Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. P-3726-COM REPORT AND RECOMMENDATION OF THE Public Disclosure Authorized PRESIDENT OF THE INTERNATIONALDEVELOPMENT ASSOCIATION TO THE EXECUTIVE DIRECTORS FOR A PROPOSEDCREDIT OF SDR 4.8 MILLION TO THE FEDERALISLAMIC REPUBLIC OF THE COMOROS Public Disclosure Authorized FOR A RURALSERVICES PROJECT April 11, 1984 Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCYEQUIVALENTS Currency Unit = Comorian Franc (CF) (The CF is fully convertible into the French franc at 50 CF = I FF). Calendar 1983 February 1984 Unit = l'omorianFranc (CF) = Comorian Franc (CF) US$1.00 = CF 390 = CF 424 CF 1,000 = IUS$2.56 = US$2.36 CF 1,000,000 = US$2,564 = US$2,358 (The Staff Appraisal]Report is based on US$1.00 = 364 CF). MEASURES i meter (m) = 3.28 feet 1 square meter (m2) = 10.76 square feet 1 kilometer (km) = 0.62 miles 1 square kilometer (km2) = 0.386 square miles ABBREVIATIONS AfDB = African Development Bank CADER = Centre d'Appui au DeveloppementRural CEFADER = Centre federal d'appui au developpement rural EDF = European Development Fund FAC = Fonds d'Aide et de Cooperation IFAD = InternationalFund for AgriculturalDevelopment IRAT = Institut de Recherche d'AgronomieTropicale PPF = Project Preparation Facility UNCDF = United Nations Capital Development Fund UNECA = United Nations Economic Commission for Africa UNDP = United Nations DevelopmentProgram WFP = World Food Program GOVERNMENT FISCAL YEAR January 1 - December 31 FOR OFFICIAL USE ONLY COMOROS RURAL SERVICES PROJECT CREDIT AND PROJECT SUMMARY Borrower: Federal Islamic Republic of the Comoros Beneficiary: CEFADER (Federal Center for Support to Rural Development) Amount: SDR 4.8 million (US$5.04 million equivalent) Terms: Standard Colender: International Fund for Agricultural Development (IFAD) Project Description: The objective of the proposed project is to reorganize the CEFADER/CADER so that it functions effectively as the network for rural services. The project would address the problems of recurrent cost financing and inadequate budgetary procedures, shortage of skilled manpower and need for better donor coordination in the sector. It would improve rural extension services, training and supervision of staff, monitoring and planning, and budgetary management and finance. It would strengthen animal health, forestry and land conservation programs and would complete two new CADERs and support existing CADER operations. Benefits & Risks: By strengthening the rural services network, the project would provide for a more systematic approach to extension, field trials and development of technical packages, which should lead to increased foodcrop, livestock and fuelwood production and better forestry management. Increased food and meat production would result in import savings. An additional benefit would be the improved nutritional level of the rural population. The project would also promote more efficient use of resources provided by external donors. The main risks to project implementation include limited Comorian skilled manpower, for which the project would provide substantial training programs for national staff and ensure that a substantial portion of technical assistants' work is devoted to in-service training; and Government lack of funds for recurrent financing, for which the project would establish proper budgetary procedures and ensure a gradually increasing contribution by Government to rural services recurrent costs. This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. -ii - Estimated Costs: Local Foreign Total ------ (US$ million) ----- Techn:.calAssistance 0.64 2.56 3.20 Overseas Training 0.04 0.55 0.59 Vehicles, Imported Livestock and Equipment 0.08 0.69 0.77 Civil Works 0.46 0.16 0.62 Agricultural and Veterinary Inputs 0.13 0.36 0.49 In-service Training and Operating Costs 1.08 0.23 1.31 Subtotal, Base Costs 2.43 4.55 6.98 Physical Contingencies 0.24 0.46 0.70 Price Contingencies 0.74 0.88 1.62 Total Project Costs 3.41 5.89 9.30 Financ:ingPlan: Local Foreign Total --------(US$ million)----- Government 0.93 - 0.93 IDA 1.60 3.44 5.04 IFAD 0.88 2.45 3.33 Total 3.41 5.89 9.30 Estimated Disbursements: IDA FY 1985 1986 1987 1988 1989 1990 -------------(US$ million)------------ Annual 0.96 1.08 0.90 0.84 0.70 0.56 CumTulative 0.96 2.04 2.94 3.78 4.48 5.04 Rate of Return: n.a. Appraisal Report: Report No. 4775-COM, dated March 26, 1984 Map: IBRD 12893R INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT TO THE FEDERAL ISLAMIC REPUBLIC OF THE COMOROS FOR A RURAL SERVICES PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Federal Islamic Republic of the Comorosl/ for an amount of SDR 4.8 million (US$5.0 million equivalent) on standard IDA terms to help finance a rural services project. The International Fund for Agricultural Development (IFAD) would participate * with US$3.3 million in parallel co-financing on standard IFAD terms. PART I - THE ECONOMY Background and Economic Structure 2. An updating economic memorandum based on the findings of an economic mission to the Comoros in September 1982 was distributed to the Executive Directors in March 1983. The following summary is based on the findings of that mission as updated by a Public Investment Program Review mission which visited the country in December 1983. 3. The Federal Islamic Republic of Comoros, with a GNP per capita estimated at about US$270 in 1983, is considered one of the least developed countries in the world. Its population is 375,000 with a density of 225 inhabitants per square kilometer, among the highest in Eastern Africa, and a ratio of population to arable land of 800 inhabitants per square kilometer. 4. The economy of the Comoros is dominated by its physical and structural characteristics -- a small archipelago isolated from the major trade routes lacking both natural resources and skilled manpower and confronted with a serious imbalance in the geographical distribution of its population as well as a high demographic growth rate. Agriculture is the main productive activity; however, the country has become increasingly dependent upon food imports, which account for about 40 percent of food consumption. During and after the colonial period, the country has lived well beyond its means, relying heavily on external assistance. The Comoros is a member of the CFA Franc zone. 1/ The Comoros archipelago consists of four islands: Grande Comore, Anjouan, Moheli and Mayotte. The Government of the Federal Islamic Republic of the Comoros has effective control over the first three islands. Mayotte is still under French administration. References to the Comoros in this report exclude Mayotte. - 2 - 5 Agricultural land is scarce. Of the total land area of 1,660 square kilometers, only 50,000 ha, much of which are steeply sloping, are suitable for annual cropping. A ratio of one hectare of arable land per eight inhabitants is hardly enough to permit food self-sufficiency. The potential for traditional in-shore fishing is limited because of the narrowness of the continental shelf and often unfavorable weather conditions limiting the number of fishing days for traditional boats. Deep-sea fishing potential is estimated at about 12,000 tons annually, but is yet unexploited because of the lack of appropriate infrastructure. There are no known mineral resources, and energy resources are limited to the hydro-electric sites of Moheli and Anjouan whose potential is estimated at a modest 20 MW and 500 KW respectively. Geothermal potential is being assessed. Potential for tourism exists, although it is also unexploited. 6. Non-agricultural activities in the Comoros are limited. The very small processing and manufacturing sector consists mainly of ylang-ylang distillation into perfume essences, a small soft drink bottling plant, a sawmill and a soap factory. The social sectors, notably education and health, were adversely affected by the econonic difficulties of the country during the 1975-78 period, but recently the situation has started to improve, partly on account cf substantial external assistance. Education hadl already started expanding rapidly before independence, and by 1978-79 enrollments in primary schools exceeded 80 percent of the population in the 7-12 age group. However, the system lacks relevance to the Comoros' needs and the quality of education remains poor. There is also a severe shortage of qualified Comorian teaching staff and a large number of teachers are being provided by the Arab League and France. 7. Population is growing rapidly, and population pressure on land is al:-eady a serious problem. The average annual rate of growth of the population since the 1966 census was 3.6 percent, resulting from a 2.6 percent natural growth rate compounded by an influx of immigrants, mainly refugees who fled Madagascar in 1977. The problem has become more acute since independence, because Madagascar, which was a natural emigration outlet for Comorians, no longer welcomes immigrants from Comoros. The present rate of growth of the population is unknown but is probably higher than 2.6 percent, given the absence of fertility reduction measures and the likely decrease in mortality in recent years. Population density varies among the three islands, with 88 inhabitants per square kilometer on Moheli, 203 on Grande Comore and 350 on Anjouan. Health conditions are poor; life expectancy is only 46 years and the child mortality rate is high. Malnutrition is widespread and malaria is hyperendemic in many areas .