Senegal - Petite Cote Tourism Project

Document of The World Bank FILE COPPY FOR OFFICIAL USE ONLY Report NoP-1995a-SE ~ = REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON PROPOSED LOANS TO THE REPUBLIC OF SENEGAL FOR THE PETITE COTE TOURISM PROJECT April 12, 1977 This document has a restricted distribution and may be used by recipients only in the performance of | their official duties. IBs contents may not otherwise be disclosed withoul World Bank authoriation.  CURRENCY EQUIVALENTS Currency tTnit: CFA Franc (CFAF) US$1.00 - CFAF 245 CFAF 1 million - US$4,080 SYSTEM OF WEI(IHTS AND MEASURES: METRIC Metric US Equivalents 1 meter (m) - 3.28 feet (ft) 1 square meter (i2) - 10.76 square feet (sq ft) 1 cubic meter (m3) - 35.29 cubic feet (cu ft) 1 kilometer (km) - 0.62 mile (mi) 1 square kilometer (km2) - 0.386 square mile (sq mi) 1 hectare (ha) - 2.47 acres (ac) ABBREVIATIONS AND ACRONYMS DGT D6l6gation Generale au Tourisme DUR Direction de l'Urbanisme et de lHabitat MDRR Ministere du Developpement Rural et de 1l'Hydraulique OPT Office des Postes et Telecommunications SAPCO Societe d'Amenagement de la Petite Cote SENELEC Societe Senegalaise de Distribution d'Energie Electrique SOFISEDIT Societe Financiere Senegalaise pour le Developpement de l'Industrie et du Tourisme SONEES Socigt6 Nationale d'Exploitation des Eaux du Senegal Fiscal Year Republic of Senegal: July 1 - June 30 SAPCO: January 1 - December 31  FOR OFFICIAL USE ONLY INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON PROPOSED LOANS TO THE REPUBLIC OF SENEGAL FOR THE PETITE COTE TOURISM PROJECT 1. I submit the following report and recommendation on two proposed Loans to the Republic of Senegal in the total amount of US$13.6 million equivalent, to help finance the Petite Cote Tourism Project. A Loan of $5.6 million would have a term of 20 years including 4-1/2 years of grace, with interest at 8.20 percent per annum. A second Loan of $8.0 million would be on standard Third Window terms, with the first repayment date on January 15, 1983, and the final maturity date on January 15, 2001. The weighted average grant element for the two loans would be 30.70 percent. PART I: THE ECONOMY* 2. A report entitled "The Economy of Senegal" (212-SE) was distri- buted to the Executive Directors on September 10, 1973. Since then, a series of preparatory sector missions and a basic economic mission visited Senegal to update the macroeconomic data base and to review the country's development strategy. The following paragraphs reflect the findings of these missions, whose conclusions will be included in a basic economic report now being prepared. Updated country data appear in Annex I. Economic Structure and Past Developments 3. Senegal is situated at the extreme western part of the African con- tinent. In the interior, the mainstay of the economy is millet cultivation and nomadic cattle-raising for domestic consumption, and groundnut cultiva- tion for exports. Soils are generally poor, and variations in rainfall periodically cause severe food shortages in the months between the sowing and harvesting of the next crop. The large river basins -- some of them fed in the tropical rain zone -- have so far been exploited only marginally. Land distribution is fairly even. In the western part of the country arable land is becoming scarce, but in the extreme south-east some good land is still available. The modern sector of the.economy is concentrated in Dakar, a well organized city of about 1 million inhabitants. The economic base of Dakar consists of excellent port facilities, an industry which is turning gradually toward exports, and a small but fast-growing tourist sector. Senegal's per capita GNP for 1975 was estimated at $370, but average in- come in Dakar is roughly five times as high as in the countryside. * The entire text of this Section is reprinted from the President's Report for the Dakar Fishing Port Project which was circulated to the Executive Directors on April 7, 1977. 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.  - 2 - 4. During the 1960s, the Senegalese economy experienced virtual stag- nation as real output increased less rapidly than population, and per capita GNP declined. Two factors were responsible for this situation. First, with independence, Senegal lost its privileged position as the center of French West Africa, and therefore had to adjust to reduced economic, administrative and political circumstances. Secondly, in the latter part of the decade, groundnut production fell due to unfavorable weather and declining export prices. In the 1970s, a new stage in Senegal's development set in, charac- terized by a higher rate of private and public investment. Private invest- ments, which had hovered around 4 percent of GDP in the late 1960s, rose to 8 percent during the period 1970-75. Until 1972, public investments stayed at around 5.5 percent of GDP, but increased to 7 percent in 1975. 5. While t'he 1970's saw a rise in the rate of investment, output and incomes were depressed in 1972 and 1973 by the Sahel's most severe drought in over a century, which brought a decline in GDP in real terms. After 1973, when weather conditions improved and purchasing power of the rural population was restored, both agricultural and industrial production shot up. The long-standing Government program to modernize rainfed agriculture proved to be very successful in years with better rains. In 1975/76 the groundnut crop reached a historical record of 1.45 million tons (more than double the average for the 1968-73 period), followed by a crop of 1.2 million tons in 1976/77; manufacturing industry grew by about 11 percent per year between 1973 and 1975. Total production increased in real terms by 5 percent in 1974 and 7 percent in 1975, and continued at about the same rate in 1976. 6. Strong price increases for Senegal's major exports helped to bring about the economic recovery. The prices of both groundnuts and phosphates quadrupled over the period 1969-74, providing strong incentives to production. However, since prices of imported oil and food also increased at high rates, the gains in real income from the rise in export prices were limited. More- over, in 1975 international prices for Senegal's exports again began to fall, almost offsetting the growth in real output. These wide international price fluctuations had serious consequences on domestic prices, public finance, and balance of payments. Public Finance and Balance of Payments 7. The Government responded with considerable flexibility in the adoption of economic policies. In 1974, the Government initially tried to maintain stable domestic prices in the face of the skyrocketing food import prices. By end-1974, it became clear that the costs of this policy were becoming excessive and that changes would need to be made, even though trans- fers to the public sector resulting from improved groundnut production and prices were much higher than in the preceding year. To reduce subsidies and put public finances on a sounder footing, the Government raised the prices for rice, sugar, and groundnut oil by 40 to 90 percent. To compen- sate for the rapid increase in basic food prices, Government salaries were raised on average by 16 percent, with actual increases ranging from 60 per- cent for the lower grades to 3 percent for the higher ones. Average consumer  - 3 - prices rose by some 28 percent in six months' time, but the Government managed to stabilize prices almost completely thereafter. At the time consumer prices were raised, the Government also increased producer prices for groundnuts to bring them closer to world prices which were particularly high. The cost to the Treasury of this latter step was expected to be compensated in large part by additional revenues from the profitable phosphate mine in which the Govern- ment increased its participation while levying an 80 percent tax on the excess profits accruing from the price rise on the world market. In recent years, Government revenues from phosphates have amounted to roughly $45 million a year. 8. These steps led to an increase in public savings from a yearly average of US$27 million during fiscal years 1970 through 1973, to US$58 million during fiscal years 1974 through 1976. The higher level of public savings was doubtless an important factor in stimulating the Government to increase its expenditure on new investments from a yearly average of US$25 million to US$59 million during the same two periods. In addition to the rise in investment, purchases of equity and lending to domestic enterprises by the Government increased from an annual average of US$5 million to US$42 million, mainly because of the participation in the phosphate mine and the acquisition of two foreign-owned public utility companies. The combined capital outlays of the Government were thus substantially in excess of public savings, and were financed in large part through foreign bank loans. As a consequence, foteign debt service carried by the Central Government increased from $8 million in FY73 to $28 million in fiscal year 1976, representing about 7 percent of Central Government revenues. 9. The balance of payments came under heavy pressure in 1973 because of low groundnut exports and increasing imports of foodstuffs and equipment goods, and net foreign reserves fell to minus US$32 million. In the following years the deficit on current transactions was reduced, but the outflows of private capital related to the acquisition of foreign enterprises continued, and net foreign reserves reached a level of minus US$66 million at the end of 1975. This was financed by US$30 million in IMF oil facilities, and the rest by increasing indebtedness of the mostly foreign-owned commercial banks with their parent companies. Senegal's membership in the West African Monetary Union lessens the risks usually associated with such low foreign reserves. 10. During 1976, the balance of payments remained under pressure. The state marketing board purchased the large groundnut crop from the farmers at the favorable prices established in 1974, injecting massive purchasing power into the economy. Investments and economic activity are therefore likely to continue their fast growth, and have substantially increased the demand for imports. However, export revenues stagnated since groundnut prices were 45 percent below the 1974 peak, and phosphate prices were down by 40 percent. Price declines of the same order of magnitude took place in some of Senegal's food imports, but the net effect on the terms of trade was heavily negative. 11. The drop in export prices also created a considerable problem for public finance. The losses on groundnut transactions in the stabilization fund were, to a large extent, compensated by gains on the domestic sales of  - 4 - rice and sugar imports, but budgeted revenues from excess profits on phos- phate operations did not materialize, rreating tinexpected deficits duiring 1976/77. Moreover, the decline of phosphate revenues diminished Government's ability to cover its financial deficits on the Eurodollar market. In January 1977, the Government decided to adjust its fiscal policies. It postponed all new current and capital expenditure programs, increased duties on imports from the EEC, ancl is considering an increase in the sales tax. It also abolished subsidiLes on wheat flour, and reduced fertilizer subsidies by 50 percent. The whole package should improve Government finances by $32 million on an annual basis which will, to a large extent, compensate for the loss of phosphate revenues. Finally, very recently there has been a recovery of groundnut prices, which will eliminate the losses on groundnut transac- tions in the stabilization fund, and one can conclude that the Government has successfully restored a balance in its current operations. Prospects and Creditworthiness 12. The Government's long-range development strategy remains based on promotion of agriculture and export-oriented activities. The agricultural program calls for development of areas less affected by rainfall fluctua- tions (Casamance and Eastern Senegal) where cash crops other than ground- nuts can be grown. Irrigated cereal production is being developed in the arid northern part of the country along the Senegal River. This policy will make the country less dependent on the uncertainties of its climate and world market prices; but since the majority of the rural poor are involved in groundnut farming, the Government is continuing its efforts to promote animal traction, treated seeds, fertilizer use, and crop rotation to raise the productivity of farmers. The Government also aims at long-term improvement of the balance of payments mainly through tripling of phosphate mining capacity, promotion of local cereal production to reduce the heavy burden of food imports, and development of light export industries and of tourism. The Government is actively preparing projects in these fields, but because costs are relatively high in mining and other export sectors, progress in developing efficient investments may be slow, and a cautious view of the long-term outlook is warranted. In particular, the expansion of phosphate mining is uncertain owing to capacity increases in other parts of the world and falling world market prices. With chances for export growth limited, and substitution of locally produced cereals for imports critically dependent on very large investments in irrigation, the trade deficit may stay high, even if the growth objectives is cut back to well below 4.5 percent a year, as compared to an official objective of 5.8 percent. Foreign capital aid and some commercial loans are expected to be available up to a potential of $214 million a year during the 1977/78-1980/81 Plan period in order to finance a widening gap in the balance of payments. 13. Because of its public finance and balance of payments situation, Senegal needs a h:igh percentage of foreign aid in the financing of new proj- ects. To replace the dwindling savings from the phosphate operation, the Government raised indirect taxes and reduced subsidies, which is the most it can be expected to do without excessive pressure on input costs and consumer prices. Moreover, hardly any other source of finance is open to the Government. As a member of a monetary union, Government borrowing from the Central Bank is subject to a statutory ceiling which has almost  -5- been reached, and access to private savings in Senegal and abroad is also very limited. To avoid cutbacks in the investment program below a level necessary to realize only modest economic growth, foreign donors should be prepared to raise their share in financing investment from 75 percent to about 85 percent, which implies substantial financing of local costs in appropriate cases. 14. Senegal is considered eligible for Bank lending on Third Window terms on the basis of the following criteria: (i) Per Capita Income: In 1975 Senegal's GNP per capita was US$370. (ii) Performance. The Government has demonstrated its commitment to development by increasing public invest- ments since 1970 by 19 percent per year in current prices. The development strategy continues to be based on agricultural production and rural devel- opment to which 27 percent of the new investment program is allocated. In recent years, price policies have become more favorable to farmers who, as a group, are the poorest segment of the population. (iii) Ability to Repay: The Government has demonstrated its capacity to respond adequately to the problems which this vulnerable economy is bound to encounter periodically, and there are reasonable prospects for long-term diversification and growth. In view of these factors and Senegal's access to short-term financing facilities and membership in the West African Monetary Union which reduce the risks associated with economic fluctuations, the country is creditworthy for addi- tional Bank lending. However, lenders (including the Bank) should provide a large part of their assistance on concessionary terms in order to avoid a rapid build-up of debt service. Assuming the continuation of responsive and sensible policies, public debt service is expected to increase from 7 percent of export earnings in 1975 to roughly 11 percent in 1980, and to be kept between 10 and 15 percent in the long run. (iv) Access to Alternative Sources of Finance: Since prices of Senegal's major exports on the world market fell dramatically, the country's ability to borrow from private banks on the Eurocurrency market has been reduced considerably, while at the same time it has no special access to new sources of concessionary finance. Financing development therefore depends heavily on developing good projects particularly in the production sectors, and attracting financing from the Bank and other sources, in order to cover foreseeable needs for capital inflows at concessionary terms. PART II: BANK GROUP OPERATIONS IN SENEGAL 15. The Bank Group has had 30 operations in Senegal to date. Total outstanding lending amounts to US$138.5 million, including eighteen IDA credits, ten Bank loans, two blends of Bank and IDA funds, three IFC opera- tions, and one blend of Bank and IFC funds. Annex II contains a summary statement of Bank loans, IDA credits and IFC investments as of February 28, 1977, and notes on the implementation of ongoing projects. Execution of these projects, apart from the railway Project, is progressing without exceptional delays. The procurement for the Railway Project has been slow due to time- consuming contract approval procedures, but most components have now been received or ordered. Two agricultural credits (140-SE and 404-SE) provided for technical assistance designed to facilitate reorganization of the Office National de Cooperation et d'Assistance au Developpement (ONCAD), the national  - 6 - marketing agency, but the programs did not achieve the anticipated results. The Government took steps in early 1975 to strengthen ONCAD's management and financial operations, but its overall performance has not improved. 16. The Bank Group's share in total disbursements to Senegal over 1976-81 will stay at around 15 percent, of which roughly 40 percent IDA. The Bank Group's share in outstanding debt was 19 percent in 1975, and will slowly start to surpass that level after 1981. The Bank Group's share in public debt service is expected to increase from 2.7 percent in 1975 to about 8 percent in 1981, a rise which is mainly due to the increase in Bank loans from 16 percent of Senegal's outstanding debt to the Bank Group in 1975 to 43 percent by 1981. 17. The objectives of Bank Group lending in Senegal fall under four main headings. Priority is being given to rural development, including development of irrigation in the Senegal River Valley Region (e.g., the ongoing River Polders project, and the proposed Debi Lampsar Irrigation Development project), intensification of groundnut production and diver- sification into new crops and new regions (e.g., the Sine Saloum, Terres Neuves and Livestcck projects, and the Second Sedhiou project in Casamance); as in the past, we would expect our agricultural lending over the next few years to exceed one-third of the total. Secondly, we have supported diver- sification of the economy by lending to the growing industrial sector through the Societe Financiere Senegalaise pour le Developpement de l'Indus- trie et du Tourisme (SOFISEDIT), a development finance company established with Bank Group assistance in 1974; this diversification objective is being further assisted by the second SOFISEDIT project approved by the Board in September 1976, and by the proposed project for development of tourism infrastructure on the Petite Cote presented in this report. Thirdly, we have encouraged modernization and expansion of the country's infrastructure through lending for highways, feeder roads, railways, and the Port of Dakar; ve are pursuing this effort through a proposed project for extension of the Dakar fishing port which we shall present for Board approval later in April 1977. Finally, Government has asked us to help re-orient and expand the country's education system, and we are in the process of identifying a follow- up operation to our Second Education Project. PART III: THE TOURISM SECTOR 18. Senegal's tourism assets include a pleasant climate for most of the year, particularly during the European winter; attractive beaches on the Atlantic Ocean south of the Cap Vert peninsula; well preserved monuments from its colonial past at the town of St. Louis, as well as on the island of Goree in Dakar harbor which from the 17th century was a center of slave trade from West Africa to the Americas; an interesting cultural life in the capital city of Dakar; colorful national parks; and a rich folklore. With its excellent international airport at Dakar (recently modernized under a Bank-financed project), and strategic location on the Europe-North Africa- America air routes, the country has begun to realize the possibilities for growth in the sector. Nevertheless, the multi-faceted tourism potential remains largely untapped.  - 7 - 19. Prior to 1973, hotel capacity was concentrated in the Dakar area and other urban centers, and accommodation (totalling about 1,400 beds) consisted chiefly of small establishments catering almost exclusively to business traffic. Since then, however, in response to vigorous Government policies to develop facilities for vacation tourism, hotel capacity tripled over 1973-75; two-thirds of the additional capacity was in large hotels in Dakar, with the remainder in vacation villages on the Petite Cote and Casamance beach areas to the south. Most of the hotels are of high standard, and luxury establishments account for over half of total capacity. 20. About one-half of the new hotel capacity added since 1973 has been financed by the Government, and the remainder about equally by local and foreign private investors. Privately-owned hotels have been financed by short- and medium-term loans which were readily available from local commercial banks, and long-term credit from abroad. The supply of long- and medium-term hotel credit is improving following the establishment in late 1974 of the Societe Financiere Senegalaise pour le Developpement de l'Indus- trie et du Tourisme (SOFISEDIT) with Bank Group support (Loan 987-SE, US$3 million). Larger hotel construction projects can also obtain long-term funds locally from the newly established affiliate of Citibank (US) and from the Banque Senegalo-Koweitienne, though on terms slightly less attractive than those of SOFISEDIT. Additionally, following changes in the regulations of the West African Central Bank in January 1976, medium-term funds for projects in priority sectors (including tourism) are now available from local commer- cial banks using the Central Bank's rediscounting facilities. 21. Concurrent with the expansion and diversification of hotel capa- city, visitor arrivals more than doubled and registered bed-nights almost tripled over the period 1972-75. Almost three-quarters of total arrivals (about 129,000 in 1975) come from Western European countries, and a large proportion belong to higher-income segments of the population. W{hile an increasing number of visitors are attracted by the country's climate, culture, and wildlife, business still remains a major motivation for travel to Senegal. Because of the continuing importance of business travel, traffic shows little seasonal fluctuation. 22. It is significant that tourist arrivals in Senegal increased 14% in 1975 compared with a 3% decrease worldwide. Arrivals are projected to continue increasing by 6% annually, a forecast which is considered reasonable in relation to past growth trends for world tourism (7% per year from 1965-75), for tourism in all of Africa (11% per year from 1966-75), and in West Africa (16% per year from 1972-75). Like most French-speaking countries in West Africa, however, Senegal is a relatively high-priced destination which depends largely on the French market (almost 40% of total arrivals); but at present only charter flights from Switzerland and Germany are allowed on a regular basis. In an attempt to diversify the tourist market and enhance price competitiveness, the Government has agreed to follow as liberal a policy as possible within the limitations of its existing international agreements on air transport, so as to permit before June 30, 1980, air charter traffic to Dakar to the extent needed by full-scale operations at the site of the proposed project at Sali Portudal. (Section 4.06 of Loan Agreement).  - 8 - 23. The rapid growth in visitor arrivals during 1972-75 is reflected in increased gross foreign exchange receipts from tourism which more than tripled over the period, reaching in 1975 CFAF 6 billion (US$26 million), equivalent to about 6% of the country's foreign exchange earnings from commodity exports in that year; present forecasts indicate that by 1980 this proportion would increase to almost 10%. Tourism is now Senegal's third source of foreign exchange, after groundnuts and phosphates. Net foreign exchange revenues from tourism are estimated at about 60-65% of gross receipts. About 2,800 Senegalese are employed directly in the hotel industry; a further 5,500 jobs indirectly attributable to the tourism sector involve the production and sale of handicrafts, as well as services in agriculture, construction, and transport. 24. Tourism is one of the few modern sectors in which a country like Senegal with relatively few natural resources can hope to expand in the future. The Government has however only recently started to give consider- ation to the potential benefits of tourism, and the 1973-77 Five-Year Plan for the first time accorded high priority to development of the sector. Manifestations of this new priority included: (i) active Government parti- cipation in financing hotel construction; (ii) the creation in 1971 of a special agency, the Delegation Generale au Tourisme (DGT) reporting directly to the Prime Minister, to be responsible for planning, promotion, and train- ing in the sector; and (iii) restructuring of -he Investment Code in 1972 to provide a number of incentives which may be granted to investors in all sectors (e.g. exemptions from customs duties and taxes), and special incen- tives available to hotel investors in certain circumstances (e.g. exemptions from income taxes up to eight years and from sales taxes up to five years; use of Government land at no cost; power and water at preferential rates; and Government participation in infrastructure financing). In practice, however, incentives have been granted sparingly. While investors usually obtain most forms of fiscal relief, no other incentive specific to private tourism investment has ever been granted. 25. Although primarily as a result of the above measures tourism development has been rapid, the growth has been somewhat haphazard, and the Government is now committed to strengthening managemen.t of the sector. Under the proposed project, an Economic Analysis and Planning Unit will be established within DGT to carry out in-depth analyses of projects for which incentives are sought, and the Government will then limit its incentives to those projects which have been recommended by the Unit as being economically, financially, and technically viable. (Section 4.02 (e) of Loan Agreement). The Government also plans to increase DGT's budget allocation for overseas promotion, and the proposed project provides for preparation and implementa- tion, in consultation with the Bank, of a marketing program designed to consolidate Senegal's existing tourist markets and to develop new ones. 26. Organization and supervision of hotel training is the responsibility of DGT. Middle-level courses are provided at the Ecole Nationale de Formation Hoteliere in Dakar which graduates about 100 students annually. This level of output is inadequate to meet the staffing needs of newly constructed and  planned hotels, but improvement is expected following construction of the hotel training center under the Bank's Second Education Project which would provide additional middle-level training, as well as refresher courses and seminars for management personnel. The proposed project includes provision for the technical assistance required to design and develop appropriate training programs. 27. As regards public investment in the sector, separate corporations had been established for each of the four existing hotels and four hotel projects in which the Government has an interest. As tourism development continues, however, the number of autonomous hotel companies has diluted Government control of its investments and permitted indiscriminate investment whenever foreign funds are available. The Government is now committed to coordinate its existing tourism holdings in the framework of a proposed general reorganization of public sector investments, and is planning to establish a single hotel holding company which would allow effective control and rational allocation of resources. The precise steps to be taken to improve Government control of its existing tourism portfolio will be defined during preparation and appraisal of a proposed technical assistance project for restructuring and strengthening of the para-public sector. 28. As far as the physical alternatives for tourism development in Senegal are concerned, investors' interest is strongest in beach areas on the Petite Cote and in Casamance, where lack of infrastructure has so far limited activity. The Government now proposes to develop integrated tourist resorts so as to reduce the costs of providing infrastructure, as well as to avoid the environmental deterioration which would be inevitable if development were haphazard. The Petite Cote is being given first priority primarily because of its proximity to existing infrastructure, particularly the Dakar Airport, and its natural attractiveness. A master plan for the Petite Cote completed in 1974 identified five areas suitable for international tourism development, and proposed a land-use plan on the basis of which the present project has been prepared, and which can also serve as a master plan for further development. PART IV: THE PROJECT Background 29. In 1973, the Senegalese Government requested Bank assistance to help finance infrastructure for the development of tourism on the Petite Cote; in December 1974, the Sali Portudal area was selected as the site for a first project. The related feasibility study was carried out by consultants Louis Berger International with financing from the United Nations Develop- ment Programme (UNDP) and with the Bank as executing agency. In August 1975, the Government established the Societe Nationale d'Amenagement de la Petite Cote (SAPCO), a mixed company (owned 90% by the Government and 10% by  - 10 - SOFISEDIT) for the purpose of preparing and implementing tourism projects on the Petite Cote. 30. The proposed project was appraised in November/December 1975. Since then, there have been extensive and continuing discussions with the Government to reach agreement on several important issues (particularly finalization of the land-use plan, land registration, draft agreements with agencies for the construction and operation of the project's revenue earning infrastructure components, and sector coordination). Once these issues were satisfactorily resolved, negotiations for the proposed Loan were held in Washington in March 1977 with a Senegalese delegation headed by Mr. Ousmane Seck, Ministry of Planning and Cooperation. The Staff Project Report (No.1266a-SE) is being circulated separately to the Executive Directors. A Loan and Project Summary is given in Annex III, and the project layout is shown in Maps IBRD 12033 and 12034R. 31. The Petite Cote is a beach area dotted with picturesque fishing villages stretching over 100 km south of Dakar. The major town is M'Bour, a trading and fishing center of about 30,000 inhabitants, located about 80 km from Dakar. The area enjoys a mild semi-tropical climate, with warm days and cool nights during most of the year. The surf is mild, and swimming conditions are generally excellent, although the water is relatively cool in the late winter months. The coastal waters provide good opportunities for deep-sea fishing. 32. Two vacation villages already established in the Petite Cote area have been successful and achieved high occupancy rates. The consultants' study recommended that tourism development continue with a site along the beach near the village of Sali Portudal, about 4 km north of M'Bour. The physical characteristics of the site and its proximity to M'Bour and to existing infrastructure make it a logical first phase for the long-term development program of the Petite Cote. The development plan for the resort proposes two hotel zones, of about 2,500 beds each, on either side of the village of Sali Portudal. The hotels are centered in a landscaped area where administration, commercial, recreational and sports facilities would also be located. An area would be reserved for extension of the village where some hotel employees would live. The proposed project will provide infrastructure for development of the first hotel zone and for the village extension. The dLecision to develop the second zone will be taken only after development of the first zone has proved the market, and additional financing has been obtained. Development of the entire Sali Portudal area will be based on a land-use plan (plan d'amenagement) now being considered by the Senegalese authorities; enactment of this plan is a condition of effec- tiveness of the proposed Loan. (Section 6.01 (i) of Loan Agreement). 33. The Sali land will be made available to the Government by SAPCO, and then leased - except for the village site - to SAPCO under a "convention generale", the terms and conditions of which have been discussed and agreed in principle with the Bank. The promulgation of a decree initiating procedures for registration of the Sali Portudal land, and signing of the "convention  - 11 - generale" with provisions satisfactory to the Bank, are conditions of effec- tiveness of the proposed Loan. (Section 6.01 (c) and (h) of Loan Agreement). Once the land is registered, it will be leased to SAPCO under a long-term lease; in the meantime, SAPCO will have the use of the land for project construction and for making it available to developers of tourism investments (Section 3.08 of Loan Agreement). 34. An important tourist attraction for which improvements are provided under the proposed project is the small island of Goree in Dakar Bay which, since the 15th century, has been occupied successively by the Portuguese, Dutch, English, and French, and was a center for slave trade to the Americas. Goree has retained the atmosphere of an 18th century colonial town, boasts a number of architecturally interesting buildings (including slave houses), and has become both an invaluable historic landmark and a cultural symbol. However, many of the buildings are deteriorating rapidly. A study for the renovation of Goree, sponsored by Unesco in 1975, identified a program of works to preserve the buildings and enhance the island's unique atmosphere. The proposed project component will contribute to the Govern- ment's ongoing program for preservation of Goree Island and its development as a tourist site. Project Description 35. The proposed project consists of three major components: (i) in- frastructure and common facilities for development of the first hotel zone at Sali Portudal, including construction of a 250 bed pilot hotel, and a new telephone exchange at M'Bour; (ii) renovation on Goree Island; and (iii) funds for project administration, technical assistance, and studies. 36. The Sali Portudal component includes: - an access road linking the project site to the Dakar- M'Bour highway, plus secondary roads and streets in the project area, parking facilities, and public street lighting; - a sewerage system to serve the resort and the village extension, consisting of a collection system, pumping station and stabilization ponds, as well as a stormwater drainage system; - a water supply network to pump water from two bore- holes to the resort and four villages nearby; - a power system linked to M'Bour to supply the resort and the village of Sali Portudal. A standby power system will provide emergency service; - a telecommunications system in the resort linked to the telephone exchange in M'Bour; - extensive landscaping and reforestation;  - 12 - a sanitary landfill for collecting and treating solid waste; provision of common facilities including commercial, sports, and recreational facilities, and buildings for maintenance, administration (including post office, police, and first aid services), and for the use of SAPCO staff and equipment; construction of a 250-bed, three-star category pilot hotel, intended to demonstrate to the private sector the potential for hotel development, and to set architectural and design standards for other hotels in the Petite Cote development. an irrigated area of 20 ha which will use the effluent of the stabilization ponds to grow fruit and vegetables for the resort, and will provide employment for about 40 families; a new 500-line telephone exchange at M'Bour. The Goree component includes: - upgrading the street system and public areas; - rehabilitation of the harbor to accommodate 10-15 pleasure boats fitted for deep-sea fishing; - extension and renovation of the Government-owned Hotel R(elais de L'Espadon. The proposed Loans also provide funds for: - project: administration, to cover the foreign exchange cost of' personne]L, equipment, and materials required for SAPCO's operations during project implementation; and to help SAPCO finance a campaign for promotion of hotel investments; - technical assistance to support DGT in establishment of the proposed Economic Analysis and Planning Unit, including funds for four fellowships to allow overseas trainirLg of counterpart staff; to help prepare and implement a marketing program for the entire country, including proposals for promoting the Hotel Relais de l'Espadon; and to design and develop appropriate training programis for the Hotel/Tourism Training Center at Dakar, including nine fellowships for overseas training of counterpart staff. - consulting services to monitor the socio-economic impact of tourism development on the Petite Cote, and to prepare a second tourism project.  - 13 - Project Cost Estimates and Financing 37. The total estimated cost of the project (net of taxes and duties and including contingencies) is US$17.3 million equivalent; foreign exchange costs are estimated at US$12.3 million (about 71%). Cost estimates are summarized below: -------US$ Million--------- % of Total Local Foreign Total Expenditure Sali Portudal Infrastructure 1,213.2 3,611.3 4,824.5 27.8 Common Facilities 420.0 845.9 1,265.9 7.2 Pilot Hotel 893.3 1,902.9 2,796.2 16.2 Irrigated Area 40.0 110.8 150.8 0.9 M'Bour Telephone Exchange 101.8 238.0 339.8 2.1 Goree Renovation 586.8 933.0 1,519.8 8.7 Project Administration 206.9 297.5 504.4 2.9 Technical Assistance & Studies 163.3 1,160.0 1,323.3 7.6 Base Line Cost 3,625.3 9,099.4 12,724.7 72.3 Contingencies Physical 314.2 692.6 1,005.8 5.8 Prices 1,088.2 2,536.5 3,624.7 20.9 1,401.4 3,229.1 4,630.5 26.7 TOTAL PROJECT COST 5,026.7 12,328.5 17,355.2 100.0 38. The above costs are derived from consultants' estimates (adjusted to account for price changes since June 1975) and revised by the appraisal mission. Physical contingencies averaging 10% have been allowed for civil works and equipment in Sali Portudal, since most of the cost estimates are based on advanced engineering; physical contingencies for the Goree works have been assumed at 15% since it is more difficult to give precise estimates for renovation. Price contingencies have been applied at an average of 12-13% annually for civil works, and 8-9% annually for equipment. Costs for consulting and technical assistance services totalling about 50 man-years have been estimated at an average of approximately US$5,500 per man-month. 39. The proposed Loans will finance the foreign exchange cost of the project (US$12.3 million) as well as estimated interest during construction (US$1.3 million); provision for the latter has been included because SAPCO  - 14 - mill not begin earning substantial revenues until about three years after completion of the infrastructure works. The Loans also include up to US$300,000 in retroactive financing to cover foreign costs of SAPCO's ex- patriate staff after February 1, 1976, as well as of detailed planning and engineering studies and some preliminary infrastructure (e.g. a borehole and landscaping) expected to be undertaken before signing. The estimated foreign exchange costs required to continue the above works and services until the expected date of Loan effectiveness (October 1977) will be financed by an advance from the Project Preparation Facility of up to $300,000. The Govern- ment will finance all local costs. 40. The Loans will be made to the Senegalese Government. Funds ear- marked for the Sali Portudal infrastructure, (except for the water and sewerage component, para 53), common facilities, pilot hotel, and project administration (US$8.2 million) will be re-lent to SAPCO on the same terms as the conventional Bank Loan under a subsidiary Loan Agreement between SAPCO and the Government satisfactory to the Bank; the Government will bear the foreign exchange risk. Signing of this agreement, the provisions of which have been discussed and agreed with the Bank, will be a condition of Loan effectiveness (Sections 3.02 and 6.01(b) of Loan Agreement). The remainder of SAPCO's financing will be provided by an equity contribution of CFAF 350 million and a complementary subordinated Government loan of CFAF 600 million. A condition of Loan effectiveness is the increase of SAPCO's subscribed equity by CFAF 350 million, and the paying in of the first installment of CFAF 87.5 million. (Section 6.01(e) of Loan Agreement.) Further install- ments will be paid in successive years according to an agreed time-table. 41. Since the investment in replacement of the M'Bour telephone exchange will upgrade the national netowrk and benefit the M'Bour region in general, the financial responsibility for this component of the project rests with the Office des Postes et Telecommunications (OPT). Funds needed for the proposed works (US$0.3 million) will be re-lent to OPT on the same terms as the con- ventional Bank Loan, under a subsidiary Loan Agreement between the Government and OPT satisfactory to the Bank; conclusion of the agreement, the provisions of which have been discussed and agreed with the Bank, will be a condition of disbursement of fundls for this project component. (Paragraph 4(iv) of Schedule 1 to the Loan Agreement). OPT will finance the related local costs. Procurement and Disbursement 42. Major civil works and equipment contracts will be awarded follow- ing international competitive bidding procedures in accordance with Bank guidelines. In order to encourage such competitive bidding, project items will be grouped to the extent possible. In order to permit smaller local contractors to tender for work of a size within their capacity and at the same time to attract foreign bidders, civil works contracts will be tendered either individually or combined into bidding groups at the bidder's option. In evaluating international bids for purchasing equipment and some building materials, Senegalese manufacturers will be allowed a preferential margin of 15% of the c.i.f. price of competing imports, or the prevailing level of customs duties, whichever is lower. Civil works contracts up to US$200,000 equivalent, and equ.ipment and materials contracts up to US$50,000 equivalent,  - 15 - will be advertised locally and awarded in accordance with procedures for competitive bidding acceptable to the Bank, provided, however, that the aggregate amount of such contracts does not exceed the equivalent of US$1 million (Section 2.03 of Loan Agreement, Schedule 4 to Loan Agreement, and Section 2.03 of Project Agreement). All consultants and technical assistance experts will be employed in agreement with, and under terms and conditions acceptable to the Bank. (Section 3.06 of Loan Agreement and Section 2.02 of Project Agreement). 43. The proposed Loans will be disbursed pari passu in a 6:4 ratio, and will meet the following costs: (i) 65% of total expenditures (net of taxes) for civil works; (ii) 100% of the foreign cost of imported goods or of the ex-factory cost of locally produced goods procured through international competitive bidding, and 75% of the cost of other locally procured items; (iii) 100% of foreign costs of consulting and technical assistance services; and (iv) 100% of interest during construction payable on each Loan. Project Implementation Sali Portudal 44. SAPCO will have primary responsibility for implementing the Sali Portudal works. SAPCO is a corporation subject to commercial law, and it enjoys the flexibility needed for timely completion of the project. All infrastructure and building works will be carried out by contractors. SAPCO will conduct the detailed planning studies, supervise final engineering, and coordinate the implementation of all construction work in Sali Portudal. In particular, SAPCO will implement the water component on behalf of the Ministere du Developpement Rural et de l'Hydraulique (MDRH), and the sewerage component on behalf of the Ministere des Travaux Publics, de l'Urbanisme, et des Transports; the conditions under which SAPCO will implement the water/ sewerage component on behalf of the Government will be spelled out in the convention generale. SAPCO will employ engineering consultants and architects acceptable to the Bank and on terms and conditions satisfactory to the Bank, to prepare the final design and supervise the work at Sali Portudal (Section 2.02 of Project Agreement). SAPCO has agreed to prepare a critical path network of all project works by April 1, 1978, and to review this network every six months in consultation and agreement with the Bank (Section 2.09 of Project Agreement). 45. For design and construction of the water and sewerage systems, SAPCO will be assisted by the Societe Nationale d'Exploitation des Eaux du Senegal (SONEES); for electric power by the Societe Senegalaise d'Electri- cite (SENELEC); for telecommunications systems by OPT; and for irrigation by MDRH. Drafts of agreements between SAPCO and each of the above agencies defining the latter's respective financial and technical responsibilities have been discussed and agreed in principle with the Bank. A condition of Loan effectiveness will be the signing of these agreements with provisions satis- factory to the Bank (Section 6.01(d) of Loan Agreement). Once the above facilities are implemented, the ownership and responsibility for operation and maintenance of the electricity and telecommunications components will be transferred at no cost to SENELEC and OPT respectively; SONEES will run the  - 16 - water and sewerage systems which will be the property of the Government (para. 53). These agencies are all adequately organized and managed to carry out their tasks. SAPCO's management of the irrigated area will be supervised by MDRH. 46. On completion of the Sali Portudal development, the land and common facilities will be leased by SAPCO to private investors at market prices (see para. 53). Leases will be subject to regulations (cahier des charges) reflecting provisions of the development plan regarding architectural and landscaping norms, and spelling out investors' obligations on service and maintenance standards (Section 3.03 of Project Agreement). Approval by SAPCO of regulations incorporating these provisions is a condition of Loan effecti- veness (Section 6.01(f) of Loan Agreement). The question of management of the pilot hotel has been discussed with the Government, and several alternatives are possible. A condition of effectiveness of the proposed Loans is the selection of suitable management on terms and conditions satisfactory to the Bank (Section 6.01(g) of Loan Agreement). 47. SAPCO's responsibilities wi:Ll evolve over the period of project implementation. During the initial years, its functions will be primarily those of a builder; on completion of the infrastructure, its commercial functions will become predominant, and its staffing pattern will be modified to reflect this shift in emphasis. SAPCO's Technical Department, will be responsible for implementation of project works, and for the operation and maintenance of common facilities and of components which will not be turned over to the utility companies. The Technical Department is headed by an experienced engineer assisted by an architect advisor, both of whom have been appointed in consultation and agreement with the Bank. SAPCO's Commercial Department would gradually assume wider responsibilities in promoting and administering the leasing of hotel sites and common faciilities. The Director of the Commercial Department is the former team leader of the UNDP-financed feasibility study wIo was selected for this post in agreement with the Bank. All the senior staf:E of SAPCO are considered to have the qualifications and experience necessary to assure efficient implementation of the proposed project. The Government and SAPCO have agreed to consult with the Bank on any proposals to replace SAPCO's President, to change its organization, or to fill its top-level positions should they become vacant (Section 4.11 of Loan Agreement and Section 3.01 (b) of Project Agreement). Other Project Components 48. Implementation of project items outside Sali Portudal will be the responsibility of separate agencies as follows: (i) construction, operation, and maintenance of the M'Bour telephone exchange will be undertaken by OPT. (ii) the Goree works will be executed by the Direction de l'Urbanisme et de 1'Habitat (DUH) within the Ministere des Travaux Publics, de l'Urbanisme, et des Transports. DUE will establish a special unit to supervise the final studies, issue tender documents, evaluate bids, and supervise imnlementation  - 17 - of the works. A condition of disbursing Loan funds earmarked for the Goree renovation is the appointment to this special unit of an architect acceptable to the Bank. A condition of disbursement of funds for work on the Hotel Relais de l'Espadon is Bank approval of a marketing program for the hotel which will be prepared by DGT under the present project as part of a larger program for the entire country (Paragraph 4(ii) and (iii) of Schedule 1 to the Loan Agreement). (iii) Technical assistance and studies financed under the project (except for the investment promotion study to be carried out by SAPCO) will be the responsibility of the Delegation Generale au Tourisme which will employ the necessary expert staff acceptable to and in consultation with the Bank. 49. The entire project will take about three years to implement. Final design for the infrastructure, common facilities, and the pilot hotel will be completed by December 1977. Construction is planned to start by March 1978 and be completed by June 1980. Market Prospects for Sali Portudal Development 50. Under the planned construction schedule, the first hotel beds will come into operation in 1978/79, and it is hoped that the full complement of 2,500 beds will be available by 1983. There is strong investor interest in the area, and SAPCO has already received requests from both local and foreign hotel promoters. The project is expected to be attractive to investors who will be provided with long-term leases at reasonable terms, and who can count on efficient utilities and on the availability of common facilities. In order to help ensure an adequate supply of long-term loan funds, the Government has agreed to make available the necessary complementary debt financing should funds for hotel credit from SOFISEDIT and other national and foreign institu- tions fall short of requirements. (Section 4.05 of Loan Agreement). The "convention generale" will spell out the incentives guaranteed to investors in Sali Portudal. In order to ensure that the development remains attractive vis-a-vis other tourism areas in the country, the Government has agreed (a) to suspend authorizations of new hotel investments on the Petite Cote outside of Sali Portudal until the planned accommodation build-up under the proposed project is completed; (b) not to grant hotel investors elsewhere in Senegal more favorable incentives than those included in the "convention generale"; and (c) to set lease rents for hotel sites elsewhere in the country at levels comparable to those in Sali Portudal. (Sections 4.02(e) and 4.13 of Loan Agreement). 51. To guarantee completion of the Sali Portudal development after the infrastructure investment has been made, the Government has provided assurances that it will take appropriate measures to ensure that sufficient hotel beds will be in operation by 1985 to attain an acceptable rate of return on infrastructure outlays, unless the Bank and the Government agree otherwise because of inadequacy of the potential market. (Section 4.07 of Loan Agreement).  - 18 - Envirormental Impact 52. Development of the resort has been designed to avoid environmental deterioration. The natural features of the site will be protected by conditions in the development plan which impose limits on the density and height of buildings. The proposed reforestation of wide areas around the site will enhance the existing landscape and protect the hotel sites from prevailing winds. The resort area will be supplied with all infrastructure (e.g. sewage collection and treatment system, solid waste collection and disposal) required to avoid detrimental effects of large numbers of people on the environment. Financial Justification 53. As the developer of the proposed tourist facilities at Sali Portudal, SAPCO will be financially responsible for the investments there except for water supply and sewerage systems which will be the responsibility of the Government. The water and sewerage component will yield a financial rate of return of at least 9% starting in FY 84; the return reflects the fact that the hotels subsidize use by the villagers who account for about 35% of total consumption. The Government has agreed that the operating agency Societe Nationale d'Exploitation des Eaux du Senegal (SONEES) will set water and sewerage charges at levels which will allow it to earn a return of 8% on net water and sewerage project assets in operation starting in FY86 (Section 4.14 of Loan Agreement). The extensions to the power supply and. telecommuni- cations systems will be transfered at no cost to the respective utility companies for operation, and SAPCO wil recoup investment costs of these components by incorporating such costs in the charges for leasing land. SAPCO will prepare and discuss with the Bank by December 31, 1978 the method- ology for calculating leases and service charges (Section 4.03(a) of Project Agreement). For analytical purposes, land leases are assumed at CFAF 40,000 or US$163 per bed per year, and the service charge at CFAF 250 or US$1.0 per bednight; these rates are comparable to those prevailing in competing desti- nations. 54. SAPCO's financial objectives will be to recover its investment costs in infrastructure and common facilities, to earn a satisfactory rate of return on its investments, and to maintain adequate debt service coverage. The Government has agreed that, from FY 86, SAPCO will earn a rate of return on properly valued net assets in operation of not less than 8% in order to have sufficient debt service and interest coverages. (Section 4.03(b) of Project Agreement) . In fact, income projections show that these objectives would be achieved by 1983 when the project would be fully operational, at which time the return on net assets would be about 11%. Projected balance sheets show a satisfactory position in 1985 when it will be possible to start reimbursing the complementary Government loan (para. 40). The Government has agreed that SAPCO will not pay dividends if such payment would reduce its working capital to less than 1.5 times its debt due the following year (Section 4.04(a) of Project Agreement). SAPCO has provided assurances that, in order to preserve a good financial position, it will not incur further debt without  - 19 - Bank approval unless its current revenues are sufficient to cover future debt service at least 1.5 times. (Section 4.04(a) of Project Agreement). 55. A detailed financial analysis was carried out for the pilot hotel whose operations are expected to be representative of superstructure operations at Sali Portudal. Income projections show that the pilot hotel will reach a steady gross operating profit of 23% of gross revenues after the second year of operation. The financial rate of return on the investment in the pilot hotel will be 9%. The return on equity will vary between 7.6% and 14.8% depending on whether management of the hotel is entrusted to an individual or to a company. These figures are indicative of the returns which can be expected by investors, whose return on equity will also depend on the terms on which they get long-term financing. A sensitivity analysis shows that financial returns in constant terms both on the overall investment and on equity are particularly sensitive to changes in hotel occupancy rates and tariffs. Thus a significant decrease in either of these determinants of hotel revenues could lead to returns unattractive to investors, a situation which might occur if demand did not keep pace with the proposed development of accommodation capacity. In order to reduce the risk that this situation occurs, the Govern- ment has agreed not to grant incentives to any competing new hotel development which might jeopardize the financial viability of the proposed development in Sali Portudal. (Section 4.02(e) of Loan Agreement). As its initial task, the Economic Analysis and Planning Unit will, in consultation with the Bank, establish the criteria that will be used to determine whether competing projects jeopardize the viability of the Sali development. Economic Justification 56. The proposed project has been designed to provide basic infrastruc- ture and other facilities required to support a major tourism development. The investment program analyzed includes items to be financed under the project (infrastructure, common facilities, pilot hotel, irrigation, and renovation on Goree island), as well as related superstructure facilities (e.g. hotels, shops) which are expected to be developed by the private sector to serve visitors to Sali Portudal. The total cost of the investment package is estimated at US$48.2 million in 1976 prices. 57. The gross benefits to the economy resulting from the project would be the expenditures of tourists attracted to the Sali Portudal resort. The project is expected to attract new beach-motivated traffic without diverting customers from existing hotel capacity. Consequently, the gross benefits would be incremental to Senegal as a whole. Benefits expected to be generated by the investment in Goree have been taken into account only to the extent that they appear in the projected expenditures of Sali Portudal visitors; even using this conservative approach, the proposed investment would yield a satisfactory rate of return. Nonetheless, the major justi- fication for the investment in Goree is the preservation of an area of cultural and historical importance which plays a significant role in en- hancing Senegal's attractiveness as a tourist destination. Benefits asso- ciated with the irrigation component and the provision of utilities to  - 20 - neighboring villages are minor and have not been quantified. Given the extent of unemployment and underemployment existing on the Petite Cote, the shadow wage rate of labor has been assumed at 50% of wages received by the unskilled labor force in the project hotels. 58. On the basis of an estimated 30-year life for the project, the economic return is expected to be almost 16%. This return is sensitive to changes in investment costs, gross operating profits, the timing of hotel development, the level of hotel receipts, and shadow pricing of foreign exchange. A sensitivity analysis shows that under assumptions where invest- ment costs increased by 20% or hotel developmert takes 15 years rather than the 5 years forecast, the economic return on the project declines to about 13% which remains satisfactory. 59. The principal beneficiaries of the project are expected to be: (i) the Government, which would receive direct earnings through SAPCO, sales taxes on tourist expenditures, as well as income taxes from firms and indivi- duals engaged directly in the sector; (ii) the workers employed in tourism activities who would benefit primarily from the higher wage levels offered in the tourist sector; (iii) the residents of nearby villages, including people not directly involved in tourism activities, who would benefit from improved public utilities to be provided as well as from the irrigation component; and (iv) private investors in hotels and related tourism facilities (e.g. shops, and restaurants). Distribution of the benefits directly generated by tne Sali Portudal development are estimated to be approximately as follows: Government (either directly or through SAPCO), 43%; hotels, 37%; other private (including common facilities in the resort area, plus other facilities outside such as shops, taxis, etc), 20%. 60. Direct employment generated by proJect hotels and commercial tourist activities is expected to total over 1,200 by 1986 when all planned accommodation would be fully operational. Indirect employment in construc- tion works, handicrafts, agriculture, and other services is likely to account for an additional 2,000 jobs. Net incremental foreign exchange earnings generated by the project are estimated at about US$15 million per year in 1986. 61. Additionally, the project is expected to provide major benefits in institution-building which, although extremely important, cannot be quantified. These benefits include: (i) a more rational development of the tourism sector through establishment of the Economic Analysis and Planning Unit (EAPU); (ii) improved organization and operation of existing tourism investments through management advice to be provided by EAPU; and (iii) the assurance of orderly development of tourism on the Petite Cote (especially with regard to design, layout, and environmental standards) which will be the responsibility of SAPCO following completion of the project infrastructure works.  - 21 - Social Impact 62. The proposed project includes a number of works which are specifi- cally directed to improving living conditions of the population in the Sali Portudal area; these include free water supply for neighboring villages, sites and services for expansion of Sali Portudal, and irrigation of 20 ha of land for cultivation of fruit and vegetables which would provide employment opportunities for about 40 farm families. 63. The project is not expected to have any significant psychological or social cost. Experience derived from the operation of existing tourist villages suggests that the influx of foreign visitors would be welcomed by the Senegalese who have a reputation for hospitality and friendliness. Local workers would live in M'Bour, a spontaneously growing city, rather than being restricted to a 'company town'. Since M'Bour is within easy reach of the resort area (about 4 km), it is expected to provide a popular excursion for visitors who would have an opportunity to participate in some aspects of Senegalese life. Tourism development in Sali Portudal, far from disrupting traditional activities in the area, is expected to improve living opportunities for the village population by providing an expanding market for food and fish production. SAPCO would promote food cultivation near the project site, and would assist local farmers and fishermen in marketing their products. 64. Since it is considered important that the Government be alert to any possible social problems which could arise around the resort area, the proposed project provides for the services of a sociologist who would monitor the project's impact on the social fabric of the M'Bour area, and advise DGT and SAPCO on measures required to ensure that, to the extent possible, contacts between the local population and the tourists would be based on understanding and mutual respect. Project Risks 65. The project is economically justified under a wide range of assumptions regarding the rate of accommodation buildup and tourist expendi- tures. However, although the proposed works have been designed to make the project area attractive to hotel investors, and although SAPCO will under- take strong investment promotion efforts, there is still a risk that inves- tors might not be forthcoming in the numbers expected unless they have expectations of reasonable financial returns on the Petite Cote as compared with investments elsewhere. This risk will be reduced by proposed Govern- ment measures directed toward: (a) stimulating tourist demand; and (b) preventing hotel over-capacity in Senegal generally and on the Petite Cote in particular. 66. As regards the former, the marketing program proposed under the project would be aimed at consolidating existing tourist markets and  - 22 - developing new ones; also, the Government has agreed to use its best efforts to permit the development of air charter traffic to Dakar, and this is expected to reduce the cost of packages to Senegal and make them attractive to larger segments of the tourist market. 67. The Government is prepared to take appropriate measures to protect its investment in the proposed project by refusing incentives to any competing new hotel development which might jeopardize the financial viability of the investment in Sali Portudal; by not granting to hotel investors elsewhere in Senegal incentives which are any more favorable than those offered for Sali Portudal; by not authorizing new hotel investment on the Petite Cote outside of Sali Portudal until the planned accommodation build-up under the proposed project is completed; and by setting lease rents for hotel sites elsewhere in the country at levels comparable to those in Sali Portudal. PART V. LEGAL INSTRUMENTS AND AUTHORITY 68. The draft Loan Agreements between the Bank and the Republic of Senegal, the draft Project Agreement between the Bank, SAPCO, and the Office des Postes et Telecommunications (OPT), the Report of the Committee provided for in Article III, Section 4 (iii) of the Articles of Agreement of the Bank, and the text of a draft resolution approving the proposed Loans, are being distributed to the Executive Directors separately. 69. Special conditions of the project are listed in Annex IV, Section III. Conditions of Loan effectiveness concern: (a) enactment of a land-use plan for development of the Sali Portudal area; (b) approval by SAPCO of regulations incorporating provisions of the development plan; (c) promulgation of a decree initiating procedures for registration of Sali Portudal land, and signing of a convention generale describing conditions under which land is to be made available to SAPCO and to developers of tourism investments by SAPCO; (d) increase of SAPCO's subscribed equity, and paying in of the first install- ment; (e) signing of a subsidiary loan agreement between SAPCO ard the Govern- ment; (f) signing of interagency agreements between SAPCO and the agencies responsible for construction and management of the water and sewerage, elec- tricity, and telecommunicatiorns components; and (g) selection of suitable management for the pilot hotel. Conditions of disbursement from the Loan Account of the related funds are: (a) conclusion of a subsidiary loan agree- ment between OPT and the Government; (b) appointment of an architect in charge of the Goree works; and (c) Bank approval of a marketing program for the Hotel Relais de l'Espadon. 70. I am satisfied that the proposed Loans would comply with the Articles of Agreement of the Bank and with the established criteria for Third Window Loans.  - 23 - PART VI: RECOMMENDATION 71. I recommend that the Executive Directors approve the proposed Loans. Robert S. McNamara President Attachments: Washington, D.C. April 12, 1977  CSENEGAL - Xl*L X"lC^fltS 34t * f;r LAND ANRA (THOU XN2) - -............. SENEGAL REFERENCE COUNTRIES (1970) rOYAL 196.2 MOST RECENT AGRIC. ..960 1970 ESTINATE CHANA IVORY COAST TUNISIA ........._^e**-- .......................................... . ..._* ................ ......,,_...... ..... .............. - GNP PER CAPITA (US$) 220.0 240.0 370.0 340.0 360.0 s70.0 ....... ........... ..-" POPULATION AND VITAL STATISTICS ._._...___...................... POPULATION tNIO-YR. MILLION1 3.6 4.4 5.0 8.6 5.4 5.1 POPULATION DENSITY PER SQUAR9 KM. I7.o 22.0 25.0 S*.O 16.0 31.0 PER SQ. KM. AGRICULTURAL LAND .. 39.0 .. 63.0 30.0 VITAL STATISTICS CRUDE 9IRTH RATE PER THOUSAND 6S.0 *7.6 47.6 49.8 66.1 44.T CRUDE DEArH RATE PER THOUSAND 27.5 24.4 23.9 24.4 23.3 16.9 INFANT MORTALITY RATE (/THOU) .. 156.0 150.0 156.0 *- 125.0 LIFE EXPECTANCY AT BIRTH CYRS) 35.9 40.0 40.0 4t.5 41.0 51.6 GROSS REPRODUCTION RATE .. 3.0 3.0 3.2 3.1 3.4 POPULATION GROWTH RATE (1) TOTAL z.l 2.6 . 2.6 20 URBAN 3.5 6.0 45 :? 3S. JRBAN POPULATION (I OF TOTAL) Z2.7 29.0 .. 20.4 28.0 60.0 AGE STNUCTURE (PERCENT) 3 TO 14 YEARS 62.6 41.2 .. 46.9 *2.5 46.3 15 TJ 64 YEARS 53.6 S4.9 .. 69.5 54.8 50.2 65 YEARS AND OVER 3.8 3.9 '- 3.6 2.7 3.5 AGE DEPENDENCY RATIO 0.9 0.8 . 1.0 0.8 1.0 E:ONOMIC OEPENDENCY RATIO 1.z 1.2 1.4 ..9& 1.8 FAMILY PLAN4ING ACCEPTORS (CUMULATIVE. THOU) .. .. .. tO.S .- 112.2 USERS (t OF MARRIED WOMEN) .. .. .. 2.0 .. 12.0 EHPLDYMENT .......... ........ TOTAL LABOR FORCE (THOUSAND) 130O.o 1600.0 .. 3300.0 2600.0 1300.0 ^ LABOR rORCE IN AGRICULTURE cz) .. 73.0 .. 54.0 82.0 57.0 A UNEMPLOYED (I OF LABOR FORCE) .. 7.0 .. s.e 6.0 12.0 INCOME OISTRIBUTION ... .. ___.___..... I OF PRIVATE INCOME REC D BY- HIGHEST SZ OF HOUSEHOLDS 6.e 8 .. .. .. .. 23.5 d HIGHEST 20S OF HOUSEHOLDS 62.5 5 .. .. .. .. 55.5 d LOWEST 201 OF HOUSEHOLDS .2 .. .. .2 LOWEST 401 OF HOUSEHOLDS . .. .. .. 11.4 OISTRIUTION OF LANO OWNERSHIP ............ .....................^_...... I OWNEO BY TOP 10 OF OWNERS .. .. .. .. .. 5 I OW4E) BY SMALLEST 101 OWNERS .. .. .. .. .. O.SE HEALTH AND NUrRITION .__.._._.............. POPULATION PER PHYSICIAN 2210D.0 / 16640.0 16540o.L 12950.0 12140.0 5950.0 POPULATION PER NURSING PERSON .. 2680.0 2260.0 ^ 1070.0 2480.0 710.0 PIPULATION PER HOSPITAL BED 830.0 Ld 810.0 b 8140.0 a 760.0 680.0 j 610.0 PER CAITY SUPPLY OF CALORIES (Z OF REQUIREMENTS) 97.0 97.0 1oa.0A 96.0 108.0 86.0 PROTrIN (GRAMS PER DAY) 6.0 6i4.0 65.04 *6.C 60.0 54.0 -O' WHICH ANIMAL AND PULSE .. 2B.0 4 .. 10.0 4 18.04 14.0 DEATH RATE (/THOU) AGES 1-4 .. .. .. .. .. EDUCATION ADJUSTED ENROLLMENT RATID PRIMARY SCHOOL .. 80:0 43.04 580 6.0 107.0 SECONDARY SCHOOL I.1. g .9.4 1.4 2. Y E AR S O F iSCHOOLING PROVIOED 5 0 Ll 0 0 Z (FIRST AND SECOND LEVEL) 13.0 13.0 13.0 15.0 13.0 11.0 VOCATIONAL ENROLLMENT (1 OP SECNONARY) .. 7.0 ..23.0 7.0 34.0 ADULT LITERACY RATE (%) 10.0 0.06 253.0 20.0- HOJSING PERSONS PER ROOM (AVERAGE) 1.5, OCCUPIED DWELLI1GS WITHOUT PIPE) WATER (1) 06OA ACCESS TO ELECTRICITY l2.0 L * 60.0 CS aF ALL DWELLINGS) 96.0 72.0 RURAL DWELLINGS CONNECTED TO ELECTRICITY (t. .. .. .. CONSUMPTION ........... RADIO RECEIVERS (PER THOU POP) 47.0 69.0 67.0 78.0 17.0 77.0 PASSEN3ER CARS (PER THOU POP) 6.0 9.0 9.0 5.0 10.0 13.0 ELECTRICITY CRAM/YR PER CAP) 41.0 i 3.0 92.0 338.0 120.0 155.0 NEWSPRINT CR6/YR PER CAP) D.1 0.1 0.1 0.4 0.2 0.1 SEE NOTES AND DEFINITIONS ON REVERSE  ANINEXI - Pago 2o-f 4 pages NOTES Unesoharwiss noted, data for 1960 refer to any year bertosec 1959 tad 1961, for 1970 between 196$ and 1970, and for Moat Rentr Estimate between 1913 end 1975. Toniois hen been talented ase bjeotilvemcutry ba..so.. of san sinllarity of it. econmy with the Sene.galeseonmy including favorable proepecta for the devIlomet of fieberiee end t-uism SENEGAL 1964 I RAti of population under 15 and 65 and over to total labor fort.; /b Population; ic 1903; /d 1962, go,nromet hoepita1 setabliabnente; It rtota, urban and -rura; If 1959, data -r for -~ne of Dakar only end refer to Enrop.an-typa dwellngs; LI Inside only. 1970 Ia Ratio of population onder 15 and 65 and over to total labor f.esa; lb Govenmet honpito1 eetabliehnoente; - 77 1964-66; /d Ulnedjuated; Iv Levr usoondary leve. MOST RECETR ISTIMATE: Ia 1972; /b Govranest hospital establisi.h.nc; /c 1969-71 averge; /d 1971. 0GHAfA 1970 /a Rgistered only; lb Registered, not all practicing in th.e coutry; It 1966-68; /d 6.15 and 16-21 years of age: rsp-ctivaly. IVIRY COAST 1970 IaSu to fuigi9snion, grouth rete fo higher than rote of nuurl or...e. lb 1965-70; Ic Ratio of popolation under 15 and 65 and over to total labor force; Id Governent only; I 1964-66; /f t2-18 years of age. TUNtISIA 19710 I 1956-66; lb 1966- lo Ratio of Ppoplation under 15 end 65 and over to total labor foros; Id Io..- r-ol- __piento; /e covering 75 nillion hectorea of privet, land. socluding 0.6 illimm hattaree in pu.blIc ouerhip, end 2.1 nj!.ilinh.ettare of collootina land; It Pereonnel in govenmet aorvlonu only; /a luvrsoet hoepita tstbiishenstnt only; /b 1964-66; T? Regietered only; Li One. to eniEration, grouch rate in lasr than rate of natural increase. R6, Augunt 11, 1976 DEIIISITIONS OP SOCIAL 1N5IrA1068S Land Area (thou hr2I Population pot nureino psrouc - Population divided by cunbor of preei- Total -Total -ufa- ano co-pr ini. land sins sod inland wtors. clog ..a. and fnul graduato cur-s, "trained" or "certified" Anric.- Mont roo...t sotinste uf agricultural oreautod tanpocr.ily or cures... an d -uilicry pornunnol with trsinici or acperionc... Pero..ceutly for erupt, patturon, markot & bkttuhon gardens or to Iin PopuIstioc Per hospital hod - Population divided by nuebec of hoopita1 ful iou. bode avilable in public and private general and epncisiiond hoapite1 And rohahilitatior ucioo; coldon nursing honen end establishente GNP per -apita (u55) - lop pe c"apita sotiostes at c-rront -aket pnicoa, for cou todia1 and proventivo noon. calculated byce noeriu- nethod an Worl Snub Atlan. (1973-75 boals); per capita supply of caoie 7 of rnuuirementn) - Computed from 160 19/0 aud 1975 fIn, energy eqoi-alno of Oct food ouppliso a-alsh ~in l country Per .c.pits pa dy;aviloblo uppIcsco-prian doceotic production, inponts lees Pocutlatiuc end vito1 atatincc ntro n uhugnin sol n pplioseoludo -nin goofed, seed., 'PoclaIuc(old-yr. million) -A.ouf July first: if not snailaule, quacile sd in fuod pr--eting and lunee in distribution; requir- --anrgo of two cud-year as tioatae; 1960, 1970 and 191~5 data, cets unre estieoted by PAO based on phy.tologloal needs far n..-a autivty and health --nedering etioneta nperoture, body weighte, Pooaicdnit'-pr -oar kn - Mid-your population per oquare kilo- af and nudineributiona of population, and al11ning 100 for .nate me"ter 10 detre' ofttahnn.a buunod lvl Popolacin denlty p-Per oc-ae ho of Aunic .lad - Computed an chu- for Per capita oopp1y of Prot... (gmmo per day) - Prutnin cotent of per ogrlucitura lard oniy. capita net sopply of food Per day; not nupply of fond io defined a abve rquiannt frl cutries atabllshe:d by USD1A itoni litul statineics feeeorob Serulocs provido fur u~~~~~~~~~~S' nii_o alownc of 60 gaeo Crude birth rtaco cth c..u.nd, -ver.ge - Annual live blrtho per thousa.nd tots1 protein per day, and 20 gr-on f animal and poles protein, of of old-peon population; ton-pour orithntir a-erageo ending in 1960 cod which Ii gE_ hbuold in urinal protein; then. etandrdn era lose.r i970, and finn-year u-orge -ndini in 1975 fur oust rooc-t ossinart. then th.e of 75 grace of total prutein and 23 grams f.f anica protein Crude eth rata per thousand. a-Erg4- Ac....l deotho per thousa.nd of old- 00 en -00mm fur the -ord, proposed by FAG in the Third World Poond ynar populatin rnyuorithnti u.....rege ening in 1960 and 1970 sod Survo.y ccoyurorg end Ingin1915' fur not roren eatinto. Per u"'ita prtei noIp Iron crie and Puie - Protein eupply of food .lare r_t,ity ogre (/thuo) -AnnualI dnathn uf llsota under urne yo derived fo- anu ndple in grunt per day of ag Per thousan d lio births. Dnath -te ((thou) agen 1-b - Annual d1-tbo Per thoonod in age group Lifo onp_utunc At birth (pen) - A-ergo ounher of yeara of life remin- 1-4 yearn, to childre in thio age group; ugg eoto~dcca indi-ntur of ing ut hirth;e onoulfp fv-70y0 --ergen coding in 1960, 1970 and talurition. 1975 fur developing -eunt-n.. G..u.n...r..uc-iuonrute- Avnr.. cE oarof linduErnsuaul du...tion fear in hcr uroa1 rep-ducivo PerIodif eh eaP.r icroo presen age- Adiuned erl cetrtio - cri-ar school - Inr-IIo-t of all agen as uPeeifi e torrlity rarno; u..ally five-year -vergen ending ic 1960, pneorc..atge of primary nehai-ogo population; includon ohildron aged 1970 and 19 75 for d_evnlP:ogou_trien. 6-li py- but adjonted for different lengthn of pri-ary edurstion; Population aouth rais (7) - LotalI - Coepou..dManal growth rtee. of old- for countries lih universa edu-tion, erlent ap .esed 1007. jce pupuaco, ur- 19si-to, 1160-7 nd i9711-15. no_ .eon pae are bic 1-or coov eo offica ennou age. Population crueth rato (71) - urban - Computod like grooth ecto of total Adiuotnd arliotratio'-seondar'y sahuol -iConputed an above; popula.tion; diff-ervt deflocitione of urban oman nap affect ...mpara- .n.undary edo...tiun requirco at Inset.four yeses of approved pri-ary * ilitt7 of data _vn countries. 'ntuto;pruvidon fe -rivetiocal or teacher trsinif urha p ultIon (7 of total) - Ratio of uI.rban to totalpopulation; iutrru clue foe Pup' of t 17 pests of age; --ropandenne di7fferen't definiti-u of urhan tee ay affant _onprabiIity of data oro.r genet% rallyiocclde.d. a _uncotrien Ynano of -eh-uling provided (firt snd ..e.ard levels) - Total .eare of sgetructur son ChIldren (0-14 y0005), coring-ago (15-64 yearn), schooling; a ....cundary Il...l, voctional instruction osy be Po-- and ret.1ireWY,d ye,n anod ove). a pernotagee of nil-pent popula'tion. Vtio11y or -opletely en.nluded. Agodydny ratio - Ratio of populatiu under 15 and 65 and ove to Voctional enrollment (% uf asnundary) - V-catiuna1 institutions those of agen 15 thr-ogh_64. iulddote-hni-ol, industrial or othor pregram whic.hi opoete iEuncic do, end"eny ratio - Stia of pupclatiia unde 1.5 cud 65 nod 00c r lodepend-ncy or se deparicens of secodary i-acicutlne to rho loborfm. nae gop of 15-64 py-r. Adult liitorary rate (0) - Llteratc sd'l t (ableto rad and'write) a Ponilyulnnnna-annpior (eacl=jj ,h.b)Q - Cou1ati-e nenber uf percentage of total edu1t .popuLaion ged 15 yearn and over. auc epturn of birth-control d-eien and or .uspi..n of onationalfamily planning program siren inupti.- Rousing Pa_il planning - -rom (0 of carrIed nsn P.teretagno of marIed Persons Or room (urban) - Aerage cachet of pereon. :penr.roo in ucuon of uhild-b-cring age v15-b4 yacosT uh. u- birth-nuntrol device oropted ue.....ni.nn1 d-ollings in uriso areas; doelIings e-nlde no.1 allnuriod wucan in -m age group. -on-,er-aneon,tructren and u--npied pane.. ...upid doelilco withoot p od atr (7. - (-cpiod convectional impl.y.nto doelding Inubnadrua rs ithout inside or outside pi ped Total labor forca (thousand& - icnnca..ersp000,inidE -atr fa-ilitiee an peroontogo of all -u-pied dwellings. arodfrron and -epleynd becr euldlu bve-wivse, students, one.; A.cease to e1-tricitv (0 ci all d-ellingA) - Ct..nent lanai dee11igs. dofinitiosin varIous tui-n are not omp.arshl- with electricity in ilinig quater se percent of total dwellings in taho.r force in narlu-Iture (0 - Agrico1tural labor far. (in farming, urban and ruralcrss footr -butn and fishing) asp-etg f tota 1sbnr force. RuaEelia oncerted to nleortlirit (0) - Cumputed as ohu- for Unemplyed (7. of labo frce) - ineplynd areuncil defined onrra do igoonly. per..n. who.ar abl and oillig to tkba a joh, out of a Job o giver day, remained out of a job, sod ...shing -th forusypo ifiof Cnamut2121 olla oid.nt.rodo 0 .eo. nay.not ho ronpsrabin heson Raioreoi.r (per thau Pop) -.All rypen of rciesfoe radia broad- coutres duo to deffaro doSition loeyon n oreo at to genral pub1ic per.thoneond of population; occ ludes daa,ng. epomnt ofic ottnl aPle surep, coopulaury unlicensd receivers .-outries and in pacts when -egitr-ti-nu unolt on loaaanc. rdio sets waa in effect; data fur recet yoaro nay nor hecom.parsbi Ioc...n Diotribution - Porcentage of private inc...e (both in cah and Panegr cao(per thnu pop) - Pos..e.ager cars cumyr iso ontor r hind)froenivo,d by richeet 50, iluhrst 210, pooront 200, and pno.ret seating less than eight pe"nenn; -1cldesablacs hearses and 400 o hoehldn mi1ctsty vehioln.. iloctricltv (khuhyv per cap) - Annual -onsuption of industriel, cc Diutrihution of land ownership - Peruntages of land owned by oeaIthinso cer.I ;uhblic and privatn elettrinity in kilcu-tt hours per c.pit.; 100 ond poorost L00. of mend owner, generally base.d on production fats, withaut allawenc for lass.es in grids hot allwin for imporreand ospuets of eetiiy Health aud Nutrition Newsprint (ha,/yr per cap) -P Per capita annual cnse-ption in bilograje PuPu1atiun Per physiefan - Population dividod by cache of practicing eatiested from domestic production plus net imports of newprint. phyuiei-n qual1ified from a nedinal ochnol at uni-rnity leve.  ANNEX I Page 3 of 44 Pages ECONOMIC MEVI0P DA TA (Amsounts in miliions of7 1.. doJLlara) 1970 Actual ~ ~~~Sftite Projcte 19 70 -19 73 19 70 19 75 19 80 ___ .~~1 4 ~ 5 1 6 198- 19 73 12.75 NATIONAL ACCOUNfTS a o iDLi Ann~sada.taa 19,,71 PTices & Echage Rate,; Average An5nual Growthi Rates As Percent of GDY 1. Gross Domestic Product 0.1 7.5 9176b 9804 0356 12117 0.3 5.7 473 99.7 100.5 107.2 P. Gains fromn Terms of Trade + 2.8 - 17.0 6~, 4. - 5. - a1.8 -:0 -. 3.Gross Domestic Income, 1 28 9L 975. 9 3 1199 --1.1 6.6 3.010. 100 00 4. Import (iocl. NFS) 306.5 301.5 308.6 297.4 324.5 357.3 -0.5 - 0.7 3.7 314.5 30.5 31.6 sExports "(import capacity) 262.0 218.14 30. 267.3 276.4 11 -6.2 10.6 1-.7 U. 27- 25.8 6. Resource Gap (4 - 5) 414.s 33.14 8.3 30.1 48.1 66.0 5.0 3.1 5.8 7. Consu~mption Expenditures 815.0 807.9 8143.9 862.4 884.2 i011.14 -0.3 3.3 3.2 91.8 88.14 89.5 P.Investment (incl. stocks) 117.3 155.0 145.8 143.3 1142.2 184.5 4.8 3.0 5.2 13.2 14.7 16.3 9. Domestic Savings (8-6) 72.8 51.6 137.5 113.2 94,1 118.5 -12.1 148.3 0.9 8.2 li.6 10.5 lo. National Savings 95.0 71.1 1146.6 119.6 93.5 120.2 -9.4 29.6 0.1 10.5 12.3 i0.6 M4ERCHANDISE TRADE T Annual Data at Current Prices As Percent of Total Thrports Capital goods 43.6 77.3 90.6 108.7 1140 205 21.0 18.6 13.6 22.5 18.7 21.3 intermediate goods (~Lsae 41.1 67.7 100.3 158.8 131 210 18.1 56.3 5.7 21.2 27.3 21.8 Fuels and related materials 10.9 23.6 64.8 69.1 76 123 29.5 74.0 1-2.2 5.6 11.9 12.8 (mostly crude oil) Con.seution goods 98.3 191k 240,7 244.8 &0 4214 24.9 13.1 11.6 5C. .2~.Lt Toa Merobh Imports (cir) 193.9 0 4o1 r4 581.14 52 92 2.2 10.6 100.0 l00.C 100.0 Exports (Oroundnurs 73,6 68.6 141.3 188.2 2148 230 -2.3 66.1 4.1 48.5 38.6 42.4 Phosphate 11.9 22.2 103.7 103.7 69 84 23.2 116.o -4.1 7.8 21.3 15.5 Petroleum products 4.2 11.14 22.1 32.4 13 10 39.7 68.5 -21.3 2.8 6.6 .1,5 Other 62,2 4, 6 149. 16. 21 15.0 31.3 6.1 140.9 33 40.3 Total Merch. Exports (fb 7~ 9.1 17.014076 413 5143 9.0 57.5 2.2 100.0 100.0 100.0 Tourism, and Burder TradLe Merchanidise Trade Indices Average 1971 1o0(i. usA) Export Price Index 91.6 121.5 221.3 183.7 159.8 195.5 Import Price Index 90.5 128.7 194.3 185.5 12.9 249.2 Terms of Trade Index 101.2 94.3 113.9 99.0 592. 78.4 Excports Volume Index 131.-9 103.9 122.4 155.14 191.6 202.3 VALUE ADDED NY SECTOR (at f.c.) An mual Data a,t 1971 Prices and Exchange Rates . . Average Annual Growth Rates As Percent of Total Agriculture 222.7 187.0 227.4 267.1 291.0 328.0 -5.7 19.5 14.2 28.5 30.3 09.8 industry and Mining 173.3 175.4 199.3 212.2 230.0 305.3 0.4 10.0 7.5 22 4.0 ? Service 585.5 !Lia.1 -i4 4.n1.. -4 4 1.4 0.2 3.0 4-)' 45. 4P-' Total 781.5 764.5 811.1 882.9 941.5 1101.2 -0.7 7.4 4.5 100.0 100.0 100.0 PUBLIC FINANCE Fiscal Years (Jl /ue 30)inbillions of current CPA Francs As Percent of GDP (C~entral Government) 1972/73 193/14 1974/75 1975/76 1976/77 1980/81I 72/73_to~74/75 74/75 to 80/81 197 19714 1975 1980 Current Receipts 51.1 55.4 77.3 90.7 89 11 18.4 20.3 19.9 19.2 1 8.1 Current Expenditures 50.8 49.7 67.5 79.6 8 15.3 10.5 15.4 17.5 16.8 17.0 Budgetary Savings T 17 ' 11.1 ~ 10 T~"3 Other Pablic Sector 2.4 7.2 0.3 5.5 5 7 1.8 1.1 0.7 1.0 Public sector investment 15.0 20.4 26.6 32.7 38 60 33.1 114.5 6.5 7.0 6.8 8.3 us million cuRRENT EXPENDITURE DETAILS (Central Galt Actuals Est. DETAIL ON _____________ (As /% Total Current Expend.) 191721 1973/74 191475 195/76 PUBLIC SECTOR Third plan IL of Total Eduication and sports 21.9 22.4 22.9 22.1 21.9 INVESTMENT PROGRAM (19 69/T - 19 72 /73 ) other Social Services (Health) 8.5 8.2 7.8 7.2 7.2 Social- Sectors 24.3 11.3 Agric-lture 5.7 5.6 14.9 4.1 4.6 Agriculture 62.4 29.o Other EconomiC Sefyices 7.9 7.5 7.7 6.9 6.9 Industry and Mining 15.3 7.1 General Services ~ 40.4 39.1 38.9 38.9 10.6 Water Supply 24.8 11.5 Other 15.6 17.2 18.5 20.4 18.8 Transport and conmmsnications 45.14 21.1 Total Current Expenditures- - - - - Other 431.1 20.C 100.0 100.0 100.0 100.0 100.0 Total Expenditures 215.3 100.0 SELECTED INDICATORS 1L960- 1965- 1970- 1975 FINANCING (calculated from 3-year averaged daLta) 1965 1970 1975 19-80PulcStoS&iS51 21 Average ICON 77i 10.'6 6.9 35Bbi .co ai 192. Import Elasticity . 0.6 10.3 Grants and Official Loans 1575. )Mrginal Domestic Savings Rate . 0.5 0.0 Loans fromPrivate Sources 37_7_17 Marginal National Savings Rate . . 0.3 0.0 Total Financing 215.3 100.0 LABOR FORCE ANDT Total Labor Force Value Added PerreWorker (171r Prices & Exc. Rates) OUTPUT PER WORKER In Millions --Iof Total In U.S.Dollars Pecn f ivrge 1971 19 71 1-9 7-1 Agriculture 0.5 70 238.8 36.6 Industry 0.1 8 1779.6 273.0 Service 0.3 22 137.7 211.3 Total 1.2 1=03 60 100.0 not applicable - JLi or negligible 17 Registered trade only not available -.less than half the ?/ Border made is not known separately, but is included in the adjustmaents maeA on the smallest unit shovn registered trade at the balance of payments. 3,/ Including General Administration, Defense, lustice and Police. ~JIncluading investments financed under foreign aid.  Pae. 4 of 4 9ag RA2AL Z0 AD2,KIUL ASSBTBIM ANEMD DM9 A,%. Amoaml Aeto.l E.tir*t.d P- IkdeZOrth Net. 19(0I 32- 1972 1975 ~ ~ ~ * SW5'ARY 5B15NC1 0F PAY9I0TS E~o-t. (mi.88) 236.8 230.8 333.4 555.5 601. 2 676.6 642.1 685 720 774 857 22.6 4.8 DV n 1.)-276.3 .294.6 -373.3 -483.1 -.690.3 -751.7 -740.0 - 86 q 3 22.2 6.9 5~~sonrce Balance (0-N) 3~~~~~~~~ ~~r -384.1F9-78 6. 11 . -194 13.7 20.9 7ot=eet (net) -2.2 -1.7 -2.1 .4. -11.6' 17 -1 -23 -2 -278 -3 098 2. Itrot Lav-b-net In-m -10,2 .10.7 -12.3 -16.4 -26.51 -35.9 -34 -30 .23 -26 .30 21.1 2.5 W-rk-oRo lemtt-a .16.0 .15.3 -19.8 -16.0 -19 9L -18.7 -22 -273 -24 20 -26 3.2 6.8 7~~ ~~~ ~~~ ;9 109 1. 4 j i ~ : 5 1 9 10.7 8.6 Carr0.ct Traantara tat) 0~~7.0 44.9 50.:0 54.8 64.o 60.1i 54 -66 7fl 10.7 3.0 C-the fcto-- r, seve -1 .7...iL- ~ 12.8 2-3.4 rivate Gte-at Inea-etM -0.2 3.2 2.3 -14.8 -2.2, -14.0 4 8 15 20 21 Offi-cl Capital Ge-ate 11.9 18.6 8.3 20.2 19. 4 24.7 29 32 36 40 44 15.7 1-2.2 Disbar-eeto 18.6 23.2 18.0 99.2 47.3 72.1 93 113 144 180 200 31.1 22.3 - -e - ~~~~ ~ ~~~~-4.6 -7.8 .8.4 -22.4 -09.4 -20.3 -25 33 -44 -50 -5 34.6 23.8 77 T 104 -10.1 76-.8 27.9 -51.8 68 80 000 100 141 29.9 22.2 7f.h- L-1 mn iOcn..rnece-ctn 11~~~ ~~.8 3.4 10. 9 - 47- -- -- - - -- - . ~~~~ ~ ~~~~-4.6 -3.1 -7.9 -27.8 -28.2 -2.7 -6 - - - - - - capi~oi Te-nrnarttonn n.a.0.03. .0.4 -7.9 34 22.0 -12.5 50- - - - - fi-agr '0lt4nmv lcean - .23.6 -0.7 ,2. -43.:9 g19.4 Z.1 12 dO5 c16 -- - .0 ~ ~ ~ ~ ~ *0~~~ .0~~~. 1900 1930 aOle ~~~EN MDAetoeL 35.4 4c 5.8.a cc. 0.d -...0(o - . 11( 4949I 11.9 18.6 19.1 24.7 - - - - - T-I9-- and Urc-ltlake 47.3 61. 2 56.6 72. 77. 7 81.1 Oetoe-et no Pablia Dbt 1.4 4.4 6.6 7.2 13.6 17.6 1111D -- -- i5.6 0.6 3.0 7.0 Rapoy-nat no Puli 0.5t 4.-6 7L.8 8.4_' 02.4 13.4 20.3 -A ~~~~2.1 7.0 01.2 23.7 -- 25.0 Total P0bli. Debt S-iale 6.0 1.2.2 13.0 29.6 03.-0 37.9 Af e-t 00-e bocd -- -- -- -- 4.8 6.1 Otior Debt S.-eae (not) 8.0 8.2 8.4 27.7 {03.-1 3.4 ct(.r 1altilata-a -- 1.5 1.0 3.0 5.4 3-7 Total Debt S-eice (et) :4.0 20.4 21.4 57.3 J66.i. 41.3 G-ver-on-an 4.6 10.1 01.3 64.6 41.5 42.9 3tPPlle-n 1.7 2. 2 1.0 10.0 0.9 ;- 8w-de an E.of,at Me-leeng(6 Fi,.-.icla i-otitatto- -- 00.0 5.9 75.4 8.2 2.0 Paulo. Debt Se-vi.e 2.5 5.3 39 8.0,j 51.5 5.6 T.t.1Nbli MUTL.- 777- -17 9- rT 68 ____ Tnte1 Debt Swi.e 5.9 8.8 6. 61 1/ 1 0.~ 6.1 IcCol robilr n&e.T 10.00 80~~~ G0~~ 49.1