Morocco - Railway Restructuring Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. P-7002-MOR MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED SINGLE CURRENCY LOAN WITH A US DOLLAR TRANCHE IN AN AMOUNT OF US$42.5 MILLION AND A SPANISH PESETA TRANCHE IN AN AMOUNT OF ESP 5,443 MILLION TO THE MOROCCAN NATIONAL RAILWAY COMPANY WITH THE GUARANTEE OF THE KINGDOM OF MOROCCO FOR A RAILWAY RESTRUCTURING PROJECT November 26, 1996 Private Sector Development, Finance and Infrastructure Operations Division Maghreb and Iran Department Middle East and North Africa Region 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 = Dirham (DH) DH I = US$0.12 US$1 = DH 8.5 FISCAL YEAR July 1 - June 30 WEIGHTS AND MEASURES Metric system British/US system 1 meter (m) = 3.28 feet (ft) I square meter (M2) = 10.76 sq. ft GLOSSARY OF ABBREVIATIONS AND ACRONYMS B billion CIPEP Comit interministriel permanent des entreprises publiques (Interministerial Committee of Public Enterprises) GOM Government of Morocco M million MED Ministry of Economic Development MT Ministry of Transport OCP Office chrifien des phosphates (National Company of Phosphates) ONCF Office national des chemins defer (National Railway Company) ONT Office national des transports (National Transport Office) PSO Public Service Obligation SOE Statement of Expenditure Vice President: Kemal Dervi* Director: Daniel Ritchie Division Chief: Amir Al-Khafaji Task Manager: Henri Beenhakker FOR OFFICIAL USE ONLY KINGDOM OF MOROCCO RAILWAY RESTRUCTURING PROJECT Loan and Project Summary Borrower: ONCF (Moroccan National Railway Company) Guarantor: Kingdom of Morocco Beneficiary: Not applicable Poverty: Not applicable Loan Amount: ESP 5,443 million + US$42.5 million (US$85.0 million equivalent) Terms: 20 years, including a five-year grace period, 50% standard interest rate for LIBOR-based Spanish Peseta single currency loan (SCL), and 50% standard interest rate for LIBOR-based US Dollar SCL. Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after signing, less any waiver. Financing Plan: Local Foreign Total ------- US$ million------- World Bank 46 39 85 African Development Bank 69 21 90 European Investment Bank 61 42 103 Government and others 197 139 336 TOTAL 373 241 614 Economic Rate of Return: ERRs per subproject range from 19% to 54%. ERR is about 22% for the overall project. Environmental Rating: B Staff Appraisal Report: Report No. 15988 MOR Map: IBRD 28080 Project Identification No.: 43725 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.  MEMORANDUM AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED LOAN TO THE MOROCCAN NATIONAL RAILWAY COMPANY WITH THE GUARANTEE OF THE KINGDOM OF MOROCCO FOR A RAILWAY RESTRUCTURING PROJECT 1. I submit for your approval the following memorandum and recommendation on a proposed single currency loan with a US Dollar tranche in an amount of US$42.5 million and a Spanish Peseta loan tranche in an amount of ESP 5,443 million to the Moroccan National Railway Company with the guarantee of the Kingdom of Morocco to help finance a Railway Restructuring Project. The project is in conformity with the Country Assistance Strategy and aims to support a restructuring program that would lead to the efficient, commercially-oriented operation of railway activity and the transformation of the railway company into a joint-stock company. The loan will be at the Bank's standard variable interest rate, with a maturity of 20 years, including a five-year grace period. 2. Background and Strategy. Over the past decade, Morocco has designed reforms to achieve macroeconomic adjustment and stabilization and to move the country gradually away from a predominantly state-administered economy towards one that is more market-driven and outward-oriented. The debt stock to GDP and debt service ratios have been reduced and inflation has been kept to single digit levels. Budget and current account deficits have been significantly reduced since their levels in the early 1980s; yet recent trends indicate continued fragility in macroeconomic trends and the need for further stabilization. Moreover, private investment and domestic savings rates remain modest; international competitiveness has not radically improved, and unemployment is 16 percent. 3. The Railway Company. The Office National des Chemins de Fer (ONCF), a public corporation established in 1963, manages and operates rail activities. Management procedures are cumbersome and bureaucratic. Technical and financial performance declined from 1988 to 1994, but since mid-1994, a new management team has designed and begun to successfully implement a recovery program. The pattern of the railway network is satisfactory; infrastructure and rolling stock are well maintained, but partly antiquated. Half of the revenue comes from transport of phosphate rock, the rest being almost equally split between general freight and intercity passenger traffic. ONCF has a permanent staff of about 14,000; the ratio of staff costs to traffic revenue is too high to ensure a sustainable financial situation. Staff enjoys a specific pension system which places a major burden on ONCF finances. 4. Railway Restructuring Policy. The Government of Morocco recognizes the need for the railway to adapt to the more competitive environment of the transport market, to improve its financial performance, and to reduce and rationalize the transfer of state financial resources to the railway subsector. In order to transform ONCF into a market-driven, financially sustainable enterprise, the Government intends: (a) to transform ONCF into a joint-stock company (socit6 anonyme, SA) fully-owned by the State in a first step and with private capital participation in a subsequent step; and (b) to adopt a new set of regulations (cahier des charges) for the SA, which, among other things, will draw a line between commercial services that will be operated in a fully deregulated environment, and services performed at the Government's request under a Public Service Obligation scheme (para. 7). -2- 5. Rationale for Bank Involvement. The proposed project is consistent with the Country Assistance Strategy (CAS) discussed by the Executive Directors on November 23, 1993, and with the CAS under preparation that will be presented to the Board shortly. It is also consistent with our strategy to reform public enterprises in Morocco. It is a response to the Moroccan Government's request for Bank assistance for the restructuring process, for achieving financial viability of railway operations by 2001, and for reducing Government financial support to the railway sector. The project would benefit from the experience the Bank has acquired during recent years in the field of railway restructuring, while the Bank could be a catalyst in the institutional reform process. 6. Lessons Learned from Previous Bank Involvement. The proposed project would be the first Bank-financed operation in the railway subsector. Past experience in Morocco emphasizes the importance of commitment and efficient institutional and procurement arrangements. In the case of the proposed project, the ministries of Transportation and Finance and ONCF appear strongly committed to the project. During project preparation, Bank and ONCF staff discussed the necessary arrangements to ensure efficient implementation of the proposed project. 7. Project Objectives. The main objective of the project is to support the preparation and the implementation of a restructuring program that would lead to an efficient, commercially oriented operation of railway activities in the form of a joint-stock company. Starting in 2001 the railway company should be financially viable and financial transfers from the Government to the railway sector will be strictly limited to: (a) compensation of Public Service Obligations; (b) construction of new lines (if any); and (c) the deficit of the railway pension fund if this is recommended by the study of the ONCF pension system (para. 8). It is noted that items (a) and (b) are not considered subsidies and their compensation is in line with Bank policy. The Bank considers item (c) issues on a case by case basis, although two principles are often adhered to; i.e., do not change acquired rights of current and retired staff, and do not burden a new company with the sins of an old company. 8. Project Description. The main components of the project are: (a) a program of investment for the rehabilitation and modernization of rail infrastructure and equipment. The program concentrates on the renewal or rehabilitation of track and of electric traction facilities (catenary, substations) on selected sections of the network and the improvement of signaling and telecommunication systems. Investment in rolling stock is limited to the acquisition of seven electric locomotives, the acquisition of 100 specialized wagons, and the rehabilitation of part of the passenger coach fleet; (b) studies and consulting services to prepare and implement the restructuring program (legal services for the preparation of legal texts); to prepare and implement the reform of the railway pension system; and to support the improvement of railway management systems; and (c) a program of acquisition of computer equipment needed for the implementation of new management systems. 9. Project Implementation. The Comit Interminist6riel Permanent des Entreprises Publiques (CIPEP) will approve all aspects dealing with transforming ONCF into a joint stock -3- company. The project will be executed by ONCE. The Loan agreement provides for the transfer to the joint stock company that will replace ONCF of all ONCF's obligations to the Bank, including those obligations related to the execution of the project. A high-level officer from ONCF will be appointed by the General Manager as the Bank interlocutor for all current matters related to the project; this officer will also liaise with other cofinanciers. June 30, 2002 is the estimated project completion date; the closing date would be December 31, 2002, to permit disbursement of the remaining loan proceeds for eligible expenditures under then existing contracts. 10. Sustainability. The project would not pose specific technical risks. Most risks involve the Government's willingness to enforce the stipulations of the performance agreement and railway subsector policy letter. However, the settlement of the long-overdue tariff dispute with the National Company of Phosphates (Office Chrifien des Phosphates, OCP), and recent changes and progress made in the management of ONCF, prove the Government's commitment to the sustainability of efficient rail and financially sustainable services. 11. Agreed Actions. Prior to negotiations, the Government had: (a) prepared and signed a draft 1996-2000 Performance Contract with ONCF; (b) increased rail tariffs for phosphate transport sufficiently; and (c) prepared and signed a draft policy letter describing, inter alia, its intentions to: (i) transform ONCF into a joint stock company (SA) according to a given time table; (ii) attract private capital in the operation of rail transport services in a subsequent phase; (iii) adopt a new set of regulations (cahier des charges) for the SA (para. 4); (iv) reduce Government support by 2001 (para. 7); and (v) reform the railway pension system to free ONCF from its financially unbearable burden. 12. The following conditions of Board presentation have been satisfied: (a) execution of the above-mentioned draft Performance Contract; (b) finalization of the policy letter; and (c) publication of the invitation to bid for the acquisition of rail and turnouts, and of the prequalification notice for track renewal works. 13. The Government has committed itself in the policy letter to: (a) prepare a plan for the transformation of ONCF taking into consideration a detailed review of ONCF's pension system, including its actuarial and financial evaluation, and a statement of all assets and liabilities to be transferred; (b) submit to the Bank for its review and approval an action plan defining dated restructuring measures to the said pension system to be implemented before the transformation of ONCF into a joint-stock company; and (c) take all action necessary to ensure that a draft law implementing the transformation of ONCF into a joint-stock company is approved by the Government not later than December 31, 1999. -4- 14. During negotiations, agreement has been reached on the following: (a) a working ratio lower than 0.8 from 1997 to 2000, and 0.75 thereafter; (b) a current ratio no lower than 1.5 from 1998 onward; (c) a debt to equity ratio lower than 35/65; and (d) a labor-cost-to-operating- revenue ratio lower than 0.41 in 1997, 0.39 in 1998, 0.37 in 1999, 0.36 in 2000, and 0.31 thereafter. 15. Environmental Aspects. The project is classified as Category B. Rehabilitation works to be done under the project will only have positive effects on the environment. A review of the environmental aspects of rail workshop operations will be conducted as part of the project, and methods of industrial waste disposal will be introduced if required. 16. Project Benefits. The main benefits stemming from track renewal in ONCF's investment program are reduced track maintenance costs, reduced train operating costs through higher operating speeds, and reduced number of derailments. There are also benefits associated with capacity effects due to increased speeds; these benefits are quantified at one-half of the transport cost savings compared with road transport, since this additional traffic is essentially an induced traffic. 17. Rail traffic between Rabat and Meknes is heavier than anywhere else in Morocco. The existing track is double between Rabat and Kenitra, and single between Kenitra and Meknes. The doubling of the track between Kenitra and Sidi Kacem, a distance of 80 km, which includes some alignment rectification between Rabat and Kenitra, is the only new construction component in ONCF's investment program. High passenger load factors and major traffic peaks during the summer months and holiday seasons justify this investment. Benefits relate to savings in: (a) passenger and freight transport savings which otherwise would divert to the more costly road transport; and (b) passenger time and train operating costs due to increased operating speeds. Transfer of traffic to road transport would occur when the line's capacity is reached. 18. Benefits related to the purchase of seven new locomotives consist of reduced costs of maintenance and improved availability. ONCF's old locomotives to be replaced by the new ones have an availability of 23 percent; a new locomotive has an availability of 95 percent. 19. The one hundred new freight wagons of ONCF's investment program are needed for the rail transport of coal which has recently increased. It is estimated that without these wagons 40 percent of the coal transport would be diverted to the road, which entails a higher cost of transport. 20. Projects Risks. The project would not pose specific technical risks. Most risks involve the Government's willingness to enforce the stipulations of the Performance Contract and railway subsector policy letter. However, the settlement of the long-overdue tariff dispute with OCP, and recent changes and progress made in the management of ONCF, prove the Government's commitment to the sustainability of efficient rail services. Technical assistance and training under the project would reinforce the Government's and ONCF's commitment to the needed reforms by identifying and enforcing necessary actions. -5- 21. Recommendation. I am satisfied that the proposed loan would comply with the Articles of Agreement of the Bank and I recommend that the Executive Directors approve it. James D. Wolfensohn President By Caio Koch-Weser Attachments Washington, D.C. Date: November 26, 1996 Schedule A KINGDOM OF MOROCCO RAILWAY RESTRUCTURING PROJECT Project Cost Estimates (US$ million) Project components Local Foreign Custom Total (direct) Duties A. World Bank (IBRD) Studies and consulting services (1) 0 2 - 2 Computer equipment 0 1 1 Acquisition ofrail and turnouts - 21 1 21 Track renewal Fs/Oujda (2) 34 10 1 45 Track renewal Rabat/Sidi Kacem (2) 8 2 0 10 Track renewal Casablanca/Marakkech (2) 11 3 0 15 Base costs (end 1995) 53 38 2 93 Physical contingencies 5 4 0 9 Price contingencies 7 3 0 11 TOTAL PROJECT COSTS (A) 66 45 3 113 B. African Development Bank (AIDB) Realignment, track renewal and platform doubling section Sidi 64 18 1 83 Kacem/Mekn6s (2) Base costs (end 1995) 64 18 1 83 Physical contingencies 6 2 0 8 Price contingencies 11 2 0 13 TOTAL PROJECT COSTS (B) 81 21 1 103 European Investment Bank (EIB) Renewal and reinforcement of electric traction facilities 14 18 7 40 (catenary, substations) Doubling and track renewal K6nitra/Sidi Slimane (3) 43 25 2 70 Base costs (end 1995) 57 43 10 110 Physical contingencies 5 4 1 10 Price contingencies 9 4 1 14 TOTAL PROJECT COSTS (C) 71 51 12 134 D. Others Rolling stock rehabilitation 8 12 3 22 Acquisition of 7 electric locomotives - 35 1 36 Acquisition of 100 wagons 4.79 2.66 0.93 8.38 Other Wagons 3 8 0 11 Containers 0 1 1 2 Modernization of signaling and telecommunication facilities 13 31 4 48 Tools 19 12 1 32 Base costs (end 1995 44 98 9 151 Physical contingencies 1 3 0 5 Price contingencies 4 6 1 11 TOTAL PROJECT COSTS (D) 49 108 10 167 GRAND TOTAL BASE COSTS END 1995 (A+B+C+D) 218 197 22 437 TOTAL CONTINGENCIES (A+B+C+D) 49 28 3 80 Physical contingencies 18 12 2 32 Price contingencies 31 15 2 48 TOTAL (A+B+C+D) 267 224 26 517 Miscellaneous (4) 76 17 4 97 GRAND TOTAL 343 241 30 614 (1) Outside investment program (2) Including cost of control of works (3) Includes realignment, track renewal and station remodeling (4)Outstanding operations from the 1988/1994 plan and miscellaneous FINANCING (US$ million) LOCAL FOREIGN TOTAL World Bank 46 39 85 African Development Bank 69 21 90 European Investment Bank 61 42 103 Government and others 197 139 336 TOTAL 373 241 614 Schedule B KINGDOM OF MOROCCO RAILWAY RESTRUCTURING PROJECT Procurement Arrangements for the Bank-Financed Items (US$ M equivalent physical and price contingencies and all taxes included) Procurement methods ICB* Others NBF** Total 24.0 24.0 Acquisition of rail and turnouts (23.0) (23.0) 1.0 1.0 Computer equipment (1.0) (1.0) 86.0 86.0 Infrastructure works (59.0) (59.0) 2.0 2.0 Studies and consulting services (2.0) (2.0) 111.0 2.0 113.0 TOTAL (83.0) (2.0) (85.0) Figures between () indicate the amounts financed by the Bank. * International Competitive Bidding ** Not Bank financed Allocation of Loan Proceeds (US$ M equivalent) Loan Disbursement Amount 1. Consulting services 2.0 100% 2. Rail and turnouts 21.0 100% FE; 100% LEX; 70% LE 3. Computer equipment 1.0 100% FE; 100% LEX; 70% LE 4. Track renewal works 49.0 100% FE; 70% LE Unallocated (contingencies) 12.0 Total 85.0 Estimated Disbursements (US$ M equivalent) FY FY98 FY99 FY00 FY01 FY02 FY03 Annual 7.5 17.2 17.2 17.2 17.2 8.7 Cumulative 7.5 24.7 41.9 59.1 76.3 85.0 Schedule C KINGDOM OF MOROCCO RAILWAY RESTRUCTURING PROJECT Key Project Events and Responsibilities (a) Time taken to prepare: 14 months (b) Prepared by: ONCF and the Bank (c) First Preparation mission: September 1, 1995 (d) IEPS: November 27, 1995 (e) Appraisal Mission Departure: August 12, 1996 (f) Date of Negotiations: October 28, 1996 (g) Board Presentation: December 19, 1996 (h) Planned Effectiveness: May 1997 (i) Relevant PCRs and PPARS: none Run Date: 11/22/96 Dataasof: 11/18/96 SCHEDULED Page 1 of 2 Status of Bank Group Operations in Morocco IBRD Loans and IDA Credits in the Operations Portfolio Difference Original amount in US$ millions between expected Pmject Loan or Fiscal and actual ID Credit No Year Borrower Purpose IBRD IDA Cancellations Undisbursed disbursements' Number of Closed Loans/Credits 117 Active Loans MA-PA-38978 L40910 1997 GOVERNMENT OF MOROCCO PSD III-VOC TRG 11 50 11 50 MA-PA-38978 L40911 1997 GOVERNMENT OF MOROCCO PSD I-VOC TRG 11 50 11.81 MA-PA-41303 L39351 1996 GOVERNMENT OF MOROCCO EMERG DROUGHT RECOV 50 00 21.59 -25 87 MA-PA-42414 L40260 1996 GOVT OF MOROCCO COOR/MON SOCIAL PRO 28 00 28 00 033 MA-PA-42415 L40250 1996 GOVT OF MOROCCO SPI - HEALTH 6800 6800 033 MA-PA-5425 L29540 1988 GOVT OF MOROCCO S.& M IRRIG.II 23 00 7.99 799 MA-PA-5433 L32830 1991 GOVT. OF MOROCCO PORT SECTOR 33 00 500 10.26 15.26 MA-PA-5433 L32840 1991 GOVT. OF MOROCCO PORT SECTOR 9900 14.56 -8444 MA-PA-5435 L36640 1994 KINGDOM OF MOROCCO/ONEP WATER SUPPLY V 12800 116.08 33.29 MA-PA-5435 L36650 1994 KINGDOM OF MOROCCO/ONEP WATER SUPPLY V 3200 30.13 -1.87 MA-PA-5437 L31560 1990 GOVERNMENT FORESTRYII 4900 12.81 12.81 MA-PA-5438 L35570 1993 KINGDOM OF MOROCCO TELECOM RESTRUCTURIN 10000 58 11 42.79 MA-PA-5440 L31710 1990 KINGDOM OF MOROCCO HEALTH SECTOR INVEST 104.00 25.48 25.48 MA-PA-5449 L28260 1987 MINISTRY OF INTERIOR GREATER CASABLANCA S 6000 1740 17.40 MA-PA-5459 L32620 1991 GOVT. OF MOROCCO SECOND RURAL ELECTRI 11400 5000 41 73 88.70 MA-PA-5460 L32950 1991 GOVERNMENT OF MOROCCO BASIC EDUCATION 14500 4500 56.33 81.00 MA-PA-5462 L35870 1993 GOVERNMENT SECOND LSI IMPROVEME 215.00 3500 143 03 2003 MA-PA-5480 L30260 1989 GOVERNMENT OF MOROCCO RURAL PRIMARY EDUCAT 83 00 8.00 4.96 12.96 MA-PA-5486 L36620 1994 CNCA NATIONAL RURAL FINAN 100.00 78 99 62 99 MA-PA-5489 L39010 1995 KINGDOM OF MOROCCO SECONDARY ROADS 5760 57.60 10.68 MA-PA-5493 L37650 1994 GOV. OF MOROCCO ASILI 121.00 61.00 33 77 17.50 MA-PA-5495 L33660 1991 MOROCCAN BANKS FINANCIAL SECTOR DEV 29.50 2005 84.01 MA-PA-5495 L33670 1991 MOROCCAN BANKS FINANCIAL SECTOR DEV 19.50 118 -1832 MA-PA-5495 L33710 1991 MOROCCAN BANKS FINANCIAL SECTOR DEV 9.50 231 0.41 -6.78 MA-PA-5495 L33720 1991 MOROCCAN BANKS FINANCIAL SECTOR DEV 11 50 3.85 -7.65 MA-PA-5499 L36880 1994 GOV. OF MOROCCO IRR AREAS AGR SERV 25.00 5.00 17.98 7.88 MA-PA-5501 L40240 1996 GOV. OF MOROCCO SPI- EDUCATION 54.00 5400 0 33 MA-PA-5503 L40100 1996 KINGDOM OF MOROCCO SEW & WATER REUSE II 40.00 4000 0.28 MA-PA-5504 L36470 1994 KINGDOM OF MOROCCO ENVIRONMENT MANAGEME 6.00 540 1.82 MA-PA-5514 L36180 1993 GOV OF MOROCCO LAND DEVELOPMENT 66.00 5529 67.36 MA-PA-5517 L36170 1993 GOV.OF MOROCCO/FEC MUNICIPAL FINANCE I 100.00 4211 -57.89 MA-PA-5522 L39281 1996 GOVT OF MOROCCO FINMARKETS DEV 125.00 92.32 19158 TOTAL 2118.60 000 211.31 1182.71 59998 Active Loans Closed Loans Total Total disbursed (IBRD and IDA) 714.76 5131.11 584587 Of which repaid 36.76 2443.46 248022 Total now held by IBRD and IDA 1870.53 2712 14 458267 Amount sold 0.00 2011 20.11 Of which repaid 0.00 20 11 20,11 Total undisbursed 1182.71 2449 1207.20 a Intended disbursements to date minus actual disbursements to date as projected at appraisal. Note Disbursement data are updated at the end of the first week of the month SCHEDULE D Page 2 of 2 Morocco - IFC and MIGA Program, FY94-96 Past Current Category FY94 FY95 FY96 FY97 IFC approvals (US$m) 18.9 0.6 0.6 0.0 Sector (%) Cement & Construction 1.0 0.0 0.0 0 Financial Services 1.0 1.0 1.0 0 (blank) 0.0 0.0 0.0 0 TOTAL 2.0 1.0 1.0 0.0 Investment instrument (%) Loans 54.0 0.0 0.0 0.0 Equity 46.0 100.0 100.0 0.0 Quasi-equitya 0.0 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 TOTAL 100.0 100.0 100.0 0.0 MIGA guarantees (US$m) 9.0 9.0 0.0 MIGA commitments (US$m) 0.0 0.0 0.0 'Includes quasi-equity types of both loan and equity instruments. Run Date: 11/22/96 Schedule E Morocco at a glance Page 1 of 2 M. East Lower- POVERTY and SOCIAL & North middle- Morocco Africa income Development diamond* Population mid-1995 (millions) 26.9 273 1,154 GNP per capita 1995 (US$) 1,130 1,780 1,700 Life expectancy GNP 1995 (billions US$) 30.4 486 1,961 Average annual growth, 1990-95 Population (%) 2.0 2.7 1.4 Labor force (%) 2.6 3.3 1 8 GNP Gross per primary Most recent estimate (latest year available since 1989) capita enrollment Poverty: headcount index (% of population) 13 Urban population (% of total population) 48 56 56 Life expectancy at birth (years) 65 66 67 Infant mortality (per 1,000 live births) 55 49 36 Child malnutrition (% of children under 5) 9 , Access to safe water Access to safe water (% of population) 59 82 78 Illiteracy (% of population age 15+) 56 39 Gross primary enrollment (% of school-age population) 73 97 104 - Morocco Male 85 104 105 Lower-middle-income group Female 60 90 101 KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1975 1985 1994 1995 EconomIc ratios* GDP (billions US$) 9.0 12.9 30.3 32.4 Gross domestic investment/GDP 25.2 27.1 21.3 21.0 Exports of goods and non-factor services/GDP 22.5 25.5 25.3 27.3 Openness of economy Gross domestic savings/GDP 14.3 18.4 15.7 134 Gross national savings/GDP 13.3 12.4 18.9 16.1 Current account balance/GDP -6.1 -6.4 -24 -4.9 Interest payments/GDP 0.7 4.3 4.2 42 Savings Investment Total debt/GDP 26.2 122.4 71.1 68.3 Total debt servicelexports 6.7 33.5 34.3 31.6 Present value of debt/GDP .. 62.3 Present value of debt/exports .. .. 194.2 Indebtedness 1975-84 1985-95 1994 1995 1996-04 (average annual growth) GDP 4.4 2.9 11.6 -7.6 5.6 - Morocco GNP per capita 1.7 0.9 10.2 -9.3 3.8 - - Lower-middle-income group Exports of goods and nfs 4.2 5.9 -0.9 4.1 6.5 STRUCTURE of the ECONOMY (%1975 1985 1994 Growth rates of output and Investment (%) Agriculture 17.3 16.6 18.4 14.3 Industry 34.7 33.4 31.5 33.2 'o Manufacturing 16.6 18.6 17.6 19.2 5- Services 48.0 50.0 50.1 52.5 - 90 93 94 95 Private consumption 69.4 65.8 67.4 71.2 -10 General government consumption 16.3 15.8 169 15.5 Imports of goods and non-factor services 334 342 30 9 34.9 _GDI ---GDP 1975-84 1985-95 1994 1995 (average annual growth) Growth rates of exports and imports (%) Agriculture 1.4 -0.1 63.0 -45.9 25 Industry 3.0 2.8 4.3 3.1 20 - Manufacturing .. 35 4.2 2.9 15 Services 6.4 3.8 3.2 1.2 10 5- Private consumption 36 4.4 16.6 -6.9 o -- - General government consumption 5.7 3.2 1 7 -3 7 S 90 91 92 93 94 95 Gross domestic investment 0.0 1.1 11.5 -8.5 -10 Imports of goods and non-factor services -0.6 7.3 5.2 4.0 Gross national product 40 3.0 12.4 -7.6 Exports Imports Note: 1995 data are preliminary estimates. The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond will be incomplete. Schedule E Page 2 of 2 Morocco PRICES and GOVERNMENT FINANCE Domestic prices 1976 1986 1994 1995 Inflation (%) (% change) Consumer prices .. .. 5.1 6.1 Implicit GDP deflator 1.5 8.4 0.2 7.2 4 Government finance 2 (% of GDP) a 7 Current revenue .. 20.7 24.2 23.9 so 91 92 93 94 as Current budget balance .. -2.4 3.0 1.5 Overall surplus/deficit .. -9.6 -3.2 -5.3 -GDPdef CPI TRADE (millions US$) 1975 1985 1994 1996 Export and import levels (mill. US$) Total exports (fob) .. 2,283 5,538 6,676 12,000 Other agriculture .. 603 1,280 1,457 1000 X Phosphorus .. 479 273 291 Manufactures .. 477 1,474 1,600 8,000 Total imports (cif) .. 3,921 8,265 9,936 6,000 F Food .. 507 798 1,332 4,000 Fuel and energy .. 1,074 1,113 1,184 2,000 Capital goods .. 649 1,845 1,854 0 Export price index (1987=100) .. 89 122 137 89 90 91 92 93 94 95 Import price index (1987=100) .. 104 113 131 o Exports 0 Imports Terms of trade (1987=100) .. 86 108 104 BALANCE of PAYMENTS (millions US$) 1976 1985 1994 1995 Current account balance to GOP ratio (%) Exports of goods and non-factor services 1,997 3,278 7,688 8,840 0 Imports of goods and non-factor services 2,939 4,402 9,368 11,314 89 90 91 92 94 95 Resource balance -942 -1,124 -1,680 -2,474 -1 Net factor income -88 -766 -1,170 -1,209 Net current transfers 482 1,031 2,070 2.115 Current account balance, -3 before official transfers -548 -826 -726 -1,587 -4 Financing items (net) 519 845 1,240 886 Changes in net reserves 28 -19 -513 702 Memo: Reserves including gold (mill. US$) .. 345 4,548 3,613 Conversion rate (local1US$) 4.1 10.1 9.2 8.5 EXTERNAL DEBT and RESOURCE FLOWS (millions US$) 1976 1986 1994 1995 Composition of total debt, 1995 (mill. US$) Total debt outstanding and disbursed 2,353 15,753 21,587 22,147 IBRD 244 1,288 3,746 3,966 IDA 31 43 35 33 G 418 A 3966 Total debt service 172 1,429 3,338 3,541 IBRD 33 167 572 630 F: 5742 IDA 0 1 2 2 Composition of net resource flows Official grants 26 416 279 300 D: 2831 Official creditors 253 412 -313 -284 Private creditors 591 195 201 132 Foreign direct investment 0 20 601 818 Portfolio equity 0 0 63 29 E 9105 World Bank program Commitments 33 379 127 433 A - IBRD E - Bilateral Disbursements 111 307 246 426 B - IDA D - Other multilateral F - Private Principal repayments 18 87 302 350 C - IMF G - Short-term Net flows 93 220 -56 76 1 Interest payments 15 81 271 282 Net transfers 78 139 -327 -206 International Economics Department 11/20/96 MAP SECTION  0 0 3n n -Z - > -n åH- ® eeo o o Z Ó Z Z Z > > fl 0 0 > c z z0~ 22 22 d --------   Mt'AG iNG Heport No: P- 7002 MOR Type: M Op