Benin - Urban Rehabilitation and Management Project

Documnt of The World Bank FOR OFCIAL USE ONLY MICROFICHE COPY Report N. P-5587-BEN Report No. P- 5587-BEN Type: (PM) CANEL, P. / X34767 / J-3125/ AFTIN MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 16.7 MILLION TO THE REPUBLIC OF BENIN FOR AN URBAN REHABILITATION AND MANAGEMENT PROJECT JANUARY 21, 1992 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit a CFAF US$1 = CFAF 283 CFAF I = USSO.0035 (June 1991) CFAF 1 mittion = USS3.534 USS1 a SDR .733 SDR 1 - USS1.360 FISCAL YEAR January 01 -- December 31 SYSTEM OF WEIGHTS AND NEASURES (METIC) 1 meter (m) = 3.28 feet (ft) 1 square meter (m2) a 10.76 square feet (sq ft) 1 cubic meter (a0) = 35.3 cubic feet (cu ft) 1 kilometer Ckm) .. 0.62 tofte (mi' 1 square kilometer (km2) a 0.39 square mile (sq mi) 1 metric ton (t) = 2,205 pound& (tb) ABBREVIATIONS AND ACRONYNS -tem c................................... EngishlFrench ********---------------*-***** AGETUR Urban Works Agency / Agence d'Exdcution des Travaux Urbains FAC French Bitateral Aid / Fonds d'Aide & La Coopdration OPTUNINO Pitot Urban Works Project Using Labor-Intensive Techniques / Opration Pflote des Travaux urbains a Naute Intensitd de Main d'oeuvre SERHAU-SEN Ragional Habitat and Urban Development Studies Bureau / Service d'Etudes Rdgionates d'Habitat et d'4mdnagement Urbain SHEs Smalt and Medium-sized Enterprises / Petites et Noyennes Entreprises UNDP Uniled Nations Development Programme / Programe des Nations Unies pour te o6vetoppement (PNUD) FOR OFFICIAL USE ONLY REPUBLIC OF BENIN URBAN REHABILITATION AND MANAGEMENT PROJECT Credit and Project Summary Borrower: Republic of Benin Beneficiary: Republic of Benin Amount: SDR 16.7 million (US$22.84 million equivalent) Terms: Standard with 40 years' maturity Onlending Terms: Not applicable Financing Plan: Government: US$ 2.00 million eq. Beneficiaries: US$ 0.23 million eq. IDA: US$22.84 million eq. Other: US$ 1.75 million eq. TOTAL: US$26.82 million eq. Economic Rate of Return: > 24 % (urban road works) Maps: IBRD N* 23256: Benin: Population, Administration and Road Network IBRD No 23378: Benin: Location of Project Towns Staff Appraisal Report: No. 9684-BEN This document has a restricted distribution and may be used by recipient only in he performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE REPUBLIC OF BENIN FOR AN URBAN REHABILITATION AND MANAGEMENT PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed development credit to the Republic of Benin for SDR16.7 million (US$22.84 million equivalent). The proposed credit would be granted on standard IDA terms with 40 years' maturity and help finance an urban rehabilitation and management project. The project would be cofinanced by FAC (US$1.30 million) and UNDP (US$0.45 million) for a total of SDR1.28 (US$1.75 million equivalent). Government of Benin (US$2.00 million) and the beneficiaries (US$0.23 million) will contribute to project financing for a total of SDR1.63 million (US$2.23 million equivalent). PART I: Country Policies and Bank Group's Assistance Strategy A. Background 2. Benin is a small country of 4.7 million people with an annual per capita income of US$360 (1990). The primary sector, representing close to 40 percent of GDP, remains the mainstay of the economy. Despite a relatively modest natural resource base, Benin is self-sufficient in food and has been successful in increasing exports of its main cash crop, cotton, since 1982. A small industrial sector (8 percent of GDP) produces mostly consumption goods (beverages, soap, and sugar) and a few basic commodities (textiles and cement). A small offshore oilfield began production in 1983, and produced some 21 percent of domestic export receipts (net of re-exports) in 1990. Due to the considerable volume of transit trade with its coastal and inland neighbors (Burkina Faso, Niger, Nigeria, and Togo), Benin is especially vulnerable to economic and political developments in those countries. A large and growing part of economic activity, particularly in commerce, services, and the re-export of agricultural products to neighboring countries, is carried out in an informal and unstructured manner. 3. Economic Developments. Economic policy during the 1975-1982 period was driven primarily by the Government's efforts to accelerate growth and development by increasing state ownership of productive activities and severely regulating private activity and trade, consistent with the prevailing marxist- leninist ideology. Partly as a consequence of the oil and uranium booms in Nigeria and Niger, but also as a result of buoyant activity under the first State Plan of 1977-80, the economic impact of these policies was initially favorable, with growth averaging 5 percent in 1977-80, in a context of internal and external stability. During this period, Benin, as a member of the West African Monetary Union (UMOA) and the Central Bank of West African States (BCEAO), enjoyed the benefits of the common currency (the CFA franc) and rediscounting facility. I Republic of Benin: Urban Rehabilitation and Management Project 4. The end of the boom in neighboring countries and completion of major public sector projects by 1983 revealed an econot tic structure saddled with poorly-designed, low-return investments, heavy external debt service, a large part of the productive economy without adequate incentives, and a state- dominated modern sector poorly managed and suffering losses. Excessively expansionary macroeconomic policies eventually resulted in domestic and external imbalances that by the late 1980s had become unsustainable (Table 1). In 1987 the severity of the economic crisis was evident in a decline in real GDP and the collapse of the banking system, 75 percent of whose consolidated portfolio was non-performing. In early 1989 the banking sector crisis resulted in the complete illiquidity of the three state banks, a freeze on deposits, and a sharp fall in the proportion of taxes paid in liquid form. 5. Political Developments. From independence in 1960 until the 1972 coup which brought the military Government of Colonel Kerekou to power, Benin underwent frequent changes in Government. Subsequently, the country experienced a comparatively long period of political stability until 1988/89. The first structural adjustment program (SAL I) was introduced in 1989 amidst growing popular discontent with the one-party marxist-leninist regime installed by President Kerekou in the mid-1970s. By end-1989 anti- government demonstrations reached crisis proportions; teachers who had been on strike for most of the year were joined by civil servants, bringing the government administrative apparatus to a virtual standstill. TABLE 1. MACROECNOMIC INDICATORS, 1985-91 .................. Actual -------.--------* Est. Proj. 1985 1986 1987 1988 1989 1990 1991 1. Annual % Rate of Change - Gross Domestic Product at m.p. 2.3 2.2 -1.5 3.0 -2.0 4.0 3.0 - Per Capita Income 1/ -5.3 -6.4 -5.2 5.5 -8.4 0.1 -3.8 - Exports of Goods & NFS -- -9.0 U.5 -2.0 -34.5 1.0 8.3 - Imports of Goods & NFS 34.8 -10.6 -3.3 3.5 -32.8 9.0 14.0 2. External Debt Indicators (%) - Debt Outstanding (DOD)/GDP 61.8 51.3 47.3 48.2 51.1 42.1 40.9 * Debt Service/XGNFS 37.9 56.3 53.0 47.1 76.2 34.4 29.9 3. X Share of GDP at m.p. - Gross Domestic Investment 14.1 13.6 13., 13.5 9.1 11.4 13.8 - Gross National savings 8.8 6.0 6.9 5.8 2.8 3.4 2.6 - Government Revenue 12.7 13.2 12.9 12.8 9.2 9.6 11.0 - Government Total Expenditures 23.6 23.8 23.9 22.3 19.7 19.4 18.8 - Government Primary Surplus (+) ** -- *3.3 -1.2 -2.0 -1.2 0.1 - Gov't Overall Deficit, -10.9 -10.6 -11.0 -9.5 -10.5 -9.8 -7.9 (commitment basis) - Current Account Balance, -5.3 -7.7 -6.2 -7.7 -6.2 -8.0 -11.2 (excluding grants) - External Terms of Trade 99.9 86.0 85.6 98.3 83.5 80.9 71.5 (base 1980= 100) 1/ GDY adjusted for external terms of trade. Sources: official Gov't data; Bank staff estimates and projections. 2 Republic of Benin: Urban Rehabilitation and Management Project 6. In these circumstances, the authorities reached the decision to abandon marxism-leninism and the single-party system in December 1989. A National Conference was called to determine the country's political future in February 1990. It put in place a one-year transitional government, and a new prime minister and cabinet were appointed in March 1990; an interim legislative body was also established, with broadly based representation of regional groups. A referendum on a new constitution was held in December 1990, followed by multi-party legislative and presidential elections in February/March 1991. The President, Mr. Nicephore Soglo, a former Bank Executive Director, was elected with an overwhelming majority of the votes and took office in April 1991. B. Adjustment Progress 7. The Government's initial response to the economic deterioration was piecemeal and included measures in the areas of investment programming, resource mobilization, elimination of irregular salary rayments, agricultural producer pricing, public enterprise reform, liberalization of transport, and public utility pricing. While addressing important issues, these measures proved incapable of containing the crisis. The Government ultimately embraced a more radical approach to structural adjustment in 1989, for which it received IDA and IMF support (SAL I and a SAF arrangement approved in May and June 1989, respectively). The program represented a fundamental shift in Benin's past development strategy towards economic liberalization, the encouragement of private sector development, and significantly reducing the public sector's role in the economy. 8. After the transitional Government's assumption of office, a second phase of the adjustment program was prepared, in support of which a second Structural Adjustment Credit (SAL II), and a second- year SAF program were approved by the Bank and IMF in June and July 1991, respectively. The program's basic objectives are to create the conditions for a sustainable recovery of economic activity, leading to a growth rate of close to four percent by 1993, and to improve the provision of basic social services while protecting vulnerable groups. SAL II aims to deepen and expand the reforms initiated under SAL I through fiscal system reforms, administrative restructuring and a civil service departure program, pursuit of the financial system restructuring, further rationalization of the public enterprise sector, and additional improvements in the trade regime and in the incentive structure for private investments. As important new elements, it includes short-term actions to protect vulnerable groups and to rehabilitate social infrastructure and measures to lay the basis for a thorough reform of the educational system. 9. Macroeconomic policy under SAL I was tailored to reduce the budget and current account deficits as pre-conditions for the resumption of growth. Overall macroeconomic performance in 1989, and the fiscal effort in particular, however, fell far short of expectations: real GDP declined, the fiscal deficit widened, and the sharp improvement in the current account deficit proved temporary. Estimates for 1990 indicate a substantial recovery of output, with GDP rising by 4.0 percent, reflecting the marked improvement in the performance of the secondary and tertiary sectors after their 1989 decline. Preliminary estimates for 1991 show real GDP growth of 3.0 percent, mostly due to the strong performance of the agriculture sector; these two years of consecutive growth provide some encouraging signs of the positive impact of the Government's strong adjustment efforts since early 1990. 10. Although government expenditure was kept below programmed levels, the overall deficit widened to the equivalent of 10.5 percent of GDP in 1989 mainly as a result of a 27 percent drop in government revenues. The overall deficit for 1990 was only slightly less than that of 1989, despite the 3 Republic of Benin: Urban Rehabilitation and Management Project continuation of a rigorous expenditure policy and an 11 percent increase in revenue. Preliminary estimates for 1991 indicate a continuation of the positive trends in revenue performance since early 1990, as well as the achievement of the important program objective of an equilibrium in the Government's primary operations,' despite a slight increase in personnel expenditure. At the equivalent of 11 percent of GDP, revenue performance in 1991 is above program targets, reflecting the improvement in the overall economic environment, the positive impact of the value added tax introduced in early 1991, as well as improved customs revenue collection. The overall budget deficit for 1991 is estimated at the equivalent of 7.9 percent of GDP- as against the target of 9.8 percent. Because the smaller deficit reflects the postponement to 1992 of key program-related expenditures, the overall deficit for 1992 is expected to approach 9 percent of GDP. 11. The 1989 current account deficit improved dramatically to the equivalent of 6.2 percent of GDP, compared with the target of 9 percent; this improvement was, however, temporary, and reflected an unsustainable drop in imports, the extraordinary performance of cotton exports, and the accumulation of external arrears. With import volumes returning to more normal levels in 1990, the current account deficit rose to 8.0 percent of GDP. As the new commercial banks pursued an extremely prudent policy in granting loans, the net foreign assets of the banking system rose by CFAF 33 billion in 1989 and by CFAF 23.5 billion in 1990. 12. Concerning structural reforms, improvements were achieved in the area of investment programming in 1986-88; the Government also implemented a large number of actions in resource mobilization, civil service, public enterprise, banking, and trade policy reform and deregulation prior to Board approval of SAL 1. However, the momentum in the area of resource mobilization slowed down as the Government soon after became preoccupied with meeting salary payment demands to contain the mounting political crisis. Major reforms introduced in 1991 include the value added tax (para. 10), a computerized system for the management of customs clearance activities at the Port of Cotonou (SYDONIA), and the pre-shipment inspection of imports. The strengthening of the customs and tax directorates is being supported by France, the Fund, and other donors. The recommendations of the organizational audit of the Ministry of Finance completed in May 1991 will be implemented in 1992. 13. Significant corrective measures were also implemented in the area of public employment beginning in 1986. Implementation of the civil service voluntary departure program under SAL I contributed to a five percent reduction in the size of the civil service and a four percent decline in the wage bill between end-1988 and end-1990. Under SAL II, a 15 percent reduction in the size of the civil service is envisaged by 1994. Severe underfunding of vital social spending as a result of budgetary constraints was partly remedied by the establishment in the budget of a Social Fund in 1989 (para. 27) to finance health and education sector non-salary recurrent expenditure. Expenditures on road maintenance continue to be inadequate, despite the earlier establishment of a Road Fund, as earmarked gasoline taxes have declined consequent on a large expansion of illicit imports from Nigeria, and because the fund's resources have been Giverted to other uses. Agreement on budgetary allocations for the health and education sectors, for road maintenance, agricultural extension services, and for government utility consumption, constitute explicit tranche release conditionality under SAL II. 14. Given the poor overall macroeconomic and public finance situation, the 1989 portion of the three-year rolling public investment program agreed with the Bank could not be executed as planned. I Excluding external and internal interest payments, but including the Government's contribution to the investment program. 4 Republic of Benin: Urban Rehabilitation and Management Project Weaknesses in investment programming and monitoiing are reflected in the persistence of non-programmed investment expenditures in 1990 and 1991. With the implementation of new arrangements for coordinating investment programming and the support of the Pre-Investment Project, improvements can be expected beginning in 1992. 15. Public enterprise sector reforms initiated in 1986 were further extended under SAL I by the liquidation of three enterprises, the successful privatization of another three, and the completion of diagnostic . studies for eight others; these studies are now being used as the basis for further privatization and rehabilitation/restructuring efforts under SAL II. The Government's portfolio, which included 60 industrial or commercial enterprises at end-1986, was reduced to 29 at end-December 1990. In 1991 the Government * issued bids for the privatization of six enterprises; relatively attractive offers have been received for three of these enterprises, and a contract for the privatization of the most important of these, La Beninoise (beer and mineral water), is currently being finalized. 16. The virtual collapse of the Beninese banking system in late 1987 was a major contributing factor in the Government's decision to embrace a comprehensive adjustment program. Despite some delays, important progress was achieved in restructuring Lhe banking system under SAL 1. The liquidation of the Caisse Nationale de Credit Agricole was completed in late 1990 and the reorganization of the rural credit network is underway. Four new private banks are now operational and have already collected a sizeable amount of new deposits; the establishment of a branch of a major foreign bank is being pursued, and the process of liquidating the other two state banks is being accelerated. Issues of banking reform presently being addressed include the reimbursement of depositors whose accounts were frozen in the banking system, reducing Government obligations to the BCEAO, the recovery of debt owed to the defunct banks, the excessive cost of operating the recovery unit, and reinforcing the supervisory and regulatory framework of the banking system. 17. Concerning trade policy reform and deregulation, the Government had, in July 1988, already removed all quantitative restrictions and prohibitions on imports and replaced them with tariffs. Further, the state monopoly on the import of consumer goods was abolished, the number of items subject to price controls was reduced in late 1988 to 22 (from 66 in 1986), and private operators were permitted to operate in fooderops and in commercial and industrial activities previously reserved for the state. Under SAL I, import licensing requirements were removed for the bulk of Benin's imports and a rationalization of the tariff structure was initiated; all remaining import licensing requirements will be removed in early 192 and a second phase of the tariff reform will be implemented by end-1992. Revised labor, commercial, and industrial legislation and a new investment code were put into effect in December 1990 and early 1991. 18. Assessment of Reforms. Benin's structural adjustment program reflected a major departure from the Government's previous dirigiste economic policy orientation towards greater reliance on private initiative and market forces. While social and political difficulties initially compromised its full implementation, important progress was achieved in a number of areas prior to and during 1990 when political and social conditions required for the implementation of the adjustment program were re-established. A renewed effort at structural adjustment was launched in 1991 with IDA support. Overall macroeconomic and fiscal performance in 1991 was broadly in line with program targets and, combined with the positive trends registered in 1990, indicate an encouraging response to the Government's adjustment efforts. The Government remains strongly committed to the adjustment program and to nurturing the domestic consensus required for its success in the country's new democratic context. It will, however, take many years of strong adjustment to address the deep-seated constraints to sustainable growth in Benin. 5 Republic of Benin: Urban Rehabilitation and Management Project C. Central Development Issues 19. These fundamental changes in political and economic orientation have created a new and more favorable basis for achieving the medium-term objectives set forth in Benin's structural adjustment program (paras. 7-8). The immediate objective is to continue to create the basis for restoring sustained growth in an acceptable social framework. The sine qua non for restoring growth is publie finance viability, requiring a sustained effort to mobilize fiscal resources while pursuing the medurn-term objective of reducing the size of the public sector of the economy. 20. Further growth will depend on creating the enabling environment, including incentives, and institutions for the rapid expansion of the private sector. The delayed restructuring of the banking system has had a heavy toll on the economy, and the financial intermediation essential to increasing private financial savings and domestic financing of investments is still largely non-existent, although a basic deposit banking system is now in place. Much remains to be done in further liberalizing the economy and eliminating the disincentives in the tar and tariffsystems that have contributed to the expansion of informal sector activities, as well as privatizing/restructuring the still important part of the economy dominated by public enterprises. 21. Inadeqiate administrative capacity and human resource constraints are major longer-term development issues which must be addressed in the adjustment process. The Beninese civil service is ill- adapted to the task of implementing a wide-ranging reform and development program based on the government's new role as an efficient provider of core public sector services in support of private sector development. Moreover, the distortions in the education system have led to the creation of a higher education establishment which graduates, at great cost, an increasing number of poorly trained students who cannot be employed by the private sector and can no longer be absorbed by a shrinking public sector. 22. A serious constraint to development prospects concerns the reduction in the competitiveness of the tradeable goods sector, which limits the scope for agricultural export diversification and Benin's share in regional transit trade. Benin's geographical proximity to Nigeria exacerbates the erosion of competitive- ness; in recent years the depreciation of the naira has led to a flood of Nigerian manufactures, food and petroleum products into Benin's limited markets. 23. The large decline in per capita incomes in 1989, a growing level of unemployment and underemployment, and the neglect of critical social infrastructure over the years, means that increased attention must be given to the social dimensions of adjustment and poverty alleviation, in order to allow the poor and vulnerable segments of society to share the benefits of economy recovery and growth. 24. The prospects for sustainable growth in Benin are limited by increasing environmental degradation and a rapidly increasing population. The deterioration of the country's natural resources threatens the future of agricultural development, agro-ecological balances, and general living conditions. These problems are exacerbated by increasing population pressures, as the high growth rate and dependency ratios adversely affect the scope for raising standards of living as well as savings needed to finance growth. 25. The Government has begun to address, already with encouraging results, the challenges described in the preceding paragraphs in the second phase of its structural adjustment program. 6 Republic of Berin: Urban Rehabilitation and Management Project D. Country Lending Strategies and Priorities 26. Bank Group Operations. As of end-November 1991, IDA commitments to Benin (40 credits), net of cancellations, totalled US$444.9 million, of wch US$301.5 million were disbursed. Since FY87 the investment credits have financed public sector management, agriclture and rural development, energy, transport and telecommunications, rural finance, and healt'h sector development. Two adjustment operations (SAL I and SAL II) have been approved for Benin to date, iepresenting 41 percent of total lending since FY87 (Table 2). The IFC recently approved its first two operations in Benin, in the form of participation in a shrimp and fish processing business and in one of the new commercial banks, and is considering additional investments. IFC staff have also advised on the privatization program, and the FIAS recently produced a report on the investment climate in Benin. TABLE 2. DISTRIBUTION OF IDA LENDING, FY87-91 SECTOR ORIGINAL CREDIT AMOUNT PERCENTAGE SHARE USS million equivalent OF TOTAL LENDING A. ADJUSTMENT OPERATIONS 40.77 1. SAL 1 45.00 2. SAL II 55.00 B. PUBL1C SECTOR MANAGEMENT 8.32 1. Public Enterprise Rehabilitation 15.00 2. Pro-Investment 5.40 C. AGRICULTURE & RURAL DEV*T 21.73 1. Zou Province Rural Dev't 20.00 2. Borgou Province Rural Dev't 21.00 3. Agricultural Services 12.30 D. ENERGY 6.11 1. Power Rehabilitation 15.00 E. TRANSPORT & TELECOMMUNICATIONS 14.47 1. Transp. Infrast. Rehab. & Maint. 19.50 2. Telecounications 16.00 F. INDUSTRY & FINANCE 1.02 1. Rral Savings & Loan Rehab. 2.50 G. SOCIAL SECTOR 7.58 1. Health Services Dev't 18.60 N. TOTAL 245.3 100.00 Source: IDA Statement of Development Credits, November 30, 1991. 7 Republic of Benin: Urban Rehabilitation and Management Project 27. Much of IDA assistance has been concentrated in the agriculture and rural development and transport and telecommunication sectors, involving (traditional) invetment projects. With the approval of SAL II, however, policy-based lending now constitutes more than 20 percent of the outstanding portfolio. In the area of public sector management, IDA assistance has involved thcee technical assistance projects, one public enterprise rehabilitation project, and one pre-investment project. IDA involvement in the health sector is fairly recent, with the only operation having b-en approved in FY89. This involved extensive reforms in health sector management and programming and included a Social Fund to provide urgently needed medical supplies and primary textbooks for the least privileged areas of the country (para. 13). 28. Project Implementation. Benin's project implementation record has been generally good, and has improved over the past two years. The implementation of SAL I and some sector projects in 1989 was constrained by the deteriorating macroeconomic situation during the year (limiting the availability of counterpart funds) and the administrative disruptions brought about by the political and socil crisis. In the transport sector, project implementation has been adversely affected by a lack of appropria, personnel, and irregularities in the proct,rement process, which are now being addressed. Project implementation and the policy dialogue in the agriculture and rural develpment sector have been generally good, as evidenced by the success with cotton sector reforms, and the recent Board approval of the Agricultural Services Restructuring Project. 29. Lending Strategy. The Bank's strategy in supporting Benin's development objectives has closely reflected the evnlution of the policy dialogue with the Government. Prior to 1982 the focus was on financing traditional investment projects; subsequently the assistance strategy shifted towards support of macroeconomic management and rehabilitation of key sectors (e.g., public enterprises and cotton), with a view to meeting the conditions for initiating a comprehensive structural adjustment program. In 1988 the strategy was redesigned to make the SAL the centerpiece of IDA lending to Benin and at the sectoral level to: (a) assist in re-establishing the international competitiveness of the cotton sub-sector and expanding food crop exports; (b) improve competitiveness through piovision of lower cost and snore efficient transit services; (c) find least-cost solutions to the problem of underutilized industrial plants, while rationalizing the distorted system of industrial incentives; and (d) raise the budgetary share of non-salary recurrent expenditures in the social sectors. 30. The Bank's current lending strategy is predicated on the continued rigorous implementation of the adjustment program, and builds on the above with the main objectives of restoring growth in an acceptable social framework and enhancing the sustainability of the Government's adjustment and development efforts. To this end current and planned lending operations focus on: (a) stabilizing and restructuring public finances, reducing the size of the public sector and promoting the rapid expansion of the private sector; (b) restructuring agricultural services and institutions as a basis for diversifying exports, maximizing the sector's contribution to growth, and increasing the participation of women; (c) rehabilitating transport, energy, and urban infrastructure in support of improved competitiveness and growth of the productive sectors; (d) addressing institutional and human resource constraints; (e) improving basic social services, protecting vulnerable groups, and employment generation; and (f) improving natural resource and environmental management. 31. Lending Operations. The Bank's (base-case) lending program for FY92-95 would approach US$168 million to continue structural and sectoral adjustincrt lending as well as to finance investment projects in key sectors; the share of adjustment lending will approximate 33 percent over the period, down fiom 41 percent in FY87-91. With SAL II, the Bank is supporting the Government's objectives of 8 Republic of Benin: Urban Rehabilitation and Management Project establishing a sound bas *;for resuming growth with equity by reinforcing and deepening the adjustment effort of SAL I and laying the groundwork for medium-term policies designed to facilitae the participation of the poor in the economy (paras. 7-8). The Pre-investment Project is currently providing support to strengthen Beninese administrative capacity; the Bank plans to support further technical assistance for economic management, including institutional strengthening, with a view towards better monitoring of social indicators and the incorporation of the latter into the design and assessment of economic policies. 32. As the state progressively divests itself of involvement in he productive sectors, the private sector must expand its activities to ensure future growth, and the lending program envisages IDA lending in support of this objective. In the lead productive sector of agriculture the Bank is currently providing support for a fundamnental reorientation of Benin's agricultural policies and institutions, with a view to maximizing the sector's contribution to growth. Since an important medium-term objective is to diversify export production away from cotton, future lending in the agriculture sector would seek to expand food and other cash crop production. 33. IDA support for infrastructure sector policy reforms and maintenance of the road network will continue through the supervision of an ongoing operation. The proposed Urban Rehabilitation and Management Project is the main element in the Bank's efforts to support urban infrastructure rehabilitation and reform, and would also further the objectives of employment generation and poverty reduction. Through its labor-intensive public works component it will provide a large number of unskilled jobs and strengthen the participation of small-scale local contractors. It will also carry out pilot health and environmental sanitation improvements it the peripheral areas of greater Cotonou. As such it constitutes an important new element of IDA assistance to Benin, fi- tiering important aspects of the Bank's strategy. 34. In support of the productive sectors, energy supply expansion and efficiency is being facilitated by a power rehabilitatien and extension project, and power generation will be increased in the context of an ongoing regional project currently financed by IDA. Because the returns to further investments in the education sector will be limited in the absence of major sector policy reforms, the lending program envisages support for a sector adjustment operation that would seek to rationalize the allocation of human and financL.. resources and improve the quality and relevance of education. Building on the success of the ongoing Health Services Development Project, future support in the health sector wilt seek to extend health service delivery, including maternal and child health. At an advanced stage of preparation is a FY92 operation designed to assist the Government in implementing policies that reconcile the imperatives of developing agriculture, forestry, and livestock with the need to arrest the deterioration of Benin's natural resources and increasing environmental degradation. 35. The main risk of the lending strategy described above is that of policy reform slippage, resulting in a non-viable macroeconomic framework. The Bank's current assessment is that this risk is minimal. However, significant delays in disbursing the second and third tranches of SAL II in excess of six months after the expected date of tranche release would signal policy slippage, in which case a core lending program would be adopted containing only those projects with important capacity-building and/or long-term growth benefits, even under less than favorable macroeconomic conditions. 36. Economic and Sector Work. The Bank's economic and sector work in Benin reflects three broad considerations: (a) the need to increrse knowledge of the key constraints to growth; (b) the need for an analytical basis for the policy dialogue and Bank lending operations; and (c) the need for a framework to facilitate aid coordination. Important macroeconomic, sectoral, and political developm'nts have occurred 9 Republic of Benin: Urban Rehabilitation and Management Project in Benin since the last Country Economic Memorandum (CEM) was completed in FY84. A CEM will therefore be prepared in FY92/93 to provide a comprehensive analysis of long-term constraints to growth, and to take stock of the policy changes being introduced. The preparation of future adjustment lending will benefit from the CEM, from a Trade Incentives Study, and from a Public Expenditure Review. The Agricultural Sector Review now being prepared seeks to further the policy dialogue on sector reforms both between the Bank and Benin as well as among the donor community; it will also contribute to the preparation of a subsequent operation to consolidate the reorientation of sector strategy. Other planned economic and sector work over the next two years include an Education Strategy Paper, a Transport Sector Strategy Note, a Poverty Assessment Paper, and a Petroleum Sector Study. E. Aid Coordination and Relations with the IMF 37. The Government's decision to embrace a more comprehensive reform program permitted the policy dialogue with the IMF to advance considerably; a first Policy Framework Paper (PFP) was discussed by the Bank and Fund Boards in May/June 1989, and the first tranche under the three-year SAF program was released. A second-year PFP and the second-year SAF program were approved by the Fund Board in July 1991. The program incorporates the main features of SAL II and shares with it a common macroeconomic framework. Bank and Fund staff maintained a close working relationship during the preparation of SAL II and the second-year SAF program, which has continued. 38. Benin enjoys a highly diversified flow of foreign aid, which currently finances more than 90 percent of the public investment program. Most of Benin's other multilateral and bilateral partners have provided co-financing for IDA projects, including significant support for the structural adjustment program. Since its adoption, the Bank has played a key role in coordinating donor assistance to Benin. The Bank will assist the UNDP in organizing a donors' Round Table meeting in early 1992 to mobilize additional financing for the structural adjustment program as well as for Benin's medium-term public investment program, including additional social projects. Benin became eligible in 1989 for balance of payments assistance under the Special Program of Assistance (SPA) for debt-distressed African countries. F. Summary Assessment 39. Foremost among the constraints to further adjustment process, and thus to Benin's medium- term growth prospects, is the severe imbalance in public finances. Some progress towards restoring stability to public finance is already evident in the achievement of an equilibrium in the Government's primary operations in 1991. In the medium term a surplus in the overall current budget would be required in order to eliminate Benin's need for exceptional financing. To further this objective, substantial real increases in budgetary revenues will be required over the 1992-94 period, buttressed by measures to limit and restructure current expenditures. Strong revenue performance and the containment of personnel expenditure should permit the real increases in investment expenditure and expenditure on supplies and material necessary for growth. The evolution of these key variables, in addition to the timely implementation of the structural measures contained in SAL II, will measure the Government'. progress in restoring the basis for sustainable growth in Benin. 40. Such progress will determine the extent to which the significant amounts of IDA asistance under the base case lending scenario outlined in Section D continue to be justified. Bank support - through 10 Republic of Benin: Urban Rehabilitation and Management Project lending, economic and sector work, and aid coordination - will remain critical in the Government's efforts to address the central development issues described in Section C and around which the assistance strategy has been designed. With the Government strongly committed to implementing its adjustment program, pursuit of this strategy should permit the establishment over the next five years of a firm basis for sustainable growth with equity in Benin. ECONOMIC INDICATORS, 1987-95 ...* Actual --*-**-*- Est. ..**** Projections -----*****--------- 1987 1988 1989 1990 1991 1992 1993 1994 1995 Growth Rates: GOP *1.5 3.0 -2.0 4.0 3.0 3.5 3.8 4.1 4.8 Gross Domestic Income (GDY) *2.1 8.9 -5.5 3.2 -0.7 3.1 4.1 4.5 4.7 GDY per Capita -5.2 5.5 -8.& 0.1 -3.8 -0.1 0.9 1.4 1.6 Total Cons. per Capita -6.1 2.1 -4.0 0.3 0.4 0.2 0.4 0.3 0.3 Private Cons. per Capita -7.0 5.1 0.1 0.6 1.0 0.5 1.0 0.7 0.9 Debt & Debt Service: External Debt (000 in USS) 739.3 780.7 781.0 800.0 829.8 869.5 920.3 975.6 1037.0 Debt Service 14LT (USS) 99.2 78.9 137.6 79.8 76.8 96.0 87.5 94.6 99.3 Of which: Interest (31.9) (24.8) (38.2) (39.0) (52.5) (56.2) (59.6) (61.6) (64.7) Debt Service/Exports (2) 36.5 31.7 55.8 26.3 23.1 25.8 21.4 21.1 20.3 Debt Service/GDP (%) 6.3 4.9 9.0 4.2 3.8 4.5 3.8 3.9 3.8 Ratios to GOP (M): Gross Investment 13.1 13.5 9.1 11.4 13.8 14.2 14.3 14.7 15.7 Domestic Savings 3.6 2.3 1.1 1.7 1.5 2.1 3.2 5.0 7.0 National Savings 6.9 5.8 2.8 3.4 2.6 3.7 4.9 6.8 8.7 Public Investment 8.8 9.1 7.9 6.9 7.8 8.1 8.0 8.1 7.7 Public Savings -4.3 -2.6 -4.8 -4.0 -3.3 -1.6 -0.2 0.9 1.8 Private Investment 4.7 3.9 3.7 4.3 5.3 5.7 6.2 6.5 8.0 Private Savings 11.2 8.4 7.6 7.4 5.9 5.3 5.1 5.9 6.9 Government Revenues 12.9 12.8 9.2 9.6 11.0 11.2 12.3 13.0 13.3 Government Expenditures 23.9 22.3 19.7 19.4 18.8 20.2 18.1 17.7 16.9 Overall Def.(-)/Surplus (+) -11.0 -9.5 -10.5 -9.8 -7.9 -9.0 -5.9 -4.8 -3.6 Marginal Rates: National Savings/GDP 0.1 0.4 1.1 -0.9 3.5 0.1 0.1 0.2 0.2 Miscellaneous: GOP Deflator (1987*100) 100.0 99.7 103.3 105.1 106.2 109.3 112.3 115.4 118.3 Annual percentage change 3.1 -0.3 3.6 1.8 1.0 2.9 2.8 2.7 2.5 External Term of Trade 100.0 114.8 97.5 94.5 83.5 83.8 85.8 88.0 88.9 Exports Growth Rate (%) 0.5 -2.0 -34.6 1.0 8.3 5.6 3.1 3.8 4.6 Exports/GDP (2) 34.5 34.5 24.3 23.7 24.7 25.7 26.3 26.9 27.2 Imports Growth Rate (%) -3.3 3.5 -32.8 9.0 14.0 4.7 2.8 3.4 4.0 Imports/GDP (2) 40.7 42.2 30.6 31.8 35.8 36.2 35.6 34.8 34.2 Current Account (USS) -96.3 -124.6 -95.3 -152.7 -226.7 -225.5 -211.8 -193.9 -183.3 Current Account/GDP (2) -6.2 -7.7 -6.2 -8.0 -11.2 -10.5 -9.3 *7.9 *7.0 Gross Ext. Reserves (end-period) (in months of imports) -1.7 -1.2 1.0 3.0 4.3 4.4 4.7 5.1 5.3 Sources: Official data; Bank staff estimates and projections. 11 Republic of Benin: Urban Rehabilitadon and Management Project PART II: The Project 41. Country Sector Background. Although still considered predominantly a rural country, Benin is undergoing a process of rapid urbanization. In 1990, its cities sheltered about 1.5 million urban residents, of which about 650,000 in greater Cotonou, the country's port and economic center, and 200,000 in Porto- Novo, the capital and administrative center, 30 km inland. Over the last ten years, Cotonou's population has increased at about 7% per annum, about double the rate of the population as a whole. Cotonou's population is likely to exceed 1.1 million in ten years and 2 million by 2015. It will then account for about 55% of the urban population and 20% of the country's total population. Economic productivity in trade and transport, which are the keystones of Benin's urban economy, has suffered considerably from the advanced disrepair of urban infrastructure, especially in Cotonou and Porto-Novo. Nearly half of Cotonou's settled areas are inaccessible during much of the year due to long neglect of road and drainage maintenance. The reasons for this situation are: (a) a difficult physical environment, a flat, low-lying, lagoon-studded coastal site, virtually at sea level, where rain and tide conspire to create frequent flooding; (b) poorly planned and controlled urban development resulting in settlement of land subject to flooding; (c) ineffective management of basic urban services such as sanitation and urban roads maintenance; and (d) low resource mobilization for ensuring even a minimum level of services. In order to respond to these problems during a period of structural adjustment, the Government has initiated a series of policy reforms and pilot procedures in Cotonou and Porto-Novo designed to improve the urban development process, to ensure community participation in decision-making, to involve small and medium-sized private local enterprises in public works while optimizing the impact of such works on the income of the urban poor, and to mobilize fiscal resources for the newly created urban administrations. The lessons learned from these experiences have been incorporated in the proposed Urban Rehabilitation and Management Project which would be the first urban project in Benin. 42. Rationale for IDA Involvement. IDA has played a key role in supporting urban policy reform by helping to establish an agency (AGETUR) specializing in the management of public works contracts with small and medium-sized enterprises, and by financing, on an experimental basis, under ongoing water supply and sanitation (Water II) and transport/infrastructure projects (Cr. 1721-BEN and Cr. 1807-BEN), a first phase of a program to rehabilitate road and drainage infrastructure in Cotonou and Porto-Novo. IDA's support helped the Government obtain cofinancing from other donors. The Government is eager to see IDA continue as investment catalyst and donor coordinator, the role which it played for this pilot operation (OPTUHIMO). Besides supporting important urban sector reforms, the project constitutes an important complement to the other Bank Group efforts in support of the Government's overall program of economic and financial recovery. In particular, urban infrastructure rehabilitation is a necessary prerequisite to economic development, and should act as a stimulus to local private investment. Also, by creating a large number of unskilled jobs in the local construction sector, the project will help to ease the economic and social transition during the structural adjustment period. 43. Project Objectives. The project's immediat objectives are to support ongoing Government programs of infrastructure rehabilitation and environmental sanitation in the country's two largest cities (Cotonou and Porto-Novo), following approaches which optimize the impact of public works on the employment and income of the urban poor, promote the development of local small and medium-sized private enterprises and involve NGOs and residents. The project's longer term objectives are to support preparation of a public investment strategy in the urban sector and to lay the groundwork for reforms required to improve the management of urban deveiopment in Benin. 12 Republic of Benin: Urban Rehabilitation and Management Project 44. Project Description. To achieve these objectives, the proposed project would include the following seven components: (a) labor-based urban infrastructure rehabilitation; (b) community-based environmental sanitation improvements; (c) urban development; (d) management of urban services; (e) local fiscal resource mobilization; (f) urban management capacity building; and (g) sector strategy. The project would be carried out over five years and would provide funds for civil works, vehicles, equipment and supplies, studies, training, technical assistance, road maintenance, and refuse collection. The total cost of the project is estimated at US$26.82 million equivalent with a foreign exchange component of US$16.05 million (60%). The project costs and financing plan are shown in Schedule A. Procurement, disbursement amounts and methods, and the disbursement schedule are shown in Schedule B. A timetable of key project processing events and the status of Bank Group operations in Benin are given in Schedules C and D, respectively. Two maps are also attached. The Staff Appraisal Report No. 9684-BEN, dated January 21, 1992, is being distributed separately. 45. Project Implementation and Sustainability. Overall project coordination and supervision during implementation will be carried out Ly an Interministerial Steering Committee for the project which shall meet by the request of the Ministers in charge of Urbanism and Public Works. It will rely upon a technical committee composed of representatives of concerned Technical Department Directors within the involved ministries. Disbursement of project funds, procurement and contract management for the proposed project will be handled by two existing agencies, SERHAU-SEM and AGETUR. SERHAU-SEM will be responsible for studies and technical assistance to urban administrations, and AGETUR will be responsible for civil works and related technical assistance and engineering. The project includes a capacity building component in urban management and fiscal resource mobilization, which will ensure its long term sustainability. 46. Agreed Actions. Prior to negotiations, as requested, the Government forwarded to IDA three documents: (a) a letter confirming Government's agreement to delegate procurement and disbursement authority to the two executing agencies and to establish special accounts for them, to seek IDA's approval of these agencies' directors, and to create a Project Interministerial Steering and Coordinating Committee; (b) the official texts classifying all urban roads in Cotonou and Porto-Novo according to whether Government or the urban administrations are responsible for their maintenance; and (c) official recognition of the statutes creating the Mdnontin Medico-Social Association, which is responsible for the operation of a health center to be financed under the project. During negotiations, draft agreements between Government and the executing agencies, which were attached to the above-mentioned letter, were reviewed and finalized; it was agreed that the no-objection on the names and qualifications of the directors of these agencies will be sought prior to credit effectiveness; arrangements for IDA's annual project review and for monitoring project implementation action plans were reviewed and agreed. Specific clauses to that effect concerning the special account and disbursement arrangements were included in the credit agreement. The conditions of Board Presentation, which have been met, are: (a) the creation of the Interministerial Committee to monitor the project; (b) transmission to IDA of the minutes of the potential SERHAU shareholders' round table, showing the commitments of such shareholders; (c) signature of a management contract between the Government and the M6nontin Medico-Social Association covering operation and maintenance of the health center; and (d) signature of an agreement concerning sharing of responsibilities for local fiscal resource mobilization between the urban administration of Porto-Novo and the executing agency. The conditions of Credit Effectiveness will be: (a) establishment of SERHAU as a joint public-private entity (SERHAU-SEM) to act as a project executing agency; (b) signature of the agreements between Government and the project executing agencies; (c) IDA approval of staff assignments for the technical units in the urban administrations of Cotonou and Porto-Novo; and (d) IDA approval of directors for the executing agencies. 13 Republic of Benin: Urban Rehabilitaion and Management Project 47. EnWronmental Impact. Project-supported works involve rehabilitation and maintenance of existing road and rainwater drainage infrastructure in Cotonou and Porto-Novo. Thus, these works will have no negative environmental impact and, indeed, are designed to contribute to substantial improvements in environmental sanitation including elimination of standing rainwater. In addition, the project will test and refine mechanisms for neighborhood environmental maintenance and will improve development procedures for environmentally vulnerable areas on the urban growth perimeter of Cotonou. 48. Project Beneflts. Road and drainage works to be carried out under the project are part of a larger program of priority infrastructure rehabilitation and maintenance; the internal rate of return of all road works included in the project is required to be greater than 24%. The specific road works supported under this project satisfy this requirement on the basis of benefits derived from vehicle operating cost savings alone. By assisting Government in carrying out this program, necessary to the functioning of the urban economy, the project should stimulate Benin's economic development and private investment. The project's impact on the revival of the local economy and of the construction industry in particular, is expected to be considerable. More than 1,375,000 workdays will be created by the SMEs carrying out civil works under the project over the five-year project period. Most of these (95%) will be unskilled, which should therefore benefit the poorest urban workers. Through efforts to optimize the 'mpact of urban infrastructure rehabilitation works on the employment of the urban poor and on the development of SMEs in the construction industry, the project should also contribute to successful economic and social transition during the structural adjustment period. Non-quantified health benefits due to reduction in waterborne diseases will also result from project-supported improvements, not only in the Mdnontin pilot neighborhood but also in the areas where drainage works will be rehabilitated or extended. It is estimated that about 350,000 residents will benefit from reduced exposure to waterborne diseases. The impact of project-supported measures on local resource mobilization is expected to lead to a doubling of income for the Porto-Novo urban administration by 1994. By stablishing pilot procedures designed to increase the yield of local taxes, improve the use of land, and involve residents in urban development decisions, the project lays the groundwork for future sector reforms. 49. Project Risks. There are two areas of risk. The first risk concerns the ability of the executing agencies (AGETUR and SERHAU-SEM) to carry out the project. This risk has been reduced through provision of technical assistance for both agencies and by support to administrative and accounting functions for the duration of the project. The second risk concerns the sustainability of operations by these two agencies. Various factors tend to attenuate this risk. Both agencies have limited the number of permanent staff so as to adapt without difficulty to a reduction in operational volume following project completion. As local financial resources grow over time, following project-supported improvements in urban tax administration in Benin's main cities, local administrations will become financially self-sustaining and thus will join central government and external donors as clients for the services of these two agencies. 50. Recommendation. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit. Lewis T. Preston President By Ernest Stern Attachments Washington, D.C. January 21, 1992 14 Republic of Benin: Urban Rehabilitation and Management Project Schedule A Page 1 of 2 REPUBLIC OF BENIN URBAN REHABILITATION AND MANAGEMENT PROJECT ESTIMATED COSTS AND FINANCING PLAN (US$ million) ESTIMATED COSTS: Project Component Local Foreign Total Base Cost % A. Labor-based Urban Infrastruc- ture Rehabilitation 4.99 5.62 10.60 45.5 B. Community-based Environmen- tal Sanitation Improvements 0.99 1.59 2.58 11.1 C. Urban Development 0.87 1.57 2.44 10.5 D. Support to Urban Services Management 2.20 2.97 5.17 22.2 E. Local Fiscal Resource Mobilization 0.13 0.47 0.60 2.6 F. Urban Management Capacity Building 0.07 0.44 0.51 2.2 G. Sector Strategy 0.17 0.90 1.07 4.6 H. Project Preparation Facility 0.00 0.30 0.30 1.3 Total Base Cost 9.42 13.86 23.28 100.0 Physical Contingencies 0.75 1.11 1.86 Price Contingencies 0.60 1.08 1.68 TOTAL PROJECT COST 10.77 16.05 26.82 15 Republic of Benin: Urban Rehabilitation and Management Project Schedule A Page 2 of 2 FINANCING PLAN - Financing Plan (USS million) - IDA UNDP FAC Govt. Benef. Total Credit A. Labor-based Infrastructure Rehabilitation 10.78 - 1.50 - 12.28 B. Community-based Environmental Sanitation 2.95 - - - - 2.95 Improvements C. Urban Development 2.83 - - - - 2.83 D. Support to Urban services Management 5.22 - - 0.50 0.23 5.95 E. Local Fiscal Resource Mobilization - - 0.70 - 0.70 F. Urban Management Capacity Buitding 0.11 0.45 - - - 0.56 G. Sector Strategy 0.66 - 0.60 - - 1.26 H. Project Preparation Facility 0.30 - - - - 0.30 TOTAL PROJECT COST 22.84 0.45 1.30 2.00 0.23 26.82 Percent of Total 85.16 1.67 4.86 7.46 0.86 100.00 16 Republic of Benin: Urban Rehabilitation and Management Project Schedule B Page 1 of 2 REPUBLIC OF BENIN URBAN REHABILITATION AND MANAGEMENT PROJECT PROCUREMENT METHODS (US$ million) PROJECT ELEMENT PROCUREMENT METHOD ICB LCB OTHER NBF TOTAL Civil Works 0.63 17.651/ - - 18.28 (0.63) (15.42) (16.05) Material and Equipment 0.30 0.41 - 0.20 0.91 (0.30) (0.41) - (0.71) Operating Costs - - 1.77 0.28 2.05 (1.77) - (1.77) Consultancies - - 4.01 1.27 5.28 (4.01) (4.01) Financing PPF - - 0.30 - 0.30 (0.30) (0.30) TOTAL PROJECT COST 0.93 18.06 6.08 1.75 26.82 (0.93) (15.83) (6.08) - (22.84) I1 Includes US$2.23 million financing by Government (US$2.00 million) and beneficiaries (US$0.23 million). 17 Republic of Benin: Urban Rehabilitafion and Management Project Schedule B Page 2 of 2 REPUBLIC OF BENIN URBAN REHABILITATION AND MANAGEMENT PROJECT DISBURSEMENTS Categories Credit Allocation % of Expenditures Category (US$ Million) Financed I. Works a. Civil Works 14.27 85 b. Health Center Construction 0.59 100 2. Equipment a. AGETUR 0.12 100 b. SERHAU 0.54 100 3. Administrative Costs and Operating Fees a. AGETUR 1.50 100 b. SERHAU 0.33 100 4. Consultancy Services a. AGETUR 1.00 100 b. SERHAU 2.16 100 5. Refunding of the PPF 0.30 100 6. Unallocated 1.73 TOTAL IDA CREDIT 22.84 ESTIMATED IDA DISBURSEMENTS: FY92 FY93 FY94 FY95 FY96 Total 0.30 4.19 7.11 8.07 3.17 Cumulative 0.30 4.49 11.60 19.67 22.84 18 Republic of Benin: Urban Rehabilitation and Management Project Schedule C REPUBLIC OF BENIN URBAN REHABILITATION AND MANAGEMENT PROJECT Timetable of Key Project Processing Events: (a) Time taken to prepare: 12 months (b) Prepared by: Government with IDA assistance (c) First IDA mission: October/November 1990 (d) Appraisal mission departure: May 1991 (e) Negotiations: October/November 1991 (f) Planned Date of Effectiveness: April 1992 19 Republic of Benin: Urban Rehabilitation and Management Project Schedule D Page 1 of 1 Status of Bank Group Operations in Benin A. Statement of Bank Loans and IDA Credits (as of 01/17/92) Amount in SDRs million (less cancellations) Loan or Fiscal Undis- Closing Credit No. Y"H Dtower byose Bag DA b!!sd Iato Fourteen (14) credits closed 123.95 C13140-BEN 1983 REPUBLIC OF BENIN RURAL DEVT. M (ZOU) 18.70 2.27 12/31/91(R) CIS300-BEN 1985 REPUBLIC OF BENIN TECHNICAL ASSISTANCE 5.10 1.86 03/31/92(R) C17210-BEN 1986 REPUBLIC OF BENIN WATER H 8.60 2.68 12/31/93 C17480-DEN 1987 REPUBLIC OF BENIN PUBLIC ENTERPRISES 12.80 10.07 06/30195 CI8070-BEN 1987 REPUBLIC OF BENIN TRANSP. INFRST. 15.20 6.22 03/31/95 C18770-BEN 1988 REPUBLIC OF BENIN BORGOU RD. H IS.90 1.90 12/31/92 C19600-BEN 1989 REPUBLIC OF BENIN TELECOMMUNICATIONS 12.50 7.81 12/31/93 C20310-BEN 1989 REPUBLIC OF BENIN HEALTH SERVICES DEV 14.10 10.22 09/30/97 C20860BEN 1990 REPUBLIC OF BENIN RURAL CREDIT 2.00 !.32 12/31/95 C22830-BEN(S) 1991 REPUBLIC OF BENIN SAL H 41.30 33.70 06/30/93 C22840-BEN 1991 REPUBLIC OF BENIN POWER REHAB 11.30 11.30 12/31/97 C22850-BEN 1991 REPUBLIC OF BENIN AGRIC. SERVICES 9.30 930 06/30195 C22860-BEN 1991 REPUBLIC OF BENIN PRE-INVESTMENT 4.10 4.10 06/30/95 TOTAL number Credits - 13 170.90 102.76 TOTAL*" 294.85 of which repaid 2.54 TOTAL hold by Bank & IDA 292.31 Amount sold of which repaid TOTAL undisbursed B. Statement of IFC Investments (as of December 31, 1991) Fiscal Original Commitment Total Year Company Type of Equity Loan Tota4 Total Held Undis- Business by IFCj bursed 1991 Bank of Africa-Benin (AEF) Banking 0.24 - 0.2421 0.24 1991 SOBEP (AEF) Fish 0.06 0.23 0.29 0.29 Process- Total Gross Amount 0.3 053 Note: ** Total Approved, Repayments, and Outstanding balance represent both active and inactive Loans and Credits. (R) indicates formally revised Closing Date. (S) indicates SALISECAL Loans and Credits. The Net Approved and Bank Repayments are historical value, all others are market value. The Signing, Effectiveness, and Closing dates are based upon the Loan Department official date and are not taken from the Task Budget file. I/ Amounts stated are net of repayments, cancellations and exchange adjustments. 1l Uncommitted as of December 31, 1991. 20 NIGER BURKINA FASO T-m Karimama 0 20 4 M 8 100 Ma (le rnoumm )s gan koora NIGERIA o ~ Gogouned~ 0 Tanguiéta Kobli Toukountouna NATIN Un Kouandé Snendé BORGOU Boukou Péhonko Bembenéke Mno Boukou 0Bbrk ° ATAKORA NikkiUd Ndali Prérb BENIN POPULATION, P OADMINISTRATION AND ROAD NETWORK 9*- Tchcourou POPULATION: -100,000 ouéssé TOGO 25,000 saouGlazoué - GRAVEL ROADS PAVED ROADS RAILROADS m URBAN ADMINISTRATIONS Djidja a Kétou o DISTRICT CAPITALS 0 A E- PROVINCE CAPITALS Agben ou "n Ou$ NATIONAL CAPITALS - o NoWd ,6o Adja- ér& - PROVINCE BOUNDARIES Aplah u llPb Djakot mé OTovikl i- INTERNATIONAL BOUNDARIES ogbo-T Z d1 un kt LOK 4NO Al az AT.u A- t ankou mm bn o ca oraGO w- ut ONOU SUr~-podji GHANA ATLANTI UE NOVF 10 %PøBENiN AT LANTIQUE BENIN A LOCATION OF PROJECT TOWNS CPROJECT / URBANIZATION AREAS MAINROALj$ o DISTRICT CAPTALS ® PROVINCE CAPITALS o ® NATIONAL CAPITALS CITY BOUNDARIES - PROVINCE BOUNDARIES - INTERNATIONAL BOUNDARIES - 0 2 3 4 4 t. TTT CDI5~T 2r 2r<2>