Angola - Lobito Benguela Urban Environmental Rehabilitation Project

Documof The Wed Bank FOR OFFICIAL USE ONLY Report No. P-5631-ANG MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 33.6 MILLION TO THE PEOPLE'S REPUBLIC OF ANGOLA FOR THE LOBITO BENGUELA URBAN ENVIRONMENTAL REHABILITATION PROJECT NOVEMBER 27, 1991 T document has a resticted distribution A aay be used by reciplents only la the perferasoce of their officia duties. Its contents asy not othierwisc be discosed without World Bank authorization CURRENCY EQUIVALENTS Curee Unit New Kwanza Mar.91-Nov.91 US$1.00 = NKz6O From Nov.16, 1991 US$1.00 = NKz9O Base Rate/ y Applicable to petroleum and diamond exports, official financial transactions and five basic consumer imports. Other rates apply as follows: NKz180 for raw materials and selected other consumer imports; and NKz55O for remaining exports and imports. Individual transactions may be conducted through the commercial banks at parallel market rates (NKz78o as of Nov. 25, 1991). MEASURES AND EQUIVALENTS 1 Meter (in) = 3.28 Feet 1 Kilometer = 0.625 Miles 1 Square Meter (in) 10.76 Square Feet 1 Hectare = 10,000 m' or 2.47 Acres 1 Liter = 0.264 Gallons (0.22 Imp. Gal.) 30 Liters per day = 7.92 Gallons per day 1 no (1,000 Liters) = 264 Gallons (220 Imp. Gal.) 1 &? per hour = 6,336 Gallons per day ABBREVIATIONS AND ACRONYMS DPSC = Provincial Directorate for Community Services EPAB = Provincial Water Company of Benguela GIs = Geographic Information System GPB = Provincial Government of Benguela GPP = Provincial Planning Office ICB = International Competitive Bidding LCA = Lobito Corridor Authority LCB = Local Competitive Bidding MINFIN = Ministry of Finance MINPLAN = Ministry of Planning M@LA = People's Movement for the Liberation of Angola NA = Not Applicable NORAD = Norwegian Agency for Development Cooperation PPF Project Preparation Facility SADCC = Southern Africa Development Coordination Conference SATCC = Southern Africa Transport & Communications Commission SIDA = Swedish International Development Authority TA = Technical Assistance UNDP = United Nations Development Program UNITA = National Union for the Total Independence of Angola FISCAL YEAR January 1 - December 31 FOR OFFICIAL USE ONLY ANGOLA LOBITO BENGUELA URBAN ENVIRONMENTAL REHABILITATION PROJECT CREDIT AND PROJECT SUMMARY Borrower: People's Republic of Angola Beneficiary: Provincial Government of Benguela (GPB) Amount: SDR 33.6 million (US$45.58 million equivalent). Terms: Standard IDA Terms with 40 years maturity. Co-Finandng: Norway (NORAD) and Sweden (SIDA) Financfng Plan: (USS mitton) Percent Fresi Lanl Ioag oftal IDA Credit $42.20 3.38 $45.58 77 NORAD ,.50 - 3.50 6 SIDA 3.50 - 3.50 6 Government * $6.30 $6.30 11 Total $49.20 $9.68 58.88 100 Economic rate of return: Not applicable. Staff Appraisal Report: Lobito Benguela Urban Environmental Rehabilitation Project Report No. 9794-ANG. * Maps: IBRD No. 23181 Angola - Project Location Map IBRD No. 23182 Lobito Benguela - Project Component Map This document has a restricted distribution and may be used by recipients only in ti! perfkrm:0ce of their official duties. Its contents may not otherwise be disclosed without World Bark au r:Ation. MEMORANDI'M AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE PEOPLE'S REPUBLIC OF ANGOLA FOR THE LOBITO BENGUELA URBAN ENVIRONMENTAL REHABILITATION PROJECT 1. I submit for your approval the following report and recommendation on a proposed development credit to The People's Republic of Angola for SDR 33.6 million, equivalent to US$45.58 million, on standard IDA terms with a maturity of 40 years to help finance an urban environmental rehabilitation project. The project would be co-financed by grants from the Norwegian Agency for Development Cooperation (NORAD) and the Swedish International Development Authority (SIDA) totalling US$7.0 million equivalent. 2. Part I of the present document describes the country's policies and the Bank's assistance strategy. It draws upon recent economic missions to Angola, the latest Country Brief for Angola, distributed to the Executive Directors in mid-1991, as well as upon an Introductory Economic Review (Report No. 7283-ANG), distributed to the Executive Directors in June 1990. Part II describes the credit, the rationale for IDA involvement, project objectives, agreements reached, and the risks of the operation. PART I - COUNTRY POLICIES AND BANK rZROUP ASSISTANCE STRATEGY 3. Angola, with a population of about 10 million growing at an annual rate of about 2.8 percent, is potentially one of the richest countries in Africa in terms of natural resource endowment (e.g., oil, diamonds, and fertile land). At the same time, its economy is one of the most distorted of the continent. Since Independence in 1975, the country has developed an economy highly dependent on income from oil. GNP per capita, estimated at US$620 in 1990, is closely linked te oil prices. The oil sector represents about half of the GDP. In 1990 oil export earnings were about US$3.0 billion, equivalent to more than 90 percent of the country's total export earnings. The oil industry, developed as an enclave, has grown rapidly since 1975, and by early 1991 oil production reached about 460,000 barrels per day. By contrast, the non-oil sector's performance has been poor since Independence. It is estimated that the non-oil sector's output growth per capita has been negative since the early 1980's. The performance of agriculture is a case in point: an important net exporter of agricultural products before Independence, Angola has in recent years been increasingly dependent on food imports (and food aid) to feed its urban population; and the capacity utilization of existing manufacturing industries has been severely affected by the lack of inputs, spare parts and maintenance services, as well as by a distorted policy environment. 4. The Government's failure to revive the economy after Independence is largely explained by three factors: (i) a fifteen-year old civil war, which made much of the countryside too insecure for agricultural production and transport, required heavy military expenditures (contributing to chronically large fiscal deficits, despite substantial revenues from oil), and destroyed a substantial part of the economic and social infrastructure; (ii) unusually severe human resource constraints, due to the massive exodus nf Portuguese settlers at Independence; and (iii) misguided economic policies which have created a highly distorted system with a formal urban economy (largely public) managed by administrative controls, and a large parallel economy. 2 Economic. Financial and Soelal PerorMne 5. Since Independence, the Angolan economy has been ravaged by a long and costly civil war and by the severe distortions common to centrally-planned economies. The fall of domestic production and agricultural exports that occurred after Independence was primarily caused by the destruction of the country's stock of human and pLysical capital, and aggravated by mactoeconomic policies which favored pub!-c consumption. In response to adverse domestic conditions and external shocks which reduced the country's resources, the Government resorted to rigid price controls and a system of administratively allocated foreign exchange, instead of appropriate price policies (exchange rate adjustments, corrections in relative prices) and fiscal adjustments. The large exchange rate overvaluation encouraged high levels of domestic consumption, mostly in urban areas, at the expense of badly needed investments. 6. In many cases, official prices have not been changed since Independence, and the few price adjustments which have taken place have been modest when compared with increases in the nominal purchasing power of the population. As a consequence of these pricing policies, the domestic production of many goods has been discouraged, relative prices have been severely distorted, waste in the consumption of some goods has been stimulated, and wide gaps have appeared between the demand and the supply of practically all goods and services. The exchange rate, which has been pegged to the US$, was unchanged at Kz29.92 per US$ between 1975 and March 1991, when it was adjusted to NKz6O.O0 per US$. Exchange rates prevailing in the parallel market have, however, sometimes been as high as a hundred times the official rate. In the absence of adequate adjustments, the exchange rate became overvalued and excess demand for foreign exchange wos curtailed through administrative controls. As a result of these policies and the hostilities, investment in the non-oil sector dropped substantially, traditional agricultural exports practically disappeared, non-oil domestic output per capita declined, and the country became almost exciusively dependent on oil and diamond exports for its foreign exchange earnings. 7. To compensate for shrinking domestic production, imports of consumer goods grew, financed by oil exports. Government policies encouraged consumption through widespread consumer price subsidies and a system of remuneration "in kind" to public sector personnel through ration cards at official shops supplied with imported consumer goods, as a supplement to cash wages. Government employees, in turn, traded part of these goods in the parallel market for food and consumption goods which were unavailable in official shops (e.g., vegetables, fish, etc). Manufacturing enterprises also sold part of their production at low prices to employees, who also traded on the parallel market. 8. Lack of financial and fiscal discipline is a serious problem at all levels of public administration and enterprises. A growing part of the formal economy has been financed through oil revenues, which in recent years have provided over 80 percent of government income. In spite of the rapid growth of oil revenues since 186, the budget has consistently been in deficit as non-oil revenue declined continuously, while expenditures remained at high levels. Military expenditures have been as high as 30 percent of GDP. In 1988-90, the overall budget deficit (including extra-budgetary expenditure) was on average equivalent to about one quarter of GDP at official prices. However, the underlying deficit valued at more realistic prices is estimated to have been lower (about 12 percent). 9. Throughout the post-independence peried, an accommodating monetary policy fully monetized the country's sizeable fiscal deficits. As a result, a growing excess liquidity rapidly 3 emergtd but its inflationary impact did not show up in the official price indices because of the tight system of administrative price c mtrols. As noted above, these policies led to the emergence of widespread differentials between the official and parallel market exchange rates. This, in turn, reinforced the existing incentives to divert resources from the official to the parallel economy. Money substitutes (such as imported beer) and barter took on an increasing role in internal trade, further complicating the management of monetary policy. 10. Foreign and domestic trade have been hampered by rigid and pervasive Government regulations and restrictions. There is a predominance of inefficient public enterprises, not only in manufacturing, but also in foreign trade, wholesaling, and in the retail network. Although there are some private enterprises, their role in providing competition to the public sector is weak, because of the administrative allocation of imports and fixed profit margins imposed by the Government. Agricultural production has been particularly affected by the war, the shortcomings of the trade system, and the disappearance of rural traders. In the earlier period of its economic history, when the country was not engulfed in armed conflicts, rural traders played an important role in the marketing and distribution system by providing consumer goods in exchange for agricultural products. 11. Angola's external debt at end-1990 is estimated at over US$7 billion (including US$0.8 billion in arrears), of which about US$3.5 billion was owed to the Soviet Union, US$2.8 billion to Paris Club and other Western creditors (mainly Brazil and Portugal), and the remainder to Eastern European countries and Cuba. External debt represents over 100 percent of GDP. About one-third of the total debt is due to military transactions. In June 1989, the Soviet Union rescheduled its loans on favorable terms (10 years and 3 percent), including arrears and maturities falling due through 1990. In July 1989, the Paris Club rescheduled almost US$0.5 billion in arrears and maturities falling due through September 1990; the other Western creditors rescheduled their own debt on the same terms. The remaining maturity profile is unfavorable, with payments bunched over the period 1991-93. Thus, scheduled debt service would absorb about one-third of projected exports of goods and services in 1991-93. Assuming further Soviet rescheduling at terms comparable to those of 1989, and "Toronto terms* for Western creditors, overall debt-servicing capacity of the existing debt could be sufficient to handle the flow of debt- service payments in the medium term, without compromising the long-term debt profile of the country. Given the above, Angola's capacity to service additional debt at non-concessional terms is very limited. New arrears have accumulated in 1991. 12. The social conditions prevailing in Angola are poor even by African standards. This is the combined result of the civil war, inappropriate policies, rapid migration to the cities and emigration of skilled manpower. The child mortality rate is 292 per thousand, nearly twice that of Sub-Saharan Africa as a whole (157); life expectancy at birth is estimated at 44 years (vs. 51 years for Sub-Saharan Africa); less than 30 percent of the population has access to health services and safe water; and despite the Governments achievements in the field of education, the adult literacy rate is still only 41 percent. Disparity in social conditions among various regions are substantial, as a result of war-induced destruction. Poverty in the rural areas is acute. In addition to the stagnation in economic activity, the main contributing factors for rural poverty are: the literruption of normal links to the cities, the drastic decline of inter-regional trade, lack of incentive goods, and the lack of access to social services. 13. These factors particularly affect women, considering their predominant involvement in agricultural activities, and their greater relative need for social services. Nevertheless, women's access to basic educationai opportunities has been expanded and the current level of literacy 4 among women, Although still low at 33 percent, is substantially higher than in earlier years. Also, the Government has adopted a more merit-oriented approach to the assignment of responsibilities by gender than is tLe case in many other Sub-Saharan African countries. Women figure prominently in the civil service, including in high-level positions. Attempts at Economic Reform (1987-1990) 14 Recognizing that Angola's economic distortions and imbalances were due in large part to inappropriate economic policies, the Government announced in 1987 an ambitious program of economic and financial restructuring. The basic objectiv,s of the program were to stabilize the economy and improve production incentives by adjusting price levels (including the exchange rate) in the formal economy. The proposed reforms, if implemented, would have constituted a major departure from the way the economy had been managed. They included: (I) a limited adjustment of the exchange rate- (ii) a reductioa in the budget deficit, and a corresponding reduction in inflationary financing; (iii) a program for restructuring public enterprises through divesture and liquidation; (iv) reform of the financial sector by encouraging the establishment of commercial banks and ensuring greater availability of credit to the private sector; and (v) limiting price controls to only selected essential goods. 15. While the overall direction of proposed reforms was appropriate, the measures generally did not go far enough to address the main strucural distortions, notably in the area of the exchange rate. In any event, with the exception of a more accommodating attitude towards parallel market activities, there was little progress in implementing the program. Since 1988, several laws were adopted that attempted to provide a broad framework for structural reform, but most of them were not applied. Moreover, on several occasions the Government announced actions to deal with exchange rate distortions and high inflation levels. Measures taken were often delayed, ineffectual, or counter-productive. This experience further undermined the public's already shaky confidence in the Government's management of the economy. Inflation accelerated and the gap between official and parallel exchange rates widened to the range which existed prior to the "currency reform". 16. The absence of concrete and coherent economic reform measures through 1990 may be attributed to various factors, including: (i) the Government's preoccupation with the war and, more recently, with the peace process (see para 20); (ii) the strong vested interests in the existing system; (iii) the uncertainty with regard to the political impact of reforms; and (iv) weaknesses in economic management, especially the limited capacity for designing and executing detailed action programs within a consistent macroeconomic framework, and the inadequate coordination between the principal actors in the policy making process. Recent Economic Reforms 17. Minor policy improvements were made between January and October 1991. In mid- November, however, the Government implemented a number of inter-related reforms, focussed on the exchange regime, public sector wages, and reduction of consumer subsidies. The official exchange rate was devalued by 50 percent to NKz9O per US$ and transformed into a base rate, with separate surcharges yielding two higher rates of NKzl80 and NKz550. The base rate applies to the petroleum and diamond sectors, to official financial transactions and to imports of the, five basic consumer goods for which ration cards are still being issued (soap, rice, edible oil, sugar, and baby formula). The rate of NKzl80 is applied to raw materials and to consumer goods for which ration cards have been discontinued. The rate of NKz550 is applied to all other 5 Imports and to all exports except petroleum and diamonds. In addition, on November 15, 1991 banks were authorized to buy and sell foreign exchange to private individuals and enterprises at the parallel exchange rate (about NKz780 as of that date). At the same time, the Government discontinued all ration cards for public employees and the subsidized distribution system (except for the five basic goods mentioned above). Other measures include an increase in the minimum salary and cuts in the personal income tax. 18. Although it will take time to assess the practical impact of the November reforms on redressing the enormous distortions existing in the economy of Angola, the measures are clearly important and in the right direction. However, major complementary reforms remain to be taken - even in this first stage of adjustment - and the large financl and fiscal imbalances are yet to be reduced. The Government recognizes this and intends to follow up with other reforms In the near future. 19. A table summarizing Angola's economic performance since 1986 is presented below. It is based, however, on statistical information whose accuracy is suspect, particularly for the years prior to 1988. Strengthening the statistical base is one of the objectives of the Economic Management and Capacity Building Project which was approved on June 19, 1991. Selected Economic Indicators 1986 .1981 .1M M 19M REAL GROWH RATES A/ GDPmarketprices 12.1 12.1 15.2 1.5 2.8 oil 26.2 28.1 24.7 0.3 4.7 non-oil 2.8 -0.5 2.8 2.2 0.4 GDPIcapita 9.3 9.3 12.4 -1.3 0 non-oil GDPlcpita 0 -3.3 0 -0.6 -2.4 NOMINAL GROWTH RATES b/ Exports (gts) -40 66 8 21 27 Imports (gfe) -17 3 43 -6 12 RATIOS Debt ServiceXgtsft .. .. 46 20 24 Govt revenue/GDP 42 32 30 31 29 Govt expenditure/GDP S/ 49 41 57 54 66 Overall deficit(GDP -7 -9 -27 -23 -27 Current account (S million) -303 449 -469 -20 246 Current account/ODP -5.4 6.8 -6.7 -0.3 2.7 INDICES (1985-100) Consumer prices (Luanda official prices) 103.6 103.6 126.2 126.2 133.8 Real exchange rate .. .. Source: Plfning Ministry. Bak and IMF Staff Estimates. if Based on constant 1980 Kwanza prices. k/ Based on current US$ prices. g/ Scheduled, after debt relief. 41 Total expenditure. The large difference between official and market prices makes these numbers difficult to Interpret; after adjusting for price distortions, the deficit in 1988-1990 would be on the order of 12% of GWP. 6 Recet PolticlWDveOoMnt 20. War, be it to seek independence from Portugal or between the Government and UNITA (National Union for the Total Independence of Angola) in the post-independence period, has been the dominant fact of life in Angola for decades. On May is, 1991 a cease fire came into force, and on May 31 a peace agreement between MPLA (People's Movement for the Liberation of Angola - the Government party) and UNITA forces was signed. It is a comprehensive agreement setting up a detailed timetable for the integration of the two armies into a national Angolan army, for the opening of the political system, and for the organization of multiparty elections at all levels of government before the end of 1992. The implementation of both the military and political aspects of the agreement is being monitore by a Joint Political-Military Commission comprising, besides the Government and UNITA, representatives from Portugal, which is acting as a mediator, the US and the Soviet Union, acting as observers, and by the UN Angola Verification Mission. 21. Since the signing of the peace accords there have been no further hostilities. The clearing of land mines has begun; exchange of prisoners has taken place approximately on schedule; and demobilization of former combatants is underway, with the assembly and disarmament phase largely completed. In addition, a number of new political parties have emerged, and the groundwork is being laid for elections in September 1992. These developments clearly constitute a major breakthrough. For the first time since Independence, a process aimed at representative government is underway. If successful, this process would significantly improve the piispects for better economic management, including the reallocation of public resources from military to development uses. Central Develolment Issues and Prospects 22. The medium-term economic prospects of Angola are good but realizing the country's potential will depend on five factors. First, the successful conclusion of the peace process, demobilization of ex-combatants and the reintegration into economic life of the estimated one million refugees. In addition to the heavy human cost, the war absorbed large amounts of financial resources and interfered with most normal economic activity. Second, the speed and determination with which economic policy reforms are undertaken is crucial to restoring confidence in the government's ability to manage the economy. Third, the rehabilitation of the economic and social infrastructure, heavily damaged by decades of war, is urgent. Fourth, there is a need to get the economy - especially the non-oil productive sectors (e.g., agriculture) - growing again. And, finally, there is a need to overcome the constraints on longer-term development imposed by the shortage of skilled personnel and by environmental degradation. With peace and an appropriate policy environment, Angola has considerable growth potential in the medium term, in view of its abundant natural resource endowment. 23. There is still considerable uncertainty about the prospects for economic recovery in the shor term. Even if the implementation of the peace agreements continues satisfactory, an effective transition to a peacetime economy is likely to take time. Also, the end of the war may not result in immediate savings of resources. Demobilization will take time; the integration of the Government and UNITA forces into a national army may require additional spending; and there are substantial costs associated with the resettlement of displaced people. Moreover, while there are large benefits to be gained from the rehabilitation of infrastructure, realizing them will take time and require large investments. Finally, despite the Government's renewed commitment to economic reform, weak economic management is a serious constraint. Therefore, capacity 7 building and technical assistance will be crucial in strengthening policy formulation and implementation. 24. In view of these uncertainties, growth prospects and the requirements for external resources are difficult to assess with any degree of accuracy. Given the substantial reconstruction needs and skilled m.npower constraints, however, it is clear that irernational assistance will be crucial during the post war reconstruction phase. This assistance is expected to consist mainly of economic policy advice, and of technical assistance, in general, and for pre-investment studies, in particular. It would also entail financing for infrastructure rehabilitation and development, for improving public sector maiagement, and for facilitating the transition to a peacetime economy. Bank Group Country Assistance Strategy and Onerations 25. Angola joined the Bank Group in September 1989 and the proposed Lobito Benguela Urban Environmental Rehabilitation Project, recommended in this report, would be the third operation in the country. The relationship between the Bank and Angola is, however, still at an incipient state, and has not yet reached the maturity prevalent with long-standing members of the institution. The Bank's short-term strategic priority, therefore, is to nurture this relationship over the coming months by broadening the dialogue on the country's development needs with the Angolan authorities and the non-governmental sectors through lending operations, economic and sector work, and coordination of foreign assistance. As contact between the Bank Group and Angola expands, confidence will grow and the dialogue can develop into the type of partnership typical of other Borrowers. 26. The Bank's longer term objectives in Angola are to help promote economic growth, improve the poor social conditions of most Angolans and ensure that the country's envi-,ament is protected. To achieve these goals, the Bank is following a strategy which emphasizes (i) building capacity in economic management; (ii) preparing studies to pave the way for investments which will help get the economy back on its feet; (iii) helping rehabilitate the counry's devastated infrastructure base; (iv) promoting human capital development programs and activities to improve social conditions for the poor, especially women and children; (v) safeguarding the environment; and (vi) supporting the process of economic reform by helping In the design and implementation of macroeconomic and sector policies needed to stabilize the economy and restore production incentives, particularly for the private sector. 27. Lending. The Bank is tentatively working on a lending program that could average as many as three operations per annum during the FY92-94 period. Initially, Bank lending to Angola concentrated on technical assistance and pre-investment studies. While a technical assistance credit to strengthen the financial sector is in the current three-year lending program, the bulk of new commitments are expected to focus on high priority investment projects in the infrastructure, social and environmental sectors. 28. In the area of infrastructure, which is critical to Angola's economic recovery, Bank staff are working on a reconstruction project, which would focus on restoring high priority segments of the transport system. An operation to reconstruct the Benguela Railroad, which links Angola's port of Lobito with the copper mining belts in Zaire and Zambia, is also in the program. To the extent possible, labor intensive techniques would be used in both projects to help in Angola's demobilization efforts. 8 29. To kelp combat poverty and improve social conditions, the Bank is planning to finance education and health projects during the FY92-94 periods. Like the project recommeaded in this report, these operations would focus especially on the most vulnerable segment of the population, women and children. And in the environmental area, the Bank hopes to finance a forestry project in FY94. As is the case for the project proposed in this report, future lending operations will address environmental issues whenever possible. 30. The FY92-94 lending program does not currently include any adjustment operations. Nonetheless, the Bank is actively pursuing an intensified policy dialogue with the -uthorities within the context of its economic and sector work. In addition, the investment operations in the lending program will, where appropriatc, pursue policy improverments at the sectorl level. For instance, the Lobito Benguela Urban Environmental Rehabilitation Project aims, IJ= aia. at rationalizing water and sewer tariffs. 31. The IFC has been approached by the Angolan authorities to help with the privatization of key industries. Discussions are still at an early stage. 32. Performance Monitoring. The volume of lending and the number of operations the Bank will actually be able to carry out in Angola is [edicated on the continued restoration of peace, security and political stability in the country; on the government's progress in implementing much-needed economic reforms; and on the ability of the country to effectively implement projects in the portfolio of ongoing operations. Improved performance in macroeconomic management - particularly in the freeing of iontrolled prices (including the exchange rate, interest rates and administered prices for products', in the reduction of fiscal imbalances and in the scaling back of military spending - will be especially critical to the size and composition of future lending. Good forward progress in macro management would, for instance, open the way to direct Bank lending in support of the productive sectors (e.g., agriculture), a foim of operational support which does not yet figure prominently in the Bank's lending plans for Angola. 33. Economic and Sector Work. The key objectives of the economic and sector work program are to support the policy dialogue with the Government and to provide the intellectual underpinnings for the Bank's lending operations. As executing agency for UNDP, the Bank undertook, in 1989-90, an Introductory Economic Review of Angola and an Energy Assessment. Following the completion of these reports, the Bank's economic work has focussed on selected issues of economic reform, which has provided an input to the Economic Management Capacity Building Project. A major report on trade, price, and wage reform was discussed with the Government in March 1991 and distributed to the 'xecutive Directors in June 1991 (Report No. 9964-ANG). In the future, the Bank plans to deepen its macroeconomic dialogue (including through joint missions with the IMF) by completing reviews of public expenditure and of public enterprises. Sector work will focus on broadening the Bank's knowledge in the productive and social sectors, thus contributing to an expanded lending program and dialogue on sectoral policy issues. For example, a report on the crucial petroleum sector is planned during the FY92-94 period. 34. Donor Coordination and Relations with the IMF. Many donors have been providing assistance to Angola for some time. As the Bank builds up its presence in Angola, however, it can be expected to play a coordinating role because of its multi-sectoral experience, as well as the overview provided by its economic and sector work. In tandem with the potential build-up of the lending program and the deepening of vaderstanding of Angola's economy, the Bank plans to intensify its aid coordination efforts. One of the objectives of the FY91 Economic 9 Management Capacity Building Prolect is to help coordinate, where necessary, the various donor efforts In certain key areas of technical assistance. The IMF l'e been advising the Angolan authoritie through staff visits and Article IV consultatio*z, and ,s been executing a UNDP techical assistance project designed to strengthen the system of macroeconomic management, to promote institution building, and to develop the skills of local staff in the fiscal area. The Bank has been coordinating closely with the IMF in carrying out its initial policy dialogue with the Government, and with the UNDP and bilateral donors in preparing projects, studies, and technical assistance interventions. 35. Summary Assessment. Angola has made little progress in realizing its considerable development potential because of: (I) a destructive, costly, and protracted civil war; (ii) a severe lack of skilled personnel, and (iii) misguided policies and weak economic management, as well as an inadequate legal and regulatory framework. The Bank's strategy is to "spring open" a relationship with this new member by engaging the authorities in a dialogue on the country's development needs, supporting capacity building, heiping to rehabilitate the devastated economic and social infrastructure, facilitating the transition to a peacetime economy, and supporting the process of economic reform. The pace and scope of the Bank's assistance program will depend on Angola's progress in achieving lasting peace and on the implementation of economic reforms and improvements in absorptive capacity. The initial focus has been on an active economic and sector work program and technical assistance lending operations focussing on capacity building, notably in economic management, and preparation of pre-investment studies. As the security situation has considerably improved over the past months, a wider range of activities in infrastructure rehabilitation is now envisaged. If the Government reforms the incentive framework, the Bank would expand its operations to include investments in productive sectors such as agriculture and industry. Finally, the Bank might consider adjustment lending, depending on the progress in implementing comprehensive macroeconomic policy reforms as well as on the country's financing requirements, which largely hinge on the price of oil. PART H - THE CREDIT Back=rUnd 36. The Bank's Introductory Economic Review (Report No. 8906-Ang of June 29, 1990) Identified the rehabilitation of urban infrastructure and services as one of the main priorities for economic recovery of Angola. Studies of the Southern Africa Transport and Communications Commission (SATCC) further identified the urban rehabilitation of the proposed project area as a key condition for the rehabilitation of the Lobito Port Transport System, the country's principal transport corridor, which crosses central Angola and links southern Zaire and Zambia to the Atlantic. The proposed credit supports the objectives of the country strategy and the Economic Management Capacity Building Credit (Report No. P-5525-ANG), and complements the Infrastructure Rehabilitation Engineering Project (Report No. P-5529-ANG), recently approved by the Executive Directors, by addressing the infrantructure rehabilitation needs of one of the country's most important urban centers. 37. The port of Lobito and the provincial capita: of Benguela are twin cities that typify the situation of the urban sector in Angola, one of the major casualties of fifteen years of civil war and economic mismanagement. The population of Lobito-Benguela has nearly quadrupled to 10 800,000 since Independence, while the delivery of basic services, especially clean water, has diminished by as much as two-thirds. The problems brought on by the lack of adequate funding for maintenance and rehabilitation of infrastructure and services has led to a breakdown of the water, sewer and waste collection systems in the face of a rapidly growing population. Controlled prices, absence of effective cost recovery and unclear institutional responsibilities resulted in loss of technical and managerial capacity of the provincial authorities that have made the situation worse. The cities now face public health and environmental deterioration of crisis proportions. Lack of water and basic sanitation have led to chronic outbreaks of cholera, typhoid and yellow fever. Child mortality is reported at 325 per thousand, exceeding the Angolan national average, 292 per thousand, and more than twice the rate for Sub-Saharan Africa (157 per thousand). Morbidity rates, i.e., the incidence of debilitating disease, are in excess of 35%. Environmental degradation is manifested by other factors, including incipient desertification, erosion, and pollution of wetlands. 38. The severe problems of Lobito and Benguela, and of Angola's overall urban sector, are not related solely to the lack of funds, or lack of clear institutional responsibilities and management capacity. The macroeconomic and sector policies in force in Angola since Independence have aggrav.ted these difficulties. The over-valued local currency, for instance, cheapens imports, depresses exports, and creates a scarcity of foreign exchange. Demand for foreign exchange far exceeds its supply, leading to forced allocations which do not reflect real economic priorities. This is one of the main reasons for the lack of spare parts which, over the long term, has rendered inoperable substantial investments in equipment for the water supply and distribution sy,tcms, for the sewerage pumping stations, and for the garbage trucks of the solid waste management system. Cannibalization of vehicles and equipment for spare parts to keep others running has contributed to the rapidly deteriorating situation in Angola's major cities. 39. Faced with this situation, the Government has begun to revise its sectoral policy framework, with the support of the two credits mentioned in para 36 above. Over the past year, the Government has begun to evolve a sectoral strategy as well as long-term goals and priority reforms that include: (a) rehabilitation of basic urban services; (b) provision of water and basic urban services to the lower income population; (c) decentralization of management and control of public utilities serving principal municipalities; (d) gradual divestiture of public enterprises responsible for manufacture and distribution of building materials; and (e) introduction of cost recovery principles through economic rents, tariffs, and user charges. The proposed project supports these changes in sectoral policies and addresses the urgent need for the rehabilitation of urban infrastructure and services and for reversing the environmental deterioration in Lobito and Benguela. The project also addresses the present weakness of the local sectoral institutions by financing technical assistance, training and studies for institutional development, reorganization of the water authority, establishment of economic tariffs, and environmental management, among others. ProIect Oblectives 40. The main objectives of the project are to: (a) restore the water supply and failed sanitary services in the Lobito-Benguela metropolitan area in order to eliminate life-threatening epidemics, improve the health of the population, and halt the degradation of the physical environment; (b) improve living conditions in the squatter settlements by provicing access to clean water and improved latrines; (c) strengthen the institutions responsible for operation, management, and control of urban services and the environment by providing technical assistance, logistical 11 support, and training; and (d) assist in policy reform through the introduction of more rational water and sewer tariffs, and by means of land registration and environmental studies. Proec Descripion 41. The project would consist of the following components: (a) Environmental Sanitation - rehabilitation and expansion of the water supply and distribution and sanitary sewer systems; provision of clean urban water to all unplanned settlements via a network of 500 standpipes and laundry facilities; rehabilitation of the solid waste management system; and rehabilitation of the starm drainage and erosion control network; estimated cost: US$ 26.18 million (44%); (b) Low Income Sanitation - an extensive improved latrine and sanitary- environmental education program, and investment in urban revegetation (planting of trees, grasses, and shrubs); estimated cost: US$ 3.92 million (7%); (c) Institutional Development - consisting of technical assistance and training, and logistical and administrative support for the Provincial Water Company (EPAB); for the Provincial Community Services Department (DPSC); and for the Provincial Planning Office (GPP); estimated cost: US$ 8.67 million (15%); and (d) Studies - a Water and Sewer Tariff and Institutional Reorganization Study; an Environmental Management and Monitoring Study; a Geographic Information and Land Registration Study; and other studies for preparation of a follow up project; estimated cost: US$6.29 million (11%). Schedule A provides more detailed costs for each of the components, as well as the project financing plan. Schedule B provides details on the procurement arrangements and the disbursements under the proposed credit. Schedule C shows a timetable of key processing events. Maps are also attached. The Staff Appraisal Report No. 9794-ANG, dated November 27, 1991, is being distributed separately. Prolect Implementation 42. Overall responsibility for project implementation resides with the Director of the Provincial Planning Office (GPP), who reports to the Provincial Governor and to the Ministry of Planning in Lranda. The GPP would be responsible for contract management and coordination of the various components through the implementing agencies, EPAB and DPSC. The GPP is a relatively competent agency and is regarded as an example for other provinces. Technical assistance in the areas of procurement and financial management would be provided under the project. EPAB is the provincial water company which would operate the water and sanitary sewer systems in Lobito and Benguela upon completion of rehabilitation and expansion of the networks. EPAB is a weak company and would require substantial assistance under the project. Aside from immediate support in the areas of operations and financial management, the project would provide for a study for the reorganization of the company and the establishment of economic tariffs. An action plan to implement these would be agreed upon by the mid-term review. The community services department, DPSC, would implement the solid waste management and low income sanitation programs, including the sanitary education component. Although the DPSC is already benefiting from technical assistance for overall management, the project would provide specific support for solid waste operations and vehicle maintenance, and for developing and coordinating the sanitary education component. Prft Sustainability 43. Overall, the project contributes to the sustainable development of Lobito and Benguela by reversing the environmental degradation that is threatening the economic development potential of the region. The project is also contributing to the sustainability of the various components 12 financed by introducing the prit.ciple of full cost recovery. In particular, the sustainability of the rehabilitated water and sewerage systems is addressed by establishing economic tariffs and restructuring the water authority; the sustainability of the solid waste management system, by establishing charges for garbage collection commensurate with the service provided; and the sustainability of the low cost sanitation program, by charging full cost recovery prices for the improved latrine slabs. Lessons Learned from Previous IDA Involvement 44. The proposed project is the first investment in physical infrastructure supported by the Bank Group in Angola. Therefore, there are no direct lessons to draw from prior Bank experience in this country. Nevertheless, Angola has institutional and technical weaknesses comparable to those in other Portuguese-speaking nations that gained Independence at the same time. One of the main sources of lessons learned is the Mozambique Urban Rehabilitation project (Cr. MOZ 1949). Lessons that have been incorporated include: scaling down the project from its original design to includ- fewer components, fewer agencies, and more realistic objectives and expectations; with regard to implementation, the use of an ad hoc Project Implementation Unit has been abandoned in favor of strengthening existing institutional structures; it is also proposed that the role of the implementing agency be limited to that of contract management for civil works, supervision, and technical assistance, rather than attempting to perform implementation tasks directly. Finally, applying a lesson learned during preparation, the Borrower has agreed to delegate to the Provincial Government full authority to execute the project and manage project funds, thus avoiding the costly delays of central government involvement in project implementation. Rationale for IDA Invlment 45. The Bank's Introductory Economic Review identified rehabilitation of urban infrastructure and services, in general, as vital to the renewed economic viability of the country. The proposed project fits well in the Bank's country strategy outlined in para 26 above; it helps the urban poor; improves the local environment; addresses priority infrastructure needs; and pursues important sectoral policy objectives. Experience gained from the project will deepen the Bank's knowledge of the urban sector and of related environmental issues, thereby contributing to the development of sound infrastructure projects in other urban centers. In addition, by taking the lead in this project, with the support of Sweden and Norway, the Bank will better be able to coordinate the contributions of numerous donors in the large projects emanating from the Lobito Corridor Development Program. Agred Actions 46. During negotiations afreements were reached with the Government on the following matters: (a) implementation of an action plan for progressive revision of water and sewer tariffs, including new interim water tariffs effective January 1, 1992 and January 1, 1993, designed to recover at least 80 percent of cost (from less than 5 percent); and interim fees and prices of solid waste collection and disposal and the improved latrine slabs; and (b) a mid-term review 18 months after effectiveness: (i) to monitor progress in carrying out the project under the implementation agreements; (ii) to review recommendations of the studies, agree on an action plan for the reorganization of EPAB, and implement full cost recovery water and sewer tariffs; (iii) to establish cost recovery mechanisms and an action plan for the solid waste and improved latrines programs; (iv) to implement the environmental action plan, based on the environmental 13 studies; and (v) to implement the land registration pilot program based on the land registration studies. Conditions of Effectiveness would be: (a) appointment of the key staff of GPP, including confirmation of the Director as Project Manager; (b) signature of the contract for the water and sewer Institutional reorganization and tariff studies; and c) implementation of the first water tariff increase agreed at negotiations. Conditions of Disbursement of specific components would be: (a) confirmation of the availability of SIDA and NORAD co-financing for the project; and (b) proof of ownership or non-existence of encumbrances of the lands occupied by the new wellfields, the oxidation ponds, and the pumping stations for the water and sewer supply and sanitary sewer civil works. EnvIronmental Assects 47. The project has been classified as an environmentally focused project. A preliminary environmental assessment conducted during project preparation determined that environmental degradation, stemming from the intensity of the urbanization process and the deterioration of urban infrastructure and services, has reached critical proportions. Pollution affects coastal, surface and groundwater while soil erosion is leading to the depletion of arable land, and deforestation is causing incipient desertification around the urban areas. The project is intended to reverse the extreme environmental degradation in the area and to strengthen the environmental monitoring and management capacity of local agencies. The project involves the rehabilitation and limited expansion of urban infrastructure and services, but involves no major new civil works. During the course of project preparation alternative designs were analyzed and the most environmentally sound solutions selected for low income sanitation, water supply, sewage treatment, storm drainage and erosion control. Environmental studies of the Lobito-Benguela region, financed by the project, would include a medium-term action plan and identify the need for specific assessments for future investment projects in connection with the rehabilitation of the Lobito Corridor. Program Objective Categories 48. The project will largely benefit the lowest income population in the peripheral settlements, where piped water and pit latrines will be provided for the first time. Among the poor, women and children who spend a great deal of energy and time hauling water, will benefit most directly. Aside from the environmental aspects discussed above, another program objective category addressed by the project is private sector development. Specifically, the studies financed by the project will explore the feasibility of privatization of the provincial water and sewer company, EPAB, and the solid waste management services run by the municipalities. In addition, the proposed project would stimulate the local private sector by offering competitive bidding for a number of small and medium-sized civil works contracts and service contracts. rowect BenefIts 49. The principal components of the project - rehabilitation of the failed water and sewer networks of Lobito and Benguela; provision of clean water and affordably priced latrines to the low income population (about 80% of the total population); and rehabilitation of the storm drainage and solid waste management systems - would bring major direct benefits to the 800,000 people of Lobito and Benguela. Benefits would be evaluated in terms of improved health of the entire urban population, especially of women and children; alleviation of poverty among the lowest income groups in the squatter settlements; positive impacts on the physical and social environment; increased productivity of the urban population; and improved economic efficiency 14 of the key institutions targeted in the project. No economic rate of return has been calculated owing to the difficulties in quantifying the major benefits of the project. While justified on health and environmental concerns alone, the proposed project would also facilitate the development of the larger Lobito Corridor rehabilitation program. 50. The risks inherent in the proposed project are due to institutional and technical weaknesses which may cause delays in project implementation and lead to further environmental and economic deterioration. There is a potential risk that the government may interfere in the administrative autonomy of the provincial water company thereby hindering reorganization effrts and the cost recovery objectives of the project. Unfamiliarity with Bank procedures, problems with communications, and a potentially unstable political environment could lead to significant delays as well. Delays in the overall urban rehabilitation effort could affect the rehabilitation of the Lobito corridor, once it gets underway. Other minor risks involve the effectiveness of some of the environmental rehabilitation efforts such as the urban revegetation component. Technical assistance, training, and logistical support, initiated during project preparation, are intended to minimize these risks insofar as possible. Recomnfldation 51. 1 am satisfied that the pro.)osed credit would comply with the Articles of Agreement of the Association and rermmend that the Executive Directors approve it. Lewis T. Preston President Attachments Washington, D.C. November 27, 1991 is Schedule A Page 1 of 1 ANGOLA LOBITO BENGUELA URBAN ENVIRONMENTAL RERABILITATION PROJECT Project Cost Estimates (US& sit tion) Perct Local Foreign Total Total Foreign I. EVIROMNENTAL SANITATION *4.94 *21.24 $26.18 451 81 A. Water Rehabilitation 1.44 8.16 9.60 16 85 8. Seer Rehabilitation 1.18 6.70 7.88 13 85 C. Storm Drainage Works 1.74 4.06 5.80 10 70 D. Solid Waste Collection & Disposal 0.58 2.32 2.90 5 80 II. LW INCOE SANITATION $1.55 S2.37 83.92 75 60 A. Improved Letrines 1.08 1.72 2.80 5 61 B. Sanitary Education 0.15 0.48 0.63 1 77 C. Urban Revegetation 0.32 0.18 0.50 1 35 III. INSTITIOWAL DEVELOPMWET 30.59 $8.08 58.67 153 95 A. Technical Assistance 0.31 5.45 5.76 10 95 9. Training 0.04 0.34 0.38 1 90 C. Adainistrative/LogisticaL Support 0.25 2.29 2.54 4 90 IV. SMWIES 50.16 $6.13 *6.29 115 9F A. Engineering Design & Supervision 3.49 3.49 6 100 B. Water & Seer Tariff & Reorganiz. Study 0.67 0.67 1 100 C. GIS/Land Registration Study 0.08 0.31 0.39 1 80 0. Environmental Ngt & Monitoring Study 0.08 0.70 0.78 1 90 E. Other Studies 0.95 0.95 2 100 V. TOFAL BAE COST $7.24 $57.82 $45.06 7M1 841 Physical Contingencies 0.99 3.81 4.80 8 79 Price Contingencies 1.45 7.56 9.01 15 84 VI. TOTAL PROJECT COST $9.68 $49.20 *58.88 1005 841 Price contingencies are based on estimated international inflation over the life of the project, averaging 3.9% p.a. per recent IDA guidelines. Base costs include taxes on locally procured goods estimated at US$1.3 million equivalent, financed entirely by Governmnt. Financing Plan (USS Alion) Percent Local Forefig Total of Total IDA Credit $3.38 $42.20 $45.58 77 NORAD Co-Financing - 3.50 3.50 6 SIDA Co-Financing 3.50 3.50 6 Government $6.30 * *6.30 11 Total $9.68 $49.20 S58.88 100 16 Page 1 of 2 ANGOLA LOBITO BENGUELA URBAN ENVIRONMENTAL REHABILITATION PROJECT Procurement Arrangements (USS siliton) Percent of Project Elepients ICe LCB Other MA Total Total 1 UORKS a) Water Rehabilitation 12.96 12.96 (11.02) (11.02) 212 b) Sewer & Storm Drainage 14.96 14.96 (12.07) (12.07) 23 c) Erosion Control 3.51 3.51 (3.14) (3.14) 6% d) Building Rehab. (1) 1.12 1.12 (1.00) (1.00) 22 e) Low Income Sanitation (2) 0.79 0.79 (0.71) (0.71) 1% 2 GOODS a) Vehicles & Equipment 4.56 1.00 5.56 (4.56) (1.00) (5.56) 11% b) Materials 2.22 2.22 (1.99) (1.99) 4% c) Logistical Support 2.11 2.11 (2.11) (2.11) 4% 3 CONSULTANTS a) Technical Assistance 6.91 6.91 (6.54) (6.54) 122 b) Design & Supervision 3.44 3.44 (3.44) (3.44) 7% c) Stidies 3.35 3.35 (3.17) (3.17) 62 4 TRAINING 1.20 1.20 (1.08) (1.08) 22 5 REFINANCING OF PPF 0.75 0.75 (0.75) (0.75) 1% TOTAL $32.47 s9.96 $15.70 s0.75 $58.88 ($27.64) ($9.25) ($14.94) (0.75) ($52.58) 1002 54% 16% 28% 1% 100% Notes: (1) Repair of DPSC workshops and GPP, DPSC, and EPAS offices. (2) Fabrication of improved latrine stabs and urban revegetation by DPSC force account. (3) Figures in parentheses are amounts to be financed by IDA and Co-Financing. (4) Cost figures include contingencies. 17 Schedule-B Page 2 of 2 ANGOLA LOBITO BENGUELA URBAN ENVIRONMENTAL REHABILITATION PROJECT Disbursements under IDA Credit (USS Million) AMount Expenditues Category Atlocated to be Fleced I Works $17.95 a) Water Rehabilitation $7.07 1002 of Foreign b) Seer & Storm Drainage Rehab 7.75 100% of Foreign c) Retention Dams 2.03 90 of Total d) Building Rehab 0.64 902 of Total e) Low Income Sanitation 0.46 90% of Total 2 Goods 56.21 a) Vehicles & Equipment $3.57 100% of Foreign b) Materials 1.28 902 of Total c) Logistical Support 1.36 100% of Total 3 Consultants $9.40 a) Technical Assistance $4.73 100% of Foreign b) Design & Supervision 2.38 100% of Foreign c) Studies 2.29 100% of Foreign 4 Training $0.78 90% of Totat 5 Ref inancing of PPF $0.75 Amount Due 6 Unallocated $10.50 Total $45.58 Estimated Disbarsements (US$ mition) FY93 FY94 FY95 FY96 FY97 FY98 Total Co*Financing 4.92 2.08 * * 7.00 IDA - 5.81 10.52 13.14 7.89 8.23 45.58 Government 0.63 0.94 1.26 1.57 0.94 0.94 6.30 Total 5.55 8.83 11.78 14.72 8.83 9.17 58.88 Percent 9% 15% 20% 25% 152 16% 1002 ID Cuantative - 5 81 16.32 29.47 37.35 45.58 Percent - 132 36% 65% 852 1002 18 Page 1 of I ANGOLA LOBITO BENGUELA URBAN ENVIRONMENTAL REHABILITATION PROJECT Timetable of Key Prject Processing Events 1. Time taken to prepare: 24 months 2. Prepared by: IDA (AF6IN and APMIN) 3. First IDA mission: Reconnaissance - January 1989 4. Identification mission: May 1989 5. Preparation missions: October 1989, February, May 1990 October, 1990 and February 1991 6. Appraisal mission: May 1991 7. Negotiations: October 1991 8. Planned Effectiveness: March 1992 19 Page 1 of 1 ANGOLA LOBITO BENGUELA URBAN ENVIRONMENTAL REHABLITATION PROJECT STATUS OF BANK GROUP OPERATIONS ANGOLA The proposed credit, which follows the Economic Management Capacity Building and the Infrastructure Rebabilitatin Engineering presented to the Executive Directors on June 19, 1991, and July 16, 1991, respectively, would be the first Bank Group investment in physical infrastructure in Angola. A. STATEMENT OF BANK LOANS AND IDA CREDITS September 30, 1991 Amount In US$ Ntilion Loan or (less cancettation) Credit Fiscal IMI: lIat lorrower euras a A& (1) Undisbr Cr. 2274 91 ANGOLA Economic Sgtt.Cap.Bldg. a/ 23.00 23.26 Cr. 2289 92 ANGOLA Infrastructure Rehab.Eng. al 3L. 70g Sub-Total active projects: 60.70 61.76 Total tess cancetlations: 0.00 60.70 of which has been repaid _.m, ..(Mi Total due Bank and IDA: 0.00 60.70 (1) Total undisbursed: 0.00 61.76 (1) The Sun of Total Undisbursed is higher than Totat due Bank and IDA because of depreciation of the US$. at Not yet effective 8. STATEMENT OF IFC INVESTMENTS No IFC investments to date. 20 AMcoW Schedule E1 AMML.A - OMMIC MrATRs Page 1 of 3 Mid-1990 Poputation (mils.) 10 1990 Per Capita GNP in US: 620 /a A. Shares of Gross Danestic Prockat 8. Growth Rates(% per arvn) (fra current price data) (fran constant price data) *...**.***************.********..******.******* ***.*.*********.*.*..................... 1965 1973 1980 1988 1989 1990 1965-73 1973-80 1980-90 1989 1990 Gross Danestic Prcht M.p. 100.0 100.0 100.0 100.0 100.0 100.0 .. .. 9.8 1.8 Net Indirect Taxes .. .. ,. *.4 0.3 .. ., .. Agriculture .. .. .. 14.5 12.9 .. .. .. -0.5 -2.9 Indstry .. .. .. 41.2 43.6 .. ., .. 12.6 1.2 (of bhich Manufacturing) .. .. .. 3.9 4.0 .- .. .. 4.6 11.0 Services .. .. .. 44.7 43.1 ., . .. .. Resource Balance ,, .. .. .. .. .. Exports of GNFS .. .. ,. .. . Inports of GMFS .. .. .. .. ,, ., Total Expenditures .. .. .. .. .. .. Total Coraptiom .. ., .. .. ., . Private Consurption .. *. .. . . Gross Dnetic trmstnt .. .. .. .. .. .. Fixed Investment .. .. ,. .. .. .. Charges in Stocks . . . . . Gross Danestic Saving .. . Met Factor Inoe .. -7.7 -9.6 .. Met Current Transfers .. .. .. 0.5 . Gross matianet Saving .. ...* . .. In thousnds of LCU 1965 1973 1980 1988 1989 1990 (at cotant 1987 prices) **. **-. **.* * .** ** .. Gross Datic Pr ct.. .. .. 223.6M 223.37 .. .. .. 9.8 -0.1 Capacity to Import .. .. .. .. .. *. ,, . Ternus of Trade AdJustmnt .. .. .. .. .. ,, * . Gross Donastic nons .. .. .. .. .. * . Gross National Product .. .. .. 179.05 176.984 .. .. .. 8.8 *1.2 Cross National trans .. .. .. .. .. .. . . -...........****(1987 a 100)**************. ****-*- Inftation Rates(% p.e.)-----*** C. Price Indices 1980 198 1986 1988 1989 1990 1965-73 1973-80 1980-90 1989 1990 ...-.-.-..***.**..-.*.***..**.- .... .... .... .... .... .... ....... ....... ....... .... .... Conmur Prices (IFS 64) ** ** ** ** .. .. .. .. 0.0 6.1 Uholesale Prices (IFS d. .. CN. Iaplicit GDP Oeflator .. 117.6 96.3 92.7 103.5 .. .. .. -3.7 11.6 Ipticit Expenditures Deft. .. .. ,, .. .. .. D. Other Indicators: 1965-73 1973-80 1980-90 Growth Rates(% p.a.): Poputation .P 2.0 3.5 2.6 Labor Force 1.7 2.8 1.8 Gross Natt. Ircone p.C. Private Cansurption p.c. .. .. . Inport Etesticity: laports (G+NFS) I GDP(ap) .. .. .. /a Provisional estinates MarginaL Savings Rates: Gross National Saving Gross Donestic Saving ICCR (period averages): Share of Totat 1965 1973 1960 1989 1990 Labor Force in: **** *.** **** **** **** Agriculture 79.1 76.5 73.8 Industry 8.1 8.8 9.6 Services 12.8 14.7 16.7 Total 100.0 100.0 100.0 100.0 100 IEC 11/26/91 21 ScheduleE MGOU E lOuC 1mCAOs Page 2 of 3 Votun~ Irdex Vatue at Current Prices (mitLa US) Ef. Merchandse Exports 1960 1985 197 1968 199 1990 1980 1965 197 198 1989 1990 X.ntM~ s .. .. .. *. .. . . 74 98 185 229 X.It .. .. .. .. - .. . 2150 2153 2181 2740 Mamfactures .. . . . . . .t. . . . . TotaL Exprts F. .. .. .. .. .. .. 2302 2322 2491 3013 F. Merchadise inports Food .. .. .. .. .. .. .. 375 194 29 Fue and energy .. .. . . .. .. .. .. .. .. Oth.cenumergood .. .. .. . .. . 212 64 114 .. Other interned gos .. .. .. .. 255 77 174 Capitatgd .. . .. .. 38 172 262 .. TotaL ~nprts CIF.. . .. . .. . .. . .. . .. . 0. Merchendise Tenm of Tradå 1980 1965 1987 1988 1989 1990 Merch.... Ex.tsP.. rdx.. . . . .... .. . Merch. Ioports Price Indx .. .. Merch. Ternm of Trade .. .. .. .. USS mittions (at current prices): H. Datance of Payments 1960 1965 1987 198 1989 1990 Exports of Goods & NFS 2408 2409 2605 3144 Merchanise (F) .. 2301 2322 2491 3013 N~rrFactar services .. 107 87 114 131 I «orts of Gods & FS .. 2105 1795 270 2416 mrcwdise (F) .. 1401 1303 1372 1273 n.Factor servics 704 492 1198 1143 Ruscurce gatance 303 614 35 72 . Net Factor Innmo. -130 -217 -538 -744 <interst per RS) 0 79 77 170 119 149 #et Current Tramfers .. 21 52 32 .4 (orkers renittanc) 0 0 0 0 0 0 Curr A/C Bat Before Off. Grants 194 449 -468 -20 #et OfficiaL Tranmfers .. 0 0 0 0 Curr A/C sat After Off. Grants . 194 449 -468 -20 .ong.Tem Capitat Infleö .. 454 55 -199 -117 Direct Investimnt 278 119 131 200 Het LT Lo ORS data) 43 1186 491 397 377 495 Other LT Inftow (metg. -1060 •?85 -708 -568 Tota( other Items (not) .W37 .487 717 170 met Shart Term Capitat .. -621 -138 1691 .753 Capitat FLos N.E.I. 0 0 0 0 0 0 Errors o: Odisslom -16 -349 -974 925 Chies in Het Revese. -21 -17 .49 6 Het Credit fran the IMF .. . . .. .. Other Reserves Chaes -21 .17 .49 6 As share of CP: Resource Batane .. 4.9 9.4 0.5 9.4 Interest Paymets . .3 1.2 2.5 1.5 Current Accaunt alance 3.2 6.9 -6.8 -0.3 Kemranda Ites: Reserve ext. Gotd CmIL. (U) .. . .. . .. - Reserves inct. Gold (mit. USM) .. Officiat X-Rate (L~sUS0) 29.92 29.92 29.92 29.92 29.92 29.92 Trw #01 Fff. X.4 a~ 1960 .. .. GOp (of t Lios of current U) .. 6091 6510 6926 724 IEC 11/26/91 22 Schedule E MOLA Page 3 of 3 ANCA - ECClotC latATORS Share of MP %) Gra*th Rates Goverrent Finwn 1980 1986 1987 19 1989 1990 1980-86 1987 198 1989 199 Current Reveu .. 42.5 31.7 29.8 31.3 29.0 .. 9.6 13.6 -11.3 Current Experditures .. 43.3 34.7 38.4 34.7 45.1 .. 0.9 3.6 1.0 Current Budget Batere .. -2.7 -6.2 -2.9 -6.5 .. .. .. .. .. Capital Receipta . 0 0 0 0 0 0 .. .. .. Capital Exrlitures ., 6.2 6.1 7.8 8.6 10.7 Extrabudgetary operacturt .. 0.0 0.0 10.6 11.1 0.0 Overatt Deficit .. 7.1 9.1 26.9 23.1 26.9 Official Capital Grants .. .. .. .. .. .. .. .. .. ., External Borrowing (net) .. .. .. 4.9 3.0 .. .. . .i 0aestic Noneank Borrowing .. .. .. .. .. .. .. .. Donestic Bank Financing .. .. .. .. .. .. .. .. .. . . met oisbursenents (US$ miliors) Debt Outstardifr & Disbursef (USS mitler) J. External Capita Flows, Debt --------**** ------------------.****** ***.*****.**** .******** .*******. and Debt Burden Ratios 1980 195 1987 1988 199 1990 1980 1985 1987 19 1989 1990 Pbic & PbicLyGur.LT 43 1186 491 398 377 '495 59 1822 3 4649 6148 7152 Official Creditors 43 163 152 52 172 129 59 33? 1034 1408 2640 343 tt tiLateral 0 9 10 5 4 0 13 28 4S 50 53 56 of which tD 0 0 0 0 0 0 0 0 0 0 0 0 ofwhichIDA 0 0 0 0 0 0 0 *0 0 0 0 0 Bilateral 43 154 142 47 168 129 46 309 987 1358 2587 3287 Private Creditors 0 1023 339 345 205 366 0 1485 2932 3241 3506 3809 Suqpliers 0 *1 -3 *6 *2 8 0 3 30 20 17 27 Financial Markets 0 1024 342 352 207 358 0 1482 2902 3221 3491 3781 Private Nn-guranteed 0 0 0 0 0 0 0 0 0 0 0 0 Total LT 43 1186 491 396 377 495 59 1822 3966 4649 6148 7152 IMPCredit 0 0 0 0 0 0 0 0 0 0 0 0 Net Short-Tem Capital .. *621 -138 1691 .. .. 0 659 867 322 801 558 Total ircl. IMF & Net ST .. 565 353 2088 .. .. 59 2481 4855 4971 6950 710 Bank and IDA Ratios 1980 1985 1987 1 1989 1990 Share of Total Lang-Tena e Nets 1. t88 as % of Total 0.00 0.00 0.00 0.00 0.00 0.00 2. IDA as % of Total 0.00 0.00 0.00 0.00 0.00 0.00 Deta on F.cn ic tridicators tables 3. ISW+IDA as % of Total 0.00 0.00 0.00 0.00 0.00 0.00 should follow the definitits rd the concepts of the Standard Tables ard Share of LT Debt Service Starderd Attachumts. 1e irdicators 1. 18RD as % of Total 0.00 0.00 0.00 0.00 0.00 0.00 should knede data throug the mt 2. IDA as X of Total 0.00 0.00 0.00 0.00 0.00 0.00 recently completed calerder w (or 3. ISm0+iDA as % of Total 0.00 0.00 0.00 0.00 0.00 0.00 fiscal year in the case of fiscal year coumtries). Staff estivates may be used MOD-to-Eyports Ratios if final or pretiminary actuats are not .............------ yet evaitable. The we of estimates ;d 1. Long-Tenn Oebt/EVxpts .. 74.97 164.16 177.45 .. . taimirary figures should be indicated 2. IMF Credit/Eports .. 0.00 0.00 0.00 3. Short-Tem ebt/Exports .. 27.12 35.87 12.29 4. LT+IMF+ST DW/E*ets .. 102.09 200.03 189.74 .. .. e a estimated data p a prelitinary date 0D-to-GDP Ratios 1. Lang-Tern DOb/0P .. 29.91 60.92 67.13 79.60 2. IMF Credit/GDP .. 0.00 0.00 0.00 0.00 3. Short-Tenm Debt/WP .. 10.82 13.31 4.65 10.38 4. LT+IMF+ST OD/QP .. 40.73 74.23 71.78 89.98 Debt Service /Eports 1. Ptbiic & Guranteed LT .. 4.43 6.54 7.58 2. Private Mn-gurnteed LT .. 0.00 0.00 0.00 3. Total LonG-Term Debt Service . 4.43 6.54 7.58 .. 4. IMF Repurdass+erv. Ch. .. 0.00 0.00 0.00 S. interest only an ST Debt .. 1.98 0.68 2.55 6. Total (LT+IMF+ST Int.) .. 6.41 7.21 10.13 .. . .............I..............................-... ---------*c 1*/* IBRD 23181 ’一雙 ANGOLA LOBITO III BENGUELA URBAN ENVIRONMENTAL REHABILITATION PROJECT SELECTED COMPONENTS PROJECr COMPONENTS: LOBITO WATER TREATMENT PLANTS WATER PUMPING STATIONS WATER RESERVOIRS SEWAGE PUMPING STATIONS Ah. L- OXIDATION PONDS VALA DO CORINGE STORM DRAINAGE CHANNEL AGRICULTURAL AREAS ROADS RAILROADS RIVERS BUILT-UP AREAS t AIRPORTS PORT INTERNATIONAL BOUNDARIES BENGUELA KILOMETERS I. III, Gtv - i KENYA 4- ZAIRE -7 TANZANIA -A, ANGOLAI-- MALW ZAMBIA V . ZIMBABWE NAMIBIA j BOTSWANA _,J SOUTH AFR(CA_ I wz r, 3w