Niger - Road Project

RESTRICTED FUE;CO 'Y Report No. P-380 This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL DEVELOPMENT ASSOCIATON REPORT AND RECOMMENDATIONS OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE REPUBLIC OF NIGER FOR A ROAD CONSTRUCTION AND IMPROVEMENT PROJECT June 10, 1964  REPORT AND RECOiilviWLTICNS OF THE PRESIDE2T TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPISIT CREDIT TO THE REPUBLIC OF NIGER FOR A ROAD CONSTRUCTION AlND IIPROVEiBIMT PROJECT 1. I submit the following report and recommendations on a proposed de- velopment credit of $1.5 million to the Republic of Niger for construction and improvement of roads in Niger. PART I - IiISTORICAL 2. Niger, formerly a French colony, became independent in August 1960 and joined the Association in April 1963. An economic mission visited Niger the same month and the Government drew the missionrs attention to the need for financial help for road construction and improvement, in particular for a road project of high priority serving a groundnut producing area in Central Higer whose transport system is closely linked iwith that of Northern Nigeria. A technical mission visited Niger in October 1963 to appraise the project. On April 30, 1964 negotiations for a development credit began in the canital, Niamey, at the request of the Government and were completed in mid-Mlay. PART II - DESCRIPTION OF THE CREDIT 3. Borrower: Republic of Niger. Amount: The equivalent in various currencies of $1.5 million. Puroose: To finance the cost of construction of about 34 Iam and improvement to 35 km of roads. Tern and amortization: 50 years with no amortization for the first 10 years. Beginning January 15, 1975 1/2 of 1% of the principal amount wlould be repayable semi-annually for 10 years, and beginning January 15, 1985 1-1/2% of the principal amount would be repayable semi-annually for 30 years. Service charge: 3/4 of 1% per annum on the principal amount of the credit disbursed and out- standing.  - 2 - PAR III - APPPAISAL OF TIE CREDIT The Econom1 4. A report "The Economy of .liger" (AF-16a) was circulated to Execu- tive Directors on April 13, 1964 (R 6L-60). 5. Niger is among the poorest and least developed of African countries. Its develorment possibilitiesseem very limited. Natural resources are poor, distances from the ocean are long and the slcills of the three million inhab- itants are engaged mainly in malking a living from a difficult soil. Exports of groundnuts to France and of cattle, sheep and goats to Nigeria allow im- ports of industrial and construction goods, fuel, textiles, sugar and other foodstuffs. Transport costs are high due to long distances and little traf- fic. Because it is landlocked, Niger depends upon the transport facilities of foreign countries for its foreign trade. Electric power is small-scale and expensive, depending upon costly imported fuel. Education is at a low1 level; less than 7 percent of school age children attend primary school. 6. Until recently Niger's public finance had been dependent upon con- tributions fromz France or from the "Solidarity Fund" of the West African "Entente" countries (Dahomey, Ivory Coast, Niger and Upper Volta). The amount of budget support from outside has usually exceeded the amount of public investment. For the fiscal year 1