Sierra Leone - Power Sector Engineering and Technical Assistance Project

Document of A & The World Bank FOR OFFICIAL USE ONLY Report No. P-3341-SL REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF SIERRA LEONE FOR A POWER SECTOR ENGINEERING AND TECHNICAL ASSISTANCE PROJE May 27, 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 1 US$ = 1.18 Leones FISCAL YEAR July 1 to June 30 ABBREVIATIONS ESB - Electricity Supply Board of Ireland KfW - Kreditanstalt fur Wiederaufbau NPA - National Power Authority OAU - Organization of African Unity OPEC - The OPEC Fund for International Development SLEC - Sierra Leone Electricity Corporation  FOR OFFICIAL USE ONLY SIERRA LEONE Power Sector Engineering and Technical Assistance Project Credit and Project Summary Borrower: The Republic of Sierra Leone Beneficiary: National Power Authority (NPA) Amount: SDR 4.5 million (US $5.0 million) Terms: Standard On-Lending Terms: The Government would make the proceeds of the Credit available to the newly created NPA as an equity contribution. Project Description: The project, which would be carried out over two years, would help rehabilitate existing thermal generation and distribution system facilities, support institutional improvements in the power sector and complete preparation of the Bumbuna hydro- electric project. It would include the following components: (a) spare parts and materials for the King Tom diesel generating station and the power distribution system, and equipment to improve the water cooling system of the King Tom station; (b) 10 man-years of expert assistance to help establish and staff the NPA; (q) overseas training for NPA staff; (d) consultants' services to complete detailed engineering for the proposed Bumbuna hydroelectric project; (e) the services of a Bumbuna Engineering Review Board; and (f) a study to assess the impact of the Bumbuna hydro- electric project on the Freetown oil refinery. The project's main long-term risk is that the Government's policies with regard to the power sector's autonomy may be altered in the future to the detriment of the sector's finan- cial and technical performance. However, the Government has taken several important measures recently which demonstrate its commitment to long-term institutional improvements in the power sector. An additional risk is that the Bumbuna hydro- electric project, preparation of which would be concluded under this project, may not be viable; however, since preparation is only being carried to the point where a reasonably accurate cost estimate of Bumbuna can be obtained, the risk is not great. This document has a restricted distribution and may be used by recipients only in the performance of l their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Estimated Cost: US$ million Foreign Local Total 1. Rehabilitation of existing equipment 2.5 0.1 2.6 2. Institutional support 2.3 0.4 2.7 3. Completion of Bumbuna preparation 3.7 0.3 4.0 Base line costs 8.5 0.8 9.3 Contingencies: Physical 0.4 0.1 0.5 Price 1.1 0.1 1.2 10.0 1.0 11.0 Financing Plan: IDA 5.0 - 5.0 The OPEC Fund 5.0 - 5.0 Government - 1.0 1.0 10.0 1.0 11.0 Estimated Disbursements: (US$ million) IDA FY 1983 1984 Annual 3.0 2.0 Cumulative 3.0 5.0 Rate of Return: Not applicable Staff Appraisal Report: None Map: IBRD 16257  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE IDA TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO SIERRA LEONE FOR A POWER SECTOR ENGINEERING AND TECHNICAL ASSISTANCE PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Republic of Sierra Leone for the equivalent of SDRs 4.5 million (US$5 million) on standard IDA terms to help finance a Power Sector Engineering and Technical Assistance Project. The OPEC Fund would help finance the project with a parallel loan of US$5 million. The OPEC loan, to be administered by IDA, would be interest-free except for 0.75 percent service charge and would have a 20-year maturity including a five-year grace period. PART I - THE ECONOMY 2. An economic report, "Sierra Leone - Prospects for Growth and Equity" (No. 3375-SL) of July 31, 1981 was distributed to the Executive Directors. The following discussion is based on this economic report and on the findings of a brief updating mission which visited Sierra Leone in February and March 1982. Country data sheets are contained in Annex I. Structural Characteristics 3. The economy of Sierra Leone is dualistic in character, a relatively small modern sector co-existing alongside a large traditional agricultural sector. For its source of income and growth, Sierra Leone relies heavily on agriculture and mining, although in recent years depletion of the country-s richest mineral deposits has led to a decline in their relative contribution to the economy. Diamonds, the largest export earner, accounted for nearly 54 percent of exports in FY81. 4. The agricultural sector, still largely outside the monetized economy, provides livelihood for nearly 80 percent of the population. Its contribution to GDP, however, is less than 30 percent, implying a low level of agricultural productivity. Rice is the staple food and is grown by over 80 percent of the farmers, primarily for subsistence; however, the country is facing increasing rice shortages. Coffee, cocoa and oil palm are the major export crops and also the principal sources of cash income for the agricultural population. 5. Sierra Leone-s social and economic infrastructure is not yet well developed. Although the road transport network is generally adequate for its present needs, there is an urgent need for improved maintenance and the development of feeder roads. The country has good water resources, but the hydroelectric power potential has yet to be tapped. Only about 12 percent of the population has access to safe drinking water, mostly in the urban areas. Health facilities are inadequate and infant and child mortality rates are among the highest in Africa. The Government has in recent years invested quite heavily in education, but primary and secondary school enrollment ratios are still low (37 percent and 11 percent, respectively) and the country's illiteracy rate remains high, at around 85 percent.  -2- 6. The dualistic economic structure is reflected in income disparities between the modern and traditional sectors. With a population of about 3.3 million, average per capita GNP in 1979 was estimated at about US$250. The average rural per capita income is around US$120 while it averages about US$600 in the urban centers. About 24 percent of the population lives in urban areas. The urban migration rate (4.9 percent) is relatively low compared with neighboring countries; however, approximately 30 percent of the urban population has an income level below the urban absolute poverty threshold estimated at around US$105. Economic Performance 7. Production and Income. During its first decade of independence, between 1962 and 1972, financial resources did not come under undue pressure because of a reasonable rate of growth in the domestic economy. Throughout this period, GDP grew at nearly 5 percent per annum, foreign exchange earnings were adequate and there was a satisfactory growth in public revenues. Begin- ning in 1972, however, this situation changed. Diamond output began to decline, mainly as a result of the depletion of alluvial deposits; there was a sharp increase in oil prices in 1973 coupled with rising import prices of manufactured goods, and in 1975 the country lost its second largest source of export earnings when the only iron ore mine closed due to rising production costs and a declining iron ore grade. As a consequence, GDP declined by 4 percent in FY1976 and remained virtually stagnant thereafter, averaging less than one percent per annum over the last five years. With a population growth rate of about 2.5 percent per year, this resulted in a decline in an already low per capita real income. 8. Fiscal Performance. The slowdown in economic growth and the erosion of the export base which were experienced after 1973 were accompanied by a marked deterioration in fiscal performance. While public revenues increased an average of 12 percent a year between 1973 and 1979, public expenditures grew about 21 percent per annum and the overall budget deficit widened from about 6 percent of GNP to about 11 percent of GNP. Fiscal and monetary expansion, financed largely by short-term external borrowing, led to ever widening budgetary deficits, a further deterioration in the balance of pay- ments and a substantial increase in the country's external debt burden. During the last two years, the increase in expenditures was largely due to civil service salary adjustments, expansion in the internal security forces and extra-budgetary spending. At the same time, revenues were affected by a sharp decline in export tax collection. The overall budget deficit reached an all time high of Le 139 million in FY 1981, or 11.5 percent of GDP. 9. Balance of Payments. The impact of stagnant production on the balance of payments was masked until 1974 by favorable prices for Sierra Leone's major exports. Consequently, the country's foreign exchange reserves remained at satisfactory levels until the end of 1973. Difficulties began to emerge in 1974 and 1975 when import prices rose sharply as a result of the oil crisis and international inflation, while export performance remained modest.  -3- During 1974 and later, the balance of payments began to deteriorate and show increasing deficits. The balance of payments position was particularly affected by oil price increases. The cost of petroleum imports jumped from US$8 million in 1971 to about US$70 million in 1979, then declined to about US$55 million in FY1981 but still claiming more than one third of the coun- try s export earnings. While diamond prices remained strong between 1974 and 1979, the volume of Sierra Leone-s diamond output declined, and overall export earnings showed only modest growth. The continued decline in physical exports in 1980 and 1981 was aggravated by depressed prices. Imports, on the other hand, rose sharply with rising import costs and expansionary fiscal and monetary policies. The overall balance of payments deficit rose to US$117 million in FY1981, or 11 percent of GDP, from about US$7 million in FY1974, or 1.5 percent of GDP. Sierra Leone-s net foreign exchange reserves, which stood at around US$36 million at the end of 1974, have declined steadily and remained low since then. In December 1980, gross official reserves amounted to US$32 million of which only US$7.7 million, equivalent to one week's imports, was freely disposable. 10. Development Objectives and Development Effort. The country's first National Development Plan (FY1975-FY1979) was prepared with the assis- tance of the UNDP and the UN Department of Technical Cooperation for Develop- ment. The development strategy and objectives stated in the Plan and many of its basic elements were well conceived and articulated. Priority was to be given to the expansion of the productive capacity of the economy and to a more equitable distribution of wealth and incomes. Unfortunately, the period of the Plan coincided with the rapid depletion of the country's principal source of foreign exchange earnings and a deterioration in the Government's fiscal performance. These factors undercut the economic and financial resource assumptions underlying the Plan. The Government's policies concentrated increasingly on short-term financial problems and neglected the requirements of longer-term structural adjustment. More recently, the Government began to focus again on medium-term policies, and formulated a three-year public investment program (FY1979-FY1981) as an interim measure, and initiated preparation of a second National Development Plan. The public investment program attempted to shift resources to increase commodity production, parti- cularly in agriculture. The second Plan, which was scheduled to become operational starting in FY1982, was expected to address the question of structural adjustment and give emphasis to development of the productive sectors while addressing income distribution objectives. However, continued financial and economic deterioration has delayed preparation of the Plan. 11. During the first Five-Year Plan, development spending by the public sector amounted to Le 150 million (about 45 percent less than the Plan target, which was based on an annual GDP growth rate of 6 percent, as compared to an actual growth rate of 0.9 percent). Out of this total, about 22 percent was spent on agriculture, 20 percent on road transport, 17 percent on energy, 15 percent on social services and 26 percent on other economic and general services. Of these expenditures, 17 percent was financed by budgetary savings while the remaining 83 percent came from external and internal borrowings. Public development expenditure rose sharply in FY1980 to Le 126 million but fell back to Le 72 million in FY1981.  -4- Recent Measures for Economic Stabilization 12. Sierra Leone has been facing a difficult economic situation for the last two years. Having successfully implemented a standby arrangement concluded with the IMF in November 1979, the Government signed an Extended Fund Facility agreement that was put into effect in January 1981. However, the Government-s inability to control expenditures and a sharp drop in export earnings resulted in the abandonment of this agreement in mid 1981. FY1981 saw a substantial deterioration of the Government's fiscal position as well as the balance of payments. New discussions between the IMF and the Govern- ment started in February 1982 and are still underway. 13. Sierra Leone's trade balance, which registered a deficit of Le 130 million in FY1979 and FY1980, further deteriorated in FY1981 to a deficit of Le 155 million in spite of a 10 percent decline in commodity imports. Un- favorable terms of trade caused exports to drop from Le 234 million in FY1980 to Le 176 million in FY1981. The overall balance of payments, which improved substantially from a deficit Le 65 million in FY1979 to a deficit of Le 38 million in FY1980, deteriorated the following year, registering a record deficit of Le 112 million. 14. Primarily as a result of increasing budget deficits, monetary and credit trends continued to be highly expansionary. Total domestic credit increased by 26.4 percent in FY1980 and 33.9 percent in FY1981. Credit to the Government grew by 35 percent in FY1980 and 37 percent in FY1981. The expansion of domestic credit in the last two years was mainly financed through increases in foreign liabilities. Foreign assets, which stood at +Le 10 million in June 1979, dropped to -Le 164 million in June 1981. 15. The FY1981 budget introduced new tax measures to yield an in- cremental tax revenue of nearly Le 20 million, about 10 percent above the estimated revenue of the previous year. The budgeted growth of recurrent expenditures was limited to 15 percent which, with the current inflation rate, implied a virtually unchanged level of Government activity in real terms. In October 1980, a general wage and salary increase of 20-30 percent was granted by the Government, the first general increase since 1978. Although this increase was not provided for in the budget, it was accompanied by revenue measures on import duties which partially offset the added expense. The overall deficit was budgeted to be Le 80 million; however, revenues and grants fell Le 14 million short while expenditures were Le 45 million above the target, resulting in a deficit which was equivalent to 11.5 percent of GDP. External Debt and Creditworthiness 16. In the face of slow growth in public revenues and export receipts, Sierra Leone has, since the mid-1970's, relied heavily or, foreign borrowing to finance its capital expenditures. Total external public debt outstanding  -5- increased by about US$132 million between 1975 and 1979. As of December 31, 1980 Sierra Leone's external public debt outstanding, including arrears of principal, amounted to US$407 million of which US$349.4 million was disbursed. The total debt outstanding and disbursed consisted roughly of 28.7 percent in commercial credits, 36.6 percent bilateral loans and 34.7 percent loans and credits from international institutions. As of December 1980, the Bank Group held about 12.2 percent of Sierra Leone's external debt outstanding and disbursed. Assistance from bilateral government sources came mostly from the Federal Republic of Germany, the People's Republic of China, the Netherlands and Japan. 17. The maturity structure of Sierra Leone's external public debt deteriorated sharply after 1975 as a result of increased reliance on supplier credits. The average maturity of all new commitments declined from 16 years (in the early 1970s) to around 5 years in FY1979 and continued to decline since then. Foreseeing that it could not service its external debt, the Government in November 1979 approached its creditor countries through the Paris Club and in February 1980 negotiated a second debt relief agreement. The total debt relief granted amounted to an estimated US$10 million for FY1979 and US$32 million for FY1980. In spite of this debt relief, Sierra Leone accumulated Le 4 million in arrears in FY1980. The virtual absence of debt relief in FY1981 caused Sierra Leone to further increase its arrears to nearly Le 63 million. The already unfavorable debt structure, added to the accumulation of arrears and the limited prospects of increasing export earning, will present difficulties in managing external resources in the foreseeable future. Debt service on Bank Group loans and credits amounted to about 2.8 percent of Sierra Leone's total debt service liability in 1980. Future Prospects 18. The next two to three years are likely to be difficult for Sierra Leone: the earliest revival of the economic activity is not expected before the mid-1980's even with new investments in mining and continued investments in agriculture. During this period, while export earnings may at best in- crease modestly, the cost of imports may continue their upward trend, creating pressures on the balance of payments. The balance of payments and the budget will be burdened by debt service obligations falling due on short-term debt. The Paris Club agreed to reschedule debt for 1980, and committed itself to reschedule debt falling due in 1981 and 1982 on condition that Sierra Leone * continue a program with the IMF; this can now only be envisaged for FY1983. In the medium and longer-term, Sierra Leone could both restore and sustain its creditworthiness if the Government implements policies and investment programs * aimed at the structural transformation of the economy. The future outlook of the mining sector is difficult to assess because knowledge of the mineral deposits is limited. There are good prospects for the Kimberlite underground diamond mining project, but these may take some time to materialize; large iron ore reserves have been discovered, but they are of low ore grade; mining of rutile has just resumed and there are plans to expand bauxite production. The proposed Bumbuna hydroelectric power project could provide lower cost energy to support these activities. Intensification of efforts to increase  - 6 - agricultural production could increase export earnings from cocoa, coffee and palm oil, and raise the standard of living and incomes for the vast majority of the country's people. Although the present balance of payments situation and the country's debt profile would not justify lending on normal IBRD terms, the country's low per capita income justifies extending IDA assistance. At the same time, to ensure an adequate flow of foreign exchange resources for the country's development during a period of budgetary stringency, it would be appropriate to finance a portion of the local costs of projects. PART II - BANK GROUP OPERATIONS IN SIERRA LEONE Bank Group Operations 19. Bank and IDA operations in Sierra Leone to date have totalled US$83.0 million. There have been five loans amounting to US$18.7 million and ten credits totalling US$64.3 million. IFC has provided a loan of US$2.1 million to Sierra Cement Manufacturing Company, Ltd. Five loans and four credits are fully disbursed. Disbursement performance under Bank loans and IDA credits has been quite satisfactory, with disbursements amounting to more than 40 percent of loans and credits outstanding at the beginning of each fiscal year from FY78 to FY81. This has been because foreign assistance, including cofinanciers' contributions, have accounted for a high proportion of project costs and because the Government has provided counterpart resources promptly. Bank and IDA operations have been in support of agriculture (42 percent), education (12 percent), power (20 percent) highways (23 percent) and technical assistance (3 percent). Annex II contains a summary statement of Bank loans and IDA credits as of March 31, 1982 and notes on the execution of ongoing projects. In general, the execution of the ongoing projects has been satisfactory. Lending Strategy 20. The principal objectives of Bank and IDA assistance to Sierra Leone are to: (a) support improved economic management, including economic develop- ment planning and project preparation; (b) stimulate the productive sectors with a view to broadening the country's export base; (c) improve the country's essential infrastructure, particularly roads and power, the inadequacy of which presently constitutes a constraint upon the country's economic growth; (d) raise the income levels and standard of living of the poorest section of the population; and (e) broaden access to education, particularly in the rural areas, and improve its quality. At the same time, the Bank and IDA aim to encourage the adoption of appropriate sector pricing policies and to strengthen the management of public sector corporations wherever appropriate. 21. Since iron ore production stopped in 1975, and the gradual decline in the production of diamonds, it has become increasingly important to develop the agricultural and manufacturing potential of the economy. Bank Group financed agricultural development projects have provided improved extension  -7- services, feeder roads and farm inputs to smallholder farmers. These activi- ties were started in the Eastern area under the first project, and expanded under the second project in the Northern area. A third agricultural develop- ment project in the East and a fourth for the Northern area were approved by the Executive Directors in FY81. These ongoing operations complement other integrated agricultural development projects under way with the assistance of the International Fund for Agricultural Development (IFAD) and the European Economic Community (EEC). To ensure smooth assimilation of these projects into the Ministry of Agriculture administration, a project is being prepared for possible Bank Group support. A possible industrial development project to assist small and medium scale enterprises is also being discussed. 22. In infrastructure, the Bank Group's First Highway Project included sections in the country's main trunk road system and a maintenance program, as well as studies for further improvement of the road system. The Second Highway Project aims at strengthening the country's capacity to maintain the country's road network. A third project in the power sector, approved in 1977, helped finance urgently needed extension of electric power genera- tion and distribution facilities in Freetown and several provincial centers. 23. In the social sectors, two education projects are helping improve and diversify education at the secondary level, and include teacher training, modern curricula to increase the relevance of education to employment, rural and non-formal training and educational planning and management improvement. A third education project which, inter alia, would support the Government's efforts to increase access to primary education in the rural areas and improve its quality, has recently been appraised. 24. To achieve its medium and longer-term development objectives, the Government needs to improve its economic planning and project preparation capability. In response to a request from the Government, IDA is financing a Technical Assistance Project which, in cooperation with UNDP/TCD, is designed to assist the Government formulate a second National Economic Development Plan and prepare well conceived development projects in a number of priority sectors. 25. As noted in Part I of this report, Sierra Leone has experienced economic difficulties in the last few years. Improvement in the Government's management of the economy will be an important determinant of the level of future Bank Group operations in Sierra Leone. PART III - THE ENERGY SECTOR Energy Resources and Sector Organization 26. With no domestic sources of petroleum, Sierra Leone is entirely dependent on oil imports to meet its commercial energy needs, which are mostly for transport and electricity generation. Imports amount to around 280,000 tons a year and claim about one-third of the country's export earnings.  Imported crude is refined for domestic consumption and bunker sales by the Freetown refinery. Gas oil and fuel oil used to generate power account for about 25 percent of the volume of crude oil imports. Fuelwood remains the main source of domestic fuel, both in the urban and rural areas. Remain- ing forest reserves cover only 4 percent of the land area and there is evi- dence of decreasing fuelwood resources. Lignite deposits exist near Freetown but have not yet been proven in sufficient quantity to justify construction of a major thermal generation station. Sierra Leone has a large, untapped, hydroelectric power potential which is conservatively estimated at about 1,150 MW. 27. As in many other countries, there are no institutions in Sierra Leone responsible for overall planning and policy formulation for energy. The Government has however taken steps to initiate an overall view of the sector by obtaining the services of a UNDP financed advisor. Nevertheless, energy related functions in the Government are dispersed with little coordination among the various ministries concerned. The Ministry of Energy and Power is charged with responsibility for petroleum storage and with supervising the operation of the Sierra Leone Electricity Corporation (SLEC), while the Ministry of Trade and Industry oversees the refinery and in effect runs the petroleum subsector. The Ministry of Economic Development is responsible for developing the country-s hydroelectric potential and the Ministry of Agricul- ture and Forestry is responsible for the fuelwood sector. To overcome planning deficiencies and to assist the Government prepare a comprehensive energy sector policy, the Bank Group has prepared an energy sector report, which is being discussed with the Government. The Power Sub-Sector 28. The Government-s Strategy for Developing the Power Sub-Sector. The Government-s present objectives for the power sector are to: (i) develop the country's renewable energy resources, in particular its hydroelectric potential; (ii) develop and consolidate the institutional structure for planning, constructing and operating thermal and hydroelectric power stations and associated transmission and distribution systems; (iii) adopt power tariffs which would permit the recovery of costs and promote an efficient allocation of economic resources; (iv) develop national managerial capabilities through systematic training of manpower; and (v) promote power sharing with neighboring countries over the longer term through interconnection. 29. Supply and Demand. At the end of 1981, the country-s total installed generating capacity was about 98 MW, of which 96 MW was thermal, and 2 MW was accounted for by a small, seasonal, hydroelectric plant. Approximately  -9- 40 percent of total capacity (38 MW) is privately owned and serves the mining industry, while the remaining 60 percent (60 MW) is operated by SLEC, a Government-owned corporation established in 1964 under the Bank supported First Power Project as the sole commercial supplier of electricity to the public. 3U. To supply the Western area, which includes Freetown, the capital, SLEC operates three diesel electric stations with a combined capacity of around 44 MW and a present firm capacity of around 31 MW, and the seasonal 2 MW hydroelectric unit owned by the Guma Valley Water Authority. In addition, SLEC operates a number of Government-owned diesel plants with a combined capacity of 15 MW in the major provincial towns outside the Western area. Peak demand in the Western area reached 23 MW in 1981 and is expected to grow at an annual rate of 4.6 percent per annum to about 35 MW by 1988. In 1984, SLEC's Western area's firm capacity will be reduced (by equipment retirement) to 26 MW, which will be insufficient to meet demand beyond this date. As an interim measure, SLEC proposes to install a 9.2 MW slow speed diesel electric unit to complement the two units installed in 1979; this, and cooling water system modifications and rehabilitation of existing older units, should be sufficient to meet the forecast demand of 35 MW in 1988. To meet demand in the Western area beyond 1988 and provide power for the mining industry, the Government proposes to start harnessing the country's hydroelec- tric power potential by developing the first phase of the Bumbuna hydroelec- tric project. 31. In 1971, UNDP financed a study of the power market in Sierra Leone and of its hydroelectric potential, including major and some minor development sites within the country's boundaries. This study ranked major sites in terms of cost per kWh to be produced and formed the basis for selecting a project to be included in a power development plan. From 19 major sites, three were selected for detailed examination. The principal criteria for selection were potential output and geographical location in relation to forecast demand, cost, and future potential with regard to further hydroelectric developments on the same river system. From this analysis, the Bumbuna Falls project on the Seli River, about 200 km from Freetown, was shown to be the most economical initial development. A decision on whether to proceed with this project was however postponed because of the country's difficult economic condition at the time. In 1972, an Italian/Canadian contractors' consortium commissioned a feasibility study with the intention of mobilizing financial resources to carry it out on a turnkey basis. The study was completed but it was not found possible to finance the project. 32. In 1975, the Government engaged an Italian consultant to review the 1972 consortium's study, update the information on hydrology and the power load forecasts, and compare the Bumbuna project with alternatives to meet the country's long-term power requirements. Following a review of this and previous studies by IDA in 1975, the Government commissioned, under terms of reference prepared with IDA assistance, a full feasibility study of the first stage of the Bumbuna project. A consortium of Swiss, Italian and Sierra Leonean consultants completed the feasibility study in 1980.  - 10 33. These proposals were reviewed by the Electricity Supply Board of Irelend (ESB) in 1981, which confirmed the choice of the Bumbuna site and the proposed phased development. 34. Based on the results of the feasibility study and the review by ESB, the Government decided, in agreement with IDA, to continue preparing the first stage of the Bumbuna project and instructed the consultants to prepare detailed engineering. Funding for the feasibility study and detailed engineering was provided under Credit 734-SL, but funding for detailed engineering proved to be insufficient due to inflation, additions to the scope of work, and delays. In 1979, the OPEC Fund agreed to provide supplementary financing (OPEC Loan 121P) to continue the detailed engineering, but this again proved insufficient to complete the work. Faced with a foreign exchange 9 shortage, the Government has been unable to cover the shortfall and, as a result, payment for past work carried out by the consultants is outstanding. Preparation work is now 97 percent complete; the proposed project would finance the cost of finishing detailed engineering so that a firm base for estimating the cost of Bumbuna may be available. This in turn would make a full economic evaluation of Bumbuna possible. If the results of this evalua- tion are positive, the Government could then seek, with IDA's assistance, foreign financing for the Bumbuna hydroelectric project. 35. SLEC supplies some 20,000 customers in the Western area of Sierra Leone. Its power production increased from 98 GWh in 1978 to 133 GWh in 1981, an annual growth rate of 10.7 percent. However, this substantial rate of growth reflected: (a) suppressed demand due to insufficient generating capacity prior to 1978; (b) underpricing of electricity and (c) ineffective billing and collection practices which further contributed to wasteful con- sumption. In 1981, industrial and commercial users accounted for about 50 percent of consumption, residential users for 21 percent, and system and unaccounted for losses for the remaining 29 percent. The latter has been rising since 1977 and can be attributed to a combination of factors: SLEC-s inability to prosecute fraudulent users of power, and its ineffective billing and collection system compounded by lack of qualified staff. Improvements in the billing and collection system would be initiated under this project while the act establishing the new power authority (para. 41) authorizes the prose- cution of fraudulent users of power. Institutional and Financial Management 36. Organization and Management. SLEC was a largely autonomous corpora- tion run on commercial lines up to 1969, when its senior management was changed following serious industrial labor unrest. Thereafter its financial and technical performance declined. The oil crisis of 1973 accelerated its financial deterioration as SLEC was not permitted to pass on higher oil prices to power consumers in the form of higher tariffs. In 1974, the Government abolished SLEC's Board and vested management responsibility in a newly-created Ministry of Energy and Power, which retained a foreign consulting firm to provide day-to-day management. Its team comprised a general manager, a chief engineer in charge of generation, transmission, and provincial systems, and a financial controller; Sierra Leonean counterparts were to be trained to  - 11 - eventually take over these functions. The counterparts (other than for the financial controller) have assumed responsibility for SLEC's activities in anticipation of a scheduled departure of the expatriate management team in mid 1982. The present expatriate financial controller will be retained pending appointment of the technical assistance team as SLEC has been unable to employ an accountant of the required caliber to act as counterpart. SLEC has had difficulty over the past five years in recruiting and/or retain- ing sufficiently competent middle-management accounting staff. As a result, the expected benefits and improvements in accounting anticipated as a result of the previous Credit have not come about. To strengthen financial manage- ment and control of commercial activities, the project would provide for international recruitment of a financial controller. 37. Training and Manpower Development. Credit 734-SL required SLEC to implement a satisfactory staff development and training program; apart from the appointment of counterparts to the expatriate management team, little tangible progress was made. To help overcome SLEC's training deficiencies, KfW has concluded negotiations with Government to finance the construction of a training center, teaching equipment, and the services of instructors for the training of technicians, skilled and unskilled labor. To complement KfW's program, the project would provide training overseas for up to twelve managers. Training would take place by secondment to selected operating utilities in other developing countries, and would emphasize practical, work-related experience. 38. Financial Performance. Notwithstanding the substantial institu- tional and administrative support provided under Credit 734-SL, SLEC's financial performance declined due to a combination of factors; poor financial control, especially evident in the billing and collection systems was one such factor. As a result of accounting staff shortages, annual accounts were not prepared for FY76 and FY77, while for FY78 only a statement of affairs was prepared. Accounts were prepared for FY79 but were heavily qualified by the auditors; the proyisional accounts for FY80, which were prepared by the auditors, show no marked improvements in the timeliness or effectiveness of accounting. The FY81 accounts are now being prepared with the assistance of consultants financed under Credit 734-SL. Accounting staff shortages also prevented SLEC from revaluing its assets by March 31, 1979 or revising its depreciation policies by March 31, 1978, as had been agreed upon with the Association under Credit 734-SL. 39. The FY80 accounts record SLEC's worsening financial position. Revenues for the year amounted to Le 12.3 million which, after fuel costs (representing 54 percent of revenues), other operating expenses, depreciation and provision for bad debts, resulted in an operating loss of Le 0.9 million. SLEC's rate of return on historical net fixed assets was negative; it had thus not met the rate of return target of ten percent on net assets in operation agreed upon under Credit 734-SL. Absence of tariff increases over the past five years, aggravated by poor financial performance, has forced SLEC to rely increasingly on the Government to subsidize fuel costs and meet its debt servicing obligations. However, as these subsidies have been unpredictable and insufficient, SLEC's operating reliability has declined and consumers have experienced frequent power outages.  12 - 40. Since abolition of its Board in 1974, SLEC's tariffs have not reflected economic costs. In 1981, SLEC's average tariff was Le cents ll/kWh (US cents 9.4/kwh) while the cost of fuel had risen to Le cents 15.6/kWh (US cents 13.2/kWh) following a substantial price increase of 60 percent at the beginning of the year. A consultants' study carried out in 1981 recommended a substantial increase in tariffs. The Government chose a phased approach to tariff increases and as a first step authorized, effective February 1, 1982, a general power tariff increase of 75 percent and the introduction of a fuel adjustment clause based on ex-refinery fuel prices prevailing in November 1981. These increases, which raised the average tariff to Le cents 19.3/kWh (US cents 16.3/kWh), will enable revenues to cover the bulk of operating costs but not debt service; continued Government sub- sidies to the power sector will therefore be needed until the second phase of the tariff increase--calling for an adjustment of 15 percent--is carried out in mid-1983. During negotiations, assurances were obtained from the Govern- ment that until this tariff increase is put into effect, it would provide grants to enable the sector to meet the financial rates of return agreed upon (Section 3.04 of the draft Development Credit Agreement and para. 44). 41. National Power Authority. To assist the Government develop the power sector, ESB was commissioned in 1980 by the UNDP, with IDA as executing agency, to study the organizational and financial requirements of the sector. In 1981, as a result of ESB's proposals, the Government decided to create a new, autonomous, institution with broad responsibility for the power sector which would replace SLEC. The necessary legislation to create the National Power Authority (NPA) was enacted in February 1982. An eight-man Board of Directors, including a Chairman, has been appointed; most Directors are prominent members of the commercial and academic communities. The NPA's Chief Executive, and a senior civil servant, will be ex-officio members. 42. NPA's organization would consist of a chief executive officer and general manager who would report to the Board. He would be supported by a deputy general manager, a project engineer and a chief financial officer. The deputy general manager would be SLEC's present assistant general manager and he would continue being responsible for operating the existing thermal generation and distribution facilities. The project engineer would be res- ponsible for implementing the Bumbuna project when it is decided to carry out that project and he would have a full-time Sierra Leonean counterpart engineer. The chief financial officer would be responsible for the financial control and management of NPA, including the Bumbuna project.. The positions of chief executive officer and general manager, chief financial officer, and project engineer would be filled by international recruitment. 43. Based on successful experience elsewhere in West Africa, the preferred arrangement for international recruitment is to contract an operating utility to provide a team with the required disciplines and ex- perience. Such a team, consisting of a chief executive, a project engineer, and a chief financial officer supported by a financial controller for the operations branch of NPA (previously SLEC) and a project accountant for  - 13 - Bumbuna, would be provided under the project. The team would have qualifica- tions, experience, terms of reference and conditions of employment satis- factory to IDA (Section 2.02 of the draft Project Agreement). 44. Since legislation to create NPA has already been approved by Parlia- ment, it is expected that SLEC's assets and liabilities will be incorporated into those of NPA on July 5, 1982. On the basis of SLEC's preliminary financial statements for FY82, financial forecasts for NPA have been prepared for FY83-86; these show that action to reduce costs and/or increase revenues will be required to make NPA financially viable notwithstanding the 75 percent power tariff increase introduced in February 1982. Considering that tariffs are high in absolute terms and that SLEC has already experienced t collection difficulties, a further tariff increase might not be possible in the near future. However, the Government could in the meantime improve the financial situation of NPA by requiring the Freetown oil refinery to adjust the price it charges for fuel used to generate power so that it reflects prevailing free market prices. At the present time, the power sector pays substantially more than free market prices for its fuel. To improve the power sector's financial situation, the Government and NPA provided the following assurances during negotiations: (i) As conditions of effectiveness of the proposed credit, (a) the Government would cause the Freetown oil refinery to adjust the price of fuel supplied to NPA to correspond to the free market price for similar fuel and (b) NPA would change the base oil price in the fuel adjustment clause to correspond to the free market price at the time of the initial adjustment (Section 5.01(b) of the draft Development Credit Agreement); (ii) The Government and NPA would ensure that NPA applies the fuel adjustment clause to its electricity tariffs (Sections 3.03 and 3.06 of the draft Development Credit Agreement and Section 4.06 of the draft Project Agreement); (iii) NPA would raise its tariffs by at least 15 percent no later than July 1, 1983 (Section 4.03 of the draft Project Agreement) and for its fiscal year ending March 31, 1984 take all measures, including adjustments in its tariffs, to achieve a rate of return of ten percent on its average fixed assets in operation and thereafter achieve a rate of return of 8 percent per annum on revalued fixed assets in operation (Section 4.04 of the draft Project Agreement); and (iv) NPA would revise its depreciation policies by March 31, 1983 and revalue its assets by March 31, 1984 (Section 4.05 of the draft Project Agreement). Bank Group Experience in the Power Sector 45. The Bank Group has provided two loans to SLEC and one credit in which SLEC was the beneficiary. The First Power Project--Loan 338-SL of  - 14 - August 18, 1964--helped finance the construction of the King Tom generation station near Freetown and related distribution facilities. The Second Power Project--Loan 553-SL of August 5, 1968--helped increase power generation capacity at King Tom and in two provincial towns, and further expanded distri- bution facilities. The Project Performance Audit Report of May 27, 1977 (Sec. M77-456) for the Second Power Project concluded that construction had been implemented satisfactorily, though with some delay and cost overruns. Other objectives of the project were not achieved however: energy sales had been substantially lower than forecast and system losses had increased. Plant outages and increases in operating costs not compensated by tariff increases, had resulted in poor financial performance. These factors and progress under the Third Power Project, for which Credit 734-SL was granted on September 29, 1977, are discussed in the preceding paragraphs. The Bank Group's Role in the Power Sector 46. To assist the Government to overcome the sector's present constraints and to achieve its sector objectives, IDA support has been requested to: (i) strengthen the commercial organization for power distribution to make it more efficient; (ii) establish NPA, so that in the event that the Bumbuna project proves to be economically viable, there will be-an institution capable of carrying out that complex project and of managing the power sector; (iii) carry out all the necessary engineering, financial and economic work preliminary to developing the first stage of the Bumbuna hydroelectric project with an initial capacity of 71.5 MW. PART IV - THE PROJECT 47. A Credit and Project Summary may be found at the beginning of this report. The project was appraised in October/November 1981 and since its main elements are engineering and technical assistance, no staff appraisal report has been prepared. Negotiations took place in Washington on April 30 and May 3, 1982; the Sierra Leone delegation was led by Mr. V. A. W. Nylander, Financial Secretary, and included The Honorable Dauda Kamara, the Ambassador to the United States, Dr. T. F. Hope, Chairman of the NPA, and other Govern- ment officials. Project Description 48. The project, which would be carried out over a two year period, would help rehabilitate existing thermal generation and distribution system facilities, support institutional improvements in the power sector and com- plete preparation of the Bumbuna project. It would include the following components:  - 15 - (a) Rehabilitation of existing facilities (i) essential spare parts and materials to maintain SLEC's existing diesel generators and distribution systems; and (ii) equipment to improve the cooling water system at the King Tom station so as to maximize its power output. (b) Institutional changes and training (i) about 10 man-years of technical assistance, over a two year period, to strengthen the management of NPA by providing a team of expatriates with the required disciplines and experi- ence; and (ii) about 5 man-years of training in foreign utility companies for up to twelve NPA executives and managers to complement in-house training for technicians. (c) Completion of the preparation of the Bumbuna hydroelectric project (i) a study to assess the economic impact of the Bumbuna hydro- electric project on the Freetown oil refinery; (ii) consultant services to complete detailed engineering so that there may be a firm base for estimating Bumbuna's cost and assessing its economic and financial viability. If the project proves viable, the consultants would help evaluate bids for the main contracts for civil works and engineering; and (iii) the services of an Engineering Review Board, consisting of up to four internationally recognized experts, to advise the Government on technical and safety aspects of the project. 49. Impact of the Bumbuna Project on the Freetown Oil Refinery. The thermal system serving the Western area currently consumes 50,000 to 60,000 tons of oil products purchased from the Freetown oil refinery, representing 20-25 percent of total output. If the Bumbuna project is carried out, the power sector's demand is expected to drop to less than 10,000 tons per annum. As this reduction in domestic oil consumption could adversely affect the oil refinery, the justification of Bumbuna should take into account any loss resulting from reduced demand from the refinery. The proposed study would assess the economic impact of the Bumbuna project on the Freetown oil refinery. Assurances were obtained during negotiations that the study would be made available to IDA no later than December 31, 1982 (Section 2.03 of the draft Project Agreement). 50. Engineering Review Board for Bumbuna Project. As part of the proposed project an Engineering Review Board, consisting of up to four internationally recognized hydroelectric power experts of various specialties,  - 16 - would be established to advise on all technical aspects of the Bumbuna project, including a review of engineering and bid documents and advice during construction. The proposed credit would finance the services of this Board up to the commencement of construction; further financial support would be provided under subsequent credits. Assurances were obtained during negotia- tions that an Engineering Review Board would be appointed by September 30, 1982 with terms of reference acceptable to IDA (Section 2.01(b) of the draft Project Agreement). Project Cost and Financing 51. Total costs are estimated at US $11.0 million of which US $10.0 million (91 percent) are foreign costs. Cost estimates are based on 1981 year-end prices and are net of duties and taxes; a breakdown may be found in the Credit and Project Summary at the beginning of this report. The estimate of consultant costs for the Bumbuna project is based on the terms of their existing contract updated to take into account increased work, inflation and delays. The estimated cost of services of the Engineering Review Board is based on the equivalent of US $15,000 per man-month, which reflects recent experience in West Africa. The cost of the oil refinery study is based on consultant services of approximately six man-months at US $15,000 per month, including travel and subsistence expenses. The cost of equipment and materials to rehabilitate SLEC's facilities has been based on the cost of such supplies in the past, adjusted for inflation and/or recent quotations, while the cost of the water cooling improvements is based on SLEC's estimates and local price enquiries; all estimates have been reviewed by IDA. Technical assistance cost estimates are based on US $15,000 per man-month; this cost is appropriate given the senior caliber of staff required and recent experience in West Africa. Training costs have been estimated at US$20,000 per trainee-year which includes fares, overseas subsistence, and training grants. A physical contingency of 5 percent has been provided, while price contingencies average 10 percent per year. 52. The foreign exchange cost of US $10.0 million would be financed in parallel by IDA and the OPEC Fund. IDA's credit of US $5.0 million equi- valent would finance 100 percent of the foreign exchange cost of completing the preparation of the Bumbuna project, the Engineering Review Board, the oil refinery study and the water cooling improvements. Retroactive financing of US $1.5 million, to cover consultancy charges incurred between March 31, 1981 and December 31, 1981 to prepare the detailed engineering for Bumbuna, is recommended. As noted earlier, the Government has had insufficient foreign exchange to meet these costs. 53. The OPEC Fund loan to the Government of US $5.0 million would finance 100 percent of the foreign exchange costs of rehabilitating SLEC's generation and distribution facilities, technical assistance and training. 54. Local costs of US $1.0 million would be for residential accommoda- tion of technical assistance personnel, office accommodation, utilities, vehicle operating expenses, subsistence expenses, and support staff. These would be met by the Government.  - 17 - 55. To carry out the Bumbuna hydroelectric project, currently estimated to cost about US $390 million equivalent including contingencies and working capital of about US $30.0 million, and to take on the responsibility of operating the power transmission and distribution networks, NPA will require an equity base of at least US $90.0 million equivalent. To start building up NPA's capital base, the proceeds of the IDA credit and the OPEC Fund loan would be passed on to NPA by the Government as an initial equity contribution. Assurances to this effect were obtained during negotiations (Section 3.02 of the draft Development Credit Agreement). Project Implementation 56. The project would be carried out between 1982 and 1984 by the NPA. Pending recruitment of NPA's executive staff, the Board, through the Chairman, would continue to monitor progress. The engineering consultants would resume work to finalize detailed engineering of the Bumbuna project for bidding documents, the study to assess the impact of the Bumbuna project on the oil refinery would be commissioned, and the Engineering Review Board appointed. The results of the consultants' work, which would be reviewed by the Engineer- ing Review Board with the refinery study, would enable the Government and IDA to evaluate the economic and financial viability of Bumbuna by late 1982 or early 1983. 57. NPA would rehabilitate the thermal generation facilities and the distribution system, and would improve the water cooling system at the King Tom generating station with contractor/supplier assistance. Lists of spare parts and maintenance materials have been reviewed by IDA and found acceptable. Procurement 58. The preparation of the Bumbuna project would be completed by the consultants appointed under IDA Credit 734-SL; if it is established that Bumbuna is economically and financially viable their services would be retained to assist with bid evaluation. These services, with the cost of advertising for bids, would be financed by IDA. 59. The four members of the Engineering Review Board would be hydro- electric project experts of international repute and would be appointed according to Bank guidelines on the use of consultants. NPA would submit a list of candidates and proposed contract arrangements for IDA to review and approve. The consultants to undertake the study on the impact of the Bumbuna project on the oil refinery would also be appointed according to Bank guide- lines on the use of consultants. 60. In view of the specialized nature of the spare parts and equipment required for the project, procurement of goods would be by international shopping after obtaining quotations from at least three suppliers. Should civil works be required for the King Tom station cooling water system, they would be contracted on the basis of local competitive bidding procedures satisfactory to IDA, as the small size of contracts would not justify inter- national competitive bidding. Foreign contractors operate in Sierra Leone.  - 18 - Disbursement 61. The Credit would be disbursed to cover 100 percent of foreign expenditures for: (a) consultant services to complete the preparation of Bumbuna, including bid advertising and evaluation, (b) services of the Engi- neering Review Board, (c) consultant services for the study on the oil refinery and (d) equipment and materials for water cooling improvements at the King Tom generating station. Disbursements would be fully documented and are expected to begin during the first quarter of FY83 and be completed by June 30, 1985. Project Benefits and Risks 62. The project would assist the Government to develop the power sector in three areas. Firstly, by improving the reliability of services and the sector's financial performance through (a) rehabilitation and overhaul of existing thermal generation units and the distribution system, (b) training to strengthen management capability, (c) technical assistance to improve financial management including cost control and revenue collection, and (d) adoption of a tariff policy based on full economic costs. Secondly, through technical assistance to fill key executive positions in the newly created NPA which will be responsible for consolidating and developing the power sector, including the country's hydroelectric power potential. Thirdly, by financing the completion of the preparation of the Bumbuna hydroelectric project. Prima facie, there is reason to believe that this project, which would be the country's first major effort to tap its hydroelectric potential, would be of significant benefit by substituting crude oil imports now refined in Sierra Leone to produce fuel used to generate electricity. Completion of the prepara- tion of the Bumbuna project and appointment of the Engineering Review Board would enable the Government, IDA and other potential cofinanciers to assess the hydroelectric project's justification, investment requirements and risks before further commitments to it are made. To complete the assessment, the project would include a study to evaluate the economic impact of Bumbuna on the Freetown oil refinery. 63. The main long-term risk to the project is that the Governments- policies with regard to the power sector's autonomy may be altered in the future. This could result in the loss of autonomy to determine tariffs on the basis of costs, recruit staff on conditions of service which would attract suitable people, prosecute fraudulent users of electricity, or purchase fuel at competitive prices. However, the Government has recently taken several important measures which demonstrate its commitment to institu- tional improvements in the power sector: it authorized a substantial increase in power tariffs earlier this year to improve the finances of the sector, and created the National Power Authority with statutory autonomy on financial and operational matters, including the power to establish its own tariffs and an independent Board of Directors. The risk therefore appears acceptable. With respect to the completion of the preparation of the Bumbuna project, there would be the risk that Bumbuna might not be economically justified or, if it is, that it may not be possible to raise sufficient concessionary financing to carry it out. However, since preparation is only being carried to the point where a reasonably accurate cost estimate can be obtained for purposes of economic and financial assessment, the risk is not great.  - 19 - PART V - LEGAL INSTRUMENT AND AUTHORITY 64. The draft Development Credit Agreement between the Republic of Sierra Leone and the Association, the draft Project Agreement between the Association and NPA and the Recommendation of the Committee provided for in Article V, Section 1 (d) of the Articles of Agreement of the Association are being distributed separately to the Executive Directors. Special features of the Credit are referred to in the text and listed in Annex III; special conditions of effectiveness are that the Government cause the Freetown oil refinery to adjust the price of fuel used by NPA to generate power to corre- spond to the free market price for similar fuel and that this price be used as the base price for purpose of the fuel adjustment clause in NPA's electricity tariff. 65. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 66. I recommend that the Executive Directors approve the proposed Credit. A. W. Clausen President Attachments May 27, 1982  - 20 - ANNEX I Page 1 of 5 pages TABLE 3A SIERRA LEONE - SOCIAL INDICATORS DATA SHEET SIERRA LEONE REFERENCE GROUPS (WEIGHTED AV RAGES LAND AREA (THOUSAND SC. IM.) - MOST RECENT ESTIMATE)- TOTAL 71.7/ HOST RECENT LOW INCOME MIDDLE INCOME AGRICULTURAL 27.7 1960 lb 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA GNP PER CAPITA (US$) .. 150.0 250.0 238.3 794.2 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 30.6 127.3 89.1 70.5 707.5 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (THOUSANDS) 2164.7 2692.1 3381.0 URBAN POPULATION (PERCENT OF TOTAL) 13.0 18.1 23.8 17.5 27.7 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 6.0 STATIONARY POPULATION (MILLIONS) 17.0 YEAR STATIONARY POPULATION IS REACHED 2130 POPULATION DENS ITY PER SQ. KM. 30.2 37.5 47.2 27.7 55.0 PER SQ. KH. AGRICULTURAL LAND 79.9 97.9 118.8 73.7 130.7 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 41.7 43.0 44.0 44.8 46.0 15-64 YRS. 55.0 53.8 52.8 52.4 51.2 65 YRS. AND ABOVE 3.3 3.2 3.2 2.9 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 1.8 2.2 2.5 2.6 2.8 URBAN 5.2 5.5 5.6 6.5 5.1 CRUDE BIRTH RATE (PER THOUSAND) 46.8 45.7 45.5 46.9 46.9 CRUDE DEATH RATE (PER THOUSAND) 26.6 21.9 18.5 19.3 15.8 GROSS REPRODUCTION RATE 3.0 3.0 3.0 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) 98.0 99.0 82.0 89.5 89.9 PER CAPITA SUPPLY OF CALORIES (PERCENT OF REQUIREMENTS) 85.0 96.0 93.0 90.2 92.3 PROTEINS (GRAIS PER DAY) 43.0 47.0 48.0 52.7 52.8 OF WHICH ANIMAL AND PULSE 13.0 14.0 17.0 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 46.8 45.8 50.8 INFANT MORTALITY RATE (PER THOUSAND) .. .. ACCESS TO SAFE WATER (PERCENT OF POPULATION) TOTAL .. 12.0 .. 23.9 27.4 URBAN 75.0 55.0 74.3 RURAL .. 1.0 .. 18.5 12.6 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. .. 26.2 URBAN .. .. .. 63.5 RURAL .. .. .. 20.3 POPULATION PER PHYSICIAN 20421.4 18067.7 .. 31911.8 13844.1 POPULATION PER NURSING PERSON 5904.0/c 3802.0 .. 3674.9 2898.6 POPULATION PER HOSPITAL BED TOTAL 1311.8 1095.2 .. 1238.8 1028.4 URBAN 288.9 361.1 .. 272.8 423.0 RURAL .. .. .. 1745.2 3543.2 ADMISSIONS PER HOSPITAL BED .. .. HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. 6.5 URBAN .. 5.7 RURAL .. 6.7 AVERAGE NUMBER OF PERSONS PER ROOH TOTAL .. .. URBAN .. 2.1/d .. RURAL .. .. .. ACCESS TO ELECTRICITY (PERCENT OF DWELLINGS) TOTAL .. .. .. URBAN RURAL 2.0/ c  - 21 - ANNEX I Page 2 of 5 pages TABLE 3A SIERRA LEONE - SOCIAL INDICATORS DATA SHEET SIERRA LEONE REFERENCE GROUPS (WEIGHTED AVERAGES - MOST RECENT ESTIMATE)- MOST RECENT LOW INCOME MIDDLE INCOME 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA EDUCATION ADJUSTED ENROLIYENT RATIOS PRIMARY: TOTAL 23.0 33.0 37.0 56.4 73.7 MALE 30.0 40.0 45.0 70.7 96.8 FEMALE 15.0 26.0 30.0 50.1 79.0 SECONDARY: TOTAL 2.0 9.0 11.0 10.0 16.2 MALE 3.0 12.0 15.0 13.6 25.3 FEMALE 2.0 5.0 7.0 6.6 14.8 VOCATIONAL ENROL. (l OF SECONDARY) 9.0 2.0 2.0_/ 8.0 5.3 PUPIL-TEACHER RATIO PRIMARY 36.0 32.0 32.0 46.5 36.2 SECONDARY 17.0 20.0 19.0/g 25.5 23.6 ADULT LITERACY RATE (PERCENT) 7.0 15.0 .. 25.5 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 2.0 8.7 6.0 2.9 32.3 RADIO RECEIVERS PER THOUSAND PUPULATION 4.3 14.9 98.3 32.8 69.0 TV RECEIVERS PER THOUSAND POPULATION 0.2/_ 1.1 4.7 1.9 8.0 NEWSPAPER ('DAILY GENERAL INTEREST") CIRCULATION PER ThOUSAND POPULATION 6.0 16.7 10.0 2.8 20.2 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.1 0.1 .. 1.2 0.7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 910.5 1055.6 1243.9 FIMALE (PERCENT) 36.6 35.8 34.9 34.1 36.7 AGRICULTURE (PERCENT) 78.0 71.0 65.6 80.0 56.6 INDUSTRY (PERCENT) 12.0 15.0 18.6 8.6 17.5 PARTICIPATION RATE (PERCENT) TOTAL 42.1 39.2 36.8 41.7 37.2 MALE 54.7 51.5 48.8 54.3 47.1 FEMALE 30.0 27.5 25.2 29.2 27.5 ECONOMIC DEPENDENCY RATIO 1.1 1.2 1.3 1.2 1.3 INCOME DISTRIBUTION PERCENT OF' PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. 33.8/f HIGHEST 20 PERCENT OF HOUSEHOLDS .. 64.17 ' .. . LOWEST 20 PERCENT OF HOUSEHOLDS .. 4.5/f LOWEST 40 PERCENT OF HOUSEHOLDS .. 10.17 . POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 105.0 136.0 381.2 RURAL .. .. 75.0 84.5 156.2 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URRAN .. .. 198.0 99.1 334.3 RURAL .. .. 40.0 61.2 137.6 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) URRAN .. .. .. 39.7 RURAL .. .. 65.0 68.8 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. /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 Estimate, between 1976 and 1979. /c 1962; /d 1967; /e 1963; /f Population; /g 1975. May, 1981  - 22 - ANNEX I Page 3 of 5 pages DFOINITIONS OF SOCIA, INDICATORS fates: Alth-ugh the data are drawn from sources generally judged the most aut.hritlai-e and reliable, it ahould also be noted that they any tat be inter- natioonsly ranynenhia beoaoae of the look of stsrdardoo ed deftoitioes and cnonepts used by bdifferen - oI ri.et on collecttig the data. The dota see, nose- theless, usefol to descriho rdern of nagnitode, iodtcntetrends, and ohearneriee -reeat snoIor ditfenerrees hetteene rotrirs. The refer r geups ore (i t . the at rap f th ubst cuntry and (2) a. e.try group with somewhat higher outrage iora.e than the traetry sroup of the eubjeot country (earept f_r Capittl Sorplun Oil Etp-rtees group ater 'rMiddle I-ooms Ntoth Afrido at d Middle dam" le tosen beoauon of stronger so-ob-oultural offiniti-e). Or ohs refereo-e group date the averages are pryulationteeghtnd ar-rtbantr acorn fur otch ifdicot-r and thorn only abet joetrity of the .countrie it a frayp hbe dnto for thne tndioaoer. Sitno the -o-erage of countrien saore the litra porn deyends or the .v.lahbilty of data mud bi nor atifoom, cautine rat the exercised in reloting aVerages f onet indiboaor to onother. Th-e-eaverages Oct otly useful t1 on i-arning the vae of one indlcator at a sine aomog tie roounry and reference groups. LfND AREA (rhoasund sq.kA.) Prpolotuon par hd-ittel ted - tutl, urbar., ard rnral - Popalultin(total, Total - T-tal turfare area romprining lard area ard ailmud nococt. unbar, and rural) dividad by thinr nesrchtina -beh of h-spital reds Agrrooltooml - Estisane of agtriultucal area used ttp orartly or pereunestly available be publtc and prurane Retral and npet airrod hospilal and le- fur -crps, pastures, market end kftche- gardens or to lie fall-w; T97t dath . habilitatnon certert. lontt are e ptovidi- prtanentlay uatoed by as beget urn hysbln Etnrlbtharnte prrn~idig Pr,tohpa-lyna-r- CtR PtR CAPITA (lS$) - GNP per topita estlEares of currnen me'Ket prloen, cal- dinl eare are nut ic_tded. Rurol ioepitals, bherv,or ifrbade health ralated by asae -oenensbin Eethe d as WIrld lark Atlas (1977-79 bhais); .960, and nediyal orenter not paeonent11l stuffed by a phyailuar (bht by a 1970, snd 1979 data. =edical mesistant, torte, htdr'fr, etc.) which offer ir-patieet arremmo- dtandi a tfyrvide a li'tted -ange of medital oaclitie. Fur atatis- ENERGY CONSUtPTION PIR CAPITA - -Atnnal -oreetpetin of ousserohal energy (coal tioa: purprectorhan boupenItl ilude tAhd pranolpah/generel brupill, and lignite, rerrom, eacal Eam g nd h ud ydr- .ear d getheh l elec- and roal hoapital, loanl or reral h tels end _edual and -erty trtciny) is kilbgrr.s of -orl eqiui-lent per -opit.; 1960, 1970, a-d 1979 renters. Specisliaed h-spitals are incIlded only order tonal. dono. Ad=issions ten fospbnal Bed - Total _nbe of adeisaioes to I r discharges from htypitels divided by the ta=ben of bode. PCPUI,ATION AiD VITAl. STATISTICS tan,. Puopuatien, Mld-Tear (thuonouds) - An of J3 py 1; 1960, 1970, and 1979 F.USING darn. deeaee Sire if toutehold (persons pec rinolcld) - rural, arbor, ind rol- Utbet Puralarion (pecent of iotal) - Ratit of uch- ur total ppopatuin; A heasebold consists of a group of tihbvidool nwho shorn living quat-es different definiton of urban arena may affeot -opparnbility of data and their ain otal. A bhuroer no Lodge- ray oray nor be inlulded be among rururien; 1960, '970, and 1979 dato. ohe household fri -atifstical parposen. Populotton rojeactrrns Average anther of persons ten vatba.z- gty .urbon, oad reral- Arerage oag - Pprlattrt in year C110 - Current population prje-titors ore bated on -1980 er af perso-r per ure. in all urban, ard tac-i -occpied t.o..eti.ona tonal pupolunben by age and sea ard their nortality and fertility rates. dwellirgn, respetpai-ly. Dfetlllngseeclude nao-prmaene-t str -rtares and Peaojmotion par.emtere fur nortaluty rants to=prite of nere levels assum- unoaupind parts. tog litfe eepectancy an birth anoratogintS wth sncouty's pecrcapit a furors Atoness no fEietoticit (percent of dveelinne) - total, uchur, and cacti - ovl, ande fenle bif onp lnno uairlieLogu 77.r.), yeas The, AZo encbaa oltgsnt lrebtyb Iin ueaa fev-, fer if rare talso hov nroe lerels at u=irg declee in of tota , rce n. and r r c el fwalgs ertsp lct olt. fertility acrording Co Intone bevel and pest foolly pltaning perfocrogne. Earl ourntry ib then .a.igned rue df rhbee tire ntbbneatoont of -crality EDUCATION and fertlitty trends for projeetion parpunes. Adiostad Eraolbeect lutre Stani-naru Populaton - In a sotamioary popolation there In no groweth .nor PrImary sthonl - tntr.1 male and ferale - tross ttotl, sale and fcrale ohm birth cute Is equel to the doith rare, nd atlso the oge anenoare re- reeblsDenn of alt ages at the poitooy level as pereentages of respefti-e eains nonatonr. Thin in achieved only a f ter fertility races debline no prary s otol-age populantion; n-oaoll includen childr-en aged b-11 the reylacerentevel of l: nr repro-d ttion rare, then eech geneescban years bat edjunted fre differenr lengths of primary ducretien fur of women replares itself exacoly. The esetetieay populotien sloe tan Ioaories with atnienal educaticn eneollent nay eaneed 100 Percent asctloted on the basis of rho yrcjetIed rharano tsotrs of the pepulation stnce seer pupils ace .b.e. 00 sbhut the official Scho-1 age. it the year 20001, nd rho rate of decline of ferility rate to replaem- Secondars Il hrl - total mlbe and fele - Computed as above:; e,o-Idry seen level. oduantion requires at lots. fear years of approved primary lesrtlo; fea- boroionary toauar It ra-hed - Thm year oben enai.onary pop.ado-fe pro-ide- general, cre-dIunel. or teac bo, radh g "eIecaoro far puPI7 star hoa beet reached. usuably of 12 to 17 years of age; correspondmene courses sae gee.rally Pupapletron Desitiy =onloded. Pee s;. hn. - Mid-year populetonr pee square kilomeitelCr (1 heotares) of tr fsecndaryf - Votioal instittutios total area; 1969, 1900 nd 1979 data. include teconibal, industrials o nther pergeesm wbich operate independ- Per sq. Fu. aeriutaral laud - Cnop-ted us above for agrioultural lard enby at asfeysenmenne of secondmry itst.tttons. Irly; b960, 1970 and 197E data. Parll-tesoheo catio - pt""arn. a-d eo-ndaoy - TIoal sntaenst enrolled ie Poplcation Age Strunuore (rctmr-I) - Children (0-14 yeses), -rfking-age (15- pri=ry and -e.oodoey levelt divfded by nuebers of rea.hers is thm 64 years), ard rerleed (6b years and over) as percentagen of eid-yer popu- correspondlng Ieves., latton; 19ff, 1970, and 1970 dana. Aduls ilt literacrate (rcente) - Literate adole (able rD rend and trIte) Popabrtion Grwnt hone fpercent) - toted - Annual groyth rates of 1otel rid- asnaprcentage of ntlal adult popatuo aged 15 years and ofer. year populationn fur 1950-60, 1961-70, and 197D-79. Pooplation Groyth Oate (pe-ce-t) - urban- Anr. l groyth rates of urban pupa- CONSMTTION lations for 195D-6D, 196D-7D, -d 1970-79. Pessenger dare (ver rhotasrd eulelian) - Ps gsergee nets ...prite metre trade Birth haoe (fer tbousand) - Apua.l live births per thousand of eid-year Prat seoinfg loss thee etght persons; enolados eaberoes, hearses ted popclatio;: 1969, 1979, and 1979 dart. silitryyvehtiles. Crud Teeth OnIc (perrbrusecd) - Anneal deonbe per tho..n.fd of mid-yeam bRdo ses R ogeneret ui e th n dln) - Al types of roa-eiers far radio pupaon 1n; 60l, 1970, ard 11979 dora. broadn..sts no g.esoce pabliro Pee h"ns,, of lpopbttn; -rlad _ s Gross Rt -odction u re - Average _aabet of daughtersn o-an will bear to litensed ..reei-rs In rusntres end be years wen rcgistrto of radio booeur nol vyredaroduve period if she experiences present age-secifitc fee- sets wee beffetters dls foe rerent yeers may set bet oeeeablestnee dility rates; usually fivs-year o9verges ondreg to t6D, 197l, and 1079. mn nt o-ntrire abolished lieesing. feebly Planning - dcceptoren Atnnnol hobassods) -OnoA.. tam hben of norepeers TV Reeiees (tee th.asand d urplatilo) - ITV reief-ar foe beanda... tq of bilrh-roaterl devices undor ausplces of ntion.al fasily planefoig Pn-ge. general pablit per tho.and pop itulai; excludes nli.eeeed TV rectivers Faeily Planntng - Psers (percent. of macried nuren) - Percenrage of married be roanneeeP and in pears ooei registration ef TV sees was ta eftect. wunen of rhild-bearing age (15-4u years) who uem b brth-oontrel devits tno NewePe2er Circulation (Pee thosasd pepatntn) - Sh-os the aerage tin- all avrried Iona in sear ag' gr-up. oslenun of "daily general ibeleesntnewspaper", defited as aperiodical Pnhboutodev-ted prlmantly to eronf lag9 geerl nag. It Is rrotsld -d FOOD AND N7UTRITION tO bh "drily" if it appears or mast