Malawi - Shire Valley Agricultural Consolidation Project

FILE (, ewy Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-2302-MAI REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALAWI FOR A SHIRE VALLEY AGRICULTURAL CONSOLIDATION PROJECT May 24, 1978 This document has s restricted distribulom and my be aged by recipients enly in the performew of their efficial duties. Its centents my net otherwise be disclesed without World Bank autherlaetim. CURRENCY EQUIVALENTS Currency Unit - Malawi Kwacha (MK) - 100 tambala (t) US$1.00 M MK 0.91 MK 1.00 - US$1.10 WEIGHTS AND MEASURES 1 kg . 2.2 lb. 1 m ton - 1.1 short tons (2,000 lb) 1 ha2 - 2.47 acrei 1 km - 0.3861 mi 1 km - 0.6 mile 1 bag maize, - 90 kg (200 lb.) 1 bag fertilizer = 50 kg. (110 lb.) GLOSSARY OF ABBREVIATIONS ADMARC - Agricultural Development and Marketing Corporation CSC - Cold Storage Company EPA - Extension Planning Area FND - Foot and Mouth Disease KRDP - Karonga Rural Development Project LLDP - Lilongwe Land Development Program MANR - Ministry of Agriculture and Natural Resources MOE - Ministry of Education MOH - Ministry of Health MOWS - Ministry of Works and Supplies MYP - Malavi Young Pioneers NRDP - National Rural Development Program SVADP - Shire Valley Agricultural Development Program GOVERNMENT FISCAL YEAR April 1 to March 31 FOR OFFICIAL USE ONLY MALAWI: SHIRE VALLEY AGRICULTURAL CONSOLIDATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: Republic of Malawi Beneficiary: Ministry of Agriculture and Natural Resources Amount: US$10.7 million equivalent Terms: Standard Project The project would assist the further development of Description: Malawi's Shire Valley region and would consolidate the agricultural and infrastructural development investments made in the region since 1968. It would intensify the provision of agricultural extension services; establish an irrigated seed multiplication farm and an afforesta- tion program; provide production credit; improve livestock extension services; expand the fisheries development program; improve village health facilities and potable water supply; and extend farm to market road networks. It would provide social and infrastructural services to about 70,000 families and introduce improved farming practices, which would enable about 40,000 smallholder families in the Shire Valley to increase their annual farm income from about US$75 to US$120. The major risks facing the project are a recurrence of extreme drought conditions experienced during the implementation of the second phase, the per- formance of some recently developed project cropping packages under prevailing farming conditions, the avail- ability of an adequate number of qualified agricultural extension staff and their ability to effectively implement the "training and visit system", and the danger of new outbreaks of foot-and-mouth disease. Estimated Cost: (net of taxes) -------US$ million ------ Foreign Exchange Local Foreign Total Percent Agricultural Services 2.2 2.0 4.2 47.0 Natural Resources 0.6 0.4 1.0 37.0 Hydrology and Water Supply 0.4 0.5 0.9 57.0 Health Services 0.3 0.2 0.5 40.0 Technical Services 0.9 1.0 1.9 53.0 Administration 1.0 0.7 1.7 40.0 Contingencies 1.4 1.0 2.4 39.0 Total 6.8 5.8 12.6 46.0 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. - 11 - Financing Plan: -------US$ million------- Local Foreign Total Percent IDA 4.9 5.8 10.7 85 Government 1.9 - 1.9 15 Total 6.8 5.8 12.6 100 Estimated Disbursements: --------US$ million---------- Bank FY 1979 1980 1981 1982 Annual 4.5 2.5 2.1 1.6 Cumulative 4.5 7.0 9.1 10.7 Rate of Return: 20 percent Appraisal Report: No. 1945a-MAI May , 1978 INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF MALAWI FOR A SHIRE VALLEY AGRICULTURAL CONSOLIDATION PROJECT 1. I submit the following report and recommendation on a proposed credit to the Republic of Malawi for the equivalent of US$10.7 million on standard IDA terms to help finance a Shire Valley Agricultural Consolidation Project. PART I - THE ECONOMY 2. A report entitled "Memorandum on the Economy of Malawi" (Report No. 1677a-MAI) dated September 30, 1977 was circulated to the Executive Directors on October 10, 1977. Country data sheets are provided in Annex I. 3. At independence in 1964, Malawi was the poorest of the three terri- tories of the former Central African Federation. With a population of 5.2 million and a land area of about 118,500 square kilometers, Malawi is also densely populated. Its main assets are moderately fertile soils, good water resources and a climate favorable to crop production. Unlike its neighbors, Malawi has no substantial mineral resources. Forests constitute the main essentially untapped resource which could be exploited on a signi- ficant scale in the future. At independence, the tax base was very narrow, government revenues had to be supplemented with British budgetary aid to support the administration, and prospects for economic development were generally regarded as bleak. 4. Malawi has a GNP per capita of only US$140 and is listed by the United Nations among the world's poorest countries. Measured against the country's natural endowments, however, progress since 1964 has been remark- able. Between 1964 and 1976, GDP at constant prices grew at an average annual rate of 6.5 percent, domestic investment and savings increased rapidly, and government finances had improved sufficiently to eliminate the need for budgetary aid. Agriculture, which dominates the economy (46 percent of GDP and 40 percent of paid employment in 1976), has been directed towards export markets by encouraging cash crop estates production and integrated rural development schemes. In addition, rapid industrial development (the share of industry rose from 9 percent of GDP in 1964 to 18 percent in 1976) has significantly broadened the economic base. 5. The continuing success of Malawi's development efforts has been the result of realistic and purposeful planning by the Government. A State- ment of Development Policies (DEVPOL), which provides a general framework for three-year rolling plans, was published in 1971. DEVPOL contains guidelines - 2 - for-major economic targets up to 1980 and states as main socioeconomic objec- tives: (a) raising living standards and productivity in rural areas; (b) achieving an average annual growth of GDP of 8 percent through the parallel development of smallholder output, estate agriculture and industry; (c) promoting a more balanced regional development; and (d) developing local initiatives by gradually increasing local participation in the economy. 6. Within the public sector, agriculture will receive 19 percent, public utilities 11 percent, and social services 15 percent of total in- vestment during 1971-80. The transportation sector will receive about 29 percent, although between now and 1980 the proportion is expected to be tem- porarily higher (46 percent) because of the concentration of several large investments in those years. Malawi has an effective administration which has been quite successful in preparing and implementing development projects. 7. DEVPOL recognizes the important role of private investment in devel- opment which, it is anticipated, will account for about one-half of total fixed capital formation over the 1971-80 period. The Government also recognizes the role of a healthy private sector in generating foreign exchange and savings needed to sustain other elements of the development strategy, and has adopted policies which are intended to attract foreign investors and to ensure a con- tinued high growth of the private sector. Trade and payments policies are liberal, profits moderately taxed and wages are held down to favor labor- intensive estates and industries. The modern private sector has been the leader in economic growth. The output of estate agriculture increased by 10 percent a year in real terms over the past decade, and industrial production rose by 13 percent annually. 8. In 1969 (the last year for which reliable income data are avail- able), the poorest 40 percent of Malawi's households received 15 percent of the total; the highest 20 percent received 53 percent and the top 5 percent received 30 percent. These figures compared well with those of other develop- ing countries. Since then, the rapid development of the modern private sector has probably led to a less equitable situation. 9. To offset the adverse distributional effect of the growth of the modern private sector, the Government has directed some of its agricultural investment program toward the smallholders. However, for some years, the Government kept producer prices well below international prices until they started acting as disincentives to producers. The Government has recently recognized the importance of sufficiently remunerative commodity producer prices and has authorized substantial increases. Indirectly, wage and price policies have reduced the gap between wage earners and subsistence farmers. Over the past seven years, real wages have fallen somewhat, while the real earnings of smallholders have risen. Nevertheless wage employment has in- creased by 8 percent a year on the average since 1968. - 3 - 10. Malawvi's population is unevenly distributed, and the population pressure in some areas is heavy in relation to arable land. While recognizing the existence of this problem, the Government has been reluctant to introduce population control policies and intends to rely instead on balanced regional development policies that would encourage the movement of population to the less densely populated areas. Only about 6 percent of the total population live in urban areas. However, because of the diversification of the economy, urban population is increasing by more than 10 percent per annum, in line with the expansion of wage employment opportunities in the non-agricultural sectors. 11. As about 90 percent of the population live in rural areas, rural development is a primary social and economic objective. At present, the majority of farmers are smallholders on the fringe of the market economy. Their staple crop is almost exclusively maize, and their principal cash crops are cotton, tobacco and groundnuts. Until now, the principal instrument for increasing smallholder productivity has been relatively intensive, integrated development projects in specific areas, which at the moment reach about 25 percent of the rural population. 12. In spite of the Government's efforts, however, production from traditional agriculture has lagged behind that of the estates. Although firm figures are lacking, indications are that the production from the tradi- tional sector has not increased by much more than 3 percent a year over the past decade. The Government is concerned about this relatively slow growth and is preparing a new country-wide approach to rural development. This would be a departure from the previous approach in that it would primarily concen- trate on providing farm inputs and extension services, with less emphasis on infrastructure. The new approach - the National Rural Development Program - is to become the Government's chief vehicle for smallholder development. 13. The country's progress in generating and using domestic resources on the whole has been impressive. Both domestic savings and fixed investment have risen steadily since independence. Savings, virtually nil in 1964, were 11.5 percent of GDP in 1976, and fixed investment during the same period rose from 8.5 to 22 percent of GDP. In general, the Government's fiscal management has been skillful. By holding recurrent expenditures down and, at the same time, expanding revenues, the Government has managed to achieve small budget surpluses and to bring the domestic contribution to financing development ex- penditures, which was negative in 1964, to 27 percent in 1976. Nevertheless, the expanding level of development activities will place additional demands on recurrent expenditures, possibly limiting future government contributions to the capital budget. Consequently, there is need for stepping up domestic resource mobilization, particularly through taxation. Since 1971, the in- crease in recurrent revenue has lagged behind the increase in monetary GDP. On the other hand, the increasing tempo of development is adding rapidly to recurrent expenditure requirements. In response, the Government has increased the company tax, personal income tax and import duties and excise taxes on some commodities. Further increases, however, will be needed, both for re- current expenditures as well as to help finance future development. The Government is concerned about the problem and with Bank assistance, has initiated a study of future recurrent budget requirements. -4- 14. After serious deterioration in 1975 and 1976, Malawi's balance of payments recovered sharply in 1977. The deterioration was due principally to international inflation (and consequent deterioration in the terms of trade), exacerbated by the suspension in 1974 of the flow of Malawian migrant workers to South Africa, which drastically reduced remittances, and substan- tial capital outflows in 1975 and 1976. As a result, Malawi's foreign re- serves declined from US$82 million in 1974 to US$26 million - equivalent to about 1-1/2 months of imports - in 1976. The Government took fiscal and mone- tary measures to deal with the problem, and in 1977 the IMF made available a first tranche standby credit, equivalent to US$6.3 million. Demand for Malawi's main agricultural exports, however, continued strong, and foreign exchange reserves rose to a record level of US$88 million (equivalent to about four months of imports) by the end of 1977. 15. The expansion of the Government's investment programs has been assisted by increased public capital inflows on very concessionary terms. The net contribution from foreign official sources to the financing of public investment increased from US$17 million in 1967 to about US$45 million in 1976, of which US$11 million were in grant form. The sources also have gradually been diversified. At independence, Britain was virtually the only source; but by 1976, the British contribution had declined to about 40 per- cent. Multilateral sources, especially IDA, provided about 40 percent, and a variety of bilateral sources, notably Canada and the USA, accounted for the remainder. 16. At the end of 1976, Malawi's external public debt totaled US$343 million, of which US$258 million had been disbursed. Debt service in 1976 amounted to US$12.7 million, equivalent to about 7 percent of foreign exchange earnings. At the end of 1976, IDA's share in Malawi's disbursed debt was 28.5 percent, and servicing of IDA credits accounted for 3.2 percent of total debt service. With the continuing increase in public investment, external capital inflow is estimated to increase to about US$125 million by 1982. In the future, we may expect some hardening in the average terms of lending. However, even if the average grant element of official assistance were to fall from the 80 percent level of 1971-75 to, say, 50 percent by 1985, Malawi's public debt service obligations still would remain below 10 percent of export earnings in 1985. Because of the Government's limited ability to mobilize domestic resources for the pipeline of projects it is able to prepare and implement (para. 13), external financing usually covers a substantial part of the project cost, including local costs when the foreign exchange component is relatively small. Despite the Government's steady improvement in upping the domestic share of development expenditures (27 percent in 1976), new invest- ment is expanding more quickly than the domestic resource base. Moreover, much of the Government's development outlays is necessarily concentrated in activities not suitable for external assistance, so that the proportion of external financing in specific projects usually ranges higher than the 73 percent overall figure in 1976. In consideration of the Government's good performance in economic management and project preparation and implementation, Malawi became a blend country in 1976 when it received a Bank loan on Third Window terms. -5- PART II - BANK GROUP OPERATIONS IN MALAWI 17. Malawi has received sixteen IDA credits totalling US$122.2 million and three Bank loans totalling US$26.2 million, of which two were on Third Window terms. Of the total Bank Group assistance, US$51.8 million (35 per- cent) was for agriculture, US$37.8 million (25 percent) to power development, US$17.9 million (12 percent) to education, US$32.5 million (22 percent) for roads and the balance of US$9.0 million (6 percent) for water supply and to finance preparation of a planned pulp mill at Viphya. The first Bank loan to Malawi was made on Third Window terms in June 1976 and the first standard Bank loan in April 1977. IFC's first investment in Malawi was in February 1976 with a loan of US$6 million for a textile mill. IFC made its second loan of US$9.0 million for a sugar development in April 1977. A summary statement of Bank Group operations and notes on the execution of ongoing projects are provided in Annex II. Project implementation is generally satisfactory. 18. While Bank Group operations in Malawi will continue to emphasize rural development, infrastructure (power, water supply and roads) and educa- tion development also will receive attention. In agriculture, the first phase of the 20-year National Rural Development Program was appraised last November and a credit proposal is expected to be submitted to the Executive Directors later this year. In education, a joint sector study was recently carried out by UNESCO and the Bank. We expect to appraise a project later this year based on its results. With regard to water supply, a WHO/Bank mission visited Malawi in November 1977 to assess conditions in the sector and carry out pre- liminary project identification. Finally, the Bank Group is also assisting the Government, through a technical assistance/engineering credit, to prepare the Viphya pulp and paper project, the total cost of which is tentatively estimated at over US$500 million. Bank financial assistance for this project will be considered if the project proves to be economically and financially viable and suitable external guarantees are obtained. PART III - THE AGRICULTURAL SECTOR Background 19. In 1975/76 agriculture employed some 85 percent of the population, contributed about 46 percent of GDP and accounted for 94 percent of export earnings. The majority of the population is concentrated in the more fertile southern regions of the country. About 82 percent of the total land area is held under customary tenure, and about 2 percent is either freehold or leasehold estates or plantations; the average holding is about 1.5 hectares. Soils are relatively fertile, and the fairly reliable rainfall permits the cultivation of a variety of food and cash crops. Land conservation and main- tenance of soil fertility through the introduction of improved techniques and inputs has become increasingly important as increased food requirements for the expanding population have to be met through expanding cultivation to land areas which are more susceptible to erosion. -6- Smallholder Production 20. Smallholders, who account for 85 percent of all agricultural output, grow maize (the most important crop), groundnuts, cassava, and, to a lesser extent, rice, sorghum and wheat. Their main cash crops are groundnuts, rice, flue-cured tobacco, cotton, pulses and maize. In 1976, exports of these crops totalled US$54.3 million, or 35 percent of Malawi's agricultural export earnings. Estates produce only 15 percent of total agricultural output, but account for over 60 percent of agricultural exports (mainly tea and tobacco). Exports from estates earned US$88.0 million in 1976. 21. The Government is determined to achieve self-sufficiency in food staples and at the same time maintain agricultural exports. In the past, smallholder productivity was raised through: (i) low-cost rural development projects (mostly funded by the UK and the UNDP), and (ii) larger, integrated development programs in four specific areas; Lilongwe (supported with three IDA Credits 113, 224 and 550), Shire Valley (supported with two IDA Credits 114 and 363), Karonga (supported with IDA Credit 282, and Third Window Loan 1286), and the Lake Shore, (first financed by the Federal Republic of Germany and now by the European Development Fund (EDF)). These programs provide infrastructure such as roads, markets, water and health facilities, land improvement and conservation, irrigation, improved extension, and credit. While the programs are making a significant contribution to increased agricul- tural production, they affect only 25 percent of the rural population. Livestock 22. Malawi's total cattle population was estimated at over 700,000 in 1976, and is growing at a rate of about 5 percent per annum, with offtake rates not generally higher than 10 percent. Nine percent of the cattle are located in the Shire Valley. The cattle are raised for the most part by traditional methods, and are valued mainly as a source of wealth; livestock development is not fully integrated into the existing development programs. Government activities include the operation of a fattening ranch, the intro- duction of stall feeder schemes, and provision of artificial insemination services. With the expansion of these schemes, Malawi is now self-sufficient in better-grade beef; however, production of lowergrade beef does not meet domestic requirements. Government Agricultural Services 23. The Ministry of Agriculture and Natural Resources (MANR) is pri- marily responsible for providing services to the agricultural sector. The Ministry exercises general supervision over the activities of the Agricultural Development and Marketing Corporation (ADMARC), which buys, stores, processes and markets (both locally and abroad) all marketable cotton and tobacco. ADMARC acts as a residual buyer of smallholder produce, a large amount of which is either sold or bartered among the farmers themselves. ADMARC also implements the Government's agricultural price policy and supplies inputs to smallholders. Most cash and subsistence crop prices are established by ADMARC -7- (with the approval of the Minister of Agriculture). Another smallholder marketing institution, the Cold Storage Company, is responsible for the Government's price and stabilization policies in the livestock sub-sector. Project Area 24. The Lower Shire Valley, an elongated alluvial plain about 144 km long and 16-32 km across, covers almost 7,000 square kilometers in the southern part of Malawi. The Valley's population, about 310,000 people, live mostly on the valley floor, where population density is about 150 per square kilometer. Approximately 70,000 smallholder families live in the Project area and cultivate about 1.5 ha each from which they earn the equivalent of about US$15 per capita yearly. 25. During a six-month long wet season, the Valley receives an average rainfall of 750 mm. Its soils can support both rainfed and irrigated cropping. Cotton, maize, millet, sorghum and groundnuts are the major dryland crops. The Valley's extensive marshes and riverine flats are good natural grazing areas and support about 60,000 heads of cattle and a large goat population. Fish, mostly from the marshes, is important both for local consumption and for export to surrounding areas. 26. The recently completed bitumen road from Chikwawa to Bangula has improved travel in the valley, and an access road from the Shire highlands to the Valley, now being built, will improve it further. The Shire River is navigable as far as Chikwawa, and barges from Nchalo carry SUCOMA sugar to the railhead at Chiromo. Previous IDA-Assisted Agricultural Projects in the Shire Valley The Shire Valley Agricultural Development Program (SVADP) - Phase I 27. The Shire Valley is an economically depressed region with high incidence of disease and low agricultural productivity. Consequently, the Government has, since the late 1960's, given high priority to a comprehensive development program in the area. The first phase of this program - The Shire Valley Agricultural Development Program - Phase I (SVADP I) - began in 1968 and aimed at increasing crop production on about 50,000 ha. The project, with a total cost of US$4.6 million, was supported with an IDA Credit (114-MAI) totalling US$3.7 million. 28. The project was completed on schedule in March 1973. The comple- tion report and the performance audit judged the project to have been well conceived, effectively implemented and successful in involving area residents in the rural development effort. This provided the initial stimulus for the participation and cooperation of the people in subsequent phases. 29. The physical implementation of the project was good and appraisal targets were in most cases either met or exceeded. The credit program was effective, and a repayment rate of over 90 percent was maintained over the -8- life of the project. Extension work and crop services focused on cotton - mainly because of the lack of a suitable technical package for other crops. The appraisal target of inducing up to 4000 farmers to adopt the use of sprayers was exceeded by 30 percent. In practice, average yields of sprayed cotton were between 800 and 1,000 kg/ha compared with appraisal projections of 300 to 900 kg per ha. SVADP - Phase II 30. Because Phase I had covered only a limited geographic area, it was decided that the second project should offer a more broadly based rural devel- opment program, which would provide agricultural services and infrastructural facilities to a larger area than under Phase I. The Project was appraised in June 1972, and an IDA credit of US$10.5 million (total project cost was US$13.5 million) was approved in March 1973 (363-MAI). The credit was fully disbursed in April, 1978. The project's primary objective was to increase crop production on 52,000 ha of land. The agricultural component was expected to affect some 16,300 farmers as well as some 1,000 fishermen. 31. The infrastructural components of the project were completed satis- factorily and on schedule. However, due largely to a severe two-year drought and low producer prices, particularly for cotton, the appraisal targets for crops production were not attained. Two outbreaks of foot-and-mouth disease limited the success of the livestock development program and the project management unit did not have adequate capacity to cope with both constructing the physical infrastructure and improving the extension services. The fish- eries program attained its appraisal targets of about 8,000 metric tons in 1976. Farmer participation in the credit program remained high and, the Government supplied required additional funds. Repayment rates fell from 90 to about 45 percent as a result of the poor harvests of the drought years but have improved since the good harvest season of 1976/77. 32. If it is assumed that the results of Phase II are limited to those already achieved, Phase II would show a zero economic rate of return. It can, however, be argued that much of what has been done in Phase II has provided the basis for the proposed consolidation phase, the economic return for which is expected to be about 20 percent. When Phase II and the proposed consolida- tion phase are combined, the economic rate of return is about 8 to 10 percent. PART IV - THE PROJECT A. General Description 33. The proposed Project was prepared by the Malawi Government, with assistance from the Association. It was appraised in the field in August 1977. Supplementary Project data are provided in Annex III. The Staff Appraisal Report is being circulated separately to the Executive Directors. Negotiations were held in Washington in May 1978. The Malawi delegation was led by Mr. C. Mpande, Under Secretary, Ministry of Finance. -9- 34. The proposed Project will constitute the third phase of the Shire Valley Agricultural Development Program, consolidating the investments made and drawing on the experience gained under the program over the past five years. The Project's major objectives are to: (i) increase the number of farmers adopting improved cropping practices by about 15,000 so that some 40,000 farmers (55 percent of the Valley's smallholders) will have adopted at least some improved practices by full development; (ii) expand the area on which improved cropping is practiced from about 11,000 ha (12 percent of cropped area) to about 50,000 ha (47 percent of cropped area) by 1982/83; and (iii) provide increased social services to benefit the Valley's 70,000 families directly or indirectly. Over a four-year period, the Project will specifically: (a) establish headquarters for 5 additional Extension Planning Areas (EPAs) with the required staff housing, training and administrative facilities; (b) establish a 150 ha irrigated seed selection and multiplication farm, directed by an expanded research team; (c) continue seasonal and medium-term credit for farm and fisheries production inputs; (d) construct additional livestock markets and dips, expand foot- and-mouth disease and tsetse control, and expand the ox-training program; (e) expand the Project Management's Natural Resources Division to include a Forestry Development Unit, and continue the improvement of wildlife facilities; (f) develop groundwater resources including constructing 40 additional boreholes, carrying out a groundwater survey and providing consultants' services to review experiences gained under existing irrigation schemes and to undertake an irrigation feasibility study of the Valley; (g) continue and improve Project area health facilities; (h) complete the access road network, and maintain project roads, buildings and equipment; and (i) continue and expand the Project Evaluation Unit and finance, for two years, the position of Chief Planning Officer in the MANR. The Project will be administered by the SVADP management team, under the general direction of the Ministry of Agriculture and Natural Resources. The health component will be administered by the Ministry of Health. - 10 - B. Detailed Features Extension and Training 35. The extension system will be reorganized and intensified to provide farmers with up-to-date advice on farming practices having an immediate impact on yields. Each Technical Assistant (TA-village extension workers) will cover about 600 farm families, divided into smaller groups of about 100 families. Each TA will visit his assigned group once every two weeks. The TAs will be trained by the Project's Staff Technical Officers. The Government will, through training and recruitment, improve the present ratio of a TA to 1000 farmers to 1 to 600 (see Section 3.03 of the draft Development Credit Agree- ment). The proposed extension methodology is based on frequent farm visits and, as it is essential that field staff and their supervisors live near their work and are sufficiently mobile to enable them to function effectively, the proposed project includes provision for staff houses and vehicles. Research 36. The Project Research Unit will provide the extension service staff with relevant technological information, suitably adapted to the locality and major crop combinations of the five ecological zones identified in the Valley. All project agricultural research in the Lower Shire Valley will be directed by the Project's Senior Agricultural Research Officer, based at Ngabu, assisted by additional staff to be provided under the Project. Seed Multiplication 37. An irrigated seed selection and multiplication farm for maize, sorghum, millet, groundnuts and beans will be built at the Makanga Research Station. At full development, sales from the scheme will cover its operating costs. The formal transfer of land required for the seed farm to the control and adminstration of the project's management team is a condition of effec- tiveness of the Credit Agreement (Section 5.01 of the draft Development Credit Agreement). Credit 38. The credit scheme established under Phases I and II of the SVADP to provide credit for farmers and fishermen is maintained as a revolving fund and is sufficient to cover the borrowing expected under the proposed project. The proposed credit therefore includes financing for only the administration of the credit scheme. An estimated 30-35,000 smallholders and fishermen are expected to use seasonal and medium term credit for production inputs. Annual interest rates for seasonal credit will be 15 percent, with a 15 percent down payment, and 10 percent for medium term credit, with no down payment. Group credit started in the first phase project will be expanded under the proposed project in order to lower administrative costs and improve repayment rates; annual interest rates will be 10 percent under such loans. - 11 - Livestock 39. The livestock extension staff will be expanded to support a market- ing campaign, better disease control, and utilization of the ox-training facilities. The Project will finance an additional cattle market near Njanje and expansion of the Khaombe holding ground established under the previous project. The tsetse investigation team, established during Phase II, will be continued for two additional years. The Project will assist in financing the foot-and-mouth disease (FMD) and tryposomiasis vaccination programs which will be implemented by the Veterinary Department of the MANR with technical guidance from the Animal Virus Research Institute of Pirbright, UK. Natural Resources 40. The Land Husbandry Section will continue to monitor the ecological effects of the development program on the Valley's natural resources, and will work with the Extension Department in providing additional resource informa- tion on early cultivation, plant densities, and rotations as they affect retention of soil moisture. The Project will continue the provision of assistance to the fisheries industry through expanding and improving infra- structure, the fishermen training program, credit for boat purchases, and pollution and pesticide monitoring in order to achieve the goal of an annual catch of 12,000 metric tons. The Project provides for four boat landings, sixty fish smoking kilns and five hundred canoes. 41. The Project includes an afforestation program, to be carried out by the Forestry Unit within the Project's Natural Resources Division. The program would seek to involve the local population in the planting and care of forestry plantations. This component also includes investigation of the adaptabilities of species, increased control of forests, teaching techniques of tree management and attempts to reduce erosion problems which have arisen due to uncontrolled and indiscriminate tree exploitation. 42. The Project will complete the construction of staff houses, fencing, ditches, and boundary demarcation started in Phase II. Funds will also be provided for increasing existing overnight tourist accommodations in Lengwe National Park from the present two four-bed chalets to 5 chalets, with 17 beds, electricity, and running water. Water Resources and Health 43. An experienced hydrogeologist will be recruited to conduct hydro- logical studies, supervise the construction of boreholes and wells and deter- mine the location and availability of groundwater for public water supply. The Project will also finance consultants, satisfactory to the Association, to undertake: (i) a national study of the organization, operation and policies of existing irrigation schemes in Malawi, and (ii) a surface-water irrigation feasibility study for the Shire Valley. Commencement of (i) will be a condi- tion of disbursement for (ii) (see Schedule 1, paragraph 4(ii) of the draft Development Credit Agreement). Forty additional boreholes for village potable - 12 - water will be drilled and developed. Poor maintenance of the grounds sur- rounding existing boreholes has reduced their yields and contaminated their water. Disbursements for the proposed additional boreholes will not be approved until the Government has prepared a program, satisfactory to the Association, to involve villagers in maintenance of the areas surrounding the wells (Schedule 1, paragraph 4(iii) of the draft Development Credit Agreement). The Government has agreed to implement the program. 44. The health improvement program for the Project area will be expanded with construction of two maternity/dispensary sub-centers, and four health posts. Field latrines, and village bathing/laundry facilities will be built to support the bilharzia control program. Roads and Maintenance 45. The Project road construction program will build secondary and district roads to support agricultural development throughout the Valley. Maintenance of completed main and secondary roads will be the responsibility of the Ministry of Works (MOW). District roads will be maintained by the Project Maintenance Unit during the four-year project period and by the MOW or the district councils thereafter (see Section 3.05 of the draft Devel- opment Credit Agreement). The Project will finance construction and the purchase of road building equipment. 46. Special units, staffed and equipped under the project, will maintain and repair all Project housing, vehicles and equipment. Evaluation 47. The existing Evaluation Unit, which has an experienced field and supervisory staff, carries out annual farm surveys similar to those in the Karonga and Lilongwe projects. The Project will provide and develop a computer package program for analyzing the annual farm survey data, including the pur- chase of computer time. Close liaison will be maintained with other evalua- tion units of the National Statistics Office and the Headquarters Planning Unit to ensure uniformity in field surveys and reporting techniques. Project Administration 48. The proposed project includes a provision for eleven additional staff for the Project Manager's Office and two accountants and a procurement and stores officer for the Finance Division to handle the increased volume of work arising out of the expansion of the program into new areas. It will also finance, for two years, the services of an expatriate to serve as MANR's Chief of Planning as well as the training of a Malawian national to replace the expatriate (Section 4.05 of the Development Credit Agreement). 49. The Project also provides for staff housing, buildings, office equipment and supplies, storage facilities, vehicles and operating costs as required for each component. - 13 - C. Project Cost and Financing 50. The total cost of the proposed Project is estimated at US$12.6 mil- lion (the Project is exempt from taxes and duties), of which about US$5.8 million, or 46 percent, represents foreign exchange requirements. The pro- posed IDA credit of US$10.7 million would finance 85 percent of project costs including all foreign exchange and 72 percent (US$4.9 million) of local costs. The Government would provide the remaining 15 percent (US$1.9 million equiva- lent). This proportion of IDA financing is justified in view of the financial demands of Malawi's development program and the country's limited ability to meet them with domestic resources (paras. 13 and 16). Costs are expressed in April 1978 prices. A physical contingency of 5 percent was applied to all costs; price contingencies were applied at varying rates. Project costs include operating costs to the extent they are needed to attain higher levels of production expected under the Project as compared to those attained under previous phases of the SVADP program. The recurrent costs of providing con- tinuing services to farmers and fishermen to maintain levels of production already attained under the previous phases are not included in the project costs. The Government will finance these recurrent costs from its budget (see Section 3.01(c) of the draft Development Credit Agreement). Project-related expenditures estimated at about US$600,000 and expected to be incurred from April 1, 1978 (when disbursements for the Phase II project were completed) until the Agreement for the proposed credit is signed, are recommended for retroactive financing. D. Procurement and Disbursements 51. Procurement of vehicles, machinery and equipment (US$1.6 million) in orders of US$50,000 or over would be subject to international competitive bidding according to IDA guidelines; orders would be bulked whenever possible. Civil works and boreholes (US$1.5 million) which, due to their small sizes and dispersed locations, would not attract international competitive bidding, would be constructed after local competitive bidding, or by force account. Purchase of office equipment (US$15,500) would be subject to local competitive bidding in accordance with existing government tender procedures, which are satisfactory to IDA. 52. Proceeds of the credit would be disbursed on the following basis: (i) 100 percent of foreign costs of internationally recruited personnel and consultants; (ii) 100 percent of foreign expenditures for vehicles and equip- ment if directly imported or 85 percent if imported and purchased locally; and (iii) 85 percent of total costs of civil works, operating costs of vehicles and machinery and local personnel. A schedule of estimated dis- bursements is in the Credit and Project Summary. - 14 - Project Implementation 53. The Project would be implemented by the existing SVADP management team, supplemented by additional local staff to be recruited (para. 48). No substantive changes are envisaged in the existing organizational structure. The Project Manager would continue to be responsible to the Permanent Secretary of MANR, who would provide overall policy guidance for the program. The Pro- ject Manager's office would oversee the four main operational divisions (Agri- culture, Natural Resources, Finance, Technical) and the Ancillary Services Division. The health component would be administered by the Ministry of Health. ADMARC would oversee construction of the markets and input stores. The seven top management posts will continue to be filled by suitably qual- ified personnel and any replacements would be selected after consultation with the Association. The Government will also prepare a program in consultation with the Association for the training of Malawians to replace all the expat- riates by 1982 (see Section 4.03 of the draft Development Credit Agreement). E. Environmental Effects 54. The Natural Resources Division of the Project Unit would monitor the environmental effects of the Project on the Shire River and its major tributaries. The Forestry Unit would enforce measures to control erosion and river siltation caused by forest cutting and cultivation of the escarpments surrounding the Valley. SVADP-related activity has been centered mostly on the Valley floor, to minimize erosion problems developed by cultivation of the hills. F. Production, Markets and Prices Crop Package 55. In addition to improved drought-resistant cereal varieties, the package includes pest control measures and moisture conserving land prepara- tion methods. The recommended crops are traditional in the various regions. Adoption of the basic package will only require farmers' acceptance of rela- tively simple changes in their present methods and minimal additional cash outlays. Improved drought-resistant varieties of cereal grains seed will be selected and multiplied to meet project needs on the proposed irrigated seed selection and multiplication farm at Makanga. Production of seed for sale to project smallholders is projected to increase by 25 percent reaching 225 tons of maize, 225 tons of sorghum, 70 tons of millet, 62 tons of groundnuts and 119 tons of beans in 1981/82. 56. Yields of cereal grains are expected to increase by about 35 percent and those of cotton to double. Additional crop production in the Project area will come primarily from increased yields, as the total areas planted will - 15 - remain fairly constant. The area in which improved farming practices are used is projected to increase from 11,000 ha to about 50,000 ha at full development. On this assumption, incremental production of the major crops attributable to the project would be 4,300 tons of cotton, 8,200 tons of maize, 1,600 tons of sorghum and 2,800 tons of rice at full development. 57. The proposed improvements in extension, marketing facilities and control of FMD and tryposomiasis coupled with the growing demand for young feeder cattle, are expected to raise cattle sales steadily. Annual offtake should increase from the present 9 percent (5,400 head) to 12 percent (8,800 head) at full development. Without the project, uncontrolled herd growth could lead to serious feed shortages and consequently higher mortality and lower reproductive rates. With the proposed support for fishermen training, the establishment of modern smoking kilns and the construction of additional boat landings, fish output should increase by 2,700 tons per annum during the next four years (an increase in the order of 30 percent). Marketing 58. Rising demand in the Valley and adjacent regions is expected to absorb the Project's entire output of food, meat and fish. Since the Valley is deficit in cereal grains, the increased production from the improved maize and sorghum varieties to be introduced by the Project would reduce the deficit, and provide an improved diet for the Valley population. Meat sales have been steadily high, with good demand from buyers from outside the Valley who pur- chase both slaughter and feeder stock. Sales of smoked fish from modern kilns have also been strong, with a steady demand by traders inside and adjacent to the Valley. Cotton produced in the Valley, which is a high grade, strong, medium-to-long staple, is expected to be exported without difficulty, and, because of its superior quality, brings about a 10 percent premium over similar grades on the world market. 59. ADMARC maintains a well established network of 43 markets in the Shire Valley, an average of one per 1,500 farm families, over 90 percent of whom live within three miles of a market. Cotton prices are fixed country- wide with the two-fold objective of insuring a reasonable return to the farmer and earning surpluses to support national development programs. ADMARC announced a 3.3 tambala per kg, (or 17 percent), price increase for seed cotton just prior to the 1977/78 planting season, and recent information from the field indicates an increase in plantings. In 1977, ADMARC's purchasing prices were MK 140 and MK 51 per metric ton for cotton and maize respectively. 60. Livestock are marketed at regular public sales located in centers of livestock concentration. Sales are supervised by the Veterinary Department of MANR. The auction markets function effectively, and demand has always been high for Valley animals because of their size and generally good body condi- tion. Selling prices are calculated on actual liveweight of the animal before it enters the auction, and range from 6 tambala per kg to 7 tambala per kg (i.e. above the announced government floor prices, of 5 tambala per kg for commercial, and 4 tambala per kg for standard grades). - 16 - 61. Seventy percent of the annual fish catch is consumed locally, and the balance sold to traders from areas adjoining the Valley. With the use of modern fish smoking kilns, demand for the traditional catch has increased, so that a kilogram of smoked fish now sells at 24 tambala (compared to 7 tambala for unsmoked and 20 tambala for traditionally smoked fish). G. Benefits and Risks 62. The Project will provide rural development services and agricul- tural production assistance to nearly all the 70,000 families in the project area. About 55 percent of these farmers will benefit directly from improved and intensified extension and training services. Incremental production would range from about 47 to 72 percent depending on the ecology of the zone. Smallholder families who adopt the improved farming practices could, by full development, increase their annual incomes from about US$75 per family at present to about US$122. 63. The Government will not be able to recover fully the on-going ex- penditure under this Project. After Project completion, and excluding debt service, the annual cost to Government to maintain the level of extension and other services would total about MK 0.53 million, amounting to a cumulative deficit of MK 8.99 million (US$9.88 million) in 20 years. In establishing the Government's cash flow, ADMARC's profits are assumed to be benefits to the Government and have been calculated on the basis of actual average profit on cotton purchases over the last five years. Farmers' contributions to Govern- ment revenue through indirect taxes resulting from increased income are expected to be insignificant and have not been taken into account. The issue of cost recovery and Malawi's capacity to sustain projects with extensive service components is to be addressed on a national basis in the context of the proposed NRDP, which was recently appraised and which is expected to be submitted for consideration of the Executive Directors later this year. Any policies adopted for cost recovery under the NRDP will also apply to this project (see Section 3.10 of the Credit Agreement). 64. At full development (1982/83), the annual value of incremental crop production attributable to the Project would be about US$1.5 million. Seed cotton, cereal grains, groundnuts and beans have been valued at export parity prices; brewing sorghum, until now an imported commodity, has been valued at its import parity price. Local market prices have been applied to fish and beef. In addition to the quantifiable benefits, the population of the Valley would benefit from improved potable water supplies, health facilities and roads, and a larger supply of firewood. 65. The overall economic rate of return (ERR) of the Project over 20 years would be 20 percent. The overall ERR of the Project and its predecessor Phase II combined would be 8 to 10 percent (para 32). A number of significant risks face the Project: (i) Although the drought-resistant cereal varieties - 17 - have been widely tested, they have been grown by farmers in only a limited area, and only widespread use under varying weather conditions can furnish a true test. (ii) Based on the long-term projections of rainfall in the Valley, crop yields under the proposed project have been calculated on the basis of a dry year every four years. No allowance has been made for a repeat of the two consecutive exceptionally dry years encountered during the implementation of Phase II. (iii) Given its innovative nature, the extension, training and visit system may encounter unforeseen problems. And (iv) the vaccination program proposed to control foot-and-mouth disease may not reach all the cattle which move in and out of the Valley. These uncertainties and the limited progress in building up production under the previous phase led to a cautious approach in designing this Project. If increases in yields were reduced from 40 percent to 25 percent, the ERR would fall to 17 percent. A 25 percent reduction in all benefits would yield a 12 percent rate of return, and a 10 percent increase in the rate at which farmers adopt improved practices would result in a 25 percent rate of return. These figures all assume a zero price for labor; if the minimum wage is used for pricing labor during the peak-labor-demand cotton picking period, the rate of return is reduced by 2 percent. 66. For crops alone, the Project would increase productive employment by 22 percent, equivalent to about 2.0 million mandays of work or about 7,500 permanent unskilled workers. Except for a short peak period during cotton harvest, these requirements could be met from the existing local population. Alternative labor opportunities in the Valley have declined in recent years, due to the completion of the main highway and most SVADP civil works and to the suspension of recruitment for South African mines. PART V - LEGAL INSTRUMENTS AND AUTHORITY 67. The draft Development Credit Agreement between the Republic of Malawi and the Association, and the Report of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. - 68. Special conditions of the Project are listed in Section III of Annex III. (a) An additional condition of effectiveness is that about 150 hectares of land at the Makanga Research Station be transferred to the con- trol and administration of the Project's management team (Section 5.01 of the draft Development Credit Agreement). (b) Conditions of disbursements are that: (i) disbursements will not be made for the Shire Valley irrigation feasibility study until the study of experiences under existing irrigation schemes has been started (Schedule 1, para. 4(ii) of the draft Development Credit Agreement), and (ii) disbursements will not be made for boreholes until the Borrower has prepared a program satisfactory to the Association to involve villagers in the maintenance of boreholes and their surroundings (Schedule 1, para. 4(iii) of the draft Development Credit Agreement). - 18 - 69. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 70. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President Attachments May 24 , 1978 - 19 - ANNEX I TABLE 3A MALAWI - SOCIAL INDICATORS DATA SHEET LAND AREA (THOU KM2) ------------------ TOTAL 118.5 MALAWI MOST RECENT REFERENCE COUNTRIES (1970) AGRIC. 41.2 1960 1970 ESTIMATE SOMALIA TANZANIA SWAZILAND * GNP PER CAPITA (US$) 40.0 70.0 140.0o 80.0 100.0 / 210.0 POPULATION AND VITAL STATISTICS POPULATION (MID-YR. MILLION) 3.5 4.5 5.2 2.8 12.9/a 0.42 POPULATION DENSITY PER SQUARE KM. 20.0 38.0 44.0 4.0 14.0 24.0 PER SQ. KM. AGRICULTURAL LAND 92.0 114.0 126.0 9.0 25.0 /a 30.0 VITAL STATISTICS CRUDE BIRTH RATE (/THOU, AV) 49.0 49.3 47.7 47.7 50.5 50.3 CRUDE DEATH RATE (/THOU,AV) 30.6 29.1 23.7 23.8 23.0 24.6 INFANT MORTALITY RATE (/THOU) 142.0 .. 160-165/b LIFE EXPECTANCY AT BIRTH CYRS) 35.0 38.5 41.0 38.5 41.8 41. GROSS REPRODUCTION RATE 3.2 3.2 3.2 3.0 3.2 3.5 POPULATION GROWTH RATE (%) TOTAL 2.2 2.6 2.4 2.4 3.0/a 2.7 URBAN 5.5 5.0 5.3 6.1 5.6 13.6 URBAN POPULATION (% OF TOTAL) 4.4 5.6 6.4 25.6 Sb 10.3 AGE STRUCTURE (PERCENT) 0 To 14 YEARS 42.9 43.9 45.4 46.5 44.4/b- 46.SLa 15 TO 64 YEARS 53.2 52,1 51.3 51.6 53.0/b 49.1/a 65 YEARS AND OVER 3.9 4.0 3.3 1.9 2.6/- 4.3, AGE DEPENDENCY RATIO 0.9 0. 0.9 0.9 o.g/b ECONOMIC DEPENDENCY RATIO 1.0/a 1.2/a 1.2/ b 1.2/b FAMILY PLANNING ACCEPTORS (CUMULATIVE, THOU) USERS (% OF MARRIED WOMEN) EMPLOYMENT TOTAL LABOR FORCE (THOUSAND) 1700.0 2000.Q 2300.0 1100.0 5600.o/a b 180.0 LABOR FORCE IN AGRICULTURE (%) 93.0 69.0 85.0 02.0 91.OIa.b 86.5 UNEMPLOYED (% OF LABOR FORCE) 20.0 INCOME DISTRIBUTION % OF PRIVATE INCOME REC'D BY- HIGHEST 5% OF HOUSEHOLDS 29.5 33.5 HIGHEST 20% OF HOUSEHOLDS 52.9 63.3 LOWEST 20% OF HOUSEHOLDS 5.7 2.3 LOWEST 40% OF HOUSEHOLDS 15.0 7.6 DISTRIBUTION OF LAND OWNERSHIP % OWNED BY TOP 10% OF OWNERS % OWNED BY SMALLEST 10% OWNERS HEALTH AND NUTRITION POPULATION PER PHYSICIAN .0 21420.0 21570-01A 8100.0 POPULATION PER NURSING PERSON 3260.O/C 4890.0/a POPULATION PER HOSPITAL BED 40.0/A 760.0 560.0 700.0/a 300.0 PER CAPITA SUPPLY OF - CALORIES (% OF REQUIREMENTS) 66.0 103.0 103.0 60.0 73.0 00.0 PROTEIN (GRAMS PER DAY) 50 14 68.4 57.0 43.0 -OF WHICH ANIMAL AND PULSE 6.0 9.o/b DEATH RATE (/THOU) AGES 1-4 EDUCATION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL SECONDARY SCHOOL t.0 2.0 3.0 5.0 3.0 10.0 YEARS OF SCHOOLING PROVIDED (FIRST AND SECOND LEVEL) 14.0 14.0 14.0 12.0 13.0 12.0 VOCATIONAL ENROLLMENT (% OF SECONDARY) 24.0 3.0 8.5 10.0/c 2.0 ADULT LITERACY RATE (%) 22.0 50; 30.0 HOUSING PERSONS PER ROOM (URBAN) 1.9/c I.7 OCCUPIED DWELLINGS WITHOUT PIPED WATER (%) 78-0/cd 30.0 /b d ACCESS TO ELECTRICITY (% OF ALL DWELLINGS) is.o/c RURAL DWELLINGS CONNECTED TO ELECTRICITY (%) CONSUMPTION RADIO RECEIVERS (PER THOU POP) 9.0/d 20.0 26.0 19.0 11.0 74.0 PASSENGER CARS (PER THOU POP) .. 2.0 2.3 2.0 3.0 10.0 ELECTRICITY (KWH/YR PER CAP) 10.0 32.0 56.0 10.0 31.0 NEWSPRINT (KG/YR PER CAP) 0.05 0.06 0.2 0.1 SEE NOTES AND DEFINITIONS ON REVERSE - 20 - ANNEX 1 NTgS Unlees otherwise noted, da', for 1960 refer to any ysar bewen 1959 and 1961, for 1970 between 1969 and 1971, and for Most Recent Eetiate between 1973 end 1976. * Swaziland has been selected as an objective country bacause the econoic etructure of both countrie are quite similar. MALAWI 1960 /e Ratio of popolation nder 15 and 65 and over to total labor force; /b 1963 /c 1961-63; /d Inciuding data for So-thero Rhodesia and Zabie. 1970 la Ratio of population under 15 and 65 and over to total labor force; /bk 1964-66; /c 1967; /d Urban only. MOST RECENT ESTIMATE: /a Ratio of population 15 and 65 and over to total labor force. SOMALIA 1970 /a Ratio of population under 15 and 65 and over to total labor force; /b Urban only; Le Including midwives and assistant nurses; /d 1964-66. TANZANIA 1970 /a Malane.d Tanoania; /b 1967; le 1965; /d a percentage of urban households. SWAZILAND 1970 la 1966; /b Ratio of population under 15 and 65 and over to total labor force. R11, April 17, 1979 DgINITIONS OP SOCIAL INDICATOMS Land Are (thou k) popolation per nursing person - Population divided by number of procticing Total - Total urface area comprising land aea and inland watere. ale end fmaa greduate our.es, "trained" or "certtfied nurs, and ric. - Most recent estiate of agricultural area used te=porarily or pera- auxiliary personnel with training or experience. nently for crops, pature., market & kitchen gardens or to lie fallow. Population per hoapital hed - Population divided by numher of hospital bada vaIlabla in public and private general and apecialixed hospital and CNP er capita (US$) - GNP per capita entimåtes at current market prices, rahabilitation centers; excludes nuraing honns and establishments for calculoted by sam conversion method as World Bank Atlas (1974-76 basis); custodial and preventive care. 1960; 1970 and 1976 data. Per capita supply of calorien (% of requirements) - Computed frn, energy nquivalent of net food nupplies aveIlsble in country per capita per day; opulation and vital atatistics avsfl.ble supplie compris. domestic prodotion, imports le eports, and opulation (mid-year nillion) - A. of July first: if not evailable, overage chnge in stock; net supplies exclude animal feed, seds, quantitie used of two end-year estimat.a; 1960, 1970 and 1976 date. in food procesaing and losse in distribution; requirements were estimated by FAO based on phyiological anede for normal activity and health conaid- Poplatio den.Ity - per -quare km - Mid-year population per square kilometer ering envlronental tenperature, body weights, agn and sex distributions of (100 hectares) of totel oroa. poPularion, and Ulwing 10% for wasta ut household leval. Pop,ution density -er squae of anri. land - Computad aa abovs for Per capit su,ply of protein (graes pr dar) - Protein contet of per nepitu agricultural land only. set aupply of food per day; net supply of food is defined s above; require- ent for all countries eaablished by USDA Econonic Research Services Vital tattatics provide for a minimum allowance of 60 gras of total protein per day, and Code birth este per thousand, everuge - Annual live births per thousand of 20 gras of anfial and pulan protein, of which 10 grann ahould be animal mid-year population; tan-yar _rithmetic averege ending in 1960 and 1970, protein; these etandard. are lower than those of 75 gras of total protein and five-yraraverage ending in 1975 for nuet recent entimete. and 23 grass of animal protein an an average for the world, proposed by FAO Crode doath rat per thousand, avorage - Annusl deathe per thousand of mid-year in the Third World Food Survey. population; ten-year arithmetic averagce ending in 1960 and 1970 end fiva- Per ,apita protein supply fro= animal and pulse - Protein supply of food yer averago ending in 1975 for nset recent estimte. derived fr le niale and pulses in gra per day. Infant mortalitv ram (/thou) - Annual deatha of infante under one year of ege Death rate (/thou) agna 1-4 - Annual deathe per thouand in agn group 1-4 per thousand live birth.. years, to children ln this age roup; soggeoted as an indicator ef LSfe expe.ctacy ot birth (yr) - Average number of years of life remaining at malnutrition. birth; usually five-ya r eve raga ending in 1960, 1970 end 1975 for develop- ing coutries. Education .iros reproduction rutr - Averaguexber of livn daughters a vaan will bear Adluted vnrollsent ratio - riary achool - Enrollmet of all agne s per- ln bor normal reproductive perird if ahe a.perienes present age-epecifi. centage of primary schonl-age population; includes children aged 6-11 years fertility ratrs; usually five-year averagem ending £n 1960, 1970 and 1975 but adjusted for different length of primary edocatin; for countries with for developing countries. univernal education, aerollesent may exceed 100% eince soam pupil. ore belo Population growth rate (%) - total - Compound annual groth rara of mid-year or ove the official .chonl ags. populution for 1950-60, 1960-70 and 1970-75. AdJusted erollset ratio - secondary school - Compued as above; secondary Popultion growth rate (%) - urban - Conputed like grovth rate of total education requires at least four years of approved primry instruction; population; different definitions of urban anas may affect cmparbillty of provides general, wocational or teacher training instructions for puplle data among coute, of 12 to 17 years of *ge; corre.pondene courses are generally excluded. Urban popuation (% of total) - latio of urban to total population; different Year. of schooling provided (fint and second levels) - Total years of definition& of urban areea my affect cofperability of data among countries. schooling; et accondary level, vonational inatruction my be partially or cmplstely excluded. as atructure (percent) - Children (0-14 years), workieg-age (15-64 years), Vocatinal enrollment (1 of secondary) - Vocational institutions include and retlrd (65 years and over) as perentagesa of eid-year poletin. mechelncal, industrial er other progras which oper.te independently or as Age dependency ratio - Ratio of population under 15 and 65 und over to those department. of secondary institutions. of egon 15 through 64. Adolf literacy rt f!) - Literate adult (able to med end writa) as per- T.conomic dependsncy ratio - Ratio of population under 15 and 65 and over to nentage of eotal adult population aged 15 years and over. tho lahor force lo ego group of 15-64 years. Family plenning- aceptern (cumulative, thou) - Cuulative nuber of acceptor Housing of btrth-control devioea under asples eP national famly planning prograz Person er ros (urban) - Average number of persons per roato nocupied sone inception. conventional dwellings in urban area; dwellinga exclude non-permanent family planning- uss ( of maeried vonen) - Percentage af iarried wamn of structures and unoccupied parta. child-bearing age (15-44 years) who ue birth-cntrol devices to all married Occupied dwellings withour pead water 1) - Occupied coveotional dwellings womninoaome ugn group. le urban and crol area i ithout inid. nr outside piped reter facilities ss percentage of all occupied dwllings. E,ployamn 6ccess to jltricity fl of all dwelling) - Conventional duelling with Total lahor force (thousand) - Economically active pernas, including srund electricity in living qu-ters as percent of total dvellinge in urban and forces and unemployed but excluding houewives, atudents, etc.; definition rural Mreas. in various countries arn not comparable- Rural dvelling connected to lectricity () - Compured a aboa for rural Lebor force in agriculture () - Agriculturl labor facn (in faring, foretry, dwellinge only. huontig ord fisbing) es pecenrage of total labor fon. Uncployd (l of labor force) - Un-sployed are usually defined es persons who Coneumption are able and willing to take a jOb, out of a job on e given day, rmaied out Radio receivere (per thou pop) - All types of receiver for radio broadca.s of a job, ord se.king work for a specified mniom period sor exceeding na to general public per thousand of population; excludes unlicensed receivers ke; may not be canparable between countries du* to different definitiona in eountrie and In years when registration of radio ses was in effeet; of uneployed and source of dato, n.g., spoymeent office setatistica, ospls data for recent years may not be camparable sinca ~ost countris oboltshed surey., cmupolsory unploymet isuranca. licenaing. Passnger care (pnr thon non) - Passenger care comprise noror car seting Irn distributbon - Percentage of privata incm~ (both In ces end kind) lena than eight penson; sxclude sombulances, hearaes and military roceived by richeat 5%, riche.t 20%. poorest 20%, and pooret 40% of hous- vehicls. hold. Electricity (khb/,r par cap) - Annual coanumption of industrial, camercial, i.trbutin of fond on-hIp - Parceotagan Of lund ownd bywealthlmet 101 public end privata electrietty in kilatt hours per capita, geserally by h sd n production data, vithout allowance for losses in gride but allow- and pooret 10% of land oer. ing for importe and expores of electricity. Neweprint <ki/yr per con) - Per capita annual consmeptimon in kilogras Health ord Nutrition stimated fru domesttc production pius nut imnports of newspeint. Populatio er physician - Population divided by nsmber of practicing phyiiano qualifiad frun a medical school at univer.tty laval. - 21- ANNEXI ECONOMIC INDICATORS GROSS NATIONAL PRODUCT IN 1976 ANNUAL RATE OF CROWTH (%, constant Prices) US$ M1n. % 1964-75 1976 CNP at Market Prices 687.8 100.0 6.5 0.9 Gross Domestic Investment 123.4 17.9 11.5 -38.5 Gross National Savings 60.0 - 8.7 14.0 -22.0 Current Account Balance -63.4 -9.2 Exports of Goods, NFS 202.6 29.5 7.5 6.6 Imports of Goods, NFS 246.4 35.8 6.7 -18.7 OUTPUT, EMPLOYMENT AND PRODUCTIVITY IN 1976 Value Added Labor Force V. A. Per Worker US n. 1 Thousand % US$ M1n. % Agriculture 311.4 46.2 1300 85.3 239.5 54.1 Industry 121.5 18.0 75 4.9 1620.0 ,366.2 Services - 241.8 35.8 150 9.9 1612.0 364.4 Total/Average 674.7 100.0 1525 100.0 424 4 100.0 GOVERNMENT FINANCE - Central Government K M1n % of GDP 197S76 ' 1975/76 1972/73-1974/75 Current Receipts 89.7 15.2 15.4 Current Expenditures 84.4 14.3 14.9 Current Surplus 5.3 0.9 0.5 Capital Expenditures 70.0 11.9 7.6 NOTE: All conversions to dollars in this Annex are at the average exchange rate prevailing during the period covered. 1/ Total labor force defined as male population between 15 and 60 years of age pJus women actually splad. 2/ TILe fiscal year i from April to Yarch; the rDP has b-ern adjusted accordingly. not available not applicable ANNEX I - 22 COUNTRY DATA - MALAWI 1/ MONEY, CREDIT and PRICES 1972 1973 1974 1975 1976 1977 June (Million K outstanding end period) Money and Quasi Money 62.9 84.6 115.7 122.4 121.0 146.8 Bank Credit to Public Sector 11.1 12.1 20.0 67.4 88.1 93.2 Bank Credit to Private Sector 35.6 33.0 49.4 56.1 76.5 89.2 (Percentages or Index Numbers) Money and Quasi Money as 2 of CDP 16.9 21.1 23.8 21.4 18.7 General Price Index (1970-100) 112.1 117.8 134.6 150.5 163.8 Annual percentage changes in: General Price Index 3.6 5.1 14.3 11.8 8.8 Bank Credit to Public Sector 136.2 9.0 65.3 237.0 30.7 Bank Credit to Private Sector 1.4 -7.3 49.7 13.6 36.4 BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1974-1976) U5$ Hln % 1973 1974 1975 1976 Tobacco 59.1 42.0 (Millions US$) Tea 24.9 17.7 Groundnuts 8.7 6*2 Exports of Goods, NFS 122,1 151.7 179.4 202.6 Sugar 14.7 10.4 Imports of Goods, NFS 167.6 214.1 284.0 246.4 All Other Comodities 33.3 23.7 Resource Balance -45.5 -63.4 -104.6 -43.8 Total 140.7 100.0 Interest Payments (net) -3.6 -4.0 -5.4 -5.5 EXTERNAL DEBT, DECEMBER 31, 1976 Other Factor Payments (net) 4.6 18.8 17.3 -14.2 Net Current Transfers 7.1 .5.7 6.1 5.5 US$"In Balance of Current Account -37.4 -41.9 -86.6 -58.0 Public Debt, incl. guaranteed 258.1 Direct Private Foreign Investment 11.4 14.9 9.9 8.2 Non-guaranteed Private Debt Net MLT Borrowing Total Outstanding & Disbursed Disbursements 25.8 37.4 42.3 34.0 Amortizations 2.4 2.6 2.9 3.3 NET DEBT SERVICE RATIO for 1976 Subtotal 23.4 34.8 39.4 30.7 % Public Debt, incl. guaranteed 6.2 Other Capital (net) 25.3 1.6 -17.9 -30.1 Non-uaranteed Private Debt Increase in Reserves (+) 33.3 16.4 -47.1 -38.3 Total Outstanding & Disbursed Gross Reserves (end year) 66.7 81.8 65.5 26.2 Petroleum Imports 11.2 17.9 22.9 26.1 Petroleum Re-exports 2.1 1.0 - - RATE OF EXCHANGE IBRDIDA LENDING, (April 30, 1978) (Mln US$) 1975 1976 Jan.-July 1977 July 1977 IBRD IDA US$ = K .6662 .9130 .9080 .8998 KI = US$ 1.1545 1.0953 1.1013 1.1114 Outstanding & Disbursed 3.4 82.6 Undisbursed 22.8 39.4 Outstanding incl. Undisbursedl 26.2 122.0 1/ IMF, International Financial Statistics, June 1977 May 24, 1978 - 23 - ANNEX II THE STATUS OF BANK GROUP OPERATIONS IN MALAWI A. Statement of Bank Loans and IDA Credits (as of April 30, 1978) Amount US$ Million (less cancellations) Bank (incl. Loan or Third Credit No. Year Borrower Purpose Window) IDA /1 Undisbursed Eight Credits have been fully disbursed 58.0 - 282-MAI 1972 Republic of Agriculture- Malawi Karonga 6.6 0.4 S-17-MAI 1974 " Transport engineering 2.0 0.4 and Services 523-MAI 1975 " Second Highway 10.0 4.1 550-MAI 1975 " Agriculture- 8.5 2.4 Lilongwe III 590-MAI 1976 " Education II 11.6 9.5 1286T-MAI 1976 " Agriculture- 9.2 - 5.8 Karonga II 1388-MAI 1977 "/ESCOM Third Power 9.0 9.0 1387-T-MAI "" 8.0 8.0 691-MAI " 8.0 5.1 711-MAI 1977 Water Supply 7.0 7.0 758-MAI 1978 Third Highway /1 10.5 10.5 TOTAL 26.2 122.2 62.2 of which has been repaid - 0.2 Amount sold ............. - - of which Repaid TOTAL now held by Bank and IDA /2 26.2 122.0 TOTAL Undisbursed 22.8 39.4 62.2 /1 Not yet effective. /2 Prior to exchange adjustments. - 24 - ANNEX II B. Statement of IFC Investments (as of February 17, 1978) Year Borrower Type of Investment Loan Equity Total 1976 David Whitehead and Sons Textile Mill 6.0 - 6.0 (Malawi) Ltd. 1977 Dwangwa Sugar Corporation Ltd. 9.0 9.0 Total gross commitment 15.0 15.0 Less: cancellations, terminations re- payments and sales Net Held by IFC 15.0 15.0 Total undisbursed 11.0 11.0 C. Bank Projects in Execution 1/ Credit No. 282-MAI Agriculture - Karonga Development Project; US$6.6 million credit of January 26, 1972; Date of Effectiveness: August 14, 1972; Closing Date: December 31, 1978 Over 4 years (reduced from 5) the project would establish 1,000 ac irrigated double cropped rice, 5,500 ac rainfed rice and improved cultivation of maize, cotton and ground nuts on about 7,800 ac of existing smallholder farms and livestock development. In addition it would provide for the con- struction of a lake terminal, the provision of a barge, and extensions to a district hospital and other health services. Due to cost escalation the project period has been reduced from five to four years. Only minor reductions of physical targets have occurred. Completion of the irrigated double cropped rice scheme, reduced from 1,500 ac to 1,000 ac was delayed due to exceptional flooding. Extension and research are working satisfactorily. All necessary staff for the health component are 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution, and in particular to report any problems which are being encountered and the action taken to remedy them. They should be read in this sense, and with the understanding that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution. - 25 - ANNEX II in post and bilharzia control is now a continuous program. Lake transporta- tion has been generally improved, but the barge purchased under the credit and put in operation in early 1976 proved defective and is currently being repaired. In addition, IDA has agreed to use project funds to raise a jetty at Chilumba harbour by 2 feet to avoid flooding caused by high tides. Design work has been completed and tendering is now underway. The original closing date has been postponed by one year to December 31, 1978 to allow sufficient time to complete these works. A Project Completion Report is under preparation. Credit No. 363-MAI Agriculture - Shire Valley Development Project Phase II; US$10.5 million credit of March 28, 1973; Date of Effectiveness: April 27, 1973; Closing Date: December 31, 1978 The project is a continuation and expansion of the program completed under Phase I and includes extension services, credit and marketing facili- ties, a livestock component, health facilities, fisheries development, feeder road construction, research on irrigated and rain-fed crops, land registration and wildlife protection. The non-agricultural components of the project - housing, water, health, roads and fisheries - have been implemented satisfac- torily. A senior health officer for the health component assumed duties recently and is now working on the operational health program. During 1976, IDA assisted the Government in reviewing the cropping program in detail and a revision of the production targets has been made. Due to a combination of technical and economic factors, crop output is lower than envisaged at appraisal. This problem has been examined in the context of the consolidation phase which is the subject of this report. Credit No. S-17-MAI Transport Engineering and Services Project; US$2 million credit of June 13, 1974; Date of Effectiveness: August 28, 1974; Closing Date: June 30, 1978 The project will help determine the infrastructural requirements and provide technical assistance for the exploitation of the Viphya forest resources. Necessary transportation studies and the design of the required transport facilities have been completed. Part of the credit proceeds that are still available are being used to finance consulting services to update prior studies and to assist in putting together a financial package for the proposed mill. Credit No. 523-MAI Second Highway Project; US$10.0 million credit of December 19, 1974; Date of Effectiveness: February 21, 1975; Closing Date: June 30, 1978 The project consists of (i) reconstruction to two-lane bituminous paved standard of the Lilongwe-Kasungu road (about 73 miles), including bypass around the Lilongwe industrial area and reconstruction of the Ligadzi bridge; and (ii) a pilot program to improve the development and maintenance - 26 - ANNEX II of district roads. Construction works for the main road, some 8 months behind schedule, are about 80 percent completed and savings of approximately US$3.0 million are currently expected for this project component. First results from the pilot program for district roads improvement and maintenance submitted to the Association in March 1977 indicate clearly that the program has been successful and that it is feasible to extend it to other districts. It is proposed that savings from the reconstruction component be used to extend the pilot program to seven additional districts. Credit No. 550-MAI Agriculture - Lilongwe Land Development Program Phase III; US$8.5 million credit of May 27, 1975; Date of Effective- ness: August 12, 1975; Closing Date: June 30, 1979 The project will continue extension, farm credit and infrastructure maintenance for previously established units and expand the program to cover an additional 210,000 ac. The project will provide for the construction of 15 unit centers with associated investments; survey and demarcate about 200,000 ac; continue development of the Dzalanyama ranch; introduce poultry and egg production and dairy development; expand and improve health facilities; and carry out project evaluation and future project preparation. The project infrastructure is now almost on schedule. Due to reduced input use as a consequence of last season's high fertilizer prices and adverse weather con- ditions, average maize and groundnut yields were lower in 1976 than in the preceding year. However, overall production of high value crops such as tobacco and groundnuts has increased considerably. The stall feeder and poultry programs are expanding rapidly, contributing to sizeable income increase of small farmers. Credit administration and loan repayments con- tinue to be outstanding. A consolidation phase of the project is under appraisal as part of the National Rural Development Program project. Credit No. 590-MAI Second Education Project; US$11.6 million credit of November 24, 1975; Date of Effectiveness: February 24, 1976; Closing Date: March 31, 1981 The project will provide prototype construction models of primary schools, strengthen the program of rural education, establish a new primary teacher training college and add facilities for the teaching of practical subjects in selected secondary schools, with emphasis on facilities for girls. The project has made a good start in the design stage due to the early appointment of consultant architects. The Project Implementation Unit is functioning well. Construction of civil works and procurement of furniture and equipment is generally proceeding satisfactorily. Project cost is within the appraisal estimates. - 27 - ANNEX II Page 5 of 6 Loan No. 1286-T-MAI Second Karonga Rural Development Project; US$9.2 million loan of June 24, 1976; Date of Effectiveness: August 18, 1976; Closing Date: March 31, 1981 The project, financed on Third Window terms, consists of the provi- sion of seasonal and medium-term credit to farmers, extension service, market complexes, health facilities, boreholes and other infrastructural facilities, agricultural and hydrological research, preparatory investments for the National Rural Development Program, and rehabilitation of berthing facilities at Chipoka Lake terminal. A civil works contractor has been selected for the reconstruction of Chipoka harbor, and the contract is expected to be signed shortly. Although understaffing hampers implementation efficiency in some parts of Chitipa district, the project progress is satisfactory. Loans No. 1388-MAI Third Power Project, US$25.0 million; Loans and Credit and 1007-T-MAI of April 28, 1977; Date of Effectiveness: November 11, Credit 691-MAI 1977; Closing Date: December 31, 1981 The project will assist ESCOM in financing its investment program to meet increased demand for power. The project consists of a rock-fill dam on the Shire River at Nkula, a pressure cut and cover conduit, head-race tunnel, penstock and tailrace outlet system, and a power house for five 18 MW hydro units, two of which will be installed at this stage. The project also provides for consulting services and training. Bid results have shown that the project cost will be within the appraisal estimate. Civil works contracts have been awarded since April 1977, and the constractors are now proceeding with the preparation of construction works. The Government has recently advertised for the positions of Chief Engineer and General Manager, who will retire by 1978. The Bank is informally attempting to assist the Government in locating suitable potential candidates. Credit No. 711-MAI Blantyre Water Supply Project; US$7.0 million Credit of June 3, 1977; Date of Effectiveness: April 18, 1978; Closing Date: December 31, 1980 The project will assist the Blantyre Water Board in financing its Phase V Development Program to increase the capacity of the supply facili- ties at Walker's Ferry on the Shire River and bring the existing pipeline, between the intake station and Blantyre, to its maximum capacity. In addi- tion, the project will make additional improvements in the distribution system in the Blantyre area, including service to squatter areas. It would also provide for consulting services and training. The credit is not yet effective. - 28 - ANNEX II Credit No. 758-MAI Third Highway Project: US$10.5 million; Credit of January 18, 1978; Terminal Date for Effectiveness: June 15, 1978; Closing Date: June 30, 1981 The project consists of (a) constructing the 53-mile Kasungu-Jenda road to two-lane bituminous surfaced standard, (b) strengthening three short sections of the Zomba-Lilongwe road and (c) providing consultant services for the supervision of (a) and (b) and for the feasibility and engineering studies of the Jenda-Mzuzu road. The terminal date for effectiveness has been extended to June 15, 1978 because the Borrower needed more time to fully meet the effectiveness requirements of its Agreement with the Opec Special Fund. - 29 - ANNEX III MALAWI SHIRE VALLEY AGRICULTURAL CONSOLIDATION PROJECT Supplementary Project Data Sheet 1. Timetable of Key Events (a) Time taken to prepare: 7 months (b) Preparation by: RMEA and SVADP Staff (c) Initial discussion with IBRD: November 1976 (d) First Bank mission: January 1977 (e) Appraisal mission departure: August 1977 (f) Negotiations: May 1978 (g) Planned Date of Effectiveness: September 1978 2. Special Bank Implementation Actions None 3. Special Conditions of the Project (a) The formal transfer of about 150 hectares of land at the Makanga Research Station to the control and administration of the project management for the seed multiplication farm will be a condition of effectiveness of the proposed credit (para 37). (b) The preparation by the Government of a program satisfactory to IDA to involve villagers in the maintenance of boreholes surroundings is a condition of disbursements for boreholes (para 43). (c) Commencement of the national study of the organization, operation and policies of existing irrigation schemes in Malawi is a condition of disbursements for the surface-water irrigation feasibility study for the Shire Valley (para 43). - 30 - ANNEX III (d) The Ministry of Works and Supplies will maintain the main and secondary roads completed under the project, and that district roads will be maintained by the Project's Maintenance Unit during the four-year project period and by its Ministry of Works and Supplies or district councils thereafter (para. 45). (e) The Government will finance the recurrent costs required to continue the provision of agricultural services to farmers and fishermen who have achieved the goals sought for them under Phase II of the SVADP, from its budget (para. 50). (f) The Government will, in consultation with the Association, prepare a program for the training of Malawians to replace all the expatriates in the SVADP management team by 1982 (para. 53). 方 MARCH 1978  IBRD 13346 34- 30' MALAWI . SHIRE VALLEY AGRICULTURAL DEVELOPMENT PROJECT ' AGRICULTURAL RESEARCH, ADMARC, AND EXTENSION PLANNING AREAS Ths -ap h.s b-a ose0-rd bY the ~ori Baksstfexc uefy hfo teorvaec of the rad-r of The de-nomatons used 0nd the Chang Iord Bank an s ,1 ast -n! ,dg-lo -n Ihe 1eg.1 stat.s of oaeP-afe b-dcohorae- 16°00' chopanang 16OC'- /k Kas thuaap.r Mandalade Sande T Mlewirad evunzu 2 ENGWE Pk ~NATIONAL ,d Ne Msene 1 Ärh-e Phw-di MwalaNsm - -Project Boundlary e Ngm ko chtone * Majr Dets Chitseko I Existing Extension -- Planning Areas snr pe 1973-7o-- _j New Extension P[anning Areas el lan Extension Planning Area HeadItrs1Shituk Z, ir~~~~Di S0 an odj oginv0 Major Research Station S Research Sub-station Crop / Weather Observation Plot 0 Crop Observation Plot Phokera, <3 Soil Productivity Research Plot MAý Peocide Res,due Sudy Site GAME - F arming Systemns Observation SiteR ATAN2 * Shelter Belt Tree Observation E A New Market 1968 -73 \ ýRET Market Recons5ructed 1973 - 78 MNew Market 1973 -78 a Major Depots i Sub Depot - Exishing Sub Depot -Tio be Construcred 1973 -78 N.nje 17 Divisional Headcquarters .4 - 7 0Mom Road beje 7'00C Minor Road - b+Railwaoy A R,ver tu. MankholA Marsh Non -Customnary Land International Boundaory 5 lp 1 2 MlLES D510 15 2 2,5 3P 3,5 4,0 KILOMETERS 34° 30' 35° 00' MARCH 1978  IBRD 13347 34° 30' MALAWI ' SHIRE VALLEY AGRICULTURAL DEVELOPMENT PROJECT HEALTH FACILITIES ANDSOREHOLES TOos b. tD been p~~oces by th. 31' Wid -8ank',tf aoo,oi the ih 1 t" d The deno nsusd and the b-~~aoe shown 00 Shos n.p World Bank and,tu ffila-- -nY MoAJ E T E y tty y ndos t GAME channn~ 16°00. anoriPena k aa1 00 h, k..w. Mpoko ola I ith.laaorr andoeptlodeteMafundde,a v akh..ira o ~ENGW* NATIONAL Ther-r sne Therere Mhz CQ Chipiiiafla. o~ u 16- 30, Do rgn hirom Projecl Boundary £vh A Primary Health Center GAM A Healh Sub-center <TanEiv® 6 Health Post A Q Health Unit l Nu. 0 To be Upgraded o Proposed New Buddings Ch Boreholes, Project Boreholes, Non - Project Main Road Minor Road N -7 t' i Railway beirilje 1-'°0o R iver Makoko Ci Marsh . , Chin Non - Customary Land mofMo - - International Boundary B.rde ý 25 MILES 0 5 10 15 20 25 30 3,5 40 KILOMETERS 340 3' 35° 00' JANUARY 1978  化