Downasutof The World Bank

FOR OFmFCUILUSE ONLY

Report No. P-4251-GM Public Disclosure Authorized

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE Public Disclosure Authorized INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT OF SDR 5.3 MILLION

TO THE

REPUBLIC OF THE GAMBIA Public Disclosure Authorized FOR A

SECOND HIGHWAY MAINTENANCE PROJECT

March 5, 1986 Public Disclosure Authorized

This document hasa restricteddistribution and may be usedby recipientsonly in the performance of their officialduties. Its contents may not otherwise be disclosedwithout World Bank authorization. CURRENCYEQUIVALENTS

Currency Unit = Dalasis (D) US$ 1.0 = D 5.2 1/ D 1.0 = US$ 0.19 US$ 1.0 = SDR 1.11

FISCAL YEAR

Julv 1 - June 30

SYSTEM OF WEIGHTS AND MEASURES (METRIC)

1 meter (m) = 3.28 feet (ft) 1 square meter (m 2 ) 10.76 square feet (sq ft) 1 cubic meter (m3) 35.3 cubic feet (cu ft) 1 hectare (ha) 2.47 acres I kilometer (km) 00.62 mile fmi) I square kilometer (kM2) 0.39 square mile (sq mi) 1 metric ton (t) = 2,205 pounds (lb) I liter (1) 0.26 UTSgallons (gal)

ABBREVIATIONS AND ACRON-YMS

AfDF African Development Fund EEC European Economic Community GPA Gambia Port Authority GPMR Gambia Produce Marketing Board GPTC Gambia Public Transport Company GRTA Gambia River Transport Authority -.RTC Gambia River Transport Company GTTI The Gambia Technical Training Institute .UC Gambia Utility Corporation MDI Management Development Institute MED Mechanical FngineeringDivision MEPID Ministry of Economic Planning and Industrial Development MF&T Ministry of Finance and Trade rMWC Ministry of Works and Communications ODA(UK) Overseas Development Administration(UK) FWD Public Works Department SIDA Swedish InternationalDevelopment Association UNDP United Nations DevelopmentProgramme LTISO United Nations Sudano-SahelianOffice USAID United States Agency for InternAtionalDevelopment

1/ As of February 20, 1986. A flexible exchange rate system went into effect on January 20, 1986. - t- FIkOROMCAUL USE ONLY

THE GAMBIA

SECOND HIGHWAYMAINTENANCE PROJECT

CREDIT AND PROJECT SUMMARY

Borrower: The Republic of The Gambia

Credit Amount: SDR 5.3 million (US$ 5.8 million equivalent)

Terms: Standard

Co-Lenders: IDA (US$5.8million equivalent); AfDF (US$4.5million equivalent);EEC (US$2.0 million equivalent);UNSO (US$0.6 million equivalent) and UNDP (US$0.7 million equivalent).

Project Description: The project would support the efforts of the Ministry of Works and Communications (MWC) in carrying out its four-and-one-half-year (1986 to mid-1990) road maintenance program which is comprised of the following components: (a) rehabilitation of part of the paved network; (b) continuation and expansion of routine and periodic road maintenance programs; (c) strengthening of the organisation and management of MWC to improve the efficiency of road and equipment maintenance; (d) introduction of sound transport planning procedures; and (e) assistance to domestic contractors to enable their more effective participation in road maintenance activities.

Project Benefits and Risks: The main benefits of the proposed project would be improvement in the physical condition of The Gambia's road network and in the functional efficiency of MWC. These two aspects are essential in the protection of highway investments, the reduction of vehicle operating costs, and the prevention of rising road user costs as a result of worsening road conditions. Other benefits include the positive effects on agricultural production because of reduced transport costs. Based on the satis- factory implementation of the First Highway Maintenance Project (1979) and the commitment of the Government to reorganize MWC and improve its management procedures, there would be no major risks concerning project imple- mentation. However, further aggravation of The Gambia's economic situation could limit the timely availability of the Government's contribution of funds for maintenance.

This document has a rsdcted distribution and may be used by recipientsonly in the performance I of their officialduties. Its contents may not otherwise be disclosedwithout World Bank authoriztion. - it - THE GAMBIA

SECONDHIGHWAY MAINTENANCE PROJECT

Summary Project Cost Estimte

- USS Thousands - Estimated Cost Local Foreign Total

1. Road Maintenance Program (a) Regravelling,Resealing, Paving 367 1,570 1,937 (b) Routine Road Maintenance 946 1,513 2,459 (c) Feeder Road Maintenance . 172 401 573 (d) Equipment and Vehicles 0 1,748 1,748 (e) Road Maintenance and Workshop Mgmt. 160 1,430 1,590

2. Road and Bridge Rehabilitation (a) Bund Road 188 784 972 (b) South Bank Road 376 1,558 1,934 (c) Brumen Bridge 172 748 920

3. InstitutionalStrengthening Ca) Planning, Studies, and Auditing 40 360 400 Cb) Management and Training for MWC 39 351 390 (c) Study and Training for Domestic Contractors 4 36 40 (d) Equipment, Materials, and Courses for MWC 70 110 180

4. Repayment of PPF Advance 55 495 550 Base Cost (February 1986) 2,589 11,104 13,693 Physical Contingencies 81 352 433 Price Contingencies 487 1,789 2,276

Total Project Cost a/ 3,157 13,245 16,402

Financing Plan (Rounded) Local Foreign Total

IDA 580 5,220 5,800 UNSO 115 485 600 AfDF 480 4,020 4,500 EEC 35 1,965 2,000 UNDP 70 630 700 Government 1,877 925 2,802 Total 3,157 13,245 16,402

a/ Project items are exempt from all taxes and duties except for a small amount from local contracts for road maintenance activities. - iii-

Estimated IDA Disbursements:

IDA Fiscal Year (US$ Millions) FY87 FY88 FY89 FY90 FY91 FY92

Annual 1.6 1.4 1.2 0.7 0.6 0.3 Cumulative 1.6 3.0 4.2 4.9 5.5 5.8

Economic Rate of Return The estimated economic rate of return (ERR) for the project, based on quantifiablebenefits covering about 79% of overall cost, is about 38Z.

Staff Appraisal Report: No. 5798-GM, Dated February 28, 1986

Map: IBRD 18944 INTERNATIONALDEVELOPMENT ASSOCIATION

REPORT AND RECOMMENDATIONOF THE PRESIDENT TO THE EXECUTIVE DIRECTORS.ONA PROPOSEDDEVELOPMENT CREDIT TO THE REPUBLIC OF THE AMBIA FOR THE SECONDHIGHWAY MAINTENANCE PROJECT

1. I submit the following report and recommendation on a proposed Development Credit to the Republic of The Gambia for SDR 5.3 million (US$5.8 million equivalent) to help finance the Second Highway Maintenance Project. The Credit would be on standard IDA terms. Additional external financing for the project will be provided by a loan from The African Development Fund (AfDF) in the amount of US$4.5 million equivalent on IDA's same terms. The European Economic Community (EEC) is expected to provide a grant of US$2.0 million equivalent. In addition, the United Nations Sudano-SahelianOffice (UNSO) would provide a grant of US$0.6 million, and UNDP a grant of US$0.7 million.

PART I - THE ECONOMY

2. The latest economic report on The Gambia dated September 6, 1985 (The Gambia - Development Issues and Prospects Report No. 5693-GOM has been circulated to the Executive Directors. Its conclusions are reflected in the following assessment of the state of the economy and its prospects. Country data appear in Annex I.

The Land and its People

3. The Republic of The Gambia comprises a narrow east-west strip of land bordering the Gambia River and surrounded on three sides by the Republic of Senegal. The terrain is extremely flat, maximum elevation being only 35 meters above sea level. Three regions can be distinguished from the mouth of the River inland: the mangrove belt, which extends upstream for over 240 km; the "bantofaros",areas that become swamps in the rainy season and parts of which are under rice cultivation; and, finally, the plateau of the eastern portion of the country which is intensively cultivated in groundnuts, millet, and other crops.

4. The population (about 700,000 in 1983) is predominantly rural, some 75Z of the work force being engaged in agriculture and animal husband- ry. Average population density is 90 persons per km2 of arable land and reaches higher levels in some areas. Population pressure and persistently disappointing harvests have in recent years prompted emigration to urban districts and aggravated urban employment, particularly in and around the capital and commercial center of Banjul.

Structure of the Economy

5. The Gambian economy is traditionally centered on the production of groundnuts. its major foreign exchange earner. Apart from groundnuts, -2-

cereals (millet, sorghum and rice) and livestock represent the principal products of the agricultural sector. Manufacturing activity is limited, with the principal activities being groundnut crushing and a few modest manufacturing enterprises supplying the domestic market, all of these located in Banjul. Fishing resources exist but appear to be substantially underexploited at present. The country is heavily dependent on trade, importing about half of its food supplies, all of its fuel and capital goods and most other manufactured goods. Exports are highly concentrated , with a single commodity, groundnut products, accounting for 85-90Z of the value of domestic exports. Other domestic exports include small amounts of fish, hides and skins, cotton, and palm kernels.

6. Outside of agriculture, the most important features of the economy are its tourism industry, and a well-developed commercial sector, which for most of The Gambia's history has been involved in reexport trade to other countries in the region. This trade expanded rapidly in the 1970s, as The Gambia maintained its traditional open-trade policy, while neighboring countries increasingly resorted to high tariffs and quotas to protect domestic industries. The Gambia's small size, substantial openness and heavy dependence upon a single export crop make it an inherently vulnerable economy, highly sensitive to shortfalls in agriculturalprouuc- tion caused by drought and to changes in the terms of trade.

Evolution of the Economy

7. In the 1960s and 1970s, The Gambia grew at close to 5Z per year, one of the best performances in Africa. It had a strong currency and a sound budgetary situation. However, over the past decade, The Gambia has seen its economy deteriorate progressively. Real GDP growth rate -- 1.4% on average per annum -- has been one of the lowest of any country in Africa not affected by war and civil strife. Given the estimated population growth rate of 3.4% per year, this implies a loss of at least 20% in per capita income in the last 10 years. The average per capita income in 1984 was only US$260. Underlying the poor performance of GDP, there has been a significant downward trend in groundnut production despite encouraging increases in food crop production. However, the dramatic shift in the economy is also the result of longer-term changes in the structure of the economy induced by past investments, the rapid growth of the public sector and high urban migration.

8. The public sector grew rapidly as a result of The Gambia's investment effort which started in the mid-1970s, largely because, given the country's low level of development, investment was initially channeled into basic economic and social infrastructure(roads, schools, agricultural extension stations, health clinics, etc.) and civil servants were rapidly recruited to furnish new services. Between 1976 and 1980, established posts in the government doubled and by 1981/82, the share of GDP absorbed by government expenditures increased to 41%. By 1983, the public sector (governmentadministration and public enterprises)accounted for two-thirds of total modern wage employment. -3-

9. Until the late 1970s, The Gambia was able to maintain broad balance of payments equilibrium in large part thanks to the central govern- ment and to the Gambia Produce Marketing Board (GPMB), a parastatal organ- ization. The marketing board was able to maintain stable prices to farmers over the period, thereby encouraging production for export. Although producer prices were kept fairly stable, farm incomes were not, and income declines in years of bad harvests tended to depress the demand for imports along with the fall in exports. At the same time, the Government main- tained a surplus on its current budget, which, along with foreign grants and highly concessional aid, was used to finance a modest level of public investment.

10. Beginning in the late 1970s the public sector shifted from a position of overall surplus to significant and growing deficits substan- tially exacerbating the inherent instability of the Gambian economy. Rapid growth of public sector employment and development expenditures contributed to large increases in imports due to the high import consumption of the fast-growing urban population, especially public sector wage earners, and the high import component of general government expenditures and develop- ient projects. These factors created a "structural deficit" in The Gambia's trade: domestic exports (as distinct from reexports), even in a good year, were increasinglyunable to generate foreign exchange sufficient to cover the cost of domestic imports (principally fuel, foodstuffs, and capital goods). At the same time, the softening world prices for groundnuts and the hike in the world oil prices combined to bring about a serious deterioration in The Gambia's terms of trade. In 1982, these stood at one-third of the level attained in the mid-1970s.

11. The above factors brought about a significant deterioration of the overall current account from 1979 to 1983. Severe adjustments that might otherwise have been necessary were to some extent averted by a massive increase in external assistance to The Gambia in 1980-81 in the aftermath of a severe drought and an attempted coup d'etat in July 1981. Total (net) resource flows rose to roughly US$85 million a year, double the average level of previous years; the inflow of foreign resources was equal to 35-40X of The Gambia's GDP. As a result of this assistance (about half of which was grant aid) the country was able not only to maintain annual investment at close to 20Z of GDP but also to avoid a decline in consump- tion.

12. When capital inflows returned to more normal levels beginning in 1982, consumption -- particularly government consumption - proved diffi- cult to restrain. Arrears on external payments accumulated rapidly, reaching nearly US$60 million (equal to 32% of GDP) by June 1984. As a result of the rapid deterioration of the balance of payments, the official exchange rate for the dalasi, which had been pegged at D 4.00 per pound sterling since 1974, could not be maintained. In February 1984, the Government implemented a 25X devaluation, to D 5.00 per pound sterling. -4-

Government Response

13. Since 1980, the Government has made several attempts to adjust the economy, including negotiations of two Stand-by Arrangements with the IMF. In 1981, the Government received various forms of immediate financial support firomthe Fund, including SDR 9 million in "compensatory financing" and two Trust Fund loan disbursements. These were followed by a one-year Stand-by Arrangement of SDR 16.9 million adopted in February 1982. The Stand-by program aimed at lowering the public sector deficit through reductions in consumer subsidies and selective tax increases, and stinulat- ing production through higher purchase prices for groundnuts and rice. The program produced mixed results. The fiscal deficit was reduced from 21% to 142 of GDP, although this was entirely accomplished through increased revenues and a drastic compression of expenditures on material and current supplies; government wages and salaries actually increased by nearly 30% under the program. There also appears to have been a significant supply response to the producer price increases: groundnut area planted rose to the highest level ever and production reached a record 150,000 tons. Unfortunately, however, these results coincided with a sharp decline in world groundnut prices.

14. Continued balance of payments deterioration in 1983/84, a decline in real GDP associated with poor rainfall and crop production, and an increase in the fiscal deficit led the authorities to negotiate a further Stand-by Arrangement in early 1984. Policy adjustmentt.under the new SDR 12.8 million Stand-by program (covering the period April 1984-July 1985) included the 252 devaluation mentioned earlier, producer price increases plus stiff price increases to reduce subsidies on rice, fertilizers and public transport. On the expenditure side, the Government adopted a hiring freeze, except for pressing emergencies, and limits on supplementary appropriations. Monetary adjustments included increases in interest rates on deposits and guidelines to limit commercial bank credit to the private sector. Although the Government implemented the agreed measures, it was not able to meet the June 1984 targets for reductions in external arrears and net credit to the Government, the GPMB, and the private sector. As a result, after one disbursement of SDR 2.63 million, the program was effec- tively cancelled on April 22, 1985.

15. The macroeconomic adjustments undertaken in early 1984 constitut- ed a notable effort by the Government to redress The Gambia's external and fiscal deficits. However, the exceptionally low (45,000 tons marketed) 1984/85 groundnut crop caused real GDP to decline by 92 and seriously exacerbated the acute shortage of foreign exchange. Significantly, al- though rainfall was uneven in some parts of the country, the low groundnut crop appears to have been less the result of drought than of inadequate price incentives and institutional weaknesses, which continue to have a crippling effect on the economv. According to the Ministry of Agriculture, several thousand hectares were prepared for groundnut cultivationbut could not be planted due to the late distributionof seeds. Pest infestationwas also unusually severe, in part associated with the lack of fuel and pesti- cides for the Ministry's crop protection services. As a result, many of the -~ ~ ~ ~ ~ ~ 5

potential benefits of the 1984 devaluation as well as of the high world groundnut prices were not realized.

16. In recent months, The Gambia's situationhas become increasingly serious. Record low groundnut export revenues (US$16 million) and increas- ing external debt service due (US$18 million, in-luding IMF charges and repurchases) in 1984/85 have produced a further deterioration of the current account deficit: from 17Z of GDP in 1983/84 to 25Z in 1984/85. As net capital inflows were not sufficient to finance this deficit, additional external arrears which at end 198,4had reached US$8.6 million, increased by another US$7.5 million at end 1985. The continued accumulation of arrears is already having a negative impact on disbursements. However, it is expected that an IMP agreement would be followed by a debt rescheduling agreement which would bring debt service more in line with The Gambia's ability to pay.

The Recovery Program

17. Faced with increasing economic and financial difficulties, the Government in recent months has become convinced of the need for a comprehensive set of macroeconomic policy adjustments. in June 1985, it moved quickly to develop, in consultation with the World Bank, an Economic Recovery Program (ERP), which addresses both the need to improve the productive capacity of the economy through alleviating existing supply constraints and the need to pursue prudent demand management policies on a sustained basis in order to overcome the present internal and external imbalances. In July 1985, an IMF mission visited The Gambia and agreed with the Government on an adjustment program, more comprehensive than the previous abortive program. An IMF Stand-by, however, was not put in place due to The Gambia's mounting arrears to the Fund which have still to be settled. However, the reforms agreed with the IMF were incorporated into the ERP which the Cabinet approved in August 1985. The major elements of the recovery programs are: price incentives and institutional reforms to achieve a rapid expansion of agriculture production, both groundnuts and food crops; removal of disincentivesand other measures to stimulate faster growth in other productive sectors (industry, fisheries, tourism); adoption of a flexible exchange rate system; civil service retrenchment; a significant reduction in government consumption and a strong shift in the composition of current expenditures to achieve a more productive balance between expenditures on wages and salaries and expenditures on current supplies; and adoption of a stringent core program of public investment focused on (i) quick-gestation projects producing traded goods, and (ii) rehabilitationprojects which include donor support for recurrent costs and lead to higher utilization of existing capacity.

18. The Governme=t has moved quickly under the ERP to introduce the envisaged reforms and a number of measures have already been taken, including the introduction of the exchange rate reform, increases in the *price of both agricultural products and inputs and elimination of consumer food subsidies, particularly on imported rice. The Government also laid off over 1,000 temporary staff in the ministries, and has well in hand - 6 -

steps to lay off a further similar number. The new flexible exchange rate system went into effect on January 20, 1986 with the assistance of a technical adviser from the IMF. In support of this system, liberalised licensing and exchange control procedures were also announced. The success of the reform program could, however, be constrained by the crippling scarcity of foreign exchange over the near-term. Reflecting this scarcity, by February 20, 1986, the Dalasi had depreciated by 50% vis-a-vis the pound sterling. Without, in particular, a rapid so'ution to the arrears problems (specifically the arrears to the IMF) it is difficult to begin dealing with the longer-term problem, given the sequential link between an IMF program, debt rescheduling, gap filling and expanded commitments. With the assistance of the Bank, the IMF and bilateral donors, the Government is currently making a major effort to mobilize donors' support for its economic recovery program while it is trying at the same time to make separate arrangements for bridging finance in order to clear its arrears to the IMF and pursue negotiations with this institution.

19. Despite the courageous steps taken by the Government to liberalize prices, adjust the exchange rate and reduce public employment, t very recent information indicates that the reforms have been slowed down by poor credit and fiscal management. In the period July to December 1985 money supply was allowed to expand much faster than envisaged in the adjustment program prepared in consultation with the IMF. Consequently, a new program with revised targets will need to be agreed.

PART II - BANK GROUP OPERATIONS IN THE GAMBIA

20. To date, the Bank Group has extended eleven credits to The Gambia, totalling US$56.3 million. Of these, three were in the transport sector, three in the agricultural sector and one each in tourism, educa- tion, rural and urban enterprises, energy and urban development. Project implementationhas in general been satisfactoryas far as the execution of the physical targets is concerned. The disbursement performance has also been reasonablv good and compares well with other countries in West Africa with similar profiles. Institution building, however, has lagged behind, largely due to a dearth of skilled personnel in most agencies. The situa- tion has improved somewhat in the last five years, as IDA projects are being increasingly designed with objectives better adapted to existing manpower constraints in the country. Our policy dialogue was minimal in the 1970s and, though it developed progressively, it remained project oriented, with the IMF being the only institution conductinga macroeconom- ic dialogue. This too has changed as our lending has become increasingly policy-based. Both projects approved in FY84 (the Second Agricultural Development and the Urban Management and Development Projects) addressed major policy issues.

21. Given The Gambia's urgent need to reverse current adverse finan- cial and economic trends, the Bank Group, in close cooperation with the IMF, is assisting the Gambian authorities in the elaboration and implemen- tation of the Economic Recovery Program. This is a crucial and necessary step for improving the country's prospects in the short-term, medium-term and long-term, as it would help in mobilizing BOP assistance, negotiating debt rescheduling and stimulating an increase in project aid commitments. In support of such a program, a Structural Adjustment Credit (SAC) is under preparation. The acute shortage of foreign exchange, together with inadequate policies, remains the main obstacle to a recovery of the econo- my. The proposed SAC would finance most urgently needed imports of capital goods and inputs. The adjustment effort will have to be sustained over a number of years given the structural nature of the Gambian problems. The country will also continue for quite some time to face a considerable foreign exchange shortage. We are, therefore, considering a second SAC operation to follow the one currently in preparation.

22. While we expect to be heavily involved in the near future in supporting macroeconomic policy changes and improved economic management, in assisting the Government in debt rescheduling and mobilizing the international community in support of The Gambia's rehabilitation program, the Bank will continue to support The Gambia through project lending in key sectors. Consistent with a strategy that emphasizes more effective utilization of the existing capacity, we are preparing projects that focus on helping the Government rehabilitate essential economic, physical and social infrastructure.

23. Agriculture. Improving the performance of the agriculturalsector is critical for sustained edonozic growth in The Gambia. The Gambia has good quality arable land, reasonable rainfall and diversified cropring patterns. Yet over the past ten years agriculturalproduction has declined by 1.4% on average per year; food imports have continued to increase and now represent the largest item on the country's import bill. Drought as well as inadequate government policies and institutional weaknesses have contributed to the sector's poor performance. The mair.policy issues which need to be addressed by the Government in order to revitalize the sector are: (i) appropriate producer prices; (ii) inefficient marketing; (iii) input delivery, which has been most unsatisfactoryboth in terms of quanti- ties and timeliness; (iv) difficulties in sustaining a viable system of agricultural credit; and (v) development projects and credit schemes which have ignored the role played by women in agriculture, particularly rice production.

24. The IDA-supported Second Agricultural Development Project, approved in FY84, the Government's largest investment in the agricultural sector, addresses the above issues, with particular emphasis on prices, input delivery and extension. The project will also help strengthen the extension system and reorganize the Ministry of Agriculture as well as increase the availability of seeds. To improve our knowledge of the sector we plan to intensify our agricultural sector work.

25. Transport. In this sector, our basic objective is to strengthen and improve maintenance management and streamline institutions. Substantial investments were undertaken under the first and second five year plans to expand the paved road network, the Banjul Port and the Yundum Airport. The Government has, I-owever,been unable to meet the growing -8-

maintenancerequirements of its investments. The ongoing Second Banjul Port and First HighwayMaintenance projects address priority rehabilitation and maintenanceneeds in the sector. The proposedSecond Highway Mainte- nance Project will address the long overdue periodic maintenance requirementsof the paved road network;it will also deal with a number of importantissues: (i) the organizationand managementof the Ministryof Works and Communications;and (ii) reassessmentof the Government's prioritiesin the transportsector. River transportplays an importantrole in The Gambia. It is used for moving groundnuts and bulk goods (fertilizer,cement, etc.). Yet river transportvessels and wharvesare in dire need of repair to avoid breakdowns,which would affect groundnut evacuationand fertilizerdistribution and thus have a direct bearing on exportproduction.

26. Water and ElectricitySupply. The rapidlyexpanding population in the Banjul area (at a rate of over 6% p.a. in the last 10 years) has strained the existing water supply facilities,causing frequent water shortagesand increasinghealth hazards. It has also causedan overloadof the existing electricit:ydistribution system. A proposed Water and ElectricityProject will rehabilitateand reinforcethe existingsystems and supplydistribution capacity. An importantobjective of the projectis to strengthen the m-nagement and operations of The Gambia Utilities Corporation(GUC), currently incurring large financiallosses due to a low tariffpolicy.

27. Industry. Prospectsappear reasonablygood for resource-based processingactivities. To be able to assist the Governmentin formulating a programof actionfor this sectoras well as other small scale enterprise activitiessuch as construction,fisheries, trade and agriculture,small scale enterprisereview was undertakenin February1986. A report on the mission's findings is currently being prepared and could form the basis for a possible SSE project. Technical assistance for the financial and organ- izational restructuring of the Gambia Commercial and Development Bank (GCDB), the largest commercial bank and only term-lending institution in the country, is being contemplated under the proposed SAC operation.

28. Health and Population. Although the Government has taken steps in policy and programs to improve the country's health situation, progress in reducingmorbidity, mortality and fertilityrates has been discouraging- ly slow. The country'shigh levelsof povertyand illiteracyare important constraintsto an effectivehealth care delivery system. However, an important part of the problem stems also from the incapacity of the system to financerecurrent costs and from shortcomingsin the core infrastructure of the servicesdelivery system. With IDA assistance,the Governmentis preparinga Populationand Health projectwhich will assistwith financing and policy reforms (through introducingcost recovery mechanisms) in meeting short-termrecurrent cost problems,and would undertakeselected long-term investments in manpower development, communication, infrastructure and analytical capacity. The project will also help strengthen family planning as well as assist the Government in developing a comprehensive family planning policy. -9-

PART III - THE TRANSPORT SECTOR

The Transport System

29. The transport system links the interior of the country with the capital and principal port of Banjul at the mouth of the Gambia river and provides for north-south overland transport corridors connecting Northern and Southern Senegal. The system consists of a relatively well-developed road network comprising some 510 km of paved roads, 800 km of laterite gravel roads and about 1,080 km of earth roads and tracks. Because the river separates the country in two, a partial duplication of road facili- ties on the river's northern and southern sides has taken place. The river is navigable for vessels up to about 4,000 dwt fully laden as far as the port of Kaur, some 230 km upstream, and for smaller craft over the remain- ing 120 km portion in The Gambia. The river system can be crossed in seven places by vehicular ferries. The Gambia has an international airport at Yundum, some 20 km from Banjul, but no railway, aviation or maritime shipping lines (Map IBRD 19844).

30. Port facilities at Banjul are undergoing renewal and expansion under the IDA-financed Second Port Project (Credit 1266-GM of September 1982). After project completion, the port's capacity will be adequate for the foreseeable future. Present annual traffic consists of about 285.000 tons of dry cargo and 44,000 tons of petroleum products as imports, and 12,000 tons of groundnut oil as exports.

31. Banjul airport is adequately equipped and includes one of the longest runways (3,600 m) in West Africa. Terminal facilities are modest and require only minor improvements to handle some 120,000 passenger movements per year, 60Z of whom travel on charter flights. Gambian Airlines handles ground services only.

32. Passenger transport is provided by the private sector which uses mostly minibuses in competition with the Government-owned Gambia Public Transport Company (GPTC) which operates about 50 large buses for urban, suburban, rural and tourist services. Passenger transport by river is negligible, except for the vehicle ferry services and small ferry boats.

33. Freight is carried by about 500 trucks, mostly privately owned, and by an aging and deteriorated fleet (para 25) of 50 barges and 8 tugs owned by the Gambia River Transport Company (GRTC). Commodities transport- ed by river are especially groundnuts and other bulky goods such as cement and fertilizer. The annual volume of river transport ranges from 60,000 to 110,000 tons, mostly depending on harvest results. All ferries are in poor condition and many of the smaller ones are frequently out of service. The ferry boats and ramps for the ferry at Banjul are to be rehabilitatedwith German assistance, and financing is being sought from the Government of Japan for the replacement of ferry boats at the Trans-Gambian highway crossing. Ferry services have been operating at a substantial loss but a recent tariff increase of 75X aims at remedying this. Furthermore, efforts -10 -

will be made to collect all ferry charges from Senegalese vehicles in convertible CFA Francs. Li

34. Transport sector administrationis predominantlythe responsibil- ity of the Ministry of Works and Communications (MWC) which supervises directly the national road network. Banjul city and Kanifing Urban Dis- trict (near Banjul) are, in principle, responsible for about 70 km of paved streets. Gravel and earth roads and tracks in rural areas come under local jurisdictions. In practice, MWC is the only organization doing regular road maintenance, and provides ad-hoc assistance for roads under other jurisdictions. The local road network is generally adequate for the country's needs, except in the Northeast. About 80% of all villages are within 5 km of a road or track, and the main transport activity (ground- nuts) occurs in the dry season. Local authorities and communities carry out road repairs as needed and when funds are available. About 420 km of local tracks have been upgraded since 1978 to semi-engineered gravel standard (6 m wide) under the UNSO Feeder Road Program, and maintenance responsibilityfor 246 kn has been handed over to MWC. A further 83 km are about to be upgraded by UNSO, with EEC financing, in the Northeast.

35. CPA and GPTC are financially and operationally autonomous agen- cies under MWC, but ferry, bus and port tariffs have to be approved by The Government. Both GPTC and GPA have operated at a loss in recent years. The latter has been losing money because of low ferry tariffs (para 33). G2RTC forms part of the Gambia Produce Marketing Board (GPMB) which falls under the Ministry of Agriculture. GPMB is the dominant user of river transport, but uses road transport when cheaper or more convenient. Transport coordinationhas therefore largely been the result of operational practices by GPMB rather than the outcome of careful planning. The role of river transport in the future development of The Gambia will be assessed under the project (para 62), and the resulting investments, if justified, and institutional aspects would then be the object of a possible River Transport Project. Road and river transport freight rates are not regulat- ed, although GPMB sets rates for its own freight movements. How&cver, passenger fares are established by the Government.

36. Transport planning has not been an effective and integrated activity of Government. The Ministry of Economic Planning and Industrial Development (MEPID) does some investment coordination but no detailed transport planning. MWC has a Planning Unit covering all activities of the Ministry. The Unit is headed by an economist who has planning experience but only limited exposure to the transport sector. The unit has for the past five years been assisted by an expatriate advisor, mainly for MWC's building activities and almost all planning information for the sector has been assembled by consultants for project related studies. The future role and staffing of the Planning Unit has been discussed and agreed upon during negotiations in the context of the review of the organizationstudy for MWC (paras 40 and 62). - 11 -

37. Transport sector investment has not always been based on sound economic and technical priorities. Instead, it has been strongly influenced by socio-political factors and donor agency preferences. As a result, a number of transport investments have been either over-designed, premature, or not economically justified. Most of these investments were incurred between FY78/79 and FY81/82, and from FY84/85 to the present, when upsurges in road investments took place. Following a severe deterioration in economic conditions in The Gambia, transport investments will have to decrease over the coming years. Moreover, it is declared Government policy is to reduce the emphasis on transport in favor of other economic sectors and, within the sector, 'to concentrate on maintenance and rehabilitation. The proposed project will assist the Government through strengtheningNWC's Planning Unit in preparing three-year roll-over investment programs based on priorities and studies to determine the needs and economic justification of proposed investments (para 62). During negotiations, agreement was reached on the FY86/87-88/89 transport sector investment program. The Government assurances were also obtained that the three-year roll-over investment programs and annual development and recurrent budgets for the transport sector will be reviewed with the Association by May 1 of each year, up to 1992. Furthermore, agreement has been reached that (i) urgent rehabilitation of transport facilities will be given priority over other transport investments; (ii) new transport investment and rehabilitation will not be undertaken unless adequate economic feasibility studies have been carried out, the estimated rate of return is at least 15Z, and can be funded without recourse to funds for maintenance programs required under the transport sector; (iii) the Association would be consulted before undertaking new investments or rehabilitation in the transport sector that exceed US$500,000 equivalent; and (iv) a methodology would be developed by December 1, 1987, and agreed with the Association, for selecting feeder roads to be upgraded.

38. The treaty that established the Senegambia Confederation in 1982 envisages economic integration between the two neighboring countries. Improvements of some short road sections connecting the two countries are underway under auspices of the Confederation,but they are not expected to significantly affect transport patterns in The Gambia during the project period. Long term effects of the Confederation, on the other hand, could be considerablebut will largely depend on agreements for economic integra- tion which are still under discussion.

The Roads Subsector

39. The road system does not suffer from capacity constraints and even the 11 Km Banjul-Serekunda section, which is now being rebuilt as a four lane highway, does not have the congestion normally experienced in capital cities. Ferry capacity at various river crossings can cause traffic delays, but this is primarily due to mechanical failures of fer- ries. The Gambia has about 6,000 motor vehicles, but registrationstatis- tics are fl--ed. The Government is taking measures to correct this deficiency. - 12 -

40. Road administration of the national network comes under the Directorate of Technical Services (previously Public Works Department-PWD) in MWC, through the Engineering Division which has the technical responsi- bility for design, construction and maintenance of both roads and public buildings; maintenance work is carried out by three provincial divisions (Northern,Western and Eastern). The MWC Planning Unit and the Main Store come under the Permanent Secretary and the Mechanical Engineering Division (MED) comes under the Directorate of Technical Services. MWC's Main Store supplies goods and materials to all government departments, and MED maintains all public vehicles and equipment except those of the Ministry of Agriculture and the Police. The present MWC organization does not permit efficient execution of road and equipment maintenance, or control of operations between the various divisions. Furthermore, the lines of responsibility within MWC and between head office and the provincial divisions are not clearly defined. To enable more efficient and cost effective management of the road network, a study is being completed by consultants to recommend the most appropriate organization, including separation of MWC's buildings and other responsibilities from road maintenance activities, and the role of NWC in transport planning (para 36). The proposed reorganization,which was discussed and agreed upon at negotiations, defines and streamlines the functions, responsibilitiesand accountability of each division and section in MWC. The enactment of the new MWC structure is a condition of effectiveness.

41. MWC has sufficient professional engineers to manage its opera- tions; however further practical training is planned, under a Kuwait Fund grant, for some of the civil engineers. The Directorate of Technical Services presently has a staff of 959 plus 335 temporary workers. Under an ongoing Government program to reduce the size of the civil service, the Directorate, at the end of 1985, reduced established staff by 77 positions and temporary workers by 441 positions. Several divisions are still overstaffed at semi-skilled and unskilled working levels. The required staffing levels and manpower development needs in MWC are being determined by the reorganization study in coordination with the ongoing ODA sponsored study on the reform of the entire civil service, which is scheduled to be completed by June 1986. Preliminary estimates for a reduction of the employment 'orce of MWC were discussed at negotiations, and it was agreed that target levels for the staff reductions will be worked out in line with the civil service reform.

42. Training operations are being conducted both internally, and at local training institutions in the Banjul area. These activities are coordinated by the Chief Engineer (Engineering Division) with assistance provided by consultants under the First Project and the USAID project (para 43). In-house training is centered around road maintenance activities, and equipment and workshop management. In October and November 1985, MWC's Deputy Chief Engineer and Training Officer participated in a seven-week course, run by the ILO Training Center in Italy, Kenya and Tanzania, financed under the First Project. During the course, an outline training program for MWC was prepared by the two participants. In addition, MWC personnel attend courses at The Gambia Technical Training Institute (GTTI) - 13 -

and the Management Development Institute (MDI) on a released time basis. Some of the GTTI courses are recognized in the United Kingdom and lead to London City and Guilds Certificates. A major constraint to training is extensive illiteracy at middle to lower staff levels. This issue is being reviewed by IDA with the Ministry of Education regarding the development of an in-house functional literacy program. The Second Project's training component will support the continuation of ongoing activities with emphasis on strengtheningMRC's interhal training capability, as well as at GTTI and MDI (para 61).

43. Equipment management is the main responsibility of MED. The centrai workshops, presently located near Banjul port in old flying boat hangers, will be relocated in mid-1986 to a new facility, financed by USAID, at Kotu about 14 km from Banjul. Consultants are preparing proce- dures for equipment, workshop and stores management and will train local staff and workshop instructors until the end of the USAID project in September 1986. However, this will not provide sufficient training for efficient management practices to be sustainable, and further assistance will be provided under the project (para 50). To date, MED has not been authorized'to charge fully for its services to the various government ageucies. A realistic charging system for mechanical services to enable MED to function efficiently is being worked out by MWC and the USAID consultants. During negotiations agreement was reached on the principles of NED's charging system; the detailed list of charges will be submitted for the Association's approval by June 1, 1986. Government's publication of the charges to be paid to NED, together with adequate budget alloca- tions, are a condition of Qffectiveness, with implementation to start by July 1, 1986, the beginning of the Government's fiscal year.

44. Accounting and internal auditing procedures have basically been adopted from the British system. There are, however, negligences and inefficievcies in the follow up of the required procedures. Some training in cost accounting was provided under the First Highway Maintenance Project but further improvements are needed to consolidate the achievements and to ensure accuracy and timely availability of pertinent information on such matters as spending authorized through the approved budget. Consultants under ongoing projects are installing systems for inventory control, stores accounting, workshop job costing, and cost and performance accounting for routine and periodic maintenance. These are simple systems which will be adapted under the Second Project for microcomputer use. Assistance to install, operate and train staff in financial and cost accounting procedures will be provided under the project (para 59). MWC's Internal Audit Branch functions directly under the Ministry of Finance and Trade. Its functions are to detect errors and lack of reliability of accounting records and to ensure that Government procedures are adhered to. However, MWC lacks sufficient qualified staff to carry out the above tasks efficiently. The computerization of records together with on-the-job training and courses at MDI under the project should enable a small staff of accountants and cost clerks to perform adequately. - 14 -

45. Revenue from road users is collected from taxes on fuel, lubri- cants, vehicle and spare part imports, and annual licenses. Fuel and vehicle import taxes provide the bulk of the revenue. All revenue goes to the national treasury. As a result of increases in internal prices, because of devaluation,and shortages in local supplies, because of foreign exchange shortfalls, fuel consumptionhas been decreasing since its peak in 1980. Although no annual traffic counts are available, traffic levels have undoubtedly declined over recent years. Road user taxes yield more than is required for road maintenance and overall road investment, including new roads. No additional efforts are therefore required for resource mobiliza- tion purposes, but a better allocation of scarce resources is needed as outlined in paragraph 37.

46. Road financing is provided through the recurrent budget, the development budget and external loans and grants. The recurrent budget finances expenditures for road maintenance. Because the various functions of MWC are not clearly separated, data on road maintenance expendituresare not precise. However, since FY77/78 the annual budget for supplies and contracts has steadily declined. The First Highway Maintenance Project financed all costs (includingwages) for regravelling and resealing works. Under the Second Project, the Government's participation in routine maintenance will be increased from mid-1987 (para 69). MWC staff salaries come under a separate heading in the recurrent budget. At negotiations, agreement was reached that the Government will modify the recurrent budget presentation by providing separate budget allocations for each MWC division, and will provide sufficient funds to undertake adequate annual road maintenance programs.

47. Transport sector rehabilitation and new construction projects are financed mostly by loans and grants, with local funds provided from the development budget. Development budget levels are determined by the Ministry of Finance and Trade and have been governed more by the availability and amount of foreign financing than priorities within and between sectors. Over 40% of the development budget has, in the recent past, been allocated to transport projects. Bank economic missions are currently discussing with the Goverment the need to reduce overall public investment levels and to change sectoral distribution for the three-year period commencing FY86/87. It is expected that less funds will be available for the transport sector and efforts need to be made for more rational allocations as outlined in paragraph 37.

IDA Involvement in the Transport Sector

48. The Bank Group has financed three projects in the transport sector: the First Banjul Port Project (Credit 187-GM, US$2.1 million, May 1971), a Highway Maintenance Project (Credit 897-GM, US$5.0 million, March 1979), and the Second Banjul Port Project (Credit 1266-GM, SDR 5.9 million, September 1982). The First Port Project was satisfactorily completed in late 1975, while the civil works under the Second Port Project were sub- stantially completed in 1984. The'project costs are within the estimates, but land reclamation works have been delayed because of unstable - 15 -

foundations and will not be completed until mid-1987, about 18 months beyond the original completion date. The delay will not unduly affect port operations.

49. Execution of the First Highway Maintenance Project proceeded reasonably well, and the objectives of the project have been met satisfac- torily or exceeded. The project was substantially completed in early 1986, two years after the original completion date. The First Project consisted of a four-year maintenance program, including routine maintenance of 780 km of roads, regravellingof 190 km of major laterite roads, and studies for a follow-up maintenance program and for exploration of locally occurring aggregates. The routine maintenance component has been successful in prolonging the life of the existing paved road system. The regravelling works have resulted in upgrading of important sections of the North Bank Road. A small resealing unit was set up in 1983 and will complete some 22 km under the First Project. This operation, which was outside the original project description, has been successful in salvaging a number of short sections of roads especially in the Banjul area. Overall, the conditions of the primary and secondary roads have not further deteriorated since the start of the First Project, and the regravelled and resealed roads are in much better condition than before.

50. Fifteen cost clerks have received formal training locally and two workshop personnel were sent for courses in the U.K. under the project, while on-the-job training was provided for the staff of the regravelling and resealing units as well as for 20 road foremen. At the start of the project thera were no Gambian engineers in I4WCbelow senior management level. The recent return of seven new civil engineering graduates should enable eventual institutional sustainability of road maintenance operations.

51. The main problems which delayed the project were outside the control of MWC. The Government's insistence that spare parts and supplies be procured through local suppliers,who carry little or no stock, resulted in prolonging the down time of equipment requiring repairs. Shortage of local funds compounded the difficulties. The procurement problem will be addressed under the proposed project through the use of international shopping (para 68), and funding constraints will be alleviated by the setting up of a revolving funds for IDA and Government funds (paras 71 and 72).

PART IV - THE PROJECT

52. The project was originally prepared under the First Highway Maintenance Project. An advance of US$550,000 in the form of a Project Preparation Facility (US$200,000 in July 1985 and a further US$350,000 in December 1985) was granted to complete project preparation. Negotiations were held in Banjul, February 5-12 1986. The Gambian delegation was headed by Mr. Abdou N'Jie, Permanent Secretary, MinIstry of Economic Planning and Industrial Development (MEPID) and included representativefrom MWC and the - 16 -

Ministry of Finance and Trade. Supplementarydata on this project are pre- sented in Annex III.

Project Objectives

53. The main objective of the project is to support 4WC in carrying out a four-and-one-half-year (1986 to mid-1990) road maintenance and upgrading program comprising: (i) continuation and expansion of the road maintenance program initiated under the First Project; (ii) rehabilitation of the highest priority sections of the paved network; (iii) strengthening of the organizationand management of MWC to improve the efficiency of road and equipment maintenance; (iv) introduction of sound transport planning procedures; and (v) assistance to domestic contractors to enable their more effective participation in road maintenance activities.

54. The IDA role in the highway sub-sector has been expanded through intensive dialogue on all aspects related to the management of the road network, and has stimulated the Government to make substantial improvements in the organization of the subsector. Also, IDA is now planning a more active role in overall transport sector issues and priorities. Continued Bank involvement in the subsector would therefore be justified and would (i) contribute to str*engtheningthe Government's resolve to address priority maintenance and rehabilitation programs, (ii) improve management capability in the sub-sector and (iii) encourage donors to support the infrastructure maintenance and rehabilitation needs of the country.

Project Description

55. To assist in fulfilling the objectives, the project would provide financial assistance for (a) Road Maintenance Program: (i) regravelling, resealing and routine maintenance of the national and local road networks; (ii) experimental low-cost paving of gravel road sections; (iii) equipment and vehicles; and (iv) road maintenance and workshop management assistance; (b) Road and Bridge Rehabilitation: (i) reconstruction of Bund Road (3.5 km), and strengthening of deformed sections along 150 km of the South Bank Road; and (ii) reconstructionof Brumen Bridge; (c) InstitutionalStrength- ening: (i) technical assistance to MWC for implementingits reorganization, for transport planning and studies, and for auditing; (ii) training program for MWC staff; and (iii) technical assistance and training for domestic contractors.

The Road Maintenance Program

56. Routine road maintenance operations presently come under the responsibility of MWC's provincial divisions. The length of roads to be maintained by MWC will increase from the present 780 km to about 1,300 km under the Project, comprising about 450 km of paved roads and 610 km of gravel roads of the national network, as well as 45 km of paved local roads in Banjul City and Kanifing Urban District and about 200 km of gravel local roads which have national imiportance. The most appropriate organization and methodology for carrying out labor-based routine maintenance operations - 17 -

will be tested under a two-year pilot project with ILO (SIDA financed). This project started in early 1986, and will include maintenance of some 60 km of paved and 50 km *of gravel roads south of the Gambia river. Two systems will be tested: (i) a lengthman system where 3 to 5 km would be allotted to a person living nearby; and (ii) a petty contract system where local communities would organize themselves into working gangs. The pilot project would also test the use of tractor-towed graders for smoothing low-trafficked gravel roads. The effectiveness and cost of these operations will be monitored and compared with MWC's present procedures of manual gangs travelling daily to work sites from the regional offices. The preliminary results of the three systems will be reviewed jointly by IWC, ILO, EEC, UNSO and IDA by Jume 1, 1987. This agreement was confirmed at negotiations. Any modifications to MWC's routine maintenance practices and equipment needs (para 63) would be incorporated into the annual road maintenance programs from July 1, 1987.

57. Periodic maintenance of national roads would continue to be carried out by MWC with continued managerial and technical assistance by consultants engaged under Ithe First Highway Maintenance Project. All periodic maintenance activities are presently carried out by force account, except for some petty contracts for the extraction and supply of cockle shells for resealing works. Under the project about 260 km will be regravelled, 100 km resealed and a further 130 km fog sealed. The periodic maintenance program would enable MWC to catch up on the work back-log and to initiate systematic monitoring of road conditions and scheduling of timely regravelling and resealing operations.

58. Renewal and Operation of MWC's Road Maintenance Equipment. Regravelling, resealing and mechanized road maintenance operations will be carried out with MWC's existing equipment. Past budget constraints and foreign exchange shortages have not permitted replacement of aged units since the start of the First Project, when some new equipment was procured a-ndoverhauls were carried out with assistance of consultants. Equipment and vehicles, including initial stocks of spare parts, will be procured in two batches under the project. The first batch will fill present gaps in the fleet and replace aged units. The second, to be carried out after the June 1, 1987 reviews of labor-based maintenance procedures (para 56) and contractor participation in road maintenance (para 63), will replace additional aged units. Consideration will also be given to the availability of UNSO equipment which is presently being used for their feeder roads upgrading program in the Northeast. Spare parts, fuel, tools and other imported materials required for road maintenance operations will be procured under the project using international suppliers where appropriate, to avoid the recurrent shortages in the local market experi- enced under the First Project, and to ensure more efficient use of equip- ment.

59. Road Maintenance and Workshop Management. In order to continue the training of MWC staff in all areas of road maintenance management and operations, the consultants financed under the First Project will continue their services (125 m-m) over the project implementationperiod. The team -18-

will also include an accountant to assist in streamlining MWC's financial accounting procedures and to firmly establish the costing system developed under the First Project. In order to follow up on the USAID project, MWC will also engage two specialists (25 m-m) to assist in managing the new central workshop under MED and in running related training programs. MED's main counterparts would be the senior mechanical engineer and the stores superintendent who would receive on-the-job training. The technical assistance would actively assist MWC staff in managing the road and equip- ment maintenance operations up to mid-1988, after which assistance would be limited to short-term visits over the remaining project implementation period. The terms of reference and counterpart staffing were agreed at negotiations.

Road and Bridge Rehabilitation

60. Highest priority road sections along 150 km of the South Bank Road will be strengthenedunder the project. In addition, the 3.5 km Bund Road, which links Banjul Port to the South Bank Road, will be reconstructed.The 117 m long, single lane, Brumen Bridge, built 20 years ago, is in poor condition because of deterioration of the concrete super- structure. Under the project the piles will be strengthened, the superstructurewill be rebuilt to higher standards for heavy truck traffic, and the deck widened to two-lane (9-lOm) width.

Institutional Strengthening

61. Technical assistance (23 r-m) will be provided to assist MC in implementing efficient management procedures under its new organization (para. 40), and in preparation of reporting and monitoring requirements at the different management levels. Training assistance (6 Ur-u)will have two major objectives: (i) to improve MWC management and use of personnel through the development of effective personnel management policies and procedures; and (ii) to improve MWC management capability and staff productivity through various training and upgrading programs. MWC's Training Officer will be assisted in preparing details of the training program by March 1, 1987, and in monitoring its effectiveness through periodic visits during the project implementation period. The project will also provide equipment, materials and supplies for upgrading MWC's offices and for in-house training, and training at GTTI and MDI; support tuition costs for selected GTTI and MDI courses; and finance expenses for overseas seminars and work study tours for professional staff. The Personnel Development Program for MWC and terms of reference for management and training assistance were agreed at negotiations.

62. The future role and functions of MWC's Planning Unit is being determined under its reorganization. The Government's transport planning capabilities require strengthening and 36 m-m of assistance will be provided under the project. Additionally, studies required to assess the economic role of river transport in The Gambia will be carried out under tae project (para 35). The function of MWC's Planning Unit and outline terms of reference for technical assistance were agreed at negotiations. - 19 -

63. Domestic Construction Industry. In order to have a better knowledge of the physical and financial capacity of the small domestic construction industry, a consultant (4 m-m) will be engaged to (i) undertake a six-week study and recommnenda plan of action to utilize more effectively private firms in road and building maintenance activities, and (ii) conduct courses and assist domestic contractors in improving their efficiency and cost control. The study will be completed in early 1987, so that MWC would be able to determine its future equipment requirements for road maintenance. During inegotiations, the Government confirmed 'ts commitment to increase the use of contractors in road maintenance activi- ties and agreement was reached on the terms of reference for the study and traininigof domestic contractors.

Project Cost Estimates and Financing

64. The estimated total cost of the project including MWC salaries and wages, and contingencies,is US$16.4 million equivalent. No duties or taxes are to be levied against project items. except for those paid by domestic contractors engaged in road maintenance activities. The foreign exchange domponent is about US$13.2 million, or 80% of the total cost. Basepcosts have been estimated at February 1986 prices. Physical contingen- cies average about 3% of base costs, and comprise IOZ for road and bridge rehabilitation and 5% for institutional strengthening. In accordance with normal practice, no physical contingencies are included for the road maintenance program which covers a four-and-one-half-year (1986 to mid-1990) time slice. Price contingencies average 17% of base costs plus physical contingencies,and are based on estimated foreign inflation of 7X for 1986 and 1987, about 7.5Z for 1988, 7.7% for 1989, 7.6% for 1990, and 4.5% for 1991 onwards. Estimated rates of inflation on foreign costs have been applied to both foreign and local costs. This assumes that the exchange rate (taken as US$1.0 - Dalasis ;.2 for base cost estimates) will be adjusted for divergences between foreign and local rates of inflation. Overall, about 220 i-m of technical, management and training assistance will be provided under the project. Consultants will also supervise civil works contracts and carry out transportationstudies.

65. The project will be externally financed by: IDA (US$5.8 million equivalent), AfDF (US$4.5 million equivalent), EEC (US$2.0 million equiva- lent) and UNDP (US$0.7 million equivalent). UNSO would cofinance feeder road maintenance during calendar 1987-88 (US$0.6million equivalent). SIDA has separately provided US$120,000 equivalent for the ILO executed pilot routine maintenance project. IDA will retroactively finance up to US$300,000 for expenditures incurred from January 1, 1986 for the road maintenance program. External financing for periodic and routine maintenance will cover 60% of total direct implementationoperating costs over the project period. The Government's contributionto the project will amount to US$1.5 million equivalent for local expenditures and US$1.3 million equivalent for NWC salaries and wages. External financing will cover 80% of total cost or 90%, excluding wages and salaries. Cross effectiveness conditionshave been provided with EEC, UNSO and UNDP. - 20 -

Present Status of Proposed Project and Implementation

66. The Permanent Secretary of MPW will have overall responsiblity for implementationof the Project, with the Director of Technical Services providing coordination of the maintenance program, road and bridge rehabilitationand MED's workshop management. Road maintenance, upgrading and rehabilitationwill be executed by the two new Rcads Divisions (East and West); workshop management comes under MED and training would come under the new Administrative Division to be established in MWC. The Permanent Secretary will directly oversee the transport planning component. The road maintenance program has been fully prepared. Detailed engineering for reconstruction of Bund Road and Brumen Bridge is underway and preliminary cost estimates have been prepared. Because of the nature of the South Bank Road strengthening (para 60) detailed surveying and design will be carried out immediately prior to executing the works; quantity estimates and specificationswill be prepared by mid-1986. Rehabilitation of Bund Road and the South Bank Road could be carried out under one contract. The project is expected to be effective in July 1986 and to be physically completed by June 30, 1991, which allows for a 12 month slippage in executing the four-and-one-half-yearmaintenance program.

Procurement

67. Procurement arrangementsare summarized as follows:

Amounts and Methods of Procurement a/ (US$ Millions) ProcurementMethod Total Project Items to be Procured ICB LCB Other NA b/ Cost

Equipment and vehicles and 1.7 - 0.4 - 2.1 initialstocks of spare parts - - (0.4) - (0.4) Road maintenance and paving c/ 0.3 0.4 3.9 1.3 d/ 5.9 (0.2) (0.1) (2.8) - (3.1) Road and bridge rehabilitation 4.6 - 0.4 - 5.0 Technical assistance, studies and training - - 2.9 - 2.9 (1.8) - (1.8) Refinancing PPF - - - 0.5 0.5 (0.5) (0.5) Total Project 6.6 0.4 7.6 1.8 16.4 (0.2) (0.1) (5.0) (0.5) (5.8) a/ Amounts financed by IDA are in parentheses. b/ Not applicable. c/ Spare parts, fuel, lubricants, tools, petty contracts and materials. d/ MWC salaries and wages. -21 -

68. Procurement of equipment, vehicles, non-proprietary spare parts and bitumen products will be carried out under ICB in accordance with Bank guidelines. Contracts for supply of goods and materials estimated to cost less than US$10,000 equivalent (except for fuel), up to an aggregate of US$200,000 equivalent (except for fuel), may be procured through local shopping. Equipment and spare parts of a proprietary nature or subject to standardization may be proc.tred with prior IDA agreement on the basis of price quotations from at leas; three qualified suppliers,with at least two of them operating internationally. Contracts for road maintenance activi- ties up to US$100,000 may be awarded on the basis of competitive bidding advertised locally. Petty contracts (under US$10,000 equivalent) for road maintenance activities would be negotiated, based on procedures and unit rates established with assistance of the road maintenance consultants. Consultants for technical assistance will be appointed in accordance with Bank guidelines. Force account operations will be permitted for road maintenance and low-cost paving works. All transactions in excess of US$50,000 equivalent will be subject to prior approval by IDA.

Disbursements

69. Although the project covers a four-and-one-half-yeartime slice, disbursementsare estimated to follow the historic disbursement profile for highway projects in West Africa, i.e. six years, as was the case under the First Project. However, initial disbursements will be greater than historic levels due to refunding of the PPF advance and the initial advance into the Special Account (para 71). The credit is expected to be fully disbursed by March 31, 1992. IDA financing of road maintenance activities would be progressively reduced from mid-1987 with consequential increases in MWC's road maintenance budget. The IDA Credit would be disbursed against the following categories, and on the basis of the estimated disbursement schedule: - 22 -

Allocation and Disbursement of IDA Credit

IDA Amount Percent Category Description (USS millions) Financed

I Equipment and vehicles (including initial stock of spare parts), office supplies and mater'als 0.40 100%

2 Road maintenance and paving; direct operating costs, excluding salaries and wages: 2.70 Expenditures before July 1, 1987 100% Expenditures between July 1,1987 & June 30,1988 80% Expenditures thereafter 60%

3 Technical assistance, audits, studies and training 1.65 100%

4 Refunding of PPF Advance 0.55 Amount Due 5 Unallocated 0.50

Total 5.80

70. Disbursements for routinieroad maintenance,regravelling, reseal- ing and low-cost paving works will be made against statements of expendi- tures (SOE's) using unit rates for each work item in accordance with the agreed program. Unit rates for force account activities have been estab- lished under the First Highway Maintenance Project for direct operating costs (field salaries and wages, equipment operation and maintenance, and materials) equipment amortization and overheads. The unit rates will be updated and agreed with IDA on a quarterly basis. For contracted activities, the applicable contract rates will apply. Other disbursements will be made against standard documentation. The uAit rates for the road maintenance program to be used from the start of the project for disbursement purposes were agreed at negotiations.

71. A revolving fund will be established for IDA funds in a Special Account opened in foreign currency in the Central Bank of The Gambia. An advance of US$400,000 from IDA funds into the Special Account will be made after the Declaration of Effectiveness, to cover about four months of project expenditures. Disbursements may be made from the Special Account for all project expenditures eligible for IDA financing. The Special Account will be replenished following applications for reimbursement by MWC, together with appropriate supporting documentation or SOE's, as well as bank statements. Reimbursement applications will be submitted to IDA - 23 -

wheneveraccumulated withdrawals amount to US$100,000. The amount of IDA replenishment will not exceed the authorized allocation.

72. Counterpart funds will be made available by the Government through its budgetary allocations. A revolving fund for local supplies and petty contracts will be established for counterpart funds in a Project Account to be administered by the Accountant General. An initial deposit of Dalasis 40,000 will be made by the Government before IDA advances the initial deposit in the Special Account. MWC will prepare, one month prior to each quarter, a work program and related -stimates of expenditures for project execution during the forthcoming quarter. The required counterpart funds will be deposited by the Government into the Project Account before the end of the first month of each quarter. IDA replenishments of the Special Account will be conditional on the Government having deposited the required counterpart funds into the Project Account. Only eligible project expenditureswill be made from the Project and Special Accounts. MWC, with assistance of the road mai4tenance consultants,will manage all accounting records and MWC will prepare supporting documentationand SOE's.

Reporting and Auditing

73. Quarterly progress reports will be prepared by MWC with the assistance of consultants and sent to the Association within one month after the end of each quarter. These reports will include: ti) progress achieved against the agreed implementation and disbursement schedules, and key performance indicators; (ii) work programs and cost estimates for the coming quarter (para 72); and (iii) statements for the revolving funds. External auditors acceptable to the Associationwill be engaged under the project to carry out annual audits of the project as well as the Project and Special Accounts in accordance with the Bank's Guidelines for Auditing. Each Audit Report, together with a management letter, will be sent to the Association not later than six months after the end of the fiscal year. The reporting and auditing requirementswere agreed at negotiations.

Nature of Project Benefits

74. The present deterioration of the highway system under the juris- diction of MWCdoes not yet impose serious restrictions on transportation. The maintenance program, however, is urgently needed to protect the highway investment, and to prevent further deterioration in road conditions which would cause physical bottlenecks in transport in the near future and would also necessitate larger future investments for road rehabilitation. Since the costs of potential transport bottlenecks are difficult to estimate, the project benefits quantified are mainly in the form of savings in road maintenance and road user costs generated by the project. Other benefits, such as time savings or positive effects on agricultural supplies and production because of reduced transport costs have not been quantified.

75. Traffic volumes for the various roads are mainly based on traffic counts made in 1982; average daily traffic (ADT) in 1984 is assumed the same as 1982 ADT, as economic activity remained stagnant during this - 24 -

period. An annual growth-rate of 5Z has been assumed for future years which is in line with the recovery scenario recently outlined in the Bank's report on the Development Issues and Prospects for The Gambia. The economic return calculations for the maintenance program were tested for a zero traffic-growth assumption. Traffic on the project roads is not expected to be influenced *by the Senegambia Confederation during the project period.

Economic Returns and Sensitivia

76. The economic benefits of the project have been calculated for all main components: maintenance of gravel roads, maintenance of paved roads, rehabilitationof 150 km of paved road sections and the Brumen bridge. The internal economic rate of return (ERR) on the gravel road maintenance component is estimated at 28%. The maintenance component for paved roads has a much higher economic justification owing to the greater state of deterioration of the roads and higher traffic volumes. The estimated ERR on this component is 70%. The estimated ERR on the entire maintenance program for the paved and gravel road network covered under the project is about 392. The rates of return were tested for a shortfall in benefits by 20%, an increase in cost by 20% and a zero percent traffic growth. The resulting estimated ERRs are 25%, 272 and 28%, respectively.

77. Pavement strengthening of sections of the South Bank Road, the principal overland link with the interior of the country, is of high priority. The road sections are in fair to poor condition and without any strengthening will continue to deteriorate rapidly. The sections to be improved carry traffiq volumes of 1,800 vehicles per day (vpd) for Yundum-Brikama (10 km) and 540 vpd for Bajana-Kalagi (100 km) and 4.80 vpd for Kalagi to near Soma (40 km). Thg combined ERR for these road sections is 342. The Bund road carries some 1,900 vpd. It bypasses Banjul's city center for most traffic to and from the port and ferry, and has been designated as the official truck route to the port. The road is in poor condition and stretches are subject to periodic flooding. The estimated ERR for the improvements of Bund Road is about 322. If the Brumen Bridge is not improved soon, its rapid deterioration will lead to severe load restrictions and probably to a disruption of road service. The ERR on this investment is estimated at 49%.

78. The composite ERR from total project investments, excluding technical assistance for institutional strengthening which could not be allocated to particular road programs, and excluding PPF advance which is treated as a sunk cost, is estimated at 38%. These quantified components cover 79% of total project costs.

Project Risks

79. Based on the satisfactory implementation of the First Highway Maintenance Project and the commitment of the Government to reorganize MWC and improve its management procedures, there would be no major risks concerning project Implementation. However, further aggravation of The - 25 -

Gambia's economic situation could limit funds for road maintenance. The Association will annually review the road investment and maintenance programs and agree on budget levels for the annual road maintenance pro- gram. A second risk concerns the extent of the Government's long-term commitment to institutionbuilding. A weakening of Government'sdecision to streamline existing procedures in MWC and to delegate responsibilitiesto line managers would not unduly affect implementation of the project but would extend the period needed for expatriate technical assistance. Through careful monitoring and follow-up, the Association will try to reduce this risk. Moreover, an important element of institutional strengtheningis the strong technical assistancesupport to implement the project over the first two years (para 59), and to train engineers, planners, managers and techni- cians in their tasks. This will, in itself, enhance the overall management efficiency of MWC, and will facilitate the establishment of sustainable operational procedures.

PART V -'RECOMMENDATION

80. I am satisfied that the proposed credit would comply with the Articles of Agreement of the Association and recommend that the Executive Directors approve the proposed credit.

A.W. Clausen President

Washington, D.C. March 5, 1986 -26- AMEbil I Page 1 of 6 OmIam. DB - SOCIAL unxCun rit3T C1D4, TM! P £1118) Is SOIT OMSTUCsUcT ESTIAt) Lb Raw.ouc LO uiOUMt ivAn SK iw incu itmet ioioLb annmSTaT SOuTHr SAR" Auc& 4. uP !AMA6

TOTAL 11. 11.3 11.3 AIWLDLTAL 3. 3.9 4.3

co ) .. .. 290.0 233. 1043.6

- aanzs PM Cm (warn or OIL qUtVIAT) 13.0 33.0 76.g 02.3 533.5 as. a_lv nuuAZS vnuaTn.KCCSAL (CTSOUINS) 374.0 465s. 497.0 4MUtSS0flIAflO (2 0F TTAL) 12.4 19.6 30.0 20.1 32.0

POPA flOU2W CIEU 1O POPUIAflS Ito WmS2000 (HILL) %TATflSAT MU.TION (HIu.) 3.2 PPULATI 10S'I 1.9

SgO. M. 33.1 41.2 61.7 33.2 65.1 SlR s. 34. 13. Lw 105.9 119.2 156.4 112.3 124.6

popMlATlo AR STUICTaR CE) 0-14 U.S 42.7 43.9 ALA 44.0 45.4 15.4 1 54.2 53.1 55.3 50.8 51.5 G* o 30m 2.9 2.9 2.2 2.9 2.7 POPUTAfOUGMTN PATSCE) OTtEL A t.2 2.2 3.I 2.3 2.9 0gu 2.6 7.1 b.5 6.4 5.1

CED Pg21 RaE (WI 130012 44.3 46.2 49.0 47.2 47.0 m Dun am (PU Tm005) 29.2 24.1 22.7 17.6 15.0 CROSSUDUMECTION Ra 3.0 3.1 3.2 3.3 3.2

*VILT PUNING ACCWTOS. AN (THOM) . 1.0 US (ECOF 1 ) .. .. .0 3.3 6.4

t305 or TOO PlO. URECAPITA (1969-71-100) 101.0 96.0 62.0 03.3 62.9

PM CAPITA SMPiLY OP cnoSnn (2 op UWaunrt s) 109.0 96.0 s6.0 *7.7 96.5 PROtEUS (GRAM PE Off) 63.0 56.0 51.0 51.9 55.4 o0 wf1cs SfUL MO PULsE 11.0 13.0 13.0 /c 16.7 10.5

CRUZ (AS 1-&) OU1 aT 53.9 52.3 45.5 23.1 16.b

LIv SPEC?. AT USET (itS) 31.1 32.3 36.0 47.6 52.0 nWLT ma. sa (CP 230) 122.0 216.5 200.0 319.5 108.l ACC55 To SAn WATER(SPOP) TOTAL .. 12.0 .. 27.1 62.4 DRSUI 97.0 65.5 1d 63.5 67.5 RURL 3.0 .. - 19.3 35.8

ACCSS TO E DISOtSAL (Z OP POPUIATIOU) TOtAL ...... 26.5 28.9 RtIt ...... 65.4 57.7 L ...... 20.6 20.7

POPLATIOS PE PNtCIA 24930.0 23950.0 12310.0 /a 27901.7 11791.7 PO. PER NUSING1 1E10 1590.0 It 1890.0 1770.0 W 3308.4 2459.6 POP. PR HOSPITAL MM TOTAL 920.0 860.0 Ia 1273.6 931.1 UIIU 190.0 l .. 170.0 7g 428.2 346.8 Ram1 9210.0 ft .. 3490.0 i 3292.5 4371.9

ADlItSSIONSPA N UDA ...... 27.2

AVER#SE SIZE Of UrSENLD TOTAL .. Li/ . tltUI XWQ .... 61§~~~~.l 7i:r ......

AVEStR N0. OF ftltSONS/10G rotaL - .. . .. UUwn ...... RURML .. ..

otAL .. .. ma4J ...... TOA UULa.. OF ...... - 27 - ANNEXI Page 2 of 6 CAMIKA.TNE _ USOCtALINDICATOS DATA T CASA. WE EEE EC ROuPS(iatGwTC AWNASS) *K ME cgt(r uCut CSTMATE) A UPar#U LOS INCOMEAFRA A S.

AiOJUTCDOCEROLII4ENT RATIOS plmlARfm TOTAL 12.0 24.0 56.0 67.8 9.7 NALE 17.0 34.0 71.0 77.6 100.0 FliULC 8.0 15.0 41.0 34.9 83.2

SECONDOATmTOTAL 3.0 6.0 1i.0 13.3 17.3 mALE 4.0 12.0 22.0 17.9 25.0 FIHALE 2.0 4.0 10.0 9.1 14.6

VOCATtOiL EX OF SCONUA) 1.4 3.6 6.1 13.2 5.V

FUflL-TEACIER RATIO PRDIA 31.0 27.0 23.0 4.9 41.1 531NID1W 19.0 20.0, 16.0 27.4 25.5

PASSNGER C&RSITN MOSSDPOP 2.1 f.2 3.3 fd 3.6 20.3 maiDO 1UZcVnlRS/THfUSANDPOP S.3 107.5 111.4 55.9 107.3 TV OscVmRSAuoDS A Oe ...... 2.6 20. uWSArAR C"DILT GENERAL IzTulrTr) CIaIAtIDOt PER TuOusD rOrWiTItw 4.f .. .. s .0 16.4 CINEA ANN"L ATENAMCAPITA .. .. 0.3 0.4

TOTALLOOt FOCEZ(THO) 193.0 227.0 331.0 PXHAIX(PERCENr) 46.8 46.2 43.1 34.2 36.2 ACRICOLTURS(IcER:S) 65.0 12.0 70.0 It 77.5 54.5 INDUSTU (PCErT) 7.0 1.0 9,.7T 9.7 18.3

PAXTIC[PATION RATE (MacrNT) TOTAL 51.7 48.7 47.5 39.3 36.6 MALE 36.2 53.5 53.6 id 30.9 47.1 FKIALE 47.4 44.2 41.6 7 2B.1 27.2

EGNONUCDCPUIDCNC RATIO 0.9 1.0 0.9 1.3 1.3 Iow. mitamm MacU.? or PRIVATE ZICUS

31l5X 3W0OF N S ...... tUSKS? 2020OF OUSEHOLDS . LONIST202 OFUOUSEIOLD S .. LokS? 402 or soUSIOLS ..

Prs=eESTmgATED 7A9DLABSOLUTE GROW POVERTlf INCOME LEVEL CUSSPER CAPITA) UaA ...... 165.5 5S07 RAL .. .. 95.0 I 95.0 275.3

ESTDUSAERIATVE CRTr raCOM LCEVL CUSSPER CAPITA) URUU .. .. 185.0 IC 113.1 545.6 RURAL .. .. 90.0 T 67.6 201.1

ESrIATED POP. bELCJ ABSOLUTE POVE3 IN111C1LEVEL. CZ) RJAN ...... 36.6 RURAL .. .. 40.0 I 61..

NOT AVAILA-LE NOT AFPLIAEB N OT E S

/a TM grap averages for each SndScator are popula-rLonoltted *riel_ttc m_s. Cwrqe of centriSe smog the indctators depend - aoIlabiltty of data and LS not atteorm. lb Unlas othewSe sotod. "Dets for 1960" refer to an year btomen 1959 and 1961; "'Dce for 1970" between 1969 and 1971; and data for "Met beset Eetate' btmee 1961 ad 1983.

/c 1977; d 1980; 1. 1978; A 1962; A 1976; & 1973; /S 1984.

OhEs. 1983 ANIEX I - 28 - PageS 3of 6

DUNImMONSOF SOCIAL INDICATORS Ne Althoughh da amdrwn frm mournpslyjudmd themost auonauve andreliable. it shouldalo be oted thattheyn -Yn be initinally comparbk became the abckor staadarlsd dsni na sadconep ud by dlEremtcontn in coflcun thed. Thedata are. n elea usefulto dt,cuibeorders of magnitude.Indicae trnds andchareeuie cenainmajor duffenom betwen counsin. he rerce owupsare (1) die naie countrygroup or thesubject country and 12) a country oup with smwhat higheraversge mncame than the contry groupof thosubjct coury (sxM for -HIg IncomeOil Eaportea goup whew Middk IncomeNnh Aftomand Middle East" is chosenbeome o ronuer soco.culral atile). In theuro_ grp data daveahe afepopbuann wedghted anthmei m_easfor eachindicator and shown only whenmajority Ofthecounbe in agoup sa daa for that dato Sinceihe coverge ofeounrie amongthe indkuior deperndon theavabiliy od a undios uniform. ceutionmus beexarisd In reing aeag, ofdoneindicaor to aother. Thm averagesar onlyueful in compaig thevalue atone indicator at a tme among thecounry d re e group

AREA (thousandsq.km.) Crde Birth Rate(per thouzsd)-Number of live birth in theyear Toni-Total surfacear comnpnsinglaud area and inlandwatwm per thousandof mnid-yearpopulation; 1960. 1970. and 1983data. 1960.1970 and 1983data. CIrud DeathRate (per thousaud)-Numberor deathsin the year Apdkxbwul-Estimaet of agriculturalarea usedtemporarily or perthousand of mid-yearpopulation; 1960. 1970. and 1983data. permanentlyfor crops.pastures. market and kitchen grdens or to GrossRepredan Rak-Average numberor daughte a woman lie faUow,1960. 1970 and 1982data, will bear in her normanrqeroductive period if she experiences presentage-speific fertility rates;usually five-year avenges ending GNP PER CAPITA(USSGNP per capita estimates at curmnt in 1960. 1970.and 1983. market prices, alculatedby sme conversionmethod as World F n.,x ricceptrs Anna (ehomnndfl-Annual num- BankAtlas (1981-83basis); 1983 data. berof acceptorsof birth-controldevices under auspices of national ENERGYCONSUMPTION PER CAPITA-Annual apparent family planningprogrm. consumptionof commercial primary energy (coal and lignite. Fhan(yPlausr-eUrs (percenrefma-kid ai )- Theperen- petroleum, natural gasand hydro-.nuclear and geothermalelec- tag of marriedwomen of child-bearingage who arepracticing or tricity) in kilogramsof oil equivalentper capita; 1960.1970. and whosehusbands are practicing any form of contraception.Women 1982data, of child-bearingage ar generallywvmen aged 15-49.although for some countriescontraceptive usa is measuredfor other age POPULATION AND VITAL STATLISTCS groups. TonalPepulul8. Mid-Yarew (theusmfz -As of July 1;1960.1970, FOODAND NUTRMON and 1983data. Uris ftp_lrwx.a (percentof total)-Ratio of urban to total lutes ofFad Aodrectie. PerCapita (1969-71 - 10) -Index of per iopulaton;differentdefinitions of urbanareas may ¢afectcompar- captta annual productionof all food commodities.Production population;differcnt definitions of urban areas mayaffect compar- excludesanimal feed andseed for agriculture.Food commodities ability of dataamong countries: 1960. 2970. and 1983data. include primary commodities(e.g. sugarne instea'Pof sugar) - Pwjecria which are edible and contain nutrients (e.g.coffee and tea are Popuationin wear200-The projectionof populationfor 2000 excluded):they comprisecereals, root crops. pulses.oil seeds. madefor eacheconomy separately. Starting with informationon vegetables.fruits. nuts,sugarcane and sugarbeets. livestock, and total populationby ageand sex. fertility rates,mortality rates. and livestockproducts. Aggregate production of eachcountry is based internationalmigration in the baseyear 1980.these parameters on national averageproducer price weights:1961-65. 1970. and wer projectedat five-yearintervals on the basisof generalized 1982data. assumptionsuntil the populationbecame stationary. PerCapita Supply ofCal e rceu efequeresseas)-Comput- Stationarv population-Is one in which age- and sex-specificmor- ed from calorie equivalentof net food suppliesavailable in countrv tality rateshave not changedover a longperiod. while age-specific percapita per day. Availablesupplies comprise domestic produc- fertility rateshave simultaneously remained at replacementlevel tion. imports lessexports. and changesin stock. Net supplies (net reproductionrate - I. In sucha population.the birth rate is excludeanimal feed. seeds for usein agriculture.quantities used in constantand equal to the death rate. the agestructure is also food processing,and lossesin distribution. Requirementswere constant.and the growth ratc is zero.The stationarypopulation estimatedbv FAObased on physiologicalneeds for normalactivity sizewas estimated on the bastsof the projectedcharacteristics of and healthconsidering environmental temperature. body weights. the populationin theyear 2000. and the rate of declineof fertility ageand sex distribution of population.and allowing 10 percent for rate to replacementlevel. wasteat householdlvel: 1961.1970 and 1982data. PopulationMonentun-ls the tendencyfor populationgrowth to PerCpita Supplyof Psroein(gras per duy)-Protein contentof continuebeyond the time that replacement-levelfertility hasbeen percapita net supplyof .oodper dav. Netsupply of foodis defined achieved:that is. evenafter the net reproductionrate hasreached as above.Requirements for all countriesestablished by USDA unity. The momentumof a populationin the yeart is measuredas providefor minimumallowances of 60 gramsof total protein per a ratio of the ultimatestationary population to the populationin dav and 20grams of animaland pulseprotein. of which10 grams the yearr. giventhe assumptionthat fertility remainsat replace- shouldbe animal protein. These standards are lower than thoseof meatlevel from yearz onward. 1985data. 75grams of total protein and 23 gramsof animal proteinas an Pepoath Density averagefor theworld. proposedby FAO in the Third WorldFood Persqklm.-Mid-year populationper squarekilometer (100 hec- Supply:1961. 1970 and 1982data. tares)of total area;1960. 1970. and 1983data. PerCapit Prein Supplyfos Animal ad Peti-Protein supply Persq.kn agriculturalho'd-Computed asabove for agricultural of foodderived from animalsand pulsesin gramsper day: 1961-65. landonly. 1960.1970. and 1982data. 1970and 1977data. PopuIbaionAge Suructue (percent)-Children (0-14 years). work- ChAl (e 1-4)Death Rate (per rhomsd)-N umberof deathsof ing agel(5-64 years).and retired (65 years and oer) aspercentage children aged 1-4 yearsper thousandchildren in the sa-e age of mid-yearpopulation: 1960. 1970. and 1983data. groupin a givenyear. For mostdeveloping countries data derived PopAato Growt Rate(perceet-toJeta-Annual growthrates of from life tables:1960. 1970 and 1983data. total mid-yearpopulation for 1950-60.1960-70. and 1970-83. HEALTH I bpulationGrowth Rat (perceut)-ehru--Annual growth rates Life Expectany at Birth (yearxl-Numbr of yearsa newborn of urbanpopulation for 1950-60.1960-70. and 1970-83data. infant would live if prevailingpatterns of mortality for all people -29- ANNX I Page 4-of 6

at the timeof or its bbrthwac to sy them_e throughoutits life; P -wacheRetdo - prwy. ad secondary-Totalstudents en- 1960.1970and 1963dat roiled in priimy and secondaryklve dividedby number of h4owo Mth Rae (p1rt- _Number of infantswho die teac in the conspondinglevels. befo.reching oneyear of ae per thoand livebinr in a given yew; 1960 1970and 1963da. CONSUMPI1ON Aceeof SO WIa (_pv of_fa-rs wIP, d uAqe_rCus er tusand PePulAu) tungr cas com- rud-Number of peope (totaLurban and ral) wih reaable prm motor ca seang kt than ight perso; exclude ambul- -comto saf watersupply (incld tatd ufae wats br aces heas and militay vehicla. untaated but unctainnted water suchu that from p! cted Rd Reva (per rwpapali-All typesof recvrs boebole. pspgpa sanitarywelDl) a pereta, of thor rpaec- for radio broadcaststo generalpublic per thousan of population; ivwpopuation In an urban are a pubic fountainor staxdpot un-icensed*xdudes rceiversi counties and in yeas whe ocatednot mor thn 200metes fro houtImay he co registato of radio sets wa in effect data for rcnt year may wtin reaoble.. ams of that house. In rural are"s . not be comparablesince most countin abolishedlicesing. aic u wouMimplye tht thehouwwifeeorembers of the housebolddo not baveto spenda diproportionatepElt of theday TVR#cuVm (per dp l)TV reeiven frorbroadcst in feching thefays watr needs to genea publicper thousandpopudatio; exdudes unliensd TV AcEss to Earns Diyua (p:te fp.sl)-iot4 Nw, srocvers in countcs and in yearswben regttion of TV ses wa d mNu-Numberof people(totaL urban. and rural) ed by i CffSCL excrete disposl a pecentags of their respectivepopulations. Akwpre Chcdmbm(pe tminmdp Is)-Shows the aver- Exreta dispasalmay include the colectionand disposal,with or ge drcudationof -dailygeal intert newspwer.-defined as a withouttreatment, of humanec nd wa w ter by wter- peiodicl publicationdevoted prinarl to recodinggeneral news borne system or the use of pit priviesand similarinstallationL It is consideredto be "daily"if it appeas at lan fourtimes a week. ,pd.al.,perPkaido-lbpulation dividedby numberof prc- CIem ASJ_ Arteser per CpeII per Yec-Based on the tisingphysicia qualifiedfrom a medicalschool it univeril numberof ticketssold duringthe year. includingadmissions to Apukleper NnIxV EPbso-Populationdividld by numberof drive-incinemas and mobileunits. prcing male and femalegraduate nuse assistuntnurse practcl nurs and nursing auxiliris. OR FORCE lpmidtlarpgr fWfasguaf -a wink d murd-4F1pulation lota Lab_ &ic (rthasniii-Economically active person. in- (totaL urban. and rual) divided by their respecti number of duding armed forces and unemployedbut excludinghouswives. hospital beds availsbl in publicand privae, nal and specalized sudents. etc.. covering population of all age. Definitionsin hospitals and rehabilitation center Hospita are esblishments various countrniesame not comparble: 1960.1970 and 19U3da. pcrmanentlystiffed by at leat one physician.Estnbisuments prov- f- (percew-Female labor force as percetage of total lIbor iting principaly custodial care are not included. Rural hospitals. force. however.incdude hith and medil centers not permanentlystaffed Ap ,w (percen)-Labor romei fanning. forestry, hunting by a physician (but by a medicalassistant, nurse midwife.etc.) and fishingas pentag of total labor fome; 1960. 1970and 1960 which offer in-tient aoimodation and provide a limied range data of medical facilities. I _nsr(perew)-Labor formcin miining.construction. manu- Ad. iois per Hesp*f hi-Total number of admissions to or facturingandelectricity. water and gas as pctage of total labor dischargedfrom hospitalsdivided by the nwnber of beds. force: 1960. 1970and 1930data.

HOtICG or activity rates am computedas tota. mae. and female labor forac A7qe Mcc of HuwehaM (pem- per hrllollJ-ioaI WhaM, as percnges of totaL male and femakl population of all ages abus-A houseold consists ofa group ofindividuals who shbar respectively;1960. 1970,and 1983data. Thesc are based on [LO's lving quarters and tbeir main meals. A boa-der or ldger may or participation rates reflectingage-sex structure of the population, and may not be induded in the household for sistcl purposes. long time trend. A few estimatesare from national sourcs A.age Nmber of Pe-sa per Raw-total, uran a ural- Eco,noc DependnKy RAi-Ratio of population under IS. and Av,erge number of persons per room in al urban. and rural 65 and over. to theworking age population (those aged 15-64). occupied conventional dwelings. respectvely. Dwellings cxdude non-perman tructures and unoccupied parts. INCOME DISTRIBUTION Prce_t of DweBus -wA Eklericrp-ra. , and rural- Perc of Torta Dspo=b Ins (both in cash ad kind)- Conventional dwellingswith clectricityin livingquarters as percen- Aacruing to percentilegroups of householdsranked by total house- tage of totaL urban. and rural dwalings respectively. hold income.

EDUCATION POVERTY TARGET GROUPS A4ssed E.wo_r Ratosn The folowing esumtes are very approximate measurcs or povety Prnawy. school - toad. mawe nd feml-Gross total, maleand kves. and should be interprecd with considerablecaution. femalecnrolment of all ages at the pnmary kvel as prcentages of EstisAedAbsofite Por*by incns Level (Sf pr capgita-when respective primary school-ag populations While many countres ad ral-Absolute poverty income level is that income klvd consider prmary school age to be 6-11 yean. othen do noL The below which a minimal nutritionally adequate diet plus essential differeacesin country praces in the ages and duation of school non-food requirements is not affordable. are reflected in the ratios given. For some counties with universal Estm ed Relie Pfevy Incoe Lewel(1USS per capdtai-reban education, gos enrolment may exceed 100 percent sac some wid rural-Rural retive poverty income level is one-third of pupils are below or above the country's standard prinary-school averge per capita personal income of the country..Urban klvd is age derived from the rural lvel with adjustment for higher cost of SeconAvy schoo - otal, mnle and femak--Computed as above; living in urban as secondary educaion reqcuresat kast four years of approved pri- Estirae d Soe.ws Ahsdre Pbrry Incenr Levd (jer- mary instruction provides gneral. vocational. or teacher trining ce)ti-ma anmd rural- PLcent of population (urban and rural instructions for pupils ually of 12 to 17 years of age: correspond- who are -absolute poor.- cnce coures ar generally exduded. Yocauonai EreoDm (pecnt of secondary)-Vocational insti- Comparative Analysis and Data Division tions include technical. ndustriaL or other programs which operate Economic Analysis and Projections Departmcnt independently or s departments of secondary instutions. June 1985 -30 - ANNEXI Page 5 of 6

EONCHIC INDICATORS- THZ GANBIA

GROSSNATIONAL PRODUCT IN 1981 * ANNUALRATE OF GRODUT(%. Constant Prices)

USS min. % 1975-79 (Av.) 1979-84 1984

GNP at Market Prices 168 100 3.8 1.9 -7.6 Gross Domestic Investment 31 1.6 21.8 -7.6 -32.6 Gross Natlonal Savings -1 -1 Current Account Balance -32 -17 Exports of Goods, NFS 111 59 31.5 -1.7 31.2 Imports of Goods, NFS -138 -73 .4 .2 -1.0

OUTPUT. ZMPLOYMENTAND PRODUCTIVITYIN 198U a'

Value 6dded Labor Force V.A. Per Worker USS Min. A Thousand uss Agriculture 54 28 232 70 233 39 Industry 25 13 30 9 833 141 Services and Unallocated 117 59 69 21 1.696 286 Total I Average 196 100 331 100 592 100

CENTRALGOVERNMENT FINANCE D. Kin. Percent of GDP M~~~~a~~1984. at 1979 at Current Receipts 128 21 23 Current Expenditure 141 23 21 Current Balance -13 -2 2 Capital Expenditure 70 12 12 Overall Balance -83 -14 -10

1980 1981 1982 1983 1981 (HIllions of Dalasis, Outstanding End-June)

MDNEY.CREDIT AND PRICES Money Supply 76 90 104 135 1.40 Bank Credit to Government (net) 27 55 37 75 81 Bank Credit to Private Sector 91 98 105 131 143 Bank Credit to Public entities 56 69 98 142 161 (Percentass or Index amabers) Money as % of GDP 17.9 21.9 23.0 25.6 23.2 General Price Index (1980-1984) 100.0 108.0 116.9 127.7 147.6 Arnual Percentage Change in:

General Price Index 5.0 8.0 8.2 9.3 15.6 Bank Credit to Government (net) - 103.7 -32.7 102.7 -8.0 Bank Credit to Private Sector - 7.7 7.1 24.8 9.2 Bank Credit to Public entities - 23.2 42.0 44.9 13.4

a/ Fiscal year ending June 30th.

September 6, 1985 -31- ANNEX I I Page 6 of 6

BALANCEOF PAYMENTS MERCHANDISEEXPORIS (1981-84 AVERAGE) 1982 1983 1984 (USS Min.) % (USS millions) - Exports of Goods, NFS 100.3 105.6 111.2 Groundnuts 22.5 85.9 Imports of Goods, NFS 142.3 131.7 138.0 Fish and Fish Products 2.1 8.0 Resource Gap -42.0 -26.1 -26.8 All Other Goods 1.6 6.1 Dome tic Exports MYU Interest Payments and Other Factor Payments (net) -5.4 -9.1 -8.0 Reexports a/ 58.0 Private Transfers (net) 3.0 2.6 2.4 Total Mercrandise exports 84.2 Balance on Current Account -4.43 -32.5 -32.4 EXTERNALDEBT AS OF DECEMBER31. 1984

Direct Investment .5 -. 1 1 Official Transfers and Grants 43.8 35.3 30.4 Public Debt, Incl. Guaranteed 263.3 Public M & LT Borrowing (net) 30.1 13.5 18.5 Non-Guaranteed Private Debt Disburaements 34.7 20.3 25.1 Total Outstanding and Disbursed 263.3 Amortization 4.6 6.8 6.6 Other Capital (net) -46.9 -48.0 -28.3 DEBT SERVICE RATIO FOR 1984 CbQnge tn Official Reserves -16.8 -31.8 -18.2 Public Debt, Incl. Guaranteed 22.3 (net) (+ - increase) Non-Guaranteed Private Debt Total Outstandingand Disbursed 22.3 Met Foreign Assets -65.9 -92.0 -106.5 (end June) Petroleum Imports 14.0 13.0 14.5 IBRD/MA L8NnING AS OF JUNE 30. 1985 UJSSKin. mwr Oustandingand Disbursed 32 Undisbursed 21.1 OutstandingIncl. Undisbursed 3rE1

RATE OF EXCHANGE Annual Averaaes End Period 1981 1982 19S3 1984 April 1

US$ 1.00 - Dalasis 1.97 2.29 2.64 3.58 4.02

ai Includes staff estimates of unrecorded reexport. - 32 -

ANNEX II Page 1 of 2

THE STATUS OF BANK GROUP OPERATIONS IN THE GAMBIA *

A. Statement of IDA Credits (as of September 30, 1985)

Amount (less cancellations) Credit (US$ million) Number Year Borrower Purpose IDA 1/ Undisbursed 1/

Six credits fully disbursed 22.49

897-GM 1979 Republic of Highway Maintenance The Gambia Project 5.00 0.71

1187-GM 1981 Republic of Energy Project 1.50 0.44 The Gambia

1266-GM 1982 Republic of Second Banjul Port The Gambia Project 6.50 2.25

1443-GM 1984 Republic of Urban Management and The Gambia Development 11.50 9.73

1476-GM 1984 Republic of Second Agricultural The Gambia Development 9.40 8.71

Total 56.39 21.84 of which has been repaid 0.27

Total now held by IDA 2/ 56.12

Total undisbursed 21.84

1/ Beginning with Credit 1187-GM, Credits shown here have been denominated in Special Drawing Rights. The dollar amounts in these columns represent the dollar equivalent at the time of credit negotiations for the "IDA" amounts and the dollar equivalents as of September 30, 1985, for the "undisbursed" amounts (1 SDR - US$1.05940).

2/ Prior to exchange adjustments.

* The status of the projects listed in Part A is described in a separate report on all Bank/IDA financial projects in execution, which is updated twice yearly and circulated to the Executive Directors on April 30 and October 31. - 33 -

ANNEXII Page 2 of 2

B. Statement of IPC Investments (as of September 30, 1985)

Fiscal Year Obligor Type of Butsiness Loan Equity Total

1983 Rombo Beach Hotel Ltd. Tourism Hotel 2.9 - 2.9

Total Gross Commitments

Less Cancellations, Terminations,Repayments and Sales -

Total Commitmentsnow held by IFC 2.9 - 2.9

Undisbursed Balance 0.0 _ 0.0 - 34 -

ANNEX III Page 1 of 1

THE GAMBIA

THE SECONDHIGHWAY MAINTENANCE PROJECT

Supplementary Project Data Sheet

Section I: Timetable of Key Events

(a) Time taken to prepare project: 18 months (b) Project prepared by: Ministry of Works & Communications (c) Date of appraisal mission: February 1985 (d) Date of completed negotiations: February 1986 (e) Planned date of effectiveness: July 1986

Section II: Special Bank ImplementationAction

None

Section III: Spection Conditions

(a) Conditions of Effectiveness:

(i) Enactment of new MWC structure (para 40); (ii) Publication of charges to be paid to MED. together with adequate allocations in FY86/87 budget to pay for MED's services (para 43); Ciii)Cross effectiveness conditions with EEC, UNSO and UNDP financed components (para 65).

(b) Conditions of Disbursements:

Ci)Initial deposit of D 40,000 by Government in the Project Account before IDA advances the initial deposit in the Special Account. (para 72). (ii) IDA replenishments of the Special Account to be conditional on the Government having deposited the required counterpart funds into the Project Account (para 72).

(c) Other Conditions:

(i) By May 1 of each year, up to and including 1992, review three-year roll-over investment programs and annual development and recurrent budgets for the transport sector (para 37); (ii) Implementationof MED's new charging system for the central workshop to start by July 1, 1986 (para 43); (iii) Provide separate budget allocations for each MWC division (para 46); (iv) Review routine maintenancemethods by June 1, 1987; any modifications in MWC's maintenance practices and equipment holdings and use to be incorporatedinto annual road maintenance programs from July 1. 1987 (para 56). THE GAMBIA SECOND HIGHWAY MAINTENANCE PROJECT 41 NATIONALROAD NETWORK

SecondHighway Maintenance Projech Notional Roads: Airport Rehabilitotion: - Paved 0 Towns

- X ~-- Paved) Roads Loterite b Rivers Bridge Earth e Notional Capital Periodic Maintenance; Local Roads. International Boundaries Poved Roads Paved Gravel Roads Laterite First Highway Maintenance Project: A MWC Division Offices Periodic Maintenance: Limit of MWC Maintenance Divisions Paved Roads @ Port Gravel Roads * River Wharves . . .

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