Benin - Zou Province Rural Development Project

Document of IP The World Bank FOR OFFICIAL USE ONLY Report No. P-3422-BEN REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT IN AN AMOUNT EQUIVALENT TO US$20.0 MILLION TO THE PEOPLE'S REPUBLIC OF BENIN FOR THE ZOU PROVINCE RURAL DEVELOPMENT PROJECT November 18, 1982 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.  CURRENCY EQUIVALENTS Currency Unit = CFAF U.S.$1.00 = CFAF 340 1/ CFAF 1,000 = U.S.$2.94 FISCAL YEAR January 1 - December 31 WEIGHTS AND MEASURES 1 meter (m) =3.23 feet (ft) 1 kilometer (km) = 0.62 mile (mi) 1 square kilometer (km2) = 0.386 square mile (sq.mi.) 1 metric ton (m ton) = 2,204-pounds (lb) 1 hectare (ha) = 2.47 acres 1 cubic meter (m3) = 1.30B cubic yards ABBREVIATIONS AND ACRONYMS BBD - Banque Beninoise de Developpement CARDER - Centre d'Action Regionale pour le Developpement Rural CATS - Cooperatives Agricoles de Type Socialiste CCCE - Caisse Centrale de Cooperation Economique CNCA - Caisse Nationale de Credit Agricole FAC - Fonds d'Aide et de Cooperation FED - Fonds Europeen de Developpement MDRAC - Ministere du Developpement Rural et de l'Action Cooperative DEP - Direction des Etudes et de la Planification du Ministere du Developpement Rural et de l'Action Cooperative PMEU - Project Monitoring and Evaluation Unit SONACEB - Societe Nationale pour la Commercialisation et l'Exportation du Benin SONAGRI - Societe Nationale pour la Production Agricole SOPROCA - Societe Provinciale de Commercialisation des Produits Agricoles SONAPRA - Societe Nationale pour la Promotion Agricole 1/ 9 The CFA Franc (CFAF) is tied to the French Franc (FF) in the ratio of FF 1 to CFAF 50. The French Franc is currently floating.  FOR OFFICIAL USE ONLY BENIN ZOU PROVINCE RURAL DEVELOPMENT PROJECT Credit and Project Summary Borrower: People's Republic of Benin Amount: SDR 18.7 million (US$20.0 million equivalent) 'erms: Standard IDA terms. The proceeds of the credit would be passed on to the project executing agencies as grants. Co-lenders: Caisse Centrale de Cooperation Economique (CCCE) Fonds d'Aide et de Cooperation (FAC) Project Description: The principal objectives of the proposed project are to improve the level of rural incomes and to increase production of both export and food crops through strength- ening and suppport of institutions, integrated with applied research, seed production, extension, cooperative training, and social services. The project will be implemented over a five-and-one-half year period. At full development, it is expected to reach some 38,000 farm families (about 50 % of the Province's total), and to generate an incremental production of 5,700 t of cotton, 5,200 t of maize, 4,000 t of groundnuts, 3,300 t of cowpeas, 400 t of paddy, and 200 t of tobacco. Benefits and Risks: The project's principal quantifiable benefit would derive from the incremental production of cotton, food crops and livestock products, yielding an estimated additional income to participating farmers at the end of the implementation period, estimated at US$2.7 million from cotton, and US$4.2 million from food crops (in 1981 prices). Unquantifiable benefits include better financial management of Government institutions, enhancement of their capability to plan and implement development activities, and the establishment of a firm basis for adaptive food crop and cotton research, and for seed production. There are no major technical risks associated with the project, as all technical proposals have been proven in other ecologically similar West African areas, and in Benin itself. The principal risks are in financial mis- management, staff turnovers, and institutional organiza- tion. However, these will be minimized by paying This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. _.~~~~~~~  - ii - particular attention to technical and organizational training programs, incentives and bonuses, and the engagement of a strong technical assistance team. Estimated Costs (including taxes) US$ million Local Foreign Total CARDER 2.5 5.9 8.4 Training 0.3 1.5 1.8 SONAPRA 0.1 0.3 0.4 Applied research and seed production 1.3 1.6 2.9 Lowland development and water supply 0.7 0.3 1.0 Monitoring and evaluation 0.2 0.3 0.5 Supplies and inputs 0.5 3.0 3.5 Ginning plants - maintenance 0.3 0.5 0.8 MDRAC - DEP 0.4 1.0 1.4 BASE COST 6.3 14.4 20.7 Contingencies Physical 0.4 0.8 1.1 Price 3.3 3.9 7.3 Total Contingencies 3.7 4.7 8.4 TOTAL COST 10.0 19.1 29.1 of which taxes 2.7 - 2.7 TOTAL COST (net of taxes) 7.3 19.1 26.4 Recurrent National Fertilizer/ Insecticide Imports _ 33.6 33.6 TOTAL PROJECT COST (including taxes) 10.0 52.7 62.7  - iii - Financing Plan US$ million Total Percent IDA 20.0 1/ 32 FAC 3.7 6 CCCE 6.5 10 GOVERNMENT 9.9 16 FARMERS 22.6 36 1/ Includes an advance of US$281,000 under the Project Preparation Facility. Estimated Disbursements: US$ million FY83 FY84 FY85 FY86 FY87 FY88 FY89 Annual 1.4 2.4 2.9 3.7 4.3 3.8 1.5 Cumulative 1.4 3.8 6.7 10.4 14.7 18.5 20.0 Economic Rate of Return: 22% Staff Appraisal Report: 3157/BEN, dated November 18, 1982 Map: IBRD-16246   INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT IN AN AMOUNT EQUIVALENT TO US$20.0 MILLION TO THE PEOPLE'S REPUBLIC OF BENIN FOR THE ZOU PROVINCE RURAL DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed Development Credit to the People's Republic of Benin for an amount in various currencies equivalent to Special Drawing Rights 18.7 million (US$20.0 million) on standard IDA terms to help finance the Zou Province Rural Development Project. Additional financing for the project would be provided on a parallel basis by the French Fonds d'Aide et de Cooperation (FAC) for the equivalent of US$3.7 million, and on a joint basis by the Caisse Centrale de Cooperation Economique (CCCE) for the equivalent of US$6.5 million. PART I - THE ECONOMY 2. The latest economic report on Benin (Report No. 2079-BEN) was issued in May, 1979. The paragraphs below are based on this report, but include updated information provided by an economic mission which visited the country in June, 1982. A new country economic memorandum is being prepared. Annex I provides basic country data. Introduction 3. After independence in 1960, a period of instability characterized by frequent changes in Government prevailed until the revolution in 1972, which brought to power the military Government of Lieutenant-Colonel Kerekou. The new Government committed itself to removing foreign dominance from the modern sector, nationalizing the major industries and strengthening Government involvement in the agricultural sector. While these measures initially disrupted the economy, one of the new policy's strong points was its conserva- tive public finance posture. A tight control over expenditures resulted in a current budget surplus. Foreign borrowing financed the limited public invest- ment program, and debt service ratios were low. 4. Benin has now enjoyed a comparatively long period of political stability under a one-party system. Following the adoption of a new Constitution, President Kerekou was confirmed by the National Assembly in early 1980 for a three-year term. He has in turn appointed a Government composed mainly of civilians. 5. In the last few years, the Government initiated a large program of public investment aimed at developing the industrial sector. These investments, concentrated in a few large projects which are slated to begin operations in the coming year (cement, sugar, petroleum), may propel Benin's economy into a phase of accelerated growth. But Benin's near-term prospects should be assessed cautiously, because they are dependent upon a few key  - 2 - factors: the neighbouring markets (Nigeria and Niger), the success of these major industrial projects, and the continuation of prudent fiscal policies. Recent Economic Developments 6. Benin's economic performance has been relatively modest during the last five years. Preliminary estimates of GDP growth for the 1976-81 period reveal a low level of growth of between 2.5 and 3.0 percent per year in real terms, compared with a population growth of 2.7 percent per annum. Benin remains a poor country with an estimated GNP per capita of $310 (1980). Between 1976 and 1981 exports of goods and non-factor services increased from $132 million to $300 million, but because of an even higher rise in imports and deteriorating terms of trade, the resource gap increased from about 20 percent of GDP during 1976-79 to 37 percent in 1980-81. Up to 1979 much of this was financed by a growing flow of workers' remittances and capital grants; after 1980, medium and long-term borrowing (mostly project-related) increased substantially, external debt having reached US$719 million (including undisbursed) at end-1981 (against US$157 million at end-1976). 7. Agriculture, which generates about 45 percent of GDP, has shown quite a modest performance since 1970, in part because of unfavorable weather con- ditions and in part because of labor migration towards the capital and Nigeria. After two good years of production (1978, 1979), food crop output in 1981 was only 3 percent higher than in 1976, the growth in maize and yam output offsetting a decline in cassava output. Exports of food crops to Nigeria have continued at high levels, resulting in higher prices for food crops sold in the internal market. Cash crop output is 30 percent lower (1980) than in the early 1970s. Cotton peaked in 1972 at 50,000 tons, but has since fallen to around 20,000 tons. Palm oil production is still recovering from the 1976/77 drought. Institutional disruptions, unremunerative producer prices, lack of financial resources, and inadequate management and organiza- tional capability are the main reasons for the unsatisfactory performance of these crops. 8. The secondary sector is still largely undeveloped, contributing about 13 percent to GDP. Manufacturing -- mostly processing of oil palm and cotton products and import-substitution activities -- has faced several problems since key enterprises were nationalized. Many of the state-owned enterprises are experiencing operational and financial problems, and the share of manufacturing value added in GDP has actually declined from 9% in 1975 to 5% in 1981. Construction activities have benefited from the investment program of the Government, their growth offsetting the stagnation of the manufacturing sector. In the mid-1970s Benin concentrated on nationalizing key enterprises and engaged in little new investment. Key projects emerged in the late 1970s, forming the basis for the 1977/78-1979/80 development plan. Three large industrial projects -- the Save sugar complex, the Onigbolo cement plant, and exploration in the Seme oilfield -- account for more than half of recent public investment; aggregate investment reached 35 percent of GDP in 1981.  - 3 - 9. The tertiary sector (commerce, transport, public services) accounts for about 42 percent of GDP. More than half of this is in commercial acti- vities, which mostly remain in private hands. The sustained growth of these activities in recent years attests to the dynamism of the private sector, and reflects the important role of Benin as a trading center. The port of Cotonou has traditionally provided access to the sea for landlocked Niger and the western part of Nigeria. 10. A prudent budgetary policy of tightly controlling current expendi- tures, limiting salary increases, and holding down maintenance expenditures, has enabled the Government to run current surpluses averaging about CFAF 7 billion during the 1976-80 period. However, owing chiefly to substantial and rising investment expenditures, the overall deficit increased in 1980 to CFAF 15 billion, nearly four -times the average level of the preceding four years. In 1981, an increase of 55% in revenues (linked to buoyant Nigerian demand for re-exported consumer goods which pay Beninese customs duties) offset the growth in current and investment expenditures (36% and 55% respectively), so that the overall deficit eased to CFAF 10.5 million. This deficit was financed totally by foreign borrowing, which reached CFAF 14 billion in 1981. 11. The deteriorating financial position of major state enterprises is a source of concern for the Government. The Treasury has not so far been directly affected by the effects of substantial cash flow losses of the sector, because the two Government banks have continued to extend credit in most cases -- credit to public enterprises represented 60 percent of total bank credit in 1981. Owing to the cdifficulties most enterprises are facing to service their debts (both domestic and external), direct subsidies from the Treasury are likely to be required soon. To deal with the problem, the Government has established a new Ministry for the Inspection of Public and Semi-Public enterprises (to supervise their operations), engaged in extensive replacement of management personnel, and implemented measures to tighten their access to credit. Bank assistance has been requested to help the Government in rehabilitating the public enterprise sector. 12. The Government establishes the prices of export crops and of certain industrial commodities produced by state enterprises. Food crop prices are for the most part market-determined. Owing to the Nigerian demand for food crops (mainly maize and yams) food prices in urban areas have gone up substan- tially in recent years. Increases in consumer prices are estimated at 16 percent per year between 1979-81. Public salaries, however, have remained at the 1974 fixed level. In early 1980 the Government planned a number of measures aimed at raising real incomes of wage earners, and minimum wage rates were raised by 15 percent in the private sector and by 11 percent in the public sector. These measures have not yet been implemented owing to budgetary constraints. The decline in real wages has contributed to the development of a considerable parallel job market. 13. The Government is committed to promoting social welfare, and to developing social sectors. But lack of money and trained personnel have hampered efforts to improve conditions in health, education and housing. Benin devotes a third of its current expenditures to education. However, there are severe shortages in buildings, supplies and teachers, and access to  - 4- education remains limited. Health is the sector most affected by the lack of public resources. Benin faces severe shortages of medical personnel and facilities to cope with the widespread health problems, the most important being leprosy and parasitical diseases. Access to safe water and sanitation conditions are poor. Assisted by international aid, the Government is seeking to solve the most serious problems, but the meager resources available for recurrent costs financing is still the major constraint to the development of Benin's social sectors. 14. Benin's balance of payments position is characterized by a large and growing deficit on goods and services, financed by foreign grants and external borrowing, with the latter increasing in recent years. During 1980-81 the trade balance worsened considerably, because of sharply higher imports of capital equipment for the major industrial projects. The 1981 current deficit reached CFAF 89 million (35 percent of GDP). A substantial increase in capital flows--mainly finance for large projects--led the overall balance to a surplus of CFAF 14.7 billion. Development Plan 15. Benin's planning capacity remains weak. The first Development Plan (1978-80), issued in October, 1977, has achieved less than 50 percent of its objectives. Principal difficulties include inadequate project preparation, coordination, and control over execution, as well as delays in obtaining foreign financial commitments. Recently, however, such commitments have been accelerated, and total public investment is likely to be around US$750 million in the five-year period 1978-82. As a result, the ratio of investment to GDP is estimated to have risen from 20 percent of GDP in 1976 to 35 percent in 1981, with most of the increase accounted for by investment in the large projects mentioned above. 16. For 1981/82, the Government has prepared an Interim Plan for Invest- ment -- consisting mainly of projects initiated during (or included in) the first investment plan. A second five-year development plan (1983-87) was originally scheduled for completion in early 1982, but is still under pre- paration. The most recent planning document is the Ten-Year Plan (1980-90), presented to the United Nations' Least Developed Countries' (LLDCs) Conference in Paris last year. This plan foresees a doubling of real GDP by 1990, a target which is optimistic in light of recent performance and natural, human, and financial recource constraints. Benin has decided to convene a donors' conference in February 1983, to solicit foreign assistance. The Bank was invited and has agreed to attend. Prospects 17. The medium-term economic outlook in Benin depends in large measure on two factors: the success of the big industrial projects which are soon to come on stream and the economic performance of (and Benin's access to) neighboring countries. An optimistic scenario shows a favorable outcome for the cement  and sugar projects (whose production is expected to be largely absorbed by Nigeria) as well as for the Seme oil field. This would enable an adequate servicing of external debt obligations, and increased public revenues, allow- ing for the much needed increase in wages, maintenance of public physical assets and rehabilitation of the social sectors. Prospects in agriculture will depend on remunerative pricing for export crops and greater attention to food crop production. In the long term, growth could slow unless the Government is able to channel resources and orient its economic development programs towards the development of food and cash crops. 18. Benin's public finances may be subject to greater pressures during the 1981-85 period than during the preceding five years. With a growing capital stock to maintain, tendencies to increase recruitment in the public sector, and pressures to prevent a further drop in real incomes, current expenditures are likely to rise faster in the future than in the recent past, leading to growing budget deficits on current operations. The success of the large projects will be critical for Benin's balance of payments position, since the new exports would greatly outweigh traditional exports of cash crops, could be an important source of Government revenues based on local productive activities, and would preserve Benin's favorable debt-servicing record. These large projects could provide substantial and sustained benefits to the budget and the balance of payments. Whether they do so will depend on their ability to produce efficiently, and to compete in the Nigerian market. 19. Reflecting increased investment, Benin's external debt (including undisbursed) rose from US$441 million in 1979 to US$719 million by end-1981, of which about 50 percent was held by commercial banks. Of total external borrowing, about 40 percent went to financing the major cement, oil, and sugar projects, and nearly 90 percent of the US$330 million committed during 1980 was provided by private banks, almost exclusively for industrial projects. The ratio of debt service to exports of goods and services is estimated to have risen from 3 percent in 1980 to 7 percent in 1981, and is projected to approach 20 percent in the mid-1980s, largely on the basis of debt already contracted. Although this is comparatively high, up to two-thirds of the debt service burden is accounted for by industrial projects which are joint ventures with Nigeria and whose debt is guaranteed by the Governments of Benin and Nigeria. Nevertheless, considering the magnitude and the continuing uncertainties of these projects, great caution is required in contracting additional foreign debt, particularly on hard terms. 20. In view of Benin's low per-capita income, the growing need for exter- nal funding of priority projects in an expanding economy, and the narrow export base, it will be necessary to increase the volume of foreign financing on concessionary terms. Benin is expected to be able to finance no more than 10-15 percent of a reduced public investment program. Foreign donors should therefore continue to provide a large share of total project costs, including some financing of local costs.  PART II - BANK GROUP OPERATIONS IN BENIN 21. To date, the Bank Group has extended seventeen credits to Benin totalling US$153.2 million, including two supplementary credits. Four of the credits were for agriculture (23 percent of total lending), six for road construction and maintenance (38 percent), two for education and energy (power and petroleum), and one each for port expansion, urban water supply, and development of small-scale enterprises. Annex II contains a summary statement of Bank Group operations in Benin, as of August 31, 1982, as well as notes on the execution of ongoing projects. 22. In the past, the Bank Group's dialogue with Benin was limited and based on a case-by-case approach to lending operations. More recently, however, the policy and lending dialogue has intensified, and Government has displayed considerable interest in, and responsiveness to, Bank lending and policy assistance. 23. Two areas of particular importance are emerging, in which the lending and policy assistance to Benin are likely to expand in the medium term. The first is the energy sector, in which the assistance effort is designed to expand energy resources and to help in the formulation of sound national and regional energy policies. Engineering and technical assi-stance credits for hydroelectric power and for oilfield development, approved in FY82, are expected to form the basis for larger lending operations in the near future -- the Nangbeto hydroelectric scheme, a regional project jointly undertaken with Togo, and the further development of the Seme oilfield. 24. The second area is the provision of assistance to Government to improve economic planning and to rehabilitate the public enterprise sector, and is in response to Government requests for such assistance. Discussions are presently in progress, which will lead to the preparation of a technical assistance project designed to strengthen Benin's macroeconomic planning and public finance administration. A second project would concern itself with the reorganization and restructuring of major state enterprises. Other assistance to Benin is expected to continue in the agriculture sector, as well as projects in transport and the urban sector. 25. The time lag between credit signing and effectiveness has averaged about one year in Benin, owing to cumbersome administrative procedures that came into effect with the promulgation of a new constitu tion and the election of a National Assembly in 1980. Following discussions with Bank staff, the Government has adopted new procedures that should greatly reduce this time lag. 26. Project disbursement profiles in Benin vary from one sector to another. However, experience to date indicates that a common problem leading to delays has been an inability by Government to make timely contributions of counterpart funds. This problem has recently been exacerbated by the diffi- cult budgetary position, with the country moving into a period of stringency.  - 7 - PART III - THE AGRICULTURE SECTOR 27. Agriculture is the most important sector of the Beninese economy. It employs some 70 percent of the active population, and provides 45% of GDP and nearly 55% of the country's total foreign exchange earnings. 28. Benin's approximately 350,000 farm families work holdings that average 1.2 ha in the densely populated southern provinces of Atlantique, Mono and Oueme, and 2.8 ha in the sparsely populated northern provinces of Atacora and Borgou. About 18% of available land is cultivated in the south with two cropping seasons, compared with only 4% in the north with one cropping season. The sector is predominantly subsistence-oriented, producing yams, cassava, sorghum, maize, beans, and small quantities of rice and tobacco. The main cash crops are palm products, cotton and groundnuts, while maize is both a subsistence and cash crop. Livestock production has grown in recent years with a population estimated at about 780,000 head of cattle, 1.7 million sheep and goats, and 600,000 pigs. Cattle production is concentrated in the nor- thern provinces of Atacora and Borgou. Sheep and goats exist in all areas, and pigs predominate in the south. 29. Zou Province, +he proposed project area in the southern part of Benin, covers 18,700 km or 17 percent of the country's total land area. Its population is estimated at about 570,000 (1979 census) of which 550,000 people (76,000 farm families) live in the rural areas. Crop production is diversi- fied; maize is cultivated on more than 30% of the area, followed by groundnuts (20%), cassava (15%), cowpeas, yam, sorghum, cotton and rice (25%). Histori- cally, the Zou Province has produced nearly 40% of the national cotton crop (22,000 ha in 1972/73). About 30 percent of Zou farm families grow cotton (0.4 ha on average) and most grow maize and groundnut as cash crops (1.5 ha) with the rest in subsistence crops (1.5 ha). Livestock production in Zou is less important. The estimated cattle population of 60,000 head represents less than 10 percent of the national total, and there are about 400,000 small ruminants. 30. Disruptions caused by profound and numerous institutional changes have resulted in sluggish growth in the sector during the past decade. Modern cotton production, which was introduced in Benin in 1963 under bilateral assistance, progressed at a commendable rate--5,000 tons in 1965 to 50,000 tons in 1972--but subsequently fell, reaching a low of about 16,000 tons in 1976/77, despite efforts made under the joint IDA-FAC Zou-Borgou Rural Devel- opment Project (FY72). This decline was partly a consequence of sweeping political changes in 1972, which brought about a fundamental restructuring of the sector, ended much expatriate technical assistance and created havoc in the organization of cotton production. Production has since partly recovered, rising to 18,000 tons in 1978/79 and to 25,000 tons in 1979/80. However, problems with input supply and unremunerative producer prices caused it to decline again to 16,000 tons in 1980/81. Because cotton was less attractive, farmers switched to production of other cash crops, although maize production continued to expand in response to growing domestic demand and border trade with Nigeria. Production of groundnuts has increased steadily for the same reason, while production of rice, although still relatively small, has grown  -8- during 1976-81, in part through improved irrigation. Production of most other food crops has been developing slowly but has been sufficient to meet growing domestic demand. Sector Policy and Institutions 31. The Government has become increasingly aware of the priority of the agriculture sector for the country's socio-economic development. This was reflected in the country's Three-Year Development Plan of 1978-80 which foresaw investments of over US$300 million (one-third of total Plan invest- ment) in agriculture (including agro-industries), and in Government's recent emphasis on institution-building and project preparation. Government policy for rural develoment has three main objectives: firstly, to achieve self- sufficiency in food production by gradually eliminating food imports and promoting food crop exports to other African countries; secondly, to develop domestic markets by increasing incomes and by linking agricultural production with agro-industries; and thirdly, to provide an economic surplus to help finance imports of capital goods. This is considered a sound overall strategy. The Borgou Province Rural Development Project (FY81), the first large integrated rural development project, aims at, and is a significant step towards, achieving the Plan's objectives. The proposed Zou 'Province Rural Development Project is designed to reinforce and to continue these efforts. 32. Responsibility for the implementation of rural development policy rests with the Ministry of Rural Development and Cooperative Action (MDRAC), and the Ministry of State Farms, Livestock and Fisheries. Regional production efforts are the responsibility of the CARDERs (Centres d'Action Regionale pour le Developpement Rural) created in 1976 and located in each of the six provinces. The CARDERs are responsible to the Ministry of Rural Development, and group the regional representatives of the central directorates of agricul- ture, livestock production, forestry, rural engineering, and fishing. The CARDER directors also act as advisors to the Prefects of the provinces, who chair their Boards of Trustees. The CARDERs provide agricultural inputs and extension services, maintain some rural roads, and handle official primary marketing of selected crops. The CARDERs have suffered from lack of funds and a shortage of adequately trained management and field staff, and their organi- zation is cumbersome and inefficient. The management and efficiency of CARDER-Borgou have improved significantly under the Borgou RDP. Similar measures would be taken under the proposed project to increase the effective- ness of the CARDER-Zou as executing agency. 33. Responsibility for agricultural credit is with the CNCA (Caisse Nationale de Credit Agricole) which, directed by a national committee composed of representatives of MDRAC, the Ministries of Finance and Commerce, and various State agencies, extends credit to state enterprises, the CARDERs, and to individuals in association with regional and local credit organizations, the Caisses Regionales de Credit Agricole Mutuel and the Caisses Locales de Credit Agricole Mutuel. CNCA has had responsible management to date, and its performance, although restricted by shortage of resources, has been effi- cient. $0.3 million of the proposed credit will be passed on to CNCA under a Subsidiary Loan Agreement, satisfactory to the Association, to provide seasonal credit for inputs and medium term credit for animal-drawn equipment. CNCA will charge an interest rate of not less than 11 percent for these credits; this interest rate is considered adequate for the early phases  - 9 - of the project, but would be adjusted as necessary in subsequent years in agreement with the Association. Execution of the Subsidiary Loan Agreement would be a condition of disbursements for this category of expenditures (Section 3.01(b) and Schedule Il, para. 3 of the draft Development Credit Agreement). 34. Fooderop marketing is handled mainly by the private sector and is efficient. The Government announces official prices for such foodcrops as maize and sorghum. The official prices effectively serve as floor prices for these commodities. When market prices fall low enough to reach the floor price, farmers may choose to sell limited quantities of foodgrains to the CARDERs. Except for the low floor price, which is rarely reached, prices for fooderops are determined by the open market. A significant percentage of domestic foodcrop production is exported unofficially to Nigeria. 35. State organizations are responsible for the marketing and processing of export crops. The Government has recently decided to merge FAS (Autonomous Stabilization Fund), SONAGRI (input imports and cotton ginning), and SONACEB (cotton lint exports) into a new organization, SONAPRA (Societe Nationale pour la Promotion Agricole), with a single management structure. This reorgani- zation appears to be a sound decision, and no major operational changes are expected that could have a negative impact on project execution. The approval by Government of SONAPRA's statutes, satisfactory to the Association, and the presentation of SONAPRA's organigram and opening balance sheet would be a condition of effectiveness of the credit (Section 6.01 of the draft Develop- ment Credit Agreement). The FAS was an agricultural price stabilization fund created to protect producers against swings in export crop prices. Costs were tabulated on a bareme, which is a statement of the standardized costs of each step in the production and marketing chain of a crop. In the past, FAS suffered from cash flow problems, due to the Government's heavy subsidization of inputs. In the 1981-82 agricultural season, the Government lost $1.5 million on input subsidies. Because of this strain on public finances, the Government has not been able to import an adequate supply of inputs to satisfy farmers' needs. The financing of recurrent national inputs proposed under this project should help remedy this situation. Past Experience in the Sector 36. The Zou-Borgou Cotton Project (Credit 307, FY72) was an attempt to stimulate basic production but performed disappointingly. The PCR and PPAR found that early in the project's execution unexpectedly strong economic competition from fooderops made cotton less attractive to farmers. However, project managers maintained the project's emphasis on cotton production. Furthermore, agricultural institutions were frequently changed, thereby reducing experience-building and efficiency. Learning from this, it was concluded that subsequent projects should be designed to focus on a range of crops, and that a significant component of such projects should be institu- tional strengthening. Consequently, a Technical Assistance Project (Credit 716, FY77) was designed to strengthen SONAGRI institutionally and to prepare proposals for future projects, including both the Borgou and the proposed Zou Province Rural Development Projects. The Borgou Rural Development Project (Credit 1127, FY81) was designed with a multi-crop approach, a strong  - 10 - technical assistance component, and material support for institution- building. After one year of operations the project is progressing satis- factorily; appraisal production targets are being met and institutional strengthening is occurring as expected; the financial difficulties encountered in delivering sufficient quanities of fertilizers and pesticides would be corrected under the proposed project. PART IV - THE PROJECT 37. The proposed project is similar to the Borgou RDP. Within the broad objective of rehabilitating production of cotton and food crops, the project concentrates on a narrower ecological and economic zone. The project was appraised in November, 1981. Negotiations were held in Washington, October 12 to 18, 1982, with a Benin delegation led by Mr. Gedeon Dassoundo, Minister of Rural Development and Cooperative Action. Staff Appraisal Report No. 3157/BEN, dated November 18, 1982 is being circulated separately. Annex III contains supplementary project data. A PPF advance of US$2B1,000 was made in January, 1982, to finance training and technical assistance for project preparation and to facilitate an early start-up in project execution. 38. The project's main objectives are to improve the level of rural incomes and to expand agricultural production of both export and food crops in the Zou Province. These objectives would be achieved through the following principal actions: (i) strengthening of the CARDER-Zou, the executing agency, through reorganization, technical assistance, systematic staff training, provision of vehicles, office space and equipment,, and organization of a monitoring and evaluation unit, and technical and organizational assistance to cotton ginneries; (ii) strengthening of farmer support services and farmer cooperative organizations through improved extension, training, input and seed supply, ox-drawn equipment, credit and applied research; (iii) strengthening of SONAPRA through improved financial management, provision of transport, operational support and technical assistance, to enable it to better organize input supply and cotton lint marketing; (iv) strengthening of the MDRAC's capacity to formulate strategic options for further agricultural development, and specifications of investment proposals. (v) infrastructure development, bottomland rehabilitation and well construction; (vi) providing medium term credit for animal-drawn equipment; (vii) consulting services to carry out studies relating to crop development and to improved organization and management of sector institutions, and preparation of a possible follow-up project; and  1 1 - (viii) financing of recurrent input costs over a transitional period, to support Government decision to eliminate subsidies. Project Implementation 39. The project would be carried out over a five-and-a-half year period, by the CARDER-Zou, whose Director would become Project Manager. He would report directly to the Minister of Rural Development and Cooperative Action. For input supply and primary seed cotton marketing, CARDER-Zou would establish close cooperation with SONAPRA, and inputs would be distributed through vil- lage farmer cooperatives. This approach is expected to increase the potential and efficiency of the extension services and facilitate the operation of the "Training and Visit" system. 40. An international cotton lint marketing consultancy would be provided to SONAPRA and a cotton sector account would be established within SONAPRA to consolidate for the first time all information related to Benin's cotton production, including input acquisition and price stabilization. By June 30, 1984, a study would be completed recommending the steps to be taken in assuring optimal management of the sector. The elaboration of terms of reference for this study, acceptable to IDA, would be a condition of credit effectiveness (Section 6.01(e) of the draft Development Credit Agreement). 41. With the proposed Zou Province Rural Development Project about 75% of Beninese agriculture would be covered by integrated rural development project activity. In order to capitalize on these projects, MDRAC now needs to strengthen its capacity to undertake more strategic sectoral planning leading to the definition of new development options and setting of priorities. At the time of preparation of the Zou and Borgou Province RDPs, the Bureau des Etudes of SONAGRI had partially performed this task at the level required, with the support of the IDA-financed Technical Assistance Project. Now, the Direction des Etudes et Planification (DEP) within MDRAC has been designated by Government to perform the function of conducting strategic planning on a national basis, and initiating in a systematic way the preparation of investment programs to be executed under subsequent five-year plans. Funds would be made available under the proposed project to reinforce DEP in its expanded role; specifically, to provide the services of two technical assistance staff for a total of five years, about twenty man-months of short- term consultancy services, overseas training for senior Beninese technical staff, and office equipment and transportation. 42. The experience of past ginning seasons in Benin has revealed con- siderable weaknesses in technical and operational support to cotton ginning operations at a central level, as well as in the actual management and tech- nical performance of the country's three operating ginneries. In addition, with the recent absorption of SONAGRI into SONAPRA and the transfer of ginnery management to the CARDERS, Benin's limited central operational and planning expertise in cotton ginneries has been lost through retirements and resignations. For these reasons, support to this highly specialized activity is needed. Therefore, a consultancy mission, to be financed under the Borgou RDP, would visit Benin in the first half of 1983 to study the situation and propose the creation of a central ginnery support unit to be financed under the proposed project. The initial function of the unit would be to carry out  - 12 - a technical analysis and evaluation of the ginneries with the objective of making their oDerations more reliable and efficient. It is anticipated that an internationally recruited ginnery specialist would work in Benin for about four years and his qualifications, experience would be acceptable to IDA. 43. The CARDER-Zou has operated in the past through seven divisions organized in 22 sections headquartered at Bohicon. Headquarters management would be strengthened by appointment of two Deputy Project Managers (one technical, the other financial) and by the introduction of aL decentralized, operational management system. Duplicate services would be combined reducing the number of divisions from 7 to 4: finance and administration, extension services, land use service, and animal husbandry. Superfluous subsector chiefs and extension agents would be reassigned, while the number of input supply, credit and adult literacy officers would be increased at farmer level to give better attention to these hitherto neglected services. 44. Field organization of extension services would be reorganized in each of the province's 15 districts. Each district would also be staffed with specialized extension agents in the areas of home economics, adult literacy, cooperatives, livestock development and animal traction. Upgrading field organization by providing material support and retraining would be the overall responsibility of the Technical Deputy Project Manager at CARDER-Zou head- quarters. As an incentive, by June 30, 1983, a system of bonuses based on individual performance for extension personnel within CARDERt-Zou would be introduced, and staff salaries increased by December 31, 1983, to a level comparable to those paid to state enterprise employees. CARDER-Zou management would introduce a system of annual work plans and associated budgets for each section and district as the basis for project implementation. Introduction of this system, and submission of the first such acceptable work plan for 1983/84, would be a condition of Credit effectiveness (Section 6.01 (b) of draft Development Credit Agreement). CARDER-Zou would submit to IDA for comments by December 31 of each year its proposed annual work plan and budget for the following year. (Section 3.08 of draft Development Credit Agree- ment). Government would prefinance operating expenses and recurrent costs of the Zou project component through a revolving fund. Establishment of the revolving fund account at CAA to be jointly financed by advances representing pro-rata shares of IDA, CCCE and Government total contributions to the project, and deposit of the Government's initial contribution (CFAF 68 million), would be a condition of effectiveness (Section 6.01 of draft Development Credit Agreemnt). Government would maintain a separate sub- account with CAA for the fund advanced by IDA. 45. The timely acquisition and distribution of production inputs is particularly important for successful project implementation. Government's present budgetary situation does not permit it to provide timely financing for the non-incremental fertilizer/insecticide requirements, thus threatening the implementation of agricultural development country-wide. To assist Government in implementing its policy of gradually eliminating its subsidy on both fertilizer and insecticides, combined with a corresponding increase in farmgate prices for seed cotton, IDA and CCCE would assist Covernment in financing recurrent fertilizer and pesticide needs country-wide. (Section 4.03(b) of draft Development Credit Agreement). These price adjustments would be announced annually not later than March 31, and this would be a condition of disbursement against recurrent input expenditures. (Schedule 1, para 3, of  - 13 - draft Development Credit Agreement). The proposed external financing for recurrent expenditures would be gradually phased out over the project disbursement period. 46. Supplies of fertilizer and insecticides for cotton would be distri- buted by SONAPRA to the level of district and communal stores throughout the project area. To carry out its tasks, SONAPRA's operations would be strengthened through reorganization and provision of transport equipment and technical assistance. CARDER-Zou would assume ownership of the inputs, paying SONAPRA with credit arranged through CNCA. Credit for seasonal inputs would then be provided to farmers by CARDER-Zou's credit administrative staff. Equipment for ox-drawn cultivation would also be made available on medium-term credit, and CARDER-Zou staff would acquire the equipment directly from local manufacturers. 47. Agronomic and farming systems research would be pursued at the research station at Niaouli and at substations throughout the province. It would continue to be directed and conducted principally by Beninese staff with adequate basic training, supported by technical assistance staff. Multiplica- tion and preparation of seed for distribution to farmers would be managed by the project's seed multiplication farm. Improved seed would be distributed to farmers through the extension service. Initially, it would be sold to farmers for cash at crop market value; later, charges would be introduced to cover variable cost of production. 48. The CARDER-Zou land use division's capacity to construct and maintain community wells, and to develop bottomland would be re-established under the proposed project, which would provide for the rebuilding of 100 wells, the construction of 50 boreholes, and development of about 200 ha of bottom- lands. The livestock and animal health division would also be strengthened under the proposed project, to enable it to provide better and wider health care and to introduce simple animal husbandry measures, such as nutrition and hygiene, at the farm level. 49. The project would provide for 45 man-years of specialist technical personnel, whose skills are currently unavailable in Benin, to fill thirteen positions for periods of three to five years. Some of these posts would be line positions. The experience and qualifications of incumbents of these positions would be acceptable to the Association (Section 3.04(a) of draft Development Credit Agreement). The technical assistance effort would be closely monitored on an annual basis with a view to gradually phasing out expatriate assistance and replacing it with competent and qualified Beninese personnel. Short-term consultancies for specialized activities, such as monitoring and evaluation, bottomland development, livestock production, agricultural research, and for studies, totalling about 84 man-months, would also be provided. 50. A project monitoring and evaluation unit (PMEU) would be established at CARDER headquarters in Bohicon to monitor both the progress of project execution and the impact of project activities on farmers (Section 3.06 (d)(i) of draft Development Credit Agreement). Such information would later serve as a basis for project evaluation, leading to recommendations for changes in approach, and the identification of components for a possible future project.  - 14 Cost Estimates and Financial Arrangements 51. Total project cost including taxes is estimated at US$62.7 million. Of this, the cost of the rural development component in the Zou province amounts to US$29.0 million with a foreign exchange component of US$19.0 million (65 percent). Taxes would amount to US$2.7 million, thus leaving US$26.3 million net of taxes. The remaining project cost of US$33.6 million equivalent represents the estimated CIF cost of total domestic needs of insecticide and fertilizer from 1983-87, net of incremental requirements for the Borgou, Zou and Atacora Provinces Rural Development Projects. Project costs are based on end-1981 prices. Estimated costs include physical contingencies of 5% on civil works, vehicles and equipment, and 10% on all other costs (except personnel), and expected local and international price increases applied on baseline costs and physical contingencies compounded yearly over the project implementation period. Price contingencies for fertilizer, insecticide, and chemicals are based on World Bank projected price increases for petroleum. Physical and price contingencies on the rural development component of the project amount to 46% of project base cost, and amount to 30% of base cost of the recurrent import component. Average man- month cost of consulting services is estimated at US$8,130. 52. Total net of tax expenditures of US$60.0 million would be financed as follows: (i) The Zou province rural development component (US$26.3 million): US$4.0 million for seed production, applied research and project monitoring and evaluation would be financed by FAC (US$3.7 million) and Government US$0.3 million; US$22.3 million for all other rural development components would be financed pari passu by IDA (US$14.8 million), CCCE (US$4.8 million), and Government (US$2.7 million). The FAC contribution would be a grant; the CCCE contribution would be lent to Government. (ii) The recurrent national fertilizer/insecticide import program (US$33.6 million) would be jointly financed by farmers (US$22.6 million), Government (US$4.1 million), IDA (US$5.2 million), and CCCE (US$1.8 million). 53. All external financing would be channelled through the CAA, Caisse Autonome d'Amortissement, the Government agency for handling official foreign financing. Funds would be passed on as follows: (i) granted to CARDER-Zou (US$20.6 million) to cover management of extension services, input distribution, operation of its specialized units, applied research, seed production, technica:L assistance and studies; (ii) granted to SONAPRA (US$0.8 million) to cover strengthening of its truck fleet for cotton evacuation, workshop rehabi:Litation, technical assistance and studies; (iii) onlent to CNCA (0.3 million), under a Subsidiary Loan Agreement, for medium-term credit (para. 33);  - 15 - (iv) paid into a "Special Account" to be operated at CAA (US$4.3 and 11.1 million) to finance the incremental, and subsidy elements of fertilizer and insecticides respectively; SONAPRA, as the sole importer of seasonal inputs, would draw against this account; and (v) passed on to the Ministry of Rural Development and Cooperative Action (US$3.0 million) for strengthening of its DEP and establishment of a technical support unit for all ginneries. 54. CARDER-Zou, having the overall technical responsibility for project implementation, including the distribution of inputs, would obtain seasonal credit from CNCA to purchase inputs from SONAPRA and repay this credit from recovery of cotton sales. This would essentially constitute a prefinancing of farmers' contributions towards the cost of fertilizer and insecticides. The other CARDERs would obtain their inputs in a similar fashion. Such interim financing should be in place by October 31 of each year to coincide with Government's provision of funds for subsidies. All funds would be credited to the "Special Account" at CAA in order to enable SONAPRA to draw from it for the import of total domestic requirements. Since CNCA has access to a re- discount facility with the Central Bank for West African States (BCEAO), the demand on its seasonal credit resources is not expected to pose a problem. Procurement 55. Civil works to be financed by CCCE, valued at a total of US$0.7 million, would be procured by local competitive bidding procedures satis- factory to CCCE. Contracts for goods valued at US$3.3 million, (IDA US$2.5 million) would be grouped as far as possible and procured by ICB according to IDA guidelines, or by local competitive procedures for contracts below US$100,000, while those of less than US$50,000 would be procured on the basis of price quotations from at least three qualified suppliers. Remaining vehi- cles and equipment, costing about US$2.9 million, would be financed by CCCE and FAC, and procured according to their respective guidelines. Seasonal inputs, chiefly fertilizer and insecticides, valued at US$39.7 million (IDA US$9.2 million) would be procured by SONAPRA through ICB. About US$0.3 million (all IDA) worth of oxen and ploughs, financed by CNCA medium-term credit, would be purchased from local suppliers. IDA, CCCE, and FAC would finance specified technical assistance and consultants' services worth US$4.9 million (IDA US$2.9 million) in accordance with their respective guidelines. Operat- ing costs and some local staff salaries for CARDER-Zou and SONAPRA estimated at US$9.6 million (IDA US$4.1 million) would be committed in line with esta- blished Government procedures. Disbursement 56. The proposed IDA credit would be disbursed over 5 1/2 years to cover: (i) For CARDER: a) 75% of vehicles and equipment, 55% of incremental operating cost and incremental local salaries, and 100% of technical assistance and 75% of consultants' services.  _ 16 - (ii) For CNCA: a) 100% of credits disbursed. (iii) For Fertilizers/Insecticides: a) 75% of incremental requirements for the project; and b) a weighted average of 18% for the recurrent National Imports, or 60% in PYs 1 and 2, 57% in PY3, 54% inPY4 and 18% in PY5. (iv) Refinancing in full of the PPF advance for project start-up activities. Disbursements for expenditures on civil works, vehicles, equipment, inputs, technical assistance and consultants' services would be fully documented. Disbursements for operating costs and local salaries, as well as medium-term credit, would be against certified statements of expenditures and statements of credit disbursed, respectively; full supporting documentation, showing costs incurred by category, would be retained for inspection by IDA. Audits and Reporting Requirements 57. CARDER's and SONAPRA's accounts would be audited by independent auditors and their reports would be furnished to IDA within six months after the close of each fiscal year. From PY3 onwards, CNCA's account would also be audited by independent auditors; the report would be submitted to IDA within six months of the end of the fiscal year and would contain an opinion on the statements of credit disbursements against which withdrawal applications were to be or had been made. In addition CARDER, SONAPRA and CNCA would submit quarterly reports to Government and the co-financiers showing actual against budgeted expenditures and statements of progress achieved. These quarterly reports would contain summary financial information indicating the level of the respective agency's borrowings and of any outstanding receivables from Government or other bodies with respect to budgetary allocations for the project and program (where feasible) and subsidies for production inputs. Project Benefits and Risks 58. The major quantifiable benefit of the project wou:Ld be expansion of cotton and food crop production. By the end of the project's implementation period, cotton production is expected to double to 11,000 t and food crops by 13,000 t through higher yields and a modest increase in cu:Ltivated area. This would yield additional real income for farmers of US$2.7 million from cotton and US$4.2 million from food crops in 1981 prices, as well as increased foreign exchange for Government. About 38,000 farm families with current net incomes of about US$600 per year (US$80 per capita) could expect to earn net incomes of about US$938 (US$125 per capita), or an increase in real terms of about 56 percent. Because of the relatively narrow range of farm-size and family sizes throughout the province, these increases would be well dis- tributed among the population. 59. Among the unquantifiable project benefits would be an improvement in the capacity of Government institutions to manage and plan further rural  - 17 - development activity, and in their financial management capabilities. In addition, a firm basis for adaptive food crop and cotton research, and seed production, would have been established. 60. The estimated economic return to the proposed project is about 22 percent, when all project costs leading to production increases at the farm level (about 88 percent of project base costs) and farm level benefits are taken into account over a 20-year period. This rate of return is sensitive to changes in real costs and benefits, since a 10 percent rise in projected real costs or a 10 percent decline in projected real benefits would lower the return to about 10 percent. It does not include a rate of return calculation for the recurrent input component of the project, which should have important benefits by increasing agricultural production nationwide. 61. There are no major technical risks in the project since all technical proposals have been proven in other West African situations to be capable of initiating a recovery in production. The principal risk is that poor organi- zation, rapid staff turnovers, and financial mismanagement may occur and lead to under-performance. To minimize this risk, technical and organizational training programs would be provided for all staff, salaries for the CARDER-Zou would be increased at least to the levels of state enterprises, and a bonus system would be worked out for extension workers. It would also be critical that a strong technical assistance team can be recruited to work in both line as well as in advisory posts. For the proposed project particular care would be taken, in cooperation with the other cofinanciers, in the selection and screening process of potential candidates for the technical assistance team. PART V - LEGAL INSTRUMENTS AND AUTHORITY 62. The draft Development Credit Agreement between the People's Republic of Benin and the Association, and the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Associa- tion, are being distributed separately to the Executive Directors. 63. Special conditions of the proposed project are listed in Section III of Annex III. Special conditions of effectiveness of the proposed Credit Agreement would be: (i) approval by the Association of CARDER-Zou's first annual work plan and budget; (ii) approval by the Borrower of SONAPRA's statutes, satisfactory to IDA; (iii) presentation of SONAPRA's organigram and opening balance sheet; (iv) the opening of, and initial deposit in, the Revolving Fund Account required for the project; (v) presentation of satisfactory terms of reference for a cotton sub-sector study; and (vi) effectiveness of the FAC Grant and CCCE Loan Agreements. 64. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association.  - 18 - PART VI - RECOMMENDATION 65. I recommend that the Executive Directors approve the proposed Credit. A.W. Clausen President Attachments Washington, D.C. November 18, 1982  - 19 - Page 1 TABLE 3A BENIN -SOCI.LINDICATORS DATA SHEET BENIN REFERENCE GROUPS (WEIGHTED AVE3AGES LAND AREA (THOUSAND SQ. KM.) - IDST RECENT ESTINATE)a TOTAL 112.6 MOST RECENT LOW INCC(E MIDDLE INCOME AGRICULTURAL 10.2 1960 /b 1970 /b ESTIMATE /b AFRICA SOuTH OF SAHARA AFRiCA SOuTH OF SARARA GNP PER CAPITA (US$) 90.0 120.0 250.0 238.3 794.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 39.9 54.0 67.5 70.5 707.5 POPULATION AND VITAL STATISTICS OPULATION, MID-YEAR (THOUSANDS) 2049.8 2645.6 3425.0 URBAN POPULATION (PERCENT OF TOTAL) 9.5 12.6 13.9 17.5 27.7 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 6.5 STATIONARY POPULATION (MILLIONS) 19.0 YEAR STATIONARY POPULATION IS REACHED 2110 POPULATION DENS ITY PER SQ. KM. 17.7 23.5 30.4 27.7 55.0 PER SQ. KM. AGRICULTURAL LAND 204.6 264.0 326.7 73.7 130.7 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 44.1 45.3 46.0 44.8 46.0 15-64 YRS. 53.3 52.0 51.3 52.4 51.2 65 YRS. AND ABOVE 2.6 2.7 2.7 2.9 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 2.2 2.6 2.9 2.6 2.8 URBAN 5.8 5.4 3.9 6.5 5.1 CRUDE BIRTH RATE (PER THOUSAND) 50.5 49.2 48.7 46.9 46.9 CRUDE DEATH RATE (PER THOUSAND) 26.5 21.9 18.5 19.3 15.8 GROSS REPRODUCTION RATE 3.3 3.3 3.3 3.1 3.2 FAMILY PLANNING ACCEPTORS. ANNUAL (THOUSANDS) .. .. USERS (PERCENT OF MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-100) 95.0 101.0 97.0 89.5 89.9 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 93.0 96.0 98.0 90.2 92.3 PROTEINS (GRAMS PER DAY) 51.0 53.0 51.0 52.7 52.8 OF WHICH ANIMAL AND PULSE 14.0 15.0 13.0 17.8 16.1 CHILD (AGES 1-4) MORTALITY RATE 41.0 32.2 25.4 27.3 20.2 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 37.2 42.4 46.7 45.8 50.8 INFANT MORTALITY RATE (PER THOUSAND) 206.0 .. ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. .. 21.0 23.9 27-4 URBAN ., .. 50.0 55.0 74.3 RURAL .. .. 16.0 18.5 12.6 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 14.0 .. 26.2 URBAN .. 83.0 .. 63.5 RURAL .. 1.0 .. 20.3 POPULATION PER PHYSICIAN 23031.3 28447.1 26883.3 31911.8 13844.1 POPULATION PER NURSING PERSON .. 2860.1 3035.9 3674.9 2898.6 POPULATION PER HOSPITAL BED TOTAL 747.6 846.9 735.5 1238.8 1028.4 URBAN 538.1 231.6 393.9 272.8 423.0 RURAL 779.5 2185.5 1134.6 1745.2 3543.2 AIIMISSIONS PER HOSPITAL BED .. 30.2 17.7 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. URBAN .. .. RURAL .. .. AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. URBAN .. .. RURAL .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. URBAN .. .. RURAL .. ..  - 20 - Page 2 TABLE 3A BENIN - SOCIAL INDICATORS DATA SHEET BENIN REFERENCE GROUPS (WEIGHTED AVEAGES - MOST RECENT ESTIMATE)- HOST RECENT LOW INCOHE MIDDLE INCOHE 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH CF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTED ENROLLMENT RATIOS PRIHARY: TOTAL 26.0 40.0 60.0 56.4 73.7 MALE 38.0 55.0 78.0 70.7 96.8 FEMALE 15.0 25.0 42.0 50.1 79.0 SECONDARY: TOTAL 2.0 5.0 12.0 10.0 16.2 MALE 2.0 8.0 18.0 13.6 25.3 FEMALE 1.0 3.0 7.0 6.6 14.8 VOCATIONAL ENROL. (R OF SECONDARY) 13.0 4.1 6.0 8.0 5.3 PUPIL-TEACHER RATIO PRIMARY 41.0 44.0 55.0 46.5 36.2 SECONDARY 23.0 26.0 31.0/d 25.5 23.6 ADULT LITERACY RATE (PERCENT) 8.0 11.0/e .. 25.5 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 1.0 4.6 5.4 2.9 32.3 RADIO RECEIVERS PER THOUSAND POPULATION 12.2 32.1 46.5 32.8 69.0 TV RECEIVERS PER THOUSAND POPULATION .. .. 0.1 1.9 8.0 NEWSPAPER ("DAILY GENERAL. INTEREST") CIRCULATION PER THOUSAND POPULATION 2.0 0.8 0.3 2.8 20.2 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.2 0.4 .. 1.2 0.7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 1048.9 1285.7 1572.2 FEMALE (PERCENT) 45.4 45.1 44.2 34.1 36.7 AGRICULTURE (PERCENT) 54.0 49.7 46.4 80.0 56.6 INDUSTRY (PERCENT) 9.0 11.8 15.5 8.6 17.5 PARTICIPATION RATE (PERCENT) TOTAL 51.2 48.6 45.9 41.7 37.2 MALE 57.1 54.3 52.0 54.3 47.1 FEMALE 45.5 43.1 40.0 29.2 27.5 ECONOMIC DEPENDENCY RATIO 0.9 1.0 1.1 1.2 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS 31.4/c .. HIGHEST 20 PERCENT OF HOUSEHOLDS 51.77 .. . LOWEST 20 PERCENT OF HOUSEHOLDS 5. 57 .. LOWEST 40 PERCENT OF HOUSEHOLDS 15.87 .. . POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (USS PER CAPITA) URBAN .. .. .. 136.0 381.2 RURAL .. .. 84.0 84.5 156.2 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. 99.1 334.3 RURAL .. .. 82.0 61.2 137.6 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. .. 39.7 RURAL .. .. 65.0 68.8 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arittnetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimaate, between 1976 and 1979. /c Population; /d 1975; /e 1973. May, 1981  - 21 - Pegs 3 DEPCtNITIONfS OP SOCIAL INDICATORS Notte: Although tho dta are draw fro .ra generally jdged the most aunharinti- and reliable, it should also be nosed that they cay Oc be inte- eatioeallpo.pareble b .....a of the leok of eneudardlead defimmioea and Ioe-pte aae bydfaet toutiee 10 ollu-tlog tho data. Th. date are, none- thb1o..... usful to de-oib oresof magnitude, indic tetrends, nd ohar...eries cetaIn coo diff feren.r bet.c.o c.oottrio. The rforenu groups are (1) the l .a.ecoutry group of the subjoot country sad (2) a ....noy group nich omeehtn higher -Io.ge Caon than the ..nn.ry group of tit nob3sci cutry (-.npi fou "Cpta -opIun oil Stnnsa onup here 'Middle I-om -tnoh hfuita uud Middle Eus" is thcee beosusa of striger oroctrauffioitnie). In the refernc grou p data the -verge are poplatIon weighted a-ite-ic scneto cueh indictor end sho.- oly oboe mejonity of the o-tselee in a group baa data for that inloato. Si..a the -avrge of cottrios among the indicatore deponde or the avilability of dat edis uot uniform, oatioa most be emeroised Ca olening averges ofonidtar to another. These avrge .r only ..eoful io cpaigthe -ouo of oeindicato at tine emog tha country end reference grops. LAND AREA (thouen e.b.)Populoion Pro fonpito1 ted ton, uba, en run.-Pouoi ttl Tonal - Tonl urut ere onuprieog land aese end inlond esters, ubnonrne)dvedyiboropoi uMbo of hoepitol bods dAtioultnra1 - etimate of gnino1tr-I an- used temporaily or pornnetly ovuilable in public erd prIvat genera nnd eproiolioed hoepita1 ord re fur coops, pasture.t arkt end kitchen godons or to lie fallow; 1978 dare. habilitocion oetors. H-opitalo 000 estublish-ets pernaronly snuffed by on1eat 000 phymlio.i lnEnthlieh-tn providing prIncipally cua to- GNlt PER. CAPITA (15$) - liNt pot npita -ntilt.st At c-onet mauhnt pohons. cu1- dial ca- no ct inclded, tota hoapitalt, h--.c, include helibh oulAred by sMe co rlumtbod as World tank Atues (1977-79 basis); 1960, and medical I-cec not permanenty.staffed by n phyocioc. (but by 1970, and 1979 date. -dic-Iu . auiein, nurs,nidwie,rIr.)haich off-r io-punien-om detanandpovid aliulcd tango of medicoI fucilit I.s. For atotie- ENIfRI CfNSLTM'IONf PuR GAPITA - Au-In .... onup.itn of oo-riu n-rY (ca tice puyIaeoF hosInal include WHoonprtiph/esolopitels, and lignito. petrolem, natural gae and hydr-, nuolea an glothtro elao1- and -.ra h-epical, loca or rurl.eito. adodica uomtoroity Irtoiity) in kilogrem of col eqival-nt P- c.Pita; 196f, 1970. sod 1979 cInnsra ipecioliard bospitala are includod only under tonal data, Admissions Itn toepicl ted - Ttcnl nubor otfdmsooto or diechorgoa from hospitals dliIded bp ubo nnber of bedn. POPTIATIONg AM1 VITAL STATISTICS Tota Prltn.mid-Tour (thounnda) - As of July 1; l9Af, 1970, and 1979 HOUSING Urban Poonledtion (e..c.an of total) - Ratio of urbon to total popnletion; A houaholdIco.eis ocfugrp of `indiidua w%ho -rlvn quatora differet dfinitios of urbas ae naY affect com parbility of duna and choir main mauls. A boarder or lodger may orny non ha icloded in amea 11toatis 191 1970, and 1979 data, tho housohold forsataiclpurpoe... Poenlatio Proet.J ionteaon9broforec erro - 'otel, urban -ad ruel-_ voag nn Poeslation in reor 2000 Curet Ppoplacion projection oe d dn 90 bsr of p Feou e roo in . all.uba,tod rnru occu pied cnntr nanl opuatonby ago: end see. and thoir mortaityan fsrilttyranee.. d-elli.g., rop-ctlely. D-olliofu maclode o-arao t-mirunaro and Prjonparamters for moriulity ratoe nompoime of th-e 1e-1l aeam-unocpiod Parts. inglIfe e.Paanyt birth nru gWth I cuny ercpt on Acoos t Elactricy(oreoofdolicn) - total, urban ond -nru - leel adlaal ifetneo o stabiliiog at 77.1 year. Tfho pars- Cov inldwoltingo with Iooticacy Ic" liing atera as. percentag ete.. for fatlllly rate almo have three level essaning derlina in tf total, -rbuc, oud rura dwoliogr-poctiv-ly. fetLt Icoding to incuol lu-o and pant tanily planoing pnfccnnc.. Euob toontry letei sige n f these"i'e o-bimationa of ncrrliny EDCICATTON and fernility trends forP" praeoio p-rpoe AdJuetod Enroll-rI Rtcio Ibnb tiomaro. t Poruleion - Ia e. statior-ylpoplto tharo. In n groth inoPrimay abo - o I.no and foe1l - Croon. total, mala end f omu the brth rte i eqo no ho dot rae,ad alno the age stunrr-onisc falao a b ror o1u ontoo f renycitt mains I...tnnt, Thia in achieve only oftar fortilitY ratee deoliso to primary -choo-an ppug tt; oray Ioclndo ohildro ugd 6-11 the replacemet lot- of uit net reprudnion rete, whe mat grnrio 70000tbut udjoa-d For differ-o longths o.f I-riary edacatios; for1 of woe rnpl.c.. itself exactly. Thestationar population else ems oontloith univoru educa.tinerloot mo ac 101 Porat ratinatod on tho besis of the promoted char--otriatics of the population since a PuP"ln are bolos or abov h fiia colae intho yer 2000, and the rot of docILne of fartility rate co repl.c.- incon.dory sch.ol - coaI aean am Coep-td as abo-;ae....dory mont level. o~~~~~~docatiooquiros oIbs ou or of -prrd prImary in-crutlon; Tetsttonr porlai-n Ce ron.cind - 'Che ynar shin ntatiuny population pru-idma g -rn,vcti.onl, o oce riin n utuofor ?.Pt ifrhsbeeo raucbd. aol of 11 to 17 pours of ag; ooroP-ondo o-u- are g..or-1lY Poe n. he. -li-yr 1cpltioa pan square il-o tr (100 heonre) of Tocutiom_l onrolnst (pHern of soodery) - Vocanionol instinuti.ts tota1 acne 19017U ed17 9 dt.innlodr toohinal, I.nd-etrIa or other progr-n hioh operat indpeod- Pee at. he.uru rl loud -_C.mp.Id os abov for agricultural land ently or as depor.teet of .. uodoryinitio. ony 960, 1970an197daa Porilt--tmco rntio - roinry. and ..... dary - Tonall lodete nole in PoonLanion Ann Snnt=f llper r)-Childre (0-li year) , workIng-ag (15- primary und e....udory 1oro diridod by -ob_ra ftcoaobnr in the 64ty-st), ad retirod (A5 pees ad-ove) oe percen.tages of n'd-yenr popo- corre..po.diugI .evols. lation; 1960, 1~970, sd 197Y9 deta. idalt lines rr (ee) - Lintrai udu1to (able to road and -rite) Parlt9ion; Groth Iat (porcant) - tonal - An--I growt ratee of total mid- Foaper .etage of totu adult poplation aged 11 yeors andovr ys ppLtotfur 1.95 00-01960-70, nrd 1970-79. Porulaion Growth Rate (Pe. nt"-_ uban - A-n-I growth rates of urban popu- CONSUMPTION 1etiom for 1950-00, 1960-70, and 1970-79. PAssenoor Cure (per th-uoad Porulotion) -Paanenger nar nmprins no- Crude Birth Race (p-r rhoosnd) - A-aua lIve births per tho..sa.d of sfd-yer oe ematln lose thac night P por..n oucldeesblao h-orse and pooain;160 9G end 1979 dean, till-toy vehile,l: Cde South Rao oe thosn)- daumal da e toeneofadpo Raditeier (ro .houaad population) All types of rre-iver for radio population; 1960. 1970, and 1979 dana. broadoesc to general polio Pertu, u ofPopulation soluee. 0 G oss perrdurt1ion Ratte -Averag naber of daughtereaoma mill bmtIncnsdrnovr Incoutries and iyorthnrgIotrtn of redi. hornr erdcive period if she aaino -pI .Presi eseifto for- actwo in effect; data forI .. cutF-yo coy nnbe opral in tility rates; usually fIve-your averages ending ~~~~~~~in oA, 1971, ad1979. noon oo bnie liabd lio--siug. Fseiiilly P=n%t - nenr.ano tasna annal nuber of acc... reTVR teceivere (per,1 thouaud Prouletiul- -TOt.. roivern for broadoa..t to of birth-otrol doniomaudnr anpinm of notional family yinnnin Frgrm geIu ulcptthou...nd ppopletio;m drutIcono TIreener Pail, Pl=n .ia-tee. (reroeno of _ariod sMe) - Poroontago of married Icontrios ond in Yo... whenrg- tainof T. onto .a i ffet wMeoo obidI-henring ago (11-44 year) who u.. birth-control d-oi.e. co nnapaper Cinro...nio fror thoca.d..u.I in) haw hyaeag-i oI _arid _sno in so_ ago group. ulation of "daily gr.r. ictc_ot ...nPaper", doi_a asaperLio-oa publiontioc devotod priIrilY to rr..ording genoro noe ft is ouneideor POOS ADil NUTRITIfON to ho "daily" if it-ppeareoc Ioa.t fou ctan ......k. Inden of Pood Production Fr Cprita (1969-71-100l - Inde of per nait ao"l Ci.en Aunual At-edanco rer Cpita to 'fou - bused on the nuber of production of all food coodition, Producionilue noodd. andI. feed and tickrto sold duciog cho Y-er includingadien dtodiv-in ci--- in no calend- yo- bosio, Coditiosoovo prinany goods (e.g. eog-..a.. und nobilt unite. inetnod of sugar) which ar dble and contain nutrient (e.g. .offtoo and to are eo1oded). Aggrogot prdotion of ouch coutop is base.d onAinOR FORCE national avrugo prod"oo pcic wrighs 161-Al. 1970, und 1979 data. TotalLabor Porno (tbonancds) - Economically ectivo peron.. iuIn Per ceita enorly of MMlrir (onocean f rore, on - Computed fron armd foru... nod penYlyd boo eoludiug houoioe . nd.t. e.. ocortgy rovetof ne food supplier -riloble in coun.try per.il Iutr rvuiog pupulnoirn of all ogre. tfiuitio.. in o-r..oun . couirie are per day. Aoailablr aupplie.... coprio doneetic prodnotion, 1npocts I... not _cpurable; 1960, 1970 -od 1979 data._ eaoi,ad uh.ne. tooo.ntnPploanlde anma feedj,erode, Peoe(occ)-Pnl ao o 0Po"rengo ftna ao Iforce. qmniia edl fodpI enig n losersN in dia11. triuint oure'giatr (oon)-Lbofrcinamngfrnry, hunting and monta sor -sat.n d by FAD hu..od on physilo.gical nee ds for noma anti- linhing un pnro-ncgr of t-cu labo ttrc; lOh, 1970 and 1979 mm. city on hoalth comidering enviro-atol toprcr,body olighta, toe Industry (cprcect - Labor for- inmito, ontru..tion, m ufaccuroti nud 000 distribution of populaion, od o1losiog 10 porcont fouarat nnd -t-rlit, orod gus or percntge of cona1 labor fo-o; 1960, he...ohold level; 1961-65, 1970, uod 1977 data. 1970 and 1979 doto. 7e- -upino enly of protein (oan Per day) - Pro trio content of por capita Partoticic tot(rr-nc - totol. malo on Tonl - Perticiyntion or _t u 1yo fond Per day, Sec snPP1Y of food ie definod as above. Ge- atvt ue r tda total, .male, od femal laborfrea qoirowets for.1 all .cotrion established by USDA pro-idr for imiou porentagra ci tota, male nnd fesal popoLacton of all aes. ro-potiv-1y; aloreof hI grane of tota protoic per day and 2T gEam of onimI ood 1969, 1970, uod 1979 dana. Thonoaro bone oo IL ,' paticipation Ot- Pulse . prtin, of which 11 franc ohould he aInprt . Thecoesond- ronIgao-nrrunoofthe P popuistioc, ad long timo tran. A are00iea ht ths of 75 gRa of tota protein and 23grn of fa o-cnae rnntiona eof Poa animal protein asnoavrge for the ouIld, prpa..d by PAO in the Third lonnc oedon-r Ratio Ratio of pupuIetion otds- 11 and 65 nod root WohId Pood in-ur; 1961-hI,.197 nn 177dta tt the t-tI lubtofoc Per oarPitaoroteit softly Iro urinalud cule '- Prutoin eupply of foud do- rive. fo oim odpulas in, gr,Z per) day; 1961-65, 1970 and 1977 data. INOM DISTRIBUTION Child fn.... 1-4) Martellty RAte (P. thouan)-A--Ima drthe por thousand lo P..r..ocao of Prio-to II--- (both to cuh und hind) - Racived by riohe- oge group 1-I yoare, to childre in this ago froop; for mast derolopiug rout- 5 Por..nt, rohooc 10 p-rco-, p-o-tn 20 pr-tn, end poornot0 P IS .proet tries data deri-d from life tubloc; 1965, 1975 and 1979 data, of hoenchoda. HEALTH POVERTY TARGET GRtOUPS Life Eup-c.a.oyat Birth (rears - Av-rug number of ..race of life rnining The follotg . ieolt-v coo vey opprci"at manro f povoty 1-loolo atbirth; 1960, 1970 end 1979 dunu. and ohoold he iot-rproed slob --riderbloa-riot, Ifan.Rralc Rte (Per thousod) - Annoul douch. of infanto nd-r cue your . faimtod Abnoutr P-vorc Incma Irve (US0 ror caito) - nrba and coral1 of agepr thoon... bI'oo birt,ibs. t.Absolirt puo-coy iocoa lovol ia that iuuom_ leve below hich n inimaI Iuos t Sif0Wao (p.Irnot oforouIon ttl,ub,ed rural - Nun- nutritionally ad.qote dioc pic asset..till coo-food roquiros- is oto her of people (tonal, urban, and rural) with onoal urst safe o';ff.rdublo. sanr sppy (colde coatd srf ceso oo oronumaod utuncntaioned laimated Raotio- P-vt Inco.- l-Ie (US$ coo .,pvita) - urbe nod rurl1 saer ;oh usfthatfomprtet edborehal,,, spins and saitr we)IFtrlrlrveptryicm ee Ia coo-rbhird of ovorafe, ..o . caita percotage of their eapootivopop1atou . I no urban . trnpobl-c yr--l i-om oftho onr. iUba Iro indnon cnt P uo fo.ntoin cc tandpost Iocetd oot m-o It-u 200 monare from ho... coy ho level ich tdjuat t for higher coot of living in urba aroo. dotthv.o.p. iprpcimt por oftheda.itfethig te.700.I. f..lI ( o .) d.en t Emt rtn liyoso d(mmmc of.-t P-atu -f total.y utan andi. rthl Numbor of proplo (cot.1 urban an Purl" er' by enItc diaposo a theclecinad disposal wih or withotrtet, of h .mo.oo..ota ucmcndSca.ooIvso an snt-wte y wtron y-t or rho 000 of pit prioiee ood oimi- E-coic unlynie ood Proje-ti... Dapoitsi PPoIruinti Por Phyreiciu - 'poplotico divided by n-b-c of prcti,ioin phymi- My18 ,Ia..n . qooflfiodIfro a mdico1 sohr1 at univority 1-v1. P Pnainconriog Perso- -Population divided by nubo_ of practicing male and fen1l grad uste ournas, p-tcioul. nurno,..ud n..sietc ore_  - 22 - ANNEX I Page 4 ECONOMIC INDICATORS GROSS DOMESTIC PRODUCT IN 1981 ANNUAL RATE OF GROWTH,% (1978 constant prices) US$ Million % of GDP 1976-81 GDP at Market Prices 951.8 100.0 3.1 Gross Domestic Investment 333.6 35.0 14.1 Gross Domestic Saving 12.5 1.3 9.5 Current Account Balance -328.9 -34.6 14.2 Exports of Goods, NFS 298.9 31.4 11.5 Imports of Goods, NFS 658.0 69.1 7.2 OUTPUT, LABOR FORCE AND PRODUCTIVITY IN 1981 Value Added Labor Force Value added per Worker US$ Million % Thousand % US$ % Agriculture 369.8 44.5 1,220.0 73.6 303.1 59.9 Industry, Construction and Public Works 102.5 13.4 100.3 6.1 1021.9 201.8 Services 367.6 42.1 338.2 20.3 1086.9 214.6 GDP at Factor Cost 839.9 100.0 1658.5 100.0 506.4 100.0 GOVERNMENT FINANCE Central Government (CFAF Billion) % of GDP 1981 1981 1981 Current Revenue 52.6 20.6 16.6 Current Expenditures 34.8 13.8 11.3 Investment Expenditures 25.1 9.8 4.7 Transfers 0.4 0.2 0.4 Net lending 2.8 1.1 2.0 Overall deficit (-) -10.5 -4.1 -1.2 External Borrowing 13.9 5.4 2.4 MONEY, CREDIT AND PRICES 1976 1977 1978 1979 1980 1981 (Billion CFAF Outstanding End Period) Money and Quasi Money 30.6 34.9 39.0 46.7 61.4 71.3 Net Claims on Central Government -7.1 -9.4 -12.9 -11.8 -17.5 -20.9 Bank Credit to Private Sector a/ 32.1 38.6 47.1 59.4 85.0 87.0 (Percentage or Index Number) Money and Quasi Money as % of GDP 22.5 23.2 23.2 23.9 28.5 27.6 General Price Index (1978=100) 83.8 86.8 100.0 113.3 131.1 159.2 Annual Percentage Change in: General Price Index .. 3.6 15.2 13.3 15.7 21.4 Net Claims on Central Gov't. .. -32.4 -37.2 8.5 -48.3 -19.4 Bank Credit to Private Sector .. 20.2 22.0 26.1 43.1 2.6 a/ Includes Public Enterprises.  - 23 - AU I Pag 5 TRADE5 PAYMDITS AND CAPITAL PLOWS (in millions of US$) (BALANCE OF PAYMENTS 1976 1977 1978 1979 1980 1981 IERCHAFDISE EXPORTS USS million % (Average 1977-1981, Recorded) Exports o