Upper Volta - Urban Development Project

Document of 'I TI FILE COPY The World Bank FOR OFFICIAL USE ONLY Report No. P-2204-UV REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF UPPER VOLTA FOR AN URBAN DEVELOPMENT PROJECT January 17, 1978 This document bm a restricted distbution and my be used by recipients only In the performance of their official duties. Its contents may not otberwise be disclosed witbout World Dank autborization.  CURRENCY EQUIVALENTS US$1 - CFAF 245 The CFA (Communaute Financiere d'Afrique) Franc is fixed with respect to the French Franc (I FF - CFAF 50) and floats with respect to the US dollar. In this report the following conversion has been used: US$ 1 = CFAF 245 CFAF 1 million = US$4,082 ABBREVIATIONS BND - Banque Nationale de Developpement - Haute Volta CCCE - Caisse Centrale de Cooperation Economique CESAO - Centre d'Etudes Economiques et Sociales de l'Afrique de l'Ouest CIDA - Canadian International Development Agency CNPAR - Centre National de Perfectionnement des Artisans Ruraux FAC - Fonds d'Aide et de Cooperation FED - Fonds Europeen de Developpement FONASEN - Fonds National d'Assainissement et d'Entretien HER - Service de l'Hydraulique et de l'Amenagement des Espaces Ruraux KfW - Kreditanstalt fur Wiederaufbau ONE - Office National des Eaux OPEV - Office de Promotion de l'Entreprise Voltaique ORD - Office Regional de Developpement SACS - Service d'Assistance, Conseil et Soutien SME - Artisan, Small and Medium Scale Enterprise Project UNDP - United Nations Development Program FISCAL YEAR October 1 - September 30  FOR OFFICIAL USE ONLY Page 1 of 3 pages UPPER VOLTA URBAN DEVELOPMENI PROJECT CREDIT AND PROJECT SU1M4ARY Borrower: The Republic of Upper Volta Amount: US$8.2 million equivalent Terms: Standard Relending Terms: Funds for the squatter upgrading and sites and services component will be lent by Government to the municipalities at 6 percent interest for 17 years with 5 years grace during which no interest will accrue. Funds for the water supply component in- cluding detailed engineering and supervision will be lent by Government to the National Water Office at 6 percent for 20 years with 3 years grace during which no interest will accrue. Funds for the re- habilitation of the Zogona Gulley will be lent by Government to the National Fund for Land Reclama- tion and Maintenance at 6 percent for 20 years with 3 years grace. Funds for school and clinic rehabili- tation, the Public hygiene and disinfection program and technical assistance will be passed on to the municipalities as grants. Funds for technical assis- tance to the project unit and for the pilot community development fund are also to be provided as grants. Project Description: The project seeks to assist Government with that part of its urban development policy which aims at providing low cost services to low-income households in urban areas. It provides squatter upgrading for approxi- mately 7,000 households in Ouagadougou and 3,000 in Bobo-Dioulasso, sites and services for about 1,100 families in Bobo-Dioulasso, water supply to an addi- tional 2,500 families of Ouagadougou not living in the neighborhoods to be upgraded, housing construction loans, community facilities and social services, and technical assistance to the Municipalities of Ouagadougou and Bobo-Dioulasso and the Department of Town Planning. The upgrading and sites and services are estimated to reach 7,000 families in Ouagadougou and 4,000 families in Bobo-Dioulasso, about 25 percent of these cities respective populations. The National Center for Rural Artisans (CNPAR) which is supported under the IDA Artisan, SmaLl and lHedium Scale Enter- prise Project will be working to stimulate emp)loyment 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.  Page 2 of 3 pages in upgraded areas. The lack of qualified local personnel, coupled with the weakness of the execut- ing agencies, particularly the Municipality of Ouagadougou, and the absence of a precedent for the system of collection for urban improvements, all contribute to making this a high risk project. Estimated Cost: The total cost of the project net of taxes and duties is US$9.1 million. Taxes account for an additional US$1.74 million. The proposed IDA credit of US$8.2 million will finance 90% of total costs net of taxes. Details are as follows: Local Foreign Total --------US$ Million------- I. Squatter Settlement Upgrading Ouagadougou 0.95 0.68 1.63 Bobo-Dioulasso 0.25 0.21 0.46 Subtotal 1.20 0.89 2.09 II. Sites and Services Bobo-Dioulasso 0.10 0.08 0.18 Gaoua 0.01 0.01 0.02 Subtotal 0.11 0.09 0.20 III. Water Supply Distribution 0.10 0.16 0.26 IV. Construction Loans - 0.83 0.83 V. Community Facilities 0.11 0.27 0.38 VI. Assistance to Municipalities 0.29 1.16 1.45 VII. Assistance to the Department of Town Planning 0.31 0.98 1.29 VIII. Project Preparation (1976) - 0.10 0.10 IX. Final Design and Detailed Engineering 0.15 0.38 0.53 X. Monitoring/Evaluation 0.04 0.10 0.14 Total (I-X) 2.30 4.97 7.27 Physical Contingencies 25% on physical works 0.29 0.28 0.57 10% on engineering 0.01 0.04 0.05 Expected Price Increases 0.43 0.78 1.21 Total Project Costs 3.04 6.06 9.10  Page 3 of 3 pages Financing Plan: IDA's contribution of US$8.2 million would cover 100 percent of the foreign exchange costs (US$6.0 million) and 71 percent of the local costs. Details of the financing plan including taxes are summarized in the following table. Total __ _ Of Which Cost Loans Grants IDA Fund PROJECT COMPONENT -------------US$ Million------------ I. Squatter Settlement Upgrading 3.63 3.30 0.33 2.17 II. Sites and Services 0.36 0.36 - 0.22 III. Water Supply Distribution 0.51 0.51 - 0.32 IV. Construction Loans 1.42 1.42 - 0.98 V. Community Facilities 0.65 0.08 0.57 0.44 VI. Assistance to Municipalities 1.74 0.43 1.31 1.68 VII. Assistance to the Department of Town Planning 1.52 - 1.52 1.48 VIII. Project Preparation (1976) 0.11 - 0.11 0.10 IX. Final Design and Detailed Engineering 0.66 0.66 - 0.64 X. Monitoring/Evaluation 0.24 - 0.24 0.17 TOTAL 10.84 6.76 4.08 8.20 Estimated Disbursements: Fiscal Year Annual Cumulative ------------US$ Million------------- 1978 1,210 1,210 1979 3,392 4,602 1980 2,453 7,073 1981 1,145 8,200 Economic Rate of Return: 34% Appraisal Report: Appraisal of Upper Volta Urban Development Project No. 1660a-UV dated January 3, 1978 MAP: IBRD 12845   INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF UPPER VOLTA FOR AN URBAN DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Republic of Upper Volta in an amount equivalent to US$8.2 million on standard IDA terms to help finance an urban development project. PART I: THE ECONOMY 1/ 2. The latest economic report entitled "Current Economic Position and Development Prospects of Upper Volta" was distributed to the Executive Directors on July 7, 1975 (RN 564a-UV). An updating economic mission visited the country in April, 1977 and its main findings are incorporated into this report. Annex I contains country data. Background 3. With a per capita GNP of US$110 in 1976, Upper Volta is one of the poorest African countries and is classified among the 29 "least developed countries" by the United Nations. The country's economy faces a number of development constraints including extreme variability of rainfall, generally poor soils, few exploitable minerals, long distances to the nearest seaports, uneven population distribution with regard to available land resources, a shortage of skilled manpower, and limited potential for industrialization. These disadvantages also explain Upper Volta's relatively slow rate of eco- nomic growth. For the period 1967-75, real GNP grew at an average annual rate of 2.5 percent, or only slightly faster than population growth; per capita real incomes as a consequence remained virtually stagnant. 4. Upper Volta is a rural economy and the economic structure has undergone little change over the last 15 years: agriculture and livestock provide a living for over 90 percent of the population but account for less than half of GNP. The modern manufacturing sector, consisting mostly of import-substituting industries, accounts for less than 10 percent of GNP, while the tertiary sector contributes about one-third. Private and public consumption typically absorb 95 percent to 100 percent of GNP, which means that the bulk of capital formation (in the monetary sector) - usually ranging from 14-18 percent of GNP - has to be financed by foreign resources. Exports consist almost entirely of agricultural and livestock products. 5. Although Upper Volta is one of the world's most rural countries with more than 90 percent of its labor force working in the primary sector, 1/ Substantially identical to President's Report No. P-2181-UV for Upper Volta's Artisan and Small and Medium Scale Enterprise Project.  -2- the urban population is estimated to have grown 5% annually over the past decade, and is expected to increase from 500,000 in 1975 (i.e. 8.3 percent of total population) to almost 1.8 million by 2000, doubling the urban share of national population. The two largest towns, the capital Ouagadougou (220,000), and Bobo-Dioulasso (150,000), are currently growing at 7% per year, but some uncontrolled squatter areas on the periphery of the cities are expanding up to 20% annually. More than half of urban growth can be attributed to rural-urban migration accelerated, in the recent past, by extreme deprivation resulting from the severe drought in rural areas. Urban growth, far from solving the problem of poverty, thus reflects a relocation of poor households from rural to urban areas. Given the sluggish growth of the rural economy, a large num- ber of the rural population emigrates in search of employment to towns and to coastal countries, mainly Ivory Coast and Ghana. If opportunities for wage employment did not exist in these countries the rate of urban migration within Upper Volta would be many times greater. Recent Developments 6. The Sahelian drought of 1973 caused a severe setback in agricultural and livestock production. Output of food grains (sorghum and millet) dropped by more than 20 percent, calling for emergency food imports of about 100,000 tons in 1973/74. Output of cotton, the principal export crop, fell by one- third and drought-related herd losses were estimated at 10 percent. With normal rainfall in 1974, crop production rebounded, but recovery in the live- stock sector was inevitably much slower. Production of food crops in 1975 equalled the record level achieved in 1970, while output of cotton also in- creased substantially. As a result, GNP as a whole rose by 7.5 percent in real terms. By contrast, in 1976/77, food production recorded an estimated deficit of about 70,000 tons, for which international aid was requested by Government in early February of last year. Owing to the relatively good performance in other sectors, however, GNP as a whole is estimated to have risen, though at a somewhat slower rate than in 1975. 7. The external trade balance has continued to deteriorate in recent years following worldwide inflation for import goods and sluggish exports due to the drought: the resource gap more than doubled from US$64 million in 1972 to US$159 million in 1975. The overall balance of payments, however, was in surplus until 1974 as a result of increasing inflows of foreign capital and workers' remittances from abroad (mainly the Ivory Coast). These remittances have traditionally been a very important source of income for Upper Volta. In 1975 the overall balance of payments showed a small deficit (US$8.9 million) for the first time since 1968, due chiefly to a recent border conflict with Mali. A balance of payments deficit occurred again in 1976, reducing foreign exchange reserves by US$15.5 million to US$52.9 million. 8. Over the period 1968-74, Government's financial position has been relatively strong as a result of an austere spending policy, French budgetary subsidies, and surpluses generated by autonomous public institutions such as the Price Stabilization Fund for Agricultural Products. At the end of 1974, public sector deposits with the banking system stood at CFAF 9.3 billion (US$38.7 million), equivalent to about three-fourths of the corresponding  -3- year's current revenue. However, in the last two years, government finances have been strained by exceptional circumstances, i.e. the border conflict with Mali, rising wage-price levels and a relatively inelastic tax base. In 1975, for the first time in many years, the budget recorded a deficit of CFAF 1.4 billion owing to exceptional military expenditures; a deficit of much the same order is likely to have occurred in 1976 as well. 9. To accelerate development through public sector investments, in January 1975, the Government established the Caisse Nationale des Depots et Investissements (CNDI). CNDI mobilizes savings from public and private bodies and channels them into public infrastructure projects and other economically and financially profitable undertakings. It aims at annual commitments of around CFAF 3.2 billion and by the end March, 1977, had committed CFAF 9.79 billion. In line with the budgetary problem described above, the CNDI is facing serious difficulties in replenishing its resources so that it may maintain the current level of its lending activities which have been averaging slightly less than CFAF 4.0 billion per year. As of April 29, 1977, total resources of the CNDI amount only to CFAF 675 million. The CNDI reportedly is planning to borrow from abroad in order to continue its lending operations. Foreign Aid 10. During the period 1967-1975, Upper Volta received from its major donors annual average aid inflows of about US$42.0 million, with sharp in- creases during the last three years. Principal foreign donors are France, FED, Canada, Germany, USA, IDA and the UNDP. About 85 percent of all aid has been in the form of grants, and, of the remaining 15 percent, 90 percent consisted of loans on concessionary terms. Investment aid accounted for about two-thirds of the total, followed by technical assistance and budget support (10 percent). In recent years aid inflows increased considerably due to drought-related relief operations (1974). While new donors, in particular some of the Arab countries, are expected to increase their involvement in the country, traditional aid sources are likely to remain dominant for many years to come. IDA is gradually becoming one of the main sources of aid: its total commitments stand at US$89.4 million as of November 30, 1977. 11. External public debt at the end of 1976 stood at US$247.5 million, (including an undisbursed amount of US$163.1 million), in which the IDA's share was about 31 percent. The ratio of debt service payments to exports of goods and non-factor services was about 6.4 percent in 1976. IDA's share in total debt service payments is still insignificant. Although the debt service ratio is expected to increase somewhat in the near future, no spe- cial problems are foreseen. Development Policies and Prospects 12. Since most of the potential for economic development in the medium and long term lies in the agricultural sector, emphasis should be put on increasing agricultural productivity in the rural sector and the improve- ment of supporting services. One of the basic problems facing the country's  -4- rural sector is an uneven populat:Lon distribution with respect to available resources. About 61 percent of the total population live in the central re- gion (the Mossi Plateau), which comprises only 34 percent of the total area and which is much less favorably endowed than the southern and southwestern regions with respect to rainfall aind soil quality. The occurrence of river- blindness in the river valley areas explains in part the concentration of population on the Mossi plateau. An important component of the country's long-term development strategy is therefore to redistribute population to more fertile areas in the southwestern part of the country, which have so far been relatively underpopulatecl. 13. While the thrust of development efforts will remain in agriculture, two other areas, industry and urban planning, are to receive increased atten- tion. Government urban policy aims at providing a minimum package of infra- structure and services to the urban population, especially those living in the squatter neighborhoods of the larger towns. Government's industrial policy aims at saving foreign exchange through import substitution where feasible, at promoting export oriented, local resource based industries and at stimulating employment in urban and rural areas. 14. The last five-year Plan (1972-76) was well conceived and essentially project-oriented. GNP in real terms was expected to grow only 3.5 percent p.a. during the Plan period. However, external factors such as the drought and worldwide inflation adversely affected the economy, and actual growth (2 percent) fell short of the moderate target. In December 1975, the Government drew up guidelines for the next Development Plan (1977-81), which is currently under preparation. The Plan will be conceived in a longer-term "perspective" for tackling the country's structural problems. Rural development in the broadest sense, including the resettlement of people in the riverblindness- controlled zones, will continue to occupy center stage; education and employ- ment will be given higher priority than in the past, and close linkage between the two will be actively sought in the form of a production-oriented education system. One of the crucial issues in planning investment allocation will be to determine the extent to which it is preferable to concentrate development efforts in the more fertile areas, and to facilitate out-migration from the Mossi Plateau towards them. While the Government, in principle, is inclined to favor concentration of investment in the more fertile areas, the extent to which it will be reflected in the third five-year Plan investment program is not yet known. 15. Foreign capital and technical assistance will continue to play a vital role in the development of Upper Volta for some time to come. In view of the country's poverty and limited growth potential, it will be appropriate for external lending agencies to provide assistance on highly concessionary terms and to finance a high proportion of project costs, including a substantial amount of local costs. Furthermore, since lack of operating funds, limited absorptive capacity, and shortfalls in project preparation have more often than not been identified as principal bottlenecks in effective implementation of planned projects, intensive efforts should be made by foreign donors to assist the Government in its efforts to gradually remove these constraints.  -5- PART II: BANK GROUP OPERATIONS 16. To date, the Bank Group's contribution to Upper Volta's development has consisted of fifteen IDA projects totalling US$89.4 million of which 30.4 million has been disbursed as of November 30, 1977. Annex II contains a summary statement of these credits as of November 30, 1977 as well as notes on the execution of ongoing projects. 17. Experience with ongoing projects has generally been satisfactory. The Bank Group's strategy in Upper Volta is dictated by the extreme poverty of the country and the need to raise productivity in agriculture and livestock, on which the bulk of the population depends for a livelihood. Basic infras- tructure, necessary to the economy, is being developed with the assistance of IDA projects for road construction and upgrading, and in telecommunications. IDA lending, in line with Government's policy, is primarily directed to projects in agricultural, education and rural area improvements, with special emphasis given to improvement which will favor the movement of peoples away from the over-populated and ecologically disadvantaged central plateau to the southwest, where conditions are much better. Ongoing projects in this area include a livestock project, an integrated rural development project and a cotton project. The Banfora - Bobo-Dioulasso - Hounde road presently being constructed under the Third Highway project provides the most important transport link in tlhis region of substantial agricultural potential. 18. The main objectives of Bank Group lending in the future are: (a) to promote agricultural development so as to help the country attain some degree of food self-sufficiency (b) to facilitate the movement of the rural population from the Mossi Plateau to the Southwest and to areas controlled from Riverblindness and help with their integration into their new environ- ment (c) to strengthen infrastructure facilities (d) to promote employment and (e) to mobilize resources from other donors through co-financing. In keeping with the above objectives, future projects include an integrated rural development settlement project aimed at the repopulation of areas which have been underpopulated as a result of riverblindness and lack of easy accessibility, a second feeder road project, a small pilot irrigation project, a forestry project and a follow-up education project. 19. Despite its rural character, Upper Volta has experienced rapid urban growth and is facing severe problems in providing urban services to its growing urban population. The proposed project builds on previous Gov- ernment experience in providing low cost urban services on a large scale. It is closely linked to one of the components of the recently approved IDA Artisan, Small and Medium-Scale Enterprise Project. Together these projects aim to improve the living and employment conditions of the most disadvantaged members of the urban centers. They both emphasize institution building and seek to increase the productivity of the urban sector.  -6- PART III: THE URBAN SECTOR Past Demographic Patterns 20. Upper Volta is one of the most rural countries in the world, with only 8.3 percent of its populatiorn living in urban areas in 1975. Even within the Sahelian region of West Africa, where the average share of the population living in urban areas is 14 percent, Upper Volta is the least urbanized coun- try. Some 90 percent of its population works in agriculture as self-employed farmers, far from the small urban--based commercial economy. 21. Despite its rural charac:ter, Upper Volta has nevertheless experi- enced sustained, rapid urban growth since independence in 1960. From 1970 to 1975, the urban growth rate reached 5.1 percent per year, following closely the rapidly urbanizing coastal African countries, such as Ghana and Ivory Coast, which had urban growth rates at 5.3 and 6.3 percent respectively during the same period. Much of Upper Volta's urban growth has been concentrated in a few major towns: Ouagadougou, Bobo-Dioulasso, and Koudougou whose popula- tion in 1975 were 200,000, 140,000 and 50,000 respectively. The entire urban sector accounted for only 500,000 in 1975. The capital of Ouagadougou grew at a rate of 7 percent annually over the last decade and has been rapidly trans- formed from a small town into an administrative and economic center. The re- maining urban population is found in small semi-urban centers such as Dedougou, Fada N'Gourma, Gaoua, Banfora and Ouahigouya each with population of about 10,000. The growth of secondary centers, which have expanded at about 3 percent annually, has not followed the rapid growth of the large towns. 22. Some 56 percent of annual urban growth can be attributed to migra- tion from rural areas, with the remaining 44 percent resulting from natural increase. These figures are close to the Sahelian-wide pattern of rural-urban population movements. The migratory share of Ouagadougou's growth is much higher, however, approaching 68 percent, reflecting the attraction of employ- ment possibilities. Migrants come from throughout the country to the national capital whose population is changing from a largely Mossi-populated center to that of a center with a very diverse population. Demographic Projections 1/ 23. Upper Volta's population, based on a yearly population increase of about 2.3 percent and a slow-down of migration to the Ivory Coast, is expected to grow from 6 million in 1975 to 11 million by 2000. Within this overall trend, it is expected that the urban share will almost double, from 8.3 to 15.7 percent in the next twenty-five years, again close to the proj- ected Sahelian increase from 14 to 24.1 percent over the same period. In 1/ Projections are based on United Nations, FAO, and IBRD estimates.  -7- absolute terms, Upper Volta's urban population would grow from 500,000 to almost 1.8 million, more than tripling its present size, and will require employment and urban services. 24. Absolute increases of these magnitudes imply high annual growth rates. Upper Volta is projected to increase its urban population at roughly 5 percent up to 1990. While these are only projections, it is nonetheless clear that substantial rural-urban migration will continue in Upper Volta during this period. Despite improvements in agricultural incomes resulting from the large rural development programs in many regions of the country, it is reasonable to expect that migratory flows to urban areas will continue. Opportunities for Employment 25. Urban growth has not been accompanied by increased labor produc- tivity or substantially higher incomes for migrants who have remained out- side the formal sector. About 80% of the urban labor force of 120,000 work within the many branches of the informal sector, earning an estimated aver- age household monthly income of CFAF 10,000 (US$40). Only some 37,000 per- sons work within the formal sector. Only 10% of the Ouagadougou population is literate. The majority of squatters are underemployed within the informal sector although, even if they had educational qualifications they would face many obstacles to finding productive employment within the very small formal sector. Outside of the public administration, which employs about 19,000 persons, there are very few jobs. The lack of training, limited access to credit, the relatively high cost of transport and marketing, and the small size of local markets, have inhibited growth of the private formal sector, which now numbers about 18,000 persons. Many migrants have moved to Ouagadou- gou, the center of public sector employment, but have been unable to obtain desired positions. Others have moved to Bobo-Dioulasso, the commercial capital in the relatively prosperous southwest region, and still others have moved on to Ghana and the Ivory Coast. 26. The Government is acutely aware of the need to generate employment in urban areas. The Ministries of Commerce and of Public Service and Employ- ment have been working together to promote employment through three principal institutions: The National Development Bank, the Office for the Promotion of Upper Volta Enterprises and the National Center for Rural Artisans. These three institutions are receiving support under the recently approved Artisan and Small and Medium Scale Enterprise Project. Squatter Settlements - Ouagadougou and Bobo-Dioulasso 27. Ouagadougou and Bobo-Dioulasso historically developed around admin- istrative and commercial areas in the town centers, surrounded by residential neighborhoods. On the periphery of these neighborhoods, squatter areas ex- tend in all directions. The principal difference between the central neigh- borhoods and the squatter areas are the land tenure system, the layouts and in the former, the presence of some paved streets, lighting, public water taps and drainage ditches.  -8- 28. The squatter areas on the periphery of these towns now cover about 1,500 hectares (1,300 in Ouagadougou and 200 in Bobo-Dioulasso) and are populated by about 150,000 persons (120,000 in Ouagadougou and 30,000 in Bobo-Dioulasso). These lower density areas cover more than half the area of the capital, with between 40 and 90 persons per hectare living in family compounds of mud huts. Most families are young, with an average household size of 6.4 persons and are recent migrants to the city. The squatter areas are almost completely unserviced: they have no piped water supply, garbage collection, waste disposal, stormwater drainage, schools or clinics. Clean water is purchased from private water vendors who buy water at public standpipes in central neighborhoods and resell it to squatters at five times the price. Presently, in these zones, households buy the equivalent of 7-10 liters per capita per day from vendors during most of the year, and consume an additional amount from shallow, polluted wells. During the 2-3 month hot season when wells are dry, households may purchase up to 15-20 liters per capita per day. Of the 58 standpipes in Ouagadougou, only 4 are found in the squatter areas, although the squatter population represents more than half of the city. 29. Within the squatter areas, individual households depend on tradi- tional chiefs for permission to occupy a designated plot of land. Households pay the chiefs a small fee, either in money or in kind, for traditional rights of occupancy. They rarely pay taxes and are individually unknown to the municipal administration. In squatter areas, the traditional chiefs continue to wield substantial authority over household and neighborhood activities. They decide on the physical layouts of the areas, type of con- struction, and, most importantly, improvements which are proposed by Govern- ment and private agencies. Institutions 30. Responsibility for urban development in Upper Volta is jointly shared by several ministries, including the Ministry of Public Works, Trans- port, and Town Planning which is responsible for the execution of urban proj- ects, the Ministry of Rural Development, whose Rural Development Works Depart- ment supervises rural and urban water supply and the Ministry of Interior, which supervises all municipal activ:iLties. The Ministry of Public Works, through its Department of Town Planning, proposes urban development policies and projects for all urban areas which are reviewed by the National Town Planning Council before submission for approval by the Council of Ministers. The Department of Town Planning, under the Ministry of Public Works, presently has 5 professional Upper Voltan staff and one UNDP technical assistant. At the present time it lacks sufficient personnel and equipment to carry out its task. 31. The Rural Development Works Department (HER) of the Ministry of Rural Development supervises the activities of the National Water Office (ONE) and and the recently created National Fund for Land Reclamation and Maintenance (FONASEN), but does not play a major role in the daily execution of urban development programs. The Minister of Rural Development participates in the deliberations of the National Town Planning Council but does not initiate policies and programs in the urban sector. Created in 1970, the ONE  -9- is fully staffed by Upper Voltans, is well managed and has been profitable since its establishment. It is divided into three technical divisions, one each for Ouagadougou, Bobo-Dioulasso, and smaller systems which supervise the preparation of detailed engineering, physical construction, maintenance, and repair of water facilities. FONASEN, a service of HER, will be responsible for rehabilitating and maintaining drainage works in Ouagadougou and Bobo- Dioulasso. 32. The Minister of the Interior supervises the activities of the municipalities but day-to-day management of municipal affairs is left to the mayors and their staff. The responsibilities of the municipalities include: (a) maintenance of social service facilities, including schools, and clinics, streets and drainage canals; (b) environmental sanitation, such as garbage collection, insecticide spraying, and waste disposal; (c) fire prevention; and (d) regulation of land development and housing construction. A combination of a low income tax base, low tax rates, infrequent and inac- curate assessments, inadequate collections, and a poorly trained staff (only 15 percent of whom are literate) has made it impossible for the municipali- ties, especially the municipality of Ouagadougou, to fulfill their responsibil- ities. The Municipality of Ouagadougou has a budget of only CFAF 347.5 mil- lion (US$1.4 million), or $6.50 per capita. About half of this is allocated to personnel expenditures with only 17 percent devoted to services and only 3 percent for investments. 33. The Municipality of Bobo-Dioulasso is in slightly better condition as it has a longer tradition of municipal administration and maintenance dating back to its previous role as a colonial capital up to 1947. As in the case of Ouagadougou, the municipality requires training of its staff, purchase of needed equipment and tools, and assistance in management in order that it may better carry out its responsibilities. The Cissin Experience 34. In 1973, the Government, with UNDP assistance, launched a three- year experiment to improve the housing conditions of the poor urban house- holds in Cissin, one of Ouagadougou's squatter neighborhoods. This joint effort, which provided 600 service plots and upgraded 8 ha. inhabited by 266 families, was successful in that it demonstrated the feasibility of pro- viding low-cost infrastructure and housing through self-help methods and com- munity participation. Initial infrastructure works included roads, minimal drainage, pit latrines, and wells. Households were given urban occupancy permits as guarantee of land tenure. This legalized tenure arrangement stimulated neighborhood participation. Community investment in infrastruc- ture and private investment in housing construction and improvements have substantially improved the living conditions of people in the neighborhood. In November 1975, the Ministry of Public Works, Transport, and Town Planning convened an international conference to evaluate the Cissin experience and to determine its applicability on a larger scale. While this evaluation was not entirely positive--the financial arrangements for the project, such as cost recovery and recovery on loans for housing construction and improvements needed  - 10 - improvement, the Government endorsed the Cissin concept as the cornerstone of its policy for providing urban services to squatter areas. The Future 35. While the Cissin pilot project represents a major step in the formu- lation of a realistic, low-cost approach to urban development, the task of replicating and improving this experience on a larger scale will be formidable. In order to do this the Government acknowledges the need to (a) strengthen urban institutions, particularly the Department of Town Planning and the municipalities of Ouagadougou and Bobo-Dioulasso through training, purchase of needed equipment, and technical assistance in specialized areas; (b) improve the methods used by the municipalities for cost recovery and tax collection, to recover public investments in infrastructure and extend services; and (c) improve environmental sanitation not only for neighborhoods to be included in individual projects, but for the entire urban area, which presently suffers from inadequate garbage collection, waste disposal, and drainage. PART IV: THE PROJECT 36. The project is based on the findings of a February 1977 appraisal mission. Negotiations were held from September 12 to September 16, 1977, with an Upper Voltan delegation led by H.E. Mahamadou Ouedraogo (Minister of Public Works). The Appraisal report (No. 1660a-UV) is being circulated separately to the Executive Directors. Project Discription 37. The proposed project, to be carried out over a 3 and one half year period (1978-1982), consists of: (a) Squatter Upgrading: Provision of basic urban infrastructure including water supply, drainage and roads to about 7,000 house- holds in the squatter neighborhoods of Cissin and Zogona in Ouagadougou and to 3,000 households in the squatter neighbor- hood of Sonsuribugu in Bobo-Dioulasso. (b) Sites and Services: (i) Preparation and servicing of about 1,100 new plots with water standpipes, stormwater drainage, and earth roads covering 50 ha. adjacent to Sonsuribugu in Bobo-Dioulasso; (ii) Preparation of a pilot sites and services area for 100 fam- ilies in Gaoua; (c) Water Supply Distribution: Provision of water by standpipes to some 20,000 persons living in three squatter neighborhoods in Ouagadougou not included in the upgrading operation. (d) Construction and Home Improvement Loans: Provision of loans for housing improvements and start-up construction.  - 11 - (e) Community Facilities and Social Services: (1) in Ouagadougou: construction of 12 community centers, four markets, rehabilita- tion of 40 schools and 10 dispensaries; (ii) in Bobo-Dioulasso: construction of 7 community centers, two markets, rehabilitation of 25 schools and 7 dispensaries. Provision of funds to finance pilot programs in community education, public health and women's activities in both Ouagadougou and Bobo-Dioulasso. (f) Assistance to Municipalities: Technical assistance for train- ing of maintenance personnel, improving financial management and tax collection; reorganization of the Department of Roads and Buildings and the municipal housing office; equipment for maintenance activities, insecticide spraying and vehicles for garbage collection. (g) Assistance to the Department of Town Planning: Technical assistance to the project unit for project preparation, execution, training and preparation of a second project; purchase of equipment, supplies and vehicles. (h) Monitoring and Evaluation: a study to evaluate the per- formance of project components during and after project execution. Project Execution 38. A Project Unit with primary responsibility for all project compo- nents (exclusive of water supply and the Zogona Gulley drainage works - para. 45) will be established in the Department of Town Planning. The Unit will be headed by the Director of Town Planning supported by a Project Chief and will include a civil engineer, a socio-economist, an accountant, an urban planner, and an expert in savings and loan cooperatives and qualified local counterparts. (Section 3.03 of the Draft Development Credit Agreement). Technical assistance for the Project Unit has been identified and will be recruited during the first quarter of 1978. The project unit will oversee project implementation and specifically will: (i) prepare detailed design and engineering plans; (ii) prepare bidding documents and contracts; (iii) super- vise the execution of civil works, including construction of community facil- ities; (iv) supervise the construction loan program and the pilot community development activities; (v) assist with the supervision of Municipal Housing Offices; and (vi) be responsible for the disbursement of project funds. Assurances were received at negotiations that final engineering and design and implementation arrangements for the upgrading, sites and services and water distribution components would be satisfactory to the Association (Sec- tion 3.07(a) of the Draft Development Credit Agreement). 39. The Municipalities of Ouagadougou and Bobo-Dioulasso are responsi- ble for: (i) reorganization and strengthening of the municipal Departments of Roads and Buildings; (ii) city wide provision of services supported under the project - environmental sanitation, garbage collection, rehabilitation  - 12 - of schools and dispensaries, and insecticide spraying. Municipal Housing Offices, headed by qualified personnel and adequately staffed are to be established within the existing Land Offices of each municipality (Section 3.04 of the Draft Development Credit Agreement). These Housing Offices are responsible for: (i) collection of application fees and initial plot down- payments; (ii) recovery of plot charges and construction and home improve- ment loans. 40. The preparation and execution of the water supply investments under the project will be the responsibility of the National Water Office (ONE). The technical division of this office will supervise the preparation of detailed engineering, and the physical construction, maintenance, and repair of works. 41. Coordination of project execution will be assured through an Inter- Ministerial Coordination Committee headed by the Minister responsible for town planning. Permanent members will be the Mlinister of Finance or his rep- resentative, the Director General of the Interior, the Prefects-Mayors of Ouagadougou and Bobo-Dioulasso, the Director of Town Planning, the Director of the Project Unit, the Directors of the Municipal Housing Offices, the Director of the ONE and the Director General of FONASEN. To ensure coordi- nation with the Artisans and Small and Medium Scale Enterprise Project, a representative of the Working Committee to be established under the SME project will be appointed to represent the National Development Bank (BND), the Organization for the Promotion of Upper Voltan Enterprise (OPEV) and the Center for the Training of Rural Artisans (CNPAR) on the Interministerial Coordination Committee (Section 3.05 of the Draft Development Credit Agree- ment). Strengthening of the Municipalities 42. Each municipality will receive four and a half-years of technical assistance which will be divided as follows: (i) two man-years for the reorganization of the Roads and Buildings Departments and the training of municipal maintenance workers; (ii) two man-years for the establishment of new procedures for land registry, plot allocation and developing and over- seeing the operation of a system for collection from participants in the municipal upgrading and sites and services schemes; (iii) six months to review tax revenue collection procedures. This review will include an assessment of current rates and financial practices including budgetary planning, and recommend improved methods and policy changes where neces- sary. It shall begin no later than June, 1978 and be completed by June, 1979 (Section 3.09 of the Draft Development Credit Agreement). Strengthening of the Department of Town Planning 43. 12-1/3 man-years of technical assistance for project preparation, execution and training will be provided to the Department of Town Planning consisting of the following: an engineer-manager (3 years), a socio-econ- omist (2 years), an accountant (3-1/3 years), a community development expert  - 13 - (3 years) and an urban planner, 1 year. An additional 2-1/2 years of con- sultant services are provided for the preparation of a second project and short term consultancy assignments. It was agreed that the qualifications, experience and terms and conditions of employment of consultants hired under the project shall be satisfactory to the Association (Section 3.02 of the Draft Development Credit Agreement). Legal Arrangements 44. Neigborhood improvements will be followed by a legalization of land tenure for project area residents. Residents who according to Upper Voltan law have customary rights to the land, will make a one-time payment of CFAF 15,000 at which time they will be granted an urban occupancy permit. This permit is a renewable long term lease with right of resale. Residents without customary land rights and new residents who will be allocated plots by the Municipal Housing Office will be granted a provisional urban occupancy permit upon down payment of FCFA 15,000, and after repayment of the total plot obligation, an urban occupancy permit. (Schedules 4 and 5 of the Draft Devel- opment Credit Agreement). Off-Site Infrastructure 45. No off-site works are needed for the Cissin neighborhood. Off-site infrastructure for Zogona and Sonsuribugu will require approach roads, water mains and drainage works. In Zogona, the major off-site work involves the channeling of the four kilometer long Zogona gulley, a major health hazard for the entire city of Ouagadougou, and concrete reinforcement of two kilometers of its banks. Drainage works are required in Sonsuribugu, due to the slopes on the sites and relatively higher rainfall in the Bobo-Dioulasso region. Housing Construction and Improvements Loans 46. Loans for the purchase of building materials will be granted to the plotholders occupying plots under this Project. Existing residents will be eligible to borrow up to CFAF 30,000 while new residents will be eligible to borrow up to CFAF 65,000. Households which have been displaced (about 750 existing households) as a result of upgrading operations and relocated on nearby plots will be eligible to receive CFAF 65,000 but will repay only CFAF 30,000 with the remaining funds considered as compensation for reloca- tion (Schedule 5, para. 8 of the Draft Development Credit Agreement). Link to Artisan, Small and Medium Scale Enterprise Project 47. A portion of CNPAR's skill training will be decentralized to two neighborhoods in Ouagadougou and one in Bobo-Dioulasso selected for upgrading under the proposed project. Initially, in response to the demands generated by the project, training in the construction trades (masonry, brickmaking, metal and woodworking) will be offered to 10-12 artisans per year in each neighborhood. Later, training will be diversified into other productive areas (tailoring, weaving) to be specifically identified with the help of consultants. Training will take place in mobile facilities constructed by  - 14 - CNPAR and as a part of the training process trainees will construct the community centers to be financed under the project. Cost Recovery Arrangements 48. The project introduces a system of collection of charges for urban improvements for the first time in Upper Volta. The system of recovery which will be elaborated during project implementation and be subject to the approval of the Association, will be applied by the Municipal Housing Offices of Ouagadougu and Bobo-Dioulasso to all households living in the neighborhoods to be upgraded and in the sites and services areas. Charges will include: (a) plot development costs including contingencies, engineer- ing, construction supervision and relocation costs for displaced families; (b) land acquisition charges with residents having customary tenure paying a flat rate of 15,000 CFAF and all others paying CFAF 100/m ; (c) management charges of 100 CFAF per plot per month; and (d) a default provision of 20 per- cent of total charges on an annual basis. Total development costs for the project area as per (a) above will be divided by the net residential area to obtain a unit cost per square meter. Development costs per plot will then be established by multiplying the2unit cost per square meter by the size of the plot (either 240, 300 or 360 m ). Plot development costs together with land acquisition charges, will constitute a total plot cost which will be repaid through the downpayment of CFAF 15,000 with the remainder paid in installments over 10 years with a rate of interest of 8.5 percent and no penalty for early repayment. Those with customary land rights would not occupy more than 10 percent of the plots in a project neighborhood and would make a one time payment of 15,000 CFAF. The frequency of installments will vary according to the source of income of the plot holder. Charges for salaried plot holders will be deducted from salaries at the source. Cost of the water supply distribution system will be recovered by the National Water Office through the collection of water charges. Housing construction and improvement loan charges will be added to the plot development charges and be given on the same terms and conditions i.e. 10 years at 8.5 percent (Schedule 5 of the Draft Development Credit Agreement). The cost of rehabilitating the Zogona gulley will be recovered on the following basis: (a) one-quarter of the total costs will be considered non-recoverable as a public sanitation measure; (b) half of the total investment costs will be recovered through tax revenues accruing to the FONASEN; and (c) one-quarter of the total investment costs will be recovered directly from residents living on the 500 hectares in the Zogona flood plain. The Housing Development Fund 49. The Municipalities will deposit revenue from plot charges and re- payments of housing construction and improvements loans into an interest bear- ing account (the Housing Development Fund) at the National Development Bank (BND). Funds collected will be used to cover the administrative charges of the Municipal Housing Offices, defaults of up to 20 percent of the amounts receivable and repayment of loans contracted for on-site investments (Section 3.06 (d) and Schedule 5, para. 4 of the Draft Development Credit Agreement).  - 15 - Cost Estimates and Financial Arrangements 50. The total cost of the project net of taxes but including import duties and contingencies, is US$9.1 million. Taxes account for an additional US$1.74 million. The proposed IDA credit of US$8.2 million would cover 90 percent of total costs net of taxes. It would cover 100 percent of the foreign exchange cost estimated at US$6 million and 71 percent of the local costs (US$2.2 million). The remaining local costs (US$.9 million) would be met by Government. Details of cost estimates are in the Credit and Project Summary. 51. Approximately US$4.95 million will be on-lent by Government to the Municipalities of Ouagadougou and Bobo-Dioulasso at 6 percent interest for 17 years and 5 years grace during which no interest will accrue for squatter upgrading and sites and services. Approximately US$0.51 million will be on-lent by Government to the National Water Office at 6 percent for 20 years with three years grace during which no interest will be paid for the water supply component. Approximately US$1.3 million will be on-lent by Government to the National Fund for Land Reclamation and Maintenance at 6 percent for 20 years with three years grace for the rehabilitation of the Zogona Gulley in Ouagadougou. About US$2.21 million will be provided by Government to the municipalities of Ouagadougou and Bobo-Dioulasso as a grant for school and clinic rehabilitation, a Public hygiene and disinfection program and tech- nical assistance. About US$1.87 million will be provided by Government as a grant for technical assistance to the project unit under the Department of Town Planning and for the pilot community development fund. Establishment of a Revolving Fund to help Finance Project Expenditures 52. In order to ensure the prompt availability of funds to meet project expenditures IDA, immediately after credit effectiveness, will deposit in a special account that the Government will agree to open at the Central Bank, an initial amount not exceeding US$400,00 equivalent, which would serve as a revolving fund. IDA would replenish the revolving fund after verifying that disbursement claims presented were eligible for financing out of the proceeds of the Credit. (Section 2.01(c) of the Draft Development Credit Agreement). D. Procurement 53. All contracts over US$50,000 for the procurement of equipment, vehicles, and building materials would be through international competitive bidding in accordance with World Bank guidelines. At the Government's request domestic contractors will receive a preference in bid evaluation in accordance with the above guidelines. Contracts would be grouped in packages of at least US$50,000 whenever possible. The channeling of the Zogona Gulley would also be offered for international competitive bidding. Civil works contracts for  - 16 - water supply, plot layouts, and off-site drainage (US$1.0 million) and con- struction of community facilities, and office repairs (US$0.3 million) would be too small to attract international contractors and would therefore be awarded on the basis of local competitive bidding, advertised locally in accordance with local procedures, which are acceptable to IDA. Earth road construction and on-site drainage (US$1.0 million) within individual neighbor- hoods would be carried out by force account by the Ministry of Public Works, Transport, and Town Planning. Consultant services would be procured according to procedures acceptable to IDA (US$1.9 million). The estimated cost per man-month of consultant services is US$6,600. E. Disbursements 54. Disbursement of the IDA credit would be made on the following basis: (i) 80 percent of all civil works expenditures; (ii) 100 percent of foreign or 90 percent of local expenditures for equipment and other goods, including tools, vehicles, and other supplies; (iii) 75 percent of operating costs including vehicle maintenance and staff salaries for the Project Unit and the Municipal Housing Offices; (iv) 100 percent of foreign or 90 percent of local expenditures on all consultants' services, including technical assistance, detailed engineering, project preparation, and monitoring and evaluation; and (v) 100 percent of the value of construction loans to plot holders. Disburse- ment for Ci), (ii), (iii) and (v) above will be made against a certificate of expenditure, the documentation for which is not submitted for review, but is retained by the Borrower and available for inspection by the Association during the course of project supervision missions. 55. A first advance from the Project Preparation Facility of up to US$100,000 was used to prepare the project during 1976-77. A second advance of US$230,000 was approved which provides for the financing of detailed engi- neering, preparation of site plans, and start-up costs for technical assis- tance in the Project Unit from July 1977 until early 1978. Both advances will be refunded upon the effectiveness of the credit (Section 2.02(g) of the Draft Development Credit Agreement). Benefits 56. Upgrading of two squatter settlements in Ouagadougou (300 ha.) and another in Bobo-Dioulasso (132 ha.), as well as 50 ha. of serviced sites in Bobo-Dioulasso will directly improve living conditions for more than 10,500 households, approximately 86,000 people, through the provision of essential infrastructure, regularization of occupancy rights and the supply of credit for housing construction or improvement. In addition, the provision of a basic water supply network in three other squatter settlements of Ouagadougou will benefit an estimated 20,000 people. Together, the upgrading, sites and services and water supply distribution components of the project will reach 76,000 people in Ouagadougou and more than 30,000 people in Bobo-Dioulasso.  - 17 - 57. In addition to providing direct benefits to a significant proportion of low-income urban dwellers in Upper Volta, the project will demonstrate the merit and replicability of low-cost approaches to urban development, and strengthen the institutions concerned through the experience gained during its implementation. By introducing a system of cost recovery for urban improve- ments, the project will also contribute to a more efficient and equitable allocation of investment resources. 58. Economic rates of return were calculated for upgraded, and sites and service areas, using expected increases in property values as a result of improvement, as the measure of project benefits. Property values are an imperfect measure of project benefits because they do not fully reflect the value to individuals and to society of an improved and healthier physical environment. However, lack of data precluded the quantification of the more intangible, yet perhaps most important, impacts of the project, such as re- duced morbidity and mortality, and the associated increases in productivity. Therefore, the rates of return based on property value increases provide only an indicative and partial estimate of the economic merit of the project. 59. Based on the benefits and costs described above, economic rates of return found for upgraded and sites and services areas in the two pro- ject cities were the following: Ouagadougou Cissin Upgrading - 40% Zogona Upgrading - 24% Bobo-Dioulasso Sonsuribugu Upgrading - 31% Sites and Services - 37% 60. Sensitivity analysis indicated that these rates of return were relatively insensitive to a 20 percent increase in costs and somewhat more sensitive to a 20 percent reduction in benefits, but it is unlikely that property values would be reduced by more than 20 percent. 61. The high rates of return reflect a great demand for an extremely limited supply of low-cost serviced land, resulting in a very high private willingness to pay, which may itself underestimate the total economic worth of the project. However, this project will significantly increase the supply of serviced land, thereby slowing the long-term rise of land values. Benefits of the Water Supply Component 62. A separate economic rate of return was also calculated for the water supply distribution system to be provided in three other neighborhoods of Ouagadougou that will not be fully upgraded. The quantified benefits in  - 18 - this analysis were expressed as consumer cost savings due to the large dif- ference in price between water sold by water vendors (their present source of supply) and water bought directly at the standpipe (the "with project" situation). 63. The economic rate of return obtained using the above benefits and costs was 37 percent. Sensitivity analysis was carried out and showed that neither a 20 percent increase in costs nor a 20 percent decrease in benefits lowered the rate of return below 31 percent. Aggregate Rate of Return 64. An aggregate rate of return covering approximately 75% of total project costs was calculated and found to be 34%. Sensitivity analysis was carried out, with both a 20% increase in costs and a 20% decrease in bene- fits, and the rate of return did not drop below 21%. Risks 65. Formidable personnel and resource constraints, coupled with the weakness of executing agencies, emphasize the high risk nature of this proj- ect. Despite the limited success of the Cissin project, its pilot nature and lack of sound financial arrangements have to be transformed into a large-scale, replicable urban development program. This challenge of repli- cability from a pilot project involving under 1,000 families to one affecting the lives of over 12,000 families, or 100,000 persons, will require sustained attention from Government and a high degree of coordination between the Min- istry of Public Works, Transport, and Town Planning, and the Municipalities of Ouagadougou and Bobo-Dioulasso. Throughout project preparation, Govern- ment has expressed considerable interest in the project. 66. Specific risks, which should be acknowledged from the beginning of project implementation, focus on cost recovery and tax collection. As noted earlier, the project will introduce a system of collection of charges for urban improvements for the first time in Upper Volta. There is no precedent for this system, particularly among low-income residents who rarely pay municipal and national taxes. The regulation of land tenure and improved services resulting from project improvements are expected to lead to an increased willingness of the community to pay their taxes but the success of the project will depend on Government's ability to enlist the support of local community leaders. It will be extremely important that the Municipal Housing Offices in both cities operate effectively at the neighborhood level. Failure to collect charges for improvement will compromise the financial viability of these operations for the future. Tax collection must also be improved if the municipalities are to have the financial resources needed to perform their legal resonsibilities in the provision and maintenance of services. The active interest of the Prefect-Mayors of Ouagadougou and Bobo-Dioulasso will thus be essential to strengthen the long-term role of municipal institutions in the implementation of the Government's national urban development policy.  - 19 - PART V: LEGAL INSTRUMENTS AND AUTHORITY 67. The draft Development Credit Agreement between the Republic of Upper Volta and the Association, and the Recommendation of the Committee provided for in Articles V, Section I (d) of the Articles of Agreement of the Association are being distributed to the Executive Directors sepa- rately. 68. Features of the Development Credit Agreement of special interest are listed in Section III of Annex III. A special condition of effectiveness of the IDA credit is the authorization, ratification and signing of the Financing Agreements between the Government and the Municipalities of Ouagadougou and Bobo Dioulasso, FONASEN and ONE. (Sections 5.01 and 5.02 of the Draft Devel- opment Credit Agreement). 69. I am satisfied that the proposed IDA credit would comply with the Articles of Agreement of the Association. PART VI: RECOMMENDATION 70. I recommend that the Executive Directors approve the proposed development credit. Robert S. McNamara President Attachments Washington, D.C. January 17, 1978   ANMEJ I TABLE 3A Page 1 of 4 pages UPPER VOL.A - SOCIAL INDICATORS DATA SHEET LAND AREA (THOU KM2) --------------- UPPER VOLTA REFERENCE COUNTRIES (1970) TOTAL 274.2 MOST RECENT AGRIC. 191.3 1960 1970 ESTIMATE MALI MAURITANIA SENEGAL*** ______________ - --- ---- -__--_ _ _-___ -_ _ _ _ ---------- -- _ _ _ _ _ _ _- ____ GNP PER CAPITA (USS) 50.0* 70.0* 110.0/a* 70.0* 210.0* 270.0* POPULATION AND VITAL STATISTICS -----------------------------__ POPULATION (MID-YR, MILLION) 4.3 5,4 6.2/a 5.1 1.2 4.4 POPULATION DENSITY PER SQUARE KM. 16.0 20.0 23.0/a 4.0 1.0 22.o PER SQ. KM. AGRICULTURAL LAND 23.0 28,0 32.07i 12.0 3.0 39.0 VITAL STATISIICS CRUDE BIRTH RATE (/THOU, AV) 49.6 49,6 48.5 49.6 44.9 47.6 CRUDE DEATH RATE (/THOU,AV) 32.7 28.9 25.8 27.8 24.7 24.4 INFANT MORTALITY RATE (/THOU) 192.0 .. .. 120.0 . 156.0 LIFE EXPECTANCY AT BIRTH (tRS) 32.2 35.5 38.0 37.2 41.0 40.0 GROSS REPRODUCTION RATE i 3.2 3.2 3.3 2.9 3.0 POPULATION GROWTH RATE (%) TOTAL 2.6** 2.2 1. ** 2.2 1.9 2.6 URBAN 4.5 4.6/b 4.3 5.1 6.0 URBAN POPULATION (% OF TOTAL) 4.5 6.6 8.3 12.1 45.3 29.0 A-.E STRUCTURE (PERCENT) 0 TO 14 YEARS 41.6 43.0 43.0 49.1 41.8 41.2 15 TO 64 YEARS 55 1 54.0 54.0 49.3 55.1 54.9 65 YEARS AND OVER 3 3 3.0 3.0 1.6 3.1 3.9 AGE DEPENDENCY RATIO 0.8 o.9 0.9 1.0 0.8 0.9 ECONOMIC DEPENDENCY RATID 0.8/a o.sf/a .. 0.9/a 1.4/a 1.2/a FAMILY PLANNING ACCEPTORS (CUMULATIVE, THOU) .. .. . . USERS (% OF MARRIED WOMEN) .. .. .. .. EMPLOYMENT TOTAL LABOR FORCE (THOUSAND) 2500.0 3000.0 . 2300.0 360.0 1600.0 LABOR FORCE IN AGRICULTURE (%) 92.0 ag.o . 91.0 95.0 73.0 UNEMPLOYED (x OF LABOR FORCE) .. 3.0/b .. .. .. 7.0 INCOME DISTRIBUTION % OF PRIVATE INCOME RECOD BY- HIGHEST 5% OF HOUSEHOLDS .. .. .. .. HIGHEST 20% OF HOUSEHOLDS .. .. .. LOWEST 20% OF HOUSEHOLDS .. . .. LOWEST 40% OF HOUSEHOLDS .. .. .. DISTRIBUTION OF LAND OWNERSHIP ____________ _________________ % OWNED BY TOP 10% OF OWNERS OWNED BY SMALLEST 10% OWNERS . HEALTH AND NUTRITION POPULATION PER PHYSICIAN .. 92760.0 59570.0 41490.0 17060.0 16640.0 POPULATION PER NURSING PERSON 4370.0/bc 4230.0 4250.0 3960.0 4280.0 2680.0 POPULATION PER HOSPITAL BED 1810.07S 1670.0/C 1170.0/c 1390.0/b 2760.0/b 810.0/b PER CAPITA SUPPLY OF - CALORIES (x OF REQUIREMENTS) 85.0 78.0 78.0 92.0 99.0 97.o PROTEIN (GRAMS PER DAY) 69.0 6.0O 59.0/d 89.0 75.0 64.o -OF WHICH ANIMAL AND PULSE .. 22.0/d .. 23.0/C 44.0/C 28.0/c DEATH RATE (/THOU: AGES 1-4 .. .. .. EDUCATION ADJUSTED ENROLLMENT RATIO PRIMARY SCHOOL 9.0 1. .0 20.0 18.0 38.0/d SECONDARY SCHOOL 0.5 1.o 12 8 3.0 2.0 eO 67, e YEARS OF SCHOOLING PROVIDED (FIRST AND SECOND LEVEL) 13.0 13.0 13.0 12.0 13.0 13.0 VOCATIONAL ENROLLMENT (K OF SECONDARY) 21.0 10.0 17.0 40.0 . 9.0 ADULT LITERACY RATE (x) 7.0 o 15 . o 10.0 10.0 HOUSING PERSONS PER ROOM (URBAN) .. .. OCCUPIED DWELLINGS WITHOUT PIPED WATER (x) ACCESS TO ELECTRICITY (x OF ALL DWELLINGS) .. . RURAL DWELLINGS CONNECTED TO ELECTRICITY (5) CONSUMPTION RADIO RECEIVERS (PER THOU POP) 1.0 10.0 17.0 12.0 47.0 69.0 PASSENGER CARS (PER THOU PoP) 0.4 1.0 1.5 1.0 4.0 9.0 ELECTRICITY (KWH/YR PER CAP) 2.0 0.0 9.0 11.0 63.0 73.o NEWSPRINT (KG/YR PER CAP) . . .. 1 . 0.o SEE NOTES AND DEFINITIONS ON REVERSE  AN=D I Page 2 of 4 pages NOTES Unless otherwise noted, data for 1960 refer to anty year between 1959 end 1961, for 1970 between 1968 and 1970, and for Most Recent Estiarat between 1973 and 1975. lGNP per capita data ere based on the World Bank Atlas methodology (1974-76 baeie). 00 Due to amigration population growth rate is lower than the rate of natural increase; 0*0 senegal has been selected as sn objective country for Upper Volta since its 1970 GNP is about four time that of Upper Volts's; thsy both are in the seeo geographical ares (Sahelian region), share a sinilar monetary system and have the em aconom ic growth rate in the period 1960-70, and have che sasle literacy rate of 5-10 percent. LIPPER VOLTA 1960 /a Ratio of population under 15 end 65 and oner to total labor force; /b 1963; Ic Including asistant nuraea; Id Gov-rnment hospital establishento. 1970 Ia Rioto of population under 15 and 65 ard over to total labor force; /b In urban areac about 20 percent; /c Government ho-pital establishmants; /d 1964-66. MOST RECENT ESTIMATE: /a 1976; /b 1970-73; /c Governmmot hospital eatabliaslh-nts, 1971; /d 1969-71 average. MALI 1970 /a Ratio of population under 15 and 65 end over to total labor force; !b Government hospital establislnhots; /c 1964-66. MAURITANIA 1970 /I Ratio of population under 15 and 65 and over to total labor force; /b Government hospital esatablshmsnts; /c 1964-66. SENEGAL 1970 /a Ratio of population under- 15 and 65 and over to total labor force; /b Government hospital establishments; Ic 1964-66; /d Unadjuated; /a Lower aecondery level. R6, JanuAry i8, 1978 UDRINTIONS OP SOC7AL DiDICATORS Land Area (thou k.r2) Population par nursina person - Population divided by nomber of practicing Total - Total aurface area conprising land area nd inland waters, els and fiale graduate nurses, "trained" or 'csrtifi ed" nurss, and Agric. Hoot rrcenot estimate of agricultoral ares used tenporarily or Perma- auoiliary personal with training or *eperine.. nantly for crope, p-atures, market & kitehen gardens or to lie fallow. Population opr hoasital bed - Population divided by tbeer of hospital beds available in public and private general and speciellaed hbapital snd GNP ner capita (US$) - GNP par capita estimatas at currnt mrket prices, rehabilitation centersn; xclude nursing hob s and establiahnts for colculated by same conversior uthod as World bank Atlas (1973-75 beais); cuatodial and prsnvotive care. 1960; 1970 and 1975 date. Per caPit- suPPIy of calories (' of rnuirments) - Conputed fre enrgy equivalent of net food eupplies -vailabls in co-try per capita par day; popalation end oltal statistic! available upplies crprise dueatic production, imports less eparts, and Population (mid-year million) uA of July first: if not available, average changes in tock; not upplies exclude sninal feed, ceeds, quantities used of two end-year estimatea; 1)60, 1970 nd 1975 data, in food processing and losses in distribution; roqreirnts wre etimated by FAD based on physiological needs for norml activity and health consid- population density - pcr square ko - Mid-year ppulation per square kilometer ering nviromental tmperatur-, body wights, age nd sex distributione of (100 he-terse) of total are. population, nd allowing 10% for waste at ho.-.hold levl. Population density - er square kb of agric. land - Cmputed as above for Per Capita supply of rotein (eras pnr day) - Protein content of per capita agricultural land only. -t supply of food per day; nt supply of food iL dfined as above; require- mnts for all countrins established by USDA Econamic Reaaerch Service. Vital statistics provide for a nini allowane of 60 grut of total protein per day, and Crude birth rate par thousand. verage - Annual liv birtb. per tbousexd of 20 gres of animal and pale protin, of hbioh 10 grms should be animl oid-ysar population; ten-year erithtic verage ending in 1960 and 1970, protein; thae stenderd ar lower them those of 75 gra of total protein and five-year -ver-ge nding in 1975 for et recant *atit. and 23 gras of ao1-l proteina em n verage for the world, proposed by PAO Crude death rate oer thousand a*vrace - Annual dethe per thousand of aid-year in the Third World Food Survey. population; ten-year eritlasatic averages nding in 1960 and 1970 and five- Per Capita protein supply fro animl and oulee - Protin supply of food year average ending in 1975 for wost reent estimate derived fron anils and pulses in gras par dy. Infant mortality rate (/thou) - Anu.al deaths of infant under one yar of age Deth rate (/thou5) ags 1-4 - Annl dastha per thouaand in age group 1-4 per thoueand live birthe. yoers, to children in this age group; suggested as an indicator of Life eupvut.ncy at birth fyrs) - Av-rage conr of years of life remaining at mlnutrition. birth; usually five-ysar average ending in 1960, 1970 end 1975 for develop- ing countriea. Education Grosa reproduction rate - iverage neber of live daughters a wn will bear Adjusted snroll_nt ratio - Primar school - Enrol7mnt of all eges as par- in her norml reproductive period if she *xpriences present age-scific c ntge of primacy echool-eg population; includes Children aged 6-11 years fertility retse; uaully five-year verages, ending in 1960, 1970 and 1975 but adjusted for different lsngthe of primary ducation; for countries with for doveloping countries universal education, enrollmnt my seead 100% aie sam pupils re ablos Population growth rate (%) - total - Cmpound annual growth rates of mid-yoar or above the official school age. population for 1950-60, 1960-70 end 1970-75. Adwuted enrollment ratio - secondary school - Cosauted as above; econdery Population orowth rate (27 - urban - Coputed like growth rate of total education requires at least four year of approved primry instruction; population; different definitions of urban rsree amy affect comparability of provide generl, vocational or teacher training inctructiona for pupils data among otttrie. of 12 to 17 years of age; correspondence coures amr generally excluded. Urban poulation (M of total) - Ratio of urban to total popultion; different Years of chwlig orovidd (first ndsecond leels) - Total years of definition of urban *rea may affect ceperability of data Cont ountriee. shling; at eondary level, vocational inAtruction my be partially or Ceopletely exluded. Ae structure (porcent) - Children (0-14 years), working-age (15-64 years), Vocational enrollment iX of secondary) - Vocational institutions include aond retired (65 years and over) .s percentages of mid-year popultion. t-hacoel, indu trial or other progras hihe operate independently or as Age dependeocy ratio - Ratio of population under 15 and 65 and over to thoes departments of aecondary in titutionw. of ages 15 through 64. Adult literacy rate CY) - Literate dults (able to read and write) as per- Ectnonic depeondecy ratio - Ratio or population under 15 and 65 end over to centag, of total adult population aged 15 eas and over. the Iabor force in age group of 15-64 years. FPily plammica - acceptors (umJultive. thou) - Cmultive nu-ber of ae optors bous JLA of birth-control devicee under auspices of notional fenily planning progr_ Person per roe (urban) - Average number of perons per roe in occupied since inception. conventional duslinog in urban ares; dellig exclude non-permanent F_ily plnning - usero (M of married wean) - Pere.ntages of married amen of structures nd unoccupied parts child-b-ering ge (15-44 years) who w- birth-nontrel device. to a11 mrricd Ocudid d-Illnma without Piped wter it) - Oc-upied conventional dllings wean in see age group. in urban nd rural areas without inide or outaids piped water failities as percentage of all occupied dwellings. EplIOV_nt Aces to electricity i% of all dwellings) - Conventional dwellingp with Total labor force (thousand) - Econoically acive person, including armed el-etrinity in living quarters as perrent of total dellings in urban nd forces and uemployed but ecluding houaewives, students, etc.; definition rural areas. in various countrie are not ceprable. Rural d"llinm nonseeted to *l ctrncitry t) - Cmpuntd s abov for rural Labor fore in oricIulture C) - Agricultural labor force (in forming, forestry, dwlliega only. hunting and fishing) s percentage of total labor force. Unemployed (2 of labor ferns) - Unemployed ar usually defined a person who Cqsu mption are able and willing to take a job, out of a job on a given day, rmained out Radio reeiers (per thou sOp) - All type of rceivers, far radio broadcasts of a Job, and seeking work for a speciflsd elnims, period not *xceeding on to general public per thousnd of population; excludes unliceaued receivers week; my not be eparpble between Countries due to different definitions in Countries and in yers when regitration of redin acts e_ in effect; of unmployed nd source of dats, e.g., ploymnt offin statitis, ample data for reenat year my not be eparable since mot countriea abolished surveys, topuleory unemployment i-urnce. liceins lg. Pass er e ar theu spo) - FPssenger cors cpries eotor car seeting Incoe distribution - Percentage of private incos (both in Cesh and kind) lees than eght persons; enclades ambulantes, harse and military received by richest 5%, richest 20%, poorest 20%, and porest 40% of houae- vehicles. holds. Electricity (kb/r ser cap) - Annul covusption of industrial, comarcial, public and privste electricity in kilowatt hours per ceapite, generally Distribution of land oanrsh:p - Percentags of land owned by welthiest 10% based en prnduetion data, without a1lawnes for lones in grids but allow- and poorest 10% of lend owners. ing for imports nd eqorte of electricity. gewprint (kf/vr Per cea) - Per capita annual conmueption in kilogras Health and Nutrition eatetit4d fre domestic production plu net imports of nprint. Population per physician - Population divided by mu.br of practicing physicians qualified fron a medical school at university lel..  Annex 1 COUNTRY DATA - UPPER VOLTA Page 3 of 4 pages GNP PER CAPITA IN 1976: US$110 GROSS NATIONAL PRODUCT IN 1975 ANNUAL RATE OF GROWTH (X. CONSTANT 1968 PRICES) US$ million _ 1960-1973 1973-1975 GNP at Market Prices 629.9 100.00 2.2 3.2 Gross Domestic Investment 117.0 18.6 2.6 -2.0 Gross National Savings 33.7 5.4 Current Account Balance 105.6 -16.8 Exports of Goods, NFS 81.7 13.0 2.6 7.6 Imports of Goods, NFS 240.3 38.2 3.5 -6.0 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1975 Value Added (Factor Costs) Jabor Force* US$ million % ( 0O)R Agriculture 260.5 44.5 2,830 95.5 Industry 110.7 18.9 45 1.5 Services 214.5 36.6 89 3.0 Total 585.7 100.0 2,964 100.0 GOVERNM1 T FINANCE General Government of GDP 1974 1975 1974 1975 Current Revenues 15.1 19.6 12.7 14.0 Current Expenditures 11.8 20.6 9.9 14.8 Current Surplus or Deficit 3.3 -1.0 2.8 -0.8 Capital Expenditures 1.3 2.0 1.1 1.4 External Assistance 0.9 1.7 0.8 1.2 Overall Balance 2.9 -1.3 Z.5 -9.9 MONEY, CREDIT AND PRICES 1971 1972 1973 1974 1975 (CFAF billion at end of year) Money and Quasi Money 9.93 9.96 14.62 17.53 21.71 Bank credit to Public Sector -4.45 -5.14 -6.13 -9.27 -4.90 Bank credit to Private Sector 6.61 7.31 9.16 15.38 20.49 PERCENTAGES OR INDEX NUMBERS Money and Quasi Money as Z of GDP 10.8 10.1 14.6 15.7 15.6 General Price Index (1963 = 100) 119.0 123.0 130.3 148.3 187.2 Annual percentage changes in: General Price Index . 3.4 10.7 8.8 26.2 Bank credit to Public Sector . -15.5 -19.3 -51.2 +47.2 Bank credit to Private Sector . 19.6 25.3 67.9 33.2 * Staff estimates Not available Not applicable November 30, 1977  COUNTRY DATA - UPPER VOLTA TRADE PAYMENTS AND CAPITAL FLOWS Annex 1 (in millions bf current US$) Page 4 of 4 pages BALANCE OF PAYMENTS 1973 1974* 1975* MERCHANDISE EXPORTS Exports of Goods, NFS 57.0 67.7 81.7 (Average of 1972-75) Imports of Goods, IES 145.5 166.2 240.3 Resource Gap (deficit -) -66.5 -98.5 -158.6 Livestock 17.2 39.3 Cotton 8.1 18.5 Interest Payments (net) 1.7 1.8 2.0 Groundnuts 6.7 15.3 Workers' Remittances 30.5 33.6 39.7 All other 11.8 26.9 Other Factor Payments (net) -4.6 -4.7 -6.0 Total 43.8 -100.0 Net Transfers 13.5 10.4 17.3 Balance on Current Accounts -47.4 -57.4 -105.6 EXTERNAL DEBT, DECEMBER 31,1976 Direct Foreign Investment (net) 2.6 5.0 5.0 Public Debt, incl. guaranteed 247.5 Official Capital Grants 50.9 53.2 84.2 Non-Guaranteed Private Debt _ Net MLT Borrowings 9.1 14.1 18.9 Total outstanding and disbursed 84.4 Disbursements (12.1) (16.7) (22.5) DEBT SERVICE RATIO FOR 1976 Repayment (-3.0) (.2.6). (-3.6) Public Debt, incl. guaranteed Other items 1/ 2.3 -6.7 -10.5 Non-Guaranteed Private Debt Change in Reserves (end year) -18.0 -8.7 +7.0 Total outstanding and disbursed 6.4% Foreign Reserves (end year) 53.3 74.2 67.5 Fuel and Related Materials IBRD/IDA LENDING, NOVEMBER 30, 1977 Imports: Outstanding and Disbursed 30.4 Undisbursed 59.0 of which: Petroleum 5.4 9.1 12.6 Outstanding incl. undisbursed 89.4 Exports: of which: Petroleum RATE OF EXCHANGE 1971: US$1.00 = CFAF 277.03 1972: US$1.00 = CFAF 252.21 1973: US$1.00 = CFAF 222;70 1974: US$1.00 = CFAF 240.50 1975: US$1.00 = CFAF 214.32 1976: US$1.00 = CFAF 245.00 1/ Including errors and omissions * Staff estimate Not available Not applicable November 30, 1977  ANNEX II Page 1 of 6 STATUS OF BANK GROUP OPERATIONS IN UPPER VOLTA A. STATEMENT OF IDA CREDITS (as of November 30, 1977) (US$ million) Amount (less cancellations) Number Year Borrower Purpose IDA Undisbursed Three Credits fully disbursed 5.8 - 225-UV 1970 Republic of West Volta Cotton 6.2 0.1 Upper Volta 430-UV 1973 Republic of Education 2.9 1.3 Upper Volta 431-UV 1973 Republic of Telecommunications 4.5 0.6 Upper Volta 442-UV 1973 Republic of DroughL Relief 2.0 0.0* Upper Volta 316-2-UV 1974 Republic of Roads 1.3 0.7 Upper Volta 496-UV 1974 Republic of Bougouriba Agricul- 8.0 4.6 Upper Volta tural Development 557-UV 1975 Republic of Livestock Develop- 9.0 8.3 Upper Volta ment Project 579-UV 1975 Republic of Rural Roads 7.5 6.5 Upper Volta 640-UV 1976 Republic of Rural Development 9.4 8.6 Upper Volta Fund II 653-UV 1976 Republic of Roads III 20.0 15.5 Upper Volta 706-UV 1977 Republic of Agricultural 3.6 5.2 Upper Volta Development 744-UV 2/ 1977 Republic of Railway 5.2 5.2 Upper Volta -UV 2/ 1977 Republic of Small & Medium Upper Volta Scale Enterprise 4.0 4.0 TOTAL 89.4 59.0 of which has been repaid TOTAL now held by IDA 1/ 89.4 TOTAL undisbursed 59.0 1/ Prior to exchange adjustment of US$0.2 million 2/ Not yet effective W US$33,201.53 undisbursed.  ANNEX II Page 2 of 6 pages B. STATEMENT OF IFC INVESTMENTS (as of December 31, 1977) NIL C. PROJECTS IN EXECUTION 1/ Credit 225: West Volta Cotton Project. US$6.2 Million Credit of December 30, 1970; Effective Date: May 1, 1971; Closing Date: December 31, 1976 - Extended to December 31, 1977 The project is part of a cotton production development program in West Volta, which originally started with FAC financing in 1963. It consists of expansion of cotton cultivation, improvement of yields, credit and extension services, and provision of better communications and processing facilities. The project also includes funds for detailed engineering of secondary roads and preparation of the Bougouriba Agricultural Development Project, both of which have been completed. The total area under cotton in 1976/77 will be 32,000 ha more than in 1970/71, about in line with appraisal estimates. However, seed cotton output in 1976/77 is expected to be 38,500 tons higher than that of 1970/71 thus exceeding appraisal estimates of incre- mental production by 17%. Due to lagging cotton production during early pro- ject years which were drought years, no additional ginnery was constructed at Hounde. Good progress was made in the improvement and maintenance of the feeder road network in the project area. This project has been completed. Credit 316: Road Project. US$4.L5 Million Credit of June 26, 1972 (As amended on March 25, 1974); Effective Date: December 31, 1974; Closing Date: December 31, 1978 The project originally comprised: (a) the reconstruction of the Solenzo-Koudougou (70 km) and Hounde-Bereba (27 km) roads, and (b) feasi- bility studies for about 400 km of primary roads, and engineering of those sections found to have the highest priority. Construction of the Solenzo- Koudougou road began in March 1974 and is now completed. Construction of the Hounde-Bereba road was deleted from the project as cotton production did not merit the construction of a ginnery at Hounde and without the ginnery there was no justification for the road. These funds were transferred to a drainage works construction component bids for which are expected end December, 1977. Regarding part (b) out of four proposed roads only two, from Banfora to Bobo-Dioulasso and from Bobo-Dioulasso to Hounde (a total of 190 km) were selected for feasibility studies as these were the only roads which showed a preliminary satisfactory rate of return. Construction began on 1/ These notes are designed to inform the Executive Directors on the progress of projects in execution, and in particular to report any problems which are being encountered, and the action being taken to remedy them. They should be read in this sense, and with the understanding that they do not purport to present a balanced evaluation of strengths and weaknesses in project executiorn.  ANNEX II Page 3 of 6 pages the road component of the Third Highway project (Cr. 653-UV) on the basis of these completed engineering and feasibility studies in March 1977. Due to currency realignment and to cost overruns on the road construction part of the project, the dollar cost of the project increased. Consequently, to enable project completion, on March 25, 1974 the Association approved an increase in the amount of the credit from US$2.8 million to US$4.15 million. Credit 430: Education Project. US$2.85 Million Credit of September 28, 1973; Effective Date: June 27, 1974; Closing Date: June 30, 1979 The project was designed to improve the quality and enlarge the scope of rural education in the ORDs of Dedougou, Koudougou, and Kaya. The project originally provided for: (a) the construction and equipping of 40 centers, and the equipping of 80 existing centers for the training of young farmers (CFJAs), (b) the organization, equipping, and servicing of 150 post- school cooperative groups for young farmers over 18 years of age; (c) the creation of three rural development training centers; (d) the provision of science laboratories for 21 secondary schools; and (e) related and supporting technical assistance for project implementation. The three rural development training centers were originally provided under the project to train graduates of rural education centers as rural development agents. However, as project implementation has been delayed, it is unlikely that graduates will be ready for further training as rural development agents during the project period. Therefore the component was deleted from the project, and the funds released will be used to provide additional support facilities and materials for the training of rural education instructors and agricultural agents for the group cooperatives. Physical implementation of the project is about 15 months behind the appraisal forecast. Construction of the science laboratories is scheduled for completion by February 1978, with equipment delivery expected by end January, 1978. Progress on the rural component has been delayed by the remoteness of and great distances between sites and by shortages of critical materials; corrective action under way is expected to enable this component to be completed by the spring of 1978. Despite the delays the project is expected to be completed within the budget; no revision of the closing date is foreseen. This is an innovative project with good local participation. Credit 431: Second Telecommunications Project. US$4.5 Million Credit of September 28, 1973; Effective Date: May 23, 1974; .Closing Date: June 30, 1978 The Credit was approved on June 21, 1973, signed on September 28, 1973, and became effective on May 23, 1974. This Credit, the second made to Upper Volta for telecommunications, finances the major part of Upper Volta's 1974-77 telecommunications expansion program. The project comprises provision of automatic and trunk switching equipment, local distribution networks and subscribers' apparatus, microwave links, auxiliary construction and equip- ment, consultants' services and training of personnel. The executing agency for the project is the "Office des Postes et Telecommunications de Haute- Volta" (OPT), a semi-autonomous public entity. The project execution is on  ANNEX II Page 4 of 6 pages schedule. All contracts were awarded by the end of 1975, and the project costs have increased only slightly, mainly for local costs, and the IDA credit is judged sufficient to cover the project's foreign exchange require- ments. The financial results for the year ending December 31, 1974 were satisfactory; however, OPT's financial situation for the years 1975-77 is projected to deteriorate. OPT has received a loan from Government to help it restore its cash flow position and finance building costs. Credit 442: Drought Relief Project. US$2.0 Million Credit of December 7, 1973; Effective Date: April 24, 1974; Closing Date: June 30, 1976 - Extended to March 31, 1978 This is one of six credits made available to the Sahelian countries to help people in drought affected areas re-establish food self- sufficiency. In Upper Volta the project is executed by the Rural Development Fund established under Credit 317-UV. The project originally envisaged four sub-projects; (i) construction and equipment of 150 tube-wells; (ii) con- struction of three earth dams; (iii) purchase of road equipment for repair of feeder roads; (iv) construction of six seed storage warehouses. Procurement has been completed, but the execution of the tube-well drilling program, the most important component of the project, began just a year ago. The delay of almost one year is due to default by suppliers of vehicle parts and drilling pipes. Project completion was extended by one year and a half to allow for completion of tubewell drilling program. Credit 496: Bougouriba Agricultural Development Project. US$8.0 Million Credit of July 19, 1974; Effective Date: July 18, 1975; Closing Date: May 31, 1979 The project, to be carried out over a four year period, is the first major effort to develop the natural and human resources of the Bougouriba ORD. The project has been ongoing for over two years and, to date, results have been mixed: while infrastructure improvements (roads, wells) have shown good progress, agricultural production is lagging and the project is in need of reorganization of its extension services. Increased attention must also be given the training and supervision of extension workers. A follow-up project for the area is presently under consideration. Credit 557: Livestock Development Project. US$9.0 Million Credit of June 18, 1975; Effective Date: November 24, 1975; Closing Date: June 30, 1981 The project, to be carried out over five years, is a broadly based program to assist cattle production in the Dedougou and Bobo-Dioulasso ORDs through group ranch development, the impravement of veterinary services, livestock marketing, meat processing and the provision of technical assistance.  ANNEX II Page 5 of 6 pages The project is running behind schedule; only the investment programs for the Project Unit and the animal health component are proceeding as originally projected; however, planning for the Group Ranch Center, the rehabilitation of the Bobo-Dioulasso abattoir and the livestock marketing component is suffi- ciently advanced, that no future slippages are expected to occur with regard to these three components. Group ranch development has proceeded very slowly; nevertheless, the site for the first 18,000 ha group ranch has been selected, and Government has issued the group ranch statute. Bids for construction of the group ranch center have been sent out and Government has issued the group ranch statute but the first group ranch has yet to start up. Progress has been further hampered by the accidental death of the Group Ranch General Manager. A supervision mission which returned in late December has recom- mended that an in-depth review of the Group Ranch component be made during the first quarter of 1978. Credit 579: Rural Roads Project. US$7.5 Million Credit of August 13, 1975; Effective Date: February 11, 1976; Closing Date: December 31, 1979 The project, to be carried out over four years, provides for the improvement and subsequent maintenance of about 1,200 km of rural roads, and maintenance of about 2,100 km of existing roads, the strengthening of the Service d'Entretien des Routes Secondaires (SERS) through technical assistance to the Ministry of Public Works, and the implementation of the above road program and procurement of highway equipment. All equipment should be delivered on schedule. Recruitment of local personnel is advancing well. Terms of reference for an evaluation and impact study have been discussed with the Government. Credit 640: Rural Development Fund II Project. US$9.4 Million Credit of June 21,_1976; Effective Date: January 24, 1977; Closing Date: December 31, 1980 The project will be carried out over five years (1976/77 through 1979/80), and will provide a line of credit to the Rural Development Fund (Fonds de Developpement Rural - FDR) for investment in small-scale rural projects, the main purpose of which would be to increase crop production and improve village water supplies. Program activities will include: bottomland development (2,700 ha); erosion control works (9,200 ha); small scale irriga- tion and improved bottomland development (500 ha); construction of 520 wells, 180 tube-wells, 400 village warehouses and 20 village centers; provision of medium term credit for agricultural equipment, US$0.5 million equivalent; and provision for unidentified projects. In addition, studies for economic dev- elopment of areas freed from onchocerciasis will also be financed under the project. Staff recruitment and the procurement of vehicles and equipment is almost complete. The project was slow in getting started due to the shortage of funds caused by delayed project effectiveness and limited pre-financing available from Government. These problems have now been overcome and work targets for the 1976-77 season have on the whole been reached.  ANNEX II Page 6 of 6 pages Credit 653: Third Highway Project. US$20 Million Credit of July 15, 1976; Effective Date: December 15, 1977; Closing Date: June 30, 1980 The project consists of: (a) reconstruction of the Banfora- Bobo-Dioulasso-Hounde road (183 km); (b) procurement of vehicle weight control and traffic counting equipment; (c) road maintenance study; (d) preinvestment study of the Ouagadougou-Kaya-Dori road; (e) technical assistance to the Department of Transport (DOT); and (f) technical assistance to the domestic contracting industry. Two contracts for the construction of the project road were awarded in January 1977. The Bobo-Dioulasso-Hounde section is currently under contruction and should be completed by June 1978. The Bobo- Dioulasso Banfora section began in October and should be completed in the spring of 1979. Offers for vehicle weight control and traffic counting equip- ment are being evaluated. The technical assistance to the DOT has been in place since January 1977. Offers for the maintenance study have been evaluated by Government and we are expecting them shortly. Arrangements for providing technical assistance to domestic contractors have not been finalized. offers for the preinvestment study are due in January, 1978. Credit 706: West Volta Agricultural Development Project. US$3.6 million Credit of May 23, 1977; Effective Date: December 28, 1977; Closing Date: June 30. 1982. The project will strengthen the ORDs of Bobo-Dioulasso and Dedougou through provision of technical assistance and equipment; establish a Financial and Administrative Unit for project monitoring and accounting; finance a ginnery and training facilities for projection extension workers; support an annual extension program; provide agricultural inputs to farmers; develop low cost irrigation schemes; implement a pilot settlement project and a pilot women's project. Credit 744: Regional Railway Project in the Ivory Coast and Upper Volta US$5.2 million Credit of Nov. 14, 1977; Effective Date: ; Closing Date: Dec. 31, 1980 This credit is not yet effective. Credit 759: Artisan, Small and Medium Scale Enterprise Project. US$4.0 million of January 12, 1978; Effective Date: ; Closing Date: December 31, 1981. The Credit is not yet effective.  ANNEX III Page 1 UPPER VOLTA URBAN DEVELOPMENT PROJECT Section I: - Timetable of Key Events (a) Time taken by the country to prepare the project: one year. (b) Agencies that prepared the project: SCET International (c) Date of first presentation to the Association: November, 1975; date of the first Bank mission to consider the project: February, 1976 (d) Date of departure of Appraisal Mission: February, 1977. (e) Date of completion of negotiations: September 16, 1977. (f) Planned date of effectiveness: April 31, 1978. Section II: - Special IDA Implementation Actions Given the lack of precedent for cost recovery and the poor collec- tion record of the municipalities, cost recovery arrangements will have to be monitored very closely during project implementation. The mission has esti- mated that 150 person weeks will be required over the project implementation period 50 of which will be during the first year. Section III: - Special Conditions (a) final engineering designs and implementation arrangements for the squatter upgrading, sites and services and water distribution components would be satisfactory to the Association (para. 38); (b) Municipal Housing Offices headed by qualified personnel and adequately staffed are to be established with the existing Land Offices of the Municipalities of Ouagadougou and Bobo-Dioulasso (para. 39); (c) an Interministerial Committee headed by the Minister with responsibility for town planning will be created (para. 41) (d) a review of municipal financial management would begin no later than June 1978 and be completed by June 1979 (para 42);  ANNEX III Page 2 (e) the qualifications, experience and terms and conditions of employment of consultants hired under the project shall be satisfactory to the Association (para. 43); (f) arrangement for legalizing land tenure for residents in the upgraded neighborhoods (para. 44); (g) principles and amounts to be applied to housing con- struction loans (para. 46); (h) principles to be applied to recovery of investment costs (para. 48); and (i) use by the municipalities of the balances in the Housing Development Funds (para 49).  ' - REPL8BUC wOF UPPER 2 - - < -URBAN DEVtPMENT PROJET)--- .i DkA Pretct ;, AHE .q ,0~~~~~~~~~~~~~~~~~~~~~~~~~~~ A H F G 'A Ft , -5 -, A 15 V O R ~~~~~~~~~~Y -.COA ST E N G A