Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. P-3358-RW

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

IN AN AMOUNT EQUIVALENT TO US$16.3 MILLION

TO THE

RWANDESE REPUBLIC

FOR A

PHASE II BUDESERA GISAKA MIGONGO (RURAL SERVICES) PROJECT

June 22, 1982

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

US$1.00 Rwandese franc (Rf) 91.91RF 100 US$1.09

FISCAL YEAR

January 1 - December 31

GLOSSARY OF ABBREVIATIONS

BGM - Bugesera Gisaka Migongo ProjectCLUSA - Cooperative League of the USACRS - Catholic Relief ServicesFAC - Fonds d'Aide et de CooperationGRENARWA - Grenier National du Rwanda (National Grain Marketing)IAMSEA - Institut Africain et Mauricien de Statistiques et Economie

Appliquee (African Mauritian Institute for Statistics andApplied Economics)

IITA - International Institute for Tropical AgricultureISAR - Institut des Sciences Agronomiques du Rwanda

(Agricultural Research Institute of Rwanda)OBM - Office du Bugesera et Mayaga

(Agency for Bugesera and Mayaga)OCIR-Cafe - Office des Cultures Industrielles du Rwanda - Cafe

(Agency for Industrial Crops of Rwanda - Coffee)OCIR-The - Office des Cultures Industrielles du Rwanda - The

(Agency for Industrial Crops of Rwanda - TeaONAPO - Office National de la Population (National Population

Office)OPROVIA - Office National pour le Developpement et la

Commercialisation des Produits Vivriers et de la ProductionAnimale (National Agency for Development and Marketing ofFoodcrops and Animal Products)

PAV - Poste Agro-Veterinaire (Agro-Veterinary Support Center)SSS - Service des Semences Selectionnees (Selected

Seed Service)

WEIGHTS AND MEASURES

Metric British/US Equivalents

1 meter (m) 3.3 feet1 hectare (ha) 2.47 acres1 a1re (100 m2) 0.02 acres1 kilometer (km) 0.62 miles1 square kilometer (km2) = 0.39 square mile (sq. mi.)1 kilogram (kg) 2.2 pounds (lb)1 liter (1) 0.26 US gallon (gal)

0.22 British gallon (imp gal)1 metric ton (m ton) 2,204 pounds (lb)

FOR OFFICIAL USE ONLY

RWANDA

PHASE II BUGESERA GISAKA MIGONGO (RURAL SERVICES) PROJECT

Credit and Project Summary

Borrower: Rwandese Republic

Amount: SDR 14.5 million (US$16.3 million equivalent)

Terms: Standard

Project (i) Objectives: To: (i) carry out research trials andDescription: introduce new cropping techniques and varieties for

the semi-arid areas; (ii) promote conservation toprevent loss of soil fertility; (iii) integratecrop and livestock activities on the farm plot andpromote destocking of cattle and substitution ofsmall stock where appropriate; (iv) intensifycultivation of cash crops and foodcrops in areas ofaverage and above average potential; (v) improverural roads; (vi) improve nutrition standards andexpand awareness of family planning alternativesand (vii) develop the project planning andimplementation capacity of local government(prefectures, sub-prefectures and communes).

(ii) Components: The project would provide for:

(a) applied and adaptive research for semi-aridcrop development;

(b) strengthening extension support servicesthrough:

i) improvement of in-service training,establishment of local demonstrations andorganization of a service network forcropping and livestock activities;

ii) promotion of an improved seed multipli-cation program; a tree nursery anddistribution program for coffee, fruit andforest trees; a program to improve soilfertility through stall-feeding andcompost production and erosion controlmeasures; promotion of improved methods ofcoffee plantation maintenance andorganization of pest control campaigns;and

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

(ii)

iii) training for cooperative management andtechnical support for agricultural credit;

(c) livestock activities, including upgrading oflocal sheep and goat stock;

(d) support to the Rubilizi Training Center fortraining assistant veterinarians;

(e) nutrition center activities and development ofa pilot family planning program in the projectarea;

(f) rural roads construction and improvement; and

(g) monitoring and evaluation and studies.

(iii) Benefits: The project would promote:strengthening of the support services foragricultural and livestock activities at the farmlevel; increased production of subsistence and cashcrops and of livestock; increased trade andtransportation in and out of the project area;useful technical information from researchactivities for the future development of thesemi-arid zones in Rwanda; and, over the long-term,reduced fertility rates through family planningefforts.

(iv) Risks: The success of the production-orientedactivities will depend on the effectiveness ofextension services in responding to farmers' needsand in introducing new inputs (such as semi-aridfoodcrop varieties) and improved cultivationtechniques. Timing and coordination problems willbe minimized by specific agreements betweenimplementing agencies. Technical and financialmanagement of all components has been carefullyreviewed to assure clear lines of responsibility,reporting and control. Thus, the program ofinvestments and the organization of projectmanagement have been carefully considered tominimize such risks.

(iii)

Estimated costs 1/:

Local Foreign Total(US$ thousands equivalent)

Project Management 703 3,045 3,748

Extension Activities 2,458 2,334 4,792Livestock Development 82 323 405Rubilizi Training School 96 128 224Research Activities 518 1,549 2,067Nutrition and Population 207 667 874Rural Road Construction 1,573 2,437 4,010

ContingenciesPhysical 484 635 1,119Price 2,946 1,388 4,334

Total 9,067 12,506 21,573

Financing Plan:

Local Foreign Total(US$ millions equivalent)

IDA 6.8 9.5 16.3FAC - 3.0 3.0Government 2.3 - 2.3

Total 9.1 12.5 21.6

Estimated Disbursements:

IDA Fiscal Year(US$ thousands equivalent)

1983 1984 1985 1986 1987 1988 1989

Annual: 1,200 3,050 3,250 2,500 2,500 2,500 1,300

Cumulative; 1,200 4,250 7,500 10,000 12,500 15,000 16,300

Appraisal Report: No. 3853-RW of May 28, 1982.

Rate of Return: 16 percent on 65 percent of project costs for whichbenefits have been quantified.

Map: IBRD 15961.

1/ Taxes included in project costs are negligible as all major items wouldbe exempt from import duties and local taxes. Project costs include anadvance from the Project Preparation Facility of about US$935,000 tofinance road-building equipment, building construction, and start-up ofthe semi-arid research and family planning activities.

0

9

INTERNATIONAL DEVELOPMENT ASSOCIATION

REPORT AND RECOMMENDATION OF THE PRESIDENTTO THE EXECUTIVE DIRECTORS

ON A PROPOSED CREDITTO THE RWANDESE REPUBLIC

FOR APHASE II BUGESERA GISAKA MIGONGO (RURAL SERVICES) PROJECT

1. I submit the following report and recommendation on a proposed credit tothe Rwandese Republic for the equivalent of SDRs 14.5 million (US$16.3 million)on standard IDA terms, to finance a Phase II Bugesera Gisaka Migongo (RuralServices) Project. The project would be cofinanced with the French FAC (aboutUS$3.0 million) on a parallel basis.

PART I - THE ECONOMY

2. A report, "Memorandum on the Economy of Rwanda" (No. 1108-RW), wasdistributed to the Executive Directors on July 27, 1976. Rwanda was visited byan economic mission in February 1979 and again in November/December 1981. Themajor findings of this recent mission are reflected below. Country data areprovided in Annex I.

3. Rwanda is a small landlocked country in sub-Saharan Africa, surroundedby Uganda, Tanzania, Burundi and Zaire. It has the third highest populationdensity of low income countries, at 188 persons/km2 (following Bangladesh andSri Lanka), and its GNP per capita is among the lowest in the world, at US$200in 1980. Rwanda's population of nearly 5.2 million in 1980 is predominantlyrural (with only 4.5 percent in urban areas), and lives in small individualfarms scattered over hilly terrain. The balance between food production andpopulation is precarious, as potentially arable land is scarce, foodcrop yieldsare declining, and population is expanding at an estimated 3.6 percentannually. Twice recently (1974 and 1980), Rwanda had to resort to emergencyfood imports. Agriculture (coffee, tea, pyrethrum, cinchona) provides most ofthe country's foreign exchange earnings. Coffee is, by far, the most importantsource (62 percent) followed by mining products (20 percent), mainly cassiteriteand wolfram. Rwanda's manufacturing base is narrow, and its growth is limitedby the small size of the market, and the lack of raw materials, marketingfacilities, entrepreneurial skills and skilled manpower. The country,consequently, imports petroleum products, capital goods, cement, steel,construction materials, and virtually every other modern manufactured product.Its merchandise trade is hampered by high transportation costs and dependence onneighboring countries for access to the seaports at Mombasa and Dar es Salaam.

1/ Part I of this report is substantially the same as that in ReportNo. P-3335-RW on the Second Education Project, considered by the ExecutiveDirectors on June 15, 1982.

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4. A quantitative assessment of Rwanda's economic performance can only betentative because of deficiencies in the statistical data base. Availableestimates indicate that during the period 1977-79 the rate of growth of real GDPaveraged 5 percent, but declined to about 4 percent in 1980. The averagecontribution of the agricultural sector to GDP, from 1977 to 1980, was 45percent, and the sector's performance reflected mainly variations in foodcropproduction, which during this period accounted for 79 percent of the value addedby the sector. Foodcrop production oscillated with weather conditions, but isestimated to have been, on average, slightly above the rate of populationgrowth. The remaining 21 percent of the value added by the agricultural sectoris shared by livestock, fishing, and export crops. As a consequence of thepressure of population on land, the cattle herd has been reduced, and thus thecontribution of livestock to the growth of the primary sector; fish productionremains very low, as there is no tradition of fish consumption. Export crops,involving only 6 percent of Rwanda's arable land and contributing an average of11 percent to the value added by the agricultural sector, are of crucialimportance to the economy. Coffee is not only the principal source of foreignexchange but also a major source of cash income to a large proportion of thepopulation and has accounted for a significant proportion of the Government'sbudgetary revenue.

5. The contribution of mining production to GDP averaged only 2 percent in1977-80, and has declined in recent years. Output of cassiterite and wolframhas stagnated, owing to low international prices aggravated recently by theappreciation of the Rwandese franc, which is linked to the United Statesdollar. Furthermore, supply of necessary fuels has at times been irregular (asin 1979, with the closing of the Uganda border), and access to additionaldeeper seams by small-scale independent miners has become increasinglydifficult.

6. The contribution of the manufacturing sector to GDP averaged 15 percentfrom 1977 to 1980. There are indications that manufacturing has experiencedsome significant real growth in recent years, principally in traditionalproduction (mainly of banana and sorghum beer), which is estimated at nearlythree-quarters of the value added in industry. Important also are theagro-industries (coffee, tea, pyrethrum), sugar refining, and beer and fruitjuice production (lemon, passion-fruit etc.). Rwanda's modern manufacturingbase has grown slowly, often in response to foreign aid. Examples include acement plant under construction in the south, financed by China, and a matchfactory financed by Japan. The construction sector contributed, on average, 4percent to GDP in the period 1977-80. Its recent growth has been limited to theconstruction of dwellings, mainly in Kigali (Rwanda's capital), and publicbuildings.

7. The assessment of performance of the tertiary sector is particularlytentative, partly because of the difficulties associated with evaluatingcommercial activities in the rural areas (traditional trade in coffee andfoodcrops), but also because of probable tax evasion. The data availableindicate that commerce and transportation contributed nearly 18 percent to GDP,on average, during 1977-80. Other tertiary activities seem to have expanded inreal terms, especially public administration, whose contribution to GDP averaged8 percent in that period.

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8. Traditionally, Rwanda's fiscal policies have been prudent, and have

taken into account the variations of revenue from export taxes, notably on

coffee. As a result, current budgetary surpluses averaged 3 percent of GDP in1977-80. The budget structure reflects the narrow revenue base, high recurrent

expenditures, and development expenditures which are contingent upon external

assistance. In 1977-80, more than 50 percent of central government revenues

came from import and export taxes, with coffee exports alone contributing 25

percent; taxes on beverages (17 percent), and on income and profits (18

percent), accounted for most of the remainder. Recurrent expenditures were

distributed mainly among Government's administrative services (25 percent),

education (24 percent), and defense (20 percent), but expenditures on

agriculture and public works have expanded faster in recent years. Budgeted

development expenditures have been particularly important in agriculture (18

percent in 1977-80), transport and communications (13 percent), education (13percent) and other social services (16 percent).

9. The fiscal situation, however, is being affected by a number of

unfavorable trends. Preliminary estimates indicate that in 1981, contrary tothe preceding years, increases in revenue fell short of increases inexpenditures. Coffee prices declined, and in spite of higher export volume,

budgetary receipts from this source fell. At the same time, there was a sharpexpansion in government expenditures reflecting, inter alia, the impact of the

general wage awards granted in September 1980 and the costs associated with theaddition of a new Ministry of Higher Education and the establishment of a newlegislative assembly. In an effort to expand the revenue base and increaserevenue, the Government introduced a new business tax which, however, has not

yet yielded sufficient resources to compensate for the fall in revenue fromcoffee. The overall treasury position thus shifted from a surplus of Rwf 1.4billion (US$15.1 million equivalent) in 1980 (equivalent to 1.3 percent of GDP)to an estimated deficit of Rwf 2.1 billion (US$23.1 million equivalent) in 1981(equivalent to about 2 percent of GDP). Even if growth in governmentexpenditures is slowed, continued deficits are likely in the medium-term, as

revenue from coffee is expected to remain depressed, and the possibility ofrecourse to other taxes (or to increase tax rates) is limited.

10. Conservative monetary and credit policies were followed during the1977-80 period. Inflationary pressures have arisen mainly from supply shortagescaused by frequent disruptions of supply routes through neighboring countries,

increased international transport costs, and increased prices of imports anddomestic foodstuffs. Inflation averaged 12.5 percent per annum during 1977-80;it peaked at 16 percent in 1979, primarily as a result of the closing of theUganda border, but also reflecting higher transport costs following the 1979-80oil price rises. The inflation rate declined to 7.2 percent in 1980 andremained at this level in 1981 as trade through Uganda was back to normal, theprices of domestic foodstuffs did not increase, and there was a significantslowdown in the rate of increase of import prices.

11. Rwanda's balance of payments generally reflects coffee market

conditions, and has benefitted in recent years from significant net capitalinflows. During the period 1977 to 1980, the current account deficit averaged

U$105 million. Nevertheless, it was substantially lower in 1977 and 1979, and

higher in 1978 and 1980, in line with fluctuations in coffee export receipts.Sustained net capital inflows led to overall balance of payments surpluses each

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year, and Rwanda's gross official foreign reserves, at end-1980, were equivalentto seven months of projected 1981 imports of goods and non-factor services. Thedecline in coffee export receipts observed in 1980 continued in 1981.Preliminary estimates indicate that in spite of a significant net inflow ofcapital, Rwanda suffered its first reserve loss in many years, bringing grossofficial foreign reserves down to the equivalent of five months of projected1982 imports of goods and non-factor services. Medium-term prospects are notencouraging, as the terms of trade are expected to deteriorate. Because thereare no viable alternatives, in the medium-term, to the products currentlyexported, export receipts are likely to increase only slightly (on the strengthof increased volumes of coffee and tea), while import payments will probablyremain at a high level, as Rwanda's import needs will increase if growth is tobe sustained.

12. Rwanda's development plan for the period 1977-81 included as its mainpriorities to increase food production, improve living standards through morewidespread access to better health care and basic social services, increaseemployment and improve utilization of human resources, and strengthen thecountry's external position (through reducing its dependence on coffee as theprincipal source of foreign exchange earnings and its vulnerability to externalfactors, such as transportation). The Government has made serious effortsto pursue these objectives, but structural, financial, and institutionalconstraints have limited the success of its policies. Particularly,institutional weaknesses stemming from lack of skilled personnel, fragmentationof institutional responsibilities, and poor coordination among concernedagencies have hindered project preparation and implementation and public sectormanagement, and have thus contributed to the sluggishness of planimplementation. The Government's efforts to increase agricultural production,especially of foodcrops, have had modest results, and food supply remainsinadequate. This situation is likely to be aggravated in the medium-term, aspopulation is increasing rapidly. The work of the National Population Office,recently created and still being organized, will take time to produce results.While there has been a gradual increase in the number of health/nutritioncenters and hospital beds, health services in rural areas are still sparse andwater supply has tended to deteriorate in some rural areas. The implementationof the 1979 education reform has been hampered by financial and administrativeconstraints and by the limited number of teachers. The only significantincreases in employment have occurred in the public administration andconstruction sectors. While Rwanda succeeded in diversifying somewhat itsexport crops by increasing the production of tea, this did not reducesignificantly its vulnerability to volatile world market conditions.

13. One of the 1977-81 Plan's main objectives was to reduce the country'svulnerability to bottlenecks affecting transportation through neighboringcountries; however, improvement of internal transportation is also needed tostimulate agricultural productivity. Rwanda's rudimentary road network hashampered agricultural specialization and monetization, and thus themodernization of the agricultural sector. External donors finance most ofRwanda's infrastructure projects, and investment in roads and road maintenancehas increased in recent years. However, a large proportion of the road networkis still not passable during the rainy seasons which sometimes seriously disrupttrade. The northern transportation corridor through Uganda and Kenya to theport of Mombasa carries most of Rwanda's external trade. Interruptions of thistrade have had negative impacts on the economy, as during the Uganda/Tanzania

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war in 1978/79 when the Government was forced to resort to expensive airtransport. Air Rwanda, the state-owned airline, purchased a used Boeing 707cargo plane which has been used since July 1979 to transport all kinds ofmerchandise. Kigali's airport has been equipped for all-weather operation and,since its recent expansion, can accommodate wide body jets. It appears likelythat air transport will continue to grow in importance, given the risks ofpolitical disruptions in the region and the prohibitively high cost of shipmentover alternative routes.

14. External agencies have financed the largest proportion of developmentexpenditures in Rwanda. The principal sources of foreign assistance and theiraverage share during 1977-80 were Belgium (26 percent), the European DevelopmentFund (13 percent), the Federal Republic of Germany (9 percent), the UnitedNations System (14 percent), and France (8 percent). IDA contributed over halfof the United Nations System share. Japan, Switzerland, non-governmentalorganizations, Canada, and the United States account for the remainder.External aid has been mainly in the form of technical assistance and financinginfrastructure development. Most technical assistance (58 percent) hasbenefitted agriculture, education, and health care. Investment in transport andcommunications accounted for about two-thirds of infrastructure financing in1980. Together, these four sectors received nearly 62 percent of the aidextended to Rwanda in 1980, an emphasis in line with the country's avowedobjectives and priorities.

15. Rwanda's need for external assistance will increase in the next fewyears, as its fiscal and balance of payments prospects are less favorable thanin the past, principally as a result of depressed world prices for its majorexports (coffee, tea, cassiterite and wolfram). Agricultural production,particularly of foodcrops, is not expected to increase significantly in theshort run, as it will take time to raise yields. Significant increases inmining production will only be possible if the financing for currently plannedinvestments materializes. The performance of the other sectors, which dependheavily on imported goods, can only be maintained with further reserve lossesand/or increased net inflow of capital, and these sectors will probably competewith food items for scarce foreign exchange. Thus, the medium-term outlook forRwanda is not encouraging, especially at a time when the external agencies alsohave financial constraints. The country's external debt is still low. Atend-1980, the public- and publicly-guaranteed external debt amounted to US$170million, or 14 percent of GDP, and the debt service ratio was equivalent to only3.2 percent of exports of goods and non-factor services. Hence, there remainsconsiderable scope for further borrowing. Nevertheless, given the poverty ofthe country, the vulnerability of its economy and its poor medium-termprospects, external funds should continue to be provided mostly in the form ofgrants or loans at highly concessionary terms.

PART II - BANK GROUP OPERATIONS IN RWANDA 1/

16. Bank Group assistance started in 1970 and initially focused on theimprovement of the road network and the strengthening of agricultureproduction. Rwanda has received seventeen IDA credits totalling US$171.4million, of which five (totalling US$69.0 million) were for roads, six (US$64.3

1/ Part II of this report is substantially the same as that in Report No.No. P-3335-RW on the Second Education Project, considered by the ExecutiveDirectors on June 15, 1982.

million) for agriculture, two (US$9.2 million) for DFC projects, two (US$18.0million reduced to US$16.4 million) for education, one (US$7.5 million) fortelecommunications and one (US$5.0 million) for technical assistance. Therehave been no Bank loans. An IFC loan of US$535,000 for a tea factory was signedin 1976; a second IFC loan of US$226,000 and contingent equity commitment of upto US$60,000 to expand the tea factory were signed in September 1980. Annex IIcontains a summary statement of IDA credits, IFC investments and notes on theexecution of ongoing projects.

17. The first three highway projects are completed and totally disbursed. Afourth credit for a highway maintenance project (Credit 769-RW), which becameeffective in August 1978, is three-quarters completed and is progressingsatisfactorily. A US$25.9 million credit was approved May 20, 1982 for a FifthHighway Project.

18. The first agricultural development (Mutara) project was completed inJuly 1979 and funds have now been completely disbursed (see also para. 34). Asecond credit of US$8.8 million, which supports the second phase of a long-termdevelopment for the Mutara region, was declared effective on May 30, 1980, buthas experienced start-up problems due to difficulties in recruiting technicalassistance. The Cinchona Project (US$1.8 million) is nearing completion and hasprogressed satisfactorily; the Bugesera/Gisaka/Mingongo mixed farming and ruraldevelopment project (BGM I) is expected to be completed in December 1982.Construction, procurement and budgeting are proceeding satisfactorily under thisproject, though the results of foodcrop and plant improvement components arebelow appraisal estimates due to a lack of appropriate technical packages forthe relatively dry project area. Given this, the proposed BGM II projectemphasizes research for semi-arid crop development. A project to supportreforestation programs in Kigali, Butare and Gisenyi Prefectures (IDA Credit1039-RW for US$21.0 million) became effective on November 11, 1981; the projectincludes a study of renewable energy sources for Rwanda. A US$15.0 millioncredit for a coffee improvement/foodcrops project in the Lake Kivu region becameeffective January 18, 1982; all staff have been recruited, the first yearextension program has been completed successfully, and research activities havecommenced. A credit for an education project (US$8.0 million) became effectivein 1975; physical implementation has been complicated by procurement problems(para. 19 below). The first credit of US$4.0 million to the RwandeseDevelopment Bank (BRD) has now been fully committed. BRD's performance underthe credit has been highly satisfactory. A second credit of US$5.2 million toBRD was signed on July 13, 1979, and became effective on January 4, 1980. Acredit for a telecommunications project (US$7.5 million) which aims at reducingRwanda's geographic isolation from other countries and at improving internaltelecommunications facilities, became effective July 7, 1981, and is proceedingsatisfactorily.

19. In fiscal years 1979-81, disbursements for Rwanda totalled US$28.9million compared to new commitments of US$42.4 million. In the same period, theaverage annual disbursement rate (ratio of change in disbursements toundisbursed balance) was 20 percent; this is about average for countries of theEastern Africa Region. While disbursement performance in general issatisfactory, notable difficulties have arisen in the case of the FirstEducation Project. The lack of acceptable record keeping has impeded theprocessing of disbursement requests. However, following a UNESCO-assisted finalinspection and evaluation mission for the worshops financed under the project,

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disbursements hasve resumed. Implementation of the Second Education Projectapproved June 15, 1982 should be less affected by similar weaknesses given thefamiliarity with Bank Group procedures now acquired in the Ministry of Primaryand Secondary Education, where in addition, a new and more positive managerialclimate now prevails since the Ministry was reorganized about a year ago.

20. One of the major constraints on Rwanda's development is the shortage oftechnical/managerial capacity. This affects all sectors and inhibits projectpreparation and implementation. Intensive technical assistance and on-the-jobtraining of Rwandese staff are therefore a salient feature of the Bank's programfor Rwanda, either under individual projects in the various sectors or throughthe recently approved Technical Assistance Project.

21. For the future, the primary emphasis of Bank operations will remain onrural development, the main objective being to increase food production as wellas export crops, while maintaining soil fertility. A major emphasis will alsobe placed on the development of human resources, focusing on population controland support to basic education and skills training to improve agriculturalproductivity, provide skilled manpower, and influence attitudes on thepopulation issue. Further investment is also justified for infrastructure and,in particular, transportation to reduce the country's isolation and provideincentives to further intensification of agriculture as well as increasedspecialization and diversification through better marketing. Another arearequiring our special attention is renewable energy to lessen the demand forfuel imports and mitigate their impact on the balance of payments. A study ofrenewable energy sources is being financed under IDA credit 1039-RW (para. 18).The proposed BGM II rural development project includes a population/nutritioncomponent, the Association's first operational effort in the critical area ofpopulation education and planning (para. 49). In highways, the Bank recentlyapproved a credit to participate in the financing of the Butare-Cyangugu road.This project is designed to open up the southern region of Rwanda towards Zaireand Burundi and support both the forestry (FY80) and the coffeeimprovement/foodcrops (FY81) projects. A second education project, approvedthis past June, addresses clearcut manpower needs and supports the training ofmiddle level technicians and managers; the project also includesselectivesupport for basic education through preservice and inservice training ofteachers. It is expected that the Bank will continue to support industrialdevelopment through the BRD.

PART III - THE AGRICULTURAL SECTOR

General

22. Rwanda, which has a traditional and overwhelmingly rural economy,is largely self-sufficient in basic foods, but there is serious doubt about theability of agricultural production to keep up with the rapidly growingpopulation. Almost all agricultural activities are carried out by smallholderson plots averaging about one hectare in size using traditional cultivationmethods and tools.

23. Agricultural and Livestock Production. The variation in elevationand climate enables a wide range of crops to be grown. Subsistence cropsinclude beans, sorghum, bananas, sweet potatoes, groundnuts and cassava.Foodcrops grown at higher elevations are peas, potatoes, maize and beans. About95 percent of the cultivated land is planted with foodcrops, and although

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climatic conditions allow two crops a year in most areas, soil fertility isdeclining and crop yields are poor. Six percent of the cultivated land isplanted with export crops, mainly coffee, tea, pyrethrum and cinchona. The sizeof the national cattle herd has been declining; in 1980 it was estimated atabout 630,000. Milk production is low, estimated at about 66 million liters in1980; with one-third going for human consumption. Meat production was estimatedat 10,000 tons carcass weight in 1980. The numbers of goats and sheep, whichprovide most of the meat consumed in rural areas, were estimated in 1980 at770,000 and 270,000 respectively.

24. Forestry. Rwanda's forest resources are estimated to coverapproximately 170,000 ha, or roughly 6 percent of the total land area. Thisresource is being depleted at an estimated rate of 5 percent per annum.Sporadic Government tree-planting programs are not sufficient to keep up withgrowing demand for wood or to provide adequate soil protection against erosionin critical zones. The marked decline in wood available for fuel and charcoalhas resulted in the increased use of agricultural residues for fuel.

25. Marketing and Prices. Most foodcrop production is consumed on thefarm. An estimated 33 percent is marketed, mainly locally on traditionalmarkets. Beans, sorghum, peas, and potatoes are the principal foodcrops tradedinter-regionally; the prices of these foodcrops are determined by the market.The National Grain Marketing Organization of Rwanda (GRENARWA), aUSAID-supported marketing parastatal, intervenes in the marketing of beans andsorghum in an effort to stabilize prices of these staples. However, the volumeof foodcrop marketing presently handled by GRENARWA (estimated at 5 percent oftotal marketed production in beans and sorghum) is not sufficient for GRENARWAto have a major impact on price stabilization. Banana beer is the mostwidely-traded item in Rwanda, and the most readily available source of cash inthe rural communities. Coffee is collected by traders licensed by the Agencyfor Industrial Crops of Rwanda - Coffee (OCIR-Cafe). Most cattle are sold insmall rural markets or in Kigali and Butare. Official beef prices areestablished by the Ministry of National Economy but there is no regularenforcement. The number of cattle slaughtered at the Kigali slaughter house hasincreased steadily in recent years from about 7,000 head in 1975 to about 13,000in 1980. The market for sheep and goats has also increased significantly.There is an important and growing export of cattle to neighboring countries.

26. Development Constraints, Prospects and Objectives. The three majorobjectives of Rwanda's Third Five-Year Plan (1982-86) are (i) to increaseagricultural productivity through erosion control, diffusion of selected seedsand integration of livestock and agriculture; (ii) to increase employment, and(iii) to achieve a satisfactory balance between foodcrop and export cropproduction. These objectives are limited above all by the shortage ofcultivable land. Increases in foodcrop production over the past decade havebeen largely achieved through extension of cultivation to poorer quality landpreviously devoted to pastoral and forestry uses; this alternative is almostexhausted. Intensification efforts in the future will require particularattention to erosion control and soil fertility. Agricultural research inRwanda has demonstrated that yields can be increased by using improved seeds, byintercropping bananas with pulses, and by applying soil conservationtechniques. In general, however, much more work needs to be done in identifyingimproved varieties and in introducing changes within the traditional farmingsystem. The budget for the Ministry of Agriculture and Livestock Developmentremains small in comparison to the needs of this sector. The combined

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development and ordinary budgets for the Ministry represented only about7 percent of the total government budget in 1981. Existing logistic servicesneed strengthening, project planning and implementation require greatercoordination, monitoring and feedback. Improved statistics collection, widerdissemination of research findings and monitoring of expenditures, are allessential to strengthening the Ministry's capacity to direct developmentefforts. To date, there has been a lack of effective coordination andmonitoring of donor-financed projects. As a result of this situation, manyprojects remain isolated and important experience and results are not efficentlydisseminated. Some measures have been taken recently to strengthen projectmonitoring and data collection within the Ministry; however, overall planningand coordination need to be strengthened in order to improve efficiency in theallocation of resources. A Technical Assistance Project, designed to strengthenthe Ministry of Plan's capacity to improve interministerial coordination as wellas planning and budgeting, was approved by the Executive Directors in March1982.

Government Services

27. The Ministry of Agriculture and Livestock is responsible for

virtually all activities related to agriculture and livestock in Rwanda. Itoperates a Selected Seed Service (SSS) and is the supervisory organization forsix autonomous parastatal companies. The Ministry has over 2,000 staff members,most of whom are field extension workers (about 1,500) or veterinary field staff(about 400), operating in all the prefectures and communes.

28. Agricultural Research. The Agricultural Research Institute ofRwanda (ISAR) is headquartered at Rubona, and is responsible for agriculturaland livestock research. ISAR has been supported mainly by Belgian aid; it hasreceived limited funds from the International Development Research Center(IRDC-Canada). The Swiss are providing assistance in forestry. TheIDA-financed Lake Kivu Coffee and Foodcrop Project (Credit 1126-RW) issupporting coffee and some foodcrop research. Up to now, ISAR's program haslacked both socio-economic studies of farm systems and adaptive trials onfarmers' fields. The Bank (RMEA) is currently assisting the Government toorganize a seminar in December 1982 to evaluate the present status of researchin Rwanda and to define the scope of future efforts. One of the intendedresults of the seminar would be the identification of a national researchproject for possible Bank or other donor financing in early 1983, to defineresearch priorities and to address the need to improve the links betweenresearch and extension and to strengthen the management and organisation ofresearch in Rwanda.

29. The Selected Seed Service. Rwanda's foodcrop seed selection and

multiplication service, the Service des Semences Selectionnees (SSS), wascreated in 1971. ISAR provides foundation seed which is multiplied by the SSSin five centers located in different ecological zones. The varieties currentlydistributed (mainly beans, sorghum, maize, peas and vegetables) have beenselected to improve yields with low or no fertilizer inputs and to be tolerantor resistant to the main diseases. The objective of the service is to produceselected seed and supply Rwanda's 10 prefectures and 143 communes for furthermultiplication and the production of commercial seed. At present, however,SSS reaches only about 4 percent of the potential users. A recent FAO study hasproposed a program for SSS which would address critical problems of financing,staffing and organization of seed multiplication and seed distribution at thecommunal level.

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30. Agricultural Training. There are three institutions responsible forpost-secondary agricultural training: the Agronomy Faculty of the NationalUniversity of Rwanda at Butare, which trains agricultural engineers andveterinary assistants; the School of Agriculture, in Butare, which operates afour-year post-secondary course; and the Nyagahanga School in Byumba Prefecturewhich trains female agricultural technicians. In January 1980, the RubiliziTraining Center near Kigali (para. 47) began a two-year program for traininglower-level assistant veterinarians. This center was financed under the BGM IProject. The first class of 56 students graduated in January 1982.

31. Rural Credit. Credit to farmers is very limited at present. Somecredit is channelled through the People's Banks (Banques Populaires)which aresupported primarily by Swiss technical assistance and provide an importantchannel for rural savings. These Banks make loans to cooperatives andindividuals for working-capital needs and other small investments for housingimprovement, transport, and a few agricultural and livestock inputs. Anexperimental credit program was begun under the BGM I Project and would betransferred to the Banques Populaires under this project (para. 45).

32. Family Planning Services. In recognition of Rwanda's highpopulation growth and limited resources, the Government has recently undertakento address the population problem. A National Population Office (ONAPO) wascreated in mid-1981, and Government is seeking the assistance of internationalorganizations in developing programs for family planning education, training andservice delivery. ONAPO has a broad mandate to define a national populationpolicy, to initiate demographic research and to coordinate the implementation offamily planning programs.

33. Local Administration. Local administrative structure is relativelywell developed in Rwanda and is increasingly being used to channel developmentresources to the rural population. Rwanda's ten prefectures are each headed bya prefect and divided into communes (usually 10 - 16 per prefecture), headed bya bourgemestre. Each of the 143 communes is divided into sectors (10-14 percommune), and each sector is subdivided into cells, comprising 50 to 60families. Each Rwandese adult man and woman is required to work a half day perweek on a community, or umuganda, project. Projects are selected by thecommunal council and include construction of feeder roads, bridges, schools,work on communal demonstration plots, tree planting, and the installation ofdrinking water systems. Participation in umuganda activities is not uniform,but in areas where the bourgemestre is dynamic, achievements have beensubstantial.

Previous Bank Lending for Agriculture

34. To date, the Bank Group has financed six agricultural projects inRwanda. The first phase of the Mutara Agricultural Development Project Credit439-RW for US$3.8 million) has been completed. A Project Completion Report wasprepared in August 1980 and a PPAR issued in June 1981. They concluded thateven though the project did not result in the expected increase in agriculturalproduction, substantial achievements had been realized in the areas ofinfrastructure development and in experience acquired by Rwandese staff inproject management. Experience gained through implementation of this and otherprojects was taken into account in designing the proposed project; notably,proposed technical interventions are fewer and simpler, infrastructuredevelopment has been reduced to a minimum, systematic farm-level monitoring and

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feedback has been introduced and implementation arrangements have beensimplified. The Cinchona Project, supported by an IDA Credit for US$1.8million, is nearing completion; implementation has been satisfactory. An IDACredit of US$8.9 million was approved in June 1979 to support group ranchdevelopment and settlement under the second phase of the Mutara Agricultural andLivestock Development Project (Credit 937-RW). Settlement of cattle owners hasproceeded in an orderly way and pasture production has been improved, butdestocking activities and credit recovery have been disappointing due to lack ofclear policies and enforcement mechanisms. The Integrated Forestry andLivestock Development Project (Credit 1039-RW for US$21 million) and the LakeKivu Coffee Improvement and Foodcrop Project (Credit 1126-RW for US$15 million)became effective in late 1981 and early 1982, respectively; technical assistanceand key local staff have been recruited and start-up activities are progressingsatisfactorily.

The Bugesera Gisaka Migongo I Project

35. The first phase Bugesera Gisaka Migongo Project, BGM I (Credit668-RW), was approved in late 1976 and became effective in November 1977. BADEAand FAC co-financed the project with IDA. It was a five-year program designedto develop essential infrastructure and improve rural services in the Bugeseraregion and parts of Gisaka Migongo. Specifically, the project containedprovisions for crop and livestock extension activities and training, theestablishment of two steer fattening ranches and extension of a breeding ranch,the establishment of two regional development centers with training facilitiesand numerous civil works, including water supply infrastructure, staff housing,feeder roads, three schools and six health centers. The first phase is expectedto be completed in December 1982.

36. Project Performance. Systematic implementation of extensionactivities did not begin until 1981; there had been staffing difficulties andthe expatriate agronomists spent a disproportionate amount of time supervisingconstruction works. Despite these factors, tree nursery activities weresuccessfully organized by 1981; soy beans, new cropping patterns, a creditprogram and measures to protect farmers' plots from erosion were alsosuccessfully introduced. Implementation of the livestock program was hamperedby lack of skilled technicians and adequate staff training. The area availablefor ranching was overestimated at appraisal; because of this and of difficultiesin providing water and the limited market for high quality beef, the Gako andNasho fattening ranches proved commercially unviable; by contrast, the Rusumobreeding ranch appears to be commercially viable under proper management. Thebuilding component of the rural infrastructure program, expanded duringimplementation to meet additional housing needs, was efficiently carried out.Only 10 percent of the targets set at appraisal for construction of feeder roadswas achieved as the execution of this activity is beyond the capacity of theMinistry of Agriculture. Appraisal targets for the development of watersupplies in eastern Bugesera are expected to be met by the end of 1982. Nosignificant research was carried out under this project, with the exception ofsome limited trials on regional center plots. Only one training specialist wasrecruited (not two as envisaged at appraisal) and arrived two years after crediteffectiveness. The Rubilizi Training Center, originally designed for training

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project veterinary personnel, was transformed into a national center fortraining veterinary extension officers; the first class graduated in January1982, but the impact of the two-year program will not be felt until themid-1980s. Regular follow-up of training for communal extension personnel beganin mid 1981. The Project Coordinating Committee (PCC), established byPresidential Decree under BGM I, has been responsible for project implementationand has proved relatively effective as an implementation, coordination andmanagement tool. Project activities were planned and carried out in accordancewith annual work plans prepared largely by the Project Unit in Kigali andapproved by the PCC and IDA. In appraising the second project, projectactivities have been planned to consolidate actions begun under the first(development of rural services, including crop and livestock extension andagriculture training; agro-veterinary support centers; feeder roads; healthcenters) and to concentrate on the development of services for the ruralpopulation of the project area. In addition, the proposed project wouldinitiate certain other activities, such as semi-arid and farm systems research,road improvement and family planning services, which would contribute in themedium and long-term to increasing productivity and living standards.

PART IV - THE PROJECT

37. The proposed project was prepared in 1980 by the Studies Bureau ofthe Ministry of Agriculture and Livestock as a follow-up to the BGM I project.The Regional Mission in East Africa (RMEA) was involved in discussions on apossible second phase since 1979, and assisted with the preparation. Anappraisal mission visited Rwanda in May-June 1981 and post-appraisal discussionswere held in Kigali in October/November of the same year. Negotiations wereheld in Washington from May 5 to 10, 1982; the Rwandese delegation was headed byH. E. Frederic Nzamurambaho, Minister of Agriculture and Livestock. A Creditand Project Summary, highlighting the main features of the project, is at thebeginning of this report. A detailed description of the project components isin the Staff Appraisal Report (No. 3853-RW), dated May 28, 1982, beingcirculated separately to the Executive Directors. Special conditions of theCredit are summarized in Annex III.

Project Area

38. The proposed Project would be implemented in the same areas as theBGM I project. These areas total approximately 3,000 km2 (Map IBRD 15961),covering three communes in the Bugesera region and three in Gisaka Migongo;their combined population was about 310,000 inhabitants in 1980. It isestimated that more than 50 percent of the inhabitants are settlers recentlyarrived from other, more densely peopled parts of Rwanda and that 50 percent ofthe current population is under 10 years old. The Bugesera and Gisaka Migongoregions are the driest zone of Rwanda and ground water reserves are limited.Only about 35 percent of the project area has soil conditions and adequaterainfall to support normal cropping activities. Approximately 20 percent ofthe land is under forest, and approximately 13 percent has little or noproductive potential. Recent migrants to the area have brought with themagricultural practices and cropping patterns poorly adapted to these

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conditions. Present crop production is mainly for subsistence. The roadnetwork serving the north of Gisaka is relatively well developed, but elsewherein the project area, roads are few and impassable during the rainy months.Infrastructure is still limited, and few communes can afford to support evenminimal services.

Objectives and Description of the Project

39. The proposed project would be the second phase of a long-termdevelopment program for the Bugesera and the Gisaka Migongo regions. It wouldconsolidate certain actions begun under the first project which was designed asa five-year program (1977-1982) to develop essential infrastructure and improverural services in the communes of the project area. In addition, the proposedproject defines new interventions, particularly on semi-arid crops, smalllivestock promotion and soil conservation activities for the semi-arid zones;its primary objectives are thus to: (i) carry out research trials and introducenew cropping techniques and varieties for the semi-arid areas; (ii) intensifycultivation of cash and foodcrops in areas of average and above averagepotential;(iii) promote conservation to prevent loss of soil fertility; (iv)integrate crop and livestock activities on the farm plot; (v) promote theintroduction of small stock where appropriate; (vi) improve rural roads; and(vii) improve nutrition standards and expanded awareness of family planningalternatives.

40. The proposed project would consist of:

(a) applied and adaptive research for semi-arid crop development;

(b) strengthening extension support services through:

i) improvement of in-service training, establishment of localdemonstrations and organization of a service network forcropping and livestock activities;

ii) promotion of an improved seed multiplication program; a treenursery and distribution program for coffee, fruit and foresttrees; a program to improve soil fertility throughstall-feeding and compost production and erosion controlmeasures; promotion of improved methods of coffee plantationmaintenance and organization of pest control campaigns; and

iii) training for cooperative management and technical support foragricultural credit;

(c) livestock activities: support for the Rusumo breeding ranch, aprogram for upgrading local sheep and goat stock;

(d) support to the Rubilizi Training Center for training assistant-levelveterinarians;

(e) nutrition center activities and development of a pilot familyplanning program in the project area;

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(f) rural roads construction and improvement; and

(g) monitoring and evaluation and studies.

Detailed Features

Semi-arid Crop Development and Farm Systems Research

41. The proposed project would support ISAR's research activities(para. 28) at ISAR's Karama Station in the Bugesera region. While a researchprogram focused mainly on foodcrops has been carried out at this station forover fifteen years, trials have been based exclusively on the more fertilealluvial soils adjacent to the lake, and not on the semi-arid plateau soils.The research program would aim to: (i) develop improved and moredisease-resistant varieties for the major crops (bananas, sorghum, beans,cassava, sweet potatoes, groundnuts and soy) (ii) identify improved agronomicpractices consistent with the capabilities and circumstances of local farmersfor the major existing crops; (iii) develop land management and cropping systemsto increase or maintain soil fertility; (iv) test combinations of improvedfoodcrop and cultural practices on farmers' plots; and (v) provide training forRwandese research staff in areas related to the agronomic and farm systemsprogram to be carried out at Karama. The signing of a contract (satisfactory toIDA) between ISAR and the International Institute for Tropical Agriculture inIbadan, Nigeria (IITA) regarding the implementation of the research component isa condition of credit effectiveness (Sections 3.07(a) and 6.01(b) of theDevelopment Credit Agreement). IITA would provide technical assistance for thiscomponent. Assurances were obtained at negotiations that ISAR, in consultationwith the IITA research specialists, would prepare a five-year work plan to besubmitted within three months of the research specialists' arrival in Rwanda forIDA for approval. In addition, ISAR would submit, by September 15 of each year,a progress report covering the 12-month period ending September 30 and adetailed annual work plan for the following calendar year (Section 3.08 andSchedule 4 of the Development Credit Agreement).

42. Extension Services and Training. There are presently about 100agricultural and livestock extension agents working in the Project area and some20 staff working in the agro-veterinary centers (PAVs). Project activitieswould focus on providing technical training and logistic support for thesepersonnel. Eighteen sectors, identified as the most responsive to innovation,have been selected for intensive assistance. To ensure adequate provision ofextension services, assurances were obtained at negotiations that the Governmentwould, over the project period (i) maintain the number of extension agents andother project personnel at the staffing level in January 1982, and (ii) continueto provide one agronomist and one veterinarian per commune in the project area(Section 3.03 (c) of the Development Credit Agreement). Foodcrop and cashcropextension themes would focus on introduction of improved varieties and improvedcultural practices, erosion control, preservation of soil fertility,intensification of foodcrop, fruit tree and coffee production, reforestation andlivestock management. Livestock extension activities would revolve around localgroups of livestock farmers. Veterinary products are presently subsidized. Toinstitute a cost recovery mechanism, assurances were obtained at negotiations

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that Government would, (i) by September 1, 1982, submit to IDA a detailed planand procedures for the progressive increase of changes applicable to allveterinary medicines dispensed in Rwanda and (ii) take all necessary measures toensure that livestock owners would be charged as follows: 70 percent of thefull cost of such medicines beginning January 1, 1983; 80 percent beginningJanuary 1, 1984; 90 percent beginning January 1, 1985; and 100 percent beginningJanuary 1, 1986 (Section 3.05 of the Development Credit Agreement). TheTraining programs would be carried out to upgrade the skills of the extensionstaff, the staff of the regional centers and the PAVs, as well as the technicalstaff of the communes in the project area. Training programs for extensionstaff would be organized regionally by the Regional Training Director assistedby an internationally-recruited Training Extension Specialist stationed in eachof the two regional centers. The prefectorial and regional agronomists wouldassist with the training of the comune agronomists and veterinary officers, thePAVs staff, and the Sector-level extension agents. INADES-Rwanda, aJesuit-supported organization, which has developed excellent teaching materialsin the local language, would collaborate with project staff in preparing andconducting short courses for extension and selected other communal staff.

43. Production and distribution of selected foodcrop seeds andcuttings is a major objective of the extension program. Two multiplicationcenters, one in each region, would be used for the first multiplication. Seedsto be multiplied include soy beans, maize, beans and groundnuts. Assuranceswere obtained that Government would, by September 15, 1983, establish prices forselected seeds produced under the project which would allow recovery of theproduction and distribution costs of such seeds, provided that these prices aresufficiently attractive to encourage farmers to buy the seeds (Section 3.06 (a)of the Development Credit Agreement). Due to the critical shortage of fuelwoodin most of the project area, a systematic program would be developed to provideadditional treecrop material to farmers; tree seedlings would be distributedfree of charge. The coffee improvement program to replace dead or unproductivetrees in existing plantations would consist of the production and distributionof about 300,000 seedlings per year. Assurances were obtained at negotiationsthat OCIR-Cafe would continue to provide adequate quantities of pesticides tothe project area at a minimum of the 1981 levels (Section 3.06 (b) of theDevelopment Credit Agreement). Investments would include costs associated withthe production of seedlings and a small revolving fund for the sale of saws andpruning tools to farmers.

44. Measures would be taken to control soil erosion and soil degradationwhich has resulted from a combination of overgrazing and lack of effectiveanti-erosion measures. Extension agents would continue to work with farmers toestablish contour bunds. In addition to assisting farmers to piant small familywoodlots, the project staff, working with communal leaders, would organize thereforestation of about 30 ha per year with paid labor.

45. Assistance to farmer associations begun under the BGM I projectwould be continued with increased emphasis on management and training. Atpresent, there are about ten formal cooperatives in the Gisaka Migongo regionand none in the Bugesera region, but there are close to 100 farmers'associations. Project staff efforts would be concentrated on introducing simple

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management techniques appropriate to activities of the cooperatives and farmers'associations. To support increased demand by local farmers, the proposedproject would assist with expansion of Banques Populaires lending operationsinto agricultural investments. Local savings deposits of the Banques Populairesare adequate to finance a modest investment program in the project area.Project extension staff, with assistance from regional finance and accounting

staff, would provide technical support for credit promotion; there would be noother specific investments associated with this program.

46. Livestock. The Rusomo breeding ranch was expanded under the firstphase of the BGM project. With pasture improvements and purchase of additionalbreeding stock to be completed under the project by the end of 1985, the ranch's

capacity could be increased from its present level of about 2,300 animals to itsmaximum potential of about 3,500. With a herd of this size, the ranch, if wellmanaged, could be expected to generate revenues sufficient to cover itsoperating costs (including depreciation). The genetic upgrading of goats willbe centered at ISAR Karama, and of sheep, at ISAR Rubona. It is expected thatby 1984, project staff would be able to launch a sheep breeding program based atNasho (para. 36), and funds have been provided for this activity to purchase300 locally-selected breeding stock from ISAR's flock, veterinary supplies,salaries and associated transport costs.

47. The Rubilizi Training Center (para. 30) for veterinary staff wasestablished under the Ministry of Agriculture in 1979, and financed with fundsfrom BGM I project. It is the only school of its kind in Rwanda, with a uniquetraining curriculum and methodology geared specifically for the requirements ofveterinary extension work. The first class of 56 students graduated in January1982 and is being placed in the BGM and other development projects to replaceunderqualified veterinary assistants. Funds under the proposed project wouldfinance costs associated with curriculum modifications recommended by the recentcommission of the Ministry of Primary and Secondary Education and, excludingteachers' salaries, of Rubilizi through 1984. At negotiations, assurances wereobtained that the Government would take all financial, administrative andpedagogical action necessary to assure that during the execution of the proposedproject, Rubilizi would continue to educate students at least at the levelreached in January 1982, in terms of quality and quantity (Section 4.03 of theDevelopment Credit Agreement).

48. The nutrition centers in the project area would be moresystematically integrated into general project training and agriculturalextension activities. Funds would be provided for the construction of four newnutrition centers and essential repairs to a limited number of the existingcenters. Nutrition centers would be assisted to strengthen and expand theirexisting programs in: (i) agriculture, by introducing wider use of selectedseeds and improved cropping techniques; (ii) small livestock, particularlyrabbit, sheep and goat breeding activities; (iii) family planning education, bysupporting training for center personnel and providing teaching materials; and(iv) family water supply, providing the cement for small, domestic cisternsconstructed by farmers under the direction of center personnel.

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49. Pilot Family Planning . Under the proposed project, pilot

activities in the project zone would aim to assist ONAPO to provide for thefirst time in rural areas, family planning service delivery and informationdessemination. To this end, an internationally-recruited family planningspecialist would provide, on an intermittant basis over 3 years, 14 man-monthsof technical assistance in project implementation and evaluation. Inparticular, the consultant would help ONAPO conduct baseline and follow-upsurveys in the component area to measure changes in family planning knowledge,attitude and use. After appropriate training, existing personnel of theMinistry of Health would provide family planning services, and personnel of theMinistry of Social Affairs would carry out educational activities. Thecomponent would also finance the training of community outreach workers topromote family planning, the construction of a family health center at KibungoHospital and short-term consultants for the development of educational materialsand monitoring. At negotiations, assurances were obtained that the Ministry ofHealth would provide the services of one doctor and one nurse-midwife at Kibungohospital and one nurse's aide each at the Mutendeli and Rukira dispensaries inthe project zone (Section 3.03 (b) of the Development Credit Agreement), and(ii) the family planning specialist would have experience and qualificationssatisfactory to IDA (Section 3.02 of the Credit Agreement).

50. Feeder Roads. At present, trade in the project area is restrictedby the poor state of the roads (para. 13). Under the project, a program toimprove and extend the feeder roads in the two regions would be carried out.One road brigade would be financed to work in Bugesera for two years and GisakaMigongo for three years. To avoid difficulties encountered under BGM I (para.36), all road works would be carried out by the Ministry of Public Works.Investments would be for equipment and materials, costs of labor and supervisorystaff, spare parts and fuel. It would be a condition of disbursement for allexpenditures on building construction and the rural road component that IDAapprove a letter of understanding between the Ministry of Public Works and theMinistry of Agriculture and Livestock defining the management responsibilitiesfor the road building component and all other project building construction(Section 3.07 (b) of the Development Credit Agreement).

51. Monitoring and Evaluation. Monitoring of extension activities andtheir impact on farmers' attitudes, practices and their agricultural andlivestock productivity would be established as a permanent project activity, andthe resulting evaluations reviewed regularly. A monitoring and evaluationspecialist would be recruited under the project to design appropriate baselineand follow-up surveys and to train a small team to carry out regular monitoringfunctions. This specialist would be based in the Ministry of Agriculture andLivestock. Key indicators for project impact would be defined and surveys wouldtest for variations in the sectors receiving intensified assistance (para. 42).Short-term consultants would be hired to conduct a baseline nutritional surveyin 1983 and follow-up surveys in 1985 and 1987. A technical land use study forthe southern Bugesera-Cyohoha area would be financed under the project. Duringnegotiations, the terms of reference for the Bugesera-Cyohoha study werediscussed and assurances obtained that the terms of reference, consultants andthe contracts for this study would be submitted to IDA for approval (Section3.02 of the Development Credit Agreement). Employment of consultants would bein accordance with Bank Group guidelines. Project staff would prepare a Project

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Completion Report assessing the progress and impact of project activities andsubmit it to IDA not later than six months after the project Closing Date.Assurances to this effect were obtained at negotiations (Section 3.10 (e) of theDevelopment Credit Agreement).

Project Costs and Financing

52. Total project costs are estimated at about US$21.6 million, of whichabout 58 percent, or about US$12.5 million, represent foreign exchange costs.Project costs were estimated as of January 1982. A physical contingency of 15percent on construction and civil works, 5 percent on staff costs, training andgeneral services and supplies, and 10 percent on all other costs was applied toreflect uncertainties in the detailed scope of project investments. Pricecontingencies were calculated on the following basis: local costs at 15 percentper annum for 1982 to 1987; foreign exchange costs at the rate of 8.5 percentper annum in 1982, 7.5 percent per annum for 1983 through 1985 and 6 percent perannum thereafter. Taxes included in project costs are negligible, since allmajor items would be exempt from import duties and local taxes.

53. Financing of the project costs would be shared by the Government ofRwanda, FAC, and IDA in the respective proportions of 10.5, 14 and 75.5percent. The proposed IDA Credit of SDRs 14.5 million (US$16.3 millionequivalent) would finance about 75.5 percent of total project costs, includingabout 76 percent of foreign exchange costs and about 75 percent (US$6.8 millionequivalent) of local costs. The Government of Rwanda's contribution wouldconsist primarily of local salaries. Government would pass on the proceeds ofthe IDA Credit and its own contribution to the Ministry of Agriculture andLivestock, the ONAPO, and the Ministry of Public Works. The contribution of theFAC would finance the salaries, travel, and local support of three technicalassistants for 5 years, 15 staffmonths of a financial advisor, 5 vehicles, andforeign exchange costs of veterinary supplies and agricultural inputs. Theaverage staffmonth cost (including salary, fees, travel) for long-termspecialists is estimated to be between US$6,500 and US$8,000. The average totalstaffmonth cost for short-term consultants, including salary, fees and travel,is estimated at about US$9,000. An advance from the Project PreparationFacility (PPF) of about U$935,000 will finance road-building equipment, buildingconstruction, and start-up of the semi-arrid research and family planningactivities. In order to assist the Government in pre-financing expendituresreimbursable under the IDA credit, a revolving fund, similar to that under thefirst phase project, would be maintained. An amount of US$800 thousandequivalent (equal to about four months of disbursements less those items to bedisbursed for directly by IDA) would be financed under the proposed project andestablished in a project account in a commercial bank. During negotiations,agreements were reached on the terms and conditions for the operation of andaccounting for the revolving fund (Section 2.02(c)-(h) of the Development CreditAgreement).

Implementation

54. Project Management. The proposed project would be carried out overa five-year period. Responsibilities for overall implementation andcoordination would continue to rest with the Project Coordination Committee(PCC--para. 36) established under BGM I. The PCC would delegate day-to-dayproject implementation responsibilities to the two Regional Directors. Localauthorities would participate in the project through the Regional Development

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Committees to be set up in each region. The Bridges and Roads Department of theMinistry of Public Works would carry out the rural roads improvement program.ISAR would manage the applied research program, and ONAPO, with the Ministry ofSocial Affairs and Community Development and the Ministry of Health, wouldimplement the pilot family planning activities. Responsibility forimplementation would be decentralized to the regional centers under the proposedproject. During a transitional period of no longer than two years, the post ofProject Coordinator would be maintained, and the Posts of Project FinancialDirector and Livestock Coordinator would remain centralized in Kigali. The roleof the Project Coordinator during the transitional period would be to ensurethat the implementation of project activities conforms to the detailed annualplans (para. 55). By end-1984, it is envisaged that the Kigali bureau would beeliminated and a Financial Director and Livestock Coordinator would be appointedto each of the two regional centers.

55. Implementation of all project activities would be carried out on thebasis of detailed annual work plans and budgets approved by IDA. Separateannual work plans would be required from the Ministry of Public Works (roadcomponent), ONAPO (pilot family planning program), ISAR (research component) andBGM II project management (extension, livestock, nutrition and Rubilizi).Approval of the work plans for each fiscal year during project execution is acondition of disbursement (Schedule 1, para. 5-c of the Development CreditAgreement). The annual plans for all extension, livestock and nutrition centeractivities in the Bugesera and Gisaka Migongo regions would be prepared by theDirector of each Regional Center, with assistance, where necessary, of supportstaff in the Kigali project bureau. Annual plans would be submitted to theProject Coordinating Committee by early August of each year. The content andessential criteria for IDA approval of the annual work plans were discussedduring negotiations and assurances obtained that the annual work plans andbudgets would be sumitted to IDA for approval by September 15 of each yearbeginning in 1982 (Section 3.04 and Schedule 4 of the Development CreditAgreement).

56. Local Staff. Most of the key management staff were trained under thefirst project and assumed full management responsibility in mid-1981. Technicaland support staff for activities to be continued under the proposed secondproject are either in place or would be recruited during 1982. The number oflocal staff by component is as follows: for project management (i.e. Kigalicoordination bureau 9; Bugesera and Gisaka Migongo Regional Centers, about 40each), 89 staff; for extension activities, 188 staff; for livestock ranches andgoat and sheep promotion, 16 staff; for the Rubilizi Training Center, 20 staff;for research, 10 staff (not including existing staff at Karama Station); fornutrition and family planning, about 30 staff; and for rural roads, about 60staff plus laborers. In total, about 415 Rwandese staff, 380 for the full fiveyears, would be involved in project implementation. The costs of about 150 ofthese staff are considered non-incremental and, therefore, are not included inproject costs. At negotiations, assurances were obtained that the Governmentwould, in addition to its contribution to project costs, provide for therecurrent costs associated with non-incremental staff through the end of theproject (Section 3.01 (a) of the Development Credit Agreement).

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Procurement

57. Civil works contracts for construction of five agro-veterinarysupport centers, 15 houses and facilities under the research, nutrition andfamily planning components, totalling about US$1.5 million (includingcontingencies) would be awarded following local competitive bidding procedures,which have been found satisfactory. These contracts would be generally small(maximum of about US$20,000), geographically scattered and not readily groupedfor simultaneous tendering. Local contractors are adequately qualified andexist in sufficient numbers to carry out the required works; foreign firms canalso participate in civil works contracts under local bidding procedures. TheMinistry of Public Works would carry out the road works under the proposedproject with a brigade especially set up for the purpose. Road constructionequipment and materials costing about US$450,000 (with contingencies) and toolsand spare parts for road construction costing about US$600,000 (withcontingencies), would be procured in accordance with local competitive biddingprocedures acceptable to the Bank. Other project vehicles and spare parts,totalling about US$800,000 (with contingencies) would be procured over a 3-4year period not exceeding six vehicles at a time and following selectivetendering procedures of the borrower. Furniture and equipment, tools and otheragricultural and livestock inputs totalling about US$1.3 million (includingcontingencies) would be purchased through local suppliers after at least twoprice quotations have been obtained. Technical assistance and short-termconsultant services for studies totals about 460 manmonths and about US$3.2million. Assistance to be engaged includes two Extension/Training Specialiststo be located in the Regional Centers. The appointment of these Specialists isa condition of credit effectiveness (Section 6.01 (a) of the Development CreditAgreement). The terms of reference, experience and qualifications of technicalassistance financed by the FAC (including the two Extension/TrainingSpecialists) would be satisfactory to IDA. All other technical assistance wouldbe hired in accordance with the Bank's guidelines for international recruitmentand use of consultants. With the exception of contracts for project annualaudits, all other proposals of technical assistance would be evaluated withpriority given to experience and qualifications.

Disbursements

58. Credit funds would be disbursed as follows: 100 percent of totalexpenditures for technical assistance and studies to ISAR, ONAPO and MPW and 35percent of total expenditures on technical assistance, surveys and studies forBGM II staff; for BGM II staff, 85 percent of foreign and 95 percent of localexpenditures for vehicles and veterinary supplies, furniture and equipment,local training and other operating costs, and 85 percent in 1983, 65 percent in1984, 50 percent in 1985 and 40 percent in 1986, and 30 percent in 1987 of totalexpenditures for local salaries and allowances; disbursement for all othercategory items would be 100 percent of foreign and 95 percent of localexpenditures. Local expenditures on staff salaries and other operating costsand miscellaneous supplies would be made against Statements of Expenditure(SOEs) and certified by the head of each implementing organization and madeavailable for inspection by IDA in the course of project supervision. SOEswould be audited by the external auditors selected for the project. Assuranceswere obtained at negotiations that all project expenditures would be documentedaccording to the above arrangements (Section 3.10 (b) of the Development CreditAgreement). Disbursements for all other goods and services would be fullydocumented.

- 21 -

Accounts and Audits

59. A good system of detailed accounting and monitoring of expenses wasestablished under the first project with the assistance of aninternationally-recruited Financial Director. A core of project accountingstaff was trained under the first project, and the Rwandese deputy to theFinancial Director was confirmed as the Project Financial Director as ofFebruary 1, 1982. Responsibility for project financial control would continueto be based in the Kigali coordination bureau for the first two years of theproject. By 1985, this function would be decentralized, and a FinancialDirector would be appointed to each of the two regions (para. 54). Projectaccounting in the two project regional centers would be controlled on aquarterly basis by project accounting staff from Kigali. A project FinancialAdvisor would be employed on a short-term basis (3 months per year, 1983-87) toassist the project financial staff. Initially, the Advisor would help ISAR andONAPO to establish proper project accounts; later, he would help put in placethe regionalization of financial control. Due to the absence of a governmentauditor or qualified Rwandese audit firms, the BGM I project accounts wereaudited by foreign firms approved by IDA. Similar contractual arrangementswould be continued under the proposed second project.

Benefits

60. The principal benefits of the project would include the establishment ofefficient support services for agricultural and livestock activities at the farmlevel, increased production of subsistence and cash crops, increased livestockfrom the Rusumo Ranch, increased trade and transportation in and out of theproject area, and the generation of useful technical information from researchactivities for the future development of the semi-arid zones in Rwanda. Most ofthe project activities are aimed at ensuring sufficient subsistence foodproduction and facilitating, where basic food needs are met, the production ofmarketable surpluses. The value of incremental production of foodcrops(including fruit trees), coffee and livestock (breeding stock and beef) are theonly benefits that were calculated. At full development in project year 9,annual incremental coffee production would have an estimated foreign exchangevalue of Rf 142 million (US$1.54 million) in estimated 1982 constant prices;annual incremental foodcrop production would have an estimated value of about Rf204 million (US$2.22 million) and annual incremental production of livestockfrom Rusumo would have an estimated value of Rf 21 million (US$230 thousand).Other benefits from productive activities, which have not been calculated forreasons of uncertainty about the timing of benefits, would include incrementalwood production from family woodlots and community plantations and incrementalmeat and milk production from the improved health and genetic upgrading of localcattle, sheep and goat stock. Additional benefits, more difficult to quantify,include: improved technical and management services through staff training;technical asistance and support to agricultural and veterinary education atRubilizi; land improvement through erosion control, improved cropping techniquesand reforestation; greater integration of rural and urban markets through roadsimprovement; higher nutrition standards and, in the long-term, a reduction of

- 22 -

overall fertility rates through family planning efforts; and increased projectevaluation capacity through the development of monitoring and feedback.

61. An economic rate of return (ERR) measuring the net incremental benefitsof the directly productive project investments is estimated at about 16percent. Project benefits are derived from the incremental foodcrop and coffeeproduction resulting from improved farming practices. The ERR is, however, notconsidered the primary justification for the long-term investments proposed inthe project which are principally aimed at farmer training and the developmentof services and infrastructure in support of smallholder agriculture. Althoughthe benefits from foodcrops in the initial years have been averaged over allcrops, the primary benefits would come from cassava, beans, and sweet potatoes,for which improved seeds and plant material are available. The overall ERRanalysis includes all expenditures for capital investments, replacements,operation and maintenance costs related to the project's directly productivecomponents (i.e. project management, extension activities, Rusumo Ranch andrural roads) which represent about 65 percent of project cost. The full costsof all technical assistance except that associated with research, familyplanning and monitoring and evaluation activities, were included. Projectactivities are not expected to require significant increases in farm labor and,therefore, no economic value for labor was taken into account in thecalculation. Coffee prices have been projected in accordance with Bankforecasts, and foodcrops have been valued at domestic market prices. Costsinclude estimated average physical contingencies of 7 percent, but do notinclude price contingencies, taxes or duties. Sensitivity analysis on theERR showed that if costs were increased by 10 percent, the ERR would be 14percent.

62. The proposed project involves certain risks which are not fullyexpressed in the sensitivity analysis. The success of the production-oriented activities will depend on the effectiveness of extension systems andlogistic support in responding to farmers' needs and in introducing new inputsand improved cultivation techniques, some of which can only be expected to yieldbenefits over the medium-term. The project seeks to organize and train regionalextension personnel to provide a few basic services to the population. Theseservices would be complemented by proper cultivation and husbandry techniques.Careful monitoring and feedback would be emphasized. The project thus addressesproblems experienced by other rural development projects in a focused andsystematic way to reduce risks and to understand better past failures. There isthe risk that the objectives of the applied research activities supported underthe project will not be realized. The proposed project, however, specificallyaddresses the needs of the semi-arid zone by giving priority to the selection ofsemi-arid foodcrop varieties already developed for similar ecological conditionsand the study of local farm systems to *ensure adaptability and acceptability.In order to avoid coordination problems, formal agreements (protocolesd'accords), defining the respective responsibilities of critical parties in theimplementation of particular activities, were discussed during negotiations andwill be agreed on during a joint IDA/I1TA mission to Rwanda in July of 1982.Technical and financial management of all components has been carefully reviewedto assure clear lines of responsibility, reporting and control. In sum, whilethere are risks, project investments and the organization of its managementhave been carefully considered to minimize them.

- 23 -

PART V - LEGAL INSTRUMENT AND AUTHORITY

63. The draft Development Credit Agrement between the Rwandese Republicand the Association, and the Recommendations of the Committee provided for inArticle V, Section 1 (d) of the Articles of Agreement of the Association arebeing distributed to the Executive Directors separately.

64. Special Conditions of the Project are listed in Section III of AnnexIII of the Report.

65. I am satisfied that the proposed Credit would comply with theArticles of Agreement of the Association.

PART VI - RECOMMENDATIONS

66. 1 recommend that the Executive Directors approve the proposedCredit.

A. W. ClausenPresident

AttachmentsWashington, D. C.June 22, 1982

ANNEX I

- ' - Page 1 of 5TABLE 3A

RWANDA - SOCIAL INDICATORS DATA SHEET

RWANDA REFERENCE GROUPS (WEIGHTED AVE5AGES

LAND AREA (THOUSAND SQ. KM.) - MOST RECENT ESTIMATE)-

TOTAL 26.3 MOST RECENT LOW INCOME MIDDLE INCOME

AGRICULTURAL 14.6 1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA

GNP PER CAPITA (US$) 70.0 100.0 200.0 238.3 794.2

ENERGY CONSUMPTION PER CAPITA(KILOGRAMS OF COAL EQUIVALENT) .. 15.8 29.5 70.5 707.5

POPULATION AND VITAL STATISTICS

POPULATION, MID-YEAR (THOUSANDS) 2916.0 -3847.0 5169.0

URBAN POPULATION (PERCENT OF TOTAL) 2.4 3.2 4.5 17.5 27.7

POPULATION PROJECTIONSPOPULATION IN YEAR 2000 (MILLIONS) 9.5STATIONARY POPULATION (MILLIONS) 29.0YEAR STATIONARY POPULATION IS REACHED 2110

POPULATION DENSITYPER SQ. KM. 110.9 146.3 188.1 27.7 55.0

PER SQ. KM. AGRICULTURAL LAND 193.1 253.1 328.8 73.7 130.7

POPULATION AGE STRUCTURE (PERCENT)0-14 YRS. 44.3 45.7 46.6 44.8 46.0

15-64 YRS. 53.0 51.6 50.7 52.4 51.2

65 YRS. AND ABOVE 2.7 2.7 2.7 2.9 2.8

POPULATION GROWTH RATE (PERCENT)TOTAL 2.8 2.8 3.6/d 2.6 2.8

URBAN 5.6 5.6 5.8 6.5 5.1

CRUDE BIRTH RATE (PER THOUSAND) 51.1 49.8 49.6 46.9 46.9

CRUDE DEATH RATE (PER THOUSAND) 26.9 22.1 18.7 19.3 15.8

GROSS REPRODUCTION RATE 3.4/c 3.4 3.4 3.1 3.2

FAMILY PLANNINGACCEPTORS, ANNUAL (THOUSANDS)USERS (PERCENT OF MARRIED WOMEN) .. ..

FOOD AND NUTRITIONINDEX OF FOOD PRODUCTIONPER CAPITA (1969-71-100) 81.0 102.0 107.0 89.5 89.9

PER CAPITA SUPPLY OFCALORIES (PERCENT OF

REQUIREMENTS) 80.0 96.0 98.0 90.2 92.3PROTEINS (GRAMS PER DAY) 49.0 61.0 51.3 52.7 52.8

OF WHICH ANIMAL AND PULSE 25.0 34.0 .. 17.8 16.1

CHILD (AGES 1-4) MORTALITY RATE 41.0 32.2 25.4 27.3 20.2

HEALTHLIFE EXPECTANCY AT BIRTH (YEARS) 37.2 42.4 46.7 45.8 50.8

INFANT MORTALITY RATE (PERTHOUSAND) .. 127.0

ACCESS TO SAFE WATER (PERCENT OFPOPULATION)

TOTAL .. .. 35.0 23.9 27.4

URBAN .. .. 41.0 55.0 74.3

RURAL .. .. 35.0 18.5 - 12.6

ACCESS TO EXCRETA DISPOSAL (PERCENTOF POPULATION)

TOTAL .. 53.0 57.0 26.2

URBAN .. 83.0 87.0 63.5

RURAL .. 52.0 56.0 20.3

POPULATION PER PHYSICIAN 138095.0/c 62048.4 38916.7 31911.8 13844.1

POPULATION PER NURSING PERSON 11197.067 9181.4 10494.4 3674.9 2898.6

POPULATION PER HOSPITAL BEDIOTAL .. 822.9 652.1 1238.8 1028.4

URBAN .. 47.8 45.4 272.8 423.0

RURAL 3224.4 1604.8 1745.2 3543.2

ADMISSIONS PER HOSPITAL BED .. 21.2 21.3

HOUSINGAVERAGE SIZE OF HOUSEHOLD

TOTAL .. ..

URBAN .. ..

RURAL .. .. 4.5

AVERAGE NUMBER OF PERSONS PER ROOMTOTAL .. ..URBAN .. ..RURAL .. ..

ACCESS TO ELECTRICITY (PERCENTUF DWELLINGS)

TOTAL .. .. ..

URBAN .. .. ..

RURAL .. .. ..

- 25 - ANNEX IPage 2 of 5

TABLE 3ARWANDA - SOCIAL INDICATORS DATA SHEET

RWANDA REFERENCE GROUPS (WEIGHTED AVERAGES- MOST RECENT ESTIMATE)-

MOST RECENT LOW INCOME MIDDLE INCOME1960 /b 1970 /b ESTIMATE /b AFRICA SOUTH OF SAHARA AFRICA SOUTH OF SAHARA

EDUCATIONADJUSTED ENROLLMENT RATIOS

PRIMARY: TOTAL 49.0 73.0 64.0 56.4 73.7MALE 68.0 83.0 68.0 70.7 96.8FEIALE 30.0 64.0 59.0 50.1 79.0

SECONDARY: TOTAL 2.0 2.0 2.0 10.0 16.2MALE 2.0 3.0 3.0 13.6 25.3FEMALE 1.0 1.0 1.0 6.6 14.8

VOCATIONAL ENROL. (% OF SECONDARY) 40.0 12.0 17.0 8.0 5.3

PUPIL-TEACHER RATIOPRIMARY 39.0 60.0 53.0 46.5 36.2SECONDARY 14.0 13.0 15.0 25.5 23.6

ADULT LITERACY RATE (PERCENT) 16.4/c 23.0/e 23.0 25.5

CONSUMPTIONPASSENGER CARS PER THOUSAND

POPULATION 0.4 0.9 1.6 2.9 32.3RADIO RECEIVERS PER THOUSAND

POPULATION . 7.8 17.1 32.8 69.0TV RECEIVERS PER THOUSAND

POPULATION .. .. .. 1.9 8.0NEWSPAPER ("DAILY GENERALINTEREST") CIRCULATION PERTHOUSAND POPULATION .. .. 0.04 2.8 20.2CINEMA ANNUAL ATTENDANCE PER CAPITA .. .. 14.6 1.2 0.7

LABOR FORCETOTAL LABOR FORCE (THOUSANDS) 1650.6 2089.7 2582.3

FEMALE (PERCENT) 49.1 48.6 48.1 34.1 36.7AGRICULTURE (PERCENT) 95.4 93.2 91.2 80.0 56.6INDUSTRY (PERCENT) 1.1 1.6 2.0 8.6 17.5

PARTICIPATION RATE (PERCENT)TOTAL 56.6 54.3 52.2 41.7 37.2HALE 58.9 56.9 55.0 54.3 47.1FFDIALE 54.4 51.9 49.5 29.2 27.5

ECONOhIC DEPENDENCY RATIO 0.8 0.9 0.9 1.2 1.3

INCOME DISTRIBUTIONPERCENT OF PRIVATE INCOMERECEIVED BY

HIGHEST 5 PERCENT OF HOUSEHOLDSHIGHEST 20 PERCENT OF HOUSEHOLDS ..

LOWEST 20 PERCENT OF HOUSEHOLDS ..

LOWEST 40 PERCENT OF HOUSEHOLDS ..

POVERTY TARGET GROUPSESTIMATED ABSOLUTE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. 148.0 136.0 381.2RURAL .. .. 85.0 84.5 156.2

ESTLMATED RELATIVE POVERTY INCOMELEVEL (US$ PER CAPITA)

URBAN .. .. ., 99.1 334.3RURAL .. .. 43.0 61.2 137.6

- ESTIMATED POPULATION BELOW ABSOLUTEPOVERTY INCOME LEVEL (PERCENT)

URBAN .. .. 30.0 39.7RURAL .. .. 90.0 68.8

Not availableNet applicable.

NOTES

/a The group averages for each indicator are population-weighted arithmetic means. Coverage of countriesanong the indicators depends on availability of data and is not uniform.

/b Unless otherwise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, between 1969and 1971; and for Most Recent Estimate, between 1976 and 1980.

/c 1962; /d 1978 census; Ie 1973.

May, 1981

- 26 - AN~NEX IPage 3 of 5

DEbtItIONO.1 ~ St C0A1.01. OICATboS

Notes Altbog os- oaeahrtt rcn>neheatj joedoosotacbte -oasr abn osrol l b Idtatmo - otb tt-ntoalnortbilb-.onos of the ar fsebroa ellosadcoashue ottos>c otso lot: tEn at I",'s err, non-

obelocs,csotol o bo-otbs croons of so0asei-e, bodbieteorsr.d, odd da-o -inor asaatat toot doffrt-..- b-res-

Tbh ssrosgrosoe 1) tIlsl st-n-ygroobcpf tbhonjsotoeotyaod 21~ ... toot7y gtptboooo: nrraecrcsoaoob.a'O-osrogrpofossoist onrA sneoto Cpse.a..sbt.o..ss ropnoe Ptdb tot othAroenttodeOso sross t.egafsrts

1.05 ut (oboc..teth I,b. aai. h,Si h - dqia. -h:e:or nc> -b :- n .- th, ':roa. 0t rflncnd- lToal-Stedtrara are a norrobo-baddI area eod ~ to -b tutors o aid t har,a- c-b -re -dto bofh thoetl icnr -0 nbr0hsttbhb

bt. ii- ... Ig - .dtIy nd I cooao'oyoonc EtS.s.s''arraotprraso cso

0970, erd19

yy don. osobool1stltron naddo..Xonrodron

an Ins Etro-s, nt- I ges ol,rb our-, -ud c r Iend groo-l ur- ob0 rblroo to sIn'- loo- r- -rrlho cooils - o. nodou 00-sSt-dP.tly o k tgrr 00ne- qtoetbO ele 19)0, 1970, -d b S-b osttt--u i -yortlooahd- :b n drluooaL l cr00ftrd

bto ,Iaoto, b-ao ohtub k-tso ly~ 1; 7 9619600ob rI add-Iiho-f~

dNERGYsONSUnT dOtNbsoPfER hcer toyIA -Ar fac-ti oopeb.ht of-i datey ob-th or .... n. ocl. Abratdro i .bduo W trorPI g ot e, -tonluobanongnouetnass 19th. 1970, rd lyly .dote, sheCho19r0ol.aoat19teosotne,,b.-oo.-s-

dorhatoo rtttstnsAdOOSttO 7 oso o r-aon-b>K use,-rd or dArhoegrs-

ousai pop ultotro b JiYage atd- tsone -ht rortfeJ ory aod f96 rs n9 Isy reet 1ollno rcoyla'.'bcl ff5cO a e-t-aaSINGrsrs r

soglfs spsneoryrborhto Rsaigno frboono-rn ...'si yrooas otAorhsN.-adcrfrY.. kroo_f h",os-orl,re o1 rdarcltona, ed ftel lI 0 atanoId oAbbint s7. yos h ae cnaaoa alIosst looOt n IO ;oreco orn g

dsfraor-0 I eettr naous h y ht isne,,s escor-tin fato ot- dt sohb ba, nod rorul Ore)-Ugo.respe-t 'oa'y

and1,1, Ae-ioyoabofrpr(nto apos. usNb.Enro'rn rotOrs-1a. - r

StatInery optlebyon-Irr a -sotoar phtt.tno thsr I.nn grnn stosttt tort-I-i -ootgl -esauoaa-G-ctr tot-al,-ol -s- or-

watsoorsen. hI Os i-h ..r .onyai r etlt ratesd dsrttr or almr tAto-' ao pnpc-e tons; b -o a -ooloda nbtd eardgd 6-1lof foandapleoet Islfd snan bili b ia r ghoary7. pcpoa-er sToatsc brnstoalr tdr-1 a1d4 sorm ina oyaosd10pet

ssomrdo ocelsoshbnetdtoersrtlcooonptatr cnaoa0 poseoe,s oaortoodcnlo'ulna

sleshas..ri heat rero"Ih " 1" Iaial-di.-1l ELab.stIOltN atD rVyutrag;n rpnbccnos :orrottoptla ttr Pslt: rdda .PjI. Adj-dbd.E 1-tRt,Plar i. h.-tn-er.cteso ar.uroOlos. 0 . .bonooos, o Puoat ..t I.s.l ernlco ftetos ofdsono

9M y "- toeonl' taddlenocotar sb.On e tttael leadl d- Cse -as ebtd act tgno. aoo re febrsy- , 00050 aoaut'totoo -din a,np.-ot a

tortlattor tao troatoors fpecent) - ObIldorn (b-to taers, noon-g 15-oor bto senodtaayf dirrls- dtnddbrobsofoaoe to stedleson;196, 1970 st- 90 ar.sdl lhreny os (erars_ - Lteoseno eb rra.ada_

tooletieOoo Isefsasof r - -a-ul rotshrattt ofd sopr n.ib- oa otega-?P of brladl pp heto agedi U yata! aoforsteartopuartoc fr 190-h, '9_-7, ea 19f7.,iiy-,tI,l-d---d- bd;a .y

Crf to at. trsosnd nullrebrt a tosn frd-sanr e easti tos shotir sIghs tes-s sc..o.ads -ashatanos-s- iocsed;roytaooh 19ff, 1970, and 197 dra al -tory no-btolesII.

posoio; 19- 1 19ff,ahsd. 0979deba freres to -eaa 1Yohato par boc--drf-p-d-utu antloe u-- yPrc aodnto ae-noaansa f ugrreta-tl srs Assbrctnd,nosessadI cosee slsstn frO.

bseeIoc 60stae dt 97reosrtdofhetaons eco g-pctOto sto tsfe;aaorsosn thercarohe chpaoehs -scn

PebIn . .t1ototostr,dtro sasts -Cp d b, fanea gtibe of. !arrrdsT ah car(or a thd osandpooa iit Prntasfrondoot

sE areted tanadn....n. seta a age.g-ornutyr noporo.. o a."'bat eeo nrsocsae',cfOe sapaolI.b 11. , 117~~~~1 .I 1179 data. AddIpohlhoobis-yettsd (p-o iys LitrIrgb ga all, tern It. Osndntierd)

tIl 12TIItIOI . 1 1- d hI- . b d to hr 'natty' OfI Os -posa atlet p.Fooai .d1 yrtsesasdsI.

Prob.- ln- f-t allfoo oott-tttr--b. -tAb...ta! orthlbo see so frda snb- CofS.1ToNosst ttgrspa,tnuto dtsost er-ttIstion cflrdr 195e60 betta. Onnedtrt7snorec peoarygood.s....dP.g....o eddsoblIroo-is

oto.1tnoal a19raf p1970os tId oshs 916, 90 n 19099bdar.Ontlitehor -htors(boad7-tnoeoly_cn pros,to:doerrg eqoo-1c, of tPI t t--d) s- d-hs pat t .h.lds b lorooc ype oepcoa nnaeorou ert ofalogsha .. nt.tAls torrtrtif one- ar

1a9oss .as 1nhogstosocd sno, d oplsecloeata ee,ses asl yse - IPos..elebc pnroon pro- tganOsootlaorfoteqoso_ lesse In oodp_nasseg obbr losses o ~l'b.r itrtnto.tqj. Oi-b-slor rIt -rneo -b Lao fort toi farmIng ye oreotro, hg ost-s5 es ddsansi ssret tta_rdi by PA aobos iysotgt a. sfrnra oiftf

0 0 aesg of stru . ea... o 96,10 . 90 00

boooahntd era!; 096 -6y.170 and. 1977 tatdie. 1970 oeb 1979 d9,Art. IPerl P1ttosi sop r- Aapt-ac borsor o)d Aoset ot-o- of cper raptTV terlo-p tos1 tesa -pa poass) toobsTaV ..rd tasee It tsr-id-pts ,,

oa,I p1 ofth I- fod-tro day. Nopi-ot nf ford.. Is s toet as a- os I-g- ar-toto asses on thna.. asd enrol, talc, a- o feal hn toeaaE onso f60grs oU orlprraopad en...0. aaoo ant-e Ptd1960,1900 oct 1979a i ybeta. Tb -saoeb-asad - f _t d parottpoiostaptlse rrtonf o nbl-b iob DO granbc l bdtt tlpoo 1 .teeead ostIsN- sins age-sati cop-osth or. the -opaoti n, oShb lnog els-arb d-

Ibtdb fec 1-b) Prorratley pana(per-Obosond - Iotlda per n- onsan- "d.t..rstse f rra n rn Clita -lo Yaidbid -B-d hen -odby >no

tedec bta derlrod fn..I'o- Iota abltes;-I-IdO.-1970yasd, 19l9ddote.iofi ottoochaldsi

at bIrth; 19661,619709end 19799da-a .- as shaob bentpoablh Enstde- bltat'le.... -idn

torosrn oy lq-abte (rmnr of.dIP. bd IrV .bn- rl, i orb tradcony apon- goetoal anoqoeta. doe f. sotta ontooetese scher of psotl (ocoal. urbn, und rtael ttth reasorblo tonsoc e sce offorbo-...ble.

sa_t doypl. cnlossseed potiao deta-sie nt sated boo. oncooresfoaI'Ooss peb -slata 1960 P 1rses Donos Lr79 (01paos-e obnad n

fonetnesasdpsh . .. onarsd ottmor thenl101 seser 0

a hi oe me be~ F?attsel Intone) of Fheotbr. ' Erho . ten g' Is boto tro ob.a,ruraA it~~~~~~~~~~~~~~~~P aelno bdsro for h.Ihrns of _Ito n r iadrrs1 ,sbsena d dt-gnOogI resntaddoe ofa rbs hnoari.tDoRuco orros AEreta1ers (Poytato.tluf dn It tner fs-oe Lre fpeen)-

eseati arosoltpyhohhneofosoeroerotbl drrltor foolen abrador(bassslo

otoss 0 -nosr AIlatsa ls-cid o ltoitfog toto-tuIen, so - egtea -Il,,,-Lb .- i I.,-fdr

th olaoa addspsl bto aro -eo Isteso ...o tO fhrna -,acItr-ity,.t, da -prnooontn Isf Soota1 Ioab. lfnct196r

P-sa il toa disollasbos dyt"- - ai. 'liPi ",P r. 111 -, - Nttay 1991ilpit anteto roe ty ItdP' .. N .PI' _udia nt predrototog R.yc- -ii - I I. .. 1 - 7 dIbda

tless qtatftrd .frm -atnisl s,btli as bosnUSDAp .. os. i.f i..p- -g ftd1, 1aadf-l .. td.alateanleiot ta Onostg Psoot - Ppotesin bloded bt snebe of pentlnls

moteerdfasalsredtasatu-sss p-taortoP noss ead 20StIa iIsass, -179dt.Th- , I.d,IL'J, iit.

Annex I- 27 - Page 4 of 5

COUNTRY DATA - RWANDA

GROSS NATIONAL PRODUCT IN 1979-80 1979 19801'

US$ Mln. % US$ Mln. _

GNP at Market Prices 1035,0 100.0 1172.5 100.0Gross Domestic Investment 194.9 18,8 187,7 16.0Gross National Saving 113,0 10.9 21.8 1.9Current Account Balance 46,8 4.5 54.3 4.6Export of Goods, NFS 226.6 21,9 16556 14.1Import of Goods, NFS 308,6 29.8 331.5 28.3

GOVERNMENT FINANCECentral Government

(RF Mln) of GD?

1980=/ 1980 1972

Current Receipts 13,259 12.0 8.3Current Expenditure 10,468 9.5 10.7Current Surplus 2,791 2.5 -2.4Capital Expenditures 2,113 1.9 1.2

MONEY, CREDIT AND PRICES 1976 1977 1978 1979 1980

(RF Million outstanding, end period)

Money Supply2/ 8,047 10,173 11,224 14,113 15,209Bank Credit to Public

Organisations 480. 221 225 233 219Bank Credit to Private Sector 2,392. 4,169 4.908 4,330 6,296

(Percentage of Index Numbers)

Money and Quasi Money as %of GDP 13.0 14.2 13.9 14.5 14.0

Consumer Price Index (Jan-Mar1976 = 100) 101.9 116.7 131.3 152.1 163.0

Annual Percentage Changes in:

Consumer Price Index 6.l 14.5 12.5 15.8 7.2Bank Credit to Public

Organisations 5.1 -54.0 1.8 3.6 -6.0Bank Credit to Private Sector 40.1 74.3 17.7 -11.8 45.4

NOTE: All conversions to dollars in this table are at the average exchange rateprevailing during the period covered.

1/ Provisional

2/ Includes Money and Quasi Money.

- 28 -

ANNEX I

COUNTRY DATA - RWANDA Page 5 of 5

TRADE PAYMENTS AND CAPITAL FLOWS

1/BALANCE OF PAYMENTS 1977 1978 1979 1980 MERCKAXIDISE EXPORTS (AVERAGE

___________________ - - - ~~~~~~~~~~1977 -80)

Exports of goods, f.o.b. 125.2 110.4 202.9 133.6 US$ Mln %Imports of goods, f.o.b. -102.3 -144.9 -159.5 -204.4 Coffee 80.3 55.9Trade balance 22.9 -34.5 43.4 -70.8 Tea 10.5 7.3

Cassiterite 7.7 5.3Services (net) -72.4 -106.3 -127.4 -90.0 Wallfram 6.s. 4.5Net transfers 66.9 94.1 130.8 106.5 Pyrethrum 1.8 1.2

Cinchona 2.1 1.5Balance on current account 17.4 -46.7 46.8 -54.3 Other 34.9 24.3

Total 143.7 100.0

Direct Investment 5.9 4.7 12.5 17.0 EXTERNAL DEBT,Net MLT Borrowing 23.3 20.1 17.6 33.2 DECE_BER 31, 1980

USS )lnOther Capital (net)and capital n.e.i. -24.1 26.1 -7.2 17.4 Public Debt, incl.

Increase in reserves (-) -22.5 -4.2 -69.7 -13.3 guaranteed 170.0Non-GuaranteedPrivate Debt --

Gross Reserves Total Outstandin(end year) 96.8 99.7 177.3 204.5 and Disbursed --

Petroleum Imports 12.3 11.8 14.5 22.8 MEIRLAL DEBT. SERVICE

Petroleum Exports - - - -

Public Debt incl.guaranteed 3.2

Non-guaranteed Pri-vateDebt --

Total outstanding and

RATE OF EXCHANGE disbursed --

Annual Averages End Period

1974-80 December 1981 I3RD/IDA LENDING Dec. 31.1980)

US$ 1.00 = RF 92.84 92.84 (USS MTh)IDARF 1.00 = US$ 0.011 0.011 Outstanding and

Disbursed 58.12Undisbursed S7.48Outst3nding mncl.

1/ Provisional Und'sbursed 115.602/ Debt Service as a percentage of Exports of Goods and Nonfactor Services.

__ GNot available.

ANNEX IIPage 1 of 5

- 29 -

THE STATUS OF BANK GROUP OPERATIONS IN RWANDA

A. Statement of IDA Credits(As of March 31, 1982)

Amount US$ million(Less cancellations)

Credit No. Fiscal Year Borrower Purpose IDA Undisbursed

(Four credits have been fully disbursed) 31.90

567-RW 1975 Rwanda Education 6.38 2.87

655-RW 1977 DFC I 4.00 0.13

656-RW 1977 Agriculture Cinchona 1.80 0.31

668-RW 1978 BugeseraGisaka-MigongoMixed Farming andRural Development 14.00 0.70

769-RW 1978 Road Maintenance 15.00 4.14

896-RW 1979 DFC II 5.20 4.71

937-RW 1979 Mutara Agriculturaland LivestockDevelopment 8.75 5.84

1039-RW 1980 Integrated Forestry andLivestock Development 21.00 10.59

1057-RW 1981 Telecommunications 7.50 7.05

1126-RW 1981 Coffee/Foodcrops 15.00 14.50

1217-RW 1982 Technical Assistance 5.00 5.00

Total 135.53 1/ 55.84

Repaid .38

Total Held 135.15

B. Statement of IFC Investments(As of March 31, 1982)

In 1976, IFC made a loan of US$535,000 for a tea factory. A secondIFC long-term loan of US$226,000 and contingent equity commitments of up toUS$60,000 for an expansion of the tea factory were signed in September 1980.

Note: Rwanda has received no Bank loan.

1/ Does not include US$25.9 million credit approved by the Board May 20, 1982for a Fifth Highway Project and a US$10.0 million credit approved by theBoard June 15, 1982 for a Second Education Project.

- 30 -ANNEX IIPage 2 of 5

C. PROJECTS IN RWANDA 1/(As of March 31, 1982)

Credit No. 567-RW Education Project; US$8.0 Milion Credit of June 30, 1975;Date of Effectiveness: December 1, 1975;Closing Date: December 31, 1982

As now constituted, the project includes construction, equipping andfurnishing of 250 primary-school workshops, a school-textbook printshop, andan office building for the School Financing and Construction Services (SFCS)as well as furnishing and equipping of the Rural Agricultural Training Centerof Gitarama. The project also provides technical assistance, vehicles andoperating expenses for the SFCS. The project has been hampered by implementa-tion difficulties centering on two misprocurements (an amount of US$130,000was cancelled because of misprocurement of certain construction materials; asecond amount of US$1,491,000 was cancelled due to misprocurement of paper).Most of the 250 workshops are nearly completed. The lack of acceptable recordkeeping, however, has impeded the processing of disbursement requests. There-fore, a final inspection and evaluation mission for the workshops, organizedby the Government (with IDA approval) was undertaken successfully in November1981 with UNESCO assistance. Disbursements have resumed. The printshop isnow operational and construction of the office building for the SFCS completed.The original Closing Date (June 30, 1982) was extended to December 31, 1982 bywhich time the project is expected to be completed.

Credit No. 656-RW Cinchona Project; US$1.8 million Credit of August 20, 1976Date of Effectiveness: March 2, 1977Closing Date: March 31, 1983

The project provides over a five year period inputs and extensionservices to grow cinchona for export. Progress is satisfactory and there isstill a demand from farmers for planting material. World market pricesfor cinchona derivates, however, remained low during 1979 and 1980, and OCIR(the implementing agency) had to reduce the farm gate price for cinchona barkand abolish the export tax and the OCIR levy. In September 1980 it wasdecided to establish a cinchona bark processing plant in the Kirambo area, andconstruction has since started and the factory is scheduled to be open inearly 1983. This should give Rwanda a stronger position in the future tocompete with cinchona derivates on the world market. The original ClosingDate (June 30, 1982) was extended to March 31, 1983 by which time the projectis expected to be completed.

1/ These notes are designed to inform the Executive Directors regarding theprogress of projects in execution, and in particular to report any problemswhich are being encountered, and the action being taken to remedy them.They should be read in this sense, and with the understanding they do notpurport to present a balanced evaluation of strengths and weakness inproject execution.

- 31 -

ANNEX IIPage 3 of 5

Credit 668-RW Bugesera/Gisaka/Migongo Mixed Farming and RuralDevelopment Project; US$14.0 Million Credit ofMarch 31, 1977;Date of Effectiveness: November 23, 1977;Closing Date: September 30, 1982

The project consists of the promotion of mixed farming and rural

development in two recently populated zones; it aims at strengthening thecentral services responsible for rural development. The project includes

tsetse control, field extension and infrastructure, credit, improvement of

feeder roads and water supply, a limited number of schools and health centersand establishment of two cattle ranches. The project is cofinanced with BADEA

(US$5.0 million equivalent for livestock development and water facilities) and

France (US$2.6 million for six technical assistants). Satisfactory progresshas been made with programming of work, budgeting and construction. The

results of the foodcrop and plant improvement components, however, are below

appraisal estimates due to technical packages which have not taken adequateaccount of the relatively dry project area. A follow-up project will build on

infrastructure put in place under the first project and focus primarily on

applied research, training and extension.

Credit 769-RW Fourth Highway Project; US$15.0 Million Credit

of April 1978;Date of Effectiveness: August 4, 1978;

Closing Date: July 1, 1982

Implementation of the Fourth Highway Project (a US$15.0 million

Credit for road maintenance) started in January 1978. Specialists financedunder the technical assistance program are performing satisfactorily. Procure-

ment of equipment is completed. On the suggestion of the Association, an

expert on labor intensive methods visited Rwanda for three weeks in June 1978

and recommended that one mechanized unit be replaced by one unit utilizinglabor intensive methods. Following the consultant's recommendation, the

Government has introduced labor-intensive methods for road maintenance.Although the project is about one year behind schedule, implementation is nowat its anticipated progress rate and the project is proceeding satisfactorily.Project completion is expected for end-1982.

Credit 896-RW Second Rwandese Development Bank Project; US$5.2 Million;

Credit of July 13, 1979;Date of Effectiveness: January 4, 1980;Closing Date: June 30, 1983

The Project aims at providing further assistance to the industrial

sector by supporting the activities of the Rwandese Development Bank. Itincludes two components: (a) a second line of credit of US$5.0 million (which

is now about 80 percent committed) to finance BRD's foreign exchange require-ments and (b) a feasibility study for the establishment of an auditing firmin Rwanda (US$0.2 million). Government has just finished reviewing the audit

study and its comments are currently under consideration by the Association.

- 32 -

ANNEX IIPage 4 of 5

Credit 937-RW Mutara Agricultural and Livestock Development Project;US$8.75 Million Credit of July 13, 1979;Date of Effectiveness: May 30, 1980;Closing Date: December 31, 1983

The project is the second phase of a long-term development programfor the Mutara region. It aims at developing techniques, procedures, and aninstitutional environment which will make it possible to preserve theproduction potential of the area, make a rational and more intensive use ofavailable resources, improve farming and ranching techniques, and integratethe project into the local administration. Settlement of cattle owners hasproceeded in an orderly way and pasture production has improved, but destockingactivities and credit recovery have been disappointing due to lack of clearpolicies and enforcement mechanisms.

Credit 1039-RW Integrated Forestry and Livestock Development Project;US$21.0 Million Credit of July 7, 1980;Date of Effectiveness: November 11, 1981;Closing Date: September 30, 1986

The project is the first phase of a long-term program to developthe forestry resources of Rwanda and to strengthen the livestock industry.Technical assistance personnel and key local staff have been recruited andstart-up activities are progressing satisfactorily.

Credit 1057-RW Telecommunications Project; US$7.5 Million;Credit of August 13, 1980;Date of Effectiveness: July 7, 1981;Closing Date: June 30, 1985

The project aims at improving the quality of existing telecommuni-cations services, while extending the coverage to geographical areas andsegments of the population which at present do not benefit from suchservices. In addition to improving international and domestic telecommuni-cations (telephone and telex) the project provides technical assistance andtraining to the Ministry of Post and Telecommunications. The project iscofinanced with FAC and CCCE (US$3.9 million equivalent) and CIDA (Can$4.95million) and is proceeding satisfactorily.

Credit 1126-RW Lake Kivu Coffee Improvement and Foodcrops Project;US$15.0 Million Credit of April 29, 1981;Date of Effectiveness: January 18, 1982;Closing Date: December 31, 1986

The project aims at building up an effective extension servicewhich would assist farmers in increasing foodcrop and coffee production usingfield-tested techniques and also helping OCIR-Cafe (the implementing agency)improve its financial management. Technical assistance personnel and keylocal staff have been recruited and start-up activities are progressingsatisfactorily.

- 33 -ANNEX IIPage 5 of 5

Credit 1217-RW Technical Assistance Project; US$5.0 MillionCredit of April 5, 1982; Date of Effectiveness:July 5, 1982; Closing Date: December 31, 1986

The project aims at increasing Rwanda's absorptive capacity,improving interministerial coordination in project preparation and monitoring,and strengthening the Ministry of Planning (MINIPLAN). The project creditagreement was signed April 5, 1982. The Project Economist to be assignedto the Programming Directorate in the MINIPLAN has been recruited and isexpected to be at his post by mid-June 1982.

- 34 -

ANNEX III

RWANDA

Supplementary Project Data Sheet

Phase II Bugesera Gisaka Migongo (Rural Services) Project

I. Timetable of Key Events

(a) Origin of Project: Studies Bureau, Ministry of Agriculture andLivestock (follow-up to BGM I Project)

(b) Identification Mission: June 1979

(c) Appraisal Mission: May/June 1981

(d) Negotiations: May 5-10, 1982

(e) Planned Date of Effectiveness: October 1982

II. Special Implementation Action

None.

III. Special Conditions

A condition of disbursement for all expenditures on buildingconstruction and the rural road component would be IDA's approval of aletter of understanding between the Ministry of Public Works and theMinistry of Agriculture and Livestock defining the managementresponsibilities for the road building component and all other projectbuilding construction (para. 50). Approval of annual work plans for eachfiscal year during project execution from the Ministry of Public Works(road component), ONAPO (family planning component), ISAR (researchcomponent) and BGM II project management would also be a condition ofdisbursement of funds concerned (para. 55).

IV. Conditions of Effectiveness

Conditions of Credit effectiveness would be (a) the appointment ofthe two Extension/Training Specialists (para. 57) and the signing of acontract satisfactory to IDA between ISAR and IITA regardingimplementation of the research component (para. 41).

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