Nigher - Economic And Financial Management Improvement Project : Credit 1493 - Credit Agreement - Conformed

)FICIAL 'CREDIT NUMBER 1493 NIR Development Credit Agreement (Economic and Financial Management Improvement Project) between REPUBLIC OF NIGER and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated <3 1984 CREDIT NUMBER 1493 NIR DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated 3 , 1984, between REPUBLIC OF NIGER (hereinaf er 711ed the Borrower or Niger) and INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Association). WHEREAS (A) the Borrower has requested the Association to assist in the financing of the Project described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the terms and conditions hereinafter set forth; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agreements of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following additional terms have the following meanings: (a) "Project Management Unit" is the unit responsible for the daily management of the Project, established within the Borrower's Ministry of Planning by the Borrower's Ministerial Arret6 No. 034/MP/DI, dated September 14, 1983. (b) "Interministerial Project Coordination Committee" is the committee responsible for the overall coordination of the Project execution, established by the Borrower's Ministerial Arrete No. 033/MP/DI dated September 14, 1983. -2- (c) "ADETEF" means Association pour le Developpement des Echanges en Technologie Economique et Financiere", a non-profit organization affiliated to the Ministry of Finance of the Republic of France. (d) "ADETEF Agreement" means the Agreement dated Septem- ber 23, 1983 between the Borrower and ADETEF by which ADETEF has undertaken to assist the Borrower in the carrying out of Part C of the Project. (e) "Project Preparation Advance" means the project preparation advance granted by the Association to the Borrower pursuant to an exchange of letters dated November 11, 1982, January 26, 1983 and September 2, 1983 between the Borrower and the Association. (f) "Special Account" means the account to be opened and thereafter maintained pursuant to Section 2.02 (c) of this Agreement. (g) "CFAF" means the currency of the Borrower. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Borrower, on the terms and conditions in the Development Credit Agreement set forth or referred to, an amount in various currencies equivalent to eleven million Special Drawing Rights (SDR 11,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of Schedule I to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) Promptly after the Effective Date, the Association shall, on behalf of the Borrower, withdraw from the Credit Account and pay to itself the amount required to repay the principal amount of the Project Preparation Advance withdrawn and - 3 - outstanding as of such date and to pay all unpaid charges thereon. The unwithdrawn balance of the authorized amount of the Project Preparation Advance shall thereupon be cancelled. (c) The Borrower shall, for the purposes of the Project, open and thereafter maintain in CFAF a special account in a commercial bank on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 4 to this Agreement. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 3 to this Agreement. Section 2.04. The Closing Date shall be April 30, 1990 or such later date as the Association shall establish. The Aseociation shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request, (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. Section 2.07. Commitment charges and service charges shall be payable semiannually on February 1 and August 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each Febru- ary 1 and August 1, commencing August 1, 1994, and ending February 1, 2034, each installment to and including the installment payable on February 1, 2004, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the French Republic is hereby specified for the purposes of Section 4.02 of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) The Borrower declares its commitment to the objectives of the Project as set forth in Schedule 2 to this Agreement, and to this end, shall carry out the Project through its Ministries of Planning and Finance with due diligence and efficiency and in conformity with appropriate administrative and financial practices, and shall provide, promptly as needed, the funds, facilities, services, staff in adequate numbers and other resources required for the purpose. (b) The Borrower shall ensure that the Minister of State for Planning shall be in charge of the administrative coordina- tion of the Project between Ministries responsible to carry it out and to this effect shall operate the Project Management Unit, to be headed by the Director of Investment Programming in the Ministry of Planning, and operate the Interministerial Project Coordination Committee. Section 3.02. (a) In order to assist the Borrower in carry- ing out the Project, the Borrower shall not later than January 1, 1985 employ consultants and experts whose qualifications, experi- ence and terms and conditions of employment shall be satisfactory to the Association, such consultants and experts to be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. (b) The Borrower shall take all measures necessary to facilitate tie work of said consultants and experts, cooperate - 5 - fully with them in the performance of their services, and make available to them all such information, staff and office facili- ties as shall be necessary or useful to the successful execution of the Project. (c) The Borrower shall assign qualified and experienced professional staff in adequate numbers in its departments and agencies responsible for the carrying out of the Project to work with said consultants and experts. Section 3.03. The Borrower shall take all measures necessary to ensure: (i) that staff trained, for at least 6 months under Part D of the Project, shall remain in the employment of the Bor- rower and assigned to the same Ministries for at least one year after completing their training; and (ii) that staff trained for a longer period of time under Part D of the Project, shall remain in the employment of the Borrower and assigned to the same Ministries for at least three years after completing their train- ing. Section 3.04. The Borrower shall through the Project Manage- ment Unit ensure coordination between the Project and other tech- nical assistance programs in the Ministries of Planning and Finance. Section 3.05. For purposes of assisting the Borrower in the carrying out of Part B (2) of the Project: (a) The Borrower shall, not later than October 31, 1984, on terms and conditions satisfactory to the Association, enter into an agreement with an organization acceptable to the Association. (b) Except as the Association shall otherwise agree, the Borrower shall not modify, waive or terminate the above agreement or the ADETEF Agreement or any provision thereof. Section 3.06. (a) The Borrower undertakes to insure, or make adequate provision for the insurance of, the imported goods to be financed out of the proceeds of the Credit against hazards inci- dent to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable by the Borrower to replace or repair such goods. (b) The Borrower shall cause all goods and services financed out of the proceeds of the Credit to be used exclusively for the purposes of the Project. -6- Section 3.07. (a) The Borrower shall furnish to the Associa- tion, promptly upon their preparation, the plans, specifications, reports and contract documents for the Project, and any Tnaterial modifications thereof or additions thereto, in such detail as the Association shall reasonably request. (b) The Borrower: (i) shall maintain records and procedures adequate to record and monitor the progress of the Project (including its cost and the benefits to be derived from it), to identify the goods and services financed out of the proceeds of the Credit, and to disclose their use in the Project; (ii) shall enable the Association's representatives to visit the facilities and construction sites included in the Project and to examine the goods financed out of the proceeds of the Credit and any relevant records and documents; and (iii) shall furnish to the Association at quarterly intervals all such information as the Association shall reasonably request concerning the Project, its cost and, where appropriate, the benefits to be derived from it, the expenditure of the proceeds of the Credit and the goods and services financed out of such proceeds. (c) Upon the award by the Borrower of any contract for goods, works or services to be financed out of the proceeds of the Credit, the Association may publish a description thereof, the name and nationality of the party to whom the contract was awarded and the contract price. (d) Promptly after completion of the Project, but in any event not later than six months after the Closing Date or such later date as may be agreed for this purpose between the Borrower and the Association, the Borrower shall prepare and furnish to the Association a report, of such scope and in such detail as the Association shall reasonably request, on the execution and ini- tial operation of the Project, its cost and the benefits derived and to be derived from it, the performance by the Borrower and the Association of their respective obligations under the Devel- opment Credit Agreement and the accomplishment of the purposes of the Credit. ARTICLE IV Other Covenants Section 4.01. (a) The Borrower shall maintain or cause to be maintained records, including separate accounts, adequate to -7- reflect in accordance with consistently maintained appropriate accounting practices the operations, resources and expenditures, in respect of the Project, of the departments or agencies of the Borrower responsible for carrying out the Project or any part thereof. (b) Without limitation to the foregoing, the Borrower shall: (i) maintain or cause to be maintained separate accounts reflecting all expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure; (ii) retain, until one year after the Closing Date, all records (contracts, orders, invoices, bills, receipts and other documents) evidencing the expenditures on account of which withdrawals are requested from the Credit Account on the basis of statements of expenditure; and (iii) enable the Association's representatives to examine such records. (c) The Borrower shall: (i) have the Special Account and the accounts referred to in paragraphs (a) and (b) of this Sec- tion for each fiscal year audited, in accordance with appropriate auditing principles consistently applied, by independent auditors acceptable to the Association; (ii) furnish to the Association, as soon as available, but in any case not later than six months after the end of each such year, a certified copy of the report of such audit by such auditors, of such scope and in such detail as the Association shall have reasonably requested, including without limitation to the foregoing, a separate opinion by said auditors in respect of the expenditures and records referred to in paragraph (b) of this Section as to whether the proceeds of the Credit withdrawn from the Credit Account on the basis of statements of expenditure have been used for the purpose for which they were provided; and (iii) furnish to the Association such other information concerning said accounts, records and expenditures and the audit thereof as the Association shall from time to time reasonably request. Section 4.02. The Borrower shall cause all plants, equip- ment, vehicles and facilities included in the Project to be maintained in accordance with appropriate administrative and financial practices and shall provide promptly as needed, the funds, facilities, services and other resources required for the purpose. ARTICLE V Remedies of the Association Section 5.01. For the purposes of Section 6.02 of the General Conditions, the following additional event is specified -8- pursuant to paragraph (h) thereof, namely, that Ministerial Arret6 No. 034/MP/D1 or Ministerial Arrete No. 033/MP/D1, both dated September 14, 1983, governing the Project Management Unit and the Interministerial Project Coordination Committee, respec- tively, shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the carrying out of the Project. Section 5.02. For the purposes of Section 7.01 of the General Conditions, the following additional event is specified pursuant to paragraph (d) thereof, namely that either event spe- cified in Section 5.01 of this Agreement shall occur. ARTICLE VI Effective Date; Termination Section 6.01. The following event is specified as an additional condition to the effectiveness of the Development Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that the Special Account has been opened in accordance with the provisions of Section 2.02 (c) of this Agreement. Section 6.02. The date OcIo e3, /c i e is hereby specified for the purposes of Section 12.04 of the General Condi- tions. ARTICLE VII Representatives of the Borrower; Addresses Section 7.01. The Minister of Planning of the Borrower is dEsignated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 7.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere du Plan B.P. 862 Niamey Niger -9- Cable address: Telex: MINIPLAN 5463 CND Niamey For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (W UI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF NIGER By/s 0~4e/ rgC V Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By /s/ e Regional Vice President Western Africa - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the Credit 1. The table below sets forth the Categories of items to be financed out of the proceeds of the Credit, the allocation of the amounts of the Credit to each Category and the percentage of expenditures for items so to be financed in each Category: Amount of the Credit Allocated % of (Expressed in Expenditures Category SDR Equivalent) to be Financed (1) Consultants 5,050,000 100% of foreign and experts expenditures (2) Training and 570,000 100% fellowships (3) Vehicles and 1,118,000 100% equipment (4) Supplemental 220,000 30% salaries for training officers (5) Office rent 47,000 100% (6) Initial deposit 95,000 Amount due under in Special paragraph 3 of Account to pre- Schedule 4 to finance goods this Agreement and services under catego- ries (1) to (5) above (7) Refunding of 940,000 Amount due under Project Prepara- Section 2.02 (b) tion Advance of this Agreement (8) Unallocated 2,960,000 TOTAL 11,000,000 - 11 - 2. For the purposes of this Schedule: (a) the term "foreign expenditures" means expenditures in the currency of any country other than that of the Borrower for goods or services supplied from the territory of any country other than that of the Borrower; and (b) the term "local expenditures" means expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods or services are supplied, expenditures in such currency for such goods or services shall be deemed to be "foreign expenditures". 3. The disbursement percentages have been calculated in com- pliance with the policy of the Association that the proceeds of the Credit shall not be disbursed on account of payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manufacture, procurement or supply thereof; on this basis, if the amount of any such taxes levied on or in respect of items in any Category decreases or increases, the Association may, by notice to the Borrower, increase or decrease the disbursement percentage then applicable to such Category as required to be consistent with the aforemen- tioned policy of the Association. 4. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of payments made for expenditures prior to the date of this Agreement. 5. Notwithstanding the allocation of an amount of the Credit or the disbursement percentages set forth in the table in para- graph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance the agreed percentage of all expenditures in that Category, the Association may, by notice to the Borrower: (i) reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures; and (ii) if such reallocation cannot fully meet the estimated shortfall, reduce the disbursement percentage then applicable to such expen- ditures in order that further withdrawals under such Category may continue until all expenditures thereunder shall have been made. - 12 - 6. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditure for such item shall be financed out of the proceeds of the Credit, and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Asso- ciation's reasonable opinion, represents the amount of such expenditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 13 - SCHEDULE 2 Description of the Project The objectives of the Project are: (i) to assist the Bor- rower's urgent need to undertake economic studies, in order to design an econonic and financial consolidation program and a long-term structural adjustment program; and (ii) the strengthening of the Borrower's Ministries of Planning and Finance in the field of economic and financial management and planning. To that end, the Project consists of the following Parts: Part A: Economic Studies 1. Carrying out of a study of the Borrower's public investment program and its general financial situation. 2. Carrying out of structural adjustment studies: (a) a diagnostic study of the Borrower's parastatal sector; (b) follow-up studies to define rehabilitation pro- grams for selected public enterprises; and (c) other sector studies. 3. Carrying out of project appraisal studies. Part B: Ministry of Planning 1. Strengthening the Investment Programming Department by: (a) the defloition and establishment of an investment information system; and (b) the improvement of its financial analysis and budgeting capabilities. 2. Strengthening the Statistical Department by: (a) the up-dating of national accounts; and (b) the improvement of metads of statistical analysis and publication. - 14 - 3. Strengthening the Computer Center to enable it to support the Investment Programming and Statistical Departments. 4. Acquisition and utilization of equipment and office supplies for the above activities. Part C: Ministry of Finance 1. Establishment of a Financial Planning Department. 2. Strengthening of the Borrower's fiscal management by the computerization of: (a) personal income tax administration processes; (b) customs clearance procedures and the recording of foreign trade operations; and (c) private property registration and taxation. 3. Strengthening of the Public Debt Department by: (a) the improvement of public debt management; and (b) the computerization of the public debt data base. 4. Acquisition and utilization of equipment and office supplies for the above activities. Part D: Joint Training Program for the Staff of the Ministries of Planning and Finance 1. Training of 30 statistical assistants. 2. Training in economic and financial management of high-level staff by provision of: (a) 10 four-year scholarships to train abroad; and (b) 20 six-month scholarships abroad to improve skills of existing staff. 3. Improvement of skills of mid-level staff by training in Niger and on-the-job training to familiarize such staff with modern data processing methods. - 15 - 4. Organization of seminars on economic and financial topics. The Project is expected to be completed by October 31, 1989.