Group operations in Guinea now include ten IDA Credits totalling US$64.9 million and SDR 63.0 million, and two Bank loans totalling US$73.5 million. Guinea's disbursement rate (disbursements in relation to the undis- bursed balance) compares very favorably with that of other countries, averag- ing 40 percent during the past five years, compared with 24 percent for the Western Africa Region and 22 percent for the Bank/IDA as a whole. Guinea's rate also compares favorably with those of other countries at similar levels of per capita income and development. 19. Current Strategy. The proposed Bank Group lending program, supported by an expanded program of economic and sector work, is based on a strategy of promoting growth through support to the directly productive sectors, and by encouraging key policy reforms at the project and sectoral levels aimed at improving existing economic mechanisms and promoting market forces. Specific targets are: (a) giving priority to projects that increase production and exports; (b) improving absorptive capacity in those social and infrastructure sectors which support the productive sectors, through rehabilitation, tech- nical and managerial training; (c) introducing technical assistance directed towards policy reforms, improved economic management and resource allocation; and (d) improving capital flows through the promotion of private investment and increasing the level of cofinancing. 20. Apart from the proposed Conakry Port Project, IDA has recently appraised projects for technical assistance for economic management and for highway rehabilitation and maintenance. A PPF advance is currently being used to prepare a technical assistance project for oil and mineral exploration promotion. The Bank is planning to discuss with Government the price and incentive structure for agriculture, and is seeking to increase the sectoral knowledge necessary to develop, and conditional upon policy changes, expand agricultural operations. It is equally important for the Bank to deepen its understanding of the industrial sector through additional sector work and policy discussions, possibly leading to a second industrial rehabilitation operation. 21. In the mining sector, final feasibility studies for the proposed Nimba iron ore project are under preparation. The Bank is providing technical advice to Government for this project, as well as for the analysis of the Konkoure hydro/aluminum smelter project, in which it has been acting as exe- cuting agency for a UNDP-financed study of the aluminum smelter component. 22. The Bank Group's share of Guinea's external debt (public and private guaranteed) at the end of 1980 stood at about 8 percent (including undis- bursed). Its portion of external debt disbursed is expected to be 11 percent by 1985 compared with 8 percent in 1981; its share of debt service on public  debt and private debt guaranteed, 6.6 percent in 1980, is expected to decline to 3.7 percent by 1985. PART III - THE TRANSPORT SECTOR 23. At independence in 1958, Guinea was wrell-endowed with an extensive road and rail network and with a port facility at Conakry. In the years immediately following, major additions were made to rail and port infrastruc- ture, mainly to carry the rapidly developing bauxite and alumina traffic. Three enclave rail lines and dedicated port facilities at Kamsar and ore hand- ling berths at Conakry were built in the 1960s and 1970's (Map IBRD 16880). The Guinean transport infrastructure now comprises: 14,000 km of roads (1,200 km paved); the public rail line from Conakry to Kankan (662 km); the three enclave rail lines - Conakry-Fria (alumina), Conakry-Kindia (bauxite) and Sangaredi-Kamsar (bauxite); deep water port facilities at Kamsar and Conakry; the main international airport at Conakry, with secondary airports at Kankan, Faranah and seven other regional centers. Despite this relative wealth of transport infrastructure, poor management, inadequate maintenance and insuf- ficient capital funding have caused extensive deterioration of all but a small proportion of it. 24. The Guinean road system carries the bulk of the internal commodity traffic outside the enclave mining sector. Traffic volumes on the main roads leading out of Conakry average 2000 vpd, most of which are goods transport vehicles. The state of the public rail line and the unreliability of its services have contributed to its decline, and it offers little, if any, com- petition to road transport. Extensive rehabilitation and maintenance of the primary and secondary road network was begun under the IDA-financed first Highway Project and has continued under the Second Project. Despite the progress achieved, substantial improvements are still needed and form the backbone of the Government's investment strategy for the roads subsector. The road transport industry is hampered by lack of foreign exchange for spare parts, and fuel is sometimes unavailable in the interior. However, as infra- structure maintenance is improved further, Guinea's road system should have little difficulty coping with the transport demand in the main agricultural centers of the country. 25. The national airline, Air Guinee, carries about 120,000 passengers a year and plays a relatively important role ir domestic passenger transport. The port of Conakry, proposed for improvement; under this project, serves as the country's main and critical maritime gateway, with Kamsar handling only bauxite exports from the Boke mines. A smal]. secondary port at Benty has declined in importance as a banana port and now handles insignificant domestic coastal traffic. Management, Planning and Coordination 26. Sector management, planning and coordination have been weak and, with :inadequate resources for maintenance, have contributed largely to the deterio- ration of transport infrastructure. Overall responsibility lies with the  - 8 - Ministry of Transport, but lack of competent personnel and reliable data result in almost no planning. Following the planning activities in the Ministry of Infrastructure under the Second Highway Project, the Government has requested further IDA assistance, and a transport planning component would be included under the Third Highway Project now being appraised. This is particularly timely as extensive investments are now being proposed to reha- bilitate various parts of the road system and to rehabilitate the public rail line and upgrade services. Given the low traffic volumes, the economic wisdom of such major capital spending on railways appears questionable, and coordina- tion with other modal choices therefore vital. Development of air transport as a viable alternative for long distance domestic passenger transport also deserves study. But rehabilitation and better maintenance and operation of existing transport infrastructure, as proposed under this project, offers high, more immediate returns, and Government's interest in transport planning and in introducing improvements justifies continued Bank Group involvement in the sector. Role of the Bank Group 27. The Bank Group adheres to the Government's strategy of maintaining, rehabilitating and upgrading the transport infrastructure needed to support development of the productive sectors. The proposed project would be the Bank Group's first port project in Guinea. The Bank Group has previously assisted the port sector indirectly through an Engineering Loan (Si-GUI) and two loans (577-GUI and 766-GUI) for the Boke Bauxite Project which included construction of a new port at Kamsar, and related rail transport and new town infrastruc- ture. These projects were completed satisfactorily. The first and the still ongoing Second Highway projects financed extensive high-priority road rehabi- litation and maintenance programs, supporting basic sector strategy. The Port of Conakry 28. Located on the northern coast of Tombo Island, the Port of Conakry is protected against swells by the Island of Kassa and two rubble mound island breakwaters (Map IBRD 16681). Owing to the inadequately maintained condition of beacons and buoys, night-time navigation in the dredged, 5 km long entry channel is restricted. The Port's total surface area is about 38 ha. There are two bulk handling facilities for exports, one for FRIGUIA (alumina) and the other for OBEKA (bauxite), four general cargo berths (with about 3.6 ha of covered storage), and facilities for fruit handling, small coastal vessels, fishing vessels and work boats. Vessels of up to 40,000 dwt currently use the Port. Bulk petroleum products are handled next to the bauxite berth, and a clinker unloading and storage facility is under construction. Much of the port infrastructure has deteriorated. Some quay facilities present potential hazards that inhibit efficient operations. Cargo handling equipment is of relatively recent vintage, but inadequate maintenance, compounded by rundown workshops, and the generally poor operating conditions have substantially shortened its useful life. Floating craft are in poor condition. Harbor tugs are operating well beyond their useful lives and risk of total breakdown is high.  - 9 - 29. Port Operations. The composite picture that emerges from analysis of port traffic data and foreign trade statistics is that total traffic did not change much during 1975-1980, and hovered around 3.0 million tons annually, of which about 10% was general cargo. Year to year fluctuations were substantial and bauxite exports declined. Containerizatibn is low but increasing rapidly. Deteriorating facilities and equipment have resulted in high berth occupancy for general cargo (80%), long ship turnaround times (seven days on average), low productivity (less than 200/tons/day of general cargo unloaded), high pil- ferage and poor security. Freight rates to CDnakry are consequently very much higher than to neighboring West African ports and some conference lines have practically abandoned servicing Conakry because of the high costs of ship waiting and cargo losses. 30. Port Organization. Faced with deteriorating facilities and opera- tions, the Government used GTZ and KfW financing in 1981 to prepare a project feasibility study and a master plan for port development. It was proposed that port activities be reorganized and the then existing fragmented responsi- bility be replaced with a new Port Authority. Responsibilities for port oper- ations were shared by four organizations. Tha Office Maritime was responsible for beaconage and buoyage, harbor master services, maintenance of infrastruc- ture and dredging. The Entreprise Nationale de Transit et de Transport (ENTRAT) was responsible for stevedoring and general cargo transit operations. The Societe Navale Guineenne (SNG) was responsible for tugboat operations, while the Administration Generale handled general aiministrative functions. This split responsibility was recognized as a major cause for the poor performance of port activities. With encouragement of the Association and co-donors for the proposed project, these activities were consolidated under a new Port Authority of Conakry (Port Autonome de Conakry - PAC), which started func- tioning on September 1, 1982. Its organizatiDnal structure and statutes meet the objectives of financial and operational aatonomy and unambiguous authority of its management team, which is satisfactory. As a public enterprise under applicable Guinean legislation, PAC is governed by a twelve-person Board (Conseil du Port), with the Minister of Transport as Chairman, and including the general manager of PAC and representatives of major users and the port workers' union. The Government has agreed to obtain the Association's agree- ment before making any major changes in PAC's statutes or the composition of its Board and PAC will maintain well qualified staff in key operating posi- tions. (Section 5.01(c) of the draft Developnent Credit Agreement and Section 3.01 (a) of the draft Project Agreement). 31. With a present total staff of the various port entities of about 1,550, PAC management has set a target staffing level of around 1,100, with about half the currentlv employed stevedores and longshoremen on its permanent payroll, allowing for about 10 permanent gangs between two shifts. As a two shift operation is vital to raising productivity, PAC has agreed to put such a scheme into effect no later than October 31, 1984 (Section 3.06 of draft Project Agreement). Staff training needs would be addressed by consultants and the technical assistance proposed under the project. 32. Consultants helped PAC during project preparation to consolidate the rudimentary accounting information of the prior organizations(para. 30), pre- pare an opening balance sheet(para. 44), and institute improved accounting  - 10 - practices and controls. In order to ensure adequate financial reporting for the project, PAC with the help of consultants will introduce not later than December 31 ,1983 appropriate accounting and control systems based on generally accepted accounting principles and current practice in other ports (Section 3.07 of the draft Project Agreement). 33. PAC's tariffs need substantial restructuring, since estimates of costs by profit and cost centers indicate that most if not all of PAC's services are underpriced and bear little relation to costs. The complete re- evaluation of the fixed assets transferred to PAC from its predecessors at June 30, 1982 was a first step in tariff revision. Consultants are now reviewing PAC's tariff structure, at this stage to merely correct the most glaring deficiencies and ensure that a reasonable progression to prudent financial management can be started in 1983 (para. 46). PAC's statutory authority to set tariffs was confirmed during negotiations and PAC has agreed to set tariffs at appropriate levels established in agreemert with the Association (para. 45) (Section 4.05 of draft Project Agreement). PART IV - THE PROJECT Project Origin and Background 34. Following Government's request to IDA for help in meeting urgent re- pair and equipment needs for the Port of Conakry, an IDA identification mis- sion visited Guinea in December 1979, recommending that Government prepare a master plan and feasibility study for port development. With GTZ financing, a medium term investment program was prepared during 1980 and 1981. This formed the basis of the project, which was appraised in February 1982. The proposed project comprises the medium-term investment plan for the Port: its concept ensures that future development of the port could not be compromised nor alternatives foreclosed by the proposed rehabilitation program. A Project Preparation Facility Advance of US$600,000, approved in April 1982, financed the PAC's physical inventory and asset valuation, complementary engineering and studies, preparation of some bid documents and a review of port tariffs. Negotiations were held in Washington in April, 1983 with a Guinean delegation led by Commandant Siaka Toure, Minister of Transport. Staff Appraisal Report No. 4160-GUI dated May 17, 1983 is being distributed separately to the Execu- tive Directors. Project Objectives and Description 35. The proposed project would meet the most urgent investment needs of the Port of Conakry. It would eliminate the constraints that make the Port a bottleneck to Guinea's economic development through: (a) rehabilitation and replacement of existing port infrastructure and equipment; and (b) strengthening the newly established autonomous port authority. The proposed project con- sists of: (i) rehabilitation and repair of general cargo transit sheds, quays, aprons and underwater surfaces, repair of existing workshops, drainage system, rail sidings and roads, buoys and beacons, and repair and construction  - 11 - of a container storage area, other minor buildings and fencing, a new admini- strative building and housing for expatriate technical assistance staff; (ii) procurement of floating craft (two harbor tugs and boats), cargo handling equipment and vehicles, workshop tools and machines,and computing and office equipment, and repair of existing equipment; and (iii) technical assistance to PAC: 264 man-months of consultant services tc assist PAC's senior technical and managerial staff in port operations, as well as 165 man-months of medium and short-term experts to assist in developing training programs, accounting and financial systems, data processing, tariff and rate setting, inventory control, evaluation of warehousing needs, cons.truction supervision and comple- tion of port Master Plan studies. Project Implementation 36. PAC will be responsible for project execution with the assistance of qualified engineering consultants acceptable t;o the Association. Project implementation is expected to take about five years and should be completed by the end of 1987. 37. Some of the cargo handling equipment PAC will procure would be leased to ENTRAT (para. 30) for its remaining transi. and city warehousing and sto- rage function, under a leasing arrangement between PAC and ENTRAT which is satisfactory to the Association. PAC has agreed that no other equipment would leave the port compound (Section 3.02(b) of draft Project Agreement). PAC has also contracted with Office Maritime to maintain at reimbursable cost buoys and beacons repaired under the project. To increase the efficiency of port operations, PAC would prepare and present for comment by the Association, not later than June 30,1984, a plan of action for improving port security, and a plan of action for resolving warehousing and 3torage constraints outside the port, and has agreed to implement these plans on an agreed time schedule (Section 3.05 of draft Project Agreement). Project Cost 38. The total estimated cost of the project is about US$38.0 million equivalent, net of taxes and duties (from which the project would be exempt,) and interest during construction, and including refinancing of the PPF advance of US$600,000. The foreign exchange component is about US$35.7 million equi- valent (94 percent). Technical assistance of 264 man-months is costed at US$12,800 per man-month, including travel and all allowances, which reflects actual experience in recruiting experts under previous projects in Guinea. Consultant services for project supervision and studies (165 man-months) are also estimated at US$12,800 per man-month. Estimates are calculated in January 1983 prices, and reflect the consultants' preliminary evaluation of tenders, which were opened prior to Credit negotiations (para. 40), and in- clude price escalation and physical contingencies during construction. Given the nature of rehabilitation works and difficulty in predicting the extent of deterioration until part of the existing structures or equipment are dis- mantled, a 20 percent physical contingency wE.s assumed for these works. For new construction and equipment, physical contingencies were assumed at 10 percent. Annual price contingencies have been calculated for local costs at  - 12 - 10 percent and foreign costs at 8 percent for 1983, 7.5 percent for 1984, 7 percent for 1985, and 6 percent for 1986-1988. 39. The proposed IDA Credit, GTZ Grant, KfW Grant and AfDB Loan would finance the total foreign exchange cost of the project. The proposed TDA Credit of SDR12.1 million (US$13.0 million equivalent) would finance PAC's administrative building, floating craft, data processing materials, and con- sultants, equivalent to 34 percent of project costs In view of the commercial nature of the project, the proposed credit would be onlent by the Government to PAC at an interest rate of 13 percent over 20 years including a four-year grace period. This on-lending rate corresponds to other interest rates in Guinea set by the Government for parapublic commercial enterprises. PAC would bear the exchange risk. The AfDB loan equivalent to US$14.0 million and the KfW grant equivalent to US$6.0 million would be onlent to PAC over 20 years including four years grace, the AfDB loan at 9.5 percent and the KfW grant at 11.5 percent. The US$2.7 million equivalent GTZ grant would be passed on by the Government as a capital grant to PAC. The Government would also contri- bute prior to effectiveness 75 million Sylis (US$3.3 million equivalent) to- wards PAC's initial working capital. A Financing Agreement between Government and PAC satisfactory to the Association would incorporate these onlending and working capital arrangements. Its execution would be condition for effective- ness of the proposed IDA Credit. Internal cash generation by PAC totalling US$15.2 million equivalent would cover local costs and interest during con- struction, and provide for necessary increases in working capital to ensure satisfactory operations. Procurement and Disbursement 40. The financing package is based on parallel financing by the Associa- tion and the other co-lenders. Agreement was reached at appraisal that, in view of the difficulties of obtaining firm cost estimates until after bid opening, procurement for the main civil works and equipment contracts would follow Bank Guidelines for international competitive bidding. Other items identified as suitable for financing by a particular co-lender, for example PAC's full-time technical assistance, were not subject to the Association's guidelines, but the Association was consulted where such items concern the overall execution of the project. Contractors for civil works were prequali- fied, and bids were opened before negotiations. Procurement of floating craft was on the basis of performance specifications. Procurement of a computer system will follow international competitive bidding under a single responsi- bility contract, including hardware, software and training. Works would be supervised by the same consultants who prepared the project. 41. Disbursements would begin in late 1983 and are expected to be com- pleted by June 30, 1988. The proceeds of the proposed Credit would be dis- bursed against contracts as follows: 90 percent of the cost of civil works (US$2.21 million); 100 percent of the cost of floating craft and data pro- cessing equipment (US$5.21 million), and 90 percent for consultant and expert services and training (US$2.6 million). After refinancing the PPF advance of US$600,000, US$2.38 million would remain unallocated.  - 13 - Budget, Accounts and Audit 42. Annual budgets would be prepared by PAC and sent to its Board for approval at least three months before the end of the fiscal year. During the project implementation period, PAC would send the draft budget for comment by the Association. PAC would also employ independent auditors acceptable to the Association to carry out annual financial audits (Sections 4.03 and 4.02(a) of the draft Project Agreement). Under PAC Statutes, an Internal Auditing and Control group would also be set up at the General Manager's level. Financial Analysis 43. There are no financial statements for the Port of Conakry, since prior to 1982 port operations were performed 'Dy four separate organizations (para. 30). Consolidated income accounts for the years 1977 through 1980 were prepared by the consultant during project pre:aration. They indicate that Port earnings declined from a net income in 1977 of 5 million Sylis to a 1980 loss of 26 million Sylis, principally because operating expenses were up by 69 percent but tariff revenues increased only 34 percent. To reach breakeven operations in 1980 would have required a 16 percent increase in tariffs, and based on cost increases since then, a similar percentage increase would have been required to break even in 1982. At July 1, 1982, PAC's net fixed assets totalled about 650 million Sylis (US$28 milliDn), with working capital of 10.5 million Sylis. Since all assets were contributed by Government, PAC began operations with no long-term debt. 44. PAC's long-term financial objective is to become a self-supporting, commercially-oriented public enterprise. Und3r its statutes, PAC's revenues must cover operating and maintenance expenditures, interest charges on debt, and yield a satisfactory return on net fixed assets employed. The financial provisions of the proposed project support this objective. However, since the 60 percent real increase in tariffs to meet this target in 1983 is too large to be achieved in one year, tariffs will be increased gradually over the project period, coincident with the improvement in port operations brought about by the project, and restructured to conform to the marginal cost of services provided. To ensure that PAC is able to meet its financial require- ments during project implementation, the Government and PAC have agreed to take all measures, including tariff increases, to produce gross operating revenues sufficient to cover in each year all cash operating costs, debt ser- vice, and working capital requirements, and to finance the local cost compo- nent of the project (Section 4.01 of draft Development Credit Agreement). Agreement was also reached that from 1987, PAC will continue to ensure that its net operating revenue is positive, and in addition, will contribute at least 40 percent of its investment costs from self-generated funds (Section 4.05 and Schedule 3 of draft Project Agreement). This results in rates of return on revalued net fixed assets in use exceeding six percent beginning in 1987, reflecting the cash coverage target, and continues the positive operat- ing position begun during project implementation. 45. Following a July 1, 1983 tariff increase to result in a six percent increase in PAC's 1983 operating revenues, PAC will increase tariff levels as necessary on January 1 of each year to ensure a positive net operating income  - 14 - position. In real terms, tariffs are projected to be 74 percent higher than 1982 levels by 1987. PAC would approve and publish the 1984 general tariff revision and increase, acceptable to IDA, before December 15, 1983. It would raise PAC's 1984 revenues by an estimated 30 percent. To ensure that the asset base for tariff setting is appropriately maintained, PAC will carry out physical revaluation of fixed assets at least once every five yea-s and index fixed assets and depreciation allowances in the intervening years (Section 4.04 of draft Project Agreement). 46. Beyond the project period, PAC cash generation is forecast to be suf- ficient for debt service and local cost investment requirements. Four mea- sures have been agreed to preserve PAC's financial liquidity. First, to en- sure sound planning of future investments under the port Master Plan, to be completed under the proposed project, any PAC investment expenditures over US$1.0 million equivalent in the aggregate per year during the project period would be subject to the Association's agreement (Section 3.09 of draft Project Agreement). Second, to conserve sufficient PAC cash reserves for equipment replacement and emergency repairs, PAC would not pay cash dividends to the Government unless, after payment, PAC's cash and liquidity position remains at least double its current liabilities, including the current portion of its long-term debt (Section 4.07 of draft Project Agreement). Third, the Govern- ment will not require PAC to pay depreciation allowances to the State (Section 4.04 of draft Development Credit Agreement). Finally, PAC should not incur additional long- and medium-term debt if the maximum future debt service arising from it would fall below 1.5 (Section 4.06 of draft Project Agree- ment). 47. Although PAC's overall cash position would remain satisfactory, the detailed cash flow forecast shows that PAC's needs for foreign currency sources (to finance equipment renewals, spare parts and insurance premiums) are higher than its potential revenues in foreign exchange (coming mainly from tariffs on liners). The Government has agreed to permit PAC to obtain in a timely manner any needs for foreign exchange not covered by its foreign ex- change revenues, and not to require PAC to invest idle funds in non-liquid securities or in any other manner immobilize such funds for periods longer than 90 days (Section 4.03 of draft Development Credit Agreement). PAC would also build up and maintain an external account with one sub-account to ensure payment of insurance premiums and a second, of at least US$0.5 million, to ensure payments to foreign suppliers (Sections 3.03 and 3.04 of draft Project Agreement). Project Benefits and Risks 48. The project is expected to improve productivity as well as financial and management performance of the Port, reduce cargo losses presently incurred through pilferage and poor handling, and reduce substantially ocean freight costs on the country's agricultural exports and general cargo imports. More generally, it would facilitate increased production and economic development of the country by providing sufficient, low-cost port capacity for the country's foreign trade. An economic rate of return has been calculated for the pro- posed project as a whole since project elements are complementary. On the basis of its quantified benefits, the proposed project would yield an economic  - 15 - rate of return of 36 percent, taking into ac3ount an assumed gradual accrual of the benefits to Guinea. These include: reduced freight costs arising from improved port conditions and productivity; reduced general cargo damage and loss arising from improved cargo handling and security; and reduced financial holding costs to goods as a result of reducel ship service and waiting times and more rapid cargo handling and transit. If the full capital cost of the two tugs to replace existing tugs that have already reached the end of their economic life were added without counting any benefits from this investment, the ERR would still be 30 percent. The sensitivity of the rate of return to more pessimistic assumptions on key variables was tested and found to be satisfactory, in the worst case - benefits lagged by two years - still ft exceeding 20 percent. The high rates of retarn for the project reflect the existing poor conditions in the Port and the basic rehabilitative nature of the project. Benefits which have not been quantified include potential sav- ings to bulk exports and imports from improved port operations in general and improved transit and city warehousing operations from equipment to be pur- chased under the project and leased to ENTRAr for its continuing transit and transport operations. 49. The major project risk arises from the difficulty of projecting Guinea's economic development and traffic at the Port of Conakry. If the country's economic performance improves, the Port of Conakry could see very rapid traffic growth in the mid-1980's and beyond. On the other hand, it is difficult to predict success in the changes :iow begun by the Government in revitalizing the rural sector and encouraging export-oriented projects. In light of these uncertainties, fairly conservative traffic growth assumptions were used for estimating benefits for the economic evaluation. The financial covenants, especially concerning tariffs (paras 44 to 47),would provide ade- quate safeguard that PAC could meet its statutory objective of financial autonomy and place it on a sound financial footing. PART V - LEGAL INSTRUMENTS AND AUTHORITY 50. The draft Development Credit Agreement between the Revolutionary People's Republic of Guinea and the Association, draft Project Agreement between the Conakry Port Authority (PAC) and the Association, and the Recom- mendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Association, are being distributed to the Executive Directors separately. 51. Special features of the draft Development Credit Agreement are re- ferred to in the text and listed in Section [II of Annex III. Special con- ditions of Credit effectiveness are the signature of a financing agreement between the Borrower and PAC, the payment by Government of 75 million Sylis towards PAC's working capital, and cross-effectiveness with the AfDB, KfW and GTZ agreements. 52. I am satisfied that the proposed Development Credit would comply with the Articles of Agreement of the Association,  - 16 - PART VI- RECOMMENDATION 53. I recommend that the Executive Directors approve the proposed Development Credit. A. W. Clausen President I Washington, D. C. May 18, 1983 Attachments  - 17 - Page I TABLE 3A GUINEA - SOCIAL INDICATORS DATA SHEET GUINEA REFERENCE GROUPS (WEIGHTED AV AGES AERPA (THOUSAND Sq. Em.) - MOST RECENT EaTlM-E)) TOTAL 246.0 AGRICULTURAL 45.7 MOST RECENT LOW INCOME MIDDLE INCOME 1960 lb 1970 /b ESTDIAJTE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA GNP PER CAPITA (US$) 110.0 150.0 290.U 250.8 1053.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAiMS OF COAL EQUIVALENT) 63.7 90.7 82.S 66.5 610.1 POPULATION AND VITAL STATISTICS POPULATION, MlD-YEAR (THOUSANDS) 3067.0 4069.0 5425.('/c URBAN POPULATION (PERCENT OF TOTAL) 9.9 13.9 19.1 17.8 28.3 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 9.5 STATIONARY POPULATION (MILLIONS) 28.5 YEAR STATIONARY POPULATION IS REACHED 2130 r POPULATION DENSITY PER SQ. KM. 12.5 16.5 21.4 27.7 54.7 PER SQ. KM. AGRICULTURAL LAND 69.7 89.0 115.4 86.7 129.9 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 42.0 42.5 43.9 44.8 46.0 15-64 YRS. 55.1 54.7 53.2 52.3 51.1 65 YRS. AND ABOVE 2.8 2.8 2.9 2.9 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 2.2 2.8 2.9/c 2.7 2.8 URBAN 8.1 6.2 6.1 6.2 5.2 CRUDE BIRTH RATE (PER THOUSAND) 46.9 46.8 45.9 47.3 47.2 CRUDE DEATH RATE (PER THOUSAND) 30.3 24.2 20.0 19.5 15.7 GROSS REPRODUCTION RATE 3.0 3.0 3.0 3.2 3.2 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) USERS (PERCENT OF MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OP FOOD PRODUCTION PER CAPITA (1969-71-100) 97.0 101.0 83.0 88.7 90.7 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMNENTS) 91.8 86.4 78.39dk 90.2 93.9 PROTEINS (GRAMS PER DAY) 45.8 42.2 39.61 53.1 54.8 OF WHICH ANIMAL AND PULSE 8.1 6.6 7.drTi 18.4 17.0 CHILD (AGES 1-4) DEATH RATE 49.6 43.3 37.1 26.7 23.9 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 34.7 39.7 44.5 45.6 51.0 INFANT MORTALITY RATE (PER THOUSAND) 207.8 186.5 165.3 129.9 118.5 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 10.0,'e 23.9 URBAN .. .. 44.C, 54.9 RURAL .. .. 2.5 _ 18.5 ACCESS TO EICRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 13.0 .. 25.8 URBAN .. 70.0 .. 63.1 RLL .. 2.0 .. 20.2 POPULATION PER PHYSICIAN 26903.5 32519.4 16626.7,'d 32097.0 14185.2 POPULATION PER NURSING PERSON 3255.4 2031.5 2494.067 3264.6 2213.2 POPULATION PER HOSPITAL BED TOTAL 1121.8 6L1.7/f 634.01S 1225.0 1036.4 URBAN 205.3 216.97? 385.5A 249.5 430.8 RURAL 2201.8 879.87? 728.9XS 1712.1 3678.6 ADMISSIONS PER HOSPITAL BED .. 16.0 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. URBAN .. .. RURAL .. .. AVERAGE NUMBER OF PERSONS PER ROOK TOTAL .. .. URBAN .. .. RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. 5.0 URBAN .. .. RURAL .. ..  - 18 - Page 2 TABLE 3A, CUINEE - SOCIAL INDICATORS DATA SHEET CUINA RElERENCE GROUPS (WEIGHTED AVEYAGES - MOST RECENT ESTIMATE- MOST RECENT LOW INCOME MIDDLE INCOMH 1960 lb 1970 /b ZSTIMATE lb AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTED EN.ROLLMENT RATIOS PRIMARY: TOTAL 30.0 33.0 34.0 63.2 83.3 MALE .44.0 45.0 45.0 72.7 96.1 FEMALE 16.0 21.0 24.0 50.3 80.4 SECONDAZY: TOTAL 2.0 13.0 15.0 10.2 15.3 MALE 3.0 21.0 22.0 13.2 19.4 FEMALY 0.4 5.0 8.0 6.6 11.3 VOCATIONAL ENROL. (1 OF SECONDARY) 21.7 3.2 3.1 7.9 4.7 PUPIL-TEACHER RATIO PRIMAR.Y 65.6 36.1 38.2 47.4 38.6 SECONDARY 26.0 22.8 24.1 26.2 23.4 ADULT LITERACY RATE (PERCENT) 7.0 9.0/h 20.0 34.0 35.6 CONSUHPTION PASSE'GER CARS PER THOUSAND POPULATION 1.8 2.4 3.0 31.9 RADIO RECEIVERS PER THOUSAND POPULATION 12.7 22.4 22.9 34.8 71.8 TV ECEIVERS PER THOUSAND POPULATION . 1.7 17.9 NEWSPAPER ("DAILY GENERAL INTEREST-) CIRCULATION PER THOUSAND POPULATION 0.2 1.2 3.8 2.9 19.1 CINEH ANNUAL ATTENDLACE PER CAPITA .. .. 1.1 0.6 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 1521.6 1939.6 2416.9 FMALE (PERCENT) 40.4 40.3 39.7 34.i 36.5 AGRICULTURE (PERCENT) 88.0 85.0 82.0 78.4 56.5 INDUSTRY (PERCENT) 6.0 8.0 11.0 9.2 17.7 PARTICIPATION RATE (PERCENT) TOTAL. 49.6 47.7 44.6 41.4 37.0 MALE 59.4 57.4 54.2 53.9 46.9 FEMALE 39.9 38.1 35.2 29.1 27.2 ECONOMIC DEPENDENCY RATIO 0.9 1.0 1.0 1.2 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE LNCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS . HSIGEST 20 PERCENT OF HOUSEHOLDS .. LOWEST 20 PERCENT OF HOUSEHOLDS . . LOWEST 40 PERCENT OP HOUSEHOLDS ... . POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 134.3 507.0 RURAL .. .. .. 82.9 200.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 70.0 96.4 523.9 RURAL .. . .. 60.4 203.6 ESTIMATED PCPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN . . .. 39.3 RURAL 90. 69.0 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. lb Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Host Recent Estiate, between 1978 and 1980. /c Recent Goverment estimates from Administration Census indicate a resident population (excluding non- Guineans) of 4.53 mill. in 1977 and population growth race of 2.7Z p.s.; /d 1977; /e WHO report May, 1980 quotes total access 11-12U. However, this does not match reported service in urban and rural areaa; If Covernment hospitals only; /S 1976; /h 1965. * Present Bank estimates indicate higher ratio of supply close to requirement. Revised March 1 -1983  PAR. I WmITiSIn O? 8&fLAL lfICA7 Ssoac kltksngh cb data a. dram fetm snrts. Nmsrly pJodd hb. meat .shrtsiusd raLbl., it shoud also b oared th they ma burh best- astioalIy ct-p-b1o hbrac of the lack of -ta4-di-sd dafiatiat sod -o t.i oat ho ditffeen conotie ta -oitriog the date. The dat are .. e. tbsissa. -af i to desc ribe ordars ofs i s isdiata treed., sod ch-acrrta cartait -aJo, diffor-ocee betwen... tre The relefoc groups or (ii th. -ns coaty grou p of the subject c-otey and (2) ... cutry grop with so-Ah- high-r a-r.og i-com tita the cootry poop of the abjeer cou..try feocpt for "Nigh Inom Oil ixpoet-n' group shre Middis incom North Aft:- cod Middle Feat" isooas hecoca of atroogro aocto-cu1lturolofirta) l the -afre-c groop dana thevrae are population weighted arith,etic means foe .-h indicatorno shee only h..o maoityo the cutries itoagrop h.o data for th-t indicator. Stn- ohs cor.rge of contis 1rn; the ticci-ra depends on thenilahiliry of dote ond in tot aiform. c-oion mos be e irisdt rel.iegenr9 of one iodicntor toaoothcr. Ties. --erage nra ocy usefo1 ic copring cte suso Ins indicucon ata -im asg the cc-ty -Ao e-f-r..ce gro..ps. AMEA (thcouaaod aqk.) Muocio Ka oeritoal Nd - cra.t orho, so .d rura - Population (total. Total - Total Iorfoe arsa c-prisiog lai area and ilan.dwatsrs; 1979 dots. orhoc ne rsl diidd by thoir o-Pottieeoshoe of hospital bodn odiurel-Esnimet of aocotraoea d ctmponarily or pormnetly o-aiahie ic pobldic cd rIocto1 genarot-cdlspn talteed hsio codi- for cror. patre,mrket md kitchen gordea or to Itie fallow; 1979 dons. htbilinutiotc-tsra. H.epitalcorner ibIontn pt-manstny staffed by Iat .o. Lt- picyatino. Etbcuitchetta pnondtog petocipaily com.o- onp AITA (iS)) " IP pe ospite asnites at .u...n IVte Prim.ca-dlcre are to inclogd. Orc-l sPurat.l. fooeo-, inclods health coood y um corriuo method as geeld Bskbra (1978480 basin); 190 o eis etr o orastysoidb hsos (bot by a 1970. cod 1980 date. edicut.. asistant. curse. ideife. ro.) hich offer it-patiror .c.o.- da tto ad Pre-ide a Isited range of medical tacll,ite. Po tsnrl tOlf tlOMTINPM AIT A c coc-panict of-orieery(ca ticot porposs arbor hospitals taclude WHO. yrscipal(gece_I hospitals, tnicity) In kilognata f ca otuntat npiro; 1960, 1970 . cd 1979 crtn . Speofalie hosPita~lsrcj iocodod only code, to tal dnru. Amain e gHerplal Ne S - b dL.- Toa ctto ecls too- lbre from hospitals. divided by the coto of beds. pOPNI,ATIOl AMP ff1A1 STAXf0Sr CS !otai PopulAtion, Mi-ea thcosads) - ho ofJuly 1; 1960, 1970, cod 1960 ftgftIhf das-r As-ras Sias cf go-eehd (perso... roe bo-ashld)-tnloba,ndra- Orba Poutatoc ynront f torn) - ratio ofurban to total rPolaItion; A h--oshold coaita ofagop fldniut %ho sc ltivig qosriers ditftsre.a defiuliots, of cohe ors ay affect -op-tbiliry of dra and thef sol meals. A boarder orldger soy or may co .h looded i sang.. cotries; 1960. 1970. and 1980 dor. the hcueho.:d fc-natnro oysa Ppstotoyes 200- Corrnt popolsrioc projeotloos am b-sd cc 1980 her of yerott pe ioo o all -bho r-d rua occ-pindct ntoi -tors pepolaio byaeofcocd their mamtlity oud fertility rates. dnsIlit0.g epetvo Oslug cli e-p--aoet icr-crore sod Projcicprmtr for or-ality rotor coaprise ofthre le-n. oum-anocpind artts. l-sg oy tanyo birth iocrt...iug stb cocotryc po copits income duress to Pec'itricito (p-ro .. rd deeliogs) - coral,1 urban, nd eura1 - lenrl, aid femal life tetcocY anbiliog. ti 77.5 yrrs The parc-.oetoa- dilloga arch ol-, "icy to lining quoc-oona perceotag soo - o for1tuit -ste slo hon three I.-In aonuicg drli-o 10 of -btu, s, -od urr)1 doe;I cgo retyctrionly. rnilt I ocodiog co Incom leooi ad p-s foully plo...iot peefo-rsooc Ouch co_tr to thee -igr ou of these doe -obi-otin- of me-tlity EDIEATICN .sd fertility trncda for p-o3e_tl_ pu_p_c_I Adjustrdtousnt is Sct-iocay polatloc - Ia ttioaypopolotion thor to no trocti iuc- Prsr oho -ttt,ml ond f-1as irons total. nub an female th It rote in rqol %to ho death -tarn and also the oge r.uiuei- orimnof all ogt- at thepimany inro atpttr f rnnprttire mat curan To It ohile..d ouly ottr EcttllY tarot detli..ta no olry -ch-ol-ogr yoaobv;otolyicuo hildco aged h-li the replucosoct oiof cin net -rroluc -o trn.I A..a etch gertiao ye-rs hot udj-std for diffe.rr leogrc of pivayeaoit foe ofIsa eioe tef en_tly . The rotnypopulorion tiewocotrion cithuinro dcni 1oro -mn soy eu-ed 1100percent coni-td eo2the basis of the projected ohe-ocristiot of tepyaboni-c coepoaar o-wo obo the off icial school agt. tthe.e_ 000, ocd rho rote of d-ci-n of fertility core corpl.c-...ndr tcboo -toal cle and foso1n - Computod us chor; -ecodnry _eo lee.xoaie,oorso Ito.. four yearn of ayp-cod prianry rsrcrn f..ar . saioer p vu-to io -eochd - Tihe yeee eh- utoti-roy pouaicpr-ldet geur-l, vccuo.,c teacher tiraicc lctections foryailt tier cull hetoted oaliy ..f 12 to 17 nrs of am; ...rr.ipondoe.. cors ..r -e11oy popolacina D._toiy eoc'lde Prr no. in. - hd-year popolotio yet uq--r kal--t (100 hbtrt....) of (calolerlmn perteor of...toodon) - Vccattonol ioctitutio.. coct ue; 91 197 oc 99dr.ttuetchla,sootcl r o-hr Peogrno which optrotn tndeprd- Per at. km.Rar17Ocutoa I ana- lospotel 00 ehev for eoOclar ad toy or a,dpr t f...c.ndoy icoti'tnico. ecly: 1967. 19)1 and 1979 duto. Pcil-tech- tony -risoy. and ..ecoad.ar- cT-1 -cdect to .roiled It yopuiacbeo Age Onroc..ur. (perceo.n) - Chtldre- il-l4 yeoro). n-rco-oge fly- prlmery e-1ccndr .lol dIvided by ou.. era of t-cher ic the 64yer) and retired (65 pynes and u iu p-rcoocgro of cd-yncr popa- coroodo Iemit. la-ioe; 1960. 1970,..ad 1900 dana. Adalt Ilt-e-L: rat (per--e) - ltrat- dut (able to readco wrt) peueno Cct rte lporc-t) - turd1 - A-oua growth ean f total mcd- osrnrtg ftnlool oooicoe )yased ovr. yea- oulto for 191-60. 1960-70, -od 1970-80. Populstoa Crouch toe_ eoc -n -athot- Aoool arotot rae f orh- popa- COMIIDWTIOO OsI.o- for 1910-I 1977.ad 1970-40. Pso....r..ro(per ll.. ticod rplro) - Paoeg- caro -opcal sna Crue Mrt rae (erchoton) boco lIon bileic yet thoonod of od-year cc ntglethaeight Per..cs e-1 ldoc osboln1 t here-n pepoloriot; 1960. 1970, aed 1900 doa. sliOtryurrlc Groo ordcintt-rooecubco.sgtroacsowl erI d. icendrenv Iaecticad in yeats h-o r-giorrctiuo of cello he om erdari-e perIod if ahe -cp-rce-ce Prrc ag-op-ecftc for ten u loffe-; dora for rec.. yernsy - be -opar-ble sinc rutt rotr solyf.re-y.. .orgueding in 1960, 1970, sod 1980 cotc-triet obolisbed _iooia.8 rall Plsel -Accptos, A...I ossos) - dooo -b-r of -c-pror Tf Recrr-r (per tlouo...d popolotic) - ftrvo rrflo hr-od-aa to ofhehoo ld-olce oodnr ...oPIcea of nonluou family p-iag pe-gr- g9nrl oilc retbnoe popolatieo; n-lodesooIcen..ed Tv oncerer Pam Iy ;r- Plutoog - tuet (pr-et of msrried s - -frcncg oIf marriod iecucreod t er hecr.. tato f Tc nts eo io effect. smnothild-heo-c san 5-44 years) ,ho use1htch-cuotnI devices to Newpaper C-ruiato pe hroaand. poyloloi~ h-Ihw thtavera-gnir P,bllrtt.-i d-eord ptta rtortrig eorltes tt roslee loes MDa NUTRITION to bs idl f at c pynnr no leas tout tImes osen k. loden of Tood rdctuper Capitn (1969-71-100) - 1odet of per cpitaoos lrnAncltelneprtrt per Cior-oond ontho oute of p-oduti-o of oh toed -cclitca. ProductIon -clades. seed d feed a-d tIcket a,ca dduringite o. toldn d n.isso. driv-in cino- in 00 oledor yoar boatio. C.-,dit,. io -cvr primuoy goods (e.g. aug-rco. aed ahil.c units. Iv1tead of augurd) chith u- edible andcoti ocrintlg, coffee oed tea ore nlded. Agugreat p-udottuc of enhcutry ic boad an LABORt 00CE noteI ceaepooeepteciha 1961-6,h 970 ad 1980 data. TeloorForce (thousnds - r.oeoocol a,tirn pe-u-o tocldtsg Per c tosplof coleioc(prco ofttieet)-Caord feeoa.n fun. .e ad usrpioynd hoc P",,nIlutia. "t'"' ldiog huewrs trden , t. eeg eqotr-Int of ar food nppylion ovatliclr in ruetry yet ccpiro covring cepoletin of al aeI Ifiliona. to vuros c-usrios are per doy. Available opplies -oprian domacic -- ro cino., isorts Inca _cwt -bcaIr; 1960, 1970 und 1980 dcto. enprt, ndrhngn n tuk.No appII_etld an-a feed, ceds,reol (porc-o) - Ftcsat ioho foer-c pcerg f total Ibhr ore qotiia sd In fool praneiag, and I.oss.et doitotttbotit teqi- Agri-toir (pec-t) - Lbohr fort. in fleriug. (or-ary, boating and meoro cero oncsted by PIAloado phyololgicol -usd for o.r-I con- finhiug an per-e-g ef ttol labor fooct; 1960, 1970 and 1980_dot.. vlyanhsIch co.osiderJe _toromnel eposur body weights;,ago Inooctroc (percet-) - abrfor. Ininig uorcir uoonr and iodastribanico of pfplro,adotwo 0ptettoosecradee-etc.eatadg.o ecnaec tota lbr fore hoced Inot 910,1971 ad177 tdr. 90 "O I.1970ad 1900 lu,te. Pry o.Pit. copply of cooreio (oroan pet v) -Proet torrent ofpee -cpita fn-ticipatg tote _prnr - _tote., sole, ad f-mei - Participotin or on supply of food Per PY. .e aupyl ffood is deflird saov,o- -tivity ruten ore oo. tnd uc ror1l sale ao teel labo force .. qairnmeuc for al ooncethihlby USDA pr-vio for.a..o erceor of toto1, nob and froole pcyu.io-c of oil egos eycivly; altoosocec ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~-d18 of0 rs f tota problt pot day cod 20 grom. fuiu r 1900 190.od19 an Then.. .. or dao 00 Ii.0'a paetictpotiono-tes pole Pr-teo, fl which 10 gros ohoold he onioo pru-et. These atad- rrtnnl .....eetrnt. nf the ppulaci-c and bogK tla tred. A rds ore1 lvrthan those of 75 gro- of trci pvtin ccd 13 arom ffcnroae r f rom us Iotlcao anlImal prteto an -nveea foe the world,Propose by PA in the Thiod foooic tpdnr oto-trto of population ond- 15 cod 6i andos Wrld Pond S-ty; 1961-65, 1970 un-17 dot..t the tc-ro robot for-r Pot ccotto Pr,rnOc porly from anima sd polo.-I Proni supply f toed do- trend fr_m ail and pule ogrm e day; 191-60, 1970 -od 1977 dora. INCOME DISTRIBUTIONt Child )agn 1-4) heth toi fete tbhooad) - ocuol deotba per thout-d in Peranot of Priroro lce- iboth in_cosh ond kind) - -i-eeod by efohent cg Ieu - nr.t hildren it this age group, for meat developtgceu- tpoce:, riches 70 pe--st, Poores 20 percent, and pooes hI pnr.teo frion dccc dertod fo life ruble.; 1960, 1970 and 1980 dat, of h-oseoIds.. 8NAO,IN PPOOIrY TARGTf GRnOUPS LI!, tipcett~1YGat girth', (vor) Argcou , of yeoro of life -rouoiu The foliatc es-imet- urn :cy op.promoi metra fpvrt ot oItre; 1 .1970 an 1960 dana. and sh.ud hr intrpreted sth coidorahin catio.. Itfant flor-atir -tor iee thou-sd) - An.-I dratha of Wnfn ndot ou ye- EstImatd kbaolutn Po'entr loum leve (1 pe toP" obcad o of age Par tho.nn.d live biethe; 1960, i970 sod 1980 doro. Alainte povertytoe lre ic tht income 1el holes chich a s.itta Aces no fon Wtrriero ofeooatu) - rural. oran aodeoal- u outr icioclly udeq-r diet plu .. stril. ne-oo t eq1i-fmeaIc it eo her of pinp1.lina.ahc n ua)ct est ,cca. 0 cf afrdable estr su.pply(nldstreaedouface eaters or co-ro-d hut ocritd enird ltesP-orrty Oem inve (11 arcpia - urbos au -rro1 ait.sonh as that fret prurto b-ohele, springe. osd sanitary taell) an Raoiou1 reePoverty inCom n tue-hird of -Prae . cito pseataes f beirsasrrve poplonius itu rbanae publin Pe-s.-o incm of the u-ry. groan leve is derived fro eh. r-rol fao-nf or stadpot Ioceted ant soetha 200 soaafrom a h.u.- may be level moth odjoatme for high-e n-t cf liningt rooes coisdr.. d as httg "tbit reaonbl accssf tho hocus. In rural aneas itisotsd PpourenNoa Ad.Iceo eecy0 mte (retreatZ- - orhae re-nbla so-a -oId iwop chatthe hoswfe er meters af rho household end r-1t Percer of pepltoistio feehbn -srrl) sAte see cubselt do n hv to upend a diaptopertie.ne. Pse of the day is fetchiug the fsmly' astseomd perc...agss of eheir tepserfe popaj.L-so Uarot dlspoas soy L-I:.d rho ea11mtoan ed diop-sa. sath or ithout tesnmt, of ha amnesi e = v50-atrby -traubt-hem aysi er the use of pOt prlriee and age- Peol -ostotPhesauac Ppoor dllde" by s-b- of prcrising physi- ceeLo and oncla1 Dnes DteOsl Pia qstia =m alulaho La ei-onatty ravel. Eco-nma Aulymis sad rosn mbeparteat Peeleos a anaga _mra - opaistl- divddd by soots of p-teIsLos ffy 1982 aim and fsaim ara&aa t usaa, amitant arm.' pemekei awm a sorsisg aslsi  20 GUINEA: PRESIDENTS' REPORT ANNEX 1 ANNEX I REVOLUTIONARY PEOPLE'S REPUBLIC OF GUINEA ECONOMIC INDICATORS GROSS NATIONAL PRODUCT IN 1981 11 ANNUAL RATE OF GROWTH (X,constant prices) US$ WIn. S 1973-77 1977-81 1973-81 1981 1981-85 Projected 1/ GNP at Market Prices 1536 100.00 4.59 -0.22 2.16 -0.57 2.00 Gross Domestic Investment 235 15.32 -6.55 7.09 0.04 -9.10 5.00 Gross National Savings 2/ 160 10.39 -3.44 0.01 -1.70 -34.17 Current Account Balance -76 -4.93 21.25 -39.77 -4.92 -461.81 Exports of Good.,NFS 490 31.92 30.41 2.35 15.53 -8.06 1.00 Imports of Goods,NPS -434 -28.28 20.03 3.46 11.44 2367 . . OUTPUT,LABOR FORCE AND PRODUCTIVITY,1981 Value added Labor force VA per worker US $ ln S thousands S Us $ S Agriculture 709 42.13 2022 82.00 351 51.85 Industry and Mining 367 21.81 271 10.99 1343 198.38 Services 607 36.07 173 7.02 3445 508.86 Total/average 1683 100.00 2466 100.00 677 100.00 GOVERNMENT FINANCE General Covernment 3/ Billioa Sylis I of GDP 1978 1979 1980 1981 1978 1979 1980 1981 Current Receipts 9.60 9.97 11.09 12.32 31.84 33.02 34.54 34.95 Current Expenditure 6.64 6.63 7.74 7.21 22.49 21.96 24.11 20.45 Current Surplus 2.76 3.34 3.35 5.11 9.35 11.06 10.43 14.50 Capital Expenditure 4/ 2.12 8.30 3.77 5.96 7.18 27.49 11.74 16.91 External Assistance (net)5/ 1.35 1.15 0.97 1.80 4.58 3.82 3.01 5.12 Central Governuent Billion Sylis S of GDP 1978 1979 1980 1981 1978 1979 1980 1981 Current Receipts 9.10 9.73 10.44 11.52 30.83 32.22 32.52 32.68 Current Expenditure 6.45 6.44 7.19 7.04 21.85 21.33 22.39 19.97 Current Surplus 2.65 3.29 3.25 4.48 8.98 10.90 10.12 12.71 Capital Expenditure 4/ 1.99 8.20 3.70 5.73 6.74 27.16 11.52 16.25 External Assistance (nat)51 1.35 1.15 0.97 1.80 4.58 3.82 3.01 5.12 MONEY,CR2DIT AND PRICES Billion Sylie Dec.1976 Dec.1979 Dec.1980 Dec.1981 Koney & quasi-money 8.95 8.90 12.97 17.17 Bank Credit to Public Sector 11.58 8.61 18.50 22.74 Sonk Credit to Private Sector 0.70 0.76 1.21 1.02 Porcest tes 1978 1979 1980 1881 Money & quasi-uoney as 2 of CDP 30.32 29.47 40.30 68.71 General Price index (1981-100) 6/ 83.70 85.50 91.90 100.00 Annual S Ch*ages in% Bank Credit to Public *oetor -6.10 -25.60 114.00 22.90 Boek Credit to Privete leator -1.20 7.30 60.30 -16.00  21 ANUEX I Page 5 REVOLUTIONARY PEOPLE'S gEPUBL:CC OF GUINEA TRADE PAYMENTS AND CAPITAIL FLOWS BALANCE OF PAYMENTS 7/ MERCHANDISE lXPORTS (Average 1979-81) 1978 1979 1980 1981 US $ Uln S (US $ Million) Bauxite 307.7 68.4 Exports of Goods,NPS 328 364 497 490 Alumina 128.3 28.5 Imports of Goods,NPS -314 -362 -394 -435 Diamonds 1.7 .4 Resource Gap (deficit--) 14 2 103 55 Agricultural Comsodities 12.3 2.7 Total 450.1 100.0 Interest Payments -43 46 -51 -53 Workers' Remittances -6 -7 -8 _9 EXTERNAL DEBT,Deceaber 31,1981 Other Factor Payments (net) -33 -38 -74 -85 Us $ *Im Net Transfers 33 9 17 16 Public & Private Debt Guaranteed (Balance on Current Account -37 -81 -13 -76 Including Undisbursed 1620.9 outstanding & Disbursed 1255.4 Direct Foreign Investment 6 28 34 36 Net MLT Borrowing DEBT SERVICE RATIOS FOR 1981 Disburements ,Public Borrowing 112 126 120 139 E Amortization,Public Borrowing -93 -109 -108 -109 Scheduled Service Payments Subtotal,Public Borrowing 19 17 12 30 Public & Private Debt Guaranteed 28.0 Private Sector(net) -26 -29 -31 -28 Private Debt Non Guaranteed 10.3 Total Borrowing -7 -12 -19 2 Total Debt Outstanding &Disbursed 38.3 Capital Grants 8/ Other Capital(net) 4 3 5 10 Actual Service Payments Other Items n.i.e. -19 34 -45 -42 Public & Private Debt Guaranteed 16.9 Increase in Reserves 9/ -53 -28 -38 -70 Private Debt Non Guaranteed 10.3 Total Debt Outstanding &Disbursed 27.2 Gross Reservea(end year) 59 66 99 91 Met Reserves(end year) 9/ -177 -208 -239 -286 IBRD/IDA LENDING (September 30,1982) US * ln Fuel and Related Materials IERD IDA Imports 99 110 Outstanding & Disbursed 50.6 53.6 of which: Petroleum 99 110 Undisbursed 0.0 76.3 Exports 0 0 0 0 Outstsdin g Including Undisbursed 50.6 129.9 RATES OF EXCHANGE 10/ 1975 1976 1977 1978 1979 1980 1981 1982 Sylis/US 20 .33 21.38 21.14 19. 72 19.11 18. 97 20. 93 22.36 1/ Preliminary estimates 2/ Defined as GDI plus Current Account Balance 3/ Local administration not included 4/ Including capital transfers to,and investment on behalf of,state enterprises 5/ Disburaments less scheduled amortization plus increase in arrears 6/ GDP implicit deflator 7/ Totals may not add due to rounding 8/ Included in net transfers 9/ Discrepancies due to different exchange rates 10/ Period geometric average. March 1,1983 f  - 22 - ANNEX 2 Page 1 STATUS OF BANK GROUP OPERATIONS IN GUINEA A. Statement of Bank Loans and IDA Credits (as of March 31, 1983) Credit Amount (less Cancellations) Number Year Borrower Purpose Bank IDA Undisbursed