Document of The World Bank Vit OVI FOR OFFICIAL USE ONLY Report No. P-3009-TA REPORT AND RECOMMENDATION OF THE PRESIDENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE UNITED REPUBLIC OF TANZANIA FOR AN EXPORT REHABILITATION PROGRAM March 31, 1981 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 = Tanzania Shilling (Tsh) Tsh 1.0 = USO.12 US$ 1.00 = Tsh 8.30 US$ 1.00 = SDR 0.817472 (As the Tanzania Shilling is officially valued in relation to a basket of the currencies of Tanzania's trading partners, the US Dollar/Tanzania Shilling exchange rate is subject to change. Conversions in this report were made at US$1.00 to Tsh 8.30 which is close to the 1980 average exchange rate. The US$/SDR exchange rate used in this report is that of February 27, 1981.) ABBREVIATIONS AND ACRONYMS BET - Board of External Trade BOT - Bank of Tanzania CAT - Coffee Authority of Tanzania CCM - Chama Cha Mapinduzi (The Revolutionary Party) CAPEX - General Agricultural Products Export Corporation TANU - Tanganyika African National Union TAT - Tobacco Authority of Tanzania TSA - Tanzania Sisal Authority FISCAL YEAR Government - July 1 - June 30 FOR OFFICIAL USE ONLY TANZANIA EXPORT REHABILITATION PROGRAM CREDIT AND PROJECT SUMMARY Borrower: The United Republic of Tanzania Amount: SDR 40.9 million (US$50 million) equivalent Terms: Standard Project Description: The Project would finance essential imports of agricultural machinery and materials, as well as vehicle spare parts, to improve the production and marketing of Tanzania's major export and food crops. It would support the Government's Export Rehabilitation Program, which consists of producer price increases, improvements to the foreign exchange alloca- tion system, preliminary steps in improving parastatal effi- ciency and measures to promote non-traditional exports. Under the project, the Government would further strengthen its foreign exchange budgeting system, begin to prepare its development and recurrent budgets on a multi-year basis and develop an agricultural policy action program aimed at in- creasing overall productivity in the sector. The Export Rehabilitation Program faces substantial risks, including the possibility that additional concessional financing will not be made available from other sources, resulting in the need to cut imports even further and hence reducing the benefits of the proposed credit. There are also likely to be delays in recruiting key technical personnel needed for achieving export recovery targets in 1982 and 1983. To help address both of these risks, the Government has asked the Bank Group to organize a Consultative Group meeting for the second half of 1981 and to consider helping key Ministries and parastatals in hiring staff under a separate technical assistance credit. Estimated Disbursements: (US$ million) IDA Fiscal Year 1981 1982 Annual 10 40 Cumulative 10 50 Rate of Return: Not applicable. Staff Appraisal Report No separate Staff Appraisal Report has been prepared for this project. 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. INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED DEVELOPMENT CREDIT TO THE UNITED REPUBLIC OF TANZANIA FOR AN EXPORT REHABILITATION PROGRAM 1. I submit the following report and recommendation on a proposed Development Credit of SDR 40.9 million (US$50 million) equivalent, on standard IDA terms, to the United Republic of Tanzania to help finance an export rehabilitation program. PART I - THE ECONOMY 2. An economic mission visited Tanzania in March and again in June 1980. Its report (3086-TA) dated January 23, 1981, has been distributed to the Executive Directors. A summary of social and economic data is given in Annex I. Background 3. At Independence in 1961 Tanzania (then Tanganyika) was one of the poorest countries in the world. Almost solely dependent on subsistence agriculture and a few estate crops, the country had a very modest industrial base (less than 5% of GDP), and a very small number of educated and trained personnel. For the first six years after Independence, the Government's development objectives resembled those of many other less developed countries, stressing growth in per capita income and national self-sufficiency in skilled manpower, based on market forces and capital-intensive agricultural projects. This approach had a number of drawbacks, such as high investment costs in the agricultural sector, and led in the Government s view to unaccept- able economic and social conditions, such as widening income differentials and unequal opportunities for advancement in the rural areas. In response to this situation, the national development strategy was reassessed in 1967. The new priorities, enunciated in the Arusha Declaration and related policy state- ments, were directed towards establishing a socialist society, with greater emphasis on broad-based rural development, self-reliance in development efforts, and the development of a mass education system. To accomplish these ertds, the State, with guidance from the Party 1/, was expected to play the leading role, especially in the reform and creation of appropriate institu- tions. This led in the late 1960s to the nationalization of large-scale industry, commerce and finance, the creation of numerous parastatal bodies, the formation of ujamaa (cooperative) villages, the decentralization of government (1972) and the mass campaign of villagization (1974-76). 1/ The single mainland political party at the time was TANU, but in February 1977, it merged with Zanzibar's Afro-Shirazi Party to form the CCM. - 2 - 4. Despite some disruption arising from these major institutional changes during the period, Tanzania managed to show improvements both in social welfare and in macroeconomic performance. Primary school enrollments increased by more than 50%, life expectancy rose by almost 5 years, and access to safe water increased in both the rural and urban areas. GDP grew by 4.4% per annum from 1966 to 1973, investment averaged 24% of GDP from 1970 to 1973, and domestic resource mobilization improved with recurrent revenues rising from 15% of GDP in 1967/68 to 19% in the mid 1970s. However, the productive sectors grew slowly and the rate of return on new investment (which was centered on the industry and transport sectors) was poor. Perhaps the princi- pal disappointment was in agriculture, the dominant sector in the economy, which grew by only 2.3% per annum from 1966 to 1973. This growth was also uneven among regions and precluded any narrowing of rural-urban income differ- entials. Tanzania made rapid progress towards localizing key posts in the economy, but large gaps in manpower requirements remained. Dependence on foreign aid to finance both domestic investment and the widening balance of payments gap also increased. By 1973, the issues which were to be so important for Tanzania throughout the 1970s were becoming clear: How quickly could a countiy with limited trained personnel develop a strong and efficient centrally administered economy? The Government's emphasis on equity was often at the expense of efficiency and incentives; how long would the country afford these costs? What could be done to improve the growth rate of the monetized, productive sectors? 5. The oil price increases and world recession of 1973-74 coincided with two years of below average rainfall in Tanzania. Also affected by disruptive changes in the rural areas at this time (decentralization and villagization), agricultural production plummeted and there was a serious shortfall in foodgrain production. The Government was forced into the world market, making large purchases of foodgrain for cash. Food imports rose from US$39 million in 1973 to US$149 million in 1974 and US$136 million in 1975. Export crop production also fell during this period and the barter terms of trade dropped by 22.5% from 1974 to 1975. Combined with the drop in export volumes, the income terms of trade fell by about one-third during these two years. As a result, the current account deficit rose from US$118 million in 1973 to around US$340 million in both 1974 and 1975. Domestically, the recurrent budget fell into deficit and Government bank borrowing rose from TSh. 416 million in 1973/74 to TSh. 753 million in 1974/75 and TSh. 1,061 million in 1975/76. 6. At first the Government was slow in responding to its difficulties. Substantial wage increases were granted throughout the economy in early 1974 to try to shield workers from the effects of inflation. Subsequently, the Govern- ment prepared a program to deal with at least the short-term effects of the crisis and was able to receive some assistance from the IMF and a program loan from the Bank. Under this program, import levels were tightly restricted, wages were frozen and government development expenditures 1/ were redirected towards the productive sectors. The Tanzania shilling was devalued by 10% against the SDR, and producer prices for food crops were substantially increased. At the same time, the National Milling Corporation was instructed to purchase a number of drought-resistant crops such as cassava, sorghum, and pigeon peas in addition to the usual foodgrains like maize. Atside from the devaluation, little scope was given to market forces and Tanzania made no basic changes in its system of administered prices and government controls. Indeed, the Government introduced more controls and administered prices after the crisis. The basic weaknesses of the economy persisted: declining export volumes, limited trained manpower, disappointing growth in the monetized and productive sectors and poor maintenance of existing capital stock and infra- structure, especially in agriculture and transport. 7. The Government program, boosted greatly by the coffee boom of 1977, increased foreign assistance and reasonable weather for agriculture, was able to keep the economy in balance until 1978. The current account deficit fell to less than US$100 million in 1976 and less than US$175 million in 1977. The Government made a net repayment of TSh. 24 million to the banking system in 1976/77. During that year, the overly stringent import controls were relaxed at the same time as the terms of trade began to deteriorate again. The balance of payments went into deficit and foreign reserves were drawn down. Then, in October 1978, the country was invaded by forces from Uganda. The resulting war coincided with the oil price increases of 1979 and with flooding and drought in different parts of Tanzania. As a consequence, the balance of payments deficit worsened and the Government built up major arrears on its import payments for the first time since Independence. The domestic budget fell heavily into deficit as expenditures (led by defense) rose by 50% from 1977/78 to 1978/79 and revenues improved by only 10%. As a result, government borrowing from the banking system increased from TSh. 600 million in 1977/78 to more than TSh. 3,000 million in 1978/79. Such borrowing was the major factor in money supply growth, which exceeded 53% in this period. 8. According to the official National Accounts statistics, GDP in constant prices has risen by 4.7% per annum since 1966, and by a slightly higher rate of 5.1% per annum over the past six years. However, this latter trend assumes an 8.6% per annum increase in subsistence agriculture, which seems somewhat overstated in the light of Bank Group project experience and the known marketed surpluses of food. Assuming a more realistic growth rate of 4.0% per annum for subsistence agriculture, overall GDP growth since 1973 would also be reduced to 4.0% per annum. With population growing by around 3.3% per annum, this implies an increase in per capita GDP of only 0.7% per annum. There would also appear to have been a change in the struc- ture of the economy over the past six years, away from the productive monetary sector and towards subsistence and service activities. 1/ Government development expenditures account for about two-thirds of public sector investment, which in turn accounts for 50-60% of total investment. -4- Excluding public administration, commercial services and trade, the monetary sector has grown by only 2.3% per annum over the past six years, well below the population growth rate. This change in the structure of the economy has been a major factor hampering the Government's efforts to mobilize domestic resources. 9. Although Tanzania has sustained a high investment ratio, this has not been matched by a similar success in the mobilization of domestic savings or in the return on investments. Up to the mid-1970s, foreign savings had financed 20%-40% of domestic investment. However, the dependence on foreign savings rose sharply to more than 60% of domestic investment during the crisis years of 1974-75 and again from 1978. The major shortfalls in domestic savings have occurred in the Government sector, where they have actually been negative in some years since 1975. The low return on investments is reflected in the incremental capital-output ratio (ICOR) for the monetary sector, which was around 4.5 at the start of the decade and rose to between 6 and 7 by the end of it. 10. Agriculture remains the most important sector in Tanzania, account- ing for 90% of total employment, 50% of GDP and 80% of exports. The long term growth of agricultural production has hardly kept pace with population growth and if anything has fallen in more recent years as the initial expansion of export crop production (through the mid-1960s) has been reversed. This poor performance cannot be adequately explained by the limitations of the natural environment. Although the importance of rural development has continuously been highlighted in Government statements, including the Arusha Declaration and successive plans, this has not always been reflected in the allocation of resources to the agricultural sector or in policy formulation and implemen- tation. The general direction of the Government's post-Arusha agriculture strategy has also tended to emphasize the transformation of the institutional structure of rural development (through the formation of villages and in- creasing public involvement in the sector) over measures designed to improve agricultural production directly. Many of these institutional changes were introduced too rapidly, without careful planning or sufficient recognition that by themselves they could not compensate for inadequate incentives and shortages of skilled manpower and managers. More recently there has been a greater awareness of the role of incentives and recent price adjustments attest to the Government's willingness to use them to influence the pattern of agricultural production. The trend towards greater public involvement in agriculture has however continued and with the resultant proliferation of parastatals and increasingly complex structure of administration, the avail- able manpower has been stretched even more thinly. This has resulted in weakened capacity for policy planning and implementation, especially in the areas of research and extension, and deficient distribution of fertilizers and other on-farm supplies and equipment. Also related to the poor performance of agriculture has been the deterioration of transport services. Roads, railways and water transport have deteriorated owing to a lack of spare parts, poor maintenance and inadequate planning and management. The Current Balance of Payments Crisis and Medium Term Prospects 11. The decline in agricultural production, transport bottlenecks, and external shocks described above have all contributed to the severe deterioration in the balance of payments over the past two to three years (see Table 1). Export volumes are estimated to have fallen by 7% during 1980, to a level one-third below the peaks of the mid-1960s and early 1970s. Furthermore, the terms of trade have declined by 27% since the coffee boom of 1977, due to a sharp increase in import costs, especially for petroleum, at a time when the overall level of export prices has been rising very slowly. Owing to these adverse developments, the purchasing power of Tanzania's exports in 1980 was one-third lower than in 1977 and only one-half of the 1966 level. 12. Part of this shortfall has been offset by additional external resources, including a sharp increase in commodity and program aid to more than US$200 million in 1980, as well as by drawings under the IMF Standby Program concluded in September 1980. Under this program, the IMF was to provide up to US$235 million over the subsequent two years, as well as US$20 million under the Compensatory Financing Facility. However, owing largely to sharper-than-expected declines in export earnings and continuing requirements for military expenditures in Uganda, the Government was unable to meet agreed targets for retiring import arrears, curbing public spending and limiting the expansion of domestic credit. As a result of these difficulties, Tanzania has been ineligible to make drawings under the Standby since December 1980. The Government has since introduced supplementary revenue measures and discussed these and other corrective steps with the Fund in March 1981. An IMF mission is currently in Dar es Salaam to begin negotiations of a new extended arrangement to replace the present program. 13. In addition to import support and IMF resources, Tanzania has utilized large amounts of exceptional financing, including suppliers' credits and an increase in import payment arrears. Despite this, the volume of imports has had to be severely curtailed, and in 1980 was still no higher than in the mid-1970s. In particular, imports of essential raw materials, intermediate goods and spare parts have been cut by more than 30% over the past two years, and are now inadequate to sustain even the present restrained level of economic activity. Furthermore, the present crisis in the balance of payments has left Tanzania with extremely unfavorable initial conditions for supporting a revival in import levels and economic activity: (a) The level of payment arrears had risen to over US$280 million by the end of March 1981; the arrears queue is now 20 months long and has not been advanced since July 1980. (b) Tanzania's net external reserves, after deducting outstanding arrears and IMF obligations, have fallen to minus US$286 million. (c) With the shortage of foreign exchange, the National Bank of Commerce has been unable to provide letters of credit for many importers, and has had to increase its overdrafts with correspondent banks to meet outstand- ing commitments; under these circumstances, Tanzania is unable to raise major new commercial and trade credits overseas and most foreign governments are no longer willing to extend export insurance cover. -6- On top of these unfavorable initial conditions, Tanzania will have to weather two adverse developments in world markets: (a) World coffee prices have recently fallen by 30% and this is still to be reflected in Tanzania's export earnings; at projected export volumes for 1981, this could mean a loss of more than US$50 million in foreign exchange earnings. (b) With the continuing unrest in the Middle East, Tanzania has lost its major source of crude petroleum, Iraq, which had been supplying its oil on concessional credit terms; the resultant need to seek other sources, at higher prices and on harder terms, will add substantially to the import bill in 1981. 14. Given these negative developments in coffee prices and oil supplies, as well as the limited scope for further exceptional financing, there is little prospect for any immediate improvement in the balance of payments, and present indications are that the situation will continue to deteriorate during 1981. This continuing balance of payments constraint is inevitably having a debilitating effect on the economy, with lower imports reducing production and maintenance of existing assets, resulting in further falls in exports and available foreign exchange. This vicious circle will be difficult to break, unless there is a substantial injection of foreign ex- change and major changes in domestic policies designed to improve producer incentives, parastatal operations, import allocations, non-traditional exports, and overall government planning and budgeting. With such a program, it could be possible to generate a revival in export performance in 1981 and 1982, with higher volumes of major export items, including coffee, cotton, sisal, and cashews. In subsequent years, to help move towards a viable balance of payments position, it will be necessary to maintain an export volume growth of at least 8% per annum. While this is an ambitious target in relation to past performance, it can be realized, provided appropriate followup action is taken to make more fundamental adjustments in the economy. If export volumes were to stagnate over the next decade (which is the best that could be expected without structural adjustments), by 1990 export earnings would be less than half the level presently projected, implying a reduction in import capability of 28% from its present very low level. 15. Even with a much improved export performance, Tanzania will continue to face a very difficult balance of payments situation, especially over the next two to three years. These projections are based on a very modest set of assumptions: imports to support an economic growth rate of 4%-5% per annum, the elimination of arrears and the return to a positive net reserve level by 1986. (Even by 1990, net reserves are projected to be equivalent to less than 1 month's imports, still well below the minimum acceptable level). Yet after allowance for existing aid flows--assuming gross disbursements remain at Table 1: BALANCE OF PAYMENTS (US$ million at current prices) Actuals Estimates Projections 1977 1978 1979 1980 1981 1982 1985 1990 Merchandise Exports (f.o.b.) 548 479 544 570 560 650 1,000 1,960 a/ a/ a/ Merchandise Imports (c.i.f.) -750 -1,146 -1,100 -1,300 -1,480 -1,680 -2,320 -3,820 Food (-41) (-35) (-19) (-90) (-60) (-70) (-80) (-110) POL (-120) (-129) (-172) (-260) (-320) (-370) (-530) (-920) Other (-589) (-982) (-909) (-950) (-1,100) (-1,240) (-1,710) (-2,790) Trade Balance -202 -667 -556 -730 -920 -1,030 -1,320 -1,860 Net Invisible Receipts 31 47 65 30 20 10 - - (including private grants) Current Account Balance -171 -620 -491 -700 -900 -1,020 -1,320 -1,860 Gross Aid Disbursements 310 362 460 580 630 680 830 1,110 (including govt. grants) Suppliers' Credits (gross) n.s. n.s. 84 100 50 50 50 50 Principal Repayments -29 -25 -22 -50 -60 -60 -110 -120 Errors and Ommissions 18 -30 -69 -60 - - - - Residual Gap h/ i - - - 200 400 650 800 Overall Balance of Payments 128 -313 -38 -130 -80 50 100 -20 Financed by: Use of Reserves -136 .270 -83 -20 10 -30 10 20 Use of IMF Credit 8 -22 30 20 120 30 -60 - Increase in Arrears - 65 91 130 -50 -50 -50 - Net Level of Reserves 195 -118 156 -286 -366 -316 -26 144 (end of period) a/ These levels are based on estimated GDP-import elasticities and may not be reached in the absence of additional foreign income. b/ To be met by possible import reductions and additional financing. Sources: Bank of Tanzania and World Bank estimates. - 8 - the 1980 level in real terms l/--there would still be a residual gap of US$200 million in 1981 and US$400 million in 1982. Only towards the end of the decade is the gap expected to stabilize, and then at the very high level of US$800 million per annum. To reduce this gap, without jeopardizing the prospects for economic growth, will require not only substantially higher levels of financing, but also a careful review of import requirements, espe- cially those for relatively low-priority projects with long gestation-periods and a large foreign exchange cost. If these adjustments are not made, the implications for the Tanzanian economy would be serious: the volumes of all imports, including priority imports, would have to be cut by another 20% over the next two years, and although some import growth would be possible after 1983, the volumes would remain below their already restricted levels until late in the decade. As a result, the prospects would be for generally stag- nant economic activity, including export production, over the 1980s as a whole, with a substantial decline in per capita incomes. To avoid this, there will need to be continued emphasis on export performance and a concerted effort to improve the level of capacity utilization and efficiency in the economy. Furthermore, this must be done without jeopardizing vital food production. 16. Although it may be possible to finance a small portion of the current account gap through commercial borrowings, the scope for this is clearly limited; in addition to the difficulties of raising commercial credit during a period of balance of payments problems, Tanzania simply cannot afford the heavy burden of debt service payments. Therefore, the bulk of the finan- cing requirement will have to be met by additional foreign assistance. Possible sources for this include further drawings from the IMF (which could add US$100 million per annum), deferred payment arrangements and other con- cessional financing from oil-supplying countries, additional new commitments from traditional bilateral and multilateral sources, and a continued movement towards non-project assistance. Additional non-project assistance will not only help speed up disbursements, but also give Tanzania more flexibility to import items required for operations and maintenance, and reduce the local budget outlays associated with the starting of new projects. 17. Owing to the very concessional terms on which past aid has been given to Tanzania and the Government's previous reluctance to use higher cost commercial loans and suppliers' credits, the country's overall debt service ratio has historically been less than 10%. However, the debt service burden is expected to increase as past loans fall due and new borrowings, including some on commercial terms, are required to meet the widening balance of payments gap. Such borrowings, together with very poor export prospects, could raise the debt service ratio to 15%-20% during the 1980s. In 1979, the Bank held 13% of Tanzania's external debt (for the Bank Group, it was 39%) and received 33% of Tanzania's debt service (37% for the Bank Group). We are projecting 1/ This could prove to be an optimistic assumption: as some donors may reduce their aid levels (e.g. Iraq, in 1981), other donors will have to provide real increases to maintain overall disbursements; and for all donors, the maintenance of aid disbursements in real terms over the medium term will require early and substantial new commitments in one form or another. the Bank Group's share in debt service to fall over the coming decade owing to the reduced IBRD component in the lending program and the continued need for Tanzania to borrow funds on less concessional terms from other sources. PART II - BANK GROUP OPERATIONS IN TANZANIA 18. Tanzania joined the Bank, IDA and IFC in 1962. Beginning with an IDA credit for education in 1963, 47 IDA credits and 19 Bank loans, two of these on Third Window terms, amounting to US$899.3 million have so far been approved for Tanzania. In addition, Tanzania has been a beneficiary of 10 loans totalling US$244.8 million which were extended for the development of the common services and development bank operated regionally by Tanzania, Kenya and Uganda through their association in the East African Community. IFC investments in Tanzania, totalling US$4.7 million, were made to the Kilombero Sugar Company in 1960 and 1964. This Company encountered financial diffi- culties and in 1969, IFC and other investors sold their interest in the Company to the Government. A new IFC investment of US$1.7 million in soap manufacturing in Mbeya was approved by the Executive Directors on June 8, 1978 and an investment of US$1.5 million in metal product manufacturing was approved on May 10, 1979. Annex II contains summary statements of Bank loans, IDA credits and IFC investments to Tanzania and the East African Commmnity organizations and notes on the execution of ongoing projects. 19. In support of Tanzania's overall development strategy, Bank Group lending operations have assisted a wide spectrum of activities. Nearly every sector in which the Bank Group has operational capacity has received some attention. While this broad involvement in Tanzania's development efforts will be continued, future work is expected to concentrate on four general areas: (i) agriculture; (ii) transport and communications; (iii) industry; and (iv) education and manpower development. As agriculture and related activities constitute the largest single sector in the economy, it has received 30% of the Bank Group's direct lending to Tanzania. The lending program in agriculture has featured three main types of projects. A series of regional rural development projects are focusing on production and the development of regional infrastructure needed to remove production constraints. The Kigoma Project (Credit No. 508-TA) was the first of these, and similar projects have been approved for Tabora (Credit No. 703-TA) and Mwanza/Shinyanga (Credit No. 803-TA). Another group of projects is centered on specific crops (such as maize, tea, tobacco and pyrethrum) and are the responsibility of the Ministry of Agriculture or one of its parastatals. A third set of projects, such as the Tanzania Rural Development Bank Project (Credit No. 987-TA), is designed to improve general support services for the agricultural sector. However, in view of growing evidence of persistent underfinancing of mainten- ance and replacement of capital in the sector, new Bank Group lending in agriculture is likely to focus increasingly on the rehabilitation and fuller use of existing production and processing capacity, rather than on expansion of such capacity. - 10 - 20. Alongside agriculture, there has been a major focus in Bank Group work on transport and communications and industry. Transportation difficulties are continuously cited as critical constraints to development in Tanzania. Indeed, the Government's inability to ensure the timely availability of inputs or the regular collection of crops has been a major bottleneck to increased production in the agriculture sector. Furthermore, during the seventies transport investments were primarily concentrated around the Tanzania-Zambia Corridor and since 1977 no systematic investment program has been prepared for the subsectors which were overseen by EAC Corporations. The major objectives of future Bank Group activities are therefore to develop a more coherent investment program in transport and communications and to provide assistance to strengthen the ministries and newly established national corporations responsible for railways, ports and telecommunications. In industry, future lending is expected to provide further support for well-developed financial intermidiaries like the Tanzania Investment Bank which are intending to consolidate their portfolios and place new stress on capacity utilization and export promotion. Bank Group involvement in education and manpower development has supported both specialized training and the improvement of the secondary school system. 21. Projects which have been recently approved or appraised reflect the above outlined priorities. Those approved include a Pyrethrum Project (Credit No. 1007-TA), a Foodgrain Storage and Milling Project (Credit No. 1015-TA), a Tea Processing Project (Credit No. 1037-TA), a Coconut Pilot Project (Credit No. 1070-TA), a Dar es Salaam Port Engineering Project (Credit No. S-24-TA) a Second Technical Assistance Project (Credit No. 1060-TA) and a Seventh Education Project (Credit 1056-TA). Projects which have been appraised include a rural development project for Mara Region, a telecommunications project and a small-scale industries project. 22. Although the comparatively high undisbursed proportion of loans and credits, detailed in Annex II, is to some extent the result of the recent approval of many of these projects, it also reflects mounting problems in project implementation, particularly in agriculture and rural development. The causes of these difficulties are varied. To a large extent they arise from the scarcity of suitably trained and experienced manpower, which would appear to call for stepped-up efforts in higher education and specialized training, as well as for sustained high levels of technical assistance in future project designs. Other implementation problems reflect the difficulty of identifying and disseminating agronomic input packages appropriate to the needs of smallholder farmers or result from administrative overextension in the undertaking of a far-reaching development program. These problems have been compounded by frequent and fundamental administrative changes, which-- though potentially the source of long-term benefits--have disrupted orderly execution of some projects and made aspects of other project designs obsolete. The Uganda war had some early impact on project implementation by diverting equipment and manpower away from development purposes; however, by contribut- ing to the current economic crisis, the temporary logistical problems caused by the conflict have been superseded by deeper and more lasting difficulties arising from a critical shortage of essential goods and services. During the last half of 1980, the direct and indirect effects of prolonged under- financing of essential import requirements became painfully obvious. Most industrial facilities were working at less than half their installed capacity - 11 - and the lack of funds for maintenance and operations (particularly for replace- ment equipment, spare parts, and fuel) was compounding the already serious effects of deferred maintenance of capital stock, especially in the agricul- tural sector. Until the general economic situation improves, the outlook is for continued and sometimes unforseen interruptions in project disbursements. There will also be an early requirement for the redesign of *ome projects to emphasize the operating and maintenance needs of major productive entities and support services in the economy. 23. As the Bank Group's lending program has expanded, increased atten- tion has been given to measures designed to improve specific aspects of project implementation. Courses on Bank Group procurement procedures have been held in Dar es Salaam for relevant Government officials. A special project monitoring unit has been set up in the Ministry of Agriculture and eleven Agricultural Development Services staff have been attached to Bank Group financed projects in agriculture and rural development. The Government has assigned responsibility for the monitoring of project performance to the Sectoral Planning Department of the Ministry of Planning and Economic Affairs. Since February 1977 there has been a regular Government/Bank Group review of implementation problems on a project-by-project basis. In October 1980, a major Country Implementation Review was held in Arusha at which all Bank- financed agricultural projects were examined, with a view to discussing sectoral issues in addition to project-related matters. Consideration is being given to obtaining technical assistance for the central economic authorities (such as Finance and Planning) and for key operating Ministries (such as Agriculture) to improve their project monitoring and implementation capacity. As a result of such steps - and a necessary slowing of the growth rate of the country s overall development program during the next three years - we expect some gradual improvement in project implementation. East African Community (EAC) 24. Major developments affecting the East African Community were out- lined in a report to the Executive Directors dated December 29, 1977 (R77-312) and more recent developments were reported in a statement to the Executive Directors during their meeting of May 6, 1980. The three former Partner States have employed Dr. Victor Umbricht as an independent mediator to recom- mend an appropriate disposition of the assets and liabilities of the Community corporations and the General Fund Services. Dr. Umbricht has visited East Africa on numerous occasions, has employed consultants to assist in the appraisal of Community assets and liabilities, and has in March 1980 made formal recommendations on the allocation of these assets and liabilities. Meetings at Ministerial level to discuss the Mediator's proposals -were held in Arusha in May 1980, and in Kampala in February 1981, and a further meeting in Nairobi is scheduled for June 1981. Meanwhile, the Mediator's report and recommendations on the future structure of the East African Development Bank (EADB) have been accepted by the Partner States and the revised EADB Charter, along with the Treaty to enact the new Charter, have been ratified by the three Governments. - 12 - PART III: THE AGRICULTURAL AND EXPORT SECTORS - PROBLEMS AND PROSPECTS 25. As already discussed, Tanzania has had a disappointing record of agricultural and export performance, for reasons which are similar and interwoven. A large part of the explanation for falling export earnings lies in the sluggishness of overall productivity in agriculture and the difficul- ties experienced in ensuring adequate food for Tanzanians, a reasonable supply of agricultural raw materials for the country's small industrial sector and a surplus of cash crops for sale in foreign markets. 26. Export volumes are now estimated to be 30% lower than in the mid-1960s, and as a percentage of GDP, export earnings have fallen from 25% in 1966 to only 11% in 1979. Although export earnings have at times risen very sharply, this has been due entirely to favorable price movements, such as during the coffee boom of 1976-77. The underlying trend in export volumes has been consistently downward for the past 15 years, and when associated with a deterioration in the terms of trade, such as at present, it has resulted in severe balance of payments difficulties. 27. Unfortunately, with the recent collapse in world coffee prices, the immediate prospects for a recovery in exports are poor, and indeed, our current projections (summarized in Annex IV) indicate that export earnings could well fall in 1981. However, with implementation of the Government's program of export rehabilitation, and complementary external financing from other sources, export volumes should increase by 5% in 1981 and 10% in 1982. With appropriate follow-up by the Government in revising its agricultural and trade policies, and the early formulation and implementation of a more comprehensive program of structural adjustment, it should also be possible to sustain an export volume growth rate of 7%-8% per annum in subsequent years. Traditional Exports 28. As in the past, export trends continue to be dominated by the per- formance of traditional primary products. Although Tanzania's export struc- ture is somewhat more diversified than for many other African countries, seven commodities--coffee, cotton, cloves, sisal (fiber, cordage and twine), cashews (nuts and kernels), tea and tobacco--still account for more than two-thirds of total export earnings. In 1980, the total export volume of these seven commodities was 28% lower than in 1966 and 34% lower than in 1973. Of these items, only tea has risen consistently since the mid-1960s: sisal and cotton have steadily declined, cashews and tobacco have recently been falling from their peaks in the mid-1970s, and coffee and cloves have fluctuated around a stagnant trend. In the cases of tobacco and cotton, rising domestic consumption in recent years has reduced the share of production available for export. However, the disappointing performance of Tanzania's major primary exports generally reflects the declining production of cash crops from the mid-1960s and especially since 1973 (See Annex V). Food production has fared better than export production during the last half of the 1970s, but is still below the highest levels achieved in the major foodgrains earlier in the 1970s (See Annex VI). There are several reasons for this disappointing level of overall productivity in agriculture: - 13 - 29. Firstly, official producer prices have not kept pace with world prices and domestic costs. Recent studies indicate that the price terms of trade for marketed smallholder production of food and export crops fell by over 20% during the 1970s. Furthermore, within the agricultural sector, there was a sharp movement in relative prices in favor of food crops vis-a-vis export crop.s during the mid-1970s which has only been partially corrected in recent years. As a result, the price terms of trade for export crops fell by almost one-third during the 1970s (see Annex VII). This sharp real fall in producer prices was not determined by world market prices, but rather reflects the rising marketing and administrative costs of the parastatals handling these crops and higher export duties, which reduced the farmers share in export earnings from coffee, cotton, tobacco and cashews to below 50%. These price developments have led to a diversion of supplies into unofficial channels (e.g. coffee), neglect and in some cases abandonment of tree and bush crops (e.g. coffee, sisal and cashews), and substitution of subsistence production for the annual export crops (e.g. cotton and tobacco). 30. Secondly, there have been inadequate allocations of foreign exchange to meet the basic import requirements of the agricultural sector and of the supporting infrastructure in processing and transport. Although this problem has become more critical with the recent deterioration in the balance of payments, agriculture has historically not received a share of import alloca- tions commensurate with its importance to the economy and its contribution to foreign exchange earnings. The resultant list of shortages, which have in many cases led to a net foreign exchange loss for Tanzania, is long: for coffee, inadequate imports of chemicals required to control coffee berry disease; for cotton, shortages of fuel and spares to maintain ginnery through- put, and insufficient bags for packing; and for cashew tinning, inadequate allocations for tinplate and carbon dioxide. More generally, Tanzania-s traditional exports have been restricted by severe shortages of imported spares to maintain tractors, trucks for crop collection, road maintenance equipment, processing capacity, and rail and port operations. The resulting processing and transport bottlenecks have been particularly severe for coffee and cotton over the past year, leaving large quantities of potential exports still stockpiled at the farms, processing plants and railheads. Large scale sugar cultivation and processing (mainly for domestic consumption) have also been severely affected. 31. Thirdly, the shortages of basic inputs and spares have been com- pounded by the generally poor organization and inefficient operations of the parastatal crop authorities. Initially, these parastatals acted in competition with private traders, but have steadily expanded their marketing role, and now have monopoly control over all of the major crops. They have also extended their functions vertically from purely marketing into production, input dis- tribution, extension services and processing. With persistent manpower short- ages and organizational problems, the performance of many of these agricultural parastatals has been less than satisfactory. This has led to delays and shortfalls in the distribution of inputs and collection of produce (e.g. coffee), poorly organized research and extension services (e.g. tobacco), and deteriorating operating and maintenance standards for processing equipment and - 14 - transport (e.g. tea and sisal). Most of the parastatals are also facing increasing financial problems, with undercapitalization, inadequate financial management (most accounts are two to three years out of date) and tightening cash flow positions (which are making it difficult to maintain prompt payments to farmers). 32. Fourthly, inadequate emphasis has been given to the development of research and extension. To date, the Government has not made critical deci- sions required to improve the organization and management of agricultural extension, the responsibiltity for which is divided among the Ministry of Agriculture, the Prime Minister's Office (responsible for regional admini- stration) and several parastatals. The organization of research has not been adequately guided by technical considerations, leading recently to a decision to establish two separate parastatals for crop and livestock research. The result has been inadequate research on appropriate technical packages and an ineffective extension system to deliver these packages to the farmer. In tobacco, for example, field management and husbandry standards seem to be deteriorating. And in cotton, there has been a paucity of research on appropriate technologies, especially regarding fertilizer levels and appli- cation methods. 33. Finally, in addition to these general constraints, there are a number of problems which have been particularly important for specific crops. For cashews, for example, the villagization program in the mid-1970's moved many farmers away from the scattered trees, increasing the costs and effort of caring for the trees and collecting the nuts. Mozambique's independence also diverted refugee labor away from the cashew-growing areas. Tobacco curing has been increasingly constrained by wood fuel shortages, due in part to the depletion of convenient sources and in part to the movement of farmers under the villagization program. The Tobacco Authority of Tanzania (TAT) has not been able to undertake its own afforestation program to helD relieve these shortages, due to its constrained financial position. Clove production has been badly affected by two virus diseases as well as by the advanced age of most trees on Zanzibar and Pemba. And for coffee, exports from the West Lake region were reduced by at least 8,000 tons during 1980, owing to a boiler explosion at the Bukoba factory in October 1979 and the breakdown in February 1980 of the rail ferry which is normally used to move the coffee to Mwanza. Both of these problems are still unresolved. 34 This review indicates the serious and interrelated nature of the factors contributing to the poor performance of Tanzania's traditional export crops. However, certain measures have recently been adopted by the Govern- ment to address some of these problems. (See Part IV of this Report.) As a result of this Export Rehabilitation Program, and complementary technical and financial assistance for which the Government would seek separate IDA support during FY 1982, we expect the volumes of these traditional exports could recover by 9% per annum in 1981 and 1982. The largest response would be for coffee, followed by cotton from 1982, with smaller increases in both years from sisal and cashews. Although the initial gains will come largely from relaxation of present processing and transport bottlenecks, a sustained improvement in export volumes could arise from production increases in later - 15 - years. However, full realization of this potential will require more funda- mental policy changes, especially in the areas of incentives, parastatal efficiency, research and extension. Non-Traditional Exports 35. In 1980, manufactured exports are expected to have earned US$115 million, or about 20% of total export receipts. 1/ However, more than 60% of this amount was contributed by petroleum products and diamonds, neither of which provides a basis for medium-term growth: Tanzania is a net importer of petroleum products (and increasingly so), while the single diamond mine is gradually being depleted. The residual manufactured exports include primary- based products such as textiles and garments, leather and shoes, and wattle extract, 2/ as well as a range of minor industrial goods based on imported components, such as aluminum products, batteries, and electrical goods. The value of these residual items had fluctuated around US$20 million per annum over the six years through 1978, with no increasing trend despite rapidly rising market prices. However, led by increased exports of textiles and garments to neighboring countries, their value has grown markedly over the past two years to US$33 million in 1979 and an estimated US$45 million in 1980. Although exports of manufactured products are still too small to provide an adequate offset to the disappointing performance of the traditional products, their continued development is important to ensure that a broader base is established for export growth over the medium term. 36. Some of the causes of the slow development of manufactured exports can be attributed to external factors such as protectionism, restricted market competition and discriminating freight rates; the breakup of the EAC in early 1977 and subsequent closure of the Kenya border have also had an adverse effect. However, taken together, these factors do not seem to present an impenetrable barrier to export success. Rather, the more fundamental problems seem to lie in the domestic economy: the high cost structure of the industrial sector, shortages of foreign exchange and agricultural inputs, the limited availability of domestic credit, transport bottlenecks, and inadequate quality control and marketing facilities. 37. To help overcome these handicaps, the Government has over the years introduced a limited range of measures to help promote manufactured exports. These include: (i) the import duty drawback scheme, which provides for the exemption or remission of all duties on imports used by domestic manufacturers to produce exports; (ii) the differential export duty scheme, which allows exporters to buy certain domestic commodities at prices net of export duties; 1/ For the purposes of this Report, the category of non-traditional exports includes both manufactured goods and a number of small and relatively new agricultural exports, including animal feed and seed beans, which together are expected to earn US$45 million in 1980. However, the primary focus of this section is on manufactured exports. 2/ Wattle is an acacia tree whose bark is used in leather tanning. - 16 - (iii) the establishment in 1978 of the Board of External Trade, to advise the Government on matters relating to national export policy and to help establish programs to expand trade relations and promote export sales; and (iv) the allocation of additional import licenses to exporters. Unfortunately, none of these measures has yet been very effective in fostering export development: administrative problems have severely limited the operation of both the duty drawback and differential export duty schemes, the Board of External Trade is still to become fully operational, and the foreign exchange crisis has frustrated attempts to channel additional import licenses to exporters. 38. The problems facing manufactured exports, together with various proposals to improve export incentives, were reviewed in a recent World Bank study prepared for the Government of Tanzania. 1/ Partly in response to that study, the Government has reiterated its commitment to export development and has indicated its intention to introduce a package of measures to promote non-traditional exports. These measures are included in the program discussed in Part IV of this Report. (The level of incentives for manufactured exports is also to be a consideration in the exchange rate study currently being undertaken jointly by Tanzania and the IMF.) This program is designed to improve capacity utilization, so that a surplus over and above domestic requirements can be generated at competitive prices, and to ensure that an appropriate share of this production will be oriented towards export markets. With implementation of this program, we project that non-traditional exports (excluding petroleum products and diamonds) could grow in real terms by 4-5% in 1981, and possibly by as much as 25% during 1982. The best prospects would appear to be for the minor agricultural crops and those manufactured products based on primary processing, especially textiles, garments and shoes to neigh- boring countries (Uganda, Zambia, and Mozambique) and finished leather to Europe. These prospects will depend critically on a revival of the agricul- tural sector and in turn, on the implementation of measures required to generate that revival. For this reason, improvements in the agricultural sector remain the central focus of the Export Rehabilitation Program. Other Considerations in the Agriculture and Transport Sectors 39. The implications of the foreign exchange crisis, not only for short term decisionmaking but also for long term planning in the agricultural sector, are only reluctantly being accepted by the Tanzanian authorities. In addition to the particular problems outlined in paragraphs 29-33 above, there are several factors inhibiting major changes in agricultural and other national policies. 40. First, there are social policy constraints in this area. When major institutional changes such as villagization, decentralization of Government and the establishment of parastatals were first introduced, it was recognized that these would disrupt basic agricultural services and hence production, at least in the short term. As such disruption has proved deeper and more prolonged than had been hoped, and the desired long-term effects (such as better extension through higher literacy and concentration of the rural 1/ Professor Gerald Helleiner et al., Draft Report for the Government of Tanzania Task Force on Export Incentive Schemes, December 1978. - 17 - population) have yet to take hold, there is great reluctance to conclude that the trial period for some of these policies is now over. For example, a firm commitment to promote equitable growth in rural incomes among Regions has prevented the adoption of otherwise attractive solutions to current pro- duction and marketing problems, such as concentration of scarce agricultural inputs and ;ransport facilities on areas with the highest production potential (e.g. Arusha, Kilimanjaro, Iringa). For the same reason, the distribution of key inputs such as fertilizer through cash sale, rather than credits in kind from the Tanzania Rural Development Bank, has been discouraged. 41. Second, food security objectives have been paramount in agricultural planning since the disastrous drought of 1974/75, and the Government has been reluctant to shift the balance of relative producer prices away from food- grains towards export crops. The food situation is now poor again in Tan- zania, despite bumper harvests of maize in 1977/78 and 1978/79 which made the country self-sufficient in this major staple for the first time since 1971. Heavy rains in 1979 spoiled stocks and poor rains in early 1980 reduced production, leading to food shortages, particularly in the towns. The Govern- ment has hence been obliged to import large amounts of maize, in addition to normal and still substantial volumes of rice, wheat and edible oils. Unofficial prices for maize are now three to four times those offered by the National Milling Corporation. Accordingly, NMC is expected to procure only 50,000 tons in 1980/81, compared with 161,000 tons in 1979/80 and 222,000 tons in 1978/79. While producer incentives appear high enough to ensure a revival of maize production, if weather permits, the Government is nonetheless concerned about even the most modest impact of official price adjustments on foodcrop produc- tion. This concern, combined with Government budgetary ceilings and the current exchange rate, impose real limits on further adjustments to producer prices for export crops. 42. A third general constraint to early Government action is the very complexity of taking decisions on a wide range of interrelated policy fronts. The lack of a coherent long-term strategy for agriculture, and manpower shortages in key Ministries and agencies, further complicate this task. The Government also knows that the re-allocation of resources to once-neglected areas (such as the maintenance and operation of agricultural production facilities) will entail costs, such as the suspension or cancellation of new projects in other high-priority sectors. A major readjustment of investment and spending to the requirements of the agricultural sector, to ensure that it receives a more appropriate share of total public resources, will also require protracted and detailed discussions with all external financing agencies, with a view to re-examining past commitments and objectives. 43. In the transport sector, the key constraints to early improvements in services are the poor state of the road network, ineffective management of parastatal transport fleets and a chronic shortage of equipment and spare parts, particularly in the private sector (which still accounts for a large proportion of input and crop deliveries in the country). Manpower shortages in the Ministry of Works and the principal agricultural parastatals also make correction of these problems extremely difficult. - 18 - 44. The Government recognizes that these constraints are severe and can only be addressed over an extended period of time. However, as a first step in a comprehensive program to deal with these problems, the Government has embarked on an immediate, more limited, program to help revitalize the country's export sector. PART IV - THE EXPORT REHABILITATION PROGRAM Background and Objectives 45. In response to the export sector problems outlined above, the Government and the Association discussed possible remedial measures throughout 1980, while trying to reach a consensus on an economy-wide structural adjust- l2ent program. Once it was apparent that finalization of this broader program would entail considerably more analysis and discussion, it was agreed that a logical first step would be to concentrate on that aspect of Tanzania's external position which could be alleviated during a relatively short period of time. In developing such a limited program, it was acknowledged that additional complementary measures would have to be taken to make even an export-specific program permanently worthwhile. In view of the country's current account deficit, it was also plain that early assistance from IDA alone would not suffice to substantially narrow the gap. To mobilize addi- tional support from other financing sources, the Government has requested the Bank Group to organize a Consultative Group meeting during the second half of 1981. It has also agreed, during implementation of the export program, to prepare prompt followup measures which would justify supplementary financing from IDA and other sources in support of a wider economic adjustment program. 46. It is intended that such measures would form the basis of appraisal for a possible Second IDA Rehabilitation Credit in September 1981 or soon thereafter. Issues to be addressed in a more comprehensive program include: formulation of an effective strategy for agriculture, with particular emphasis on improving productive efficiency through better incentives, input supplies and research and extension systems; improved organization and operational efficiency of the parastatal sector; greater budgetary provisions for opera- tions and maintenance, especially in agriculture and the supporting processing and transport infrastructure; a re-evaluation of development projects, to ensure that they are of high priority and compatible with present resource constraints; and a general improvement in governmental budgetary control and planning capacity. Initial steps in these directions are included in the specific proposals which follow. However, concerted follow-up by the Govern- ment will be necessary to ensure that these preliminary measures will lead to a well-defined set of wider policy actions. These have been set out in a Memorandum of Understanding, which was agreed upon during negotiations. 47. The proposed Export Rehabilitation Program was appraised in October- November 1980. Negotiations were held in Washington in March 1981. The Tanzanian delegation was headed by Mr. F. Kazaura, Principal Secretary at the Ministry of Finance, and included the Principal Secretary of Planning and Economic Affairs, the Principal Secretary of Agriculture, the Economic Adviser to President Nyerere and representatives of the Bank of Tanzania and the Tanzanian Embassy in Washington. - 19 - 48. The broad objectives of the program are to reverse the decline in the volume of traditional agricultural exports and to increase the rate of growth of manufactured and processed exports. The means of achieving these objectives are: (a) to improve producer returns to farmers from major export crops; (b) to ensure foreign exchange financing of high priority imports necessary for the operation and maintenance of existing productive and processing capacity in the agricultural sector; (c) to improve the efficiency of agricultural parastatals; and (d) to introduce higher incentives for the production of non-traditional exports. (a) Raising Agricultural Producer Prices 49. Producer prices for most export crops have declined during the 1970s in relation to food crop prices, to the domestic cost of living index and to world prices (see Annex VII). The resulting deterioration in relative returns to export crop production has been a major factor in the declining output of such crops. The Government has recently recognized this problem and has taken steps over the past two years to adjust producer prices. Furthermore, as part of its recent agreement with the IMF, the Government is committed to reinfor- cing such producer price incentives. In July 1980 producer prices of the principal export crops for the current 1980/81 season were raised by 7%-19%, while the producer prices of the principal food crop (maize) and other minor food crops were left unchanged. The price of cashewnuts - where production has declined dramatically during the late 1970s - was increased by 67% 1/. Following further studies, including recommendations made during appraisal of the Export Rehabilitation Program, the Government has concluded that these price adjustments have not been sufficient to ensure increased production of certain major export crops. As a result, the Government has taken action to increase producer prices. On February 1, 1981 the Government abolished the export duties on coffee and sisal, and removed the production tax on tobacco. The benefits of these tax changes are to be passed on entirely to producers of the affected crops, resulting in price increases of 30-50 per- cent. These prices, and those of other crops, will be reviewed again in June 1981. The Government has agreed to complete a study by August 31, 1981 of its system of setting producer prices, including an analysis of the fuel, trans- portation and other marketing costs of the national pricing system, and to emphasize producer incentives in future adjustments of such prices (Section 3.10 of the draft Development Credit Agreement). The Government also plans to introduce auctions, similar to the existing coffee auction, to replace direct sales of sisal, cotton and tobacco. Such auctions could increase foreign earnings from these crops by 10%-15% per year. 50. The recent producer price adjustments were made outside the annual cycles for budgetary and agricultural price review, which are usually completed in June and July respectively. While the price changes will make it more worthwhile for farmers to maintain their current plantings of export crops and to increase their yields, the coffee and cashew prices are still somewhat lower in real terms than those obtainable in 1969/70. Further adjustments will hence be necessary, as early as July of this year, to induce a significant expansion of cultivated acreage. However, at the current international prices for some crops (e.g. coffee) and at the present exchange rate, such further adjustments will not be possible without Government subsidies. 1/ Production of raw cashewnuts has declined steadily from a peak of 145,000 tons in 1973/74 to about 40,000 in 1979/80 despite strong world prices for cashew during recent years. - 20 - The impact of the new producer prices on the production of major food crops is likely to be minimal. Of the three crops selected by Government for substantial price adjustments this year (coffee, cashew and sisal), none is usually in major direct competition for land and labor time with the staple foodgrain (maize). Producer returns for maize also remain high both in the official and unofficial markets. (b) Priority Allocation of Imports to the Agricultural Sector 51. As explained in Part III of this Report (para. 30 above), the agricultural sector in Tanzania has not been receiving adequate allocations of foreign exchange to meet the basic import requirements of producers and processing facilities, or of the transport infrastructure on which production and marketing depend. This problem became so acute during 1980 that an apparent downward spiral seemed possible, in which the key earners and savers of foreign exchange in the economy (e.g. coffee, cotton, sisal, maize, sugar) would receive progressively smaller shares of a diminishing pool of external income, further hampering their capacity to earn and save foreign exchange for the economy. The situation was especially unfortunate as agricultural produc- tion has a smaller import content and accounts for more foreign income than any other sector of the economy. Arresting this downward spiral became a matter of the highest priority, even if it implied some specific advance earmarking of new foreign income to priority uses in the economy. While the Bank of Tanzania has traditionally favored certain categories of producers, including agriculture, in its allocation of import licenses 1/, such pre- ferential treatment has not sufficed to ensure that agricultural producers received an adequate amount of foreign exchange. A decision to focus these arrangements even further on agriculture was a subject of much discussion within Government during late 1980, as some sectors (e.g. industry) appeared to be faring even worse than agriculture in their access to foreign exchange. The eventual decision to proceed with these arrangements was based on the view that the minimum essential requirements of agriculture had to be fully met, if the Government was to halt the decline in export earnings, and perhaps reverse it, within a reasonable period of time. The need to increase domestic produc- tion of foods which are currently imported (e.g. sugar, maize, rice and edible oils) was also recognized. 52. With these purposes in mind, the Government has taken the following actions to improve the procedures for the allocation of foreign exchange and to increase the proportion of such resources which are available to agriculture: - It has established a Special Agricultural Account at the Bank of Tanzania to meet the full direct and indirect import requirements of the agricultural sector. These requirements are currently estimated to be US$180 million per year, if one includes only the costs of operating and maintaining 1/ BOT has given special attention to (a) domestic resource-based industries (such as agriculture, agricultural processing and agro-based exporters); (b) "priority" industries, meaning those resulting in substantial Government revenues (such as beer and textiles); and (c) secondary exporting industries. - 21 - existing productive facilities in the country 1/. The Govern- ment is taking steps to mobilize foreign exchange resources for this purpose. In addition to allocating a substantial proportion of Tanzania-s own export earnings to this Account, the Government intends to approach external financing a,encies to raise foreign exchange in support of agri- cultural imports. It will do so during bilateral dis- cussions with those agencies and in the context of the next Consultative Group Meeting, at which the Government is expected to argue the case for a major reallocation of development resources to agriculture, and supporting activities, and within these, from the undertaking of new projects to the operation and maintenance of existing capacity. If resources permit, the Government will also undertake the phased rehabilitation of key productive facilities in the country, in the knowledge that without such remedial work, its own targets of export recovery will be undermined. During the first year of operation of the Special Agricultural Account (April 1, 1981 - March 31, 1982), the Government will make available US$50 million from its own resources, as well as the proposed IDA credit, to finance the importation of US$100 million of pro- ductive inputs such as fertilizers and chemicals, agricultural equipment and spare parts (including replacement parts for crop processing facilities), agricultural packing materials and vehicle spare parts. In subsequent years, the Government will assign to the Account at least 15 percent of all receipts from the sale of six of its major export crops (i.e., coffee, cotton, cashew, sisal, tea and tobacco). In addition, the Government will make every effort to raise additional resources from bilateral and multilateral sources with the objective of allocating US$180 million per year for these purposes (Section 3.09 of the draft Development Credit Agreement). The resources of the Account would be reserved for those industries which offer the largest potential for additional export earnings, as well as early opportunities for import savings (e.g. maize, wheat, rice, sugar). Only eligible producers of these crops and a limited number of supporting industries 1/ This figure does not include the fuel and lubricant requirements of the agricultural sector and the costs of overdue capital replacement for major crop parastatals.Similarly, the transport equipment to be financed, does not include provision for the replacement or expansion of the existing transport fleet, which is urgently required in certain cases. - 22 - and services would have access to these foreign exchange resources. (See Annex VIII) 1/ The Government has announced that the agricultural sector will receive priority in the allocation of fuel oil, heavy diesel oil and lubricants for production and processing purposes, as well as in the allocation of fuels for transport of productive inputs and harvested crops. To implement this policy, the Government has established an interministerial task force to prepare contingency plans for meeting the requirements of agricultural producers and other major consumers in the event of serious oil shortages. This task force is expected to submit its recommendations to Government before June 30, 1981. The Government has appointed a representative of the Ministry of Agriculture to sit on the Import Licensing Advisory Committee chaired by the Bank of Tanzania. Before this, agricultural specialists had no direct involvement in the import allocation system. - The Import Licensing Advisory Committee is to look primarily to the representa.ive of the Ministry of Agriculture for screening all import requests from agricultural parastatals and other producing units, to ensure that such requests are adequate and justified. To assist him in this task, an economist, a financial analyst and two agricultural engineers, will be recruited by the Ministry by September 30, 1981. (To meet this target date, immediate efforts will be made to recruit such staff internationally, if Tanzanians have not been found to fill these posts by April 30, 1981.) These measures, taken together, will begin to remedy the worst effects of underfinancing in the agricultural sector, both in the major export crop industries and in food production. The impact of such remedies, however, will have to be reviewed during implementation of the proposed Export Rehabilitation Program, with a view to further increasing, if necessary, the proportion of overall foreign exchange and other resources which are reserved for agri- cultural production. 1/ This measure will have two significant benefits: (a) it will set an absolute floor on allocations to agriculture from the country's "free" foreign exchange (i.e. the amount remaining after provision for oil and food, project-related imports and debt service payments) and (b) it will establish an automatic link between foreign earnings and import allocations in the principal sector of the economy. The level of "free" foreign exchange is expected to drop from US$410 million in 1980 to US$210 million in 1981; under the proposed arrangements, agricul- ture's share of these resources is to rise from 17 to 23 percent, in an effort to halt the decline in general foreign exchange earnings. - 23 - (c) Improvements in the Efficiency of Agricultural Sector Parastatals 53. The large number and broad functions of parastatal organizations in the agricultural sector have made improvements in their operations indispen- sable to a revival of output in the export industries as well as food produc- tion. The inefficiency and high costs of these organizations -- in such vital areas as research, extension, input distribution, crop purchase, storage, processing, marketing and direct production -- have provoked wide dissatisfac- tion in the rural areas and prompted a new look at the appropriate size and workload of parastatals by the Tanzanian authorities. A Task Force has been established to study the organization and operations of the National Milling Corporation, which is the largest crop collection agency in the country and the most important single source of cash income for farmers, especially in the remote regions of the country. Another Task Force is looking into the possible re-establishment of Regional Co-operatives, which until 1976 were largely responsible for the distribution of inputs and the collection of agricultural produce at the village and district level. The outcome of these reviews may include some scaling-down of key parastatal bodies and the transfer of certain functions to other bodies (such as co-operatives). However, the Government is aware that changes in parastatal organization and structure alone will not suffice to ensure improvement in support services for agricul- ture. Indeed, unless such changes are introduced carefully, there is every possibility that they will prove more disruptive than helpful to rural ser- vices, at least in the short term. More important to parastatal efficiency over the long term will be better management information systems (including proper accounts), manpower development and a recognition of practical limits on their overall operational capacities. 54. In support of these longer-term improvements in parastatal opera- tions, the Government has recently decided on a number of important measures: - A Task Force has been established to bring the financial accounts of parastatals up to date. As a first step, the Government is preparing a detailed timetable for the comple- tion and audit of the accounts of key parastatals such as the Coffee Authority of Tanzania (CAT), the Tanzania Sisal Authority (TSA) and the Tanzania Cotton Authority (TCA). A further step will be to establish the machinery for keeping these accounts current in the future and to improve the detailed design of accounting systems so that timely informa- tion relevant to upgrading management of these parastatals is collected. In conjunction with IDA, and with financing to be proposed under a separate credit, the Government intends to initiate overseas recruitment for about thirty key positions in the Ministry of Agriculture and major agricultural paras- tatals by December 31, 1981. Such personnel will include factory engineers and accountants for TSA, an irrigation engineer, soil scientist and agronomist for the Sugar Development Corporation and a chemical and electrical engineer for the Tanganyika Pyrethrum Board. These personnel - 24 - would not only serve to fill important gaps in the technical capacities of major export earning industries, but also provide a corps of experienced specialists on whom the Ministry of Agriculture could draw for in-service training of Tanzanian staff and for other special tasks. As most agricultural parastatals have only part of their transport fleets in working order (owing as much to poor management as to the general shortage of transport spare parts),the Government has instructed the parastatal crop authorities to establish more effective transport planning and management systems, with separate cost records and controls. The Government also intends to expand the role of other available road services, including private truckers, who still control some 60%-70% of road haulage capacity in the country. These specific measures affecting the major agricultural parastatals have been decided upon in addition to the more general approach to parastatal improvements outlined to the IMF in August 1980, as part of the Standby Arrangements. At that time, the Government informed the Fund that parastatals were being directed to improve their production targeting, financial planning and accounting practices, as a first step toward a more rigorous enforcement of the Regulation of Dividends and Surpluses Act, which requires the prompt annual submission of comprehensive budgets and accounts. More generally, during 1980/81 the Government intends to distinguish between the commercial and social policy functions of parastatals so as to clearly identify the cost of social measures and their budgetary implications. Such a review could lead to substantial and beneficial adjustments in parastatal operations. The progress and impact of these complementary efforts would be reviewed in the course of supervising the proposed Export Rehabilitation Credit. (d) Measures to Promote Non-Traditional Exports 55. While the major focus of the Export Rehabilitation Program is upon the traditional agricultural crops, substantial scope also exists for expand- ing non-traditional exports, including both manufactured goods and minor crops which are not yet significant export earners (see paras. 35-38 above). A critical consideration in this is the adverse impact of the over-valued exchange rate on producer incentives. As an interim measure, the Government has decided to introduce a cash bonus for non-traditional exporters, equiva- lent to 15% of the customs value of exports and payable in local currency. Under the terms of the IMF Stand-by Arrangement, an understanding on an appropriate exchange rate policy is to be reached by July 1981. Other measures to be implemented to promote non-traditional exports include: review and if necessary modification of the differential export duty scheme to ensure that export processors can purchase local agricultural raw materials at prices net of export duties; simplification and centralization under the BET of export clearance procedures; and adoption of clearer criteria and procedures for allocating import licenses to non-traditional exporters on a priority basis. - 25 - 56. Two further measures remain to be taken during 1981: namely, the review and implementation by December 31, 1981 of a proposed export credit guarantee program (Section 3.06 of the draft Development Credit Agreement) and the provision of additional staffing for the BET (Section 3.07 of the draft Development Credit Agreement). These measures can be expected to have some early effect in increasing foreign exchange earnings from the small but potentially dynamic non-traditional export industries. (e) Related Measures 57. In addition to the measures summarized in paragraphs 49-56 above, which constitute the first phase of adjustment to the foreign exchange crisis, the Government intends to adopt a number of supplementary measures during the next six months to prepare the second phase. These measures are described in paragraphs 58-61 below: 58. Foreign Exchange Budgeting and Import Allocations. In a highly restrictive foreign exchange situation, general improvements in foreign exchange budgeting and the import allocation system are clearly required. Accordingly, apart from assigning priority to the import requirements of agri- cultural producers and exporters, the Government has announced its intention to introduce other improvements in the existing system. By June 30, 1981, the Bank of Tanzania will be required to prepare quarterly projections of likely export volumes and earnings, on the basis of its own production and price projections, and to revise these monthly. The Government also intends by September 30, 1981, to establish a central unit within the Bank of Tanzania to monitor more effectively all official loans, suppliers' credits (1-10 years) and short-term trade credits (less than 1 year) undertaken by government departments, parastatals and private borrowers (Section 3.05 of the draft Development Credit Agreement). This unit will also monitor and report on official grants, which now constitute the largest share of foreign aid dis- bursements. In this way, it is hoped that the Government will be able to predict and meet future debt service obligations more accurately, and at the same time determine systematically the amounts of foreign exchange which will be available for other purposes. To ensure broader representation of the export sector in a key decision-making area, the Director General of the Board of External Trade has been appointed to the Bank of Tanzania's Import Licensing Advisory Committee. 59. Review of Ongoing and Future Development Projects. As part of its effort to address the current foreign exchange crisis, the Government requested all major donor agencies during the annual round of bilateral consultations in 1980 to assign primary importance to completing ongoing development projects and to improving utilization of existing capital facilities. In pursuit of these objectives, financing agencies were asked to convert funds, already committed to new projects, to balance of payments support and to increase the share of local and recurrent cost financing in bilateral commitments. This request led to substantial increases in import support financing during the year, but will need to be made again during the next round of consultations in 1981. The Government also intends to review all current projects, with the purpose of: (a) re-assessing the feasibility of each project in view of the current shortage of Treasury resources; (b) judging the extent to which - 26 - further foreign resources can be re-directed from project financing to general balance of payments support; and (c) estimating the scope for reallocation of resources within projects to meeting operating and maintenance expenditures. Upon completion of the first round of this investment review, the Government will submit an indicative framework for the next Five Year Plan (1981/86) to the Consultative Group meeting which it has asked the Bank Group to organize during the second half of 1981. 60. Planning, Programming and Budgeting. The Government is addressing a number of weaknesses in public fiscal management, which prevent it from assigning adequate levels of local resources to priority areas, such as the export sector. These weaknesses include inadequate funding of key recurrent expenditures despite the existence of large overall recurrent budget deficits, excessive expenditure targets in the development budget, weak expenditure monitoring and control and the lack of a multi-year framework for both the recurrent and development budgets. In August 1980, the Government agreed with the IMF to reduce the budget deficit to 9% of GDP in 1980/81 (from 11.5% in 1979/80), mainly through reductions in Uganda-related military expenditures. The Government also agreed to contain expansion of domestic credit to 20% (compared with 34% in 1979/80). These measures are already forcing the Government to be highly selective in the new financial commitments which it undertakes and to concentrate its limited resources on those productive activities which offer the highest returns, such as export rehabilitation. To facilitate medium-term financial planning, the Government has decided to introduce annual two-year rolling budgets for both the development and recurrent accounts, beginning in the 1981/82 financial year, with a view to further extending the time horizon to three years, as soon as this is practical. During 1981, the Government will also be preparing explicit criteria for the guidance of operating Ministries in the preparation of their budgetary submissions, both for the Annual Plan for 1981/82 and for the next Five Year Development Plan (1981/86). During implementation of the Export Rehabilita- tion Program and in the course of economic and sector work, the Bank Group will discuss these criteria with the Ministries of Finance and Planning with a view to assisting the Government in finalizing guidelines which are opera- tionally sound and likely to maximize returns from public investment and spending. 61. Longer-Term Agricultural Measures. A goal of paramount importance must be to increase general agricultural productivity so that self-sufficiency in foodcrops and growth in export earnings from cash crops can become comple- mentary, rather than sometimes competing, objectives of national planning. To build upon past and recent discussions of major agricultural issues between the Government and the Association, it has been agreed that the Government will prepare a mutually satisfactory action program by September 30, 1981, outlining studies and steps to be undertaken to improve major aspects of agricultural services, including research, extension and the organization of other support activities in the sector (Section 3.08 of the draft Development Credit Agreement). - 27 - Fiscal Impact of the Export Rehabilitation Measures 62. The total cost to the Government of introducing additional export incentives would be approximately TSh 400 million during the 1981/82 financial year. This cost assumes a cash bonus of 15% for non-traditional exports (which would require TSh 100 million), an increase of TSh 4.C! kg for 50,000 metric tons of coffee (TSh 200 million) and an increase of about TSh 1.0/kg for 100,000 metric tons of sisal (TSh 100 million). Adjustments to the producer price for tobacco have been made possible by eliminating the produc- tion tax on this crop, and will entail some loss of Government revenues. However, without such adjustments the Tobacco Authority would have required a subvention or loan from the Government during 1981/82 in order to meet payments to farmers. In this sense, the export program will impose no supplementary costs on the Government, related to tobacco, which it would not have incurred normally during the fiscal year. The total projected fiscal burden during the year would represent less than 5% of Government revenue and could be offset by a less than 3% reduction in expenditures. This fiscal burden should decline and eventually be eliminated, if the export rehabilitation program proves effective. Furthermore, in the event of a substantial exchange rate adjustment, the costs of the program might well be offset through a major increase in import and export duty receipts by the Government. For the above reasons, it is expected that the proposed program would have fiscal implications which should be manageable within the limits of the current IMF Standby Arrangements. Administration and Allocation of the Proposed Credit 63. The proposed credit would provide US$50 million to help finance essential imports of agricultural chemicals, agricultural machinery, equipment and spare parts, agricultural packing materials, and vehicle spare parts. Credit funds would be used approximately as follows: Agricultural chemicals, e.g. coffee fungicide US$2.0 million Agricultural machinery, equipment and spare US$18.0 million parts, including tractor spares, harrows and cotton ginning equipment Agricultural packing materials, including US$15.0 million tinplate for cashew and jute bags for cotton, and other raw materials, particularly rubber for tire production Vehicle spare parts, including truck spares US$15.0 million The proposed credit would finance 100% of the foreign cost of these inputs and equipment. The credit would be administered by the Bank of Tanzania in consultation with the Ministry of Finance and the Import Licensing Advisory Committee which has been expanded to include representatives of the Ministry of Agriculture and the Board of External Trade. The Tanzania shilling equiva- lent generated by the sale of foreign exchange to importers under the program would be credited to a special account in the Bank of Tanzania and would be - 28 - used for rural development purposes in the Central Government recurrent and capital budgets (Section 3.02 of the draft Development Credit Agreement). It is expected that the entire amount of the credit could be disbursed by October 31, 1981. Procurement and Disbursement 64. Purchases in excess of US$5 million would be made through procedures ensuring broad international tendering and would be awarded to the lowest evaluated bidder. Such contracts would be subject to ex post review, i.e. a brief report containing evidence that it was let in accordance with the guidelines would precede or accompany the withdrawal application. Other procurement by Government or parastatal organizations would for the most part follow the procedures of the Government's Central Tender Board, which are generally satisfactory to the Association. A portion of the credit proceeds would also be used for private sector imports and would be subject to normal commercial practices. To monitor procurement, particularly in the parastatal and private sectors, the Bank of Tanzania would continue to require that all imports (with a few exceptions) be subject to compulsory quality and quantity inspection, as well as price comparison, by the General Superintendence Company of Switzerland - which has an office in Dar es Salaam. Such inspection would assist the Government in ensuring economic procurement of goods under the credit. 65. The proposed credit would cover the c.i.f. cost of eligible imports on the basis of evidence that they were paid for by the Bank of Tanzania and subsequently delivered. Disbursement would be against full documentation, including original invoices returned to the Bank of Tanzania under existing regulations controlling the allocation of foreign exchange. It is proposed that up to US$5 million of the credit be made available to finance retro- actively items for which Government had either provided foreign exchange financing or had made financial commitments after November 15, 1980 (Schedule 1, paragraph 2(c) of the draft Development Credit Agreement). This is pro- posed in order to facilitate prompt clearance of stockpiled cotton and cashew- nuts in remote rural areas. Eligible invoices would have a minimum value of US$10,000 (Schedule 1, paragraph 2(d) of the draft Development Credit Agree- ment). Benefits and Risks 66. The principal benefits of the proposed credit would come from assisting Tanzania in halting the decline in its agricultural exports and setting the stage for long-term export growth. As a result of the Export Rehabilitation Program, the volumes of traditional exports could recover by 9% per annum in 1981 and 1982 from their present limited base. The largest increase in shipments would be in coffee, followed by cotton in 1982 and smaller increases in sisal and cashew shipments in both years. Although the initial gains will come mainly from relaxation of present processing and transport bottlenecks, a sustained improvement in export volumes could be expected from production increases in later years, provided the more funda- mental policy changes agreed upon in such areas as parastatal efficiency and agricultural research and extension are carried out. The proposed program should also make possible an increase in non-traditional exports (excluding petroleum products and diamonds) of 4%-5% in real terms in 1981 and possible 25% in - 29 - possibly 25% in 1982. The combined value of these additional earnings would be US$35 million in 1981 (including US$27 million from coffee) and USS80 million in 1982. The program should also have a substantial, but as yet unquantified, impact on domestic food production and hence in import savings. The credit would support ongoing discussions of economic policy and constitute a first st-p in a broader structural adjustment program. 67. The program, however, faces substantial risks. Even with an im- proved export performance, Tanzania will continue to face a very difficult balance of payments situation, especially over the next two to three years. Without an increase in concessional flows (which are already high), the country is expected to face a substantial residual gap in 1981 and 1982 - even with the proposed credit. The Government is attempting to reduce this gap by seeking further exceptional assistance from oil exporting countries and asking traditional donors to increase their balance of payments support. However, any shortfalls (particularly in meeting the US$180 million annual target for imported agricultural inputs) are likely to be made up by further cuts in an already highly constrained import level, and these could neutralize the positive effects of the export rehabilitation credit. The Bank Group intends to assist the Government in addressing this problem in the context of a Consultative Group meeting later in 1981. There is also some risk that the technical assistance which the Government requires for identifying key pro- duction constraints, as well as for supervising the ordering, delivery and use of high priority imports in the sector, will be identified and recruited too late to achieve export recovery targets in 1982 and 1983. To minimize this risk, efforts will be made to recruit key personnel (e.g., those for the Ministry of Agriculture) during the second half of 1981; until this is done, the Government will assign new responsibilities to existing personnel in connection with the proposed export program. A parallel IDA credit for technical assistance will also be presented separately to the Executive Directors in the near future to help finance and expedite recruitment of the necessary personnel. A third risk is that complementary measures necessary to ensure the full potential impact of the export program may not be taken by the Government in a timely and effective manner. In the key areas of input delivery and crop collection, however, the credit should provide urgent relief to the transport sector, including the private road hauliers who account for some two-thirds of internal agricultural traffic. Alternative approaches to improving the organization of these key support services will also be discussed in the context of the proposed long-term agricultural action program. PART V - LEGAL INSTRUMENTS AND AUTHORITY 68. The draft Development Credit Agreement between the United Republic of Tanzania and the Association and the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement of the Association are being distributed to the Executive Directors separately. Special conditions of the credit are listed in Section III of Annex III. - 30 - 69. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 70. I recommend that the Executive Directors approve the proposed credit. Robert S. McNamara President By: Ernest Stern Senior Vice President, Operations Attachments March 31, 1981 Washington, D.C. - 31 - Annex I TABLE 3A Page 1 of 6 TANZANIA - SOCIAL INDICATORS DATA SHEET TANZAN7A REFERENCE CROUPS tWEICPTED A?RACPFS LAND AiREA (THOUSAND SQ. En.) - MOST RECEST ESTIMATE) _a TOTAL 94 5.1 AGRICULTURAL 498.0 MOST RECENT LOW INCC4e MIDDLE INCOME 1960 /b 1970 lb ESTMATE jb AFRICA SOUTR OF SAHARA AFRICA SOUTr OF SAHARA GNP PER CAPITA (USS) 70.0 130.0 270.0 260.0 868.0 ENERGY CONSUNPTION PER CAPITA (EILOGRAMS OF COAL EQUIVALENT) 41.0 62.0 65.0 80.0 699.4 POPULATION AND VITAL STATISTICS POPULATION, MID-YEAR (MILLIONS) 10.2 13.3 17.4 URBAN POPULATION (PERCENT OF TOTAL) 4.8 6.9 10.8 17.3 28.9 POPULATION PROJECTIONS POPULATION IN YEAR 2000 (MILLIONS) 32. 0 STATIONARY POPULATION (MILLIONS) 92.0 YEAR STATIONARY POPULATION IS REACHeD 2145 POPULATION DENS ITY PER SQ. 1SM. 11.0 14.0 18.0 27.4 61.7 PER SQ. B2f. AGRICULTURAL LAND 21.0 26.0 35.0 82.6 126. 0 POPULATION AGE STRUCTURE (PERCENT) 0-14 YRS. 42.7 44.4 45.7 44.9 45.5 15-64 YRS. 54.3 52.5 51.2 52.2 51.6 65 YRS. AND ABOVE 3. 0 3.1 3.1 2.8 2.8 POPULATION GROWTH RATE (PERCENT) TOTAL 2.2 2.7 3.4 2. 7 2.7 URBAN 5.0 6.3 8.9 6.8 4.9 CRUDE BIRTH RATE (PER THOUSAND) 47.0 47.0 48.0 47.4 46.8 CRUD10 DEATH RATE (PER THOUSAND) 22.0 19.0 16.0 19.6 16.4 GROSS REPRODUCTION RATE .. 3. 2 3.2 3.2 3. 2 FAMILY PLANNING ACCEPTORS, ANNUAL (THDUSANDS) .. .. 93. 6 USERS (PERCENT OF MARRIED WOMEN) .. .. OOD AND NUTRITION INDEX OF FOOD PRODUCTION PER CAPITA (1969-71-00) 95.0 104.0 91.0 91.8 94.0 PER CAPITA SUPPLY Or CALORIES (PERCENT OF REQUIREMENTS) 85.0 91. 0 86.0 90.2 92. 7 PROTEINS (GRAMS PER DAY) 44.0 49.0 47.0 53.0 53.0 OF WHICH ANIMAL AND PULSE 17. 0 21. 0 20.0 18.4 15.6 CHILD (AGES 1-4) MORTALITY RATE 32.0 25.0 20.0 27.7 21.3 HEALTH LIFE EXPECTANCY AT BIRTH (YEARS) 42.0 47.0 51. 0 45. 3 50. 1 INFANT MORT&LITY RATE (PER THOUSAND) .. 155. o. ACCESS TO SAFE HATER (PERCENT OF POPULATION) TOTAL .. 13.0 39.0 23.2 31.0 URBAN .. 61. 0 88.0 58.0 66.8 RURAL 9. 0 36.o 16.8 ACCESS TO EXCRETA DISPOSAL (PERCENT OF POPULATION) TOTAL .. .. 17.0 28.9 URBAN .. .. 88.0 67.0 RURAL .. .. 14.0 POPULATION PER PRYSICIAN 21020.0/ 24770.0 18160.0 30910.4 14508.2 POPUtATION PER NURSING PERSON 10440.0/d.e 3830.0 3080.0 5793.2 3279.5 POPULATION PER HOSPITAL BED TOTAL 570.O/d . 520.0 1198.9 1141.5 URBAN .. .. RURAL .. .. ADMISSIONS PER HOSPITAL BED .. .. HOUSING AVERAGE SIZE OF HOUSEHOLD TOTAL .. 4. 4 .. URBAN .. 3. 2 .. RURAL . 4.5/ 5.3 AVERAGE NUMBER OF PERSONS PER ROQI TOTAL .. .. URBAN RURAL .. ACCESS TO ELECTRICITY (PERCENT OF IRELLINGS) TOTAL .. .. URBAN .. .. RURAL .. - 32 - Annex 1 Page 2 of 6 TABLE 3A TANZANIA - SOCIAL INDICATORS DATA SHEET TANZANrA REFERtNCE GROUPS (WEIGRTED AVFRAGES - MOST RECENT ESTItUTE).L! MOST RECENT LOW INCOME MIDDLE INCOQE 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTR OF SAHARA AFRICA SOUTH OF SARARA EDUCATION ADJUSTED ENROLLMENT RATIOS PRIKARY TOTAL 25.0 38.0 70.0 57.7 61.7 MALE 33.0 46.0 79.0 74.2 69.2 FEMALE 18.0 30.0 60.0 54.1 51.4 SECONDARY- TOTAL 2.0 3.0 3.0 10.0 20.6 MALE 2.0 4.0 5.0 13. 7 29.2 FEMLE 1.0 2.0 2.0 7 1 14. 7 VOCATIONAL ENROL. (2 OF SECONDARY) 23.0 .. .. 6.8 7.0 PUPIL-TEACHER RATIO FRlMARY 45.0 46.0 50.0 45 0 36.6 SECONDARY 20.0 19.0 20.0 25.2 24.3 ADULT LITERACY RATE (PERCENT) 9. 5/d 28. 1c 66.0 25.5 CONSUMPTION PASSENGER CARS PER THOUSAND POPULATION 3.0 2. 5 2.6 3.6 38.8 RADIO RECEIVERS PER THOUSAND POPULATION 2.0 11.0 19.0 31.5 83.5 TV RECEIVERS PER THOUSAND POPULATION .. 3 0.3 1.8 NESISPAPER ("DAILY GENERAL INTEREST") CIRCULATION PER THOUSAND POPULATION 3.0 5.0 4.5 4.6 24.2 CINEMA ANNUAL ATTENDANCE PER CAPITA 0.5 .. 0.2 .. 0. 7 LABOR FORCE TOTAL LABOR FORCE (THOUSANDS) 4734.5 5841.7 7342.8 FEMALE (PERCENT) 37. 1 36.6 34.0 33.5 38. 1 AGRICULTURE (PERCENT) 89.3 86.0 83.0 80.7 54.3 INDUSTRY (PERCENT) 3.8 5.0 6.0 8. 1 17. 8 PARTICIPATION RATE (PERCENT) TOTAL 44.7 43.5 42.2 42.2 38.8 MLALE 56. 9 55.7 54.3 55.1 48.4 FEMALE 32.8 31.5 30.3 29.5 29.4 ECONOMIC DEPENDENCY RATIO 1.0 1. 1 1.2 1.2 1.3 INCOME DISTRIBUTION PERCENT OF PRIVATE INCOME RECEIVED BY HIGHEST 5 PERCENT OF HOUSEHOLDS .. 33. 5 RIGHEST 20 PERCENT OF HOUSEHOLDS .. 63.3 LOWEST 20 PERCENT OF HOUSEHOLDS .. 2.3 LOWEST 40 PERCENT OF HOUSEHOLDS .. 7.8 POVERTY TARGET GROUPS ESTIMATED ABSOLUTE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN .. .. 147.0 138.2 RURAL 1 * 109.0 86. 1 ESTIMATED RELATIVE POVERTY INCOME LEVEL (US$ PER CAPITA) URBAN . . 125.0 107.0 RURAL .. .. 74.0 65.0 ESTIMATED POPULATION BELOW ABSOLUTE POVERTY INCOME LEVEL (PERCENT) ORBAN .. .. 10.0 RURAL .. .. 60.0 66.9 Not available Not applicable NOTES /a The group averages for each indicator are population-weighted arithretic means. Coverage of countries among the indicators depends on availability of data and is not uniform. /b Lless otherwise rnoted, data for 1960 refer to any year between 1959 and 1961, for 1970, between 1969 and 1971, and for Most Recent Estimate, between 1974 and 1978. /c 1967, /d 1962, /e Registered, not all practicing in the country. Most recent eatimate of GNP per capita is for 1979, population and related estimates have alao been revised, all other data are as of April, 1980. October, 1980 33 - ~~~~Annex I Page 3 of 6 bP!f111IOtNS I QCi2_Ad. D iICAWIOS No.tes: Aith-gh too data ate daw from sot -- otly judged te. most ath .tni .4druihe it shoud alto he -otd that they may sat be Latw- A toslyusOahohoas of th. took of st-ndardfed deteittoos and oo-cpt. coed by diff-oeo -outries ir. -oleting the dots, The data e. e Tho cferens grops ur (11tho sae -ost g-oc of ths -birot tostory and 11) otonIy toco. pit " one-ht high.,ovrg Ios thea the -ostey grs of th shl00 -uoe ecpt far "Capital S.rphus Oil taoet -goP theta "Middle 1-on tooh Africa end Middls Eat.. cosnboue farae Sooo-clooul fOl:tteei i th. 9-penegoc dlat the . aI.ta.e err cpulotloo seigh-od aitholc, seat- Fo each indic-to ood shew oY w.en at leas holt of the onorisI a group has data foe that lod oo__t unto thocov-agu -fcnrtsaog the rloos eed r the er-1sbllity of of on Indicator- tIns omo the ro-ui and ref erooo groups. LAND AREA inhoa-ud sq,.is.) fooalt e hntht-fp-unti 01500. by ste.r Os ptattioi"ahty- 10tti - Total au.. ace area -prhisg- land ott sod foland cacao. otols qua.lfied 0'. ru .a.dic. ol autrtyintl. A&rtLtura - E.Iso tar of agti-ltsra Ores -ed oeaporarib or p-on,trnt Otoelr e ruaPro- Poyalthon dlotdad by nehr at preonlnag fo -tpt, pOtrt,mrtet and blcha- g-rdes r n Ie. talks; 1917 dUo., molsd femae gadsca -raa, prot-toa -u..n. .ad a..nIntat morase lOPf't CAITA1001 -GSfPe p ospita esti-e at curet kar- pti-o, rut-' oreo t osidcddh hi epol ~rEf beaPitea bade cula-d by tom ttarti-n -ehodl as bold Baok Atlas (ttfl-79 bahs) ; fl6t, avIlable hr fohcad priv-ne geasra and spelaed asapia.1 medem 1670, - and 79ydata. hbhli.ttsiee cotain. . taptl r eatebIishmete p.VMAmaWt1Y aCaff d itgiiYtOhIMTil Nft olle . dstl cseuyrat f rsatollettg (tsI by at loses nr phyticisa. Blcabliuhlots prviding prisalpahly astadll sad Ilooite, peroeu, tacrsl gee en hydre-. nohmead g-otherra eIn- omet.os era P.rmonetly sta1ffd by a phyaholss (but by a Weal. amalsatast, trichicy) ft kilodrana at co- elllo pee -oplia 19ff. 19701. ad 1978 torte, midwife, etc.) nOo offar in-p.tlet --os4dtlm end prawd a dana. liettad range af -dirl fiseldiem. ar stetiatioal paepe- seis beeld- PNPIIlA7IfS AtOll OCt1. tIdIlOThi tale Inluds StOOP principsi geeral ned ePetiaLeed hoseimla., eS mrena PPITotlIONrANDtirA. STAId-Tea aICS t)-d hll I 91 9 n hospItals 1en1 or rora1 hespiala and edios1 and Measmity eMaItere T-1 PP,,l - A. ~~~~~~f J.ly 1- 1960deimesh1a9retNaarta15ed -Total -ubr of adm.istaa to se d1*ohs4Tge 4 - f-~~~~~~~~~~~~~~~~~~~o hespitel. djirdad by the eb.r of beds. Orban forolatlo (-soet ofwtetal ORatio ad seee to tonl oolitt diftrtom deftlttes of arb-s ae_ any shfeot c. nrahility of data HMS aaa -oatries; 1960, 1970,. an 1978 data. ....s liar of EO....hold (Ne-naas or heebold - onl e"R.an ee- pooclatato ftOieOtions ~~ ~~~Ahushold or.sat of a 9roep rf tadloidole sh. share ltisau 4-ats a PopulaioN I omot ihO -Cortra populationP--1 -r btos t hosed no lOn and choI totsol.~ A hear.de- or ledger y t- nay tot be Ineded in total poPatioo 'y age and a- end their mortality aed fertility rates. the hoomehold for scatietee frrpeo.- feolarthti pmroatoatar mo rtality rates -opti.a of thr- levels ..t0- AvergeOuhe of rroa crroo tota. tbas. sad era - LAmegs eaan heg lift ouPeteaty at biech imoeoetss with coatryt. Pet 00ffr cc trm her of Ppeson pe o._ _bal oa.' aad rur"l oeptd ... -emiese lerol, .od feaelift espettnoy et.bil"isog at 717.5 easts. Th. at' datlI.gs, roep-oti-ey.Oeltgeetd ro-pranet st-stee and motrs lot fettIlity rat also here thren 1-nel asmaing decline in oocopied parts. fertility Oooordhag On IOoOn lere and past fatly PI a..oot prfrau. dustofotfl (rnnatselha)-ea.abn.nd el- lath o_onty is thna assIgned -a at thees nin -cblath.. Pt -ortaity Cove- ltal- d-eelldc with aleotolOty inIlieg yasceers as Pear. e adfertility treds lao proj-tlen Purpo.... Iof tonal, other, and rntel a-lllngsrra,p-tivly. liatonan Otulehen- I.atethenaoY pspaiatloa tho th o rth thor ths bitch rota in agual to the death oats, and a1-cthe age teuur. r-EDC7 motes oocn.Thin isaciee ony tne fertility rtate deallue to idO oan irla-cltl the reo -et ee of omit net rpeuoinrate, when moth gooce rmr col-tcl oealtml es na,ml n el of manse -ePlo- itself natly. The etatlanry populatIo tie- cnerlm tof all agee at the ptha-y level as p-eestages bd repeacl1 e tItd o- he heels of stan penJ.oted oharao-t-dati-a of the potl.sties pole_y XIoleepplroa;ntol tlds thds gdhi istheya lIt,an the rate rf d-olie of f-tnility -tat to roplace-yerba adjste to d..iffore. leagtht o primaty eideasmis fe nat level.. ooaetrhn nut unve saadnatlon ealrtsy enoeed 199 percet Im_c stetitnary Opalaiho is rehahd - Th. yeas then sttiomoy popolotice ehoc soa pu.pils are heist or abve nba offloal .ofsel as.. shea baa ban easohed. eodr o l- totl. mole and teasl - Ceepate am ab-v;sasde feealaoiaa DensIty edloutlor ra9a~~~~-qireb at Isa.ti four ~year of approve pteary isetrantlea Po n. ha .Mid-yea pepsitian per sqare kilomeer (10O beotare) of prenidesgeerl ruelsa. tearher traIing- istesti-te fOr paPiks atal. 5t-a o Ia o 2to 17 years of ego; otraespssd*aoe osrn r gaearally oal.c. Voca~~~~~~~~~~~tional ..ratlea"t fe-roet of enco aryv '. Wo-tismo ibatitmiem Pershoi-o A.. Nteuosar (P.tont) - Clhildea (0-14 yearn), wokiag-Og 115- fuoluade teobaloal. loserh r ether prog- sa wffo oPeot. Nedeym 64 at) end rtired (65 year and, -se en pn-aentoge of eid-ya oe' d-tly or An 4 detsotn of -aodat Iaetit.tsioa. hetiar; 1960, 1970. end 1979 date. rauri- arro tlst. ad sonds T. tota students eedin ?Pshueno- loath `tot Retrt r - damse g-ath rae fctatl Odd- primary sad t-ood-y I.velo divided by satbe- nitea-hers in the year poplation a 9 h,16-0 n 17-g9. -rr-p-ndint hel.1 fouol r itow lace (roereo - orban - Amsh growth rom o f oebsn p.p.- idl tto asl on)-Literate adolte (able ta read ne mlt.) lotlo- fur 01Sf-hO 1960-70. and 1970-70. atpar-otags ot.sne adaic ot ltoae 15 yanee andns trad 010th, tate fre th.aasd) - donu1 lIve births pee thousand f aid-you "papeltirn; 196O, 1970, aed 1970 dan, ..s.rlo heads atD Rte Par theon.And - AeneI deathe Pot thb..a.d of aid-yea-r Paeerhr Ntsosa uaete emne asots no pouain 960, 1970, and 1929 data, oars stoing lut thne t pe-nne noc1de aaanse hes-sa and i-as Neooeoottr Ns -dreeng oabro of daughters a oa ill bat in nilitary hira her ;.r-a er"-d-tlr- period if afar esyrirn.e. pru"et ag-sysiflc for- Wdl ttOler a hoo...und . -saaior) - All typen of roi afar Tad, tilIty eaten; ...ahhy 0 ir-year a-reaIn ead1g in 1161, 197,. ad 1977. hcdon o o o uho e hoodOfppltup-mldsai' alily Pleomiea-Anetcor. dse huad)-ana cbra Ott --osn trot ..er hoo-tris and is y'oar sh..ro ugetat-ta sf adie e of bitth--otr-L daviran nder.. usiovo of .atioe tally plasiof p-ograt. ou.. In f r dare far or-art fooe- ay tot he -op-rln ainte mot nona of ohild-beri.g ago 15-44 yearn) who a- birth--oooo d-ci-e tO TV Veonhyot (-e ThVai ounhai 7 -noiv-rm for b-sac-t to all battlednoo Innaot horap. genetl public too thouandpplain -noode "'hlonnd TVttocvt lsdeo of Food Oted.othos Par Capita (1969-71-100) - Isles of pro capita aoe canf"daily gooal nterest _eapopr. dftnod en priedlol p0b- -rd-oti-o of all food --oaditth- Productho-r-ld.a. aced a.,d feed and li-ooira devted primarily no ts-rdiag .....e tIws In i .hoasid-rd ia os o-led-r peao boas ta-oditie- ounc protory X.odee.gausee no hr "dotly" if ht pappere An o-t f-ar Otms a sek. Isated ofaogar oniN ar edible and -oenis .ocrtst- (c.g. cf0s r ioadno tedsaorCpc a fa - .ano.on he obre satino aveag you.door pri-o tights; 1961-hi, 19,70, ead 1)9 dN.- and obile onto. Per 0010C.l foaols(roenoftsiea .aput.d Eoa eoaog r yuraa u art fad mppilia avial oooyPe" :aP,,e ")dRC.n pe -a.Avial oplr rars oral oduta,IspruIs Ttota Laboo force(thso..anda) - Coosominahly -oti- pna,inoldie exports, modobasget is soob, Nec mopites anoloisoslmol food -od, re f-r- and o-Plryed hut ..oo1odita O,-uaai-, ttsdrac, to qaaothiet_ used to food pr-o...siag, ol lo.-s It distribution. ', I teOie- lflchtic- 10 00000 - oao t 000 00 .o..arble; 1960, i9Pl tand ccons note estImated by ?IAt h.."d .. pbyninloglcal nad. for -orua -ct- 1)7. 00 oity and bh-inb othdethn ettoaoalnp-ta-o, hody oaihhtu, Ft eae;Oort; - fol 1eo oc o eon fttllbor toot.. aed se di~tOOu-tJ.. of pup.lnt ton sd ollniug 10 percet for outO- beioltrL prcon lohortors In farmlg, fooacy. bntieg and houshol leosl-; 1901.60, 1970, and 1977 dorn.,oo 1a eonaao rtotl labrfro 16,hY od1. os Prorpiosuoc fornl (goat ose day) - frutoit cot.to of Pso captIt Ind-n prcsl-LaborZ. bo t h itg rneora ae tr cot tp cffodprdo.Pt supply of land iu dollsea as abov.- Os- '~ lcrui,ocro a spte fttllhrtre 90 qoiranoc foral a1 attnes estebliohad by USDA pr-ide f or 5i.ito 1920 .od 1Oyd data. oraO f6hI groa of total pootrin per day end 2 goon of a Iaa o snopte eofeot oa,ar o aae-Prilets0 Pohas prasof ihin 10 gSran sh-ld be autosl poti. Thes stood- lao_tjtty racesat tousdastoa, molt, sad tfel laho force a atIn -r Iccr thee tht.. r 75 gram of total poocoi. ead 23 hosa- 00 proatge f ito., mole sad tamal pou bhcelf lae rapmotivey; to,"e Prenis asataerg f0 athb sand, pt.posed by fAt is the Third T~.r L' * attt Wol olOto; 196-5 90ad11 ns 1960, 1970, sou 1975 data. hn r 1' atoiahsnterteta toocaitoprten oplyI 197n0sa an. us rtetrpl ffod1In- agatara trurcos of the popoletot., cd hang tir trend. Afew tOi- oEl ro. as.si-n and Psle.. in asa- p00 day; 1961-A5, 1970 sod 1977 Inca. monos err from -.stiottnl sNortes .1d M-1 4-b. P- th-aad 1. t.~~~~~~~~n thr total labo- foo-a agegras 1- er,t hide stI ge Op; f.r ..oat dov-loplg -ao- noose data derived fro life tabLse; 1960, 1970 eel 1970 data. tsconm DISTRIBUTION at birth; 1960, 1970 sad 1970 data. 1sf ot Xtorna icy ate . t tosn) - A-al deoths of tehasts sadsr cNnsr 5DVE7T TARGET ihO7Sy cO ege I00 thmn iebirh.. RtiSa,ted uolnPvetbo s rl(0$etal.a-urban sad -eal A-ne. to Oafs Wfatf loret of asnia- tt l,uba..,s M rusa - 0 bbslsn ponrty inom srli ha no ee balsa whiche ill -athr ofpol ttl ra,an so)ct aoal acrst so artoa adofnte diet plus enete n-fond tegiatesata ia rot aacrspyly l-ieodea .tretd aefcetars orautrna-d ou dostmnan of f. -ah strr soul us thot fros poterted borbhle..eong,ad aA.aywln 00 ~ fetiana Releti-m Pr I. tcm lee CIS$ -e -cit.) -b"rfs an rspj peoear f their -epeeciv PopsI.i-tlm . I Os -rbea vs pofalt Nu-o r-la-t- PovryIasols n-hr faeaePerCpt f-ati or. -stadpoet -trose at mor thor 700 narra hrs_ a horna may bn pesnl t aort, thc cco'Or. a --rsirds darfe teo nb- rera -oanIdea 00ba'sg withi.a onor-bla scuan of that haut. 10 rural sosa lee with adjc.toen too hIdfae cot at lIvIng in 'ubanaes _tu...able ocosa -aId hep ly that the h..ea-'f. rr nrbrca of the bruaholK olae ouahnOlaO,aoeNvnyIon Le-e (Varoet) - arha do nut hove nops a dtsptrp-tla-ai parr. cf the day it, lettihg Oh n rot por-ea of .I yataacs uban and rrl who ate 'bsePar". -uol - Maeara icola (_totl rbu uraltl nomad tynsor__ dipoala p--teeges t their raspeonirs "popoltos. fanoeta Its- tsaloand OSala Oars Dleisl p .atImay i-lode shin ..lettn o diepoee, wIth c- wloh-t tresn.-s,toa_ir Ansalysis int Prbojetlam Osaperent oh huss eor.ta ad waste-wtr by -tar-borm myn.tom ar cbs _5 otf pin privIes sod nabiso testaliatloss. Annex I TANZAN9IA Page 4 of 6 Econoic Development Data Sheet 1977 Actual Provisional Pro iected Averag 7. Annual Growth gates Share of 1972 1973 1974 1975 1976 197 7 198 17 90 1890 197 2-77 97-3 1985-90 GDP A NAINLACCOONTS (Milion DD at 9197 Price) 1 0DP 2773 9 26622 30D47 3119 4 3364 1 3542 4 3734 1 3890 2 4069 7 5105 8 6592 3 3D 4 7 4 9 100 0 2 Gales true Terme of Trade (TT) -161 0 -207 3 -348 9 -345 7 -69 9 -116 1 -135 2 -174 5 -223 4 -251 8 -277 4 -3 3 3 ocea .DoMestic Income 5612 9 24,547 2 655 6 2773 7 3294 2 3456 3 3598 9 37 19 6 3846 2 4t54 1 6223 9 5 6 4 4 5 1 96 7 4 Deports 1084 7 1019 8 895 4 939 4 751 0 902 4 1063 9 904 9 924 7 1102 8 1330 4 -5 9 4 1 3 8 22 7 5 DEports Volume 1054 7 1004 5 741 3 734 5 924 5 686 3 674 7 700 8 746 4 907 0 1164 7 9 2 3 5 5 1 19 4 6 thspnmts-TIadiunted 89957 8033 5465 493 7 691 1 88. 3 559 5 52653 522 9 655 2 8865 -52 -0 6 6 2 19 4 7 Resource Gap - STTdjueted 191 0 2075 3489 345 7 69 9 116 1 524 4 378 5 401 8 447 6 444 2 33 8 Total Canusnptien 2163 0 198463 240,~1 2555 0 2654 9 2986 6 3404 5 3421 1 3540 6 4371 5 5448 3 668 4 9 4 5 84 3 9 Investment 640 9 682 2 755 7 669 3 655 7 671 9 718 9 673 1 707 4 930 9 1219 8 1I0 4 2 5 6 19 0 10 Nationaloavinga 430 4 4645 3041 314 2 676 4 537 1 325 0 412 0 416 6 617 9 951 7 11 198 9 0 15 2 11 Doa..atinls-ioge 449 9 4664 2527 2i8 7 639 3 439 7 194 4 294 6 305 6 482 5 775 6 -04 1 2 100 12 4 12 CUP at curr ent US 1564 1 1866 2 2259 1 2564 4 2761 4, 3542 4 4555 7 4686 4 5593 1 9941 7 18605 0 17 9 13 8 1533 8 StCTOR OUTPUT 1 (sharo at GCOP at 1977 points)-' 1 Induetry 16 3 17 3 16 0 15 1 14 4 13 8 13 0 12 7 12 3 12 3 13 2 1 3 3 1 6 4 2 Agnicult'cre St1 540 46 8 48 6 50 4 51 0 59 8 50 4 59 1 48 3 47 1 47 3 8 4 4 3 Servicee 32 7 285 37 2 36 4 35 3 35 2 36 2 3608 37 6 39 3 39 6 63 6 0 5 1 C PtiCti 1 Export pcicelndex 36 4 433 64 2 63 6 76 7 100 0 91 0 95 9 102 5 142 2 190 8 226 4 5 6 0 2 Deport Prine Cndsm 43 0 54 1 87 1 94 6 92 6 100 0 113 8 127 7 146 3 196 9 250 7 18 4 8 8 5 0 3 Te-is ofTrade 84 7 800 73 7 67 2 82 7 100 0 80 0 75 1 70 1 72 2 76 1 4 GOP Deflator (US $)56 4 70 1 74 5 82 2 82 1 100 0 116 1 120 5 132 5 194 7 286 1 12 1 8 7 8 7 S Averag Exnhange Rat. (foaShtS$) 7 143 7 021 7 143 7 414 8 379 8 274 7 6899 0 StLECTED INDICATORS 1972-77 1978-95 1985-9-0 1 1108 440 3 93 3 72 2 Deport Ela. icity -0 22 0 11 0 77 3 Average Domes tic saviogs gate 17 2 7 3 11 4 4 Acetate National Oavin6s tate 19 0 10 9 13 9 5 Marginal Notional Savings Rate -t, 24 0 27 0 25 6 Import/GD? 3908 2352 20 9 7 Investment/GOP 2 40 18 9 19 4 8 Rtaoora Gap/GDY 7 8 9 4 8 0 2/ ~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~Prov Proem E PUNLIC PFlNANCE-/ Actual Actual Eta (Milli.n TShillinge) 1965/66 1972/73 1975/74 1974/75 1975/76 1976/77 1977/78 1970/79 1 Current Ravanun- 716 2357 3023 3946 3919 525D 6082 6689 0.1 Tax Revenue 602 1927 2510 3161 3302 4644 5317 5859 2 Corret tEpnditturo 707 2223 2785 3961 3716 5022 5847 8907 3 Government Savings 9 134 238 -15 203 220 235 -2218 4 Pareign Grantu 62 214 377 469 626 709 1250 S Scrplun Available tot FPs...ang o 6 Develepoent Enpeeditore 196 452 362 672 894 944 -969 6 Dovelop-et Oxpe-ditor 230 956 1642 2225 2253 2763 3585 4771 7 Overall Deficit -760 -1190 -1863 -1581 -1069 -2641 -5739 0 Pinancing of the Oef-ct E.ternal Loane 83 456 467 661 564 777 660 1177 Domstic Borrowangu Bankc-D System 269 321 834 570 464 3003 other 25 202 369 447 1517 1559 I/ In 1966 prices and 1977 s-deo -bane year FAIDA 2/Cnta Owr -ent January 3, 1980 Annex I TANZANIA Page 5of 6 Balance of Payments and External Assistance (Million US$) Act-al Preliminary Projection 1972 1973 1974 1975 1976 1977 1978 1979 1980 1985 1990 A. Summary of Balance of Payments 1. Exports (incl. NFS) 384.3 434.6 476.0 467.0 632.1 686.3 613.9 672.0 765.2 1289.4 2222.0 2. Imports (incl. NFS) 466.1 546.8 779.8 793.8 697.1 802.4 1210.7 1155.3 1353.2 2170.2 3335.5 3. Resource Balance -81.1 -112.2 -303.8 -326.8 -65.0 -116.1 -596.8 -483.3 -588.0 -880.8 -1113.6 4. Net Factor Service Income -5.9 7.4 -5.2 -7.3 21.5 -18.7 -24.6 -47.5 -66.5 -137.0 -266.8 1. Net Interest Payments of which: 3.2 11.2 8.9 -3.1 -17.9 -16.4 -15.8 -37.8 -55.9 -119.8 -239.2 (Interest on Public M & LT Loans) (-11.1 (-12.5) (-13.6) (-16.2) (-19.5) (-22.1) (-24.7) (-27.8) (-35.0) (-121.8) (-250.2) 2. Direct Investment Income 3. Workers Remittance (Net) ) -9.1 -18.6 -14.1 -4.2 -3.6 -2.3 -8.8 -9.7 -10.6 -17.1 -27.6 4. Other Factor Service Income (Net) 5. Current Transfers (Net) -4.2 5.0 45.2 92.9 55.4 116.1 175.0 195.0 218.4 384.9 678.3 6. Balance on Current Account -91.9 -114.6 -263.8 -241.2 -31.1 -18.7 -446.4 -335.8 -436.1 -632.8 -702.0 7. Private Direct Investment 0.0 0.0 0.0 0.0 0.0 5.0 5.4 5.7 6.1 8.6 12.0 8. Capital Grants 14.0 18.6 6.5 34.9 2.9 13.9 0.0 0.0 0.0 0.0 0.0 Public M & LT Loans 9. Disbursements 1/ 109.5 113.6 161.3 249.5 122.4 177.8 173.2 210.5 10. Amortization 1/ -34.2 -23.7 -18.8 -18.0 -21.9 -26.4 -26.8 -54.8 11. Net Disbursements I/ 75.3 89.9 142.5 231.5 100.5 151.4 146.4 155.8 12. Use of IMF Resources 0.0 0.0 60.3 25.2 23.7 8.8 17.0 30.0 13. Short-term Capital Transactions 7.2 -17.9 7.5 -5.1 -38.3 35.1 60.0 120.0 14. Capital Transactions, n.e.i. 54.8 49.0 -47.4 -30.1 -10.8 -26.0 0.0 0.0 15. Change in Reserves (- - increase) -59.4 -25.0 94.4 -15.2 -46.9 -169.5 229.0 24.3 B. Grants and Loans Commitment 1. Official Gtants 2/ 9.8 23.6 51.1 127.8 119.0 130.0 200.0 216.0 2. Public M & LT Loans 65.4 107.1 260.4 151.8 194.1 197.3 225.3 269.9 2.1 IBRD - - 65.0 30.0 37.0 53.0 25.0 66.0 2.2 IDA 10.8 22.6 61.2 10.0 52.0 49.2 73.5 63.0 2.3 Other Multilateral 3.3 1.8 7.1 18.0 10.8 33.5 27.6 18.2 2.4 Governments, of which: 47.1 82.8 127.1 93.7 82.7 61.3 98.3 30.0 Centrally planned economies 4.9 3.0 76.5 5.4 - - 2.6 - 2.5 Suppliers - - - - - - - 80.0 2.6 Financial Institutions 4.2 - - - 11.7 0.3 - 10.0 2.7 Bonds - 2.8 Public Loans, n.e.i. 3/ - - - - - - - - 2.8 3. Other M & LT Loans (where available) 26.4 18.6 5.6 2.9 6.0 - - C. Memorandum Items 1. Grant Element of Total Commitments 49.2 83.4 63.1 56.4 66.6 56.8 45.5 32.8 *. Average Interest 3.6 0.6 2.3 3.0 2.2 3.2 4.5 5.4 3. Average Maturity (Years) 28.1 47.8 32.2 31.9 38.8 35.1 32.8 25.5 1/ Includes financing of projected balance of payments deficit (1979-1990) on blend Bank/IDA terms. 2/ Excludes technical assistance grants. EAIDA 3/ Represents commitments to cover projected balance of payments deficit. January 2, 1980 Annex I IANZANiA Page 6 of 6 I/ Debt- and Creditworthiness Actual 1972 1973 1974 1975 1976 1977 1978 A Medium and Long-Term Debt (Disbursed Only) (Us $ Million) I Total Ocbt Outatanding (DOD End of Period) 441 7 551 1 728 3 917 1 1029 2 1123 4 1213 1 2. Including Undisbursed 835 5 987 3 1280 5 1359 0 1555 9 1649 3 1806 4 3 Public Debt Service 43 3 39 3 32 4 34.1 41 6 48 4 49 6 3 1 Interest 11 1 12 3 13 6 16 2 19 5 22.1 24 7 4 Other M & LT Debt Service B Debt Burden I Debt Service Ratio 11 3 9 3 6 8 73 6 6 7.1 7 8 2. Debt Service/GDP 2 8 2 1 1.4 13 1 5 1.4 1 1 3 Public Debt Service/Government Revenue 14 7 10 3 6 6 64 7 6 7 0 5 8 C Terms I Interest oil Total DOD/Total DOD 2.5 2 2 1 9 18 1 9 2.0 2 0 2 Total Debt Service/Total DOD 9 8 7 1 4 4 37 4 0 4 3 4 1 D Dependency Ratios for M & LT Debt I Gross Disbursements/lmports (incl NFS) 23 5 20 8 20 7 31 4 17 6 22 2 14 5 2 Net Transfer/Dmports (iocl NFS) 6 2 3 Net Transaer/Gross Disbursements 68 8 2992 28 82 I B HA E. Exposure 1. tBRD Dibburauseuts/Gross Total Disbursements 16.9 19.1 10 4 21 0 14 0 17.2 17.8 2 Bank Group Disburseisents/Gross Total Disbursements 19 4 21 8 14 0 28.2 37.2 37 8 31 6 3 IBRD DOD/Total DOD 12 2 13 4 12 4 15 4 15 1 16 3 17.3 4 Bank Group DOD/Total DOD 23 1 23 8 21 1 24 2 25 7 29 3 31 3 5 IBRD Debt Service/Total Debt Service 10.2 15.3 20 4 26 4 34 1 33 1 40 5 6 Baink Group Debt Service/Total Debt Service 11 1 16 3 22 5 28 4 36 5 35 5 43 5 Outstandint December 31, 19tZ Amount Percent (US $ Million) F External Debt (Disbursed Onily) I IBtD 209 9 173 2. Bank Group 379 2 313 3 Other Multilateral 61 2 50 4 Governments 714 1 589 of which Centrally Plained Economies 317.3 26 2 5 Suppliers 16 5 14 6. Financial Institutionis 18 8 1.5 7 Bonds 20 3 1 7 8 Public Debt, n.e i 1/ 3 1 6.3 9 Total Public M & LT Debt1 1213 1 100 0 10 Total Public Debt (incl undisbursed)- 1806 4 148 9 G Debt Profile I Total D,bt Service 1979-83/Total DOD t5nd of 1978 60 5% 1/ Includes Tanzania's notional share of 40% of EAC debt ElIDA 2/ Represents DOD on loans to cover projected balance of payments deficit January 2, 1980 - 37 - ANNEX II Page 1 of 18 THE STATUS OF BANK GROUP OPERATIONS IN TANZANIA A. STATEMENT OF BANK LOANS AND IDA CREDITS TO TANZANIA AS OF FEBRUARY 28, 1981 (US$ million) Amount less cancellation No. Year Borrower Purpose Bank 1/ TW IDA 1/ Undisbursed Five loans and fourteen credits fully disbursed 77.20 96.76 287-TA 1972 Tanzania Smallholder Tea 10.80 0.55 371-TA 1973 Tanzania Fourth Education 10.30 1.15 382-TA 2/ 1973 Tanzania Livestock 18.50 1.01 454-TA 1974 Tanzania Cotton 17.50 5.95 1014-TA 1974 Tanzania Cashewnut 21.00 1.31 495-TA 1974 Tanzania Sites and Services 8.50 0.82 507-TA 1974 Tanzania Highway Maintenance 10.20 1.73 508-TA 1974 Tanzania Rural Development 10.00 3.27 1041-TA 1974 Tanzania Sugar 9.00 0.27 580-TA 1975 Tanzania Dairy 10.00 5.66 1128-TA 1975 Tanzania Textile 15.00 1.74 1172-TA 1975 TIB Tanzania Investment Bank 15.00 1.37 601-TA 1976 Tanzania Technical Assistance 6.00 1.82 606-TA 1976 Tanzania National Maize Program 18.00 9.06 607-TA 1976 Tanzania Fifth Education 11.00 5.83 1306T-TA 1976 Tanzania Power 30.00 0.80 1307-TA 1976 Tanzania Forestry 7.00 2.70 652-TA 1976 Tanzania Fisheries 9.00 6.86 658-TA 1976 Tanzania Tobacco Processing 8.00 1.09 1354-TA 1977 Tanzania Urban Water Supply 15.00 6.04 1385T-TA 1977 Tanzania Morogoro Industrial Complex 11.50 2.57 1386-TA 1977 Tanzania Morogoro Industrial Complex 11.50 1.92 703-TA 3/ 1977 Tanzania Rural Development (Tabora) 7.20 5.22 732-TA 1977 Tanzania Second Sites and Services 12.00 10.78 743-TA 1977 Tanzania Trucking 15.00 10.19 1498-TA 1977 TIB Tanzania Investment Bank 15.00 2.01 801-TA 1978 Tanzania Second Cashewnut 27.50 9.42 802-TA 1978 Tanzania Tobacco Handling 14.00 12.04 803-TA 1978 Tanzania Rural Dev. (Mwanza/Shinyanga) 12.00 8.77 1607-TA 1978 Tanzania Morogoro Textile 25.00 24.71 833-TA 1978 Tanzania Morogoro Textile 20.00 17.62 860-TA 1979 Tanzania Tourism Rehabilitation 14.00 13.17 861-TA 1979 Tanzania Sixth Education 12.00 11.87 875-TA 1979 Tanzania Mufindi Pulp and Paper 30.00 22.05 1650-TA 1979 Tanzania Mufindi Pulp and Paper 30.00 29.65 876-TA 1979 Tanzania Fifth Highway 20.50 20.50 1745-TA 1979 TDFL Tanganyika Development Finance Co., Ltd. 11.00 6.70 1750-TA 1979 TIB Tanzania Investment Bank 25.00-/ 21.32 S-24-TA 1979 Tanzania Dar es Salaam Port Engineering 2.50 1.67 987-TA 4/ 1980 Tanzania Tanzania Rural Dev. Bank 10.00 10.00 1007-TA 4/ 1980 Tanzania Pyrethrum 10.00 10.00 1015-TA 4/ 1980 Tanzania Grain Storage & Milling 43.00 43.00 1037-TA 4/ 1980 Tanzania Smallholder Tea 14.00 14.00 S-27-TA 1980 Tanzania Songo-Songo Petroleum 30.00 22.29 1056-TA 1980 Tanzania Education VII 25.00 25.00 1060-TA6/ 1981 Tanzania Second Technical Assistance 11.00 11.00 1070-TA4/6/1981 Tanzania Coconut Pilot 6.80 6.80 Total 276.70 41.50 581.06 of which has been repaid 13.67 - 8.34 Total now outstanding 263.03 41.50 572.72 Amount sold .09 of which has been repaid .09 Total now held by Bank and IDA 1/ 263.03 41.50 572.58 Total undisbursed 99.74 3.37 330.19 433.30 1/ Net of exchange adjustments. 2/ Includes Norwegian participation of $6.20 million of which $5.63 million has been disbursed. 3/ Amount excludes Canadian participation of approximately US$4.2 million equivalent. 4/ Not yet effective. 5/ Excludes $15.0 million EEC Special Action Credit being administered by IDA. 6/ Sixth replenishment; approximate US$ equivalent of SDR's. - 38 - ANNEX II Page 2 of 18 B. SUMMARY STATEMENT OF BANK LOANS FOR COMMON SERVICES GUARANTEED BY KENYA, TANZANIA AND UGANDA AS OF FEBRUARY 28, 1981 (US$ million) Loan Amount (less cancellations) No. Year Borrower Purpose Bank 1/ Undisbursed Five loans fully disbursed 93.40 638-EA 1969 EAHC Harbours 35.00 0.52 674-EA 1970 EARC Railways 42.40 0.03 865-EA 1972 EAHC Harbours 26.50 0.35 914-EA 1973 EAPTC Telecommunications 32.50 0.53 1204-EA 1976 EADB Development Finance 15.00 3.38 Total 244.80 4.81 of which has been repaid 63.02 Total now outstanding 181.78 Amount sold 24.36 of which has been repaid 24.36 0.00 Total now held by Bank 1/ 181.78 Total undisbursed 4.81 4.81 1/ Net of exchange adjustments. - 39 - ANNEX II Page 3 of 18 C. PROJECTS IN EXECUTION 1/ (as of February 28, 1981) There are currently 44 projects under execution in, Tanzania. AGRICULTURAL SECTOR Credit No. 287-TA - Smallholder Tea Project: US$10.8 million Credit of March 3, 1972; Date of Effectiveness - July 26, 1972; Closing Date - December 31, 1980 After initial serious management problems, the Tanzania Tea Authority (TTA) has finally reached a satisfactory level of senior staffing and this has had a clear impact on the working of TTA and resulted in improved control over field activities. Factory engineers have been appointed for all factories. Because of weak extension and poor farm practices in the past, about 1,600 ha of the 9,671 ha planted since 1971 must be infilled or rehabilitated, and yields have been lower than anticipated. In line with the 1976 survey of the tea industry, additional planting has been carried out and effective rehabili- tation and infilling has been achieved except in the Bukoba area. Recommenda- tions of the survey regarding crop yields, husbandry techniques, field organi- zation, TTA structure and extension activities are also being implemented. In general, progress on the project is improving. Since eligible disbursements will be completed within three months of the closing date, this date was not postponed. Credit No. 382-TA - Second Livestock Development Project: US$18.5 million Credit of May 23, 1973; Date of Effectiveness - September 28, 1973; Closing Date - December 31, 1980 This project was the subject of an in-depth review in November 1976 and again in January 1979. Although progress has been made in alleviating the financial problems of the meat processing parastatal (TPL), in correcting some of the deficiencies in the livestock marketing parastatal (TLMC), and in adopting some of the decentralized management recommendations in the ranching parastatal (NARCO), TPL will still need to improve its overall efficiency, and NARCO its unsatisfactory financial situation. In the meat processing component, the settlement of a dispute between the Livestock Development Authority (LIDA) 1/ These notes are designed to inform the Executive Directors regarding the progress of projects in execution and in particular to report any problems which are being encountered and the action being taken to remedy them. They should be read in this sense, and with the under- standing that they do not purport to present a balanced evaluation of strengths and weaknesses in project execution. - 40 - ANNEX II Page 4 of 18 and the contractor enabled completion of the meat plant in Kawe; the two new meat plantsin Shinyanga and Mbeya will be completed by June 1981. There is little change in other project components, where major difficulties remain to be resolved. Since the Credit is expected to be fully disbursed within three months of the Closing Date of December 31, 1980, this date was not postponed. Credit No. 454-TA - Geita Cotton Project: US$17.5 million Credit of January 17, 1974; Date of Effectiveness - April 5, 1974; Closing Date - December 31, 1982 The project has continued to show good progress. However, in view of the failure of the crop technical packages to give economic responses, the project must now be considered to be an infrastructure and adaptive research project rather than an agricultural production project. A major objective is now to develop a more soundly based and productive agricultural strategy. The most significant progress has been in the trial program with about 50 well distributed and supervised trial sites and improved credit recovery. Recruit- ment of staff has been more vigorously pursued since the Project Implementation Reviews began. Project problems remaining are the lack of senior staff, the shortage of extension staff, delay in deliveries of some equipment and financing of road construction. The project will continue to be kept under close review. Loan No. 1014-TA - Cashewnut Development Project: US$21.0 million Loan of June 24, 1974; Date of Effectiveness - September 26, 1974; Closing Date - December 31, 1981 Construction of the five factories and ancillary facilities is pro- ceeding well in accordance with the revised completion schedule. Processing plant and machinery has been delivered to two factories, and is under shipment for the remaining three. However, the project continues to face problems arising from a sharp decline in the marketed production of raw nuts. The producer price has been recently increased and the Cashewnut Authority (CATA) is considering the introduction of additional incentive and tree-planting schemes for farmers, but these measures are not likely to have a significant impact for several years. As a result, the completed cashewnut factories are expected to operate well below capacity for a number of years. Credit No. 508-TA - Kigoma Rural Development Project: US$10.0 million Credit of August 21, 1974; Date of Effectiveness - November 20, 1974; Closing Date - December 31, 1983 Despite senior staff changes in the Region and continuing procure- ment constraints, construction of agricultural and other training facilities, as well as water supply and feeder roads, is proceeding satisfactorily. The coffee rehabilitation and expansion program, and the land-use surveying and mapping, are also making reasonable progress. While the keeping of crop records is not yet regular or systematic, there has been a substantial increase - 41 - ANNEX II Page 5 of 18 in maize, bean and cotton production in the Project area. However, the village fertilizer trials have yet to produce conclusive results, and recommendations for recasting the trials are under review. The Project is not likely to be completed before June 30, 1982. Consequently, the closing date has been p.stponed to December 31, 1983. Credit No. 513-TA and Loan No. 1041-TA - Kilombero Sugar Development Project: US$9.0 million Credit and US$9.0 million Loan of September 27, 1974; Date of Effectiveness - February 14, 1975; Closing Date - December 31, 1980 Physical work on the project has been completed. The 1979/80 planting campaign had a difficult start owing to excessive rains between November 1978 and May 1979, and sugar production was twenty percent lower than the targetted level. Production is likely to decline even further during 1980/81, owing to a shortage of equipment and spare parts in the older of the two estates (not covered by the project) and poor planning. There has been a general deteriora- tion in management of the Kilombero Sugar Company, which the Government is now trying to correct. The sugar survey has been completed and discussions were recently held in Dar es Salaam to explore a possible follow-up project centered on the rehabilitation of the existing estates rather than on expansion of existing productive and processing capacity. Ex-factory sugar prices were recently raised and are expected to be increased again very soon to permit some improvement in the financial situation of sugar producers. Credit No. 652-TA - Fisheries Development Project: US$9.0 million Credit of July 12, 1976; Date of Effectiveness - October 12, 1976; Closing Date - December 31, 1981 The Project continues to progress on all fronts at a very slow pace. There has been a delay in the procurement of boats for the Kigoma Commercial Center, a major shortfall in the purchase of boats for the coastal centers and a postponement of procurement of lake transport facilities (pending adequate fish catches on Lake Tanganyika). However, engines for the coastal vessels have been received and are being assembled for installation. Loans to five villages have been approved by TRDB under the Ujamaa Village Program. Agreement has been reached with the Crown Agents of the U.K. for the pro- vision of technical assistance staff. Credit No. 606-TA - National Maize Project: US$18.0 million Credit of January 29, 1976; Date of Effectiveness - May 28, 1976; Closing Date - December 31, 1982 Although the project has made some progress with regard to village participation, delivery of inputs and concentration of high potential maize regions, it is beset by a number of problems which must be overcome if the project is to achieve its primary objective. Following a midterm review of - 42 - ANNEX II Page 6 of 18 the project, the Government submitted in September 1978 draft proposal for a three year Intensification Phase in six regions where potential for increasing production exists, extending the project period from July 1979 to June 1982. The project has therefore been redesigned in order to intensify the project activities during the remaining period. The redesign of the project has been agreed upon by the Government, BADEA (the co-financier) and the Association. Credit No. 580-TA - Dairy Development Project: US$10.0 million Credit of August 15, 1975; Date of Effectiveness - November 13, 1975; Closing Date - April 30, 1981 There was a marked improvement in project implementation during 1980. The technical and financial situation of most of the project beneficiaries improved as a result of better cost control, increased Government equity financing, and a substantial increase in the milk price. Dry mid-season weather somewhat reduced projected yields for 1980, but nevertheless total annual milk yields from all parastatals under the project have increased by about 50% per annum since 1976. The rate of total yield increase naturally shows signs of flattening out as farms approach their carrying capacities and as cows near their productive potential under existing environmental and management conditions. Disbursement for Ujamaa villages has improved and 55 smallholder loans have been made. Loan No. 1307-TA - Sao Hill Forestry Project: US$7.0 million Loan of July 12, 1976; Date of Effectiveness - October 12, 1976; Closing Date - June 30, 1982 After a slow start and serious management problems during the first year, project implementation has improved considerably and is now ahead of schedule. Plantation targets have been exceeded in spite of labor shortages, a lack of equipment and a prolonged drought during the last planting season. All key staff have been appointed and there are no serious procurement or disbursement problems. Credit No. 658-TA - Tobacco Processing Project: US$8.0 million Credit of September 16, 1976; Date of Effectiveness - February 15, 1977; Closing Date - December 31, 1981 Improvements to the existing line were completed except for instal- lation of the main circuit breaker equipment. Building work at Morogoro is proceeding satisfactorily. TAT/TTPC are preparing a properly coordinated building program to cover the balance of the project, and proposals are awaited from the Treasury rationalizing the financial and functional responsi- bilities of these entities. TAT-s financial position is critical due to high bank overdrafts. The Treasury has agreed to reimburse TAT TSh. 29 million representing the local contribution it has spent on the project. In addition, TAT has also claimed TSh. 13 million from the Treasury to meet the cost incurred by them during 1977-78. TTPC-s accounts for 1976/77 have been audited and the report is expected shortly. - 43 - ANNEX II Page 7 of 18 Credit No. 703-TA and Credit No. 703-TA-5 - Tabora Rural Development Project: US$12.0 million Credits 1/ of May 11, 1977; Date of Effectiveness - November 11, 1977; Closing Date - June 30, 1983 Project implementation has slowed down considerably as a result of severe and continuing shortages of construction materials and diesel fuel. These shortages have affected all components, except land-use planning which is proceeding satisfactorily. The roads and water supply programs have been the worst affected and are also suffering from shortages of technical staff. The agricultural trials and production program, too, appears to have been disrupted by the recent drought. Project management is attempting to resolve the materials shortages by increasing the use of local substitutes. However, overall progress in institution-building is likely to remain slow. Credit No. 801-TA - Second Cashewnut Development Project; US$27.5 million Credit of June 14, 1978; Date of Effectiveness - October 2, 1978; Closing Date - December 31, 1984 Project implementation is progressing satisfactorily. Factory con- struction is ahead of schedule despite a shortage of cement. However, the appointment of key staff and the maintenance of up-to-date accounts at exist- ing cashewnut factories continue to pose difficulties. As with the First Project, the prospects for operation of the new facilities at full capacity are rather poor. Credit No. 802-TA - Tobacco Handling Project: US$14.0 million Credit of June 14, 1978; Date of Effectiveness - January 5, 1979; Closing Date - April 30, 1983 The project has made a slow start. Procurement of vehicles and equipment is also lagging. However, progress on recruitment of technical assistance has been good. The Building Engineer, Financial Systems Develop- ment Assistant and Transport Officer are all in post. Three suitable can- didates have been identified for the five posts of Regional Accountant and advertisement of the other two have been done. Credit No. 803-TA - Rural Development Project (Mwanza/ Shinyanga): US$12.0 million Credit of June 14, 1978; Date of Effectiveness - March 5, 1979; Closing Date - December 31, 1984 While some of the senior support staff have been recruited, most key posts remain to be filled, and although good progress has been made in the livestock, water resource and forestry components, the expected implementation of an experimental program of agricultural extension has not been initiated. 1/ Credit No. 703-TA-5 (US$4.8 million) is financed under the special CIDA arrangement; Credit No. 703-TA is an IDA Credit of US$7.2 million. - 44 - ANNEX II Page 8 of 18 Future supervision missions will pay particular attention to progress made by the agricultural extension staff towards improving the extension system. The effects of the Uganda war are still being felt in the project's area causing problems for the supplies situation. Credit No. 987-TA - Tanzania Rural Development Bank (TRDB) Project: US$10.0 million credit of October 24, 1980; Closing Date - December 31, 1983 This credit is not yet effective. Credit No. 1007-TA - Pyrethrum Project: US$10.0 million Credit of October 24, 1980; Closing Date - June 30, 1982 This credit is not yet effective. Credit 1037-TA - Smallholder Tea Project: US$14.0 million Credit of August 20, 1980; Closing Date - June 30, 1985 This credit is not yet effective. Credit 1070-TA - Coconut Pilot Project: US$6.5 million Credit of October 24, 1080; Closing Date - March 31, 1986 This credit is not yet effective. EDUCATION SECTOR Credit No. 371-TA - Fourth Education Project: US$10.3 million Credit of April 13, 1973; Date of Effectiveness - July 2, 1973; Closing Date - December 31, 1980 All facilities have been completed with the exception of three Community Education Centers. The project is expected to be completed and the credit fully disbursed within three to four months after the revised Closing Date of December 31, 1980. This date was, therefore, not postponed. All completed facilities are in operation with the exception of the Bagamoyo College of National Education which will be used for the in-service training of primary school science teachers. Credit No. 607-TA - Fifth Education Project: US$11.0 million Credit of January 29, 1976; Date of Effectiveness - March 23, 1976; Closing Date - June 30, 1982 Progress in physical implementation is satisfactory. The Village Management Technicians' training program was completed on schedule in July 1980 with 1,500 technicians trained. The primary education subsector review and the secondary education facilities survey are in progress. Prepara- tion of diversified curricula for general secondary education and staffing plans for the project secondary schools are also in preparation. There are reasonable prospects that the project will be completed by its Closing Date. - 45 - ANNEX II Page 9 of 18 Credit 861-TA - Sixth Education Project - US$12.0 million Credit of January 22, 1979; Date of Effectiveness - June 25, 1979; Closing Date - June 30, 1985 The Ministry of Labor has appointed a representative to the Project Unit and is working with the Ministry of Education on a plan for coordinating project implementation, is still largely in the design phase. Due to the rapid increase in construction cost, the cost of civil works to be financed under the project is estimated to be at least 40% above appraisal estimate.. Credit 1056-TA - Seventh Education Project: US$25.0 million Credit of September 26, 1980; Date of Effectiveness - December 29, 1980; Closing Date - December 30, 1986 This credit became effective on December 29, 1980. TOURISM SECTOR Credit No. 860-TA - Tourism Rehabilitation Project US$14.0 million Credit of January 22, 1979; Date of Effectiveness - August 24, 1979; Closing Date - June 30, 1983 Project implementation is progressing satisfactorily. Recruitment of a project coordinator is being finalized and the consultants for the rehabi- litation of project lodges and hotels, have been appointed. TRANSPORTATION SECTOR Credit No. 507-TA - Highway Maintenance Project: US$10.2 million Credit of August 21, 1974; Date of Effectiveness - November 20, 1974; Closing Date - December 31, 1982 After a slow start, project implementation improved and all equip- ment procured through ICB has been delivered. However, rehabilitation, regravelling and routine maintenance activities have been seriously affected by the war in Uganda and by the termination of some expatriate technical assistance. It was necessary to recast the project by amending its scope to address the problems which have been encountered in its implementation; these changes will bring the project in line with the Fifth Highway Project. The previous Closing Date of December 31, 1980 has been postponed to December 31, 1982 to allow for completion of the project and the disbursement. The technical assistance contract with the consulting firm "ORT" expired in November 1979, and the Government is now recruiting individual experts to complete the project. - 46 - ANNEX II Page 10 of 18 Credit No. 743-TA - Trucking Industry Rehabilitation and Improvement Project: US$15 million Credit of November 3, 1977; Date of Effectiveness - April 3, 1978; Closing Date - June 30, 1983 Implementation planning is progressing well. Initial progress in the recruitment of technical assistance has been good, with 24 people in post or approved out of a total of 29. The project is experiencing some problem with equity contribution for the proposed project transport companies. The Treasury proposed to provide the balance of the equity contribution for 1979/80. The National Transport Coordination (NTC) has submitted a report to the Treasury regarding the availability and distribution of vehicle spare parts in recent years. NTC has also commissioned a study of the role and objective of the National Institute of Transport. The design of the transport data collection system is progressing well. Credit No. 876-TA - Fifth Highway Project; US$20.5 million Credit of March 2, 1979; Date of Effectiveness - December 3, 1980; Closing Date - December 31, 1984 This Credit became effective on December 3, 1980 and will involve follow-up to Credit No. 507-TA in the maintenance of the national trunk road system. All three key advisers and six key local staff are now in post. In addition, ten individual specialists for various other technical assistance positions have been recruited. PORTS SECTOR Credit No. S-24-TA - Dar es Salaam Port Engineering Project: US$2.5 million Credit of February 27, 1980; Date of Effectiveness - August 13, 1980 Closing Date - June 30, 1980 This Credit became effective on August 13, 1980 and is progressing well. The consultants have submitted a number of reports and drawings to the Tanzania Harbours Authority (THA) for its review and comment. The only major problem is the need for sound planning and coordination in commissioning the new oil jetty, to ensure that the necessary pipeline link to the refinery and the existing network will be completed and ready for use at the same time as the jetty. This matter has been discussed with THA, and it has been asked to decide on who will prepare the design of this associated work, carry out the actual site work, and provide the foreign exchange financing required. URBAN SECTOR Credit No. 495-TA - National Sites and Services Project; US$8.5 million Credit of July 12, 1974; Date of Effectiveness - October 3, 1974; Closing Date - December 31, 1980 Infrastructure construction has been completed satisfactorily on all project sites. Construction of health facilities in Dar es Salaam is completed and ready of occupation. Education facilities for the Dar es Salaam sites have been completed; the rest of the community facilities in the - 47 - ANNEX II Page 11 of 18 project are nearing completion. Progress on the lending program administered by the Tanzania Housing Bank is slow although satisfactory progress is being made in the implementation of the action program to improve it. Total project cost is estimated (at current exchange rates) at US$15.9 million, compared to the appraisal estimate of US$16.7 million. As the remaining balance under the Credit of US$1,713,650 is expected to be fully disbursed within three to four months after the December 31, 1980 closing date, this date was not post- poned. Credit No. 732-TA - Second National Sites and Services Project: US$12.0 million Credit of November 3, 1977; Date of Effectiveness - April 3, 1978; Closing Date - June 30, 1982 Progress on implementation is satisfactory for the residential com- ponents although overall implementation progress is slow. Preparation of the small scale industry component is also making satisfactory progress. All project staff have now been appointed. The Consultants' report on the Land Rent and Service Charge Study was approved by the Government in January 1978 and a pilot test of the new Urban Charge System for cost recovery proposed in the study was carried out in Morogoro. However, progress in the implementa- tion of this system in other areas is slow. Disbursements are substantially behind appraisal estimates. These issues will be reviewed during the next supervision mission. WATER SUPPLY SECTOR Loan No. 1354-TA - Urban Water Supply Project: US$15.0 million Loan of January 5, 1977; Date of Effectiveness - March 2, 1977; Closing Date - June 30, 1981 Of the five main contracts for water supply works in Morogoro, con- tract for exploratory drilling at Mindu Dam site is completed, two contracts for plant (pumping and treatment) are in the stage of final inspection of goods priot to shipment to Tanzania, and two construction contracts were awarded in December 1978 and March 1979. Completion of the water works expansion is expected in February 1981, 21 months behind schedule, but a pilot operation is scheduled to commence in November 1980. Project cost is now estimated at US$27.6 million, 43% over the appraisal estimate of US$19.2 million. In December 1978, the Government approved an increase in its contri- bution to the project to cover the financing gap. Some progress has been made towards creation of a parastatal national urban water supply authority and increase in tariff to maintain their levels in real terms at the level exist- ing in July 1976. Progress in project implementation and the expected large increase in project costs will have to be closely monitored. ENERGY SECTOR Loan No. 1306-T-TA - Kidatu Hydroelectric Project Phase II; US$30 million Loan on Third Window Terms of August 12, 1976; Date of Effectiveness - March 1, 1977; Closing Date - December 31, 1981 The project is financed by IBRD, SIDA and KfW. All contracts have been awarded. Project construction is on schedule-at all sites. TANESCO has - 48 - ANNEX II Page 12 of 18 obtained approval on its tariff increase. Current estimated project cost is US$97.8 million compared to appraisal estimate of US$89 million, a cost over- run of 28%. This is mainly due to underestimation of the project costs by the engineering consultants. KfW has already increased its contribution to the project and SIDA has indicated that it would be prepared to increase its allocation to cover its proportionate share of the cost overruns. Plans to make any additional contribution by the Bank to bridge the gap is being reviewed. An EEC Special Action Credit (No. 55-7A) in the amount of US$7.0 million, to be administered by IDA, has been allocated to this project. Credit S-27-TA - Songo Songo Petroleum Exploration Project: US$30.0 million Credit of June 30, 1980; Date of Effectiveness - September 12, 1980; Closing Date - September 30, 1982 This Credit became effective on September 12, 1980 and most bidding documents have been received and approved. Drilling of the onshore well began in January 1981, slightly behind schedule because of shipment delay. Drilling of the offshore well has not started because no bids were received. Both the Tanzania Petroleum Development Corporation (TPDC) and the drilling manage- ment consultants are actively pursuing all avenues for the acquisition of a contract rig capable of meeting the requirements. INDUSTRIAL SECTOR Credit No. 460-TA - Tanzania Investment Bank Project: US$6.0 million Credit of February 13, 1974; Date of Effective- ness - April 18, 1974; Closing Date - June 30, 1980 This Credit has been fully committed. Because of a reallocation of funds from a subproject previously approved to a new one still under implementation, the credit is still not fully disbursed and the closing date has been postponed to June 30, 1980. Loan No. 1172-TA - Tanzania Investment Bank: US$15.0 million Loan of November 12, 1975; Date of Effectiveness - February 20, 1976; Closing Date - December 31, 1981 This loan is fully committed. However, because of slow implemen- tation of some of the sub-projects financed by TIB under this project, the closing date has been postponed to December 31, 1981 in order to finalize disbursement. The undisbursed balance remaining under the loan to date is US$1,463,031. Loan No. 1498-TA - Tanzania Investment Bank: US$15.0 million Loan of December 28, 1977; Date of Effectiveness - April 3, 1978; Closing Date - June 30, 1983 This loan is now fully committed and disbursements are proceeding satisfactorily. - 49 - ANNEX II Page 13 of 18 Loan No. 1750-TA 1/ - Tanzania Investment Bank: US$25.0 million Loan of August 20, 1979; Date of Effectiveness - February 5, 1980; Closing Date - June 30, 1984 This loan became effective on February 5, 1980. Loan No. 1128-TA - Mwanza Textile Project: US$15.0 million Loan of June 19, 1975; Date of Effectiveness - October 6, 1975; Closing Date - June 30, 1981 The project provides for expansion of an existing textile mill and is designed to increase annual fabric production capacity by 20 million linear meters. Project implementation performance has been acceptable and all tech- nical installations are now operating satisfactorily. The National Textile Corporation (TEXCO), the holding company for state-owned textile mills, has agreed to institute an immediate action program to improve the operating performance of existing mills. The project was technically completed in October 1978 with a savings of about US$1.7 million. In order to utilize this amount for rehabilitation of the existing facilities, which are essential parts of the project, the Closing Date was postponed to June 30, 1981. Credit No. 601-TA - Technical Assistance Project: US$6.0 million Credit of January 9, 1976; Date of Effectiveness - September 14, 1976; Closing Date - June 30, 1981 Total commitments as of March 31, 1980 were US$4.74 million (net of cancellations) for consultancy services, training and project unit services. The procedures for processing proposals have been streamlined and are working well. The credit will be fully committed by December 1980. The Closing Date was postponed to June 30, 1981 in order to complete disbursement. Loan No. 1385-T-TA/Loan No. 1386-TA - Morogoro Industrial Complex: US$11.5 million Loan on Third Window Terms and US$11.5 million Bank loan, both of April 6, 1977; Date of Effectiveness - July 6, 1977; Closing Date - December 31, 1982 Project implementation is proceeding satisfactorily in spite of some initial delays in the appointment of consultants and start-up of pro- curement. Although there will be some delays in the start-up of individual components of the Industrial Complex, completion of the project is still scheduled for July 1982. Revised capital cost estimates are only slightly higher than those contained in the Appraisal Report. 1/ In addition, a US$15.0 million EEC Special Action Credit in support of this project is being administered by IDA. - 50 - ANNEX II Page 14 of 18 Credit No. 833-TA/Loan No. 1607-TA - Morogoro Textile Project: US$20.0 million Credit and US$25.0 million Loan of June 29, 1978; Date of Effectiveness - May 7, 1979; Closing Date - June 30, 1985 This loan and this credit became effective on May 7, 1979. Prep- aration of tender documents are progressing satisfactorily and no delay in project completion is anticipated. Credit No. 875-TA/Loan No. 1650-TA - Mufindi Pulp and Paper Project: US$30.0 million Credit and US$30.0 million Loan of April 6, 1979; Date of Effectiveness - April 15, 1980 Closing Date - December 31, 1983 Site preparation and procurement have been proceeding satisfactorily, with the contract for the main civil/structural work signed and most of the major equipment packages awarded. Good progress has also been made in arranging construction of the necessary railway spur and escarpment roads. As a result of currency fluctuations, delays in infrastructure development outside the project (such as a power line and the new township), and unanticipated Government taxes, the project cost has increased by about 15%. This overrun is to be met by contingent financing from the Nordic Investment Bank and from savings achieved by the Government on equipment packages. Preparation has begun for implementing a training program and obtaining technical assistance for operating the mill. Loan No. 1745-TA - Tanganyika Development Finance Company, Ltd. (TDFL) Project: US$11.0 million Loan of July 27, 1979; Date of Effectiveness - November 1, 1979; Closing Date - December 31, 1983 This loan became effective on November 1, 1979. About 70% of the loan amount has been committed. Credit No. 1060-TA - Second Technical Assistance Project: US$11 million credit of October 24, 1980; Date of Effectiveness - February 10, 1981: Closing Date - June 30, 1985 This credit became effective on February 10, 1981. EAST AFRICAN COMMUNITY There are currently five projects in execution in the East African Community. 1/ 1/ Since October 1, 1977, the East African Community loans (excluding the East African Development Bank) have been disbursed on the basis of separate national guarantees. The agreed allocation of undisbursed balances for each loan, as proposed in a report to the Executive Direc- tors dated December 29, 1977 (R77-312) and approved on January 12, 1978, is given in this Annex. The closing date for Loans 638-EA, 674-EA and 865-EA have passed. However, since the amount allocated to and guaran- teed by each Partner State is clearly identified under the terms of the Agreement signed on January 25, 1978 as proposed in the above report (R77-312), we are continuing disbursements. - 51 - ANNEX II Page 15 of 18 Loan No. 638-EA - Second Harbours Project: US$35.0 million Loan of August 25, 1969; Date of Effectiveness - December 16, 1969; Closing Date - December 31, 1977 Loan No. 865-EA - Third Harbours Project: US$26.5 million Loan of December 18, 1972; Date of Effectiveness - April 16, 1973; Closing Date - June 30, 1978 The Second Harbours project included financing for five general cargo berths and a single bay tanker terminal for the Port of Dar es Salaam; two general cargo berths and a bulk cement wharf for Mombasa; tugs, lighters, cargo handling equipment, offices, housing and general improvements for both ports. The Third Harbours project included three new deep water berths, modernization of two berths and a lighterage quay, a training school build- ing and central repair area for Dar es Salaam; modernization of several berths and a lighterage quay, construction of a tug berth, cold storage facilities and a training building in Mombasa and improvement of a lighterage quay in Tanga. Construction of all major project elements has been completed and a joint project completion report was issued in January 1979. Because of shortage of funds under both loans, the following minor project elements have not been submitted for Bank financing: the second phase of modernization of the lighterage quay and a training school for Dar es Salaam; modernization of the lighterage quay and a training school for Mombasa. Locally financed contracts have been awarded for these project elements with the exception of the modernization of the lighterage quay in Mombasa. General cargo throughput has increased above appraisal forecasts for Dar es Salaam, and cargo handling productivity has improved with increasing throughput; however, port labor productivity has stagnated in Mombasa where general cargo throughput has declined considerably. Legislation to establish a Tanzania Harbours Author- ity and a Kenya Ports Authority has been enacted. Management of Ports in both countries is competent. Some US$34.50 million of Loan 638-EA and US$26.15 million of Loan 865-EA has already been disbursed. The agreed allocation of undisbursed funds at October 1, 1977 between the countries concerned is given below: For Loan No. 638-EA (US$ million) Kenya 0.7 Tanzania 0.6 Total 1.3 For Loan No. 865-EA Kenya 1.7 Tanzania 0.3 Total 2.0 - 52 - ANNEX II Page 16 of 18 Loan No. 674-EA - Third Railways Project: US$42.4 million Loan of May 25, 1970; Date of Effectiveness - October 30, 1970; Closing Date - June 30, 1978 The original purpose of the project was to complete the Railways 1969-1972 Development Program, including track improvement, procurement of rolling stock and other equipment, and to finance studies of the economic feasibility of certain railway lines and services. The physical execution of the original project has been seriously delayed due to administrative and political problems within the Community. In November 1974, the Executive Directors approved a reallocation of the uncommitted balance of the Loan to be used for consultant services and emergency investments in track material. All three countries have now enacted legislation to establish their own Rail- ways Corporations. The agreed allocation of undisbursed funds at October 1, 1977 among the various countries concerned is given below: $ Million Kenya 2.0 Tanzania 3.8 Uganda 1.9 Total 7.7 On January 12, 1978, the Executive Director approved the utilization of US$1.2 million equivalent to finance the East African Mediation effort. This amount, in addition to US$0.5 million provided by UNDP for this purpose, is expected to cover the total estimated cost of the mediation service. Loan No. 914-EA - Third Telecommunications Project: US$32.5 million Loan of June 22, 1973; Date of Effectiveness - September 19, 1973; Closing Date - December 31, 1979 The project included provision for procurement of local telephone exchange equipment, cables and subscriber apparatus, microwave and UHF/VHF systems and multiplex equipment, interurban cables and wires, automatic switching and signalling equipment, telegraph, telex and data equipment, and training. All project items except the microwave radio system have been com- pleted; this system is likely to be completed by mid-1980. The slippage of the project-s completion was due to initial delays in procurement caused by staffing and other problems associated with the relocation of headquarters. About US$31.89 million of the loan had been disbursed to date. The agreed allocation of undisbursed funds as at October 1, 1977 among the countries concerned is as follows: $ Million Kenya 2.4 Tanzania 3.5 Uganda 0.1 Total 6.0 - 53 - ANNEX II Page 17 of 18 Loan No. 1204-EA - East African Development Bank: US$15.0 million Loan of March 1, 1976; Date of Effectiveness - June 7, 1976; Closing Date - March 31, 1980 The environment within the Community has continued to have a nega- tive impact on EADB operations. Level of operations both for appraisal and supervision has been depressed, but there has been some improvement in the state of the portfolio with the arrears affected portfolio falling from 50% as of June 30, 1977 to 43% as of June 30, 1979. Some US$10.13 million of the loan has been disbursed to date, and the uncommitted balance amounts to US$3.0 million. - 54 - ANNEX II Page 18 of 18 D. STATEMENT OF IFC INVESTMENT IN TANZANIA AS OF February 28, 1981 Fiscal Year Obligor Type of Business Amount in US$ Million Loan Equity Total 1960 and 1964 Kilombero Sugar Company Food Processing 3.96 0.70 4.66 1978 Highland Soap and Soap Manufacture 1.38 0.36 1.74 Allied Products Limited 1979 Metal Products Limited Household Utensils 1.33 0.18 1.51 Total gross commitments 6.67 1.24 7.91 Less cancellations, terminations, repayments and sales 3.97 0.69 4.66 Total commitments now held by IFC 2.70 0.55 3.25 Total Undisbursed 0.58 _ 0.58 - 55 - ANNEX III TANZANIA EXPORT REHABILITATION PROGRAM SUPPLEMENTARY PROJECT DATA SHEET Section I. Timetable of Key Events (a) First Presentation to IDA: March 1980 (b) First IDA Mission to identify and prepare project March 1980 (c) Departure of Appraisal Mission October 1980 (d) Completion of Negotiations March 1981 (e) Planned Date of Effectiveness April 1981 Section II. Special Association Implementation Actions Provision is being made in the proposed credit for US$5 million in retroactive financing to help the Government expedite orders to agri- cultural packing materials, which are needed to allow clearance of stockpiled cotton and cashewnuts from up-country storage facilities. Section III. Special Conditions (a) The Government will complete a study of its agricultural producer price system by August 31, 1981, and on the basis of this study, as well as its annual reviews of such prices, adjust them to provide appropriate incentives for producers (paragraph 49). (b) The Government will maintain a Special Agricultural Account at the Bank of Tanzania to meet the import requirements of the agricultural sector (paragraph 52). (c) The Government will implement an export credit guarantee program by December 31, 1981 (paragraph 56). (d) The Government will recruit an External Trade Policy Manager and an Export Promotion and Publicity Manager by December 31, 1981 (paragraph 56). (e) The Government will formulate by September 30, 1980, and thereafter implement, a satisfactory action program to strengthen its agricultural support services (paragraph 61). EXPORT PROJECTIONS (Volume in '000 tons; Unrt value in US$/ton, Value in US$ million) 1980 1981 1982 Volume Unit Value Value Volume Unit Value Value Volume Unit Value Value Coffee 41 3600 146 52 2500 130 55 2650 146 Tea 16 1500 24 17 1400 24 18 1500 27 Cotton 38 1700 65 36 2000 72 40 2100 84 Tobacco 8 1800 15 8 1800 15 8 1800 15 Cashew Nuts 15 700 11 6 700 4 4 700 3 Cashew Kernels 5 3000 15 8 3000 24 10 3000 30 Sisal Fiber 65 700 45 65 700 45 65 700 46 Cloves 6 7500 45 3 8000 24 5 8000 40 Cereals and Animal Feed 5 - 10 Vegetable Seeds 15 15 15 Sugar 6 8 8 1 Other Primary Products 20 22 25 un Total Primary Products 412 383 449 Sisal Cordage and Twine 25 1300 33 30 1300 39 32 1380 44 Petroleum Products 28 20 22 Diamonds 45 50 55 Textiles and Garments 20 22 30 Leather Products and Shoes 4 6 10 Other Manufactured Goods 20 25 32 Total Manufactured Goods 150 162 193 Re-Exports 10 10 10 TOTAL EXPORTS 572 555 652 Source: World Bank estimates N Graph 1: PRODUCTION AND EXPORTS OF MAJOR CROPS (in '000 tons) COFFEE TEA COTTCN# ilO --3 (- r- t60 290 i 93 t9' ' 197t7 t9 9 1066 193 1975 19717 19 '9 t°96 1975- 1951977 1i9'9 SISALA CASHEWSbi TOBACCOC ;~~~~~~~~~~~~~~~~0 30 L t: C.0 IN,t-t- 1 °° 0/T w.-1 2,.rzf - C 4/ Extports Include fiber i JE.por is Include nu1 ,\.- adcordage and tgin and Inut ttriuvabn) ' ' r; PIIoduction ha been l l ~~~~~~~ ~ ~ ~~~~kerr/eei | , lagged one year Sti40t i ^ ; I l 50 si i_ 1 1 1 # ' O it j I t96B V 1973 t1975 1977 1979 1966 S 1973 1975 1977 1979 1966 1973 1975 tY71 1979 SOVAfCES Slatistial Appnix Tables 3.4 and 7. t Productior, ty Crop Year .I- - *', El- PrJrIS l5V Calendar Ysia(rWorld Bank - 72028 . C MARKETED PRODUCTION OF FOOD CROPS, 1974/75 - 79/80 ( OOO's of tons) Crops Previous 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 Max. Maize 186.9 23,9 91.1 127.4 214.2 222.3 161.5 Paddy 93.6 22.7 18.3 22.4 52.3 52.0 46.5 Wheat 56.8 14.4 24.5 23.0 35.0 27.5 26.5 Groundnuts 3.5 .5 .5 .4 1.4 2.6 Sesame 8.2 5.8 5.9 5.9 6.6 6.6 Sunflower 9.5 7.0 6.9 5.9 7.1 12.0 .. Sorghum n.a. 1.9 2.9 10.1 33.6 58.6 20.7 Millet n.a. 2.5 2.2 10.8 39.1 39.7 16.9 Cassava n,a. 17.-3 16.5 19.9 36.9 63.8 44.2 Source: Marketing Development Bureau, Ministry of Agriculture. Not available. - 59 - Annex VII AGRICULTURAL PRICE INDICES (1969/70=100) In Current T.Sh. In 1969/70 T.Sh.A/ 1975/76 1978/79 1981/82 1975/76 1978/79 Official Producer Price Indices Maize 286 304 429 142 107 Paddy 192 231 385 96 81 Wheat 175 219 333 87 77 Sorghum/Bullrush Millet b/ 250 333 333 124 117 Cotton (AR) 182 218 336 91 77 Ca.hew Nuts (SG) 111 179 316 55 63 Tobacco (flue) 136 144 234 68 51 Tea (green leaf) b/ 130 220 220 65 77 Pyrethrum (grade 3) 140 167 367 70 59 Average Export Unit Values Cotton 271 311 157 134 Cashew Nuts 132 259 66 91 Tobacco 210 267 104 94 Tea 185 180 92 63 Pyrethrum Flowers 112 56 a/ Calculated by deflating official producer prices by National Consumer Price Index. b/ Index is based on 1972/73. Sources: Bank of Tanzania, Economic Surveys; Ministry of Agriculture, Marketing Development Bureau; Customs Department, Annual Trade Reports - 60 - ANNEX VIII TANZANIA EXPORT REHABILITATION PROGRAM Special Agricultural Account List of Eligible Enterprises Coffee Food Crops Coffee Authority of Tanzania National Agricultural and Food Tanganyika Coffee Curing Co. Corporation (NAFCO) Bukop Ltd. National Milling Corporation Kilombero Sugar Co. Cotton Kagera Sugar Co. Mtibwa Sugar Estates Tanzania Cotton Authority Tanganyika Planting Co. (TPC) Sisal Fiber Vehicle and Tractor Dealers Tanzania Sisal Authority State Motor Corporation Amboni Limited Agricultural and Industrial Karimjee Jivanjee Estates Supplies Corporation (AISCO) Tea Tanzania Tea Authority Brooke Bond Liebig Tanzania Others George Williamson Tanzania Mufindi Tea Co. General Tyre East Africa Tanzania Tea Blenders Metal Box Tanzania Tanzania Bag Corporation Cashew Ubungo Farm Implements Tanzania Fertilizer Company Cashewnut Authority of Tanzania General Agricultural Products Export Tanzania Cashew Co. Corporation (GAPEX) Mtwara Cashew Co. A Tanita Co. Tobacco Tobacco Authority of Tanzania Tanzania Tobacco Processing Co. Pyrethrum Tanganyika Pyrethrum Board Tanzania Extract Co.