Upper Volta - Hauts - Bassins Agricultural Development Project

Document of The World Bank I LE COPU r Y FOR OFFICIAL USE ONLY Report No. P-3362-UV REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT IN AN AMOUNT EQUIVALENT TO US$4.7 MILLION TO THE REPUBLIC OF UPPER VOLTA FOR A HAUTS-BASSINS AGRICULTURAL DEVELOPMENT PROJECT July 8, 1982 Western Africa Region This document has a resricted diribution and may be sed by recipients eniy in the perfenance of their official dus. Its contes may not otherwise be dbdosed without Wolid Bank authorizion.  CURRENCY EQUIVALENTS SDR 1 = US$1.12 = CFAF 336 US$1.00 = SDR 0.89 = CFAF 300 CFAF 1,000 = US$3.33 = SDR 2.96 WEIGHTS AND MEASURES Metric system ABBREVIATIONS AVV Volta Valleys Development Authority CCCE Central Agency for Economic Cooperation (France) CNCA National Agricultural Credit Bank FAC Fund for Aid and Cooperation (France) IRAT Tropical Agriculture and Foodcrops Research Institute IFAD International Fund for Agricultural Development MRD Ministry of Rural Development OFNACER National Cereals Agency ORD Regional Development Organization PY Project Year SOFITEX Voltaic Textile Fibre Company (Parastatal) FISCAL YEARS Government: January 1 - December 31 ORD:- April 1 - March 31 IDA: July 1 - June 30 Project Year 1: July 1, 1982 - March 31, 1983 Project Year 2-5: April 1 - March 31  UPPER VOLTA FOR OFFICIAL USE ONLY HAUTS-BASSINS AGRICULTURAL DEVELOPMENT PROJECT CREDIT AND PROJECT SUMMARY Borrower: The Republic of Upper Volta Amount: SDR 4.2 million (US$4.7 million) Terms: Standard Project Description: The main objectives of this project, which follows the first West Volta Agricultural Development Project (Cr. 706-UV), but is confined to the Hauts-Bassins area, are to raise domestic food production, increase cotton exports and improve the quality of rural life. Specifically it aims to: (a) encourage improved manual cultural techniques amongst traditional farmers; (b) promote the integration of livestock and agriculture, and the use of organic fertilizer and animal traction; (c) promote and monitor measures which may lead to cheaper alternative chemical fertilizers; (d) encourage the use of inputs including selected seeds to allow further production increases by more advanced farmers; and (e) foster further development of village groups, and test a small literacy program for some of these groups. Benefits: Agricultural extension services would directly benefit about 40,000 very poor farm families in the area, resulting in crop production increases, higher farm incomes, better nutrition and more on-farm employment. The livestock vaccination com- ponent would benefit all livestock owners in the area by reducing animal disease incidence; the village group support program would bring greater self-reliance to the farmers in the area; while the technical assistance component would help improve local capability to operate and manage development projects. Risks: There are no unusual technical risks associated with the project. The proposed approach has already been tested within the area and elsewhere in Upper Volta. Potential risks are: inadequate use of inputs or a breakdown in the delivery system due to difficulties in financing fertilizer subsidies; possible constraints in the marketing system in providing an outlet for the increased cereals surplus; slow farmer respon- siveness; shortcomings of measures to counter the decline in soil fertility and delays in funding of operating expenses by Government. Recognizing these risks, particular attention is being given to strengthening the role of village groups in marketing, adaptive research, monitoring generally, and to pursuing discussions with Government concerning a proposed Fertilizer Credit under which subsidies would progressively be reduced. 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 - Estimated Costs (net of taxes and duties from which the project would be exempted): Local Foreign Total --------US$ Million-------- 1. Agriculture and Livestock 2.2 0.3 2.5 2. Village Groups 0.4 0.4 0.8 3. Supplies and Credit 3.1 2.9 6.0 4. Management, Monitoring and 0.4 1.9 2.3 Training of Senior Staff 5. Regional Training and Support 0.2 1.0 1.2 6. Settled Pastoralists Extension - 0.4 0.4 7. Studies and Subprojects to be 0.3 1.0 1.3 Approved Total Base Costs 6.6 7.9 14.5 Physical contingencies 0.8 0.8 1.6 Price contingencies 2.4 2.3 4.7 TOTAL PROJECT COSTS 9.8 11.0 20.8 Financing Plan: Local Foreign Total --------US$ Million------ External: IDA 1.8 2.9 4.7 France 4.9 4.4 9.3 IFAD 2.3 0.8 3.1 Upper Volta: Commercial Banks 0.3 2.9 3.2 Beneficiaries 0.5 - 0.5 TOTAL 9.8 11.0 20.8  - iii - Estimated Disbursements: FY83 FY84 FY85 FY86 FY87 FY88 --------------US$ Million-------------- Annual 0.2 0.9 1.2 1.1 1.0 0.3 Cumulative 0.2 1.1 2.3 3.4 4.4 4.7 Rate of Return: 33 percent Appraisal Report: No. 3811-UV Map: No. IBRD-15915  .~~~~~~~~~~~~~~~  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF UPPER VOLTA FOR A HAUrS-BASSINS AGRICULTURAL DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Republic of Upper Volta in an amount of SDR 4.2 million (US$4.7 million) on standard IDA termt to hel, fiaance a Hauts-Bassins Agricultural Developmei.t Project. The French Government will contribute US$9.3 million equival&nt (comprising loans from the Caisse Centrale de Cooperation Economique (CCCE) and a grant from the F(inds d'Aide et de Coopera- tion (FAC)). The loans for medium-term agricultural credit, available in annual tranches are expected to be on terms of 3 per:ent interest per annum with repayment over 15 years, following a 5-year grace period. The loans for other costs are likely to be in a three-year tranche, followed by a two-year tranche, repayable over 20 years following a 10-year grace period on terms of 1.5 percent per annum during the grace period and 2 percent subsequently. The International Fund for Agricultural Development (IFAD) will contribute a loan of US$3.1 million equivalent on standard terms of 1 percent interest per annum with repayment over 40 years, following a 10-year grace period. PART I - THE ECONOMY 1/ 2. An economic report entitled "Economic Memorandum: Upper Volta" (2146-UV) was distributed to the Executive Directors on March 14, 1979. An updating economic memorandum is presently under preparation, based upon a mission in February, 1982. Information obtained during that mission is incorporated in the section below. Socio-Economic Background 3. Upper Volta is one of the poorest countries in the world with a GNP per capita of US$210 in 1980. 2/ Over 80 percent of the population depend on agriculture or livestock for their livelihood. Soil quality and rainfall vary considerably across the country, in particular between the dry central plateau and the wetter zone of the southwest. Over half of the population of 6.1 million (1980) is concentrated in this central region, which has resulted in overcultivation of the already fragile soils and progressive erosion. The sharp annual fluctuation in rainfall, few mineral resources, scarcity of roads and other infrastructure, and long distances from the nearest seaports further constrain the country's development. 1/ Parts I, II and III have been substantially revised since the President's Report for the Third Telecommunications Project (Cr. 1235-UV, US$17.0 million, April 1982), and are identical to those in the Volta-Noire report. 2/ National income and population data quoted here are based on recent analyses and differ from figures in Annex I.  - 2 - 4. The impoverishment of the central region has given rise to net emigration to the coastal countries, mainly the Ivory Coast, of about 0.6 percent of the population each year, and spontaneous resettlement to the less densely populated southwest. While internal resettlement and emigration represent important avenues for many individuals to improve their incomes, Upper Volta will face for some time a difficult challenge to raise the pro- ductivity of food cultivation on the central plateau, which will continue to provide the livelihood for a very large share of the population. The opportunities for economic growth over the long term will not improve, however, unless special efforts are made to accelerate the development of human capital, in particular by raising the primary school enrollment rate and life expectancy which are among the lowest in the world, at 20 percent and 43 years, respectively. Past Economic Performance 5. Upper Volta's economic performance has in general reflected a relatively prudent economic management. The Government's favorable record in this respect, however, reflects more its inclination against active interven- tion in the economy rather than a strong capability of policy analysis and execution. Indeed, a problem is that the Government has provided only a limited degree of coordination and oversight of investment planning and budgeting, a weakness which extends to essential sectoral activities such as agricultural research. This weak administrative capability has been put under a special strain by the large inflow of foreign assistance and the prolifera- tion of donor agencies which have become a feature of the Voltaic scene since the major drought of the mid-1970s. The present Government, which came to power in 1980, demonstrates an increasing inclination to proceed with some major investments which have weak economic justification and will place an undue burden on domestic financial resources (especially for operating costs). It is also evident that the Government has made only limited progress in implementing reforms to strengthen financial management. 6. National Output. Recently revised estimates of GDP show an annual increase of 3.7 percent over the 1970-79 period, or about 1.8 percent per capita. Real output of the primary sector, which contributes almost 40 per- cent of total value-added, increased by about 1.5 percent annually, a perfor- mance which compares favorably to that of other semi-arid Sub-Saharan Africa countries and reflects the effect of development projects and reasonably good sectoral policies. The livestock subsector showed no overall growth from 1970-79 in value-added. Industrial production, which accounts for about 13 percent of GDP, expanded by 4.1 percent per year over the same period. The main sources of growth in the economy were public administration and other services, which increased 6.0 percent annually. The greatest expansion in these activities reflected the substantial increase in externally-financed development projects following the drought. 7. National income fell by 5 percent in 1980 as a result of poor rains, which caused a decline in crop production of 15 percent, and the general slowdown in economic activity preceding the military coup. The economy rebounded in 1981, expanding about 9 percent above the previous year's low.  8. Total gross investment averaged about 17 percent of GDP over the past decade. The high incremental capital:output ratio (ICOR), which amounted to 6.4 percent for 1976-81, reflects the dearth of productive resources besides capital in the country, and the lack of coordination of public invest- ment which is almost entirely externally-financed. The resource gap has risen from 14 percent of GDP in 1970 to 24 percent in 1981, and domestic savings have remained strongly negative throughout the decade. Most of this excess consumption has arisen from the government sector. Because of workers remittances, which largely supported private consumption, gross national s vings have been only slightly negative or zero. 9. Overall, the economy's performance during the past decade was better chan average for the lowest income countries in Sub-Saharan Africa. However, the dominant features of the Voltaic economy--the deterioration of soils on the central plateau, the predominantly illiterate work force, vulnerability to climatic variation and dependence on foreign capital--make it evident that the country still has a very weak basis for sustained economic growth. 10. Balance of Payments. The balance on the external account has shown a deficit for most years since 1976, in contrast to the pattern of surplus in the early decade. The overall shortfall was estimated at CFAF 2.3 billion (US$8.2 million) in 1981. Wide swings have been apparent in the export of cotton and sheanuts, the main export crops, partly as a result of variations in rainfall. Cereals, capital goods, and especially petroleum are the fastest growing imports - to a great extent, however, these are counter-balanced by grants (e.g. food aid) and loans for development projects. Although Upper Volta clearly has a structural imbalance with respect to foreign trade, it is likely that the availability of aid and remittances has enabled the demand for imports to grow disproportionately. The balance of payments situation therefore does not mark a need for policies to tightly restrict domestic demand, but constraints on petroleum imports and measures to ensure buoyant export sectors (especially cotton and livestock) will be important to achieve greater stability of the external account. 11. Public Finance. Although the Government pursued generally conserva- tive fiscal policies prior to 1975, this pattern changed with the expansion of foreign aid at mid-decade. Budget deficits averaging CFAF 3.0 billion (US$12.6 million) have appeared each year from 1976-80. A much larger gap of CFAF 8.8 billion (US$31.4 million), or 2.8 percent of GDP, is estimated in 1981, with another shortfall expected in 1982. 12. The deficitary trend has occurred despite a fairly buoyant perfor- mance in revenue mobilization. Civil service salary raises have been well below the rate of inflation, and the Government has recently tightened certain administrative expenditures. Financial losses of the parastatal sector, although they are beginning to reach an important scale for certain enter- prises, have not been a factor to date in the overall budgetary situation. Although there are specific areas where tax and expenditure reforms are needed, for the most part the deficitary trend has arisen from the widespread expansion of government activities in many sectors as a result of development investments.  - 4 - 13. As the first generation of development projects financed after the drought come into their operational phase, the Government is going to be faced increasingly with new recurrent expenditure obligations. Yet at present the Government has no consolidated investment budget, nor are the recurrent expenditures of investment projects taken into account in the preparation of the national budget. The Government and the Bank have for the past two years been discussing an institutional reform proposed by the Ministry of Plan to bring about a more systematic accounting for investment expenditure, and a technical assistance project to help implement the reform has been under preparation. Progress on the reform has been slow, owing to failure to reach agreement on the allocation of responsibilities between different ministries. The IMF also has a Standby Program under discussion with the primary aim of strengthening the public finance situation. 14. Foreign Assistance and Investment. Although three development plans have been prepared, the latest covering the 1977/81 period, the process of formulating the investment programs has involved little evaluation and selec- tion of projects by Government based upon economic criteria and development priorities. The 1982-86 plan is still in a very early stage of preparation. Despite the absence of a distinct investment program, foreign aid to Upper Volta has continued at a high level, with both commitments and disburse- ments of official inflows exceeding total budget revenues for the past several years. Most of this aid is on highly concessional terms. The principal foreign donors are France, the European Development Fund, Canada, the Netherlands, Germany, the United States, the Association, and the UNDP. Although a large degree of informal consultation among the donors exists, especially with respect to large infrastructural projects, increased co- ordination will become more important to improve the efficiency of investment and ensure that the recurrent costs are sustainable, especially given the Government's own limited capability in planning and analysis. The Bank is discussing these issues with the Government. PART II - WORLD BANK GROUP OPERATIONS IN UPPER VOLTA 15. The Bank Group's commitments in Upper Volta, as of March 1, 1982, amount to US$191 million and cover twenty-two IDA credits. IFC has one investment. About US$87 million have been disbursed. The IDA projects include eleven agriculture (including two supplementary credits), five trans- portation (including one supplementary credit), two education, two telecom- munications, one small and medium scale enterprise, and one urban development project. The IFC investment is for plastic production. Of total IDA lending, the agriculture and transportation sectors account for 44 and 40 percent, respectively. Annex II contains a summary statement of IDA credits and IFC commitments as of March 1, 1982. It also includes information on the status of ongoing projects. 16. A few projects have experienced implementation delays necessitating extensions of closing dates, and world price inflation in others has led to cost overruns, requiring supplementary financing or eliminating lower priority components (Third Highway Project, Cr. 653-UV, US$20.0 million, 1976, and EEC Special Action Credit 38, US$3.5 million, 1980; West Volta Agricultural  Development Project, Cr. 706-UV, US$3.6 million (IDA) and Can.$3.0 million (Canada), 1977, and EEC Special Action Credit 49, US$3.0 million, 1980; Urban Development Project, Cr. 766-UV, US$8.2 million, 1978). Financial control on some projects has been weak due in part to a lack of general financial standards or procedures. Budgets are nominally prepared, approved and controlled by a central authority, but the procedures are insufficiently rigorous. There are few official standards or procedures for setting expen- diture norms. Furthermore, partly due to fiscal management problems, the Government has had difficulty in promptly meeting its counterpart funding obligations. Future projects will address these issues by the provision of further project-related technical assistance and training, as well as at the central level through a proposed Technical Assistance Project to improve Government's financial management, investment planning and budgeting process. On the whole, however, past project performance has been generally satis- factory given the environmental, institutional and managerial constraints within the country. 17. Upper Volta's disbursement performance has been normal compared to other countries in the region. Recently, however, its performance has begun to deteriorate mainly due to lack of counterpart funds as a result of current budgetary difficulties and delays in project effectiveness (Highways IV). The Bank is helping to tackle these problems by ensuring that Government is aware of forthcoming counterpart obligations and by offering increased assist- ance from the Bank's Resident Representative during the period prior to project effectiveness. The proposed Technical Assistance Project would also help to address disbursement problems. 18. The Bank Group's lending is in line with Government's priorities as expressed in its Third Development Plan (1977/81), and will continue to support Government's efforts to: (a) increase productivity in agricul- ture, from which most of the population derives its livelihood; (b) improve the human resource base; (c) strengthen basic infrastructure facilities; and (d) mobilize resources from co-donors. Government is currently working on a Fourth Five-Year Development Plan (1982/86) with UNDP assistance. Priori- ties are, however, not expected to differ from those of the Third Plan. 19. In the near-term (FY82-84), Bank Group operations are expected to include a pilot agricultural development project for the Regional Development Organization (ORD) of Koudougou; a second rail project to be executed with the Ivory Coast; a hydro-electric power project, a technical assistance project to strengthen Government's investment planning and control procedures; and a credit to assist Government to deal with the policy aspects of fertilizer usage and food security, while phasing out subsidies on fertilizers. In the medium-term, Bank assistance strategy toward Upper Volta envisages combining our present commitment to the promotion of food and export crop production with a new emphasis on agricultural research, development of human resources through basic education and health, and the strengthening of aid coordination. 20. Upper Volta's external public debt at the end of 1980 amounted to US$508 million (including US$185 million undisbursed) of which IDA credits accounted for about 25 percent. The ratio of debt service to exports of goods and non factor services was 9.2 percent in 1980, and the ratio is not expected to increase significantly over the next several years.  PART III - THE AGRICULTURE SECTOR Sector Background 21. Economic growth in Upper Volta is necessarily closely linked to progress in the agricultural sector which employs 80-90 percent of the popula- tion and comprises about almost 40 percent of GDP and almost all exports. However, soils are poor, rainfall is low and uncertain, and the potential for irrigation is economically limited, requiring costly investments to develop. Improving agricultural productivity as is necessary for maintaining food security and increasing national income is thus a challenging task. 22. Although the country is relatively flat, there are pronounced regional differences in climate and soils. The low and erratic rainfall in the north (600 mm) results in unreliable harvests and greater reliance on livestock for survival, and consequently low population densities. On the central plateau, crop farming is at a subsistence level because of population pressure, over-exploited soils and unreliable rainfall. In the southwest, soil and rainfall conditions (reaching 1200 mm) are more favorable, population density lower, and production more market-oriented. 23. Agricultural production over 1961-79 has performed as well as could have been expected given the severe constraints. Foodcrop areas, which account for almost 90 percent of cultivated land, have increased less than the net annual growth in rural population. In contrast to most other food crops, sorghum production has grown more rapidly than population, reflecting in part the residual effects of cotton fertilizer in crop rotation, as well as direct fertilization. Overall, the country has continued to satisfy all but a small share (5 percent) of its consumption of foodcrops from local production in years of normal rainfall. But this has only been achieved through increas- ing dependence on the southwest as a source of food surplus, which tends to limit the resources available in that region for growing the country's major export crop, cotton. This dependence must continue, however, in the short term, whilst adaptive research attempts to develop improved approaches for increasing productivity over wide areas of the center. 24. Cotton yields have risen markedly in the last decade and output rose from 36,000 tons in 1970 to over 78,000 tons by 1979 due to cultivation shifting to more fertile areas and to the use of fertilizers and insecticides, coupled with extension programs. Since 1979, cotton acreage has fallen, indi- cating that close attention needs to be paid to the relationship of cotton and cereals prices, including reviewing whether current taxes on cotton, which are not high, should nevertheless be reduced. The Association's continuing policy dialogue with Government includes attention to this. 25. Because of the population pressure, there is considerable migra- tion away from the central plateau, partly abroad but mainly close to roads in other parts of the country, particularly the area immediately south of the central plateau, and the southwest. Government has sought to address migration in an organized fashion through the Volta Valleys Authority (AVV), which has resettled families, previously at high cost, in areas freed from  - 7 - onchocerciasis. Government has recently adopted new policies, broadly in line with recommendations of the Association, aimed at reducing costs of AVV opera- tions. Under the proposed project, funds are included for studies in AVV areas. Outside these areas, a low cost approach to migration was to have been tested under the West Volta Agricultural Development Project (Cr. 706-UV), but terms of reference for preliminary studies were not agreed between Government and Switzerland, the financing source involved, in time to permit execution; it is now intended that this component will be undertaken under the proposed project and that of the Volta Noire. Principal Sectoral Institutions 26. The Ministry of Rural Development (MRD) is responsible for agricul- ture and livestock and related national support services, including adaptive research and seed production. It oversees parastatal marketing organizations and eleven decentralized Regional Development Organizations (ORDs). Except in the case of those ORDs in areas with externally-financed projects, the ORDs lack adequate budgetary allocations; however, the heavy cost of maintaining an ORD is most easily justified in areas where economical technological packages exist readily usable by farmers on a wide scale - that is, presently only in the southwest. 27. Agricultural credit is largely the responsibility of the National Agricultural Credit Bank (CNCA) established in 1980, which, in line with recommendations of the Association, has concentrated upon setting policy norms for agricultural credit, training, and control of funds, and has successfully completed its initial program in these areas. Day-to-day credit operations continue to be the responsibility of the ORDs. Commercial banks provide short- term credit for the purchase of annual inputs and for the marketing of cotton. 28. Marketing: Cereals are marketed mainly by private traders who purchase grains in producing areas and sell them in the main consumption points. The system works fairly efficiently, with most farmers being able to sell any excess production without difficulty. Government sets official consumer and producer prices, but does not enforce them as such; rather it attempts to influence market prices through the National Cereals Agency (OFNACER) which was able last season, to offer to purchase cereals at the official price throughout the country, and although it did not meet its purchase quotas, it may have induced traders to offer higher prices than they would have otherwise. The Association has advised Government that it considers that the role of private traders should be maintained, as at present, and that OFNACER's role should be limited to marketing emergency stocks, selling food aid supplies to drought-stricken areas, and improving market information. Cotton marketing, ginning and export is competently undertaken by the Voltaic Textile Fibre Company (SOFITEX), owned by Government (63 percent), and by the French Textile Fibre Development Company (CFDT) (37 percent) which provide technical support and receive a commission of 1.5 percent on all exports. SOFITEX also imports fertilizers and insecticides for sale at subsidized prices, not only for cotton (fertilizers and insecticides) but for cereals (fertilizers) as well. The system which has worked successfully is under strain however, especially for areas not producing cotton, because of delays by Government in reimbursing SOFITEX for the subsidy element for fertilizers used on cereals.  -8- An active program of agricultural research is undertaken by externally- supported specialist institutions for cotton, irrigated crops, sorghum and millet, and other foodcrops. However, the work has suffered from a lack of focus upon the need to produce recommendations valid at farmer level, which has arisen in part because of concentration by the institutions upon specific crops, and a resultant lack of attention to farming systems research. The recently created Voltaic Institute for Agronomic and Zootechnical Research intends to address these problems; the Association is discussing with Govern- ment possible support to the Institute. Seed production, a Ministry function, has also encountered problems of pricing policy, inadequate extension atten- tion and liaison with research, and lack of attention to farmers' preferences. Under forthcoming Association-financed projects, particular attention is to be paid to seed production and the factors affecting uptake. Sector Strategy and Bank Group Lending 30. The Government's strategy in agriculture has given priority to (a) improving the productivity of rainfed agriculture; (b) promoting migra- tion from the densely populated and relatively infertile central plateau to the more fertile and less densely populated areas in the southwest; (c) expand- ing irrigation and swampland production schemes; and (d) ensuring national food security. In line with this strategy, Bank Group lending for Upper Volta has emphasized development of rainfed agriculture for food and cash crops in the southwest, small-scale land development schemes to expand the agricultural production base in the central plateau, and testing a larger scale swampland production scheme in the southwest. 31. Since 1970, IDA has financed eleven projects in the rural sector of which five have been completed. The Cotton Project (Cr. 225-UV, US$6.2 million, 1970) demonstrated that an improved technology, within the means of small farmers, could be spread widely and rapidly. The project's Audit Report noted substantial improvements in farming practices and yields. The First Bougouriba Agricultural Development Project (Cr. 496-UV, US$8.0 million, 1974) after a slow start also achieved satisfactory results in expanding cotton and cereal production. The project closed in December 1981 and a project completion report is being prepared. The Drought Relief Project (Cr. 442-UV, US$2.0 million, 1973) and the First and Second Rural Development Fund (RDF) Projects (Cr. 317-UV, US$2.2 million, 1972 and Cr. 640-UV, US$9.4 million, 1976) aimed at financing small discrete works with community par- ticipation. The Project Audits described the Drought Relief and First RDF Projects as highly innovative and successful in implementing diversified and scattered subprojects. The second RDF Project, completed in December 1981, continued the development of bottomlands, wells and anti-erosion works on the central plateau. A third RDF Project was approved by the Board on March 30, 1982. 32. The ongoing IDA-assisted agricultural projects are: the West Volta Agricultural Development Project discussed at para. 36 (Credit 706-UV, US$3.6 million, 1977, Credit 706-5-UV for Can.$3.0 million and Special Action Credit 49-UV for US$3.0 million equivalent); the Livestock Development Project (Credit 557-WV, US$6.0 million, 1975); the Forestry Project (Credit 982-UV;  - 9 - US$14.5 million, 1980); the Niena Dionkele Rice Development Project (Credit 1013-UV, US$6.5 million, 1980); and the Second Bougouriba Agricultural Devel- opment Project (Credit 1097-UV, US$16.0 million, 1981). They are being implemented satisfactorily, although the swamp drainage Niena Dionkele Pilot Project has run into technical problems of water availability and rice varieties, and the Livestock Project had difficulties with its group ranch component which necessitated a redesign and a reduction in the credit by US$3.0 million. Future Orientations 33. The Association is currently discussing with Government an agricul- tural issues study resulting from recent sector work. The study confirms the broad orientations of agricultural policy discussed above but seeks to highlight some of the priority areas that merit attention if the four general goals are to be achieved. For rainfed agriculture, regional priorities need defining, in order to focus on the major constraints and areas of potential in the west by continued promotion of food and export crop production and in the center, by encouraging erosion control, better husbandry, and animal traction, and undertaking research to improve drought-resistant varieties. It will be appropriate, in the more difficult regions, for pilot projects to be under- taken to test the suitability of promising approaches for wider adoption. For migration, the proposed project and that of the Volta Noire include studies and implementation of pilot components aimed at testing low cost approaches to dealing with installation of arriving migrants. For irrigation/ swampland development, a study by the FAO Cooperative Program is currently underway to collect more data, in order to establish whether a potential for economically attractive investments exists, and if so, the priorities. For national food security, one of the key issues is how to assure a steady increase in fertilizer use which is forecast to need to rise by some 3,000 tons/year over the next five years in order to meet food production require- ments. Government is finding it increasingly difficult to finance the subsidy, which in turn threatens adequacy of supplies. Recognizing this and in line with obligations under the Second Bougouriba Agricultural Development Project, Government reduced the subsidy in June 1982 from 64 to 57 percent. It has also confirmed its strong interest to pursue discussions concerning a proposed Fertilizer Credit having an objective of a progressive reduction of the subsidy over five years to a level supportable without external finance. The Project would need to carefully monitor and take into account effects of price changes on output and consumer prices. The adjustment process which needs to be flexible will involve difficult political and economic judgments for the Government, as it seeks to maintain farm output in the face of rising input costs, whilst restraining to acceptable levels, increases in the prices paid by urban consumers who exercise a considerable degree of political power. PART IV - THE PROJECT 34. The proposed project fits into the general sectoral strategy by building upon the success of the ongoing project to raise further domestic food production and cotton exports in the southwest. It will also seek to increase farmer involvement in the input distribution and marketing system at  - 10 - the village level. Particular attention has also been given to the need, in view of Government's difficult financial situation, for cost recovery measures in order to reduce the demand for Government support at the end of the project implementation period. 35. The project was identified in 1979, following Government-s request for a follow-up project in the area, and appraised in October, 1981. Negotia- tions were held in Washington, D.C. from June 7 to 11, 1982; the Upper Volta delegation was led by H.E. the Minister of Rural Development. A report entitled "Staff Appraisal Report - Hauts-Bassins Agricultural Development Project" No. 3811-UV dated June 28, 1982 is being distributed separately to the Executive Directors. Supplementary project data are contained in Annex III. Bank Assistance in the Area 36. The West Volta Agricultural Development Project, which covered the Volta Noire and the Hauts-Bassins Regional Development Organizations (ORDs), has been successful in extending the work of the earlier Cotton Project; the Livestock Project, the Second Education Project, the Second Rural Development Fund Project and a French-financed Foodcrops Project have also assisted de- velopment of the area. The West Volta Project covered both cotton production and foodcrops. Cumulative incremental production of cotton in the Hauts-Bassins area over the five years of the project is 32,000 tons compared to 26,500 tons estimated at appraisal. Yields have risen from 850 kg/ha to 1,200 kg/ha, largely through increased application of fertilizers and insecticides. Cereal yields have increased by 12 percent and Hauts-Bassins production has risen in 1981 by 12,500 tons/year (compared to 14,000 tons/year at appraisal). A recalculation of the rate of return gives a result of 30 percent, compared to the appraisal estimate of 32 percent. Components not directly under the control of the two ORDs have been less successful; for example, only about 10 percent of the targets of the small irrigation component have been met. Organizationally, there is a need to simplify objectives and responsibilities, and to give increased attention to financial management, both as to control over expenditures, and in instituting cost recovery of input distribution costs. Description 37. The project, to be executed over a five-year period starting in September 1982, would cover the following components: (i) Agriculture and Livestock Development: comprising (a) extension services to 40,000 farmers to increase further cotton and foodcrop production, and integrate livestock themes into the general exten- sion message; and (b) adaptive research, to test new varietal and husbandry recommendations and develop cheaper fertilizer formula- tions. (ii) Village Group Development: increasing the number of village groups from 106 to 300, in order to continue developing farmers' responsibility for their own affairs;  - 11 - (iii) Supplies and Credit: providing inputs and credit with village level administration being undertaken by village groups; and produc- ing and promoting improved seeds for sorghum, maize, rice and groundnuts; (iv) Management, Training of Senior Staff and Monitoring; (v) Regional Training and Support: continuing assistance to the regional training center at Bobo-Dioulasso, especially in its role of training extension staff and farmers' representatives; (vi) Extension for Newly Settled Pastoralists: continuing for three years extension activities for newly settled pastoralists in the Samorogouan area; and (vii) Studies and Subprojects to be Approved: undertaking further studies, and establishing a mechanism for appraising and implementing small subprojects in accordance with agreed criteria. Detailed Features 38. Extension services would be reorganized to allow a phased reduction during the life of the project of the number of extension agents from 125 to 100, thereby reducing recurrent cost and redeploying staff, permitting increased emphasis on seed production, applied research, monitoring and demonstrations. The extension message would selectively cover better husbandry techniques, use of fertilizers, animal traction, and improved seed varieties, depending on the level of a farmer's development. Particular attention would be paid to production of manure, and the feeding and health of draft oxen. 39. Adaptive Research: A project substation would be established to test in conditions approximating those of farmers', new varietal and husbandry approaches which research stations have developed, and alternative cheaper fertilizer formulations in close contact with the relevant research institutes. 40. Village Groups: A small specialist service consisting of five agents, together with extension staff would seek to foster a further 194 groups (and support the 106 existing groups) and to promote functional literacy, using existing educational material prepared by the Literacy Directorate in Ouagadougou. 41. Supplies and Credit Services: Under the proposed project, the ORD Supplies and Credit Services which would become self-accounting, would, from the outset, apply a minimum margin of 7 percent on supplies, and increase this margin, or reduce distribution costs as necessary in order to assure complete recovery of defined handling costs by the fourth year of the project. Assur- ances to this effect were given during negotiations (Section 4.07 of Credit Agreement). Medium-Term Credit would be provided for oxen and animal traction equipment. Credit recoveries in the ORD have been satisfactory and around 90 percent in the last 5 years. CNCA national lending terms, which are acceptable to the Association, would apply. Interest rates would be 11 percent, the maximum permitted under the preferential schedule of the Central Bank's  - 12 - -agulations. This rate compares with a present inflation rate of about 12 percent which is forecast to decline by 1986 to about 10 percent. Assurances were given during negotiations that Government would enforce a minimum interest rate of 11 percent (Section 4.12 of Credit Agreement). Seasonal credit financed by a local banking consortium, has also operated satisfactorily under the ongoing project, and no changes are proposed. A seed farm would be estab- lished, in order to produce improved sorghum, maize, and groundnuts seeds from foundation stock obtained via the National Seeds Service (cotton seed is produced and distributed by SOFITEX). Selected farmers or young farmer groups would also further multiply seeds. 42. Management, Senior Staff Training, and Monitoring: The proposed project would be executed by the Hauts-Bassins ORD whose director would be the Project Director. Reflecting the present shortage of qualified Voltaic staff, external finance at an average manyear cost of US$100,000 would allow for international recruitment for six key posts - two of which are for regional support activities in training and livestock/agriculture integration. The other four posts are: technical, financial, monitoring and settled pastoralist coordinators. For Senior Staff the project would finance five 9-month study courses abroad, ten short study tours, and on-site courses. Monitoring will seek to improve the data base for proper project management; to assess the incremental production results; to undertake various special surveys and to prepare proposals for small subprojects to be executed. 43. Regional Training. The ORD training center, successfully estab- lished under the West Volta project, to which it made a major contribution, would receive continued funding under the proposed project. It would remain responsible at a regional level, for recycling extension agents to improve their technical knowledge, and their communication and extension methodology skills. 44. Extension for Newly Settled Pastoralists: The project provides for a further period of extension services beyond the period of infrastructure build-up that occurred under the Livestock Project (Cr. 557-UV) in order to allow the pastoralists to add to their traditional herd management techniques further modern improvements in animal health care, herd quality improvement through castration of lower quality bulls, and possibly modifications to pasture rotation practices. 45. Studies and Subprojects to be Approved: US$733,000 (base cost) would be reserved for studies related to rural development in Upper Volta, including preparation of a program for migrants into the project area, an expanded literacy program and studies related to the planned work of the Volta Valleys Authority (AVV) in settling people in areas freed of onchocerciasis. US$550,000 (base cost) would be reserved for execution of an approved test program for migrants, and for small development actions prepared during the life of the project, in response mainly to requests expressed by farmers or villagers for schemes to which they would contribute in cash or in kind, or in response to needs identified during execution for small actions complementing the principal project objectives. These small projects would be approved by the Association in line with agreed criteria.  - 13 - Project Costs and Financing 46. Project costs, net of identifiable taxes and duties from which the project is to be exempted, are estimated to be US$20.8 million, including a foreign exchange component of US$11.0 million (50 percent). A detailed breakdown of project costs and financing plan is shown in the Credit and Project Summary. Physical contingencies added to base costs are 15 percent for civil works and farm equipment, and 10 percent for vehicles, non-farm equipment and operating costs. International inflation is allowed for at 8 percent in 1982, declining to 6 percent in 1986 (except for fertilizers for which higher rates have been used); local inflation has been taken at 12 percent in 1982, declining in line with international inflation to 10 percent in 1986. 47. The proposed IDA Credit of US$4.7 million would finance 22 percent of net project costs. The Association would act as cooperating agency for the International Fund for Agricultural Development (IFAD) for a loan of US$3.1 million (15 percent of project cost) to be disbursed in general, pari passu with the IDA Credit. The French Caisse Centrale de Cooperation Economique (CCCE) would finance US$6.4 million (31 percent of project cost) and the Fonds d'Aide et de Cooperation (FAC) would contribute US$2.9 million (14 percent of project cost). The French finance will be on a parallel basis with IDA/IFAD for technical assistance, seed production and agriculture, livestock integra- tion, and on a joint basis with IDA/IFAD for the adaptive research, village groups and monitoring components. External finance of US$17.1 million would in effect cover 100 percent of foreign exchange costs (US$11.0 million) and US$6.1 million or 62 percent of local costs (US$9.8 million). Upper Volta's contri- bution is 19 percent of project costs - 3 percent from beneficiaries, and 16 percent from commercial sources under existing arrangements. Government would contribute US$1.2 million to recurrent costs of the ongoing project, and allocate a further US$0.9 million of support from France; these costs, however, as with the Second'Bougouriba Agricultural Development Project (Cr. 1079-UV), are not included in the definition of project costs. It is currently estimated that funds of the ongoing project will be exhausted in September 1982. As credit signing may occur after this, retroactive financing of up to US$330,000 of eligible expenditures would be permitted. Moreover, as in other recent Upper Volta projects, due to Government's fiscal constraints, and in order to assist project implementation, an amount of US$330,000 would be advanced from the IDA Credit and IFAD loan to be placed in a Special Account to prefinance eligible expenditures (Sections 3.02 and 7.01 (a) of Credit Agreement). 48. Expenditures on total inputs in the project area, not included in the definition of project costs, are estimated at US$32.8 million in current terms over the next five years, and would mainly be borne by farmers directly, or in the form of reduced prices for cotton. Of the amount, Government would need to find some US$4.0 million for subsidies on fertilizers used on cereals, assuming a reduction in subsidy levels broadly in line with obligations under the Credit Agreement for the Second Bougouriba Agricultural Development Project. As indicated previously, a special Fertilizer Credit is currently being discussed with Government. The fiscal implication of the project to the Government will be covered to a large extent by anticipated increased revenue flows from indirect taxes and taxes on cotton. A potential fiscal  - 14 - implication exists should extension costs not be reduced at project completion to the level needed to simply maintain output, or alternatively supported by external finance under a project designed to produce further production gains. Procurement, Disbursement and Audits 49. The following procurement procedures would apply: Project Element US$ Million Procurement Procedure (i) Construction under 0.1 Local procedures acceptable to IDA. contract (ii) Construction materials 1.6 International competitive bidding for construction under (ICB) for contracts above CFAF 25 force account, vehicles million (US$83,000); local competi- and equipment tive bidding for contracts between CFAF 5-25 million; local competitive shopping for contracts under CFAF 5 million (US$16,700). Procedures satisfactory to France for contracts of US$0.3 million financed wholly by France. (iii) Animal traction equipment 2.7 Local procedures acceptable to' CCCE. (iv) Oxen and cereals for vil- 2.8 Direct purchase by farmers in local lage grain banks markets. (v) Incremental fertilizers 3.2 As part of bulk orders by SOFITEX and insecticides through limited international tendering. (vi) Other incremental inputs 0.3 Government procedures, private traders procedures, or procedures satisfac- tory to France. (vii) Technical assistance, 4.8 Not applicable. audits, scholarships (viii) Local staff salaries 4.5 Not applicable. and sundry expenses (ix) Subprojects to be approved 0.8 Generally as above. 20.8 50. The proposed IDA credit of US$4.7 million and the proposed IFAD loan of US$3.1 million would be disbursed, allowing for delays, over an estimated six years, in the ratio of 40:60, except for technical assistance (other than aerial surveys) and settled pastoralists, for which the ratio would be 100:0, as follows:  - 15 - Project Element IDA IFAD Percentage of -US$ ( 000)- Expenditures (M) Construction (a) On force account for adaptive research and village groups components 150 225 60 (b) By contract for other components 45 65 100 (ii) Vehicles and equipment (a) For adaptive research, village groups, and monitoring components 20 25 60 (b) Other 130 190 100 (iii) Scheduled salaries and operating expenses (a) For adaptive research, village groups, and monitoring components 180 270 60 (b) For settled pastoralists component 45 - 100 (b) Other 1,055 1,480 100 (iv) Technical assistance, studies, audits and scholarships (a) Aerial surveys for monitoring component 60 90 60 (b) Other 2,140 - 100 (v) Subprojects to be approved 170 250 60 (vi) Initial deposit in Special Account 130 200 - (vii) Unallocated 575 305 Total 4,700 3,100 51. Applications for withdrawals from the credit would be fully docu- mented, except for scheduled salaries and operating expenses, and labor and sundry expenses for force account construction, which would be submitted with certified detailed statements of expenditures whose supporting documentation would be retained for verification by the project auditors and for inspection in the course of project supervision. As with preceding projects, the various accounts would be audited annually by independent auditors acceptable to the Association, and certified copies of the audited accounts and the auditor's report would be sent to the Association within six months of the end of each financial year (Section 5.01 of Credit Agreement). Benefits, Economic Analysis and Risks 52. Direct Beneficiaries of the project would be the 40,000 farmers in the area. Benefits result from increases in annual crop production, raising farm incomes, improving nutrition and increasing on-farm employment. Farmers in the area are very poor as indicated by the per head annual crop income of traditional farmers of US$78. By the end of the project, the model for a farmer using improved techniques and animal traction indicates a per head crop income of US$96 - an increase of 23 percent. Additional benefits derive from: (i) the livestock component which would benefit all livestock owners in the area; and (ii) the village group support component which would bring greater self-reliance to the farmers of the area, while relieving the ORD of some of its present tasks. The project-s overall rate of return is estimated to be 33 percent.  - 16 - 53. There are no unusual technical risks associated with the project for which the proposals are simple and have already been tested within the project area and elsewhere in Upper Volta. The main elements of risks are: (i) inade- quate use of modern inputs, in particular fertilizer, due to restricted supplies caused by subsidy funding problems or decreased demand because of input price increases not being adequately compensated for by increased output prices; (ii) constraints in the marketing system in providing an outlet for the expected cereals surplus; (iii) slow responsiveness of farmers; (iv) shortcoming of livestock and land husbandry practices to counter the possible decline in soil fertility; and (v) delays in funding of operating expenses by Government. Recognizing these risks, particular attention is being given to a dialogue with Government concerning subsidies in the context of a proposed Fertilizer Credit, strengthening of the role of village groups in marketing, adaptive research, and monitoring generally. PART V - LEGAL INSTRUMENTS AND AUTHORITY 54. The draft Development Credit Agreement between the Republic of Upper Volta and the Association and the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. 55. Special conditions of the project are listed in Section III of Annex III. These include the following conditions of effectiveness: (a) conditions of external finance are fulfilled; and (b) IFAD appoint IDA as Cooperating Institution. 56. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 57. I recommend that the Executive Directors approve the proposed credit. A. W. Clausen President Attachments Washington, D. C. July 8, 1982  -17- Annex I Page 1 of 5 TABLE 3A UPPER VOLTA - SOCIAL INDICATORS DATA SHEET UPPER VOLTA REFERENCE GROUPS (WEIGHTED AVRAGES AREA (THOUSAND SQ. ICH.) - MOST RECENT ESTIMATE)- TOTAL 2i4.2 MOST RECENT LOW INCOME MIDDLE INCOME AGRICULTURAL 125.6 1960 lb 1970 /b ESTIMATE lb AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA GNP PER CAPITA (US$) 70.0 100.0 210.0 250.8 1053.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 5.0 13.6 26.0 66.5 610.1 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUSANDS) 4164.0 5072.0 6064.0 URBAN POPULATION (PERCENT OF TOTAL) 4.7 6.8 10.3 17.8 28.3 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 10.2 STATIONARY POPULATION (MILLIONS) 29.2 YEAR STATIONARY POPULATION IS REACHED 2140 POPULATION DENSITY PER SQ. KM. 15.2 18.5 21.8 27.7 54.7 PER SQ. EM. AGRICULTURAL LAND 34.7 41.5 47.5 86.7 129.9 POPULATION AGE STRUCTURE (PERCENT) f 0-14 YRS. 42.8 43.9 44.7 44.8 46.0 15-64 YRS. 54.3 53.2 52.5 52.3 51.1 65 YRS. AND ABOVE 2.9 2.9 2.8 2.9 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 1.9 2.0/c 1.8/c 2.7 2.8 URBAN 5.7 5.7 5.9 6.2 5.2 CRUDE BIRTH RATE (PER THOUSAND) 48.6 48.0 48.0 47.3 47.2 CRUDE DEATH RATE (PER THOUSAND) 26.8 24.3 24.2 19.5 15.7 GROSS REPRODUCTION RATE 3.2 3.2 3.2 3.2 3.2 PAMILY PLANNING ACCEPTORS, ANNUAL (THOUSANDS) USERS (PERCENT OF MARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-100) 101.0 102.0 93.0 88.7 90.7 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 91.8 89.4 92.8/d 90.2 93.9 PROTEINS (GRAMS PER DAY) 71.1 68.9 70.37d 53.1 54.8 OF WHICH ANIMAL AND PULSE 19.3 19.2 19.071 18.4 17.0 CHILD (AGES 1-4) MORTALITY RATE 62.9 57.8 50.6 26.7 23.9 NEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 36.2 37.2 38.9 45.6 51.0 INFANT MORTALITY RATE (PER 129.9 118.5 THOUSAND) 252.3 235.0 211.2 ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. 12.0 25.0/e 23.9 URBAN . 35.0 50.o71 54.9 RURAL .. 10.0 23.071. 18.5 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. 4.0 4.O/e 25.8 URBAN .. 49.0 47.071 63.1 RURAL .. .. .. 20.2 POPULATION PER PHYSICIAN 81647.1 87448.3 50000.0 32097.3 14185.2 POPULATION PER NURSING PERSON 4090.0/f 3984.3 3650.0 3264.6 2213.2 POPULATION PER HOSPITAL BED TOTAL 1717.1 1575.6 1590.0 1225.0 1036.4 URBAN 207.6/g 269.2 329.0/d 249.5 430.8 RURAL 3089.9/g 2439.2 2485.571 1712.1 3678.6 ADMISSIONS PER HOSPITAL BED .. .. 31.0 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL 7.5/b .. URBAN .. .. RURAL .. .. AVERAGE NUMBER OF PERSONS PER ROOM TOTAL .. .. URBAN .. .. .. RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. .. URBAN .. .. .. RURAL .. .. ..  -18- Annex I Page 2 of 5 TABLE 3A UPPER VOLTA - SOCIAL INDICATORS DATA SHEET UPPER VOLTA REFERENCE GROUPS (WEIGHTED AV,ERAGES - MOST RECENT ESTIMATE)- MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 lb ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 8.0 12.0 20.5 63.2 83.3 MALE 12.0 16.0 26.0 72.7 96.1 FEMALE 5.0 9.0 15.1 50.3 80.4 SECONDARY: TOTAL 0.5 1.0 3.3 10.2 15.3 MALE 1.0 2.0 4.3 13.2 19.4 FEMALE 0.3 1.0 2.4 6.6 11.3 VOCATIONAL ENROL. (% OF SECONDARY) 21.2 14.7 16.1 7.9 4.7 PUPIL-TEACHER RATIO PRIMARY 47.3 44.5 56.0 47.4 38.6 SECONDARY 19.8 22.6 20.0 26.2 23.4 ADULT LITERACY RATE (PERCENT) 1.5ZI 5.0/i 5.0/ 34.0 35.6 ) CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 0.4 1.3 L.7/e 3.0 31.9 RADIO RECEIVERS PER THOUSAND POPULATION 0.7 17.2 18.4 34.8 71.8 TV RECEIVERS PER THOUSAND POPULATION O.1/f 1.2 1.2 1.7 17.9 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION .. 0.3 0.3 2.9 19.1 CINEMA ANNUAL ATTENDANCE PER CAPITA .. 0.2 0.5 1.1 0.6 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 2379.9 2779.9 3178.9 FEMALE (PERCENT) 47.1 46.8 46.5 34.1 36.5 AGRICULTURE (PERCENT) 92.0 87.0 82.0 78.4 56.5 INDUSTRY (PERCENT) 5.0 8.0 13.0 9.2 17.7 PARTICIPATION RATE (PERCENT) TOTAL 57.2 54.8 52.4 41.4 37.0 MALE 60.8 58.8 56.6 53.9 46.9 FEMALE 53.5 50.9 48.3 29.1 27.2 ECONOMIC DEPENDENCY RATIO 0.8 0.9 0.9 1.2 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS HIGHEST 20 PERCENT OF HOUSEHOLDS .. LOWEST 20 PERCENT OF HOUSEHOLDS .. LOWEST 40 PERCENT OF HOUSEHOLDS .. POVERTY TARGET GROUPS ESTD4ATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 164.0 134.3 507.0 RURAL .. .. 105.0 82.9 200.6 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. 96.4 523.9 RURAL .. .. 53.0 60.4 203.6 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URBAN .. .. .. 39.3 RURAL .. .. .. 69.0 Not available Not applicable. NOTES /a The group averages for each indicator are population-weighted arithmetic means. Coverage of countries among the indicators depends on availability of data and is not uniform. lb Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969 and 1971; and for Most Recent Estimate, between 1978 and 1980. /c Due to emigration population growth rate is lower than rate of natural increase; /d 1977; /e 1975; /f 1963; /g 1962; /h 1964; /i 1972; Z.L 1974. May, 1982  -19- Annex I P., 3 of 5 OgFINfTItWS Or SOCla. 1101