Announcement of IDA Approves Credit to Zambia for Agricultural Development on December 10, 1981

. . ~ (} FOR -1,MMEDIATE. RELEA E ~ •World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 82/21 Contact: Pushpa Schwartz December 10, 1981 (202) 477-5306 IDA APPROVES CREDIT TO ZAMBIA FOR AGRICULTURAL DEVELOPMENT The productivity of Zambia's small-scale farmers will be improved with the assistance of an SOR 15.9 million ($18 million) credit approved by the International Development Association (IDA), the concessional lending affiliate of the World Bank. The loan will support a $24.6 million project for increasing the use of modern agricultural practices by farmers in the country's Southern Province. Marketing facilities will also be improved. As a result, it is expected that crop and livestock production will be increased, as well as farm incomes. The major crop, maize, is produced for food as well as for cash. Other important crops are cotton. groundnuts, sunflower seed, and soybeans. • Under the project, smallholders will be provided with farm inputs on credit and storage facilities for farm supplies and produce,and extension ser- vices will be improved. For livestock raisers, veterinary and tsetse control services wi11 be provided. These services will be provided by the provincial offr~e of the Ministry of Agriculture, the Southern Province Cooperative Marke- ting Un!on, Limited, and the Zambia Agricultural Development Bank. The cooperative marketing union, which operates through a system of 500 primary society depots, will be provided with technical assistance to improve its credit administration~ Because the project is only the second of its kind in Zambia, particular emphasis will be placed on the evaluation of its results. The project is intended to assist the province's roughly 65,000 rural families, largely subsistence farmers, ranging from those who use only hand tools and family labor, to the majority who use ox ploughs for cultivation. About 27,000 farm families are exp~cted to participate, increasing their real incomes bp up to over 100%. The IDA credit of SDR 15.9 million to Zambia is for 50 years, with 10 years of grace; it is interest-free but will carry a service charge of 3/4 of 1% to cover IDA's administrative costs. The credit will be committed when funds are available. NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), which are • valued on the basis of a 11 basket 11 of currencies. The U.S. dollar equiva- lent of the SDR amount of the ID~ credit reflects the exchange rates existing at the time of negotiation of the credit.  FORM NO. 1121 (5-76) T E CHN I CA L DA T A PROJECT: COUNTRY: TOTAL COST: Southern Province Agricultural Development Zambia $24.6 • mi 11 ion (including $0.8 mil lion in· taxes and duties) IOA FINANCING: SOR 15.9 million ($18 million) OTHER FINANCING: Government of Zambia, $5.8 million IMPLEMENTING ORGANIZATION: Provincial Permanent Secretary Southern Province Li vi ngstone Zambia PROJECT DESCRIPTION: It aims at increasing crop and livestock production and raising farm income levels in the Southern Province by increasing the use of modern inputs by smallholders and improving marketing facilities. It provides for credit to smallholders, improvement of ~nput and storage and extension services, including veterinary- services and tsetse I. control, and technical assistance for strengthening the credit administration I capability of the cooperative marketing organization. PROCUREMENT: Contracts of $100,000 or more -- for the purchase of vehicles, machinery and equipment (totalling $1.5 million) -- will be bulked where possible, and awarded on the basis of i~ternational • competitive bidding; domestic manufacturers will be granted a preference of 15% or the existing rate of duty, whichever is lower. Vehicles, machinery and equipment of less than $100,000 (to a total of $500,000)will be purchased under local com- petitive bidding procedures which are satisfactory to IDA. Civil works contracts for construction of housing, stores and storage platforms, totalling $4.2 million, will be too small and scattered to attract international interest and therefore will be awarded after local competitive bidding open to foreign firms. Rehabilitation of housing (totalling $500,000) will be carried out either by local contractors or by force account. Fertilizer, veterinary supplies and pesticides (totalling $2.6 million) will be bulked with overall national requirements and procured through The National Agricultural Marketing Board under normal procedures which include intern~tional ten- dering; seed· requirements (tota11 ing $300,000) ·wi 11 be procured from the Zambia Seed Company. CONSULTANTS: About 20 man-months of short-term consultancy services to strengthen storage operations and related training w i 11 be requ i rP.d • · ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 27% June 30, 1987. - 0 - • . t ... l$ ' SIS