Tanzania - Tourism Rehabilitation Project

Document of FILE Copy The World Bank FOR OFFICIAL USE ONLY Report No. P-2418-TA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE UNITED REPUBLIC OF TANZANIA FOR A TOURISM REHABILITATION PROJECT November 29, 1978 This document has a resicted distributon 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.  CURRENCY EQUIVALENTS Currency Unit = Tanzania Shilling (TSh) US$1.0 = TSh 8.00 TSh 1.0 = US$0.125 (As the Tanzania Shilling is officially valued at a fixed rate of 9.66 TSh to the SDR, the US Dollar/ Tanzania Shilling exchange rate is subject to change. Conversions in this report were made at US$1.00 to TSh 8.00 which is close to the 1978 average exchange rate.) ABBREVIATIONS AND ACRONYMS EAC - East African Community HTTI - Hotel and Tourism Training Institute MNR&T - Ministry of Natural Resources and Tourism NCA - Ngorongoro Conservation Authority SSLL - Serengeti Safari Lodges, Ltd. TANAPA - Tanzania National Parks TTC - Tanzania Tourist Corporation FISCAL YEAR Government: July 1 - June 30 TTC January 1 - December 31  FOR OFFICIAL USE ONLY TANZANIA TOURISM REHABILITATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: United Republic of Tanzania Beneficiary: Tanzania Tourist Corporation (TTC) Amount: US$14.0 million equivalent Terms: Standard Relending Terms: US$9.5 million of the Credit will be onlent to TTC for 16 years with 4 years of grace at an interest rate of 10% per annum. Project Description: The proposed project, which will assist the Government in reversing the deterioration in tourist facilities and services, would consist of the following components: (i) works and equipment required to bring TTC hotels and lodges to appropriate operating standards; (ii) tech- nical assistance to TTC in the field of hotel maintenance, marketing, hotel supplies, hotel communications and proj- ect administration; (iii) preparation of promotional materials and marketing campaigns aimed at the tourist travel trade; (iv) construction, furnishing and equipping, and technical assistance for a new Hotel and TJourism Training Institute (HTTI) in Dar es Salaam; (v) equipment for improving the effectiveness of the Governmient's anti- poaching efforts; and (vi) improvements to the terminal building of the Dar es Salaam Airport. The project's major risks involve the uncertainty related to the fore- cast of tourist flows to Tanzania (particular]y in light of past deterioration in tourist services and facilities), and TTC's managerial capability to implement the project effectively. By providing substantial technical assistance as well as the other ingredients necessary to market Tanzania's tourist attractions effectively, the project is designed to overcome these risks. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  -2- Estimated Cost: (US$ millions) Local Foreign Total Civil Works Hotel rehabilitation 1.04 1.96 3.00 HTTI 0.50 0.88 1.38 Airport terminal 0.30 0.57 0.87 Subtotal 1.84 3.41 5.25 Furniture & fixtures 0.30 0.90 1.20 Equipment 0.68 3.95 4.63 Professional services 0.72 0.39 1.11 Technical assistance 0.17 1.52 1.69 Marketing expenditures 0.19 0.54 0.73 Total Base Cost 3.90 10.71 14.61 Contingencies Physical 0.32 0.79 1.11 Price 1.28 2.50 3.78 Total Project Cost 5.50 14.00 19.50 of which taxes and duties 1.20 - 1.20 PROJECT COST NET OF TAXES AND DUTIES 4.30 14.00 18.30 Financing Plan: (US$ million) Local Foreign Total % IDA - 14.00 14.00 77 Government 4.30 - 4.30 23 PROJECT COST NET OF TAXES AND DUTIES 4.30 14.00 18.30 100 Disbursement: (US$ million) IDA FY 80 81 82 83 t Annual 1.2 4.2 5.8 2.8 Cumulative 1.2 5.4 11.2 14.0 Rate of Return: 21% Appraisal Report: Report No. 2138-TA dated November 20, 1978.  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE UNITED REPUBLIC OF TANZANIA FOR A TOURISM REHABILITATION PROJECT 1. I submit the following report and recommendation on a proposed credit to the United Republic of Tanzania of US$14.0 million equivalent on standard terms to help finance a Tourism Rehabilitation Project. Approx- imately US$9.5 million equivalent of the proceeds of the credit would be relent to the Tanzania Tourist Corporation at 10% interest per annum for 16 years with 4 years of grace. PART I - THE ECONOMY 1/ 2. A Basic Economic Mission visited Tanzania in August 1976. The Basic Economic Report was distributed in December 1977 (Report No. 1616-TA). A summary of social and economic data is in Annex I. Profile of the Economy 3. Tanzania is one of the twenty-five least developed countries in the world with a per capita income in 1977 of US$200. The economy is still heavily dependent on agriculture: 90% of the labor force is engaged in agri- culture and approximately 40% of GDP and two-thirds of total exports are derived from agricultural production. Average rural incomes are much below average urban incomes and there is considerable regional variation in rural incomes owing largely to differences in climate and land fertility. Overall population density is low, though a few areas are considered overpopulated. Population growth is estimated at 2.7% per annum with both fertility and mortality at relatively high levels. 4. Since the Arusha Declaration in 1967 Tanzania has pursued a socialist development strategy. Banking, insurance, and most large-scale enterprises in manufacturing, plantation agriculture, and wholesale trade are under state control. Controls are used extensively to direct economic activity, including import licencing, foreign exchange control, price control, the reservation of some activities to the state or cooperative sector, and detailed Government investment planning. The second major feature of Tanzania's development strategy is its strong emphasis on rural development and social programs to benefit the poor. This is reflected in ambitious programs for the provision of rural water supplies and health services and in the decision to achieve universal entry into primary education by 1977. The Government policy of settling rural population into villages is an important element in its attempt to facilitate the provision of economic and social services in rural areas. 1/ This section is essentially the same as that of the President's Report on the Education VI Project, dated November 29, 1978.  -2- Long-Term Economic Trends 5. In the decade 1967-77 real GDP at factor cost grew at an annual average rate of 4.6%, or about 1.8% per annum per capita. While economic growth was severely disrupted by the economic crisis following the failure of rains and large increases in import prices in 1973 and 1974, it has since resumed with the improved weather in 1976 and 1977. 6. The Government has an impressive record of domestic resource mobilization. Between 1966-67 and 1976-77 the share of recurrent revenue rose from 14.3% to 20.2% of GDP. This has been achieved through a combina- tion of highly progressive direct taxes and proportional or moderately pro- gressive indirect taxes. Except during the economic crisis in 1974-75, the rate of national savings has also been high: gross national savings fluc- tuated at around 16-17% of GNP from the mid-1960's through 1973, fell to half that level during the crisis years and recovered to the pre-crisis level in 1976-77. These are extremely high levels of savings for a country at Tanzania's income level. 7. Some progress has also been made in achieving the Government's objective of a more equitable income distribution. While between 1969 and 1975 the average urban-rural gap remained approximately constant, it is likely that the gap has now been slightly reduced due to continued recovery of agri- cultural production and higher producer prices. Within the urban sector there has been a dramatic narrowing of the post-tax income differential between the highest-paid government officials and minimum wage earners from 50 to 1 in 1961 to 8 to 1 in 1975. However, the overall formal urban sector earnings structure has remained relatively stable while an informal sector has emerged comprising large numbers of unemployed, underemployed and other workers with earnings significantly below the official urban minimum wage. The policies of wage restraint and higher producer prices pursued by the Government since 1975 have had a beneficial impact on almost all dimensions of income distri- bution and the basic needs oriented programs in rural water and health and in universal primary education (para 4 above) are resulting in a significant redirection in public expenditures toward the rural poor. 8. Despite satisfactory performance on growth, domestic resource mobilization, and income distribution there are other areas in which per- formance has been less satisfactory. The most problematic long-term trend is the slow growth of agricultural production. From 1967-77 agriculture grew at an annual rate of 2.7%, the same as the rate of growth of population. While in the past three years agricultural growth has been higher, this pri- marily represents recovery to the long-term trend from the bad years in 1973-74. In addition the recovery has been limited to subsistence agricul- ture; monetary agricultural production was only 2.2% higher in 1977 than in 1972. 9. Low agricultural growth has been largely responsible for a second problem, the disappointingly slow growth of export volume: while the total volume of exports of goods and services was 7.7% higher in 1976 than in  - 3 - 1966, the volume of exports of goods alone was actually lower in [976 than a decade earlier. From 1966-71, the volume of exports of goods and services grew at 7.7% per year, but this was followed by a decline after 1971, a sharp drop in 1974, and only a partial recovery by 1976. Increased levels of foreign assistance and high coffee prices have mitigated the worst effects of the decline in export volume, but Government authorities have been forced to impose stricter import controls which have had particularly adverse effects on industrial production in recent years. Recent Economic Performance 10. The economy continued its recovery in 1977. Total GDP increased by 5.9% while agricultural production increased by 5.6%. There was no sig- nificant change in export volume but the boom in coffee prices helped raise mainland commodity export receipts from TSh 3,828 million to TSh 4,585 mil- lion. External reserves were US$280 million at the end of 1977 but had fallen to US$200 million by May 1978 largely as a result of falling coffee prices. This is equivalent to three months imports at the 1977 lEvel. 11. Recovery has been aided by good economic management. The Govern- ment has continued to adhere to the principal elements of the policy package introduced at the time of appraisal and negotiation of the Program Loan (No. 1063-TA) in late 1974. These include reallocation of investment in favor of directly productive sectors, higher agricultural producer prices, constraints on wages and salaries, and price and tax increases to restrain private consumption. The Government has also succeeded in bringing Gov- ernment spending under control and has begun to relax import controls. Because excessive Government spending and borrowing from the banking system was threatening to undermine financial stability and the entire program of recovery in early 1976, a program of budgetary control was developed by the Government and supported by both IMF assistance and a Program Credit (No. 688-TA) in early 1977. Through the imposition of new budgetary control measures and the reimposition of a progressive tax on coffee exports, the Government was able in 1977-78 to hold bank borrowing to nearly zero. The Program Credit was also designed to support selected relaxation of import controls in order to provide needed imports of spare parts and raw materials for increased capacity utilization. After some delays, the availability of essential maintenance imports has increased. 12. In addition, the Government has experimented in recent months with measures to increase labor productivity. These have included layoffs of some redundant workers and consultancy studies of the operational prob- lems of individual firms. Of potentially greater importance, in his Budget Speech in June 1978 the Finance Minister called for the immediate adoption of a payment-by-result wage system to stimulate productivity.  13. Tanzania continues to attract large amounts of foreign assistance on concessional terms. Because of the very concessional terms on which aid has been given to Tanzania and the Government's refusal to use higher cost commercial loans and supplier's credits, the overall debt service ratio has remained low. Including a notional 40% share of the debt of the East African Community Corporations, it was less than 8% in 1977. Bank debt as a percentage of Tanzania's total debt was about 26% in 1977; this is pro- jected to rise to about 29% in 1985 and remain stable thereafter. While the favorable terms of much of Tanzania's foreign assistance (particularly the increasing proportion of grants) significantly reduce the debt service burden, they also increase Bank Group exposure. Debt service payments to the Bank Group were about 28.6% of Tanzania's total debt service payments in 1977, and are projected to rise to approximately 30% in 1980. 14. Tanzania has a suitable development program which will require substantial domestic funds in excess of local savings and available non-Bank Group external capital. Local cost financing is justified in view of our support for the Government's increased emphasis on local cost-intensive rural investments and the importance of not aggravating the local funds shortage. East African Community (EAC) 15. The recent developments in the East African Community were ouitlined in a report to the Executive Directors dated December 19, 1977 (R77-312). Dr. Victor Umbricht, the independent mediator appointed by the Partner States, has visited East Africa on numerous occasions and has begun work on the ques- tions involved in appraising the assets and liabilities of the EAC Corpora- tions and making recommendations on their allocation. The de facto breakup of the Community is expected to have some impact on Tanzania's budget as new national corporations take over the services formerly provided by the EAC Corporations. While substantial initial investments are required (particu- larly in the formation of the airways corporation and the rehabilitation of the railways), the burden on the Government budget should be temporary as the new corporations are expected to become self-financing. A major development related to the EAC difficulties was the closure of the border with Kenya. Kenya was a major trading partner of Tanzania and in the short run consider- able adjustments have had to be made in locating new suppliers for some items and developing alternative outlets for some manufactured goods and agricultural products. PART II - BANK GROUP OPERATIONS IN TANZANIA 1/ 16. Tanzania joined the Bank, IDA and IFC in 1962. Beginning with an IDA credit for education in 1962, 34 IDA credits, and 16 Bank loans including two on Third Window terms amounting to US$604.5 million have so far been approved for Tanzania. In addition, Tanzania has been a beneficiary of 10 1/ This section is essentially the same as that of the President's Report on the Education VI Project, dated November 29, 1978.  - 5 - loans totalling US$244.8 million which have been extended lor the deveiLupent of the common services and development bank operated regionally by Tanzania, Kenya and Uganda through their association in the East African Community. IFC investments in Tanzania, totalling US$4.7 million, were made to the Kilombero Sugar Company in 1960 and 1964. This Company encountered financial difficulties and in 1969 IFC and other investors sold their interest in the Company to the Government. A new IFC investment of US$1.75 million in soap manufacturing in Mbeya was approved by the Executive Directors on June 8, 1978. Annex II contains summary statements of Bank loans, IDA credits and IFC investments to Tanzania and the East African Community organizations as of October 31, 1978 and notes on the execution of ongoing projects. 17. In keeping with Tanzania's overall development strategy Bank Group lending operations are increasingly focusing on the rural sector and directly productive projects. Up to the end of FY72, 10 out of 14 loans and credits made individually to Tanzania had been for infrastructure. The overwhelming majority of the operations approved since then have been for directly pro- ductive projects. Furthermore, a number of Bank Group supported infrastruc- ture projects have been closely linked with specific productive activities. For example, the Urban Water Supply Project (Loan No. 1354-TA) approved in January 1977, will support the Industrial Complex in Morogoro (Loans No. 1385-T-TA and 1386-TA) and the Morogoro Textile Project (Loan No. 1607-TA and Credit No. 833-TA). Directly productive projects recently approved include a Tanzanian Investment Bank Project, a Tobacco Handling Project, a Second Cashewnut Processing Project, and a Mwanza/Shinyanga Rural Development Project. The first Bank Group assisted project in the forestry sector, the Sao Hill Forestry Project (Loan No. 1307-TA), approved in July 1976 will provide the raw materials for Tanzania's first paper and pulp plant, also under consideration by the Bank Group for financing. Projects which have been appraised include a Sixth Education Project, a Second Urban Water Supply Project, the Mufindi Pulp and Paper Project, lines of credit to the Tanzania Rural Development Bank and the Tanzania Investment Bank, a Fifth Highway Project and a Smallholder Tea Consolidation Project. A rural development project in Mara, a foodgrain storage and milling project, a harbours project, and an agricultural services project are also under preparation. 18. Although the comparatively high proportion of undisbursed loans and credits, detailed in Annex II, is in large part a result of tlne recent approval of many of these projects, it also reflects the fact that overall project implementation has been slower than was projected. It is clear in retrospect that both the Bank Group and Tanzania have been optimistic regard- ing Tanzania's absorptive capacity. The causes of the difficulties in implementation are varied. Some stem from the scarcity of suitab:Ly trained and experienced manpower, some reflect the problems in identifying agronomic input packages appropriate to the needs of smallholder farmers while others result from the strains associated with attempting a "frontal attack" on poverty. These problems have been compounded by frequent and drastic adminis- trative changes, which -- though potentially the source of long-term benefits -- have certainly disrupted orderly execution of projects and made parts of earlier project concepts obsolete. In general, difficulties have been most severe in agriculture, particularly in the smallholder rural sector. As  Bank Group lending program has increasingly concentrated on this sector, these problems have become correspondingly more apparent and severe. By contrast, the "modern" sector projects have tended to fare better: the Tanzania Investment Bank, Mwanza Textile, and Cashewnut Processing Projects, for example, are proceeding well. 19. As the Bank Group's lending program has expanded, increasing attention has been given to measures designed to improve project implementa- tion. A course was conducted in Dar es Salaam in 1973 and again in 1978 on Bank Group procurement procedures with the relevant Government officials. A special project implementation unit was set up in the Ministry of Agriculture and nine Agricultural Development Services staff have been assigned to Bank Group projects in the agriculture sector. The need to establish a close and continuous working level dialogue between responsible Tanzanian officials and Bank Group staff on implementation problems was one of the prime reasons for the expansion of the Resident Mission to two professionals in October 1976. In February 1977 a regular Government/Bank Group review of project implemen- tation was established. Discussions on the Bank Group portfolio chaired by the Ministry of Finance and attended by Bank Group staff and officials from implementing agencies, were to be held on a quarterly basis. Steps to strengthen these review procedures were taken in August 1977 when those meetings were shifted to a monthly basis. The Government also agreed that periodically these reviews will be conducted on an "in-depth" basis to dis- cuss in detail individual problem projects and problems which are affecting project implementation across a number of sectors. As a result of these reviews a number of positive developments have been noted: most actions agreed to during the reviews have been completed on schedule and the coor- dination and communication between the Ministry of Finance and the various ministries and agencies responsible for project implementation have improved markedly. 20. The Government has also become increasingly conscious of the importance of implementation. In addition to fully supporting the project implementation review system, the Ministry of Finance has now decided to set up an internal unit to oversee project performance. Furthermore, there have been more consistent responses to Bank suggestions and a willingness to openly discuss project problems raised by Bank Group staff. As a con- sequence, the disbursement record of Bank Group financed projects has improved somewhat over the last two years, and a recent analysis indicated that the Tanzanian disbursement performance is now about equal to the Bank Group average. PART III - THE TOURISM SECTOR Tourism Assets 21. Tanzania has impressive tourist attractions including spectacular scenery, wildlife and beaches, and historical and archaelogical sites. The wildlife resources are among the finest in the world, including the Serengeti  - 7 - Plains, Ngorongoro Crater, and Lake Manyara in the north, and the relatively undeveloped Selous Game Reserve in the south. These game reserves together with the attraction of Africa's highest mountain, Kilimanjaro, have long been part of an established East African tourist circuit. Additional attractions include the sandy beaches north of Dar es Salaam, the "spice island" of Zanzibar, and excellent deep sea fishing at Mafia Island. Along the Indian Ocean coast are the remains of ancient settlements, and Olduvai Gorge, in the interior Rift Valley, is the site of discoveries of the traces of earliest man. Tanzania also offers numerous arts and crafts, most notably the Makonde sculptures and carvings. Government and Public Attitudes Toward Tourism 22. After substantial investments were made in tourism in Tanzania during the 1960s, the development of tourism became a subject of controversy in 1970, the major issue being the compatibility of tourism and socialist development. In 1973 the Economic Committee of the Cabinet decided to avoid major expansion in state-owned tourist facilities and to concentrate instead on consolidation of the existing investments. Due to the resulting uncer- tainties about the future of tourism, private entrepreneurs also refrained from further investment in the sector. When Tanzania faced a severe economic crisis in 1974, the operating conditions of state- and privately-owned hotels worsened considerably: the overall scarcity of foreign exchange and the low priority given to tourism meant that practically no foreign exchange was available to hotels. Consequently, hotels were unable to purchase maintenance material, spare parts and necessary equipment, and their physical plants deteriorated rapidly. 23. Since late 1975, the attitude of the Government has changed gradually as it became confident that through proper education any adverse impact of tourism on political and social values could be avoided. Accordingly, the TANU Party and the hotel industry initiated a campaign to educate workers to the value of tourism. With the subsequent improvement in the general economic conditions in 1976 and 1977, the Government also increased foreign exchange allocations to the sector. Hotels could again order essential equipment and supplies from abroad, maintenance expenditures at state hotels were increased and more funds were made available for promoting Tanzania's tourist attractions. 24. In a clear change from the uncertain policy of the early 1970s, the Government is now urging the private sector to invest in tourism. At the end of 1977, the Minister of Natural Resources and Tourism, on behalf of the Gov- ernment, invited all private investors, national and foreign, to invest in the sector. In addition, the Association of Hoteliers was revived in early 1978, and discussions on the needs of the private sector were initiated between Government and private hotel operators. In a number of recent dis- cussions, the Government has emphasized that the foreign exchange needed to properly operate the sector will be made available. Finally, the Government requested Bank Group assistance in rehabilitating the tourism industry.  -8- The Hotel Industry 25. Present hotel capacity in Tanzania is about 3,600 rooms (6,900 beds). Of these, about 2,500 rooms (4,900 beds) are considered of interna- tional standard; they are located mainly in the northern wildlife area, along the coast and in Dar es Salaam. Hotels in Tanzania are owned by both Govern- ment agencies and private entrepreneurs. At the end of 1977, the publicly owned Tanzania Tourist Corporation (TTC) controlled about 2,300 beds or over 45% of international standard hotel capacity in Tanzania. In addition, TTC has large minority shareholdings in two other international hotels which account for 10% of accommodation capacity. It is estimated that two-thirds of the private hotels are owned by Tanzanians. Visitor Trends and Market Forecasts 26. For the safari-oriented tourists, Tanzania offers one of the finest concentrations of wildlife in the world; few countries can effectively compete with Tanzania for this segment of the market. While competition for beach- oriented winter tourists is fierce, Tanzania enjoys three advantages in this market: (i) its beaches are not over-developed, (ii) hotel prices are some- what below those of neighboring countries and substantially below those of Caribbean destinations, and (iii) tourists can combine beach vacations with excursions to the wildlife areas. 27. Tourist flows rose rapidly in the 1960s and early 1970s as Tanzania changed from a discovery area to an important tourist destination. Increased popularity of safari tours in Africa as well as construction in Tanzania of additional hotels of international standard helped sustain this increase. Visitor bednights in registered hotels increased from about 295,000 in 1969 to 560,000 in 1976, or about 10% annually. However, underlying this general trend was a marked slowdown in the period 1972-76, reflecting in part the ambivalence of the Government toward tourism. Tourist flows to the northern wildlife area, which grew by 25% annually between 1969 and 1972, actually declined by 2% annually between 1972 and 1976. Then in 1977, the border with Kenya was closed as an outgrowth of the East African Community difficulties (para. 15) and there was a sharp reduction (about 70%) in visitors to the northern national parks. At Dar es Salaam beach hotels, the number of visitor bednights, which rose to over 80,000 in 1972 fell to half that level by 1976. 28. Tour operators in Europe and North America (the major tourist gen- erating markets) have been reluctant since 1972 to offer tours to Tanzania. They could not be certain of the quality and reliability of services provided as hotel accommodations deteriorated rapidly; in some cases tour operators were liable for compensating disenchanted visitors. This development is reflected in the visitor statistics: between 1972 and 1976 overall European visitor bednights decreased by 2% per annum and American visitor bednights by 5% per annum. As of 1976 Europeans accounted for 40% and Americans for 20% of visitor bednights, down from 50% and 28% respectively in 1972. 29. In the future, the overall safari market is projected to grow at 8% annually, and with an appropriate marketing effort and the improvement  - 9 - of tourism facilities and services it is projected thaL fanzania could gradually increase its share of the East African safari market from the depressed 1977 level (about 15%) to its 1976 market share (about 40%). Furthermore, with improved performance in the industry, it is expected thaL the average tourist stay could be increased from the present 2.3 days to 3 days in the northern national parks and from 1 to 2 days in Arusha, which serves as an access to the northern wildlife areas. Moreover, it has been estimated that about 20% of the tourists to the wildlife areas could be attracted to Tanzania on a safari/beach package including 5 days of safari and 4 days of beach stay. The island of Zanzibar, which is only a twenty-minute flight from Dar es Salaam, could also provide an increasingly attractive component in a tour package with visits lasting 1 to 2 days. The table below summarizes the forecasts of demand and supply of hotel accommodation in Tanzania. Excess 1985 Additional 1976 1985 Current Demand over Rooms re- Actual Projected Available Available quired by Location Bednights Bednights Capacity Capaci2L_ 1985 ('000) ('000) ( '000) ('000) Dar es Salaam 532 1,017 571 446 760 Beach Hotels 94 200 204 - - Northern Wildlife 171 224 257 - - Arusha/Moshi 142 237 281 - - Zanzibar 27 53 69 - - The table demonstrates the underutilization of presently available hotel capacity and therefore the high sectoral priority of increasing the visitor flow to Tanzania. Tourism Related Infrastructure 30. Dar es Salaam Airport is the main international port cf entry and the hub of the domestic air transport system. It is served by 18 scheduled and 20 nonscheduled carriers. The airport currently handles abcut 1,200 passengers per day, but its facilities are inadequate: processing of arriv- ing passengers is extremely slow, the luggage handling system is inefficient and the departure lounge is too small to handle demand at peak hours. The proposed project contains a component. specifically addressed at resolving these problems (para. 46). The northern wildlife area is adequately served by the Kilimanjaro Airport at Arusha which was completed in 1971: in addition to occasional charter flights, four international airlines include that airport in their scheduled operations. 31. The main access to Tanzania's national parks is by road. Although the roads within the national parks are adequately maintained and passable throughout the year, some of the roads leading to the parks, especially to the popular northern wildlife area, are poorly maintained. Because of lack of proper drainage they are frequently flooded during the rainy season and can be used only by four-wheel drive vehicles. The Government has agreed that the major access road to the northern national parks will be upgraded to an  - 10 - all weather standard and subsequently maintained to that standard (Section 3.07 of the draft Development Credit Agreement). Bank Group financing for this investment is under consideration as a component of the recently appraised Fifth Highway Project. Tourism Sector Management 32. The Ministry of Natural Resources and Tourism (MNR&T) oversees wildlife management and the development of national parks through its Wildlife Division. The formulation of tourism policies, hotel classifications and supervision of the hotel training school is overseen by MNR&T's Tourism Division. The Tanzania National Parks Authority (TANAPA) and the Ngorongoro Conservation Authority (NCA), Government-owned parastatals under MNR&T, are responsible for the operation of the National Parks and the Ngorongoro con- servation area, respectively. The TTC (para 25), another Government-owned parastatal organization under MNR&T, is charged with managing and controlling state investments in tourism and promoting the tourist industry. By the end of 1977, TTC owned 13 hotels and controlled and operated the State Travel Service (a travel agency and tour operator), and Tanzania Duty Free Shops Ltd. TTC also runs overseas offices in Frankfurt, London, Milan, and New York and is responsible for conducting the overall promotion campaign for Tanzania's tourism industry. Total TTC staff is about 2,400. Tourism Training 33. The major training institute for the tourism sector is presently the hotel training school located in central Dar es Salaam on the premises of an old hotel; the physical facilities of the school are inadequate and the curriculum does not reflect the training needs of the sector. In addi- tion, since the departure of the technical assistance team which had been running the school, only a few qualified instructors remain. Because the existing school building is a historic landmark (which precludes its alter- ation) the proposed project includes financing for a new school; funds are also provided for the technical assistance needed to operate the school properly (para 43 and 44). Wildlife Policies 34. The Government of Tanzania has recognized the importance of conserv- ing its vast wildlife resources and of utilizing these resources rationally; its policies are summarized in the Wildlife Conservation Act of 1974. The national parks, game reserves and game controlled areas (25% of the country) are among the best managed in East Africa. Animal inventories, research and monitoring programs are carried out continuously and form the basis for game cropping. Due to recent increases in animal population, hunting safaris have been allowed since mid-1978 under special licenses and strict control. Sus- tained yield management allows the country, through the commercial operations of the Tanzania Wildlife Corporation, to earn foreign exchange from sales of hides, skins and trophies. The Government attitude towards safeguarding the wildlife resources is firm and it intends to continue to pursue policies  - 11 - consistent with the preservation of wildlife resources (Section 3.08 of the draft Development Credit Agreement). The Government has agreed that any major changes in policies affecting wildlife preservation relating to organization and staffing of anti-poaching units, licensing of hunting, and dealing in and exporting of trophies will be submitted to the Association in sufficient time to enable it to comment on them (Section 3.08 of the draft Development Credit Agreement). The Government has built up and maintains substantial antipoaching forces which will be strengthened under the proposed project (para 45); it also imposes stiff penalties on convicted poachers. Contributions of Tourism to the Economy 35. According to figures published by the Bank of Tanzania, foreign exchange earnings from tourism rose from TSh 80 million (US$11 million 1/) in 1969 to TSh 119 (US$15 million 1/) in 1972. By 1976, foreign exchange earnings from tourism had fallen to TSh 88 million (US$11 million). Foreign exchange earnings in 1976 represented 2% of total exports and 0.4% of GNP compared to 4% and 1.1%, respectively, in 1972. By comparison, Kenya, with similar tourist attractions, earned over US$100 million from tourism in 1976, representing 9% of exports and 3% of GNP. Employment in hotels in Tanzania was estimated at approximately 4,500 in 1977. Direct employment in tourist activities other than hotels (airlines, national parks, travel agencies, tour operators, handicrafts) is estimated at an additional 4,500, bringing the total direct employment generated by tourism to 9,000. PART IV - THE PROJECT Background 36. In October 1976, at the request of the Government, a project identi- fication mission from the Bank Group prepared terms of reference for a study of the measures required for rehabilitating and increasing the utilization of existing tourist facilities in Tanzania. Funds for this study were made available through the IDA Technical Assistance Credit (Credit 601-TA) and proposals from four consulting firms were received in March 1977. Later in the year, Coopers and Lybrand, in cooperation with Norman and Dawbarn, was chosen to conduct the study. The consultants completed the study in early 1978 and the project was appraised in March 1978. Negotiations were held in Washington in October 1978 where the Government delegation was led by Mr. J. Sepeku, Principal Secretary in MNR&T. The Staff Appraisal Repcrt for this project is being circulated separately. A Credit and Project Summary is included at the beginning of this Report and the Supplemental Data Sheet is given in Annex III. Project Objectives and Description 37. The proposed project is designed to assist the GoverrLment in its efforts to reverse the deterioration in tourist facilities and services 1/ At the then prevailing exchange rate.  - 12 - since the early 1970s, thereby reestablishing LouLism as ULI imporLaliL ioreign exchange earning industry in Tanzania. Specifically, hotels would be re- habilitated, adequate hotel training provided, the promotion of Tanzania's tourist attractions intensified, anti-poaching activities strengthened, and transportation infrastructure improved. The improvements to be brought about by the project will provide a basis for the full utilization of Tanzania's present tourist facilities. 38. The project would consist of the following components: (a) urgent and essential works and equipment required to bring seven hotels and five lodges owned and operated by TTC to appropriate operating standards; (b) technical assistance to TTC in the fields of hotel main- tenance, marketing, hotel supplies, hotel communications and project administration; (c) preparation of promotional material and marketing campaigns aimed at the tourist travel trade; (d) construction, furnishing and equipping, and technical assistance for a new Hotel and Tourism Training Institute (HTTI) in Dar es Salaam; (e) equipment for the anti-poaching units within the national parks; and (f) improvements to the terminal building of the Dar es Salaam Airport to provide better facilities for international arrivals and departures. 39. Hotel Rehabilitation: Because of poor maintenance, failure to carry out essential repairs, and lack of spare parts or technical ability to keep major equipment in working condition, TTC's hotels and lodges are no longer offering the quality of accommodation and service they were designed for. With many of TTC's hotels on the verge of a breakdown in operations, the hotels' buildings and technical plants require immediate major rehabilitation. This component would provide for (i) external works, comprising site develop- ment and urgently needed roof improvements; (ii) improvement of plumbing installations, repair or replacement of electrical installations, overhaul of air conditioning and heating systems, improvement of boiler plants, overhaul of water and sewage treatment plants, and repair or replacement of equipment in kitchens, laundry and service areas; (iii) improvement or replacement of finishes, furniture and fittings in public areas and guestrooms; (iv) staff housing; and (v) vehicles essential for the operation of hotels and lodges. 40. An essential link in the implementation of this component is that the rehabilitated hotels be properly maintained after project completion. In order to ensure that deficiencies in maintenance and deterioration of facilities are not allowed to recur, TTC's expenditure for the repair and  - 13 - maintenance would, by December 31, 1981, reach at least 6% of hotel sales or 2% of the current value of TTC's principal fixed assets, whichever is higher (Section 3.04 of the draft Project Agreement). 41. Technical Assistance to TTC: While overall TTC's management is adequate, several of the operating departments within TTC need strengthening. Therefore, fifteen man-years of specialists' services (in the fields of engineering, marketing, supply and distribution and reservation and communica- tions) would be provided to TTC under the project at a cost estimated at about US$45,000 per man-year. 42. Marketing: Because of lack of marketing expenditures since the early 1970s, substantial amounts are needed over the project period to pro- vide the Marketing Department of TTC with adequate supplies of promotional materials as well as funds for campaigns aimed at the tourist travel trade. Financing for these purposes was included in the project because intensive marketing efforts are viewed as essential to the success of the project. 43. Hotel and Tourism Training Institute: The facilities of the pro- posed new HTTI would accommodate over 130 trainees and include general purpose classrooms, a language laboratory, workshops and demonstration rooms, a library, administrative offices and a practice hotel with 30 bedrooms (the minimum suitable size for training purposes). The practice hotel would be open to the public and would function commercially with all the departments and services generally found in international three-star hotels. Various sites for the HTTI within Dar es Salaam are under consideration, and the final location would be determined in consultation with the Association (Section 3.02(a) of the draft Development Credit Agreement). To ensure that HTTI will have adequate funds for its operation, the Government has agreedl to undertake a study on how the operation of HTTI could be financed and inform the Asso- ciation on its results by December 31, 1980, (Section 3.02(b) of the draft Development Credit Agreement). 44. Technical assistance will be essential for the success of the HTTI. Therefore, the project would provide funds for teachers, a senior advisor on hotel training and scholarships for teacher training. The head teacher would be nominated by December 31, 1979, and all experts funded under the project for HTTI would be suitably qualified and experienced and appointed on terms and conditions acceptable to the Association (Section 3.02(e) of the draft Development Credit Agreement). In total, this component would provide for 18 man-years of internationally recruited specialists at a cost estimated at about US$45,000 per man-year as well as 20 man-years of fellowships. 45. Anti-Poaching Equipment. Until recently, poaching did not pose a serious threat to Tanzania's wildlife resources. However, in the past two years there has been increasing incidence of well-armed poachers; the Govern- ment has responded by strengthening its anti-poaching activities. To support these activities, the project will provide the necessary vehicles and equip- ment for the anti-poaching units of TANAPA and NCA. To assist in monitoring the effectiveness of this anti-poaching component, a report dealing with  - 14 - the wildlife situation in Tanzania and the results of anti-poaching activities will be furnished annually to the Association (Section 3.08 of the draft Development Credit Agreement). 46. Terminal Building at Dar es Salaam Airport: This component is a stopgap solution to alleviate the present problems in the arrival and departure of passengers which will multiply as tourist and general traffic increases. The project would provide funds for the construction of a new international passenger building adjacent to the existing terminal building: it would be a single-story, light structure that could easily find alternative use should a new terminal building be constructed at some time in the future. The component would also include the installation of luggage conveyors and equipment for moving luggage to and from the aircraft. Cost Estimates and Financing 47. The total cost of the project net of taxes and duties is estimated at US$18.3 million; US$14.0 million in foreign exchange expenditures and US$4.3 million in local expenditures. Cost estimates are based on the con- sultants' studies (para 36), updated to March 1978; they include physical contingencies of 10% on civil works, furniture and equipment, and price contingencies totaling 26% of base costs. The average rehabilitation cost per hotel room is estimated at US$8,500 excluding contingencies. Consultants services required for the designs for the hotel rehabilitations, the HTTI, and the airport terminal building are estimated at 37 man-years at an average of US$30,000 equivalent per man-year. 48. The financing plan provides for an IDA Credit of US$14.0 million, 77% of project cost net of taxes; this is equivalent to the foreign exchange cost of the project. The Government would contribute US$4.3 million equiva- lent (excluding taxes and customs duties). IDA funds would be channeled through the Ministry of Finance to (i) TTC for the hotel rehabilitation, marketing and technical assistance components; (ii) MNR&T for HTTI; (iii) TANAPA and NCA for the anti-poaching equipment; and (iv) Ministry of Works for the international passenger terminal building at the airport. The funds for hotel rehabilitation would be passed on by the Ministry of Finance to TTC under a subsidiary loan agreement which would be on terms and conditions acceptable to the Association including an interest rate of 10% per annum for 16 years including 4 years of grace (Section 3.01(c) of the draft Development Credit Agreement). 1/ Project Implementation 49. Overall project coordination will be vested in the office of the Principal Secretary, MNR&T. The project would be implemented in about four 1/ These terms are consistent with prevailing loan term in Tanzania. The average inflation rate for Tanzania in the 1975-77 period was 13% as measured by the consumer price index but inflation moderated to about 10% in early 1978 and is expected to continue to fall over the next three years.  - 15 - years with an expected completion date of December 31, 1982. The hotel rehabilitation component would be executed by contractors under the supervi- sion of TTC personnel. As the extent of the hotel rehabilitation works involved would put an excessive strain on existing TTC manpower, a qualified and experienced Project Coordinator to oversee the rehabilitation work would be appointed by April 30, 1979 (Section 2.02 of the draft Project Agreement). The construction of the HTTI will be performed by contractors under the supervision of the Ministry of Works, and its operations would come under the supervision of the MNR&T. The design and construction of the terminal building at Dar es Salaam Airport will be performed by contractors under the supervision of the Ministry of Works, Roads and Aerodromes Division. Once completed, operation and maintenance of this facility will be entrusted to the Airport Services Section of the Ministry of Works. All technical assistance required for the project and financed by the Credit would be carried out by qualified and experienced personnel on terms and conditions satisfactory to the Associa- tion (Section 3.02 (e) of the draft Development Credit Agreement and Section 2.04 of the draft Project Agreement). Procurement and Disbursement 50. Contracts for civil works, furniture, fixtures, equipment and vehicles would be awarded on the basis of international competitive bidding in accordance with the Bank's guidelines for procurement, except (i) civil works contracts costing US$250,000 equivalent or less (up to US$2.4 million in total); (ii) furniture, fixtures and equipment contracts costing less than US$100,000 equivalent each (up to US$1.5 million in total); and (iii) spare parts for equipment already installed in hotels and lodges (up to US$0.3 mil- lion in total). Contracts for items (i) and (ii) would be awarded on the basis of local competitive bidding in accordance with local procurement procedures satisfactory to the Association. Spare parts for exisl:ing equip- ment would be purchased directly from manufacturers or distributors. In evaluating civil works bids, domestic contractors would be allowed a 7.5% preference. Qualified domestic manufacturers of furniture, fixtures and equipment would be granted a preferential margin in bid evaluation equal to the prevailing tariff, or 15% of the c.i.f. cost of imports, whichever is lower. 51. Disbursement would be on the basis of (i) 65% of total expenditures for civil works; (ii) 100% of foreign expenditures for imported furniture, fixtures, equipment and vehicles; 75% of local expenditures for such imported items when procured locally; 100% of ex-factory costs of such items when manu- factured locally; (iii) 100% of foreign expenditures and 50% of local expendi- tures for consultant services; (iv) 100% of foreign expenditures and 50% of local expenditures for technical assistance and fellowships; and (v) 100% of foreign expenditures and 50% of local expenditures on marketing. In order to facilitate the delivery of urgently needed equipment for various hotels, up to US$400,000 for expenditures incurred on these items after October 1, 1978 would be eligible for retroactive financing.  - 16 - Accounting and Insurance 52. Separate project accounts would be maintained by the various Government agencies involved in the project and TTC (Section 3.06 of the draft Development Credit Agreement and Section 4.01(b) of the draft Project Agreement). The financial statements for each TTC subsidiary, consolidated financial statements for TTC and the separate project accounts would be audited by independent auditors acceptable to the Association and the reports of such audit would be submitted to the Association within six months of the end of each fiscal year (Section 4.02 of the draft Project Agreement). Presently, TTC's accounts are adequately maintained; the quality of its accounting procedures has improved significantly over the past three years. 53. Because the operations of HTTI will generate substantial revenues, it is important that proper accounting procedures be observed. Therefore, it has been agreed that an accounting system, acceptable to the Association, would be installed in HTTI six months before its expected opening and annual audited financial statements for the HTTI would be submitted to the Asso- ciation within six months of the end of each fiscal year (Section 3.02(c) and (d) of the draft Development Credit Agreement). 54. Present TTC insurance coverage, which is based primarily on initial investment cost, exposes TTC to potentially large losses in the event of extensive damage to one or more hotels. Therefore, TTC's Board has decided to reappraise all major fixed assets; the initial reappraisal of assets is expected to be completed by September 30, 1979 and thereafter TTC shall adjust coverage periodically as asset values change. Current and Forecast Financial Position of TTC 55. Consolidated income statements show that TTC and subsidiaries combined operated close to the breakeven point during 1974-76. However, in the wake of the border closure with Kenya, losses increased sharply to about TSh 13.2 million in 1977 and an estimated TSh 13.3 million in 1978. While TTC has a reasonable debt-to-equity ratio of 47/53 (largely because of sizable Government infusions of funds), its current position is weak with negative net working capital of about TSh 30 million, a current ratio of about 0.6 to 1, and a debt service coverage of only 2.2. 56. Reflecting the difficult liquidity situation, TTC was past due on about TSh 15.3 million in principal payments and TSh 9.5 million in interest charges involving six loans as of December 31, 1977. The Serengeti Safari Lodges, Ltd. (SSLL), a fully-owned TTC subsidiary which was particularly affected by the closure of the border, accounted for about TSh 19.5 million, or about 80%, of the overdue payments. The Government has decided to assume responsibility for SSLL's overdue principal and interest payments and has confirmed that the actions needed to implement this decision will be taken by the end of calendar year 1978.  - 17 - 57. According to the financial projections made by ASSoci;LLiua staff, TTC will continue to face a very tight liquidity position until 1982. There- fore, while the financial projections suggest that no additional Government subventions would be required after 1979, the Government has agreed to provide TTC the funds necessary for any capital expenditures in excess of TSh 2 million per fiscal year if these expenditures are not financed through new long-term borrowing by TTC and if TTC's consolidated current ratio after such expenditures falls below 1.1 to 1 (Section 3.03(a) of the draft Development Credit Agreement and Section 4.03 of the draft Project Agreement). Project Justification 58. Without the major rehabilitation proposed, TTC's hotels would con- tinue to deteriorate and some hotels and lodges would be forced to close due to equipment failures or as their occupancy rates reach uneconomic levels. By rehabilitating the hotels, improving tourism infrastructure and tourism training, and providing adequate marketing for Tanzanian tourism, the project would provide the framework for a significant growth in tourism revenues. 59. The main source of project benefits would be increased visitor traffic to Tanzania resulting in higher occupancy rates for hotels and lodges and therefore greater total expenditures by holiday and business visitors (while expenditures outside the hotels were not taken into account in the economic analyses, foreign visitors will spend considerable additional amounts on transportation, park fees, curios, etc.). A second source of benefits would arise from projected increases in room rates. These increases are justified because after the hotels are renovated they will offer improved services and because prices are higher at competing destinations which offer similar attractions. In view of this, TTC would prepare, and submit to the Association by December 31, 1979, a study examining the feasibility and magnitude of real rate increases at its hotels and lodges and recommend policies and procedures for future TTC tariff rate decisions (Section 3.05 of the draft Project Agreement). Reflecting both increased occupancy rates and room rates, it is projected that with the project TTC should by 1983 be able to generate internally sufficient funds to cover all debt service and operating costs, achieve an adequate liquidity and debt structure, and have a net income of about TSh 22 million (US$2.8 million). This net income would represent a return of 11.6% on equity and 6% on book value of total assets employed. 60. The economic rate of return for the hotel rehabilitation component (about 60% of project costs) has been calculated at 22%, ranging from 10 to 32% for individual hotels. A broader rate of return concept which includes (a) the cost of the tourist road to the northern wildlife area lodges; (b) 45% of the costs of marketing and 45% of the cost of HTTI (in line with TTC's share of the total hotel capacity in Tanzania); (c) the costs of technical assistance to the TTC; (d) the benefits to a new TTC hotel not needing reha- bilitation (Mt. Meru Hotel in Arusha); and (e) the cost and benefits asso- ciated with the new airport terminal building, results in an ecorLomic rate of return of 21%.  - 18 - 61. Net annual foreign exchange receipts resulting from the project will total over US$3 million by 1985 and over US$4 million by 1990. An average of about 72% of the foreign exchange receipts earned from this project will be retained in Tanzania. Although the basic thrust of the project is to maximize the use of existing facilities and increase foreign exchange earnings, the project also has employment benefits. The project is expected to generate 600 construction jobs in the project period. Furthermore, about 450 jobs will be created or saved in TTC as a result of the hotel rehabilitation, and a similar number of jobs will be added to in related activities such as shops, travel agencies, parks and transportation services. The total rehabilitation cost per direct job created or saved is about US$12,000. Project Risks 62. The project's greatest risk involves the question of whether the projections of tourist flows can be attained. A second risk involves the managerial capability of TTC to effectively implement the project. 63. On the issue of tourist flows, there is no question that Tanzania has the attractions to draw substantially greater numbers of tourists. However, as the projections assume that European and North American tour operators will again schedule package tours to Tanzania it will be necessary to ensure that the problems which formerly deterred them are adequately addressed. As some of the previous difficulties have already been acted upon by the Government (in particular the clarification of the Government's support for the sector), and as a number of the other major constraints are being focused on under the proposed project we believe the projected tourist flows are realistic. With regard to the issue of implementation capacity, adequate technical assistance is being provided to those areas of TTC where weaknesses have been identified. In view of these steps it has been concluded that this project can achieve its objective of providing a basis for rehabilitating Tanzania's tourism industry. PART V - LEGAL INSTRUMENTS AND AUTHORITY 64. The draft Development Credit Agreement between the United Republic of Tanzania and the Association, the draft Project Agreement between the Association and TTC and the Recommendation of the Committee provided for in Article V Section 1(d) of the Articles of Agreement are being distributed to the Executive Directors separately. 65. Features of the draft Development Credit and Project Agreements of special interest are given in Section III of Annex III to this report. Execution of the Subsidiary Loan Agreement between the Government and TTC would be a condition of effectiveness (Section 5.01 of the draft Development Credit Agreement).  - 19 - 66. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 67. I recommend that the Executive Directors approve the proposed Credit. Robert S. McNamara President Attachments Washington, D.C. November 29, 1978  ANNEX I -~ 20 -Page 1 of 5 TABLE 3A TANZANIA - SOCIAL INDICATORS DATA SHEET RBFERZXCZ GROUPS (ADJUSTED A5RACES LAND ARtA (THOUSAND SQ. KM) TAMI.0IA - HOST RECENT FST7LATE) TOTAL 945.1 SAME SAME NEXT HICHER AGRICULTURAL 508.3 3DST RECzr CEOGRAPHIC INCOME INCOME 1960 /b 1970 tb ESTIMATE /b REGION /k GROUP /d GROUP /e CNP PFR CAPITA (US$) 70.0 Lf 110.0 Lf 200.0 Lf 223.6 182.9 432.3 ENERGY CONSUMPTION PER CAPITA (KILOGRAMiS UF COAL EQUIVALENT) 41.0 62.0 69.0 86.7 88.9 251.7 POPULATION AND VITAL S'ATISTICS TOTAL POPULATION, MID-YEAR (KILLIONS) 9.6 /f 12.9 Li 15.5 /f URBAN POPULATION (PERCENT OF TOTAL) 4.6 5.5 7.3 13.6 15.0 24.2 POPULATION DENSITY PER SQ. KM. 10.0 14.0 16.0 18.4 46.8 42.7 PER SQ. XK. AGRICULTURAL LAND 20.0 26.0 30.0 53.6 254.1 95.0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 42.5 1Lf, 44.4 Lb 46.7 44.4 43.6 44.9 15-64 YRS. 55.5 Lfa 53.0 /h 50.9 52.7 53.3 52.8 65 Y2S. AND ABOVE 2.0 .LLR 2.6 /h 2.4 2.8 2.9 3.0 POPULATION GROUTH RATE (PERCENT) TOTAL 2.3 3.0 Lf 2.7 /f 2.6 2.4 2.7 URBAN 5.0 5.6 7.5 li 5.8 4.0 8.8 CRUDE BIRTH RATE (PER THOUSAND) 51.5 50.5 47.0 46.9 44.3 42.2 CRUDE DEATH RATE (PERETHOUSAND) 27.1 23.0 20.1 20.6 19.7 12.4 GROSS RZPROIJUCTION RATE .. 3.2 3.3 3.1 2.9 3.2 FAMILY PLANNING ACCEPtORS. ANNLiL (THOUSANDS) .. .. .. USERS (PERCEIJT OF KARRIED MKHEN) .. .. .. 2.5 14.6 14.2 FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1970-100) 91.6 100.0 107.5 94.2 96.4 104.3 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQURL-FNTS) 69.0 88.0 86.0 90.1 92.3 99,5 PROTFINS (GRAMS PER DAY) 42.0 43.0 47.1 55.2 50.0 56.8 OF W1ICH ANIMAL AND PULSE 22.0 Li 23.0 20.0 17.1 13.9 17.5 CHILD (ACES 1-4) MORTAI.ITV RATE .. .. .. .. .. 7.5 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 35.7 41.8 44.5 43.7 45.8 53.3 INFANT MORTALITY RATE (PER THOUSAND) 190.0 160.0 /h .. 138.4 102.7 82.5 ACCESS TO SAiE WATER (PERCENT OF POPULATICN) TOTAL .. 13.0 39.0 22.4 26.4 31.1 URBAN .. 61.0 88.0 66.3 63.5 68.5 R'JRAL .. 9.0 36.0 10.4 14.1 18.2 ACCESS TO EXCRYrA DISPCSAL (PERCENT OF POPULATION) TOTAL .. .. 17.0 23.9 16.1 37.5 URBAN .. .. 88.0 70.3 65.9 69.5 RURAL .. .. 14.0 14.2 3.4 25.4 POPULATIOI PER PIIYSICIAN 21750.0]f.k 21570.0 ff20760.0 1! 21757.5 13432.7 9359.2 VOPUILATTON PER NHIRSDIC PERSON 9240.6?il 4890.0 If 3180.0 If 3473.8 6CS3.3 2762.5 POPUI.ATION PER HOSPITAL BED IXTAL 570.0/f,k 700.0 Lf .. 645.4 1157.6 786.5 URBAN .. .. .. 172.9 183.3 278.4 kURAL .. .. .. 1292.6 1348.8 1358.4 ADMISSIONS PER HOSPITAL BED .. .. .. 19.2 19.5 19.2 HOUSING AVERAGE SIZE 0 UOUSEHOLD TOTAL .. 4.4 /h .. 4.9 5.2 URBAN *- 3.2/ . 5.0 4.8 RURAL .. 4.51, 4.7 5.3 AVERAGE NUtlBE'R OF PERSONS PER ROOm lOYAL .. .. .. . .. lURBAN 1.8 . .. .. .. 1.8 2.3 RURAL. .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DIT L!LLNCE) TOTAL .. .. .. .. 25.9 28.3 URhAN .. .. .. RURAL .. .. .. .. 8.7 10.3  21 - ANNEX I TABLE 3A TANZANIA - SOCIAL INDICATORS DATA SHEET Page 2 of 5 REFERENCE GROUPS (ADJUSTED AVERAGES TANZANIA - MOST RECENT ESTIMATE) SAME SAME NEXT HIGHER HDST RECENT GEOGRAPHIC INCOME INCOME 1960 k 1970 /b ESTIMATE Lb REGION tc GROUP Ld GROUP te EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 24.0 35.0 57.0 52.1 62.9 75.8 FEMALE 16.0 28.0 46.0 37.6 45.9 67.9 SECONDARY: TOTAL 2.0 3.0 3.0 8.0 14.4 17.7 FEMALE 1.0 2.0 2.0 5.0 B.8 12.9 VOCATIONAL (PERCENT OF SECONDARY) 23.0 .. .. 7.2 6.6 7.4 PUPIL-TUACHER RATIO PRIMARY 45.0 47.0 53.0 43.2 38.5 34.3 SECONDARY 20.0 19.0 20.0 22.8 19.8 23.5 ADULT LITERACY RATE (PERCENT) 9.5 28.1 th 49.0 1n 20.3 36.7 63.7 CONSUMPTION PASSENGER CARS PER THOUSAND POPIULTION 3.0 2.5 2.6 3.9 3.1 7.2 RADIO RECEIVERS PER THOUSAND POPULATION 2.0 11.0 16.0 40.1 31.1 71.1 TV RECEIVERS PER THOUSAND POPULATION .. 0.3 .. 2.2 2.8 14.1 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION - ~ 3.0 5.0 3.0 3.9 6.0 16.3 CINE?A ANNUAL ATTENDANCE PER.CAPITA 0.5 .. .. 1.2 1.4 1.6 EMPLOYMENT TOTAL LABOR FORCE (THOUSANDS) 4900.0 Jo 5600.01f.h6300.0 tn FDKALE (PERCENT) 37.1 36.6 36.3 32.6 24.2 28.0 AGRICULTURE (PERCENT) 96.0 /o 91.Otf.h 83.1 73.3 60.7 54.1 IWIXISTRY (PERCENT) 3.8 5.0 .. PARTICIPATION RATE (PERCENT) TOTAL 44.7 43.5 42.2 42.0 39.8 37.8 MALE 56.9 55.7 54.3 54.8 53.3 50.3 DEKALE 32.8 31.5 30.3 27.3 19.6 20.9 ECONOMIC DEPENDENCY RATIO 1.1 to 1. 2jL h 1.2 1.2 1.3 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY - HIGHEST 5 PERCENT OF HOUSEHOLDS .. 33.5 .. 25.7 20.3 19.5 HIGHEST 20 PERCENT OF HOUSEHOLDS .. 63.3 .. 55.1 45.1 48.9 LOWEST 20 PERCENT OF HOUSEHOLDS .. 2.3 .. 5.8 5.7 5.9 LOWEST 40 PERCENT OP HOUSEHOLDS .. 7.8 .. 14.5 16.8 15.7 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCQME LEVEL (US$ PER CAPITA) URBAN .. .. 117.0 108.8 88.5 155.9 RURAL .. .. 89.0 74.1 71.9 97.9 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) UlBmN .. .. 146.0 124.4 100.8 143.7 RMRAL .. .. 45.0 59.6 42.0 87.3 ESTIMATED POPULATION BELOW POVERTY INCOME LEVEL (PERCENT) URBAN .. .. 25.0 26.8 46.0 22.9 RURAL .. .. 85.0 47.6 48.0 36.7 Not svailable Not applicable. NOTES Le The adjusted group averages for each indicator are population-veighted geooetric means. excluding the extreme values of the indicator and the most populated country in each group. Coverage of countries among the indicators depends on availability of data and is not uniform. 1b Unless othervise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, betveen 1969 and 1971; and for Most Recent Estinate, between 1973 and 1977. /c Africa South of Sahara; /d Low Incom ($280 or less per capita, 1976); /e Lower Middle Income ($2B1-550 per capita, 1976); /f Mainland Tanzania; JI 1957; /h 1967; Li 1967-73; LI 1961-63; k 1962; /1 Registered, not all practice In the country; La 1958, Zanzibar only; a 1972; Jo 1963. September 1978  -22- ANNEX I DE F NMMS OF 1!y',:cATORS Page 3 of 5 a!:5: Altb,-ch the itt. are dr.- f,ri soo~res generally Judged the most authoritative and ntal.it shcnl sin- be noted they then sta not be inter nat.ionally c ......e ecus of th, lack At standardi-d defielitona And acncpts used bv diff-ren -ounries it: cill1ecttne the dots. Th. d.t. are. nonetheLss.. -ef,al to de-criha cr-r ofAt ontie indicate treeds, .nd characterize tertain naf.r differences e.e. ctcis T'he uliu-td ue,,p -......a for each indicator are popolatlon-veightod gec-eAecric . .tl. ee .cludicg the eu'rren -aue of the indicator and the moat populat-d " r in -0t grc. (r-rcae of --;tri.a -amng the indicators depe-ds on .av .iailftv oF inta an,d In not utIfom. Doe to lack nf data. groupevrus for Capital unveOil Eopo"rter and indicators of accese to eater end .corst. disposal1, hoosinA. Inton distribution and paosrty sr. alepls uontu-e atdg.uetric -ens itcheot the slea of entrees Values. LA).lf AitEA (t- .u.and .-.. kn) POoclati.n par hoptLbcd - totl.1 urban. and rural - Population (total, Totc, - Tots: surfce urns ...eprlsing land aera and inland ..ters. reban. And rcurl) divIded by th.ir respective cuohb' of hospital beds Aelutr:- Most recent estimate of agricultural ares used temporarily a-ailable in publIc and private gener al ardepoalnd hospital and re- ot pere-anrtly for crops. psacorea, market and kitchen gardens or to habilitation Centern. Hfospitals are ent.blishn... L permanently stoffed by IIe follow, at least one physlica. lEtablishoent. providing prrincipally custodial tare,are not.aintuIled. Rurslhoptes howevr, Incolde health and .edi- GilP FER CAPIC.A (US-$) - lIP per capita estimates at corrent market pricea. Ca Ienters no per.....tly at.ffed by a phyail.ln (but by a me*dical se- calculatel hy same conversion method as World Bank Atlas (1975-77 heals); isiecat. nurse. 1dvlfe, setc.) whIch offer le-pocinot accommodation and 1960, 1910, arid 1917 data. prooida a limited conga of radical facilitIes. Admissions Per hospital hod - lotal number of sosiesio.s to or discharge. ENERGY COSuforp10TlO PER CAPITA - Annual.. c touptio. of t aonertial energy from hospitals dinid.d by the number of beds. (coal aid i.igmt.. petroleum nacurol gs. and hydro-, nucloar And Sao- thermal olactricity) in kilograms of coal equivalent per capita. mousiNGc Anrlg ala,x of house.hold (persons per householdi - total, urban, and rural- POPCI;ATIGii 1'.71 VITAL STATISITCS A household ronaists of a group of individuals oh. share lining qoarters 'rotal pop,la:liri. eli-year 1ilIllons) - Ad of July 1; if sot Available, and their -in mas A hoarder or lodger may or map ot he Included In an.Srag uu tw onen-year estimate.; 1960. 1970. and 1977 data, the household for statistical purposes. Statistical deftitltoa of house- Urban populu:Ion (percent of total) - Ratio of urban to total popule- hold nary. tlan; different definitions of urban areas may affsect comparability Average number of persons Per room - total, urban, end roral - Average nun- of dare -ong countries. bar of per""n per rom. ic all, urban, and roral occuapied conventional. Popu,l&tIoc density dwellings. respectinaly. Duelling. antlude noo-parmanmnr structuoree and Pe, sq. ho M id-y.ar population par equater kiloeater (110 bactaras) unoccuepied parts. of total area. Stress to electrIcIty~~~~~Ae prcen of duelllntsg) -vtotal, urba, and rural - Par so.ho agrIcult le lnd - Compurad as shove for agricultural leand Co oinldelnswt ltrct nlvn u rtesa erecg only. of total. urban. and rural dealinig. respectively. Pop:latIon aes structure (percent) - Children, (0-li years), wrtoking-age (13-64 Y-sar) and ratired (65 years end over) as percentages of aid- EDUCATioN ,aa pouton AdJust.d enolmnratios PopultIon rovehnate(portent) - t.tal. and urban - Compoud snnual Priary scol-toa,ed female - Total end fenala serollmant of all ages growth rates of total end urban aId-year pnp.lscions for 195D-60. r ths prImr lee aan Pe tOi 5 of respectiVely.prma&ry scbolag 1960-70~..ad 19yQ70 pouaizns; c0arnally iclde chlre ge -I eashlt adjutedfo Crude birt r.at (Per thousand) - Annul lIve birtha par thousand of differant lengths of primary educ.tion; for coutries Izth universa eda- aid-yearppualm tee-pear snithnonc -neragas ending In 1960 end cation. anrolleent may emceed 100 percen.t sLots some pupils are below or 1970 and fits-year average endieg in 1975 for mast cacent estimate. -abv the official school age. Crdedet rotea(per thousandi - Annual deaths par thousand of mid- Sacendary school - total, ard female - Computed as ahoves; secondary educa- ?ear popul.tio.; tee-year aritheetic. averages ending In 1960 And 1970 tIon requires at least fear yearsr of approved primay lnstru,ctdol to.- end fiv--oar ve...age ending in 1975 for most rc.ast estimate. Vldes gesaral v'caIonal, or teacher training iostruotions for puplsa Genes raprofutticnrt, veaenme o agtr a vomn -ill bear usually of 12 to 17 yeara of &g.; correspondence courses are generally in her nuoa-l tepr dutlne perio If, absp*riencas present age- secluded. specifIc fertilIty rates; usually fle-ya aerages ending in 1960, Vocational enrollesnt (percent of secondary) - fiocational Lostltutiona in- 1970. d 973. dude tehlcal, industrial, or other progrsme which operate independently Famiy olcyitg -acceptors. anniual. (thasaands) - Annul number of ora dpartmanta of secondary lotiiuciOriO. acceptors of hicth-csntrol. devices under iuspicea of national. family Puooh-teacher ratio - prim."y. and secondary - Total wtudeato enrolled in piniug;og .Primary and secondary levels divided by usbers of teachers in the corres- Famly, aanulne. .. usrs (e.arcat of marri.d comae) - Per-ent.ge of epoidinglels maried -oem of child-hearing age (15-41 pears) vho use birth-control Adult literacy rcac (Percent) - Literate adults (able to read and wnts) as devices to all married somma in asame age group. a Percentage of total adult population, egd 19 years amA ovr. FM0 ANDO lfl.TVION c0wsCOaTiON Index of f pd roduction por capita (1970..100) -Index camber af par Passenger ears (par thousand population) - Passen.ger toar comprise water cars capia anual redctio of ll,food comeoditla.S. stIng less them eight personsl "exludes ambulances, hearses and military Prcactssupl oclres(renof renulrssments) - Computed from, eicle. ;aargy equivalent of met food supplies -vil.ebl. in country per capita Rladio receivers (per tho...sand tplopltIon) - All types of receivers for radio per day. vA-lblaba supplies Comprise domestic production. imports lass broadcasts to general public per thousand of porulatic,nI axcludes unlicensed mperts. and cheages in stock. Net supplies exclude animal feed. seeds. re...iveks In countri.a and In years ,'hen registration of radio sets woe Ic quatitles used in fond processing, sod losses is distribution. Re- effect; data fer recent pears nay cat be comparable since mast countriee wulemets .era estimated by tAO based on physiological needs for nor- abolished licensing. ol actitity an health considsring .evircr.encatl. temperature, body TV receivers (per thoue...d populatIon) - TV receivers for broadcast to generA "Seihts . age and see distributions of populatIon. and allo-Ieg 10 per-- public per thousand Population; excludes unlicensed TV receivers i. coon- cant for wuste at houSehold level, tries and In years shoe registration of TV set. was in effect. Par capita -upplyo proteIn lorrd:s. Pet day) - Protein content of per Nestenacer cirolation (per choosa..d population) - Sh-v the anerage circula- capita ne:sppyo food par day. et eu pply of fond ts defined as tlan of "daily general icteceet n.top.per", defined as a periodical publi- abv.Requiremnts far all countries setebllshed by USDA provida for cationt dsvoted primarily to recording general nests. It is considared to a inlau= alose aeo 60 gta.a of total protein per day end 20 gremsa be "daily" If it appeacs at least four close a ..eak. of auleau and pulse protein, of which 10 gras. should be nia protein. Cinema annual attendac net&oa capita car ceac - Baaad os the cumber of tiuketa Th'a se-ut9drd. are la.er than these of 75 grame of total protein and so ld during the pear. incloding doissiona to drive-ic cinemas. and mabils 23grams of .nina Protein as An avecage for the world, proposed by anita. peFAO in theThid 'ord d Survey. Pe tap . Ir=tl suply from animal and pulse - Proteins supply of fond DlIfV)tomn dar 1ed i-c aelna.u and pulses in grama Par day. Total labor farce (thousands) - Economically active persons. i.oluding armed CIld:lo.. _-k) mrat rt prhosn)- Annrual deaths par th.us- fortes sad unemployed but eotludieg housaives..suet,at eli and in sge group 1-4 years. to children 10 this age group. tins in various cauntries ace not Comparable. Pemle perept -Femal labor force se p.rosotase of total labor force. HLALli eiulue(Hret Labor for.. In farming, forestry, bunting san fishing Life epeectunc at birth (years) - A-nanag nunber of yeaars of life a. p-rceatage of total labor force. renicn atbirth; usually five-year averagee ending In 1960. 1970. Indouste (percent) - Labor force in minIng. co...tr-ctin. mwanufaccurieg and and 1975. eleracrtcly. v-ter and gan as perneu.ctge sf total labor farce. Infant nortalttt rata (p.r thous..And) - AnnualI deaths of infests under Particiato-rt leooS -ttal. "ae adfml oa,mlo. a.d one year 01 age per thousand lice hirhts. feaelbo oc as.percentages of their respecie Ppula tensd. Accessto sul canerfoercnt of orolaton) -total. urbc. end rural - hese are (LO's ad)tod pa rticiPation ra tes reflcIngn-e Nu.bec of ;eopl. (total, ran and. roca) wIth resonable acess tstroctarn of the pooaio.ad long tiee treed. safewter PPuppip (Incue tr seae sorfaca waters or .Ctreated hot cnotcder,ndsnn ratio - Ratio of populatioe under IS and 63 And o.. r to 0acotantvted water such ao that iron prot.cted bocaholan, nyrings. the labor force in age group of 15-h4 pears. and sanitary wellst as per-etagen of their r.oeepcti" populationa.. .0 -s urba ae a,, poblifo f ulor scadpasc loca.ted Aca.r.mn INCOME DISTRT3,TI0N theAo Ci cate~rs ftcn a h-use may bs oonaid-te as hbet8 within tea- Percentage of prln-tel. e(loth in cash end bind) r.eceivd by rIchest 5 Arnheass f Oc,t IIose.In rucl area raoAhis aoccen woul..d percent. richeuc 2i percent. poorest 20 percent. and poteat 40 perccant icblp cia:th ho tf or ember of the houohld'do ct huts tO of households. spend a t-uyroprottloata part of th. day in fetching the family's __'n, - ' ~~~~~~~~~~~~~~~POycoTyY TARi'PT CROVPS AC---. to z octa douoo~,al 'rrceic o ptutip- to-al, urban, and Isloe couepcryboeiclls ret -caital - cbhor and n-t.lI fue a P~y -l,I.t-tal, urban. otA roca I) ... led by ...tauslueromt invrtt 1is cha ioone linte h.lco whi.h a aciuui. Ouyools;rscaoutuorrsycospplttn. Rcenatricfcci.y adequate J-b- plus e.sentisl non-load reqalteeanta is not dIPoa ca oS- h oieto diaynai 1 lth owithou .fford.bl.. 11t.eonon of h--s. -nocst end osewtrby aa-on systems Esimte CoA$,opvor ee (USS .rec -ois) - urban arid rural- or the ~u f pit pliolas Aod s.lollr losal.t... lcive yan-rty Iv 1oI,u-ol 1JI that ic...e 1-n1 les. than one-third _n.: kcC t~!j cbsoa- ,P,p';itio di-J.id b, ouaoar of p ...tiulca p...a.t yero1s tons. of the -onrn- '-non, n, 4ualItod tr ..asdicl1 -ohol At unl-ratry level. -sfao#.uaas 'Iyo~t nun ee trat) - urban and rurl Pouboioc (Ir'urT.PeE-' - Popu"l.ato dividud by number of P-ttest of popuI.l.tIa (urban and ruralf ch. rO either `absoLute poor" or p-taO-cn..B or. l-nabo graduate nurses. prootiosi cre,And 'rel.ti-e poor" whi,hever is greater. tonmlo ' a d ioir Jtat IonIs  23 - ANNEX I 7581004 'Page 4 of 5 X1:vwGc 2IVfrl2fT 0414Sa -,.d L9"- L9~~~~~Ira47aea 19 874- ft...) ~ ~ ~~~~~g 4 L95 iLt 1977 1974 1908390 94 1990 1944 1? L986. i; a L. GM 2384.2 246.4. 2412.3 2737.6 2376.1 3024.3 3183.1 4137.2 531. 9 5.1 3.1x 5.1 108.8 2. G4J.. tre 7m at ted. 12.33 74.9 -467 29.8a tg 10. 23.0 -8.2 -421. -802.1. -14.1 . ., 4 3 -30*** f I.- Mg591 2378.I1 2384 24. 299. 32. 3140. 403. 163. 483.3 3.0 94.9 4. ~aa 811.1 756. 68.0o 7"43 .71 76.7I 8081.7 537.21 84.4 1288.1 3.6 4.0 33 22.3 3. b.rt - "Lj 4.70.0 307.6 337.7 353.8 3 74.4 594. 7 620.3 798. 3 1041.1 3. 7 2.83 4.9 1. 6 tp. - T if .148. 344.9 43.2 547.3 tI3 3.3 3W. s 3713 66 4.4 830 . -4. 3.3 6. 7 eooe C. - TT odJaccd 306.3 317.0 114.3 4L1 133 222 29. 1. 1. 8. 2.6.1 C...lae 2~~~~~~~~~~~~ 318.2 27. 201 2~383. 241.24 2346.4 3723.0 343.1.6 41294. L . 4.3 4., so. 9.2.e. 307.3 316.0 M5.4 34.4 4431.3 684.3 477.8 893.3 1113.0 6.3' 5.6 3.7 22.2 to. M.fLsmI uense 195.3 240.6 3us. 538.5 492,8 314.9 303.9 484.4 94.8 S 0.0 -1.4 3.7 17.8 * 1. ,a14 osrisa I411 202. 2332.3 463.2 417.4 133.3 418. 1 - 53.3 84927T -.0.7 -3.3 6. 9 16.3 12. C o ra7 243 2333. 3764.8I 3387.8 39473.9 4,323.3 400.1 0814.1 1 6043.0 (Oe.. 2 c197676 7l.c.a. L. t.-r 17.2 15.3. 13. 163I43 67 17.1 19.3 22.8a 6.0 7.7 Y 3.0 2..cuLm 38.0 40.2 402 3.3 3. 367.0 37.3 34 .3 31.4 24 3.35. 3. 1a.44.a 44.3 44.3 44.7 45.1 43.3 41.4 46.2 4.3 51.6 a. . mii (2874.76 - 201.3) 1. 7ao- 101:: :4... 99.1 90.7 122.6 127.2 129.3 132.4 133.3 177.8 243. 1 . .4.36. 2 . Ier Pric 744a 83.3 104.9 104. 7 L124.6 124.3 234.1 144.3 204.3 288.3o 8. 7. 3. fir atr,. 144 112.2 84.35 103.3 119.7 124.3 96.6 93.2 87.1 84.3 a. U2 3.41 .t..rf334 94.1 103.3 125.6 123.0 137.1 143.2 133.3 214.4 201.3 . . 7.3 3 . 4-5015 le.. ..l (M0 7. 41501.303 7.14 LO .414 8.373 16. 1974-76 1977-40 IMUtE 1. o238 3.9 4.3 4.1 4.1 2. m-n fL-C.a.LCr 1. 3.4 1.1 3.7 2. *n 0--.