Announcement of Nine Million Five Hundred Thousand Dollars to Senegal for Agriculture on January 16, 1969

INTERNATIONAL BANK FOR • RECONSTRUC'l,:ON AND DEVELOPMENT INTEHNATIONAL DRVELOPMENT ASSOCIATION 1818 H STREET. N VV WASHINGTON D.C.20433 TELEPHONE EXECUTIVE 3-6360 Bank Press Release No. 69/3 Subject: $9.5 million to Senegal IDA Press Release No. 69/3 for agriculture January 16, 1969 The World Bank and its affiliate, the International Development Association (IDA), are lending $9.5 million to Senegal for the continuation of a program to increase the production of groundnuts, the country's chief export, and of millet, the staple food. About one million people, over a quarter of the population, are affected by the program which will result in a steady increase in farm incomes and in Government revenues. Agriculture employs over 85% of Senegal's popula~ion of 3.6 million and i~ • likely to continue to be the mainstay of the economy for a long time. Groundnuts are the one important cash crop and the main source of foreign exchange, account- ing for nearly two-thirds of exports. The other main crops, which are produced for internal consumption, are millet, cassava and.rice. The total area cultivated for groundnuts increased over 60% in the past 15 years; annual production is now just over one million tons, making Senegal the fifth largest groundnut producer in the world. Senegal's long-term development plans are centered on diversification of agri- culture to reduce imports of foodstuffs and raw materials, as well as on increased groundnut production. The latter is of vital impor~ance because Senegal. had to face a considerable loss of export revenues as a ·result of the progressive elimina- tion of preferential arrangements for marketing its groundnut crop in France. To • compensate for this loss, a five-year program was started in 1964 with financial assistance from the European Economic Community, with the objective of achieving a 257.· increase in the production of groundnuts and an expansion of other crops, /more Bank P.R. No. 69/3-Senegal-Agriculture • IDA P.R. No. 69/3 - 2 - notably millet. The project being financed by the Bank and IDA is a continuation of this program. Under the project, which will be carried out over a three-year period, credit will be provided to the cooperatives through the B.anque Nationale de Developpement du Senegal (BNDS) for the purchase of simple animal-drawn farm implements, for some draft animals and for fertilizer. Part of the fertilizer will come from a new fac- tory which was partially financed by the Bank's affiliate, the International Finance Corporation. Funds will be provided for consultants to assist in the management of the cooperatives' supply and marketing institution; at the end of three years the institution should be able to operate efficiently with trained Senegalese staff arid with a minimum of assistance from expatriate staff. Funds will also be provided for some technical services for the cooperatives, and for overseas fellowships for training staff of the cooperatives' institution. involved in the execution of the project. A Project Coordinating Com- mittee is being formed to ensure close cooperation among the many organizations • The total cost of the program over the three-year period is estimated at the equivalent of $24 million. The Bank and IDA loans will contribute about 39%, farmers' about 16%, and the Government, both directly and through BNDS, the balance of 45%. The Bank loan, for an amount of $3. 5 million, will be for a term of 30 years, including 10 years of grace, with interest at 6-1/2%. The IDA credit, of $6 mil- lion, will be for a ttrm of 50 years, including 10 years of grace. It will be free of interest, but a chti,,rge of 3/4 of 1% will be made to cover IDA' s administrative costs. About three-q~arters of the proceeds of the loan and credit will be relent to the Banque Nationale de Developpement du Senegal, at a rate of 3-1/2% for a period of 14 years, for on-lending to farmers. The balance of the funds will finance consultants' services and technical assistance. A specialist from th~ Food and Agriculture Organization (FAO) of the United Nations participated in the preparation of the project under the Bank/FAO Co- operative Program. - 0 - •