Document of The World Bank FOR OFFICIAL USE ONLY 4 LiE COPY! Report No. P-3727-LBR REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 6.4 MILLION TO THE REPUBLIC OF LIBERIA FOR A SECOND BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT February 21, 1984 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 The official monetary unit is the Liberian dollar with a par value equal to the U.S. dollar. The U.S. dollar is legal tender in Liberia. FISCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS ACDB Agricultural and Cooperative Development Bank ADF African Development Fund CARI Central Agricultural Research Institute CDA Cooperative Development Agency CSU Cooperative Service Unit DCS District Cooperative Society IFAD International Fund for Agricultural Development LPMC Liberian Produce Narketing Corporation MOA Ministry of Agriculture MPW Ministry of Public Works T & V Training and Visit FOR OFFICIAL USE ONLY LIBERIA Second Bong County Agricultural Development Project Credit and Project Summary Borrower: The Republic of Liberia Amount: SDR 6.4 million (US$6.7 million equivalent) Terms: Standard Project Description: The project seeks to increase farmer productivity and income by consolidating the experiences and achievements of the first phase project (Cr. 700-LBR) and extending agricultural services to lower Bong County as well as to part of the adjacent Gibi Territory. The project would include: (i) supply of agricul- tural inputs to improve production of upland and swamp rice, cassava, other food crops and coffee; (ii) expansion and improvement of extension services and staff training; (iii) agricultural research and development of improved plant production material; (iv) strengthening of cooperatives and the Agricultural and Cooperative Development Bank (ACDB) to improve input supply, credit and marketing services; (v) maintenance of secondary and feeder roads and construction or rehabilitation of feeder roads and tree crop tracks; (vi) schistosomiasis monitoring and control services; construction of wells and latrines; and (vii) support to the Ministry of Agriculture central services. About 7,500 farm families would obtain higher incomes as a result of the crop improvement and credit programs; an even greater number of the rural population would benefit from improvements in the road network and health services. In addition, employment would be created by the increased business activity induced by the project. It is estimated that about half the rural families in the county would benefit in some way from the project. The normal risks associated with this type of project would be minimized since it would be building upon the institutions and experience of the first phase project. The main risk is that institutional developments envisaged under the project may not take place as quickly as supposed. However, in view of the high priority given by the Government to rural development and of the technical assistance and training support being provided, this risk has been reduced to acceptable levels. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii - Estimated Costs: Project Item ----- (US$ million) ----- Local Foreign Total Crop and Farm Development 4.9 2.0 6.9 Agricultural Research 0.1 0.1 0.2 Input Supply, Credit and Marketing Services 1.7 1.4 3.1 Roads and Workshop 1.6 2.0 3.6 Realth Services 0.4 0.3 0.7 Project Management and Administration 2.2 0.7 2.9 Monitoring and Evaluation 0.3 0.1 0.4 Technical Assistance & Consultancy Services 0.1 0.4 0.5 Support to MOA Central Services 0.1 0.3 0.4 Total Base Cost 11.4 7.3 18.7 Physical Contingencies 0.2 0.3 0.5 Price Contingencies 1.4 1.7 3.1 Total 13.0 9.3 22.3 Project Preparation Facility Reimbursement 0.2 0.4 0.6 Total Project Costs 13.2 9.7 22.9 less Recurrent Costs of Phase I 4.9 0.6 5.5 Total Financing Required 8.3 9.1 17.4 Financing Plan: Local Foreign Total IDA 3.4 3.3 6.7 IFAD 3.0 2.8 5.8 ADF 1.0 3.0 4.0 Government 0.9 - 0.9 TOTAL 8.3 9.1 17.4 Estimated Disbursements: FY85 FY86 FY87 FY88 FY89 Annual 2.1 1.6 1.5 1.3 0.2 Cumulative -- 3.7 5.2 6.5 6.7 Rate of Return: 22% Staff Appraisal Report: No. 4681-LBR dated February 15, 1984 Map: IBRD 17191R INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF LIBERIA FOR A SECOND BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed credit to the Republic of Liberia for the equivalent of SDR 6.4 million (US$6.7 mil- lion equivalent) on standard IDA terms to help finance a Second Bong County Agricultural Development project. The International Fund for Agricultural Development (IFAD) would provide US$5.8 million equivalent of cofinancing for the project, with IDA serving as cooperating institution for the administra- tion of the IFAD loan, and the African Development Fund (ADF) would extend a loan of US$4.0 million equivalent on ADF terms. PART I - THE ECONOMY 2. An economic report, entitled "Liberia: Recent Economic Developments and Medium-Term Prospects" (No. 4178-LBR), was distributed to the Executive Directors on December 30, 1982. An economic mission visited Liberia in October 1983 to review the current economic situation; its principal findings are included in the following paragraphs. Country data are shown in Annex I. Basic Economic Characteristics 3. Liberia has a dual economy. A foreign controlled enclave sector, endowed with advanced technologies and skills, co-exists with a traditional agricultural economy which uses rudimentary technologies. The wholly export oriented enclave or "concession" sector includes iron ore mining, rubber production and forestry and provides about 90 percent of the export earnings and generates about one quarter of the GDP. The links between the concession sector with the rest of the economy are, on the whole, weak. However, stronger links exist in the case of the rubber industry; these take the form of demand for labor services (about 7 percent of the labor force is employed by rubber concessions) and material inputs. Contributions by the concessions to Government revenues in the form of profit sharing and royalties provided the strongest linkage with the rest of the economy until 1976/77. Because of low iron ore profits since the late seventies, contributions to revenues now mainly take the form of income tax levied on employees and, to a limited extent, indirectly in the form of duties on imported inputs which are not exempt under the Concession Agreements. These revenues have historically accounted for about one half of total Government income. 4. Outside the enclave sector, Liberia is not unlike other less devel- oped African nations; about 66 percent of the population live in rural areas and depend for their livelihood on agriculture; the bulk of them are tradi- tional farmers producing mainly rice and cassava for subsistence. Rubber, coffee and cocoa are the country's major cash crops; yet they contribute less - 2 - than 10 percent of GDP and only 18 percent of export earnings. Almost all rubber is processed and exported by foreign companies. Non-agricultural productive activities outside the enclave sector are very limited; the largest of these, manufacturing, contributes about 5 percent of GDP. This structural imbalance in the economy between the modern, largely enclave sector, and the traditional agricultural sector is reflected in a sharply skewed income dis- tribution. With a population of about 1.9 million, average per capita GNP in 1982 was estimated at about US$510. However, 80 percent of Liberia's house- holds received less than 30 percent of total income. 5. The effectiveness of Liberia's public institutions is severely handi- capped by a scarcity of trained manpower at all levels. Though Liberia has competent managers in public office, they are insufficient in number and their effectiveness is handicapped by a shortage of trained people for middle man- agement positions. Organizational weaknesses furthermore result in poor communications within the Government and its agencies and in duplication of effort. These inadequacies of public institutions are not only a bottleneck to the effectiveness of day-to-day government but to the public sector's development effort as a whole, since the large number of unproductive workers on the public payroll swell the Government's current expenditures and prevent the accumulation of savings for an adequate investment effort. 65. With a crude birth rate of 49.7 and a crude death rate of 14.2 per 1,000 population, Liberia's annual rate of population increase of 3.4 percent i:s among the highest in Sub-Saharan Africa. The rate has risen from 3.1 percent during the 1960s and is expecteu to accelerate to 3.7 percent by the year 2000. Consequently, on the basis of past trends in birth and death rates, the current population of about 1.9 million is projected to double by the year 2000. The high population growth rate has put pressure on social services, infrastructure, etc. and, in the light of a declining economy, unemployment has risen, especially in Monrovia where migration from rural areas accentuates the problem. 7. About 58 percent of Liberia's domestic energy needs are met by local fuelwood and charcoal, another 35 percent from imported petroleum and its products, and 7 percent from domestic hydroelectric power. Petroleum imports cost Liberia $129.6 million in 1981, or 24 percent of export earnings, as compared to $12 million or 5 percent of export earnings a decade earlier. Although the reduction of world oil prices in late 1982 and early 1983 pro- vided some relief, reducing the ratio of oil imports to total export earnings to 20 percent, problems of paying for oil imports continue to mount and it is clear that Liberia should seek adjustments in its use of imported oil by substituting domestic hydropower to the extent possible and by conserving energy so as to alleviate its balance of payments and fiscal problems. 8. The country has poorly developed economic and social infrastructure outside the enclave areas. An incomplete and inadequate road system is poorly maintained. Only 20 percent of the non-enclave population has access to dependable water supply, while education and training have been inequitably distributed and are of inadequate quality. The health status of the majority of Liberians remains poor--life expectancy at birth is estimated at 54 years, and morbidity and mortality are high. The infant mortality rate is 152 per - 3 - thousand live births (1981). The existing health care system is inadequate and unsuited to the country's health problems. Poor health and malnutrition continue to plague vulnerable segments of the population, especially pregnant and lactating women as well as young children. Recent Economic Performance 9. The military Government which took power in April 1980 inherited a sluggish and strained economy in which GDP growth had averaged less than 1.0 percent per annum between 1974 and 1979. The economy was suffering from the effects of a heavy oil import bill and a stiff debt burden at a time when the external demand for Liberia's products was depressed. The commodity concen- tration of Liberia's exports aggravated the impact of the international reces- sion. In addition, doubling of the public sector minimum wage in 1980 exacer- bated the fiscal crisis. Capital flight and a severe shortage of public funds for investment also hurt the economy. The depletion of the banking sector deposit base, restricted external credit lines and a general liquidity crisis made management of the economy difficult, particularly during the present: administration's first two years of office and still continue to plague economic management. To meet its foreign currency obligations, the Government relies on offshore tax revenues paid by concessions and on disbursements of external loans and grants. Because of decreased prices for export commodities and low export earnings of concessionaires, their contribution to the Govern- ment's offshore revenue has decreased drastically in recent years. Thus, the public sector balance of payments has accordingly deteriorated and the National Bank of Liberia continues to have difficulty in obtaining foreign resources to meet the cost of oil imports, service debt and public sector import payments. 10. There has been a decline in GDP each year since 1980. Between 1980 and 1982, real GDP declined by about 15 percent and real consumption by over 22 percent. The decline in the economy is mainly attributable to the con- tinuing weak performance of exports. Exports account for a high share of GDP (62 percent in 1981). During 1982, export earnings fell by 9.8 percent (from $540.7 million in 1981 to $487.4 million in 1982) due to decreased earnings from iron ore, rubber, logs, cocoa and sawn timber. This deterioration in export earnings continued in 1983, with revenue for the period January to June showing a 10 percent decline over the corresponding period in 1982. Because of the dominance of iron ore whose market prospects still look grim, prospects for export earnings in the short run are not promising but the recent upsurge in world rubber prices have made prospects look better, especially in the medium term, as the recession in the OECD countries ends. However, in order to respond to stronger demand in the medium-term, substantial investments need to be undertaken, especially in the iron ore sector. 11. After deteriorating considerably in 1980 following the doubling of the minimum wage, fiscal performance improved as a result of expenditure restraints under successive stabilization programs supported by the IMF. Total expenditures declined from $385.4 million in FY82 to $343.5 million in FY83. While expenditure restraint has been successful, revenue performance has been disappointing in part due to the deterioration in the economy but also due to poor tax administration. Revenue and grants totalled $256.3 - 4 - million in FY83 compared with $279.3 million in FY82 and $283.0 million in the budget estimates. As a result, a large deficit developed in the last quarter of FY83 resulting in borrowings from the banking system of $77.5 million, com- pared to $32.0 in the budget. Creditworthiness 12. Liberia's external public debt outstanding and disbursed was US$635.7 million at end December 1981 and grew by less than one percent to $641.2 million at end 1982. The Bank Group share of the public debt outstanding and disbursed was 19.7 percent in 1982 and is expected to increase to about 23.2 percent by end 1984. As a proportion of external public debt servicing liability, the Bank Group's share was estimated at about 26.1 percent in 1982 but is projected to decline to about 16.9 percent in 1984. Debt service payments as a proportion of exports of goods and non-factor services were estimated at about 7.0 percent in 1982 but would have been higher had it not been for the debt relief provided under the Paris Club in 1980 and 1981 as explained below. Public debt service payments as a percentage of Government revenues (a more meaningful indicator for Liberia which uses the US dollar as a medium of exchange) reached 22 percent in 1980. This upsurge in the debt service ratio occurred primarily as a result of short-maturity loans contracted by Liberia in the late sevcnties to finance OAIJ-related expendi- tures and to meet growing budgetary deficits. The increase in debt servicing obligations created severe pressures on Liberia's public finances. The Government therefore sought and obtained the assistance of the Paris Club in rescheduling its external public sector debt of US$32 million maturing during the period July 1980 to December 1981; the rescheduled debt is to be repaid over 9 years, including four years of grace. Debt service problems, however, persisted. In December 1981 further relief was requested and Liberia obtained an 18-month extension, from October 1, 1982 to June 30, 1983 subject to renewal of the standby agreement with the IMF when it expired in September 1982. This condition was satisfied as explained below. 13. Liberia has maintained a standby arrangement with the IMF since mid- 1980 except during the fourth quarter of FY83 when the unresolved issue of US$26 million arrears to the oil facility banks and a shortfall in revenue made Liberia ineligible to draw SDR 20 million. The current program covering FY84 with new revenue measures was approved by the IMF Board on September 14, 1983 and according to the review undertaken in December 1983, Liberia satis- fied the quantitative performance criteria for end-November. In addition, an agreement with the London Club to refinance a private bank syndicated loan of about US$27 million was signed in December 1982 and became effective early 1983. These measures temporarily ameliorated the debt service burden. As a result, debt service as a proportion of Government revenue declined to about 14 percent in 1982. However, Liberia continued to face severe debt service problems, and in 1983 requested further debt relief from the Paris and London Clubs. The Paris Club considered Liberia's third request on December 22, 1983 and offered relief for one year on official loans and insured export credits contracted before January 1, 1983. Eligible maturities covered by the agree- ment are estimated at US$23.6 million. Of this amount, 90 percent (US$21.2 million) will be consolidated and repaid over 8-1/2 years, including four years of grace. The 10 percent non-consolidated portion is to be repaid in - 5 - four equal annual payments beginning on the last date of the consolidation period (June 30, 1984). Negotiations for further debt relief from the London Club, including settlement of the US$26 million arrears under the oil facility, are expected to be concluded soon. 14. Although the movement in world prices of Liberia's main export com- modities in 1981 and 1982 was not favorable, the growth in export earnings is projected to be higher in subsequent years as a result of the likely strength- ening in demand for rubber and timber and, to a lesser extent, iron ore. Forecasts for natural rubber and log prices indicate a consistently upward movement. Other ongoing agriculture projects (particularly for coffee, cocoa and palm oil), and exploration of other mining resources, including oil, gold and barite, may help diversify the economy and could result in an acceleration in the rate of growth of exports during the next three to four years. Public revenues would benefit from these increased export earnings. Assuming that exports grow at a possible average of 4.5 percent per annum between 1983 and 1986, and the Government continues to implement stabilization and reform policies, Government revenues could grow at an average of about 9.0 percent per annum increasing from US$238.0 million in 1982 to US$328.3 million in 1986. On the expenditure side, performance in FY83 has demonstrated the Government's ability to reduce expenditures. If this effort continues, growth of recurrent expenditures could be kept to about 1 percent per annum in real terms in the short to medium term. Thus, prospects are clearly contingelnt upon the resumption of growth in the industrialized countries to which Liberia supplies primary goods and upon the successful implementation of a number of policy measures over the next few years, e.g., a continued reduction in the size of the Government budget deficit, further restraint on new commercial borrowings and public sector credit expansion, increased mobilization of public savings, maintenance of the traditional openness of the economy, appropriate pricing and tariff policies, revival of investor confidence, inflow of new private investment and further improvement in the coordination of overall economic management. 15. Even with the improved performance assumed above and the debt relief already provided or anticipated in the near future, the debt burden is likely to remain strenuous in the short-to-medium term. Debt service (interest and amortization) on public and public guaranteed debt, as a percentage of budget revenues, is projected at 32 percent in 1984 after taking account of all the debt relief to be provided by the Paris and London Clubs. This debt service ratio could not be reduced further because the remaining debt to multilateral institutions and previously rescheduled loans is not subject to rescheduling. Before 1981 Liberia's debt service burden was not as severe as it has become in recent years. Bank group lending to Liberia was therefore a blend of IDA credits and Bank loans. In view of the country's relatively low per capita income and high public debt service liability, continued IDA assistance is justified. - 6 - PART II - BANK GROUP OPERATIONS IN LIBERIA 16. As of November 30, 1983 the Bank had approved 22 loans (including one Third Window loan) for projects in Liberia totalling US$155.22 million; there have been 13 IDA credits totalling US$88.76 million, and one technical assis- tance grant of US$200,000 for development planning. IFC has made two equity investments totalling US$555,000 in the share capital of the Liberian Bank for Development and Investment (LBDI) and a further investment was approved by the Executive Directors on August 30, 1983. The Bank Group assistance has finan- ced roads, agricultural development, power, education, water supply, industry and mining, small enterprises, and petroleum pre-exploration. Annex II con- tains a summary statement of Bank loans, IDA credits, and IFC investments as of November 30, 1983. 17. Bank Group disbursements for projects in Liberia increased steadily from FY78 to FY81 when disbursements were equivalent to 26 percent of credits and loans outstanding at the beginning of that fiscal year. This performance was made possible by close coordination with the budgetary authorities which consistently earmarked sufficient counterpart resources to Bank Group supported projects in Liberia. More recently, the Government has experienced considerable difficulty in providing counterpart resources because of the sharp deterioration in public finances discussed in Part I of this report. Close monitoring of project implementation and continued coordination with the budgetary authorities should avoid excessive delays in implementation due to lack of counterpart resources. However, the Government's present resource position is being taken into account in structuring new projects: their scope is being limited to essentials and as much foreign financing as possible is being provided so as to reduce the need for Government contributions. 18. The objective of Bank Group operations is to obtain the adoption by the Government of policies which would be more conducive to renewed economic growth. In its lending operations the Bank Group is giving priority to: (a) strengthening institutions and policies in the public sector in order to improve its efficiency, including improvement in the quality of the public investment program; (b) consolidating development programs in sectors critical to the country's development, with special emphasis on policies and programs to improve the balance of payments; (c) maintenance and rehabilitation programs that help to preserve exist- ing capital; and (d) improving the country's manpower resources. 19. In support of the objectives of increasing production as well as improving income distribution, Bank Group lending has emphasized agriculture and rural development. The Bank Group is financing two integrated agricul- tural development projects: the first phase Bong County and the second phase Lofa County integrated agricultural development projects. These projects are designed to (a) assist subsistence farmers expand their production base and income by increasing their productivity through support services and infra- structure, and (b) help diversify the country's export and revenue base. A rubber development project, co-financed with the Commonwealth Development Corporation (CDC), is designed to increase exports and improve the producti- vity and incomes of smallholder farmers. A forestry development project which the Bank is co-financing with the African Development Bank (ADB) and the German Agency for Technical Cooperation (GTZ), seeks to strengthen the Govern- ment's forest service, initiate an industrial plantation program, and help Liberia better manage and exploit its forestry resources. An oil palm project, co-financed by the ADB and the CDC, is helping expand and diversify the country's export and revenue base, provide employment, increase the incomes of rural families, and strengthen the institutional capability to develop oil palm. 20. In addition to its support for agriculture, the Bank Group is also assisting the Government develop the manufacturing sector. A credit for a small and medium scale enterprises project approved in November 1980, seeks to stimulate economic activity and employment by providing credit and technical assistance. The Bank has also provided loans to the Liberian Bank for Development and Investment (LBDI), virtually the only source of long-term credit to industry. While reinforcing the Government's efforts to become less dependent on mining, the Bank has granted loans for a project to rehabilitate a mine operated by the National Iron Ore Company. A petroleum exploration promotion project, for which a loan was approved in October 1980, is to develop Liberia's hydrocarbon potential by attracting oil companies to take oil exploration permits in Liberia. 21. Given Liberia's pressing needs for physical infrastructure, the Bank Group has played a prominent role in financing road construction and mainte- nance, and power and water supply facilities. A feeder roads project for which a Bank loan was approved in 1979 is designed to open up the agricultural hinterland to support ongoing and proposed agricultural and rural development programs. The nearly completed fourth highway project has, like earlier Bank- financed projects, expanded the country's limited basic road network. The proposed fifth highway project, which we intend to submit for the considera- tion of the Executive Directors in the near future, would improve the country's road maintenance capability and help carry out urgent rehabilitation works. Through four projects in the power sector, the Bank has helped expand the Liberia Electricity Corporation's (LEC) thermal generating facilities to meet current demand, strengthened LEC's management, and extended connections to poor urban households in Monrovia. A water supply project for which a credit was granted in 1978 helped rehabilitate and expand the Monrovia water supply system, extend water distribution to lower income groups in metropolitan areas, and strengthen the Liberia Water and Sewer Corporation (LWSC). An urban development project, for which a credit was approved in April 1982, seeks to improve the living conditions of Monrovia's urban poor by (a) upgrading infrastructure and providing essential services in three of its most needy neighborhoods, and (b) strengthening key institutions to provide more effective management and establish a solid revenue base in the municipality. 22. For the future, the Bank Group is helping the Government develop a program 3f economic structural adjustment to deal with the country's severe resource constraint and decline in export earnings. Preparation of this program is in the initial stages, and our discussions with the authorities have so far met with an encouraging response. We also pr-opose to provide further support for the agricultural sector in the medium term, primarily to help relieve constraints on increased production of export crops such as natural rubber, which could yield quick return to the economy. A second oil exploration project would also be appraised in the coming months; it would aim at assisting the Government determine-Liberia's hydrocarbon potential in collaboration with international oil companies, one of which has already agreed to initiate explorations in the country. PART III - THE AGRICULTURAL SECTOR Characteristics 23. Agriculture accounts for about 36 percent of Liberia's GDP and over 70 percent of employment. Growth, which averaged 3.9 percent in 1974-79, fell in 1980/81 because of decreased world demand for forest products and natural rubber. With an average of 15 persons per square kilometer, land is not a constraint to agricultural development. Rice is the main staple, largely grown in the upland areas using traditional shifting cultivation as this restores fertility to generally poor soils, iwhich are heavily leached and unsuitable for continuous cropping. They are, however, suited to tree crops such as rubber, coffee and, in the better areas, cocoa. 24. There are three different farming systems: (a) rubber concessions and foreign-managed oil palm plantations that have attained relatively high production efficiency, employ trained managerial and technical staff and use capital-intensive production methods; (b) Liberian-owned commercial farms, primarily producing rubber, which attain yields about half of those attained in the concessions; and (c) traditional farms with low productivity that produce predominantly for subsistence. About 90 percent of all households engaged in agriculture are in the last category. Most farmers in the tradi- tional sector are outside the monetized economy, have access to minimal infrastructure and cultivate less than 2 hectares of subsistence crops, mainly rice and cassava, with some cash crops such as coffee, cocoa and sugar cane. Over 90 percent of the rice is grown on uplands following slash-and-burn shifting cultivation; the rest is grown in swamps. Imports of rice, which increased from 50,000 mt yearly on average in the early 1970s to some 90,000 mt in 1982, now account for about 40 percent of consumption. This increase was due to the rapid growth of urban population and subsidized consumer prices until September 1981. Because of the primitive technology used, yields in traditional farms for almost all crops are well below those obtained in research trials and by the more advanced farmers. There is thus a consider- able productivity reserve which is still untapped. Livestock production is of minor importance because of unsuitable climatic conditions, animal diseases (trypanosomiasis) and the absence of natural pastures and of a livestock tradition among the population. Government Objectives, Strategy and Constraints 25. The Government gives high priority to agricultural and rural develop- ment, seeking to: (a) expand participation of poor farming families in devel- opment; (b) increase farmer productivity and income and attain an equitable distribution of the benefits of economic growth; and (c) diversify and expand agriculture so that it becomes the principal base for self-sustaining develop- ment. Public sector allocations for agriculture (excluding forestry) increased from about 4 percent of the development budget in 1970 to about 30 percent in 1982/83, as projects in Lofa, Bong and Nimba Counties, and in rubber, oil palm, forestry, research and training were undertaken; parastatal enterprises to produce and process tree crops were also established. These increased allocations also reflect the Government's desire to diversify the economy away from overdependence on iron ore exports by promoting food and cash crops for export markets. 26. The Government's agricultural strategy consists of: (i) encouraging smallholder production of rubber, coffee, cocoa and oil palm to diversify production and increase exports; and (ii) projects to raise the income level and living conditions of traditional farmers and improve agricultural services to them. 27. Although these programs have begun to have some impact, serious constraints remain. These include inadequate feeder roads, transport, storage and marketing facilities. Input availability, particularly of improved upland rice seed, as well as agricultural support services, are also inadequate. There is a shortage of qualified and experienced agricultural officers and crop specialists and the extension staff that deals with farmers is inade- quately trained, ill-equipped, and poorly supervised. Farmers' organizations, particularly cooperatives, are still in the early stages of development and play a limited role in marketing, input supply and credit. Despite a reorganization, the Ministry of Agriculture cannot yet effectively perform its policy-making, sectoral planning, project preparation and implementation, and monitoring and evaluation functions, due to lack of adequately trained and qualified staff, budgetary constraints resulting in an almost complete absence of logistical support for its field staff, and a shortage of modern inputs to provide to farmers. The Agricultural and Cooperative Development Bank (ACDB), which was created in 1978 to provide short, medium and long term credit to farmers, farmer organizations and rural industries, and the Central Agricuil- tural Research Institute (CARI) have not yet been able to carry out their respective functions fully. The ACDB has been unable to provide credit to the traditional farmers to any significant extent because of a weak capital base, an inadequate branch network and inexperienced staff, while CARI has been limited by inadequate operating funds, lack of autonomy and management defi- ciencies. The Liberian Produce Marketing Cooperation (LPMC), which is the most important agricultural marketing institution in the country, has high operational and administrative costs and, moreover, its agents frequently pay prices to producers which are below official producer prices. The Government has agreed, however, to (a) carry out a program of cost reduction, review it annually with IDA and establish targets for reducing LPMC's costs in the following year; and (b) hold the first review and establish cost reduction targets for 1985 no later than September 30, 1984 (Section 4.11 of the draft Development Credit Agreement). - 10 - 28. A recent agricultural sector review carried out by the Bank iden- tifies possible sources of growth in the medium term--namely, upland rice, rubber and forestry products--and some crops with significant long-term potential, viz., swamp rice and possibly oil palm, cassava and coconut. A strategy of emphasizing these crops would satisfy equity objectives since upland rice, swamp rice and cassava are grown by low-income, traditional farmers and half of the rubber acreage belongs to smallholders. In addition, it is recommended that area specific development projects consider promoting other tree crops, including coffee, cocoa, citrus, as well as minor food crops. Bank Group Lending 29. Bank Group lending for agricultural development in Liberia totals US$60.7 million to date. It supports the Government's objective of increasing smallholder productivity and income through integrated development projects, i.e., the Lofa County Agricultural Development (Cr. 577-LBR and Cr. 1242-LBR) and Bong County Agricultural Development (Cr. 700-LBR); export promotion through the Rubber Development Project (Cr. 786-LBR/Ln. 1544-LBR), and tree crop components in ADPs; improved forestry management through the Forestry Development Project (Cr. 839-LBR); and diversification of the production base through Decoris Oil Palm Project (Ln. 1765-LBR). 30. The First Bong County Agricultural Development Project, which became effective in March 1978, was cofinanced by USAID, IDA and the Government of Liberia. The objective of the project was to increase and sustain small farmer incomes by providing farm inputs (improved planting material and fer- tilizer); strengthening farm support services (especially extension and train- ing), input supply, credit and marketing systems based on cooperatives; devel- oping infrastructure including feeder roads and wells; strengthening project management, monitoring and evaluation; and schistosomiasis surveillance. The project suffered initially from management problems; the project manager was changed frequently and there was quick turnover in senior positions. The situation improved when the fourth project manager, a Liberian, was named in late 1981; staff motivation has since improved considerably. Management problems contributed to a slow start but the pace of implementation subsequently increased with farmers responding well to the introduction of improved planting material. Upland rice, cocoa and coffee planting targets have now been achieved. Swamp rice cultivation has not been as readily taken up however and only 16 percent of the average forecast during appraisal has actually been developed. This has been largely because the technology of swamp cultivation is new and labor intensive and because in some cases areas were selected where population pressure in the surrounding upland was insufficient to encourage swamp rice development. however, since 1980/81 implementation has improved to about 100 ha per year and areas suitable for expansion have been identified. Although the objective of creating a viable cooperative system to take over full responsibility for input supply, credit and marketing operations by the end of the project was not attained, good progress has been made. About 230 Cooperative Service Units (CSU) based on traditional farmer communal labor groups (Kuu) have been established. Each CSU is affiliated to one of six District Cooperative Societies (DCS) and total membership is now about 7,500, or about one third of all farm families in the - 11 - county. Although DCSs are still weak because they have little capital and poor management, the cooperative movement has made a modest start in marketing. The seasonal credit program is also progressing well, with an overall recovery of about 90 percent in early 1983. As a result of delays in obtaining project benefits, the lower than anticipated swamp rice program and lower yields (tree crops and rice) and costs 5 percent higher than expected, the project's overall rate of return is now estimated at 6 percent as compared with 21 percent at appraisal. 31. While physical achievements under the project were mixed, valuable lessons were learned and the potential for improving small farmer incomes and for increasing food and tree crop production was demonstrated. The main lessons learned and applied in preparing the proposed project are: (a) more rigorous project area selection procedures are required, particularly for tree crop and swamp development; (b) fertilizer recommendations have been improved and linked with those recommended by the Central Agricultural Research Institute (CARI); (c) the cooperative system needs further strengthening and modification to provide effective farmer support in input supply, credit and marketing; and (d) infrastructure construction can be speeded up by encourag- ing the participation of beneficiaries in construction. The Project manage- ment has succeeded in correcting early mistakes, in developing a well motivated staff and in introducing new farming techniques. However, the development of viable input supply, credit and marketing services, and farmer acceptance of improved techniques require considerably more time than that provided for under the first project. The proposed second project would provide the necessary continuity and would start merging the project's staff into the Ministry of Agriculture's own field staff so that services could be provided on a permanent basis. This merging process would rationalize extension and related services and make them more cost effective. Overall, with the investment of the first project and availability of a trained and reasonably motivated staff and management, there is a good basis for the second project under which a more effective response can be expected. 32. In general, progress in carrying out other Bank Group supported projects in the agricultural sector has been satisfactory. Though the Govern- ment has been extremely short of resources for investment, it has provided sufficient counterpart funds for all Bank Group assisted projects in the sector, demonstrating the high priority given to agricultural development. PART IV - THE PROJECT 33. The proposed project would be the second phase of the Bong County Agricultural Development Project, the first phase of which was financed by IDA under Credit 700-LBR (see paras. 29 and 30). Since a good start has been made in developing smallholder farmer support services under the first project, the Government requested in late 1981 that IDA consider a follow-up project. The second phase was prepared by the Ministry of Agriculture with IDA assistance and a project report was issued in July 1982. IDA appraised the project in February-March 1983 and a Project Preparation Facility advance of US$643,000 was made in September 1983 to help finance land planning, nursery and plant - 12 - production activities between the first and second projects, start-up activities for the ACDB in Bong County, and technical assistance. The PPF would be reimbursed out of the proposed Credit. Negotiations were held in Washington in November 1983. The Liberian Delegation was headed by Mr. James Mehn, Deputy Minister of Agriculture, and included officials from the Ministries of Finance, Planning and Justice. The International Fund for Agricultural Development (IFAD) participated in the appraisal and was repre- sented at negotiations. The African Development Fund (ADF) confirmed its interest in cofinancing but did not participate in negotiations. Project Objectives 34. The proposed project would consolidate the experiences and achieve- ments of the First Bong County Agricultural Development Project and extend agricultural services to lower Bong County as well as to part of the adjacent Gibi Territory. Major project objectives would be to: (a) improve the incomes of about 7,500 farm families by increasing their production of food crops (upland and swamp rice, cassava and vegetables) and coffee; and (b) strengthen existing, nationwide credit and agricultural cooperative institutions in order that they may provide inputs to farmers on a sustained basis. The total number of farm families benefitted by both projects would be about 15,000 by the conclusion of this second project. The project would start to prepare the Ministry of Agriculture so that it could eventually absorb the staff of the project unit; it would also seek to strengthen the Ministry of Agriculture's development planning services. These objectives are consistent with the Government's strategy for the sector as well as with the conclusions of a recent Agricultural Sector Review (paras. 25 to 28). Project Description 35. The project would include the following components: (i) the supply (on credit or for cash) of agricultural inputs, including improved planting material and fertilizers to improve production of upland and swamp rice, cassava, other food crops and coffee; (ii) expansion and improvement of extension services using the Training and Visit (T & V) system, with female extension workers to reach women farmers; (iii) staff training to improve agricultural extension and the cooperatives and to develop managerial capabilities; (iv) production of improved coffee seedlings, cassava setts and foodcrop interplants for coffee, adaptive research into rice agronomy and support of a cassava pest control project; (v) strengthening of cooperatives in order that they may provide input supply and marketing services and of the ACDB to handle agricultural credit operations; - 13 - (vi) maintenance of the secondary road network and construction, upgrading and maintenance of the feeder road network; (vii) schistosomiasis monitoring and control in swamp areas, construction of wells and latrines; (viii) support to the central Ministry of Agriculture development planning services. 36. Agricultural Development. The project would strengthen the land planning, agricultural extension/training, research and plant production services of the existing project unit and would promote a crop development program, including: improved seed for 5,500 ha of upland rice; development of 350 ha of swamplands for rice and vegetable cultivation; 4,000 ha of new coffee (of which 550 ha would be intercropped with foodcrops during the establishment period); and 330 ha of improved cassava. Inputs would also be provided for bringing Phase I plantings to maturity. Consistent with experience gained under the first project, the swamp rice program would be limited to no more than 100 ha per year and alternative development methods would be tested. The success of the project in raising production would depend on selecting swamp and tree crop areas of good potential and where farmer interest could be maintained after the initial investment period. Procedures for selecting swamp and tree crop areas for development would be improved and greater emphasis would be given to social factors. Forecast producer prices are expected to provide an adequate incentive for farmers in the project area. A modified form of the T & V extension system would be introduced linking it to Cooperative Service Units (CSU) which are based on traditional farmer groups (Kuu). Female home extension workers would be employed to help farmers' wives and female farmers. Through the CSUs, the project would promote a higher participation of farmers in development activities and would seek to make them responsible for managing their development affairs. The project would develop closer links with the IFAD- supported Smallholder Rice Seed Project, which would supply improved rice seed requirements and contribute to staff and farmer training. Improved coffee and cassava planting material would be promoted and by project completion farmers should produce 75 percent of their own coffee seedling requirements at collective CSU nurseries. The project would support adaptive research work on swamp rice agronomy at Central Agricultural Research Institute (CARI) as well as on cassava pests as part of a regional project being implemented by the International Institute for Tropical Agriculture in Nigeria and supported by IFAD. The Government has agreed to submit to IDA and IFAD by December 31, 1984, for review and comment, detailed proposals for carrying out an agri- cultural research program, and to consult with the above agencies regarding any reorganization of CARI (Section 4.07 of the draft Development Credit Agreement). 37. Input Supply, Credit and Marketing Services. The project would strengthen the existing cooperative structure with the objective of handing over responsibility for input supply and marketing services by the end of the project period. During the transition period, the project unit's Commercial Services Division would gradually hand over responsibility for procurement, transport, storage and input distribution to the cooperatives. The cooperatives - 14 - would also handle crop marketing. The Cooperative Development Agency (CDA) would provide training and would ensure that the Cooperative Societies Act's requirements with regard to accounting, auditing and election of office bearers are followed. The project would assist CDA, which has a small and competent staff, to extend its activities to Bong County. While input supply and marketing activities would be handled by the cooperatives with the assis- tance of the project unit's Commercial Services Division, agricultural credit operations would be handed over to the Agricultural and Cooperative Develop- ment Bank (ACDB) which has a mandate, as yet unfulfilled, to provide credit to small farmers. Its participation in this project would provide an excellent opportunity to start carrying out its mandate. ACDB would, with the assis- tance of the project unit's Commercial Services Division and the cooperative societies, assume responsibility for agricultural credit throughout Bong County. To support ACDB, the project would provide funds for a credit adviser for a further three years and, as little cash income would be generated during the project period because of the long grace periods of repayment of principal on coffee loans, the project would fund ACDB's investment and operating costs in Bong County as a grant. The Government has agreed to carry out a study of ACDB's organization, management and operations by December 31, 1984, review the conclusions with IDA and IFAD, and carry out the recommendations according to an agreed schedule to be prepared by March 31, 1985 (Section 4.08 of the draft Development Credit Agreement). The Government also intends to reach a formal agreement with ACDB for the transfer to ACDB, in the form of Government equity, of all funds for loans granted under the first project and this project (Section 4.13 of the draft Development Credit Agreement). Signing of the agreement would be a condition of effectiveness of the credit (Section 7.01(d) of the draft Development Credit Agreement). 38. Development and seasonal credit would be granted for coffee, plantain/cocoyam, intercropped coffee, and swamp rice. Seasonal credit for upland rice would be discontinued and replaced by direct seed exchange. Credit would not be available for vegetable or cassava development. Hired labor for land clearing and crop establishment would be paid in cash; all other credit such as for tools, equipment, fertilizers, pesticides, herbi- cides, etc., would be in kind. Credit would be available to all categories of farmers, the main criteria being creditworthiness and repayment capacity based on incremental income from the investment. Farmers with holdings of up to 4 ha would obtain credit from the Project; farmers with larger units could apply directly to ACDB. Extension officers and project commercial aides would be actively involved in credit allocation. They would contact farmers and initiate loan applications to ACDB who would approve them on the recom- mendation of CSU and District Cooperative Societies. Interest charges to farmers would be 15 percent per annum on seasonal loans and 12 percent on medium/long term loans 1/. The Government has agreed to review annually with IDA and IFAD ACDB interest rates and lending terms and conditions and adjust them if necessary (Section 4.10(b) of the draft Development Credit Agreement). 1/ The domestic inflation rate climbed from about 6 percent in 1976-77, to reach 13.7 percent in 1980. More recently, the inflation rate has declined and was estimated at about 9 percent per annum in 1981 and 1982. - 15 - 39. It is not expected that Liberia would face any problem in marketing the additional output of 1,700-1,800 tons of coffee per year since this would be a small proportion of world supply. Liberia is a member of the Inter- national Coffee Organization (ICO) and its current export quota is 8,700 mt. An undetermined part of Liberia's total coffee exports ranging from 8,000 to 10,000 mt during the past few years, is accounted for by unofficial inflows from neighboring countries due to price differentials and the use of the dollar in Liberia. These unofficial inflows are expected to decline given (a) the current levels of producer prices paid by LPMC (which are now in line with world prices and those of the neighboring countries) and (b) the removal of consumer subsidy on rice which was being bartered for coffee and cocoa at the borders. Taking into account the likely growth in Liberia's export quota to ICO countries (forecast to be 1 to 1.6 percent per annum, resulting in a quota of 10,000-11,000 mt by 1995) and exports to non-ICO countries of about 2,000 mt, a production level of about 13,000-14,000 mt (including possible unofficial inflows from neighboring countries) could be aimed at by 1995. Production from existing and additional coffee plantings from the proposed as well as other projects, would be within the expected growth in exports and domestic consumption. Coffee or cocoa are the only source of cash for many farmers in the area so the inclusion of coffee in the project will make an important contribution to raising smallholders' income. Moreover, expansion of the area under coffee would reduce the deleterious effects of slash and burn cultivation in the uplands. 40. Infrastructure. The project would provide for maintenance of the secondary (260 km) and feeder (440 km) road network until the Ministry of Public Works' (MPW) capacity for road maintenance has been improved. Con- struction or rehabilitation of 110 km of feeder roads and construction of 50 km of tree crop tracks to group farm sites would also be carried out by the project unit. Design standards and criteria for the selection of roads to be constructed or rehabilitated have been agreed with IDA (see Schedule 5 to the draft Development Credit Agreement). A preliminary screening has been completed and 187 km of potentially viable roads from which to select the 110 km identified. Options for the 27 km to be constructed in the first year of the project have been listed, and evaluation and selection will be finalized prior to startup of the proposed project. Construction costs have been established following experience under Phase I. The Government has also agreed that the annual road construction and maintenance program would be submitted to IDA for approval and that IDA's approval would be sought before transferring any equipment from the project (Section 4.12 of the draft Development Credit Agreement). A Highway Maintenance Project which will be submitted to the Executive Directors shortly would develop MPW's capacity to maintain secondary roads in Bong County by 1987 and feeder roads by the end of this project. The project now being proposed would fund operating costs and construction materials for one construction and two maintenance brigades. These would use equipment acquired under the first project and some supplementary items to be acquired under this one. To support the increased activity of the roads unit, the project would strengthen workshop organization. 41. Health. A unit for surveillance and treatment of schistosomiasis, both in swamps developed for rice production and at communal water points, - 16 - would be maintained. A program of well (120) and latrine (40) construction would be carried out in villages participating in the crop development pro- gram. Villagers would be encouraged to participate in selecting well points and in the operation and maintenance of wells. 42. Monitoring and Evaluation. More effective use would be made of the Monitoring and Evaluation Unit to provide a timely flow of information to project management. Emphasis would be put on limited, well defined surveys to assess the extent to which qualitative and quantitative objectives were being met so that managers could modify the project as necessary. Monitoring and evaluation studies would be presented regularly to senior managers and, at least quarterly, open seminars would be held to review key topics selected by the project manager. The Monitoring and Evaluation Unit would also parti- cipate in pilot work on swamp development and obtain population data to help select areas for development. Project Implementation 43. The Ministry of Agriculture (MOA) would continue to have overall responsibility for the project, with implementation delegated to a project manager who would be supported by technical and administrative units. Under the proposed project all existing and, at present, parallel services provided by the MOA in the county would be merged with the project into a single structure. The project manager, who would be designated the Chief Agricul- tural Officer for Bong County, would be responsible for all project-related staff as well as for MOA's staff handling non-project activities such as fisheries and livestock. The schistosomiasis surveillance unit would, in addition, continue to be supported technically by the Ministry of Health and the Liberian Institute for Biomedical Research. The Government has agreed that the revised MOA organization would be put into effect by December 31, 1984 and that any further organizational changes in MOA's services in Bong County would be subject to IDA agreement (Section 4.09 the draft Development Credit Agreement). The Government also intends to reduce extension and other staff in the project area according to an agreed schedule. The Government has also agreed that the appointment of senior managers in the project area would be acceptable to IDA and IFAD (Section 4.01(b) of the draft Development Credit Agreement). A Project Steering Committee under the chairmanship of the Minister of Agriculture would continue to provide policy guidance. At the county level, a Project Consultative Committee (PCC), chaired by the Assistant County Superintendent for Development and consisting of local officials and chiefs, would be extended to include representatives of all Ministries and Government agencies that are active in the county. Farmers' views on project development issues would be expressed through paramount chiefs representing them on the PCC and through the cooperative movement. The MOA's home economics unit, which would be absorbed by the project unit, would encourage the active participation of women and guide them in tackling problems of public hygiene, nutrition etc., linking with the well and latrine construction and schistosomiasis programs. - 17 - Project Cost and Financing 44. The project would cover a four-year period (1984-88) and total project costs are estimated at US$22.9 million comprising US$17.4 million for Phase II development costs and US$5.5 million for recurrent costs of Phase I, which would be funded by the Government. A summary breakdown of costs is shown in the Credit and Project Summary on page (ii). Physical contingencies have been applied at 10 percent for buildings and 5 percent for all other items excluding salaries, technical assistance and labor costs and amount to about 2 percent of base costs. Price contingencies amount to about 16 percent of base costs plus physical contingencies and (except for local salaries and emoluments) are based on annual local and foreign cost increases of 8 percent in 1983, 7.5 percent in 1984, 7 percent in 1985 and 6 percent in 1986-90; for local salaries and emoluments the following percentages have been applied - 0 percent for 1983 and 3 percent for 1984-87. The man-month cost (including fees, international travel and local subsistence) of internationally recruited consultants is estimated to be about US$12,000 which is in accord with the Region's experience. Local salaries and emoluments have been estimated on prevailing costs. 45. The total financing required to meet the development costs is esti- mated at US$17.4 million, of which US$9.1 million, or 52 percent, are foreign costs. The proposed IDA credit of US$6.7 million, an IFAD loan equivalent to US$5.8 million and an ADF loan of US$4.0 million, would cover 95 percent of total financial requirements or 100 percent of foreign costs and 89 percent of local costs. A condition of effectiveness of the IDA credit would be that all conditions of effectiveness of the IFAD and ADF loans had been fulfilled (Section 7.01 of the draft Development Credit Agreement). The IDA credit would finance the equivalent of US$3.4 million of local costs. Local cost financing is recommended because the Government is facing severe budgetary constraints and is short of resources for investment. The Government's contribution of US$0.9 million would cover local personnel and operating costs; the Government would in addition provide $5.5 million during the project period to cover the recurrent costs of the first phase project. 46. As discussed in Part I of this report, the Government faces severe financial constraints which would make it difficult for it to provide the working capital required for project execution. In view of this, it is recom- mended that SDR 270,000 (US$280,000) from the IDA credit be deposited on credit effectiveness in a special account which the Government would open at the National Bank of Liberia. Opening of the special account would be a condition of effectiveness of the credit (Section 7.01(c) of the draft Development Credit Agreement). Following effectiveness of its loan, IFAD would deposit SDR 260,000 (US$270,000) in the same special account. The account would be replenished upon receipt of disbursement requests supported by appropriate documentation and subject to Government contributions being up- to-date. Procurement 47. Goods. Vehicles (US$1.5 million) and fertilizer (US$0.2 million) would be grouped in packages of over US$50,000 and would be procured through international competitive bidding in accordance with IDA procurement - 18 - guidelines. In bid comparison, domestic manufacturers would be allowed a margin of preference equal to 15 percent of the c.i.f. bid price of imported goods or the level of import duties and taxes, whichever is less. Contracts in packages of US$10,000-50,000 totalling US$0.4 million for farm chemicals, tools, and furniture would be awarded on the basis of local competitive bidding (LCB) procedures in which foreign suppliers are eligible to participate, while contracts below US$10,000 for the same items totalling US$0.2 million would be procured through shopping with at least three price quotations. Seeds (US$0.2 million) would be procured through the Smallholder Rice Seed Project. Technical assistance and consultancy services (US$1.0 million) would be procured in accordance with the principles and procedures described in the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency." Assistance to MOA (US$0.4 million) would consist of technical assistance, studies, overseas training, vehicles and operating costs which would be procured according to procedures for the respective items discussed above. Vehicles, equipment and buildings (US$1.1 million) and operating expenses (US$2.9 million) for roads, workshops and health services are financed by ADF and would be procured in accordance with their regulations. The remaining US$13.9 million include salaries, vehicle operating and general administrative costs, and hired labor which are unsuitable for competitive bidding. 48. Works. Contracts for civil works/buildings totalling US$0.5 million consist of improvement to traditional markets, village stores and buildings that are scattered around the country and would be awarded on the basis of LCB procedures since local capability exists to execute such small civil works. Disbursements 49. Disbursement of the IDA credit would be on the following basis: for agricultural inputs, 100 percent of foreign expenditures or 90 percent of local expenditures; for buildings, 85 percent of local expenditures; for vehicles, furniture and equipment, 100 percent of foreign expenditures or 90 percent of local expenditures; for technical assistance, consultant services and overseas training, 100 percent of foreign expenditures or 90 percent of Local expenditures; for local staff costs, 90 percent of local salaries (for plant production, research, land planning, training, CDA, ACDB and monitoring and evaluation); and for vehicle operating, general administrative and other operating costs, 80 percent of expenditures. The proceeds of the IDA credit and the IFAD loan would be disbursed pari passu on a 51:49 basis. 50. Disbursements for vehicles and equipment, buildings, salaries and allowances of internationally recruited consultants and farm inputs would be made against full documentation submitted to IDA. In the case of local costs of operating expenditures, disbursements would be made against statements of expenditure which would be reviewed in the course of project supervision. Auditing 51. The Government would have the accounts for the project audited yearly by independent auditors acceptable to IDA. The audit reports would be in a form acceptable to IDA and would include a separate opinion on the Special Account and on the records in support of statements of expenditure. - 19 - Project Benefits and Risks 52. About 7,500 farm families would benefit from the crop improvement and credit programs under the project. At full development of their respective crops, and after repaying all development loans, about 85 percent of the participating farm families would earn incomes about twice as large as the present average of about US$600 per annum, while about 15 percent would in- crease their incomes by about 50-75 percent. Differences in incremental incomes would result from the choice of different crop combinations. 53. Improvements in the road network and construction of village wells and latrines would benefit a larger proportion of the rural population than that affected by the crop improvement and credit programs. In addition, employment would be created by the increased business activity induced by the project in other sectors, such as trading, processing, construction, and transportation. About half the rural families in the county could benefit in some way from the project. The training programs and institutional improve- ments to be introduced would facilitate planning and implementation of future agricultural development progams. 54. While incremental revenues to the Government from indirect taxes on increased production and business activity in Bong County resulting from the project would not fully cover project costs, they would be sufficient to cover the recurrent costs of agricultural development in the county once the project is completed. Incomplete cost recovery is justified because of the low level of family incomes in the project area. 55. As Liberia is a net importer of food, incremental food production could be absorbed by the local market and would represent a foreign exchange saving. By 1990, the incremental annual output of rice would be worth, at border prices, about US$1.0 million (at 1990 prices in constant 1982 terms), net of the foreign cost of farm inputs. In addition, the promotion of cassava could lay the foundation for an increase in local consumption and a surplus for processing. Coffee is mainly an export crop and incremental production from the project would add to foreign earnings. Incremental net annual foreign earnings from coffee could reach US$5.1 million by 1995. 56. The project's economic rate of return is estimated at 22 percent taking into account project development costs and recurrent costs to be in- curred by the Government after the project is completed as well as incremental production costs incurred by farmers. Benefits are based on the expected incremental value of crops. Sensitivity analyses indicate that the project is fairly resilient and would remain viable unless benefits should fall by more than 39 percent or costs increase by more than 65 percent. 57. Since the project would be the second phase of an integrated agricul- tural development program in Bong County and would build on the institutions and experience of the first project, many of the risks normally associated with projects of this nature would be minimized. The main risk would be that the institutional developments for input supply to farmers, in marketing and for credit allocation to small farmers visualized under the project may take - 20 - longer than anticipated. However, this risk has been reduced to acceptable levels by the technical assistance and training components included in the project. PART V - LEGAL INSTRUMENTS AND AUTHORITY 58. The draft Development Credit Agreement between the Republic of Liberia and IDA as well as the Recommendation of the Committee provided for in Article V, Section 1(d) of the Articles of Agreement are being distributed to the Executive Directors separately. 59. In addition to the features of the Development Credit Agreement which are referred to in the text and listed in Section III of Annex III, special conditions of Credit effectiveness would be: (a) that the conditions of effectiveness of the IFAD and ADF loans have been met (para. 45); (b) that the special account referred to in para. 46 has been opened in a form satisfactory to IDA; and (c) that the agreement between the Government and ACDB referred to in para. 37 has been signed (Section 7.01 of the draft Development Credit Agreement). 60. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 61. I recommend that the Executive Directors of the Association approve the proposed Credit. A. W. Clausen President by Moeen A. Qureshi Attachments Washington, D.C. February 21, 1984 - 21 - ANNEX I T A B L E 3A Page 1 LIBERIA - SOCIAL INDICATORS DATA SHEET LIBERIA REFERENCE GROUPS (WEIGHTED AVERAGES) /a MOST (MOST RECENT ESTIMATE) /b RECENT MIDDLE INCOME MIDDLE INCCME 1960- 1970- ESTIMATE- AFRICA S. OF SAHARA N. AFRICA & MID EAST AREA (THOUSAND SQ. EM) TOTAL 111.4 111.4 111.4 AGRICULTURAL 6.1 6.1 6.1 GNP PER CAPITA (US$) 170.0 270.0 520.0 1147.9 1340.0 ENERGY CONSUMPTION PER CAPITA (KILOGRAMS OF COAL EQUIVALENT) 96.0 600.0 502.0 724.2 810.4 POPULATION AND VITAL STATISTICS POPULATION,MID-YEAR (THOUSANDS) 978.0 1335.0 1941.0 URBAN POPULATION (% OF TOTAL) 20.5 26.2 33.7 28.5 47.4 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILL) 3.7 STATIONARY POPULATION (MILL) 12.6 YEAR STATIONARY POP. REACHED 2130 POPULATION DENSITY PER SQ. EM. 8.8 12.0 16.8 56.5 36.0 PER SQ. KM. AGRI. LAND 160.3 220.3 306.5 131.8 449.0 POPULATION AGE STRUCTURE (%) 0-14 YRS 45.4 46.8 46.3 45.9 43.9 15-64 YRS 52.0 50.8 51.1 51.2 52.8 65 AND ABOVE 2.6 2.5 2.5 2.8 3.3 POPULATION GROWTH RATE (%) TOTAL 2.8 3.1 3.4 2.8 2.9 URBAN 5.4 5.6 5.7 5.3 4.6 CRUDE BIRTH RATE (PER THOUS) 50.1 48.8 49.7 47.6 42.5 CRUDE DEATH RATE (PER THOUS) 20.6 16.5 14.2 15.2 12.0 GROSS REPRODUCTION RATE 3.4 3.4 3.4 3.2 3.0 FAMILY PLANNING ACCEPTORS, ANNUAL (THOUS) USERS (% OF HARRIED WOMEN) .. .. FOOD AND NUTRITION INDEX OF FOOD PROD. PER CAPITA (1969-71=100) 96.0 101.0 91.0 95.7 97.5 PER CAPITA SUPPLY OF CALORIES (% OF REQUIREMENTS) 114.0 100.0 114.0 97.1 102.3 PROTEINS (GRAMS PER DAY) 46.0 43.0 51.0 56.0 72.0 OF WHICH ANIMAL AND PULSE 11.0 12.0 13.0/c 17.2 17.8 CHILD (AGES 1-4) DEATH RATE 45.5 39.6 33.1 23.6 15.2 HEAL TH LIFE EXPECT. AT BIRTH (YEARS) 44.1 49.1 53.5 51.9 57.2 INFANT MORT. RATE (PER THOUS) 194.0 173.8 151.5 117.6 104.2 ACCESS TO SAFE WATER (%FOP) TOTAL .. .. 20.0/d 25.4 59.3 URBAN .. .. 64.0/d 70.5 84.9 RURAL .. .. 6.o7d 12.3 37.5 ACCESS TO EXCRETA DISPOSAL (% OF POPULATION) TOTAL .. .. 11.O/d. URBAN .. .. 35.Ol/d RURAL .. .. 6. /ld POPULATION PER PHYSICIAN 12600.0 11750.0 9610.0/e 12181.6 3536.0 POP. PER NURSING PERSON 1410.O/f 2670.0 1420.OTh 2292.0 1820.7 POP. PER HOSPITAL BED TOTAL 710.0 590.0 700.O/e 1075.4 643.3 URBAN 180.0 190.0 .. 402.3 545.0 RURAL .. .. .. 3926.7 2 462. 0 ADMISSIONS PER HOSPITAL BED .. 27.7 .. .. 26.4 HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. .. URBAN 3.9/g .. RURAL .. .. AVERAGE NO. OF PERSONS/ROOM TOTAL .. .. .. URBAN 1.7/g .. .. RURAL .. .. .. ACCESS TO ELECT. (% OF DWELLINGS) TOTAL .. .. .. .. 46.2 URBAN .. .. .. .. 77.6 RURAL .. .. .. .. 16.1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _- _ _- _ _- _ _ _ - -_ - -_ - -_ - -_ - -_ - -_ _ _- _ _- _ _- _ - -_ - -_ - -_ - -_ - -_ - -_ - -_ - -_ - -_ - -22- ANNEX I T A 8 L E 3A Page 2 LIBERIA - SOCIAL INDICATORS DATA SHEET LIBERIA REFERENCE GROUPS (WEIGHTED AVERAGES) /a MOST (MOST RECENT ESTDIATE) /b 1960/b 197/b RECENT /b MIDDLE INCOME MIDDLE INCOME 1960/b 1970/- ESTIMATE- AFRICA S. OF SAHARA N. AFRICA & MID EAST EDUCATION ADJUSTED ENROLLMENT RATIOS PRIMARY: TOTAL 31.0 50.0 66.0 97.2 89.6 MALE 45.0 67.0 82.0 103.1 104.8 FEMALE 18.0 33.0 50.0 88.5 72.4 SECONDARY: TOTAL 2.0 9.0 20.0 17.2 41.7 MALE 3.0 13.0 29.0 23.5 52.8 FEMALE 1.0 4.0 11.0 14.2 31.2 VOCATIONAL (X OF SECONDARY) 11.7 5.3 4.3 5.2 10.3 PUPIL-TEACHER RATIO PRIMARY 32.0 36.0 25.0 42.9 31.9 SECONDARY 14.0 17.0 17.0 23.7 23.3 ADULT LITERACY RATE (Z) 8.9/h 15.0/i 25.4 37.1 43.3 cOESImfrIOE PASSENGER CARS/THOUSAND POP 1.0 11.1 5.5/e 18.8 18.0 RADIO RECEIVERS/THOUSAND POP 102.2 116.1 170.8 97.8 138.1 TV RECEIVERS/THOUSAND POP 1.5 5.2 11.2 18.6 45.6 NEWSPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 0.8 5.2 6.1 18.2 31.0 CINEMA ANNUAL ATTENDANCE/CAPITA 0.8 0.7 0.8 0.6 1.7 LABOR FORCE TOTAL LABOR FORCE (THOUS) 380.0 482.0 665.0 FEHALE (PERCENT) 33.9 32.5 31.4 36.1 10.7 AGRICULTURE (PERCENT) 80.0 75.0 70.0 56.8 42.5 INDUSTRY (PERCENT) 10.0 12.0 14.0 17.5 27.8 PARTICIPATION RATE (PERCENT) TOTAL 38.9 36.1 34.3 37.0 25.6 MALE 51.9 49.0 47.0 47.1 45.4 FEMALE 26.1 23.3 21.5 27.0 5.6 ECONOMIC DEPENDENCY RATIO 1.2 1.4 1.4 1.3 1.8 INCCME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5% OF HOUSEHOLDS .. 61.7/ .. HIGHEST 20% OF HOUSEHOLDS .. 72.6** LOWEST 20% OF HOUSEHOLDS .. 5.3T LOWEST 40% OF HOUSEHOLDS .. 10.9 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. .. 534.2 276.1 RURAL .. .. 75.0/c 255.9 177.1 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 137.0/k 491.5 400.0 RURAL .. .. 125.0o7 188.1 283.3 ESTIMATED POP. BELOW ABSOLUTE POVERTY INCOME LEVEL (%) URBAN. , . 23.0/c .. 22.0 RURAL .. .. .. 30.8 NOT AVAILABLE NOT APPLICABLE N O T E S /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; "Data for 1970" between 1969 and 1971; and data for "Most Recent Estimate" between 1979 and 1981. /c 1977; /d 1974; /e 1978; /f 1964; /g 1956, city of Monravia only; /h 1962; /i 1973; /j Population, higher income calculated as residual; includes expatriates; /k 1975. May 1983 _ 23 _ ANTNEX I Page 3 DEFINITIONS OF SOCIAL INDICATORS Notee:A lthoogh tlbe data re drac frPm sources generaF1y Judged the most .o.horitat.ie sod reliable, It should also be noted thba shop sap sno bh internatioooloy comparable becaose of the luck of noaos -rdioed defionit-oncood concepts -sed by dOfferent countriem in coOlecoing the dai. Thb daha are, nonetheless, useful no descrlobe s of magntude, Iodicate trends, and charscterizo certa sujor diffsrence: berorru coottro The refrrenre groups are (I) the same country group of the s-bject country and (2) a country groop cilh s-hebus higher o-ge Ioeome thu tnoe .o.ntry group of the aubjacocou=try (esceps for "high Incose' Oil ixpo rters' group vhere "Hlddle Ino-oe orth Aft Ia ond Moddle hvst" Is chosen hocause nf atrongee soclo-rultotat affioinies) I. tho reference group da-a the --eeages are yopuiatio veoighted aritfoetec meaos for tarh indlcator sod shown copl ohm eajurity of the countries so group hoc doss for thst Indicucor Sloor the h ooerage of countries ano the indicators depends on the availability of data and insnot ,iform, cautIon isot he eseroised in relating sver.ges of or indictor to aother. These avurages ore ooly useful io comparing ths value of one indicetor cc a time - oh country ond referesro stoops. ARoA (ihousand sq ho.) Popularlot Par Phvvlicln - Popciation divided bp ousher of practicing Tond - Total surfloe creA c-eprising lund areA and il-od echers; 1960 phycluo..s quallfild fros a medlial sohooi at unluersity lenvie 1970 asd 09ffdata Pouaiepr osnreso-PyitItdnddb nm er fpunn Agri-ultraL - Etmt,i_e of agricultural cree uyed teaporarily or peryan_otly soelocud fea grYdRatson p I dtiant nurmec, practicai nurses and for rrops, pemtures, marker sod kischen g-rdens or to .Ie falov; 1960, oursing suoli tories. 1971 cod fi8l data PopulAtion pes Oocpital fed - tol, urban, sod rural - Population (utoal, urban, and rurol) dinided by their respecoive numbet of buspital brds let PEt CAPITA (fSp) - lONP yes capiet sun -lee ot current caroke prices, sosOlabir so public sod prunate general and speclallsed hompital and caloulated by came toso-rsiot ecohod as World tack Aslac (0979-il baief1 dehPbiliutlton contort. ospitals are edtailieboents pehmoneotly ctaffll 0960, 1970, end f981 dt9. by at lst ute physiclen E tahiluheents providilg printipatlt crusodla cuss ore nor Includad. Rurol hospitals, hoaeoer, Include health end ENiRCY CONSUMPTION pER CAPITA - aeouai apparent ooopthon or comnericot nedlcul centers not pormnodnhOp staffed by a physician Oboe by a medical peimary esergy (coal and lignite, peteolewp, natural gas oed hydro-, nocleAr assistant, nurse, midoife, ntc,) wbict offer In-patienetossodatcon and cod geothormal eleroicity) Is kiligrace of coo) eqol -cient per rsp_ts; proide A hoOted ronge of nodical facilities For clariotoha purpusem 1960, 1970, cud l9f0 dots urban hospit,it ounlude WPOyh prictyal/generat hospitals, cud rural tospiala , urlor rural bum tritl and n-disl and n-orityc renr POPUIOTION MD VITAh STATISTICS Spteoivized hoepitAI are includd Odly uner tuna).n TPunc ppulation, hid-Ye-r (thouoa) - As of July 1; 1960, 1970, and 1981 Adnitahuot coo Roupihel ted - Total oubhor of admissions no or fluoherges dote true hospitals disided by the -uaber of eds. rban Populationt (percent of total) - Rblin of urbon en total p-ioulatno doffesteno definitioi c of urban areas sy vffet compara-biliy of data OUSING omong tountriesl; 1910, 1970, a-d 1911 daot. -es 20 h of oosehofd Ipersos per hoo;ehoid) - total, urban, And roral pouainProeciss-A hocodcostsfagrou ofldoias Ih hP 00f ,(air Population in coat 2000 - Curree population projections are hosed on fill ond their aln meals 0 hoarder or lodger oay or may not be incloded in toita populanioi by age cud sew sod their -ortality aod fertlitIy the ho uehold for sOutintirel porposen rao.P-ojs-s-nprs..etera foenor,eaillyra_e_c_Prissofsheee --ergun...her of reur.o.a Peersroo-noa, renadruroi anaragesuer lheeis a*Rteing Olilfe esportsuy so birth iY reu comg atis cotryse of pec...a per rou Or all urban, ad rro ,p ou d rural c eiiar cepitu Inrose leove, and se'ale life expectancy atabiliztng at 77.5 doellings, respectively. iOhilon s excude non-pecuanenn sneutturns and years The par.e.ters for fertility rate siso tans three ievels unoccupled parts acasutg denline o fert01ilisy occrdiog 0o incous leoel and p-so foully Acceasto Electricityprcent of doe'llings) - noto, urhen, ond er,il - plumling performance, tth cuounry Is that assigoed nor of threste ni Conventlonah durelings aith electricity in lvtng quarters as percentage co-bisetiont of torceliny sod fertility trends for projectlon purpoes. of Cotal, urban, and rpraI dvellingn e-p-ctinrly. Stalto_arly cupoln_o - I sct olonary population there Is no gro_th stnce the birth rate Is equal to tie death rate, and also the cgo EDUCATION astructure cescn constanto This Is achioevd only after lestiliIy rotes A unted htmll(ann Rariot declinootho =repIec-eett leeloif -otterrrep-od-uitto -rats Ittprocucoi-ua.nlodfasale -Arna1 totoi,maieudfE:7lei deachi getPr n ofe comeEt cepiaCos oselt s oa-tlY. The atatlnary eonroomt of ohiages at the pis-e V onl as percoocage ofen pet populationsizewaaes estuted on the bosis of the proJected choracter- prcmary schooi-age popoitlouc ; Doumaly inscludes cbhidran uged i-il itt ice of the popolition in noe year 2000, ood the rate of de,ione of years bht udju-ced fon differeth lengths of prioary educarion; fu fortillty tao to replacrent -oel. coun. ries. oth universal education enruiiment mop exceed 10 percent Year rhanios..y cocuistion ic reacerd - The year oh- souriouary sInce some puplso ore belov or ahove the officoil school age popuiltion uier vill be reoached. condary school-2tot2 l suit and feale- Compoted as above; corndafry Population D-ity1 adlucation requires a0 leasf four years of approovd prilary Ostructios; Per sq kh. - hid-year populatlon per square kltone-rr (100 hectarso) of provid"s general, vouc decial, or teocher craloing inseructions for tonal urea; 1960, 1970, and 19hO data. pupls unoally of 12 to 17 ysars of oae; corr-spondence courses ae Per q. km. ugric- ruia land - Conputed as above fto agriccltural isod generaliy exciuded noly; 1910, 0970 sod 1980 data, Vo acionoi enrolment (portenitIof s edry iro .rals tuc ucuti-nd 64 years). and retir;d(65 years undopver)as prercencages of mid-year eoolpror SderurcnentoufcyecoduOf iPustrutuotso Popoiasios Grovth tate (peeceset) - total - Aonual grost h rates of total sod- prisury and asecotndory leoels dioided by nuehers of teachers to the nor- year pop1l9o0n for 0950-hI, 196i-70, and 1970-il responding levels PopulationS ro.th Ate(prcent)-urban-.n ....rowthrrtes of urban duit llteracyrotl (percenc)-Literate adults(ble oreadandc rite)as populatsonm for 1950-hO, 1960-70, and 1970-91. a percencuge of tocua0 adulc popclcrian Aged 15 years and pvera Crufe tOrch tans (per chousuod) - Osoual hone booths yet thousnod of old- CrodisuMat Ode leper tomu d - DWai deunths per rhocmaod of mod-year P grs Car Ipso thoua ihPo9pu - Panenk ars conprise notor PopohaOiOO; 1960,lD ,ul - 09d1E doc.I ousnsigls hneIh eaol cuo onbu_lun- -c- , hers1es- cod Gross Rpepoductton Ootr- Average number of daughtersuasvonan sill bear in military veticles fertilty ratvs,ucueally tine-yeAr anara ien.. y pon en digin 0 17 pen broadiaoss to gendrc public-l P irhiosd o Iupultsion reci o 19810 Iicensedrecicers icscouries1andio years whenregitration of radio PAmily Phanoing -Acceptors,gAnoinuabtousaonds)-Annualtnumbeoruofcceptors setsoods ineffsct; dataforrrcent years maynnot becomparable since coot of bct-th-contrl denticet under auspices no nohonol faelly piconnog countries ubolisbed (scooting. prograp . TV Rceinvrolers rchousandpopulation) -f TVreceivers fpr broadcast to ami Planning -tUsers (percsnt of marriedonsoe - Percentage ofmaroried generai public per housandfp_uicn;secludes uni ensed TV reccivers vomen of child-besringAge (05-0 yearsJ who a tirth-concroldcviestou LD cuntries ondin yearsc tn restoratouofTVsetswaoIDeffct cal ourosed ounso e1 usPe age group. Newsp- pro Caluerotpro (per tihounud populoocoo - -OShoe othe Arage loden of Foo Produ6ction for . opoc1 fe9i9-7hl1ICh - ledrp of per tapuda put.lcobi-_ d ohted pceoro Iy ou rocordg croca definet so cons oder hnnuelprodctcnofmalfoodccoditcos Productlonexcludessedoad to be "dally" If ch appears at leat tfourc n I Osh wee fe rtand Ionted of... ayr) shYot are ody ir- sod contain cute 1entv (e.g tichoto soLd duecg thr poo Pr poodiog ad sono t rO-tdo P; .e a 9offe1 andta areoeciuded) Aggregate pcnductlon of accA country oS nobla un-ft. F layd on Pl tional -aerage p-oducer prics o --ights; 1961-6, 1970, sod 09ff Per capia sucply of calories (percent of reqimt - Coputd Iro TVtal labor Porno (thousands) - p onucely O T ctive persofns, Including arnd energy -qoinciso of set hood soppflec noiheble iDd coutry per cap-ta per forces and ososploy_d bho excluding housewtvrs, students, etc, coeerig day. Analblhe supplies I co_rise donestin yeducttuu, loports less pgptulti-o of l gos . h-fctons Inovrlous countries ore net exports end changes On stock. Net supplies exclude aniual teed, sends, cc poubie; 9190, 1970 d 119l date qusiUtiesnsod in fund procesming, end asses in ftstribatlo. Pemale (percent) - ..nuid iobor force as perceutage of sotal laeor feoce acinvot7 rAntd oseit ecoend by PAP hiosmedon Physiological needs for DPrmai 'Agnoctitore (percent) - Labor forceA in foto, foety ;960in so*99 dAt sodo- yandhelth consIdering ='~ onuosoPeeeatr , bd a,oP t, fsIg_s_rcue fccey oo force;g -t190..07 n 098 --dons, Age and sex dictrOibsoiou of popolatien, end alloving 00 percent for saute Induscry (peccent) - (ahor force ho diing, construcntion, esnotacetulng as bowmrhoid level; 1961-b5, 1971 end 910E datoa and electrticity, sorer und get as percentage of totol labor force; 1910, set sup NuPly Y orfond perday. iccapply 0t food is defuned Vs abone Part- ipatho` Oats IE rercen - total, oat, cod female - Partiecpation oe isqucreenpts for all coustrOos esrablished by iStA provide for cinhoon arnOolty rates are componco us tonal, oats, and femaIs labor toess alioova ies of 60 grame of total prPtein pr dAy and (0 grass of spimal and percentages of total, P ee nan femal; pepuiation of st else .. bpectioely; pulse preo-t-, of thioh It graam should he asb adl prot-io Thes e g 1-60,970, and 91 data. These are hated on IL-'s partiripati-n rates mtandarde are loner than hobes of 75 graA s of total protein sod 2T graus refiecti ego-ss scructure of che population, and mug tier trend. A oftacloel proteinoasaen aeragefornthevorld,prcoposed bybFAOinthes fsevnnlmasesoare fromsnationalisourcoes Third forld food iurney, 19h1-65, 1970 and l980 data. Economic hopendency btob - carlo of population coder I5 end i5 ond onernto yeroeCPita protein socoop true animal and polse- Proteln supply of food the tonul lshor force. deemed es_t soioais oAP puluss in gpams per day; 1961-65, loot ad 1977 couserloc data dortoed fros itfe ohIes ; 1910, 0970 and lOll dora. tos eholds 010(1 P0000 OVERhY TAR 0E CROUP Life topectoocuat tirmh (coors) - Average oster of yearn of lOts Pisuic-if The folloasng eonimaces are veryoppsuo.iets meusures of povsrty levels, and at birth; 1910, 0970 sod l98f datae should he Interprrind oo- conuiderable 1 autiton, year ofage R thoud P c hirth 10 1070 and i98 data, I_eFicol yoope p- incoe bo rflIs cho pemoons level bol uhich abunimtal Accesc of Safe Peter (percent of population) - total, urtan, ond rural - cuiritionoliy adequate d-0 plus euss-enil too-food rf qulryhentt in cot Number of peopie (total, urbay, and rurue) ohttreasonableaccess to sate ffordahle ocer su d p lteho .. icdraed st f acs.at ry or uttr d but RtiaLfd eLa.in Pop e ty ina o s l ei (il Ph capitA - orban arc cam 1 - asancurpowhies) as perentages of theIr respectirg pIpulotions. O an PIrd-nai coron of the cb-fry. Irban hevel is dsrioed from...sr.url urban ures' a public fo .n.ain or ttcdp.sr locaned not note thtn 200 mosets tenrI uled JdjSotmonH for higher coct of ilnivg tt orban arms, from a house nay ho consIderedas aCcbeing wOht rrosou h t rthoeo houvf cha intosated popuiation Orhfos oheoute Pnotch Yanc d us r (pewo ret 'a -orion lembere of the hof eebfld do not boor to spend u difpropertiaobte port opr _l the day in frcuhigR the fAsily' eIater nsedso Acsesstocoxcrsta Oisposal (percent of population) - tootl , noun,g atd rurai -e fmber ofp .plm(toti, urban,e nd rurDlA served bf ydcreta dimposal en perrenoAgac of thelr respective populafions. tocroor disposal say itnlude the celleccion and disofcal, ofth or vithout treatomnt, of Ecoppmic and Social hone itniu-dn bomanexcreteand sects-outer by saner-horse systems or the use of pit Pcnoehc Analysis and Pruoretlono horporooe,t prives and similar -nstalletioou fey 199) - 24 - ANNEX I Page 4 ECONOMIC INDICATORS - LIBERIA ANNUAL RATE OF GROWTH GROSS NATIONAL PRODUCT IN 1982 1/ (% 1971 CONSTANT PRICES) US$ Million % 1978-81 1982 GNP at Market Prices 930.7 100.0 -0.9 -4.3 Gross Domestic Investment 233.5 25.1 -6.6 12.9 Gross National Saving 93.5 10.0 18.4 -0.6 Current Account Balance -44.6 -4.8 - - Exports of Goods, NFS 487.4 52.4 -2.7 -9.9 Imports of Goods, NFS 513.5 55.2 -10.3 -7.9 OUTPUT, EMPLOYMENT AND PRODUCTIVITY IN 1982 Value Added Employment 2/ V. A. Per Worker US$ Mln. % 000 % US$ % Agriculture 345.0 36.3 515.0 79.3 669.9 45.8 Industry 197.8 20.8 40.0 6.2 4945.0 338.1 Services 407.1 42.9 94.5 14.5 4307.9 294.6 Total/Average 949.9 100.0 649.5 100.0 1462.5 100.0 GOVERNMENT FINANCE Central Government 1981/2 4/ 1982/83 4/ US$ Million % of GDP US$ Million % of GDP Current Receipts 237.9 21.2 223.3 19.6 Current Expenditure 289.0 25.8 252.6 22.2 Current Surplus -51.1 -4.6 -29.3 -2.6 Capital Expenditures 96.4 8.6 90.9 8.0 External Assistance (Net) 41.4 3.7 33.0 2.9 MONEY, CREDIT AND PRICES 1978 1979 1980 1981 1982 7W llions Liberian $ Outstanding, End of Period) Bank Credit to Public Sector 61.7 92.4 152.1 192.1 255.3 Bank Credit to Private Sector 143.8 184.6 132.9 130.9 123.7 (Annual Percentage Changes) Consumer Price Index 3/ 7.4 11.5 13.8 8.2 6.2 Bank Credit to Public Sector 315.8 49.1 64.6 26.3 32.9 Bank Credit to Private Sector 27.6 28.4 -28.0 -1.5 -5.5 NOTE: All conversions to dollars in this table are at the average exchange rate prevailing during the period covered. 1/ Preliminary estimates 2Tr Employment data subject to further verification 3/ September - November 1964 = 100 __ From data collected by IMF in August 1983 December 21, 1983 - 25 - ANNEX I. Page 5 TRADE PAYMENTS AND CAPITAL FLOWS BALANCE OF PAYMENTS MERCHANDISE EXPORTS (AVERAGE 1980-82) 1980 1981 1982 1/ (Millions US$) US$ Million % Exports of Goods, NFS 613.5 540.7 487.4 Iron Ore 315.6 58.9 Imports of Goods, NFS 614.1 560.9 513.5 Rubber 80.8 15.1 Resource Gap (deficit =-) -0.4 -20.2 -26.1 Diamonds 27.7 5.2 Logs or Lumber 47.3 8.8 Interest Payments (Net) -23.9 -20.2 -28.0 Coffee 25.1 4.7 Workers' Remittances -32.0 -33.0 -35.0 Palm Products 4.2 0.8 Other Factor Payments (Net) -83.7 -72.0 -64.0 Cocoa 11.0 2.1 Net Transfers 35.7 68.1 108.5 All other Comnodities 24.0 4.5 Balance on Current Account -104.5 -77.3 -44.6 Total 535.7 100.0 Direct Foreign Investment 2/ -10.7 -42.9 -45.0 Net MLT Borrowing 3/ 62.5 62.2 40.7 Disbursements 78.1 71.6 59.4 Amortization 15.6 9.4 18.7 EXTERNAL DEBT. DECEMBER 31, 1982 3/ Subtotal 51.8 19.3 -4.3 Public Debt, incl. guaranteed 641.2 Non-Guaranteed Private Debt Increase in Reserves (+) -61.8 -49.3 -57.5 Total Outstanding & Disbursed 641.2 Gross Reserves (end year) -101.2 -150.5 -208.0 DEBT SERVICE RATIO FOR 1982 4/ Net Reserves (end year) Public Debt, incl. guaranteed 33.2 Non-Guaranteed Private Debt Total Outstanding & Disbursed 33.2 Fuel and Related Materials Imports 152.1 129.6 115.1 Debt Service as % of Government Revenue 14.4 RATE OF EXCHANGE: US$1 = Liberian Dollar 1 IBRD/IDA LENDING (DECEMBER 31, 1982) (MILLION US$): IBRD IDA Outstanding & Disbursed 90.7 36.4 Undisbursed 46.0 49.4 Outstanding Including Undisbursed 136.7 85.8 1/ Preliminary 27r Data provided by Sierra Leonean authorities 73 IBRD Debtor Reporting System __ Debt Service as percent of Exports of Goods and NFS. not available not applicable December 21, 1983 - 26 - ANNEX II Page 1 THE STATUS OF BANK GROUP OPERATIONS IN LIBERIA A. STATEMENT OF BANK LOANS AND IDA CREDITS (as of November 30, 1983) Loan or Amount (US$ Million) Credit less cancellation Number Year Borrower Purpose Bank IDA 1/ Undisbursed Fourteen loans and five credits fully disbursed 87.22 24.96 - 1323 1976 Liberian Bank for Third Development Dev. & Investment Finance 7.0 - 1.86 1417 1977 Rep. of Liberia Education III 6.3 - 0.08 3, 700 1977 Rep. of Liberia Bong Agriculture - 7.0 0.12 3 786 1978 Rep. of Liberia Rubber Development - 6.0 2.76 8319 1978 Rep. of Liberia Forestry - 6.0 3.07 Development 1544 1978 Rep. of Liberia Rubber Development 7.0 - 7.00 L664 1979 Rep. of Liberia Feeder Roads 10.7 - 7.11 1765 1979 Rep. of Liberia Decorls Oil Palm 12.0 - 10.26 1907 1980 Rep. of Liberia Petroleum Explo. 5.0 - 0.24 1Q76 1981 Rep. of Liberia Small & Med. Scale Enterprises - 4.0 2/ 3.07 4, 2080/81 1982 Rep. of Liberia/NIOC Mining 20.0 - 11.73 1223 1982 Rep. of Liberia Urban Development - 10.0 2/ 7.96 4, 1242 1982 Rep. of Liberia Lofa II - 15.5 2/ 11.56 4, 1306 1983 Rep. of Liberia Education IV - 13.5 2/ 10.27 4, 1311 1983 Rep. of Liberia Highway IV (Supplement) - 1.8 2/ 0.38 3, Total 155.22 88.76 77.47 of which has been repaid 23.08 0.14 Total now outstanding 132.14 88.62 Amounts sold 0.41 of which has been repaid 0.41 0.0 Total held by Bank and IDA 132.14 88.62 Total undisbursed 38.28 39.19 77.47 1/ Prior to exchange adjustments. 2/ Calculated at rate of exchange in effect at approval date. 3/ Closing date is December 31, 1983. 4/ Calculated at rate of exchange at November 30, 1983 of SDR 1 = $1.05058. Nolte: The status of projects listed in Part A is described in a separate report on all Bank/IDA financial projects in execution, which is updated twice yearly and circulated to the Executive Directors on April 30 and October 31. - 27 - ANNEX II Page 2 B. STATEMENT OF IFC INVESTMENTS (as of November 30, 1983) Fiscal Year Obligator Type of Business Loan Equity Total 1966 Liberian Bank for Development Development and Finance Company Investment 0.250 0.250 1977 Liberian Bank for Development Development and Finance Company Investment 0.306 0.306 0.556 0.556 Less Sold 0.001 0.001 Now held by IFC 0.555 0.555 - 28 - ANNEX III Page 1 LIBERIA SECOND BONG COUNTY AGRICULTURAL DEVELOPMENT PROJECT SUPPLEMENTARY PROJECT DATA Section I: Timetable of Key Events (a) Time taken to prepare project: 8 months (b) Agency which prepared project: Ministry of Agriculture (c) Date of first presentation to the Bank: July 1982 (d) Date of departure of Appraisal Mission: February 1983 (e) Date of Completion of Negotiations: November 23, 1983 (f) Planned Date of Effectiveness: June 1984 Section II: Special IDA Implementation Action None Section III: Special Conditions (a) Government to carry out a cost reduction program to reduce LPMC's operating costs, review it annually with IDA, and establish targets for the following year (para. 27); (b) Government to (i) submit to IDA and IFAD proposals for an agricul- tural research program, and (ii) consult with IDA and IFAD with regard to any reorganization of CARI (para. 36); (c) Government to carry out a study of ACDB, review its conclusions with IDA and IFAD, and carry out the recommendations according to an agreed schedule (para. 37); (d) Funds for loans under the first project and this project to be transferred to ACDB (para. 37); (e) ACDB interest rates and lending terms and conditions to be reviewed annually with IDA and IFAD (para. 38); - 29 - ANNEX III Page 2 (f) IDA approval to be sought on road construction and maintenance program and any transfer of equipment from the project (para. 40); and (g) Government to (i) put into effect revised MOA organization by December 31, 1984 and secure IDA agreement to any further reorganiza- tion, and (ii) ensure acceptability to IDA and IFAD of senior managers (para. 43). IBRD17)91R Iajoo N 1f\ /'Iy' .Ioc 98 SEPTEMBER 1983 J / SOINJAM ,vols :LIBERIA 2/~'. F 2r , , + BONG COUNTY AGRICULTURAL f A F R I C AX t/, bIghun %~8akb7 DEVELOPMENT PROJECT If I ERRA// / Ekemo 0~U/ NO T- GUINEA L ~ \ E 0 Nt> E S ot ~ZoIow
Группа Всемирного банка · Memorandum & Recommendation of the President
Liberia - Second Bong County Agricultural Development Project
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Memorandum & Recommendation of the President
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