Mali - Education Project

CIRCULATING COPY 10 BE RETURNED TO REPORTS DESK DOCUMENT OF INTERNATIONAL DEVELOPMENT ASSOCIATION Not For Public Use E ? * .. , : > Report No. P-1248a-MLI REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALI FOR AN EDUCATION PROJECT June 1, 1973 This report was prepared for official use only by the Bank Group. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report.  Currency Unit: Mali Franc (MT) US$ 1.-00 = MF 460 MF 1 = US$ 0.002 MF 1,000 = LB$ 2.17 MF 1,000,000 = US$ 2,174.00 Fiscal. Year = January 1 through December 31.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALI FOR AN EDUCATION PROJECT 1. I submit the following report and recommendation on a proposed de- velopment credit to the Republic of Mali for the equivalent of US$5.0 million on standard IDA terms to help finance an education project. PART I: THE ECONOMY Background 2. A report on "Recent Developments in the Economv of Mali'" (F-30a) was distributed to the Executive Directors on November 10, 1971. A Country Data Sheet is attached as Annex I. An updating economic mission visited Mali in early 1973, and a new report is being prepared. 3. With a per capita GDP of around $70, Mali is one of the poorest countries in Africa, and one of the 25 "least developed" countries identified by the United Nations General Assembly. Agriculture, livestock and fisheries are the mainstays of the economy and the principal sources of foreign exchange. Manufacturing output accounts for only about 4 percent of GDP. The recorded real growth of total GDP during the 1960's was about 2.8 percent a year or marginally higher than the popullation growth rate of 2.5 percent. Since 1970, however, GDP has actually declined owing to a series of drought years which have inhibited foodgrain production and caused heavy losses of livestock. During the past six months, the drought has assumed crises proportions, and there is likely to be a sharp drop in national output this year, with conse- quences for public finances and the balance of payments which cannot yet be predicted with accuracy. 4. Reports on previous credits to Mali have drawn attention to the legacy of difficult economic problems inherited from the regime overthrown by the military in November 1968. Many of these problems persist, in spite of the efforts of the present government to correct the most serious distor- tions in the economy by raising agricultural prices, removing some of the re- strictions on trade, stimulating the inflow of private capital, and increasing tax revenues. Food prices continue to be held down for the benefit of urban consumers, with consequent disincentives to production and an incentive to smuggle grain to neighboring countries where prices are higher, thus reducing domestic availabilities and increasing import needs. Government policy of hiring all graduates of the nation's secondary and higher schools unable to find employment in the private sector has been a factor exerting constant up- ward pressure on public expenditure. Most state enterprises appear to be still operating at a loss. Action to deal with these problems will at best  be taken onyv very gradually, and with the additional difficulties created Dv the drought, the econovmy remains weak and its foreign excchange reserves negative a situation romade tenable only by the French guarantee of converti- bilitv for t;e Malian franc and French financial assistance. 5. ihere are nevertheless a number of encouraging developments. Productior of cotton and erourdnuts, the two principal export crops, appears to nave been fairly well maintained in spite of the drought, though tiev re;:;ain about 10 percent below the 1970-72 plan target. Substantial investments are oein- made in programs for expanding cotton and rice output, including t;.e 7[opti rice project being financed by IDA. River fisheries, for ,wich the European Development Fund has provided assistance, hiave also been makein rood rrogress. and fish exports to neighboring countries are on the increase. 6. lThe balance of payments iriprovet, con-;iderablv durin, 1968-71. lhe overail deficit fell from MF 9.6 billion in 1ith8 to NXF 1.2 billion in 1970. hIowever, in 1971 substantial imports of careals, necessitated bv the effects of the drought on domestic food production, wer-e large]y responsible for a "E :3.4 billion deficit. The net derficit on services was reduced by 30 percent during the 1968-71 period. The major improvement in the balance of payments was due, however, to the reversal of capital flows, rostly on private account, from a net outflow of tF 6,.6 billion in 196zh;; lo a net inflow of iMW 0.2 billion in 1971. JData for 1972 are still incomplete, but mid-year figures suggest that recorded exports and recorded imports were runaning 26 percent and 18 percent lower respectively than in the previous year. The apparent discre,n- ancy between exp;ort and production growth may. be explained, particularly for groundnuts and fish, by variations in the volume of unrecorded exports and farm consumri:ion, for which. cata are not available. The decline in exports is likely to continue into 1973 on account of the drought. 7. Public savings have remained negative- despite some improvement in tax collection in recent vears. Government current expenditures have been rising, at the rate of i6 percent a year. 1n spite of this, the budget deficit (excluding investment expenditures financed' ouit of foreign aid) was reduced from NY 6.3 billion in 1969 to N. 2.4 billion in 1971. Comparable data for 1972 are not yet available. 8. The 1973 budget provides for expernditures of WE 28.1 billion as compared wit:! MF 25.8 billion in 1972. Personnel emoluments, which claim about 80 percent of the bud-get, account for most of this increase, some of which was due to a small g!eneral increase in salaries with effect from January 1, 1973. 9. The Government is seeking to increase its revenues by improving tax collection. To this end, it ha-s adopted the policy of closine down businesses which are in tax arrears. Such businesses would be alloWed to reopen upon payment of half of their arrears, the remainder being due within three months. Nevertheless, a current deficit of MP 2.4 billion is projected for 1973, a substantial increase over the 1972 budget estimate (MF 1.8 billion).  -3- Foreign Aid 10. The greater part of public investment is financed from externa! sources. During the period 1966/67-1970, Mali received an annual average of US$30 million of external aid, including technical assistance of about US$3.0 million. Nearly half of this aid was provided by the U.S.S.R. and the People's Republic of China in the form of long-term concessionary loans; close to 40 percent of the total came from France and the European Development Fund in the form of grants. In 1971 Mali received foreign aid disbursements of US$30.5 million (including US$7.0 million in technical assistance), of which US$17.4 million were grants and US$6.1 million loans. How much of this was used to finance the emergency grain imports mentioned earlier remains undetermineU. Data for 1972 are not yet available. 11. The present drought has prompted special emergency aii to Mali tTr-m various sources. Of the emergency aid which FED recently approved for tb-A si' drought-stricken Sahelian countries, US$8.6 million is earmarked for Mali. The FAO announced an emergency crash program for all six countries and, in this connection, sent a special mission to Mali at the time of the most rew-ent bank economic mission. The FAO operation, with which the World Food Provrom (WFP) and the UNDP are associated, has already allocated 50,000 tolns of fooc grains for the six countries. This quantity is almost three tilmes last year's .allocation and is estimated to claim some three-quarters of t7ikl WFP emergency resources for 1973. 12. Mali's total external public debt outstandinfo at the encd of 197" was IJSS317 million equivalent (including US$56 millioni undisbursed). Tota l repavments of principal and interest due in 1971 would have claimedi about percent of the year's total foreign exchange earnings (8 percent in 1970); nevertheless, actual debt service payments were small owing to the 1970 short- to medium-term rescheduling of Chinese and Russian debts which constitute two- thirds of the country's total foreign debt. 13. Mali's prospects for accelerating economic progress depend primarily on raising agricultural and livestock production for export, and on improvinn its infrastructure with investments geared closely to the needs of the pro- ductive sectors of the economy. In view of its limited capacity to raise public savings and its difficult balance of payments position, Mali will con- tinue to rely heavily on foreign assistance. Mali's very lirmited debt ser;i- ing capacity and the poverty of the country suggest that this assistance should be on the most concessionary terms possible, and should cover a high proportion of total project costs, including substantial local expenditures. PART II: BANK GROUP OPERATIONS IN MALI 14. The proposed credit would be IDA's seventh operation in Mali, bring?lng the total of IDA funds committed to US$48.5 million. Of the presently out- standing amount (US$43.5 million), US$16.5 million had been disbursed as of April. 30, 1973.  -4- 15. Bank Group lendin? during the 1960's was handicapped by the coun- try's poor economic performance and the lack of' well-preparec, and economically iustified projects. However, in 1966, a US$9.1 mi:Llion IDA Credit (95-MSLI) -.s made for improvement of the Malian section of the Bamako-Dakar railway. Since the end of the 1960's, project preparation has becn sharplv stepped up. The Bank's 1969) economic mission and other reconnaissance and preparation missions provid,ed the basis for formulating a substantially ex:panded and diversified Bank Group lending program, and the initial resulis of these efforts have already materialized. An IDA Credit (197-MLI) of- USS7.7 million helped finance a first higlhwav maintenance project in 1970. Credits -espectivelv amounting to $6.9 and $3.6 million for the Mopti rice project (277-VfLI) and a telecommunications project (321-MLI) were approved in 1972. Most recently, a $9.5 million second highway project (383-MLI) and a $6.7 mil- lion second railway project (384-vdI), involving highway rehabilitation and maintenance, and rolling stock and track renewal, w.ere signed. Annex II con-- tains a summary statement of IDA Credits as of April 30, 1973., as well as notes on the execution of on-going projects. Experience with ongoing projects ias beeu good. 17. Mlost of the operations envisaged by the 3ank Group for the period 1974-75 concern the ruiral sector either directlv or indirectl;, and include groundnut/miliet and livestock development proiects being prepared witlh the assistance of French Fonds d'Aide et de Cooperation experts and the Bank's Permanent Mission in West Africa, and scheduled for Board presentation in MY1974. In addition, consideration is currently being given to the possi.- hilitv of a sDecial. line of credit for drought relief. A cotton projecr has heen identifi.ed for FY1975. Finally, the Mopti rice project o'f 1972 includet, feasibility studies for a second rice project to be finance<! at a later stape. III. THE EDUCATION SECTOR 1.-. The Ministry oL Education, Youth and Sports vas, unltil recentl, principally responsible for administering education and training in Mali. A-: of Mav 3., 1973, however, this Ministry was divided to form the. Ministry of Fundaimlental Education, Youth and Sports and the Ministry of Higher and Second- ary Education and of Scientific Research. Not all details -with regard to the organization of the new ministries have been worked out. Other agencies and m,iinistries (Production, 3lealth, Post and Teleconu-iunications) operate training facilities to meet their own requtirements. A six-year primi.ry school (the first cycle of basic education, grades 1-6) prepares for the lower secondarv school en,rv examination and for lower level vocational and agricultural trainin-. Lower secondary e(lucation (the second1 cycle of basic education, grades 7-q) prepares students for entry into upDer secondary general education, and 'or vocational, agricutlttural and teacher trainino at thatt _evel (grades 1ri--I3). Approximately 20 percent of children of primary school age are pre- sently enrolled in primary sch1ools; corresponding fi,gures at the lower and iuncr secondary levels are 7.5 and 1.2 percent respectively. Stidents con- tinuing to higher education (grades 13-16) are channeled or) the basis of  Baccalaureat results as well as on the guidance of the Bureau of School and University Orientation. 19. The Government's policy of expanding educational opportunities has been demonstrated by the recent growth of recurrent expenditures on education/ training (15 percent per year during the period 1967-72), and this at a time of overall expenditure restraint (4 percent per year during the same period). Until now, much the greater portion of recurrent expenditure for education has been directed to fostering the formal system. (Non-formal education! training, including several new rural training programs introduced recently, accounted for only one percent of recurrent expenditures in 1972). While the formal system has met some of the modern sectors' manpower requirements arising from economic growth and the replacement of expatriates by Malians, it has not yet fully adapted its programs and methods, particularly at the lower levels, to the economic and social objectives of the country. Because of the large share of recurrent expenditures on education (32 percent of public recurrent expenditures in 1972) there is also a need to adjust the financial claims of the education sector to the needs of other sectors. 20. The education system is hindered by a number of problems which center upon the lack of long-term planning and the prevalence of theoretical programs and teaching methods. These problems are evident: (a) at the level of the Ministries of Education, where the need to develop long-term educational plans, to control student enrollments and flows, to rationalize budgeting and manage- ment, and to introduce program evaluation procedures is hindered by the lack of trained and experienced personnel; (b) at the primary school level, which is mainly geared towards preparation for further education, and not to the needs of the rural masses, and which is hindered by a scarcity of classroom materials, poorly trained teachers, and by instruc- tion in French (rarely spoken in the countryside) rather than in the widely used languages, Bambara and Peul, which in turn causes a large number of rural students to drop out of the system or to repeat courses (on the average 31 percent of students at this level are repeaters); (c) at the lower secondary level, which is a continuation of essentially theoretical instruction owing to the lack of specialized facilities and equipment and appropriately trained teachers for science and practical work; and, (d) at the upper secondary level, where there is insufficient practical training, particularly at the key technical training institution, the Central School for Industry, Commerce and Administration (ECICA), and where extension of three-year programs to four years duration results from the poor quality and preparation of lower secondary school graduates and from the necessity for remedial work in basic skills.  -6- 21. Employment opportunities in the modern sector of the economy, in- cluding the civil service, benefit only a fraction of the population. The modern sector absorbs about one person in 100, one of the lowest such ratios 4n Western Africa. Prospects for the improvement of such opportunities are not bright. In addition, the government's hiring policies (para. 4) have developed the unfortunate expectation (correct in the past) that a formal education at any level guarantees civil service emtloyrnent. Therefore, although it will not be popular, student enrollments and flows will need to be selectively controlled henceforth to avoid creating, in the near future, urban pockets of unemployed secondary and higher level graduates and of pri- mary school leavers. In light of the preceding, educational development in Mali is confronted by serious challenges which include: (a) the need to develop local capabilities for planning, programming, budgeting, progran evaluation, and cost analysis and control, in order to reduce costs and control student enrollments and flows; (b) the need to extend opportunities for basic education, presently biased toward the modern urban sector, through the identification, exploration and development of economi- cally viable alternatives to the present system; and (c) the need at both the prirmary and secondary education levels for qualitative improvements such as teacher training and better physical facilities and equipment, and for the de- velopment of curricula more relevant to Malian requirements and more practical in content and presentation0 23. The Government is now developing an education strategy which takes into account, to some extent, financial constraints, the developing imbalances among manpower demand and supply, and the need for qualitative improvements in the system. Already, some measures have been taken to control the educa- tional system's exnansion, including the introduction of selective examina- tions for access to lower and upper secondary level institutions and the stabilization at 1972 levels of new enrollments in the higher institutes of engineering, teacher training and administration, through the award of scholarships in constant numbers. Additional measures will be required, how- ever, to reorient enrollments, especially toward agricultural specializations. 24. Pending the outcome of studies that will determine alternative ways of expanding basic education opportunities, the Government's education develop- ment strategy would prepare, on the one hand, a comparatively small number of academically able students for further education and training and, on the other hand, the majority of students for direct productive employment by im- parting to them functional skills in reading, writing, and calculation. This strategy is in harmonv with the economic and social objectives and interests of tne countrv, and is supported by the education project proposed in this report.  - 7 - PART IV. THE PROJECT 25. A report entitled "Appraisal of an Education Project" (No. 140a - TILI) is being circulated separately. A Credit and Project Summary, including a detailed breakdown of costs, is attached as Annex III. This education project would complement the programs of other bilateral and multilateral agencies in higher education teacher training, extension agent training, ftnc- tional literacy programs and rural training. 26. The proposed projIect would finance: (a) construction and equipment for (i) eleven groups of multipurpose science laboratories and basic technology and domestic science workshops, each group serving one to four lower secondary level schools (grades 7-9) in the surrounding area; (ii) a multipurpose science laboratory in the Women's Technical Teacher Training College (ENETF), the training institute for lower secondary school domestic science teachers (grades 10-13); and (iii) classrooms, laboratories, technology rooms, and admi- nistrative offices in the Central School for Industry, Commerce and Administration (ECICA), the upper second- ary level technician training institute (grades 10-13); (b) the costs of a special upgrading program for teachers and of the training of the directors of the facilities listed in item a (i) above; (c) the provision of (i) 7 man-years of specialists' services and 1-1/2 years of fellowships for the above institutions; (ii) 11 man-years of specialists' services to train local per- sonnel and organize and develop procedures for improved planning and management in the Ministries of Education, and to develop manpower planning capabilities in the Division of Human Resources of the Government's Central Planning Bureau; (iii) 5-1/2 man-years of specialists' services to organize and implement a study of the alternatives for the extension of basic education, and the identification and preparation of a possible project in this area;  - 8 - (iv) 2-1/2 man-years for an architect or an engineer experienced in school construction to aid the Project Director; (d) furniture, equipment and accommodation for the Project Unit. 27. In view of the highly theoretical nature of instruction as well as of the lack of specialized facilities and equipment for science and practical work at the lower secondary education level, the project would provide for construction and equipment of 34 Tulti-purpose science laboratories, 28 technology workshops, and 17 practical work facilities for girls' family and social education, all in 11 groups of laboratories and workshops. The groups, each serving one to four schools, would provide about 2,000 student places, ar.d be located within walkinig distance from the user schools and built on or adjacent to the site of one of the schools to be served. About 6,600 students would use these facilities, corresponding to almost one-fourth of projected public enrollments at the lower secondary education level by 1978-79. 28. In addition, an administrator for each of the eleven zroups would be trained in inventory, bucdgeting and class scheduling procedures. Further, 60 teachers would be upgraded in the use of the aforementioned facilities. Finally, didactic materials for the first three years of the centers' opera- tion, corresponding to a full cycle of studies at the lower secondary educa- tion level, would be provided. 29. For the purpose of training teachers in biology and nutrition, the project would provide for the construction and equipment of a biology labo- ratory at the Women's Technical Training College. Similarly, at the Central Schlool for Industry, Conmmerce and Administration (ECICA), existing classrooms and work areas would be converted into laboratories as well as into technology rooms and a library. Conmmercial and secretarial classrooms and an administra- tion block would also be constructed, and equipment for the industrial sections of the institution and for simulated commercial work areas would be installed. These additions/alterations at both the 'Women's Technical Training College and ECICA would provide, at the upper secondary education level, specialized facilities and equipment for practical work and training needed to strengthen the educational system, and to prepare suitably trained manpower for the Malian economv. 30. When planned secondary level qualitative improvements are implement- ed and are allowed to run their course for an adequaite period of time, it is expected that a shortening oi the duration of selected upper secondary level training programs, by one year, will be possible, with conmensurate reductions in program costs. The Ministry of Higher and Secondary Education and Scientific Research, for examnle, intends to shorten the program of ECICA to three years when it is satisfied that the quality of entering students has improved suffi- ciently through the implementation of practical laboratory and workshop facil- ities, upgraded teachers, ancl adequate materials at the lower secondary level, all to be provided under the proposed project. 31. In addition, technical assistance for ahout 11 man-years would be provided for the General Directorate of Planning, Finance and Administration,  - 9 - which serves both Education Ministries, as well as for the Human Resources Division of the Government's Planning Bureau, and this would in turn streng- then the planning and managerial capabilities of those who will bear respon- sibility for implementing the Government's education development strategy in the future. Specialists' services would also be required for project imple- mentation. In addition, fellowships would be funded for study abroad of two Malian education administrators in technical/vocational training schemes. 32. This education project would be a transitional operat'on; it would meet the immediate needs of the sector pending the results of the study of alternative means of extending basic education, which would provide a re- ference point for long-term development of the education sector. As envis- aged, the study would lead to a second education project aimed at re- orienting basic education to mass needs and extending the existing educa- tion and training system to those not now served by it. This study would be one of the first of its kind to be conducted under Bank Group financing. It would, therefore, be designed to provide evaluation and experimental data which would help in the design and implementation of similar projects in other member countries, especially in the West Africa Region. Consultative and work groups of parents, teachers, employers, or others affected or interested by eventual reforms would be established to guide, react and contribute to the work of the study team, which would include foreign specialists as neede(! Cost and Financing 33. Total project cost, net of taxes, is estimated at US$5.5 million, with a foreign exchange component of approximately US$4.1 million equivalenr. The proposed IDA credit of US$5.0 million would finance about 90 percent of all project costs net of taxes, including US$0.9 million of local expenditures. A contribution from Mali of US$0.5 million would cover the remaining local costs. Project Execution, Supervision, Procurement and Disbursement 34. A project unit, in the General Directorate of Planning, Finance and Administration, would be responsible for (i) supervision of project implementa- tion, (ii) coordination with other Ministries and parties involved in the proj- ect and (iii) liaison with the Association. The unit would include, on a full- time basis, a project director who would usually report to the head of the Directorate, but would be empowered to make all day-to-day decisions relating to the operation of the unit, including staff management and procurement of supplies and services. The Director would be assisted for two and a half years by a project architect or engineer experienced in school construction and by an accountant. During negotiations, a Ministerial Decision creating the proj- ect unit within the General Directorate of Planning, Finance and Administra- tion was signed by the Minister of Higher and Secondary Education and of Scientific Research. It was agreed that a joint decree, signed by both the Minister of Higher and Secondary Education and of Scientific Research and the Minister of Fundamental Education, Youth and Sports would formalize the crea- tion of the project unit following signature of the Credit Agreement. It was  - 10 - further agreed during negot-[ations that the formal establishment of the project unit as well as the appointient of the project director would be conditions of effectiveness of the Credit. 35. Design, planning, and construction supervision for the new laboratorv- workshop groups and alterations to the technical training school would be per- formed by consultant architects engaged on terms and conditions acceptable to the Association. To accelerate implementation, the Government would appoint the consultants as soon as possible, and for this reason retroactive financing of professional fees up to US$40,000 is recommended. 36. Civil works, furniture, and equipment contracts would be awarded through international competitive bidding in accordance with the Guidelines for Procurement under World Bank Loans and IDA credlits. Local manufacturers of furniture would be allowed a preferential margin of 15 percent of the C.I.F. costs of competing imports or the currently applicable import duty, whichever is lower. Preferential treatment would also apply to suppliers in countries which are members of the Western Africa Economic Community (C.E.A.0.). Lots for furniture and equipment would be for at least US$40,000 to facilitate delivery to each school, although miscellaneous items which cannot be grouped in packages of at least US$5,000 would be procured locally up to a maximum of US$70,000 (corresponding to 5 percent of total costs of equipment and furni- ture). 37. Disbursements from the project credit would cover: (i) 100 percent of the total costs of furniture and equipment; (ii) 100 percent of technical assistance, teacher training, education study and project unit costs; and, (iii) 75 percent of civil works and related professional service costs. The project is expected to take five and one-half years to complete. PART V. LEGAL INSTRUMENTS AND AUTHORITY 38. The draft Development Credit Agreement between the Association and the Republic of Mali, the Recommendation of the Committee provided in Article V, Section 1 (d) of the Articles of Agreement of the Association and the text of a resolution approving the proposed credit are being distributed to the Executive Directors separately. 39. The draft agreements conform to the normal pattern for credits for education development projects. 40. I am satisfied that the proposed development credit would comply with the Articles of Agreement of the Association.  - 11 - PART VI. RECOWMENDATION 41. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President Attachments June 1, 1973.   COUNBRY DATA - MALI ARFAI 1,20,000 K.2 ~ ~ ~ ~ ~ ~pPOUATION: 5.14 million (mid-1971) 2/ Ifl : 4.1 per Km AREA, 1,240,G00OO m2 Rate of iGroth; 2.2% 4fvoPJ1966 to 1971) 43.3 per ImL of rable len 2/ POPULATION CHARACTERISTICS (1967-1971) REALTH (1968) CrPuAdeBIOrth Rate per 1,000) 60-65 Population per physic.in 56.320 3/ Crude tooth Rote per 1,000) 35-40 Population per hoapital bed 1,570 Infent Mortality (per 1,000 live birtho) 120 ACCESS TO PIPED WATER (1970) ACCESS TO ELE RICITY (1970) % of Urban Population 40 of Urban Population 55 NUTRITION (1970) EDUCATION (1969) Calorie intake ao 6 of requiremente 100 Adult literamy rate lo% Per capita protein intake 75 g per day Primary mohool enrollment 19% C.NP PER CAPITA in 1971: US870 j/ ROSS DOMESTIC PRODUCT IN 1970 ANNUAL RATE OF GROWTH (%, onntant 1969 prioe) OS, ia. 96-66 1965-7051 2/ 971f SDP at Market Prioee 274.t 100.0 .. 3.0 3.7 Grose Deee:tic Inveat-ent 41.1 15.0 , - 4.9 6.5 Grone D.o.etic Saving 32.8 11.9 11.5 6.8 Current Account Rolance - 2.2 I/ EOporta of Goode, NFS 49.7 18.1 14.1 6.6 Importe of Goode, NFS 58.0 21.1 1.1 5.6 OUTPUT LABOR FORCE AYD PRODUCTIVITT IN 1970 Value Added Labor Foroe V.A. Per Worker 751 3 ; Min. % US5 % Agriculture 121.2 44.1 Coduotry 39.3 14.3 servocos 1.14.3 41.6... Total/Average 274.6 100.0 GOVERNMENT FINANCE General Government TI Bin. Aof 1971 1971 1969-1971 Current Rec.ipte 21.5 13.3 13.0 Current Eopendlture(iool.tranofere) 22.4 13.8 14.4 Current Surploo - 0.9 - o.6 - 1.3 Capital xpend.ituree 1.7 1.1 0.8 External Aooiotance 2.0 1.2 2.2 MONEY. CREDIT AND PRICES 1965 1962 1970 1971 June 71 June 1972 (Billioa PMF outetanding end of pencE) Money and Quoai-MTony 19.04 25.07 27.80 30.33 31.78 34.24 Rank Credit to Publio Sector (net) 17.59 41.7' 40.48 40.74 40.24 40.62 Bank Credit to Private Seotor 11.94 19.58 23.48 27.68 27.88 32.98 of chich: State Eteerprieee ( 8.68) (12.41) (15-07) (17.65) (17.49) (19-95) Money and Quaai-Money 00 9 of GDP 21.1 20.0 16.2 18.7 GCooral Price Indca (1966/67-100) 2/ .. 18.1 136.9 143.7 A--al percentage chog.ee in: General Price Index 4.1 6.9 5.0 Bank Credit to Public Sector (net) *2/ 13.0 - 1.8 o.6 Book Credit to Private Sector 2/ 50.7 19.9 17.9 of chich: State Enterpriee 2/ (33.6) (21.4) (17.1) BALANCE OF PAYMTETS IO/ MERCHANDISE EEPORTS (AVERAGE 1969-1971) 12/ 1969 14/ 1970 .1971 USM Min. % (Million0 of UBS) Liveetock 10.1 34.0 Exporte of Goode: NFS 30.6 49.7 54.5 Cotton (lint and secd) 6.4 21.6 l.portefc Goodo, NPS 66.7 66.2 82.1 Groundcuit, grou-dnut oil and cake 4.7 15.e Ree-urce Cap -30l -Y83 -R2fl6 Fieh 2.5 8.3 All other co.. doitiee / 6.o 25.3 Irvootmeat Inoc=e Paymoate (net) - 2.0 - 5.3 - 5.7 Total 29.6 Workere' Reittance 6.2 5.8 6.7 ,riv-tc Transfer- (-ot) 3.6 - 0.5 3.1 EYTERNAL DEBT. DECEMBER 31. 1971 SovernmencTraslfer- (net) 17.3 14.3 13.8 Balance on Current Account -11.6 -Th -37T Public Debt, incl. guaranteed 1 NBn,-garanteed Pri'ate Debt Not M f L Borro-ing 4.7 1.4 5.2 Total Outetanding and DiOber-ed IL/ 22.1 Dibeureemente (11.4) 2 8) A.orti-atio. (-6.7) (-1-4) (-2.9) DEBT SERV7CE RATIO FOR 1971 Othera Capital (net) -0.4 -4.9 -4.0 % SDR Allcc-ici - 2.9 2,4 Public Debt, inol. guaranteed 0.9 / Increano in Reeerve (.) -155 2.2 -6.1 IDA LENDING. FEBRUARY 28. 1973 (Million USB) Groe R.eeervee (end year) 1.0 8.6 7.6 Net Renervee (end year -53.1 -55.3 -61.4 Outetanding and Disbursed 15.94 Undieb-r.ed 1/ 8.83 Outatanding i-l. Undibureed 6/ 2.77 RATE OF EXCHANGE Through Aug-ut 10, 1969 U35 1.00 MF 493.71 Auguot 11, 1969- Auguet 14, 1971 US5 1.00 - MF 555.42 Deceaber 20, 1971 - Februory 13, 1973 US8 1.00 . MF 511.57 From Feb-ayry 26, 1973 USS 1.00 .M 460.41 1/ Tentative eati-ate; the laet ceneus .ao nonaduted between ./ Arable land and land under prmanent erope; 1970 estimate, June 1960 -ad May 1961. 3,/ 45,000 including technical a..ietanse personnel; 1970 etimsate. _4/ Preliminary oetimate rounded to the neareet ten dollars. 5/ 1966/67 - 1970. P/ Preliminary. F/ Proc the balance of pye.ents. (/ Implied GDP deflnter. 2/ Prior to 1965 credit to the private aector includee eo.. ../ foporte and imports of goode and BPS do net eWeee oith credit to the guvernment. national anooante estimates; reoonoiliation efforte ha" net been euceeneful o fer. 134/ Converted froo TIP At the weighted rAte of 517.7 per dollar. 12/ Officially recorded moport. only (cuetome etatistios). 4_/ Inoludiog ree.ports. 1/ Includee tSU 13.3 million prinlpal in erreere, exolud 0 8 2.2 million interest in arrears. _5/ If the total debt eervice dAe had been paid, the debt nerrine 4/ E-OiOditg a credit of USO 3.6 million (321 - M1LI) whioh ie ratio in 1971 could have been 11.7 percent (See AW-30a, net yet effeoti-e. Statietioal Anncv, Table 23). . ot appllcable = not available   ANNEX II Page 1 of 2 THE STATUS OF BANK CROUP OPERATIONS IN MALI A. Statement of IDA Credits as of April 30, 1973 Credit Amount (US$ million) Number Year Borrower Purpose IDA Undisbursed 95-LTI 1966 Republic of Mali Railway 9.1 .2 197-Mil 1970 Republic of Mali Highway Maintenance 7.7 1.1 277-MLI 1972 Republic of Mali Rice Development 6.9 5.9 321-MLI 1972 Republic of Mali Telecom- munications 3.6 3.6 383-MIL 1973 Republic of Mali Highway Rehabilita- tion 9.5 9.5 384-fMLI 1973 Republic of Mali Railway 6.7 6.7 Total 43.5 of which has been repaid 0.0 Total now outstanding 43.5 Total now held by IDA 43.5 Total undisbursed 27.0 B. Projects in Execution- Credit 95-MLI: First Railway Project The US$9.1 million First Railway Project of 1966 (95-MLI), the physical program of which lagged behind schedule at one time by about three years, is now almost completed in terms of physical content. The closing 1/ These notes are designed to inform the Executive Directors on the progress of projects in execution, and in particular to report any problems whicl. are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the understanding that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution.  ANNEX II Page 2 of 2 pages date, set initially for June 30, 1970, was first postponed to December 31, 1971. The Association, hcwever, agreed that savings of $480,000 under the credit should be used for track renewal on an additional 14 km of track and therefore extended the closing date to December 31. 1972. Most recentlv, the credit's closing date has been fuirther postponed to June 30, 1973, because of a delay in delivery of equipment. Progress toward the financial targets of the project has also been slow. In particular, the Railway's financial situation has been precarious but is ncw improving. The RCFM's liquidity position has been Door due to the I.-lrge volume of debt owed partly to the Government and part:lv to the Senegal Pailway. The Government, hawever, has recently acted to lessen RCFN's debt burdeni by waiving MF788 million aied to it by the Regie. Further. Government has agreed to continue waiving RCUN pavments of interest and principal on the proceeds of Credit 95-MLI, relent to the Regie, and compensating the Regie for payments made by the latter to the Senegal Railway for equiiment charges. Credit 197-IL1: First Hi ghway Project Thle US$7.7 million P'irst Highway Pjrojec.t of 1970 (197-MLI) is bei.ng carried ouLt wlith the assistance of two teamLs ofr experts, froTm the Internatlional Labor Organization T'LO). which are providing technical assistance including,, help to reorganize the Equipment DepartmeUt of the National Directorate of Public Works (DPW)J The borrower's performance is good and the project is progressing satisfactorily after a low start. Credit 277-MI: Vopti Rice Proiect The USS6.9 million Rice Development Credit of Januarv 1972 (277-ULl) is now making satisfactory progress after initial delays due to Government budgetary constrainits anrd the lack of knowledf-e of IDA procedures by officials of the relevant Yfinistry. It is expected that the project's main civil works contract, awarded recently., shouLd be completed within two years, or one year ahead of appraisal schedule. Credit 321-ME.: Teleconmuunications Prole_ct The US$3.6 million Telecommunications Project of June 1972 (321-.ILO) was declared effective April 4, 1973, after some delav in the Covernment's meeting certain conditions of effectiveness. No major problems are anticipate6. Credit I3'D-LI: Second Highwai Project The US$9.5 million Second Hlighway Credit (383-DLi), negotiated in late February 1973, was signed May 23, 1973. No major problems are anticipated. Credit 384-SMLI: Second Railway Project The US$6.7 millioni Second Railway Credit (384-HLI), negotiated in late February 1973, wlas signed May 23, 1973. 1No major broblems are anticipated.  ANNEX III Page 1 of 3 MALI Education Project Credit and Project Summary Borrower: The Republic of Mali Amount: US$5.0 million equivalent Terms: Standard Project Description: Construction and equipment for eleven groups of science laboratories and domestic workshops, upgrading of teachers and training of directors for the laboratory-workshop:groups; pro- vision Of technical assistance including services to the Ministries of Education for improving planning and management procedures and specialists' assistance to organize and implement a study of the alternatives for the extension of basic educa- tion; and financing of the project unit. Estimated Cost:The estimated cost of the project net of taxes, is US$5.5 million equivalent, including a foreign exchange component of US$4.1. Details are given on the following page.  ANNEX III Page 2 of 3 U.S. Dollars (thousands) Local. Foreign Total .A. Planning, and Management 121 363 484 B. Biasic Education Study 171 264 435 C. Lower Secondary Centers 1,067 1,642 2,709 D). Women's Technical Teacher Training School (E.N.E.T.F.) 11 17 Central School for Industry, Commerce and Administration (E.C.I.C.A.) 178 702 880 F. Technical Assistance 84 243 327 ,. iProject Unit 42 118 160 Sub-total 1 1,669 3,343 5)012 Physical Contingencies 143 .'62 405 Price Contingencies 300 504 804 Sub-total 2 443 766 1,209 Total 2,112 4,109 6,221 Total net of taxes 1,404 4,112 5,516 Financing Plan: The proposed credit of US$5.0 million would meet about 90 percent of the project's total cost, net of taxes, and finance all foreign exchange requirements plus some local expenditures. The Republic of Mali would contribute the remaining local currency costs. US.$ million Association 5.0 Ma:li .5 Total 5.5  ANNEX III Page 3 of 3 Estimated Disbursements: Fiscal Year Yearly Disbursements Cumulative Disbursements (US$ million) 1974/75 0.2 0.2 1975/76 1.6 1.8 1976/77 2.5 4.3 1977/78 0.4 4.8 1978/79 0.1 4.9 1979/80 0.1 5.0 Procurement Arrangements: Civil works, furniture, and equipment contracts would be awarded through international competitive bidding in accordance with the Guidelines for Procurement under World Bank Loans and IDA credits. Local manufacturers of furniture would be allowed a preferential margin of 15 percent of the C.I.F. costs of competing imports or the currently applicable import duty, whichever is lower. Preferential treatment will also apply to members of the Western Africa Economic Community (C.E.A.0.). Lots for furniture and equipment would be for at least $40,000 to facilitate delivery to each school, although miscellaneous items which cannot be grouped in packages of at least $5,000 would be procured locally to a maximum of $70,000. Consultants: Design, planning and construction supervision for the new laboratory-workshop groups and alterations to the technical training schools would be performed by con- sultant architects engaged on terms and conditions acceptable to the Association. Appraisal Report: Report No. 140a, dated June 1, 1973.   12