Burundi - Agribusiness Promotion Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 10628-BU STAFF APPRAISAL REPORT BURUNDI AGRIBUSIESS PRO4TTION PROJ3CT JULY 21, 1992 N I 'RF I CHE C'OPY heport No :IO 6258--PJ] r L.i-+r: FAUPUSIP2;s- I(9l'RCMOT'N PRO)JECT Ext. : 4255 1v c J i09?7 Dept. :Ah AFP Agriculture Operation DivisiOU South-Central and Indian Ocean Departimelat This document has a restricted disttibutOn and myis be used by rcipients only in the performance their f dties. Its contents ,*Y not Otbefwb  Currency Enuivalents Period Average Currency unit = Burundi Franc (FBu) 1992 USS1.00 FBU 200 (as of March 1992) 1991 US$1.00 = FBu 181.5 1990 US$1.00 = FBu 171 1989 US$1.00 = FBu 159 1988 USS1.00 = FBu 140 1987 US$1.00 = FBu 124 WEIGHTS AND MEASURES Metric International Standard System GLOSSARY OF ABBREVIATIONS ADAP Association pour le developpemcntagro-pastoral (Farmers' professional association) AfDB = African Development Bank AGCD = Administration Gdnerale de la Coopdration au Developpement (Belgian) APDF = African Project Development Facility APEE = Agence de promotion des echanges exterieurs (Export Promotion Agency) BCC = Burundi Coffee Company BEST = Burundi Enterprise Support and Training Pr( lect BNDE = Banque nationale de d6v-loppement economique (Development Bank) BTC = Burundi Tobacco Comp:.ny CCCE = Caisse Centrale de Coop6ration Economique (French Aid Agency) CCIB = Chamber of Commerce and Industry of Burundi COGERCO = Compagnie de gdrance du coton (Cottun Company) COTEBU = Complexe textile dt; Burundi (Textile Company) EAP = Environmental Action Plan EC = European Communities EB = European Investment Bank FMA = Fund Management Agency PMU F Pund Management Unit ICP = Interministerial Committee for Privatization IFC = International Finance Corporation MCI = Ministry of Commerce and Industry MOAL = Ministry of Agriculture and Livestock NGO - Non-governmental organization OCIBU = Office du Cafe du Burundi (Coffee Board) OTB = Office du the du Burundi (Tea Board) PE Public Enterprise PA = Project Administrator PSD Private Sector Development RDC Regional Development Company SAC Structural Adjustment Credit SAE Service d'appui aux exportations (Export Promotion Service) SCEP Service Charge des Entreprises Publiques (Public Enterprises Reform Office) SEM SociEe6 d'economie mixte (Mixed-capital Company) SIDI Societe d'investissement et de ddveloppement international (Internatioral Investment and Development Company) SODECO = Societe de deparchage et de commercialisation (Hulling and Marketing Company) SOCESTAL = Societe de gestion des stations de lavage (Washing Stations Managernent Company) SOSUMO = Societe sucriere du Mosso (Mosso Sugar Company) SRDI = Societe rdgionale do developpemcnt de l'lmbo (Imbo Regional Development Company) SSE/APEX Small-scale Enterprise Project TC Treasury Certificates TEC = Technical Evaluation Commissions USAID = United States Agency of International Development VAT = Value-added Tax GOVERNMENT OF BURUNDI FISCAL YEAR January I to December31  FOR OMCIL USE ONLY BLRUNDI AGRIBUSINESS PR0MC0Q<N PROQJEC STAPP APPRAISAL REPORT Table of Conket Page No. Credit and Project Summary . ........................................ I. INTRODUCTION . ............................................ II. SECTOR BACKGROUND .................................. 2 A. The Public Agro-Industries ......................... 3 1. Introduction ......................... 3 2. Status and Performance ................................ 3 B. PrivateAgribusiness ......................... 4 M. GOVERNMENT'S POLICY IN AGRICULTURE AND AGRIBUSINESS ......... 6 A. Past Policies and Performance ................... 6 B. The New Policy ............ ............................. 6 IV. THEPROJECT .............................................. 8 A. Project Objectives and Justification .............. ................ 8 B. Project Description ................... ..................... 8 C. DetaUedFeatures ............. 9 1. Privatization of Publicly held Agro-dustries .................. 9 2. Assistance to Private Entrepreneurs ........................ 13 This report is based on the findings of an appraisal mission which visited Burundi from March 9 to 30 1992; The mission consisted of Messrs. Jean-Frangois Barres, Sr. Agricultural Economist (AF3AG, mission leader and task manager), Jean-Claude Fayd'Herbe, Senior Financial Analyst (AF3AG - financial sector), Lucie Phillips, Economist, (Consultant-private enterprise), Cbarles Thiry, Management Specialist, (Consultant-privatization), FElix Nahimana (Consultant-Legal issues). Mr. Claude Carlier, Senior Agriculturalist, (AFTAG) was peer reviewer. Contributions are acknowledged from Juste Rwamabuga, Operations Officer (RMB-investment prospects), Mr. Xavier Reille, Consultant (Investment Company Component), Mr. Van Tuu Nguyen, Senior Irrigation Specialist (AFTAG -Rescructuring of the Imbo RDC) and Mr. Charles Bolduc, Sr. Financial Analyst (AF3AG). Bilingual secretarial support was provided by Mme Mo-wue Piette, Sr. Staff Assistant, (AF3AG). Messrs. Francisco Aguirre-Sacasa (AF3DR) and Adrian Otten (AF3AG) are the Department Dirictor and the managing Division Chief, respectively. This document has a restricted distribution and may be used by recipionts only in the performance of their offcial duties its contents may not otherwise be disclosed without World Bankt authorizstion.  D. Organization and Management ............................... 15 E. Reporting and Monitoring .................................. iS F. Estimated Costs and Financing Plan ............................ 16 G. Project Financing ...................................... 18 H. Procurement ............... ........................ 19 I. Disbursements ....................................... 20 J. Accounts and Audits ...................................... 21 K. Environmental Inpact ..................................... 22 V. BENEFITS JUSIfFICATION AND RISKS ............. ............... 22 A. Benefits ............................................. 22 B. Risks ........................................... 23 VI. AGREEMENTS REACHED AND RECOMMENDATIONS ....... .......... 23 A. Agreements Reached . .................................... 23 B. Agreements reached at Negotiations ............................ 24 C. Conditions of Effectiveness ........... ...................... 25 D. Conditions of Disbursement ........... ...................... 26 TABLES IN MAIN TEXT Table 1: Burundian Companies by Sector and Management Type ................... 5 Table 2: Summary of Project Cost . .................................... 17 Table 3: Project Financing Plan ....................................... 8 Table 4: Procurement Method . ...................................... 19 Table 5: Disbursements ........................................... 21 ANNEXES Annex I Declaration de politique sectorielle relative I l'agrobusiness Appendix 1 Proposed Draft Policy Matrix Annex 2 Appendix 1 Project Cost Summary Appendix 2 Summary Accounts by Year Appendix 3 Financing Plan by Project Component Appendix 4 Project Components by Year Annex 3 Procurement Method Disbursement Table Annex 4 Agribusiness Development Fund Potential Demand Annex 5 Supervision Plan Annex 6 The Public Agro-Industries Sector Annex 7 The Private Sector Annex 8 Key Indicators Annex 9 Institutional Arrangements Annex 10 List of Documents in Project File MAP IBRD 23199  BUR-UNDI AGRIBUSINESS PROMOTION PROJECT Credit and Project Summary Borrower: Republic of Burundi AmQoun