Announcement of World Bank and IDA Lend Thirteen Million Dollars to Liberia for Rubber Development on April 3, 1978

FOR I MM ED I ATE ·RELE;;ASE •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 78/68 IDA NEWS RELEASE NO. 78/54 Apr i 1 3 , 1978 WORLD BANK AND IDA LEND $13 MILLION TO LIBERIA FOR RUBBER DEVELOPMENT The World Bank and its soft-loan affiliate, the International Development Association (IDA), have approved a total of $13 million -- $7 million from the Bank and $6 million from IDA -- for a rubber development project in Liberia. The project will increase Liberia's ·income and export earnings from rubber through an intensive program of replanting about 40,000 acres of old rubber and rehabilitating about 24,000 acres of mature untapped rubber as a first phase of a long-term effort to increase and sustain production from Liberian-owned rubber farms . • The $29.6 million project includes the provision of credit, extension services, training of farmers and tappers, and assistance for on-farm proces- sing and marketing. The institutional capability of the Government to plan and implement further development of Liberian-owned rubber industry will also be strengthened through the establishment of a Rubber Development Unit (RDU), staff training, provision of technical assistance, and establishment of rubber tree nurseries. This project falls within the Four-Year Development Plan (1976-80) that attaches high priority to integrated rural development as the corner- stone of the Government's diversification strategy. At present, the Liberian economy depends heavily on iron-ore mining for export earnings. At peak production (1998), the project will more than double rubber production from Liberian-owned farms, and bring about a substantial increase in the produc- tivity and incomes of 6,300 smal 1- and medium-scale farmers. In addition, it will provide employment and increased incomes for about 3,000 tappers and 600 budders. The principal beneficiaries will be small-holders cultivating less than 10 acres of rubber with family labor. The $7 million Bank loan is for a term of 20 years, including 5 years of grace, at 7.45% per annum. The $6 million IDA credit is for a term of 50 years, including a 10-year grace period; it carries no interest but has a service charge of 3/4 of 1% per annum to cover administrative costs . • NOTE: Money figures are expressed in U.S. dollar equivalents. FORM NO. 1121 (5-76) T EC HN I CAL D A T A PROJECT: COUNTRY: TOTAL COST: Rubber Development Republic of Liberia $29. 6 mi 1l ion • BANK FINANCING: $7 million amortized over 20 years, including 5 years' grace, at 7.45% percent interest per annum. IDA FINANCING: $6 million, standard IDA terms. OTHER FINANCING: The United Kingdom Ministry of Overseas Development (ODM), $1.4 million (technical assistance grant); the Commonwealth Development Corporation (CDC), $7 mill ion; the Government of Liberia, $7.4 mill ion; and project farmers, $0.8 million. IMPLEMENTING ORGANIZATION: The Ministry of Agriculture and Rubber Development Unit, Monrovia, Liberia PROJECT DESCRIPTION: The project will increase Liberia's income and export earnings from rubber through an intensive program of replanting about 40,000 acres of old rubber and fehabJl{tatin~ about 24,000 acres of mature untapped rubber as a first phase of a long-term effort to increase and sustain production from Liberian- owned rubber farms; improve productivity and incomes of 6,300 small- and medium-~cale rubber farms (70% of total Liberian holdings) through provision of credit for improving planting • material and other inputs; better extension services; and assistance for on-farm processing and marketing; and strengthen the institutional capability of the Government to plan and implement further development of Liberian-owned rubber industry through establishment of a Rubber Development Unit (RDU), staff training, provision of technical assistance, and establishment of rubber tree nurseries. PROCUREMENT: Procurement contracts for fertilizers, chemicals, vehicles, equipment and tools valued at more than $50,000 will be through international competitive bidding in accordance with Bank/lDA guidelines. Such contracts are estimated to total S3. 1 mill ion. Domestically manufactured goods will be allowed a 15% preference or the applicable duty, whichever is lower, when comparing domestic bids with those of foreign manufacturers. Contracts for less than $50,000 will be awarded on the basis of competitive bidding advertised locally in accordance with procedures satisfactory to Bank/lDA. The aggregate total of such contracts will be limited to $500,000. Civil works, estimated to cost $3 million, comprising mainly offices, staff housing, training centers and warehouses, are widely scattered and construction is phased over 4-1/2 years; such works will not attract international contractors and it is proposed that these be awarded on the basis of competitive bidding advertised locally under procedures satisfactory to Bank/lDA. CONSULTANTS: The employment of consultants and internationally recruited staff to be financed by the Bank/lDA will be in accordance with normal Bank/lDA's procedures. The project will include the employment of consultant ser- vices for: (a) a rubber pricing policy study (24 man-months); (b) a feasibility study of a second st~ge project {9 man-months); (c) formulation and monitoring of effective smallholder rubber m?rketing programs (4 man-months); (d) training RDU instructors and monitoring RDU traini.ng programs (6 man-months); and (e) assistance to the Agricultural and Cooperative • Development Bank in formulating operating procedures and training staff (48 man-months). ECONOMIC RATE OF RETURN: 13% ESTIMATED COMPLETION DATE: 1983