Togo - Second Structural Adjustment Project : Credit 1599 - Credit Agreement - 2 - Conformed

AFRICAN FACILITY CREDIT NUMBER A-2 TO African Facility Credit Agreement (Second Structural Adjustment Project) between REPUBLIC OF TOGO and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FACILITY for SUB-SAHARAN AFRICA Dated /3 , 1985 AFRICAN FACILITY CREDIT NUMBER A-2 TO AFRICAN FACILITY CREDIT AGREEMENT AGREEMENT, dated A 4e4*ut4 /J , 1985, between REPUBLIC 0 TOGO (the Borrower) and INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FACILITY FOR SUB- SAHARAN AFRICA (the Administrator). WHEREAS (A) the Executive Directors of the International Development Association (IDA) have established by their Resolu- tion No. IDA 85-1 of May 21, 1985, (the Resolution), a Special Facility for Sub-Saharan Africa (the African Facility) consti- tutd by the funds which shall be contributed by the Inter- national Bank for Reconstuction and Development (the Bank) and other donors and administered by IDA, acting as Administrator of the African Facility, for the purpose of, and in accordance with the provisions of the Resolution; (B) IDA has received from the Borrower a statement of economic development policy dated April 23, 1985, describing a second program of structural adjustment of the Borrower's economy, including: (i) a reform of agricultural incentives; (ii) an action program to raise the output of food crops; (iii) the preparation of an industrial promotion policy; (iv) the improvement of macro-economic management; and (v) a reform of public sector enterprises; (C) the Borrower has declared its commitment to the execu- tion of such program; (D) the Borrower has requested assistance from the re- sources of the African Facility in the financing of urgent imports to be made during the execution of such program, and the Administrator has determined that such assistance would be in accordance with the provisions of the Resolution; (E) by agreement dated June 24, 1985 (the Development Credit Agreement), IDA has agreed to make a development credit (the Development Credit) to the Borrower in various currencies eq%ivalent to SDR 28,100,000 to assist in financing the Project on the terms and conditions set forth in the Development Credit Agreement; (F) the Borrower intends to contract from the Federal Republic <of Germany a grant in the amount of 16,500,000 Deutsche Mark (the German grant) to assist in the financing of the Project -2- on the terms and conditions set forth in an agreaent to be entered into between the Borrower and the Federal public of Germany (the German Grant Agreement); and WHEREAS the Administrator has agreed on the basis, inter alia, of the foregoing, to extend the African Facility Credit to the Borrower upon the terms and conditions set forth in this Agreement. NOW THEREFORE the parties hereto hereby agree as follows: ARTICLE I General Conditions; Definitions Section 1.01. The General Conditions Applicable to Develop- ment Credit Agreements of the International Development Associa- tion, dated January 1, 1985, with the modifications set forth below (the General Conditions) constitute an integral pa,t of this Agreement. (a) the term "Association", when used in the General Condi- tions, means the International Development Association acting as Administrator of the African Facility, except in the phrase "member of the Association" in Sections 2.01 (5), 4.20 (b) and 6.02 (e) thereof; (b) the terms "Development Credit Agreement", "Credit" and "Credit Account", when used in the General Conditions, are amended to read "African Facility Credit Agreement", "African Facility Credit" and "African Facility Credit Account", res- pectively; (c) the last sentence of Section 3.02 is deleted; (d) the second sentence of Section 5.01 is deleted; (e) in Sections 6.02 and 7.01, the term "Association" shall also include the International Development Association acting in its own capacity, and (f) the term "Project" means the imports that may be financed out of the proceeds of the African Facility Credit pur- suant to the provisions of Schedule 1 to the African Facility Credit Agreement. Section 1,02. Unless the context otherwise requires, the several terms defined in the General Conditions and in the Pre- amble to this Agreement have the respective meanings therein set -3- forth and the following additional terms have the following meanings: (a) "Part 11 member of IDA" means a member of IDA with respect to which the terms and conditions of membership are those prescribed in the Articles of Agreement of IDA for countries whose names are listed in Part II of Schedule A to those Arti- cles; (b) "Development Credit Agreement" means the agreement dated June 24, 1985 between the Borrower and IDA for the Project, as such agreement may be amended from time to time, and such term includes the General Conditions Applicable to Development Credit Agreements of IDA, dated January 1, 1985, as applied to such agreement, and all schedules and agreements supplemental to the Development Credit Agreement; (c) "BCEAO" means Banue Centrale des Etats de l'Afriaue de l'Ouest; (d) "CFA Franc" and "CFAF" mean the curreancy of the Bor- rower; (e) "IOTO" means Industrie Olalineuse du Togo; (f) "ITP" means Industrie Togolaise des Plastiques; (g) "ITT" means Industrie Togolaise du Textile; (h) "OPAT" means the Office des Produits Agricoles du Togo of the Borrower; (i) "SITC" means the United Nations Standard International Trade Classification, 1974 Revision (SITC, Rev. 2), published in Commodity Indexes for the Standard International Trade Classifi- cation, Revised, Statistical Papers, Series M, No. 34/Rev. 2 (1975); (j) "SODETO" means Societe des Detergents du Togo; (k) "SOTOMA" means Societg Togolaise de Marbre at des Mat&riaux; (1) "TOGOGRAIN" means the Office National des Produit Vivriers of the Borrower; -4- (n) "TOGOROUTE" means Societe Nationale des Transports Routiers; and (n) "TOGOTEX" means Societe Togolaise des Textiles. ARTICLE II The African Facility Credit Section 2.01. The Administrator agrees to lend to the Borrower on the terms and conditions set forth or referred to in the African Facility Credit Agreement, an amount in various currencies equivalent to ten million one hundred thousand Special Drawing Rights (SDR 10,100,000). Section 2.02. The amount of the African Facility Credit may be withdrawn from the African Facility Credit Account in accordance with the provisions of Schedule 1 to this Agreement, as such Schedule may be amended from time to time by agreement between the Borrower and the Administrator, for expenditures made for, if the Administrator shall so agree, to be made) in respect of the reasonable cost of imported gods. (b) Withdrawals shall be made only on account of expendi-- tures for goods produced in, or services supplied from, the territories of: (i) any Part II member of IDA; (ii) any country designated by the Administrator as meeting the provisions set forth in paragraphs 4 (f) (ii) and (iii) of the Resolution. Section 2.03. The Closing Date shall be December 31, 1987 or such later date as the Administrator shall establish. The Admin- istrator shall promptly notify the Borrower of such later date. Section 2.04. (a) The Borrower shall pay to IDA a commitment charge at the rate of one-half of one percent (1/2 of 1%) per annum on the principal amount of the African Facility Credit not withdrawn from time to time. The commitment charge shall accrue from a date sixty days after the date of the African Facility Credit Agreement to the respective dates on which amounts shall be withdrawn by the Borrower from the African Facility Credit Account or shall be cancelled. (b) The commitment charge 'iall be paid: (i) at such places as IDA shall reasonably request; (ii) without restrictions of any kind imposed by, or in the territory of, the Borrower; and (iii) -5- in the currency specified in this Agreement for purposes of Section 4.02 of the General Conditions or in such other eligible currency or currencies as may from time to time be designated or selected pursuant to the provisions of that Section. Section 2.05. The Borrower shall pay to IDA a service charge at the rate of three-fourths of one per cent (3/4 of 1%) per annum on the amount withdrawn from the African Facility Credit Account and outstanding from time to time. Section 2.06. Commitment charges and service charges shall be payable semiannually on April 15 and October 15 in each year. Section 2.07. The Borrower shall repay to IDA the principal amount of the African Facility Credit in semiannual installments payable on each April 15 and October 15, commencing October 15, 1995, and ending April 15, 2035. Each installment to and includ- ing the installment payable on April 15, 2005, shall be one-half of one per cent (1/2 of 1%) of such principal amount, and each installment thereafter shall be one and one-1half per cent (1-1/2%) of such principal amount. Section 2.08. The currency of the Republic of France is hereby specified for the purposes of Section 4.02 of the General Conditions. Section 2.09. (a) BCEAO is designated as representative of the Borrower for the purposes of taking any action required or permitted to be taken under the provisions of Section 2.02 of this Agreement and Article V of the General Conditions. (b) Without limitation or restriction to the foregoing, the Borrower shall entrust BCEAO with responsibility for the prepa- ration of withdrawal applications under the African Facility Credit and for the collection of the documents and other evidence to be furnished to the Administrator in support of such applica- tions; such withdrawal applications shall to the extent practi- cable be consolidated so as to apply for withdrawal of aggregate amounts of not less than $1,000,000 equivalent. ARTICLE III Particular Covenants Section 3.01. (a) The Borrower shall open and thereafter maintain an account (hereinafter called the Project Account) at BCEA0 and shall, upon each withdrawal from the African Facility Credit Account, deposit in the Project Account the equivalent in CFA Francs of the currency or currencies withdrawn from the African Facility Credit Account (such equivalent to be determined as of the respective dates of such withdrawals). The amounts so deposited in the Project Account shall be used exclusively to finance the Borrower's development-related expenditures and to support the Borrower's economic adjustment program. (b) The Borrower shall furnish to the Administator all such information as the Administrator shall reasonably request con- cerning the utilization of the .amounts deposited in the Project Account pursuant to paragraph (a) of this Section. Section 3.02. (a) The Borrower and the Administrator shall from time to time, at the request of either party, exchange views on the progress achieved in carrying out the program for struc- tural adjustment referred to in the Preamble to this Agreement and the measures specified in Schedule 3 to this Agreement. (b) Prior to each such exchange of views, the Borrower shall furnish to the Administrator for its review and comment a report on the progress achieved in carrying out said program, in such detail as the Administrator shall reasonably request. Section 3.03. The Borrower and the Administrator shall from' time to time, at the request of either party, exchange views on the Borrower's public sector investment programs in the light of their consistency with overall macro-economic projections and with the statement of economic development policy referred to in the Preamble to this Agreement, taking into account the readiness of feasibility studies and the availability of concessional financing for specific projects. Section 3.04. Except as the Administrator shall otherwise agree, procurement of the goods to be financed out of the pro- ceeds of the African Facility Credit shall be governed by the provisions of Schedule 3 to this Agreement, subject to the eli- gibility restrictions set forth in Section 2.02 (b) of this Agreement. ARTICLE IV Remedies of the Administrator Section 4.01. For the purposes of Section 6.02 of the General Conditions, the following additional events are specified pursuant to paragraph (h) thereof: -7- (a) that an event has occurred which shall make it improb- able that the program for structural adjustment or a significant part of the program for structural adjustment referred to in the Preamble to this Agreement will be carried out; and (b) (i) Subject to subparagraph (ii) of this paragraph: (A) the right of the Borrower to withdraw the proceeds of the Development Credit or the German Grant shall have been suspended, can- celled or terminated in whole or in part, pursuant to the terms of the Development Credit Agreement or the German Grant Agree- ment; or (B) the Development Credit shall have become due and payable prior to the agreed maturity thereof. (ii) Subparagraph (i) of this paragraph shall not apply if the Borrower establishes to the satisfaction of the Administrator that: (A) such suspension, cancellation, termination or prematuring is not caused by the failure of the Borrower to perform any of its obliga- tions under the Development Credit Agreement or the German Grant Agreement; and (B) adequate funds for the Project are available to the Borrower from other sources on terms and conditions consistent with the obliga- tions of the Borrower under this Agreement. Section 4.02. Pursuant to Section 7.01 (d) of the General Conditicns, the following additional event is specified, namely, that the event specified in paragraph (b) (i) (B) of Section 4.01 of this Agreement shall occur, subject to the proviso of sub- paragraph (ii) of that paragraph. ARTICLE V Effective Date; Termination; Designation of Administrator Section 5.01. The following event is specified as an addi- tional condition to the effectiveness of the African Facility -8- Credit Agreement within the meaning of Section 12.01 (b) of the General Conditions, namely, that all conditions precedent to the effectiveness of the Development Credit Agreement have been ful- filled. section 5.02. The date 90 days after the date of this Agree- ment is hereby specified for the purposes of Section 12.04 of the General Conditions. Section 5.03. In the event that the Executive Directors of IDA decide to terminate the functions of IDA as administrator of the African Facility pursuant to paragraph 10 of the Resolution, the Administrator may, by notice to the Borrower, designate another party which, on the date specified in such notice, shall assume part or all of the rights and obligations of the Adminis- trator under this Agreement in accordance with the Resolution and such decision of the Executive Directors, as specified in such notice. ARTICLE VI Representatives of the Borrower; Addresses Section 6.01. Subject to the provisions of Section 2.09 of this Agreement, the Ministre de l'Economie et des Finances of the Borrower is designated as representative of the Borrower for the purposes of Section 11.03 of the General Conditions. Section 6.02. The following addresses are specified for the purposes of Section 11.01 of the General Conditions: For the Borrower: Ministere de l'Economie et des Finances B.P. 387 Lome Republic of Togo Cable address: Telex: MINFIE 5286 Lome, Togo 9 For the Administrator: Administrator of the African Facility (International Development Association) 1818 H Street, N.W. -Washington, D.C. 20433 United States of America Cd,ble address: Telex: INDEVAS 440098 (ITT) Washington, D.C. 248423 (RCA) or 64145 (WUI) IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized representatives, have caused this Agreement to be signed in their respective names in the District of Columbia, United States of America, as of the day and year first above written. REPUBLIC OF TOGO By 44i/AMA Authorized Re esentative INTERNATIONAL DEVELOPMENT ASSOCIATION as ADMINISTRATOR of the SPECIAL FACILITY for SUB-SAHARAN AFRICA By / t ~i'fl.O A;re~S4 ' Regional Vice Pr ident Western Africa - 10 - SCHEDULE 1 Withdrawal of the Proceeds of the African Facility Credit 1. The reasonable cost of importation of any goods into the territory of the Borrower may be financed out of the proceeds of the African Facility Credit, except that no withdrawals shall be made in respect of: (a) goods included in the following SITC groups or sub- groups: Group Sub-grou Description Of Items 112 - Alcoholic beverages 121 - Tobacco, unmanufsctured, tobacc( 'efuse 122 - Tobacco, manufactured 667 - Pearls, precious and semi- precious stones, unworked or worked 688 - Uranium depleted in U235 and thoriam, and their alloys, unwrought or wrought, and articles therefor, n.e.s.; waste and scrap of uranium depleted in U235 and of thorium 718 718.7 Nuclear reactors, and parts thereof, n.e.s. 897 897.3 Jewelry of gold, silver or platinum group metals (except watches and watch cases) and goldsmiths' or silversmiths' wares (including set gems) 971.0 Gold, non-monetary (excluding gold ores and concentrates) (b) expenditures in the currency of the Borrower or for goods supplied from the territory of the Borrower; provided, however, that if the currency of the Borrower is also that of another country from the territory of which goods are supplied, expenditures in such currency for such g-oods shall be eligible for financing out of the proceeds of the African Facility Credit; (c) payments made for expenditures prior to the date of this Agreement; (d) payments for taxes levied by, or in the territory of, the Borrower on goods, or on the importation, manufacture, pro- curement or supply thereof; (e) expenditures for goods procured under contracts costing less than $10,000 equivalent; (f) expenditures for goods supplied under a contract which any national or international financing institution or agency other than the Administrator shall have financed or agreed to finance; (g) expenditures for goods intended for a military or para-military purpose or for luxury consumption; and (h) expenditures in excess of an aggregate amount equiva- lent to $2,500,000 for petroleum products and $2,500,000 for foodstuffs. 2. Notwithstanding the provisions of paragraph 1 above, no withdrawal shall be madq and no commitment shall be entered into to pay amounts to the Borrower or others in respect of expendi- tures to be financed out of the proceeds of the African Facility Credit unless the Administrator shall be satisfied, after an exchange of views as described in Section 3.02 of this Agreement, with the progress achieved by the Borrower in the -Carrying out of the program- for structural adjustment referred to in the Preamble to this Agreement and in particular that the measures described in Schedule 3 to this Agreement have been taken. 3. If the Administrator shall have reasonably determined that the procurement of any item to be financed under the African Facility Credit is inconsistent with the procedures set forth or referred to in this Agreement, no expenditures for such item shall be financed out of the proceeds of the African Facility - 12 - Credit and the Administrator may, without in any way restricting or limiting any other right, power or remedy of the Administrator under this Agreement, by notice to the Borrower, cancel such amount of the African Facility Credit as, in the Administrator's reasonable opinion, represents the amount of such expenditures which viould otherwise have been eligible for financing out of the proceeds of the African Facility Credit. - 13 - SCHEDULE 2 Procurement 1. Contracts for the procurement of goods to be purchased by public entities and estimated to cost the equivalent of $1,500,000 or more each, shall be awarded through international-, competitive bidding in accordance with procedures consistent with those set forth in Section I of the current edition of the "Guidelines for Procurement under World Bank Loans and IDA Credits" published by the Bank in May 1985 (hereinafter called the Guidelines), subject to the follo\ ing modifications: (a) By the deletion of paragraph 2.8 of the Guidelines and the substitution therefor of the following: "2.8. Notification and Advertising The international community should be notified in a timely manner of the opportunity to bid. This will be done by advertising invitations to apply for inclusion in a bidder's --vitation list, to apply for prequalification or to bid; such advertisements should be placed in at least one newspaper of general circulation in the Borrower's territory and, in addition, in at least one of the following forms: (i) a notice in the United Nations publication, Devel- opment Forum, Business Edition; or (ii) an advertisement in a newspaper, periodical or technical journal of wide international circula- tion; or (iii) a notice to local representatives of countries and territories referred to in these Guidelines, that are potential suppliers of the goods required." (b) By the deletion of paragraphs 2.55 and 2.56 of the Guidelines. 2. Contracts for goods to be purchased by other than public entities or estimated to cost the equivalent of less than $1,500,000 each shall be awarded on the basis of the normal procurement procedures of the purchaser of such goods. - 14 - 3. With respect to each contract referred to in paragraph 1 of this Schedule, the Borrower shall furnish to the Administrator, prior to the submission to the Administrator of the first appli- cation for withdrawal of funds from the African Facility Credit Account in respect of such contract, two conformed copies of such contract, together with the analysis of the respective bids and recommendations for award, a description of the advertising and tendering procedures followed and such other information as the Administrator shall reasonably request. 4. With respect to each contract referred to in paragraph 2 of this Schedule, the Borrower shall furnish to the Administrator, prior to the submission to the Administrator of the first apppli- cation for withdrawal of funds from the African Facility Credit Account in respect thereof, such documentation and information as the Administrator may reasonably request to support withdrawal applications in respect of such contract or purchase order. 5. The Administrator shall, if it determines that the award of a contract or the documentation received, as the case may be, was not consistent with the provisions of this Schedule, promptly inform the Borrower and state the reasons for such determination. 6. For the purposes of this Schedule, the term "public enti- ties" shall mean the. Borrower, any of its political or admini- strative subdivisions and any entity owned or controlled by the Borrower or any such subdivision. - 15 - SCHEDULE 3 Conditions of Second Tranche Release (Schedule 1, paragraph 2) 1. The Borrower has adopted a 1986-1988 public investment pro- gram satisfactory to the Administrator. 2. The Borrower prior to the crop season has increased the pro- ducer prices of cocoa, coffee and cotton for the 1986-1987 crop year to a level acceptable to the Administrator. 3. The Borrower has made progress, satisfactory to the Adminis- trator, for the restructuring, privatization or liquidation, as the case may be, of the following public enterprises: IOTO, ITP, ITT, OPAT, SODETO, SOTOMA, TOGOROUTE and TOGOTEX. 4. The Borrower has agreed with the Administrator on a schedule for restructuring, privatization or liquidation of about ten more public enterprises. 5. The Administrator is satisfied with the efficiency of the supervision system of the Ministry of State Enterprises, includ- ing the control mechanisms of public enterprises. 6. The Borrower has established a Road Fund account in the Treasury for the deposit of all road maintenance funds and has increased the fiscal year 1986 budget allocation for the main- tenance of roads, other than urban streets, to CFAF 1.2 billion. 7. The Borrower has increased the railway tariff on the Lome- Blitta line by February 1986 by not less than 15 percent over the level prevailing on the Effective Date of this Agreement. 8. The Borrower has informed the Administrator by March 1986 of its decision of award of a concession for the operation of a bus line on the Lome-Aneho route. 9. The Borrower has allocated not less than 25 percent of the fiscal year 1986 budget of the Ministry of Rural Development to non-personnel costs. 10. The Borrower has established new guidelines, satisfactory to the Administrator, for the opet dtion of TOGOGRAIN. INTERNATIONAL DEVELOPMENT ASSOCIATION CERTIFICATE I hereby certify that the foregoing is a true copy of the original in the archives of the Interna- tional Development Association. In witness whereof I have signed this Certifi- cate and affixed the Seal of the Association thereunto the 3 day ofAe- , 198. FOR SECRETARY