Ghana - Reconstruction Import Credit : Credit 1393 - Credit Agreement - Conformed

FOFFICIAL REDIT NUMBER 1393 GR DOCU M E NTS Development Credit Agreement (Reconstruction Import Credit) between REPUBLIC OF GHANA and INTERNATIONAL DEVELOPMENT ASSOCIATION Dated , 1983 CREDIT NUMBER 1393 GH DEVELOPMENT CREDIT AGREEMENT AGREEMENT, dated /6 ,1983, between REPUBLIC OF GHANA (hereinafter cKl1ed the Borrower) and INTER- NATIONAL DEVELOPMENT ASSOCIATION (hereinafter called the Associa- tio'I). WHEREAS (A) the Borrower has requested the Association to aosist in the financing of the foreign exchange cost of the Pioject described in Schedule 2 to this Agreement by extending the Credit as hereinafter provided; (B) the Project will be carried out by the Bank of Ghana with the B^.rrower's assistance and, as part of such assistance, the Borrower will make available to the Bank of Ghana the pro- ceeds of the Credit as hereinafter provided; and WHEREAS the Association has agreed, on the basis inter alia of the foregoing, to extend the Credit to the Borrower upon the term and conditions hereinafter set forth and in the Project Agreement of even date herewith between the Association and the Bank of Ghana; NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The parties to this Agreement accept all the provisions of the General Conditions Applicable to Development Credit Agreements of the Association, dated June 30, 1980, with the same force and effect as if they were fully set forth herein (said General Conditions Applicable to Development Credit Agree- ments of the Association being hereinafter called the General Conditions). Section 1.02. Wherever used in this Agreement, unless the context otherwise requires, the several terms defined in the General Conditions and in the Preamble to this Agreement have the respective meanings therein set forth and the following addi- tional terms have the following meanings: (a) "Project Agreement" means the agreement between the Association and the Bank of Ghana of even date herewith, as the -2- same may be amended from time to time, and such term includes all schedules to the Project Agreement and all agreements supple- mental to the Project Agreement. (b) "Subsidiary Agreement" means the agreement to be entered into between the Borrower and the Bank of Ghana pursuant to Section 3.01 (b) of this Agreement, as the same may be amended from time to time, and such term includes all schedules to the Subsidiary Agreement. (c) "Economic Recovery Program" means the Borrower's pro- gram for economic recovery as announced in the Borrower's Budget Statement and Economic Policy for 1983 dated April 2.1, 1983. (d) "Interministerial Committee" means the committee to be established by the Borrower pursuant to Section 3.02 of this Agreement. (e) "Technical Committee" means the committee to be estab- lished by the Borrower pursuant to Section 3.03 of this Agree- ment. (f) "Project Unit" means the Project unit to be established in the Bank of Ghana pursuant to Section 2.03 (a) of the Project Agreement. (g) "Special Account" means the account to be opened and thereafter maintained pursuant to Section 2.02 (b) of this Agree- ment. (h) "Counterpart Funds Account" means the account to be opened and thereafter maintained pursuant to Section 3.05 (a) of this Agreement. ARTICLE II The Credit Section 2.01. The Association agrees to lend to the Bor- rower, on the terms and conditions set forth or referred to in this Agreement, an amount in various currencies equivalent to thirty-seven million Special Drawing Rights (SDR 37,000,000). Section 2.02. (a) The amount of the Credit may be withdrawn from the Credit Account in accordance with the provisions of -3- Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Association, for expenditures made (or, if the Association shall so agree, to be made) in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit. (b) The Borrower shall, for the purposes of the Project, open and thereafter maintain a special account in a commercial bank in London satisfactory to the Association on terms and conditions satisfactory to the Association. Deposits into, and payments out of, the Special Account shall be made in accordance with the provisions of Schedule 3 to this Agreement. Section 2.03. Except as the Association shall otherwise agree, procurement of the goods and civil works required for the Project and to be financed out of the proceeds of the Credit shall be governed by the provisions of Schedule 2 to the Project Agreement. Section 2.04. The Closing Date shall be December 31, 1984 or such later date as the Association shall establish. The Asso- ciation shall promptly notify the Borrower of such later date. Section 2.05. (a) The Borrower shall pay to the Association a commitment charge at the rate of one-half of one per cent (1/2 of 1%) per annum on the principal amount of the Credit not with- drawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the Development Credit Agree- ment to the respective dates on which amounts shall be withdrawn by the Borrower from the Credit Account or shall be cancelled. (b) The commitment charge shall be paid: (i) at such places as the Association shall reasonably request; (ii) without re- strictions of any kind imposed by, or in the territory of, the Borrower; and (iii) in the currency specified in this Agreement for the purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.06. The Borrower shall pay to the Association a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the principal amount of the Credit withdrawn and outstanding from time to time. -4- Section 2.07. Commitment charges and service charges shall be payable semiannually on March 1 and September 1 in each year. Section 2.08. The Borrower shall repay the principal amount of the Credit in semiannual installments payable on each March 1 and September 1 commencing September 1, 1993, and ending March 1, 2033, each installment to and including the installment payable on March 1, 2003, to be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter to be one and one-half per cent (1-1/2%) of such principal amount. Section 2.09. The currency of the United States of America is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.10. The Bank of Ghana is designated as repre- sentative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. ARTICLE III Execution of the Project Section 3.01. (a) Without any limitation or restriction upon any of its other obligations under the Development Credit Agree- ment, the Borrower shall cause the Bank of Ghana to perform in accordance with the provisions of the Project Agreement all the obligations therein set forth, shall take and cause to be taken all action, including the provision of funds, facilities, serv- ices and other resources, necessary or appropriate to enable the Bank of Ghana to perform such obligations, and shall not take or permit to be taken any action which would prevent or interfere with such performance. (b) The Borrower shall make the proceeds of the Credit available to the Bank of Ghana under a subsidiary agreement, satisfactory to the Association, to be entered into between the Borrower and the Bank of Ghana. (c) The Borrower shall exercise its rights under the Subsi- diary Agreement in such manner as to protect the interests of the Borrower and the Association and to accomplish the purposes of the Credit, and except as the Association shall otherwise agree, the Borrower shall not assign, amend, abrogate or waive the Subsidiary Agreement or any provision thereof. -5- Section 3.02. The Borrower shall establish and thereafter maintain an Interministerial Committee under the direction. of the Coordinating Secretary of the Provisional National Defense Council of the Borrower and consisting of the Secretary of the Borrower's Ministry of Finance and Economic Planning and the Governor of the Bank of Ghana with the participation, as appro- priate, of the Secretaries of the Borrower's Ministries of Trans- port and Agriculture, such Interministerial Committee to provide interministerial coordination and policy guidance for the Pro- ject. Section 3.03. The Borrower shall establish and thereafter maintain a Technical Committee under the direction of a senior officer of the Bank of Ghana, whose qualifications and experience shall be satisfactory to the Association, and consisting of representatives of the Borrower's Ministries of Finance, Trans- port, Agriculture and Trade and the project coordinator referred to in Section 2.03 (a) of the Project Agreement, such Technical Committee to be responsible for the coordination, monitoring and supervision of all Project activities. Section 3.04. In order to assist the Borrower in the pro- curement of goods under the Project, the Borrower shall employ procurement agents whose qualifications, experience and terms and conditions of employment shall be satisfactory to the Associa- tion, such procurement agents to be selected in accordance with principles and procedures satisfactory to the Association on the basis of the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" published by the Bank in August 1981. Section 3.05. The Borrower shall: (a) not later than thirty days after the date set forth in Section 5.03 of this Agreement, open and thereafter maintain a counterpart funds account in the Bank of Ghana; (b) instruct the Bank of Ghana to deposit in such Counter- part Funds Account the local currency funds generated from the sale of foreign exchange by the Bank of Ghana under the Credit; and (c) use such funds for the recurrent and capital costs of priority activities under the Economic Recovery Program. - 6 - Section 3.06. The Borrower shall, by October 31, 1983, review with the Association the Borrower's program for removing the subsidy provided to the domestic price of fertilizer imports, and thereafter take all measures necessary to remove such subsidy in accordance with such program. Section 3.07. The Borrower shall review, on a semi-annual basis, the level and commodity coverage of the tariffs on road transport-and, following consultation with the Association, make adjustments to such tariffs as necessary or appropriate to main- tain adequate financial incentives to road transport operators. , Section 3.08. The Borrower shall review, on an annual basis, the prices paid to farmers for the purchase of cocoa and, follow- ing consultation with the Association, make adjustments to such prices as necessary or appropriate to maintain such prices at an incentive level, the announcement of such adjustments to be made sufficiently in advance of the beginning of the cropping season. Section 3.09. The Borrower shall assist the Bank of Ghana in the preparation of the report referred to in Section 2.06 (c) of the Project Agreement. ARTICLE IV Remedies of the Association Section 4.01. For the purposes of Section 6.02 of the General Conditions the following additional events are specified pursuant to paragraph (h) thereof: (a) The Bank of Ghana shall have failed to perform any of its obligations under the Project Agreement. (b) As a result of events which have occurred after the date of the Development Credit Agreement, an extraordinary situa- tion shall have arisen which shall make it improbable that the Borrower will be able to carry out the Economic Recovery Program or the Bank of Ghana will be able to perform its obligations under the Project Agreement. (c) Act 182 of 1963 of the Borrower, as amended, shall have been amended, suspended, abrogated, repealed or waived so as to affect materially and adversely the ability of the Bank of Ghana to perform any of its obligations under the Project Agreement. (d) The Borrower or any other authority having jurisdiction shall have taken any action for the dissolution or disestablish- ment of the Bank of Ghana or for the suspension of its opera- tions. (e) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of any loan or grant made to the Borrower for the financing of the Project shall have been suspended, cancelled or terminated in whole or in part, pursuant to the terms of the agreement providing there- for, or (B) any such loan shall have become due and pay- able prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Association that such suspension, cancel- lation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obligations under such agreement. Section 4.02. For the purposes of Section 7.01 of the General Conditions, the following additional events are specified pursuant to paragraph (d) thereof: (a) the event specified in paragraph (a) of Section 4.01 of this Agreement shall occur and shall continue for a period of 60 days after notice thereof shall have been given by the Associa- tion to the Borrower and the Bank of Ghana; (b) any event specified in paragraph (c) or (d) of Section 4.01 of this Agreement shall occur; and (c) the event specified in paragraph (e) (i) (B) of Section 4.01 of this Agreement shall occur, subject to the proviso of paragraph (e) (ii) of that Section. ARTICLE V Effective Date; Termination Section 5.01. The following events are specified as addi- tional conditions to the effectiveness of the Development Credit -8- Agreement within the meaning of Section 12.01 (b) of the General Conditions: (a) the Subsidiary Agreement has been executed on behalf of the borrower and the Bank of Ghana; (b) the Special Account has been opened in accordance with the provisions of Section 2.02 (b) of this Agreement; and (c) the procurement agents referred to in Section 3.04 of this Agreement have been employed. Section 5.02. The following are specified as additional matters, within the meaning of Section 12.02 (b) of the General Conditions, to be included in the opinion or opinions to be furnished to the Association, namely: (a) that the Project Agreement has been duly authorized or ratified by the Bank of Ghana, and is legally binding upon the Bank of Ghana in accordance with its terms; and (b) that the Subsidiary Agreement has been duly authorized or ratified by the Borrower and the Bank of Ghana and is legally binding upon the Borrower and the Bank of Ghana in accordance with its terms. Section 5.03. The date / , is hereby specified for the purposes of Section 12.04 of the General Conditions. ARTICLE VI Representative of the Borrower; Addresses Section 6.01. The Principal Secretary of the Ministry of Finance and Economic Planning of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purpose of Section 11.01 of the General Conditions: For the Borrower: Republic of Ghana Principal Secretary Ministry of Finance and Economic Planning Accra, Ghana -9- Cable address: ECONOMICON Accra For the Association: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America Cable address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their representatives thereunto duly authorized, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF GHANA By Authorized Representative INTERNATIONAL DEVELOPMENT ASSOCIATION By , Regione" dice President Western Africa - 10 - SCHEDULE 1 Imported Goods Eligible for Financing under the Credit 1. The table below sets forth the Categories of services and imported goods to be financed out of the proceeds of the Credit and the allocation of amounts of the Credit to each Category: Amount of the Credit Allocated (Expressed in Category SDR Equivalent) (1) Agricultural Sector: (a) Insecticides 2,770,000 (b) Sprayers 3,610,000 (c) Fertilizers 4,810,000 (d) Weedicides and pesticides 1,660,000 (e) Tools and equipment 2,030,000 (f) Spares for tractors 920,000 (2) Transport Sector: (a) Truck tires (private garages) 7,950,000 (b) Truck tires (state corporations) 2,220,000 (c) Truck spares 3,330,000 (d) Truck batteries 740,000 (e) Retreading material 370,000 (3) Consultants services, office equipment 650,000 and supplies (4) Initial Deposit into Special Account 4,620,000 (5) Unallocated 1,320,000 TOTAL 37,000,000 - 11 - 2. Notwithstanding the provisions of paragraph 1 above, no withdrawals shall be made in respect of: (a) expenditures in the currency of the Borrower or for goods or services supplied from the territory of the Borrower; (b) expenditures made prior to the date of this Agreement, except that withdrawals in an aggregate amount not exceeding the equivalent of $50,000 may be made in respect of Category (3) on account of payments made for such expenditures before that date but after May 1, 1983; (c) payments for taxes levied by, or in the territory of, the Borrower on goods or services, or on the importation, manu- facture, procurement or supply thereof; and (d) expenditures for goods (not including office equipment and supplies) procured under invoices of less than the equivalent of $20,000. 3. Notwithstanding the allocation of an amount of the Credit set forth in the second column of the table in paragraph 1 above, if the Association has reasonably estimated that the amount of the Credit then allocated to any Category will be insufficient to finance all expenditures in that Category, the Association may, by notice to the Borrower, reallocate to such Category, to the extent required to meet the estimated shortfall, proceeds of the Credit which are then allocated to another Category and which in the opinion of the Association are not needed to meet other expenditures. 4. If the Association shall have reasonably determined that the procurement of any item in any Category is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the Credit, and the Association may, without in any way restricting or limiting any other right, power or remedy of the Association under the Development Credit Agreement, by notice to the Borrower, cancel such amount of the Credit as, in the Asso- ciation's reasonable opinion, represents the amount of such ex- penditures which would otherwise have been eligible for financing out of the proceeds of the Credit. - 12 - SCHEDULE 2 Description of the Project The Project is to provide financial assistance to support the Borrower's Economic Recovery Program by providing foreign exchange for the importation into Ghana of equipment, spare parts and materials for the agricultural and transport sectors as set forth in Schedule 1 to this Agreement. The Project is expected to be completed by June 30, 1984. - 13 - SCHEDULE 3 Special Account 1. For the purposes of this Schedule: (a) the term "Category" means a category of items to be financed out of the proceeds of the Credit as set forth in the table in paragraph 1 of Schedule 1 to this Agreement; (b) the term "eligible expenditures" means expenditures in respect of the reasonable cost of goods and services required for the Project and to be financed out of the proceeds of the Credit allocated from time to time to Categories (1) and (2) in accor- dance with the provisions of Schedule 1 to this Agreement; and (c) the term "initial deposit" means an amount in various currencies equivalent to the amount allocated to Category (4) and to be withdrawn from the Credit Account and deposited in the Special Account pursuant to the first sentence of paragraph 3 of this Schedule. 2. Payments out of the Special Account shall be made exclu- sively for eligible expenditures in accordance with the provi- sions of this Schedule. 3. The Association shall, at the request of the Borrower, withdraw on behalf of the Borrower from the Credit Account and deposit into the Special Account the initial deposit. Thereafter and on the basis of requests by the Borrower furnished to the Association at such intervals as the Association shall specify, the Association shall further so withdraw from the Credit Account and deposit into the Special Account such amounts as shall be required to replenish the Special Account with amounts equal to payments made out of the Special Account for eligible expendi- tures, but only to the extent that the amount of any such deposit, together with any amount remaining on deposit in the Special Account as of the date of such request, shall not exceed in the aggregate the equivalent of the initial deposit. Except as the Association may otherwise agree, each such deposit after the initial deposit shall be withdrawn by the Association from the Credit Account under the respective Categories (1) and (2), and in the respective equivalent amounts, as shall have been justi- fied by the evidence supporting the request for such deposit furnished pursuant to paragraph 4 of this Schedule. - 14 - 4. Prior to or at the time of each request by the Borrower for a deposit by the Association into the Special Account after the initial deposit, the Borrower shall furnish to the Association, in respect of each payment made by the Borrower out of the Special Account, such documents and other evidence as the Asso- ciation shall reasonably request showing that such payment was made for eligible expenditures. 5. Notwithstanding the provisions of paragraph 3 of this Sched- ule, n further deposit into the Special Account shall be made by the Association (a) when the Association shall have determined at any time that all further withdrawals can be made directly by the Borrower from the Credit Account in accordance with the provi- sions of paragraph (a) of Section 2.02 of this Agreement, or (b) unless otherwise agreed by the Association, when the total un- withdrawn amount of the Credit allocated to Categories (1) and (2) for the Project, minus the amount of any qualified agreement to reimburse made by the Association and of any special commit- ment entered into by the Association pursuant to Section 5.02 of the General Conditions with respect to the Project, shall be equal to the equivalent of twice the amount of the initial depo- sit, whichever shall be sooner. Withdrawal from the Credit Account of the remaining unwithdrawn amount of the Credit for the Project shall follow such procedures as the Association shall specify by notice to the Borrower and the Bank of Ghana and shall, except as the Association shall otherwise agree, be made only after and to the extent the Association shall have been satisfied that all such amounts remaining on deposit in the Special Account as of the date of such notice have been or will be utilized in making payments for eligible expenditures. 6. If the Association shall have determined at any time that: (a) any payment out of the Special Account (i) was made for any expenditure or in any amount not eligible pursuant to para- graph 2 of this Schedule, or (ii) was not justified by the evi- dence furnished pursuant to paragraph 4 of this Schedule, the Borrower shall, promptly upon notice from the Association and, unless otherwise agreed by the Association, prior to any further deposit into the Special Account by the Association, deposit into the Special Account or, if the Association shall so request, refund to the Association an amount equal to the amount of such payment or the portion thereof not so eligible or justified; or - 15 - (b) any amount outstanding in the Special Account will not be required to cover further payments for eligible expenditures, the Borrower shall, promptly upon notice from the Association, and unless otherwise agreed by the Association, refund to the Association such amount then outstanding in the Special Account. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the day of 198 1. FOR SECRETARY