Public Disclosure Authorized FILE Copy · 2016. 8. 9. · Conversions in this report were made at US$1.00 to TSh 8.00 which is close to the 1978 average exchange rate.) ABBREVIATIONS

Document of FILE CopyThe World Bank

FOR OFFICIAL USE ONLY

Report No. P-2418-TA

REPORT AND RECOMMENDATION

OF THE

PRESIDENT OF THE

INTERNATIONAL DEVELOPMENT ASSOCIATION

TO THE

EXECUTIVE DIRECTORS

ON A

PROPOSED CREDIT

TO THE

UNITED REPUBLIC OF TANZANIA

FOR A

TOURISM REHABILITATION PROJECT

November 29, 1978

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

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

Currency Unit = Tanzania Shilling (TSh)US$1.0 = TSh 8.00TSh 1.0 = US$0.125

(As the Tanzania Shilling is officially valued at afixed rate of 9.66 TSh to the SDR, the US Dollar/Tanzania Shilling exchange rate is subject to change.Conversions in this report were made at US$1.00 toTSh 8.00 which is close to the 1978 average exchangerate.)

ABBREVIATIONS AND ACRONYMS

EAC - East African CommunityHTTI - Hotel and Tourism Training InstituteMNR&T - Ministry of Natural Resources and TourismNCA - Ngorongoro Conservation AuthoritySSLL - Serengeti Safari Lodges, Ltd.TANAPA - Tanzania National ParksTTC - Tanzania Tourist Corporation

FISCAL YEAR

Government: July 1 - June 30TTC January 1 - December 31

FOR OFFICIAL USE ONLY

TANZANIA


CREDIT AND PROJECT SUMMARY

Borrower: United Republic of Tanzania

Beneficiary: Tanzania Tourist Corporation (TTC)

Amount: US$14.0 million equivalent

Terms: Standard

RelendingTerms: US$9.5 million of the Credit will be onlent to TTC for

16 years with 4 years of grace at an interest rate of10% per annum.

ProjectDescription: The proposed project, which will assist the Government

in reversing the deterioration in tourist facilities andservices, would consist of the following components:(i) works and equipment required to bring TTC hotelsand lodges to appropriate operating standards; (ii) tech-nical assistance to TTC in the field of hotel maintenance,marketing, hotel supplies, hotel communications and proj-ect administration; (iii) preparation of promotionalmaterials and marketing campaigns aimed at the touristtravel trade; (iv) construction, furnishing and equipping,and technical assistance for a new Hotel and TJourismTraining Institute (HTTI) in Dar es Salaam; (v) equipmentfor improving the effectiveness of the Governmient's anti-poaching efforts; and (vi) improvements to the terminalbuilding of the Dar es Salaam Airport. The project'smajor risks involve the uncertainty related to the fore-cast of tourist flows to Tanzania (particular]y in lightof past deterioration in tourist services and facilities),and TTC's managerial capability to implement the projecteffectively. By providing substantial technical assistanceas well as the other ingredients necessary to marketTanzania's tourist attractions effectively, the project isdesigned to overcome these risks.

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

-2-

Estimated Cost: (US$ millions)Local Foreign Total

Civil WorksHotel rehabilitation 1.04 1.96 3.00HTTI 0.50 0.88 1.38Airport terminal 0.30 0.57 0.87Subtotal 1.84 3.41 5.25

Furniture & fixtures 0.30 0.90 1.20Equipment 0.68 3.95 4.63Professional services 0.72 0.39 1.11Technical assistance 0.17 1.52 1.69Marketing expenditures 0.19 0.54 0.73

Total Base Cost 3.90 10.71 14.61

ContingenciesPhysical 0.32 0.79 1.11Price 1.28 2.50 3.78

Total Project Cost 5.50 14.00 19.50of which taxes and duties 1.20 - 1.20

PROJECT COST NET OFTAXES AND DUTIES 4.30 14.00 18.30

Financing Plan: (US$ million)Local Foreign Total %

IDA - 14.00 14.00 77Government 4.30 - 4.30 23

PROJECT COSTNET OF TAXESAND DUTIES 4.30 14.00 18.30 100

Disbursement: (US$ million)IDA FY 80 81 82 83

t

Annual 1.2 4.2 5.8 2.8Cumulative 1.2 5.4 11.2 14.0

Rate of Return: 21%

Appraisal Report: Report No. 2138-TA dated November 20, 1978.

INTERNATIONAL DEVELOPMENT ASSOCIATION

REPORT AND RECOMMENDATION OF THE PRESIDENTTO THE EXECUTIVE DIRECTORSON A PROPOSED CREDIT

TO THE UNITED REPUBLIC OF TANZANIAFOR A TOURISM REHABILITATION PROJECT

1. I submit the following report and recommendation on a proposedcredit to the United Republic of Tanzania of US$14.0 million equivalent onstandard terms to help finance a Tourism Rehabilitation Project. Approx-imately US$9.5 million equivalent of the proceeds of the credit would berelent to the Tanzania Tourist Corporation at 10% interest per annum for16 years with 4 years of grace.

PART I - THE ECONOMY 1/

2. A Basic Economic Mission visited Tanzania in August 1976. TheBasic Economic Report was distributed in December 1977 (Report No. 1616-TA).A summary of social and economic data is in Annex I.

Profile of the Economy

3. Tanzania is one of the twenty-five least developed countries inthe world with a per capita income in 1977 of US$200. The economy is stillheavily dependent on agriculture: 90% of the labor force is engaged in agri-culture and approximately 40% of GDP and two-thirds of total exports arederived from agricultural production. Average rural incomes are much belowaverage urban incomes and there is considerable regional variation in ruralincomes owing largely to differences in climate and land fertility. Overallpopulation density is low, though a few areas are considered overpopulated.Population growth is estimated at 2.7% per annum with both fertility andmortality at relatively high levels.

4. Since the Arusha Declaration in 1967 Tanzania has pursued a socialistdevelopment strategy. Banking, insurance, and most large-scale enterprisesin manufacturing, plantation agriculture, and wholesale trade are under statecontrol. Controls are used extensively to direct economic activity, includingimport licencing, foreign exchange control, price control, the reservation ofsome activities to the state or cooperative sector, and detailed Governmentinvestment planning. The second major feature of Tanzania's developmentstrategy is its strong emphasis on rural development and social programs tobenefit the poor. This is reflected in ambitious programs for the provisionof rural water supplies and health services and in the decision to achieveuniversal entry into primary education by 1977. The Government policy ofsettling rural population into villages is an important element in its attemptto facilitate the provision of economic and social services in rural areas.

1/ This section is essentially the same as that of the President's Reporton the Education VI Project, dated November 29, 1978.

-2-

Long-Term Economic Trends

5. In the decade 1967-77 real GDP at factor cost grew at an annualaverage rate of 4.6%, or about 1.8% per annum per capita. While economicgrowth was severely disrupted by the economic crisis following the failureof rains and large increases in import prices in 1973 and 1974, it has sinceresumed with the improved weather in 1976 and 1977.

6. The Government has an impressive record of domestic resourcemobilization. Between 1966-67 and 1976-77 the share of recurrent revenuerose from 14.3% to 20.2% of GDP. This has been achieved through a combina-tion of highly progressive direct taxes and proportional or moderately pro-gressive indirect taxes. Except during the economic crisis in 1974-75, therate of national savings has also been high: gross national savings fluc-tuated at around 16-17% of GNP from the mid-1960's through 1973, fell tohalf that level during the crisis years and recovered to the pre-crisislevel in 1976-77. These are extremely high levels of savings for a countryat Tanzania's income level.

7. Some progress has also been made in achieving the Government'sobjective of a more equitable income distribution. While between 1969 and1975 the average urban-rural gap remained approximately constant, it is likelythat the gap has now been slightly reduced due to continued recovery of agri-cultural production and higher producer prices. Within the urban sector therehas been a dramatic narrowing of the post-tax income differential between thehighest-paid government officials and minimum wage earners from 50 to 1 in1961 to 8 to 1 in 1975. However, the overall formal urban sector earningsstructure has remained relatively stable while an informal sector has emergedcomprising large numbers of unemployed, underemployed and other workers withearnings significantly below the official urban minimum wage. The policiesof wage restraint and higher producer prices pursued by the Government since1975 have had a beneficial impact on almost all dimensions of income distri-bution and the basic needs oriented programs in rural water and health andin universal primary education (para 4 above) are resulting in a significantredirection in public expenditures toward the rural poor.

8. Despite satisfactory performance on growth, domestic resourcemobilization, and income distribution there are other areas in which per-formance has been less satisfactory. The most problematic long-term trendis the slow growth of agricultural production. From 1967-77 agriculturegrew at an annual rate of 2.7%, the same as the rate of growth of population.While in the past three years agricultural growth has been higher, this pri-marily represents recovery to the long-term trend from the bad years in1973-74. In addition the recovery has been limited to subsistence agricul-ture; monetary agricultural production was only 2.2% higher in 1977 than in1972.

9. Low agricultural growth has been largely responsible for a secondproblem, the disappointingly slow growth of export volume: while the totalvolume of exports of goods and services was 7.7% higher in 1976 than in

- 3 -

1966, the volume of exports of goods alone was actually lower in [976 thana decade earlier. From 1966-71, the volume of exports of goods and servicesgrew at 7.7% per year, but this was followed by a decline after 1971, a sharpdrop in 1974, and only a partial recovery by 1976. Increased levels offoreign assistance and high coffee prices have mitigated the worst effectsof the decline in export volume, but Government authorities have been forcedto impose stricter import controls which have had particularly adverseeffects on industrial production in recent years.

Recent Economic Performance

10. The economy continued its recovery in 1977. Total GDP increasedby 5.9% while agricultural production increased by 5.6%. There was no sig-nificant change in export volume but the boom in coffee prices helped raisemainland commodity export receipts from TSh 3,828 million to TSh 4,585 mil-lion. External reserves were US$280 million at the end of 1977 but hadfallen to US$200 million by May 1978 largely as a result of falling coffeeprices. This is equivalent to three months imports at the 1977 lEvel.

11. Recovery has been aided by good economic management. The Govern-ment has continued to adhere to the principal elements of the policy packageintroduced at the time of appraisal and negotiation of the Program Loan(No. 1063-TA) in late 1974. These include reallocation of investment infavor of directly productive sectors, higher agricultural producer prices,constraints on wages and salaries, and price and tax increases to restrainprivate consumption. The Government has also succeeded in bringing Gov-ernment spending under control and has begun to relax import controls.Because excessive Government spending and borrowing from the banking systemwas threatening to undermine financial stability and the entire program ofrecovery in early 1976, a program of budgetary control was developed by theGovernment and supported by both IMF assistance and a Program Credit (No.688-TA) in early 1977. Through the imposition of new budgetary controlmeasures and the reimposition of a progressive tax on coffee exports, theGovernment was able in 1977-78 to hold bank borrowing to nearly zero. TheProgram Credit was also designed to support selected relaxation of importcontrols in order to provide needed imports of spare parts and raw materialsfor increased capacity utilization. After some delays, the availability ofessential maintenance imports has increased.

12. In addition, the Government has experimented in recent monthswith measures to increase labor productivity. These have included layoffsof some redundant workers and consultancy studies of the operational prob-lems of individual firms. Of potentially greater importance, in his BudgetSpeech in June 1978 the Finance Minister called for the immediate adoptionof a payment-by-result wage system to stimulate productivity.

13. Tanzania continues to attract large amounts of foreign assistanceon concessional terms. Because of the very concessional terms on which aidhas been given to Tanzania and the Government's refusal to use higher costcommercial loans and supplier's credits, the overall debt service ratiohas remained low. Including a notional 40% share of the debt of the EastAfrican Community Corporations, it was less than 8% in 1977. Bank debt asa percentage of Tanzania's total debt was about 26% in 1977; this is pro-jected to rise to about 29% in 1985 and remain stable thereafter. Whilethe favorable terms of much of Tanzania's foreign assistance (particularlythe increasing proportion of grants) significantly reduce the debt serviceburden, they also increase Bank Group exposure. Debt service payments tothe Bank Group were about 28.6% of Tanzania's total debt service paymentsin 1977, and are projected to rise to approximately 30% in 1980.

14. Tanzania has a suitable development program which will requiresubstantial domestic funds in excess of local savings and available non-BankGroup external capital. Local cost financing is justified in view of oursupport for the Government's increased emphasis on local cost-intensive ruralinvestments and the importance of not aggravating the local funds shortage.

East African Community (EAC)

15. The recent developments in the East African Community were ouitlinedin a report to the Executive Directors dated December 19, 1977 (R77-312).Dr. Victor Umbricht, the independent mediator appointed by the Partner States,has visited East Africa on numerous occasions and has begun work on the ques-tions involved in appraising the assets and liabilities of the EAC Corpora-tions and making recommendations on their allocation. The de facto breakupof the Community is expected to have some impact on Tanzania's budget as newnational corporations take over the services formerly provided by the EACCorporations. While substantial initial investments are required (particu-larly in the formation of the airways corporation and the rehabilitation ofthe railways), the burden on the Government budget should be temporary as thenew corporations are expected to become self-financing. A major developmentrelated to the EAC difficulties was the closure of the border with Kenya.Kenya was a major trading partner of Tanzania and in the short run consider-able adjustments have had to be made in locating new suppliers for someitems and developing alternative outlets for some manufactured goods andagricultural products.

PART II - BANK GROUP OPERATIONS IN TANZANIA 1/

16. Tanzania joined the Bank, IDA and IFC in 1962. Beginning with anIDA credit for education in 1962, 34 IDA credits, and 16 Bank loans includingtwo on Third Window terms amounting to US$604.5 million have so far beenapproved for Tanzania. In addition, Tanzania has been a beneficiary of 10

1/ This section is essentially the same as that of the President's Reporton the Education VI Project, dated November 29, 1978.

- 5 -

loans totalling US$244.8 million which have been extended lor the deveiLupentof the common services and development bank operated regionally by Tanzania,Kenya and Uganda through their association in the East African Community.IFC investments in Tanzania, totalling US$4.7 million, were made to theKilombero Sugar Company in 1960 and 1964. This Company encountered financialdifficulties and in 1969 IFC and other investors sold their interest in theCompany to the Government. A new IFC investment of US$1.75 million in soapmanufacturing in Mbeya was approved by the Executive Directors on June 8,1978. Annex II contains summary statements of Bank loans, IDA credits andIFC investments to Tanzania and the East African Community organizations asof October 31, 1978 and notes on the execution of ongoing projects.

17. In keeping with Tanzania's overall development strategy Bank Grouplending operations are increasingly focusing on the rural sector and directlyproductive projects. Up to the end of FY72, 10 out of 14 loans and creditsmade individually to Tanzania had been for infrastructure. The overwhelmingmajority of the operations approved since then have been for directly pro-ductive projects. Furthermore, a number of Bank Group supported infrastruc-ture projects have been closely linked with specific productive activities.For example, the Urban Water Supply Project (Loan No. 1354-TA) approvedin January 1977, will support the Industrial Complex in Morogoro (Loans No.1385-T-TA and 1386-TA) and the Morogoro Textile Project (Loan No. 1607-TAand Credit No. 833-TA). Directly productive projects recently approvedinclude a Tanzanian Investment Bank Project, a Tobacco Handling Project, aSecond Cashewnut Processing Project, and a Mwanza/Shinyanga Rural DevelopmentProject. The first Bank Group assisted project in the forestry sector, theSao Hill Forestry Project (Loan No. 1307-TA), approved in July 1976 willprovide the raw materials for Tanzania's first paper and pulp plant, alsounder consideration by the Bank Group for financing. Projects which havebeen appraised include a Sixth Education Project, a Second Urban Water SupplyProject, the Mufindi Pulp and Paper Project, lines of credit to the TanzaniaRural Development Bank and the Tanzania Investment Bank, a Fifth HighwayProject and a Smallholder Tea Consolidation Project. A rural developmentproject in Mara, a foodgrain storage and milling project, a harbours project,and an agricultural services project are also under preparation.

18. Although the comparatively high proportion of undisbursed loansand credits, detailed in Annex II, is in large part a result of tlne recentapproval of many of these projects, it also reflects the fact that overallproject implementation has been slower than was projected. It is clear inretrospect that both the Bank Group and Tanzania have been optimistic regard-ing Tanzania's absorptive capacity. The causes of the difficulties inimplementation are varied. Some stem from the scarcity of suitab:Ly trainedand experienced manpower, some reflect the problems in identifying agronomicinput packages appropriate to the needs of smallholder farmers while othersresult from the strains associated with attempting a "frontal attack" onpoverty. These problems have been compounded by frequent and drastic adminis-trative changes, which -- though potentially the source of long-term benefits-- have certainly disrupted orderly execution of projects and made parts ofearlier project concepts obsolete. In general, difficulties have been mostsevere in agriculture, particularly in the smallholder rural sector. As

Bank Group lending program has increasingly concentrated on this sector,these problems have become correspondingly more apparent and severe. Bycontrast, the "modern" sector projects have tended to fare better: theTanzania Investment Bank, Mwanza Textile, and Cashewnut Processing Projects,for example, are proceeding well.

19. As the Bank Group's lending program has expanded, increasingattention has been given to measures designed to improve project implementa-tion. A course was conducted in Dar es Salaam in 1973 and again in 1978 onBank Group procurement procedures with the relevant Government officials. Aspecial project implementation unit was set up in the Ministry of Agricultureand nine Agricultural Development Services staff have been assigned to BankGroup projects in the agriculture sector. The need to establish a close andcontinuous working level dialogue between responsible Tanzanian officials andBank Group staff on implementation problems was one of the prime reasons forthe expansion of the Resident Mission to two professionals in October 1976.In February 1977 a regular Government/Bank Group review of project implemen-tation was established. Discussions on the Bank Group portfolio chairedby the Ministry of Finance and attended by Bank Group staff and officialsfrom implementing agencies, were to be held on a quarterly basis. Steps tostrengthen these review procedures were taken in August 1977 when thosemeetings were shifted to a monthly basis. The Government also agreed thatperiodically these reviews will be conducted on an "in-depth" basis to dis-cuss in detail individual problem projects and problems which are affectingproject implementation across a number of sectors. As a result of thesereviews a number of positive developments have been noted: most actionsagreed to during the reviews have been completed on schedule and the coor-dination and communication between the Ministry of Finance and the variousministries and agencies responsible for project implementation have improvedmarkedly.

20. The Government has also become increasingly conscious of theimportance of implementation. In addition to fully supporting the projectimplementation review system, the Ministry of Finance has now decided toset up an internal unit to oversee project performance. Furthermore, therehave been more consistent responses to Bank suggestions and a willingnessto openly discuss project problems raised by Bank Group staff. As a con-sequence, the disbursement record of Bank Group financed projects has improvedsomewhat over the last two years, and a recent analysis indicated that theTanzanian disbursement performance is now about equal to the Bank Groupaverage.

PART III - THE TOURISM SECTOR

Tourism Assets

21. Tanzania has impressive tourist attractions including spectacularscenery, wildlife and beaches, and historical and archaelogical sites. Thewildlife resources are among the finest in the world, including the Serengeti

- 7 -

Plains, Ngorongoro Crater, and Lake Manyara in the north, and the relativelyundeveloped Selous Game Reserve in the south. These game reserves togetherwith the attraction of Africa's highest mountain, Kilimanjaro, have long beenpart of an established East African tourist circuit. Additional attractionsinclude the sandy beaches north of Dar es Salaam, the "spice island" ofZanzibar, and excellent deep sea fishing at Mafia Island. Along the IndianOcean coast are the remains of ancient settlements, and Olduvai Gorge, in theinterior Rift Valley, is the site of discoveries of the traces of earliestman. Tanzania also offers numerous arts and crafts, most notably the Makondesculptures and carvings.

Government and Public Attitudes Toward Tourism

22. After substantial investments were made in tourism in Tanzaniaduring the 1960s, the development of tourism became a subject of controversyin 1970, the major issue being the compatibility of tourism and socialistdevelopment. In 1973 the Economic Committee of the Cabinet decided to avoidmajor expansion in state-owned tourist facilities and to concentrate insteadon consolidation of the existing investments. Due to the resulting uncer-tainties about the future of tourism, private entrepreneurs also refrainedfrom further investment in the sector. When Tanzania faced a severe economiccrisis in 1974, the operating conditions of state- and privately-owned hotelsworsened considerably: the overall scarcity of foreign exchange and the lowpriority given to tourism meant that practically no foreign exchange wasavailable to hotels. Consequently, hotels were unable to purchase maintenancematerial, spare parts and necessary equipment, and their physical plantsdeteriorated rapidly.

23. Since late 1975, the attitude of the Government has changed graduallyas it became confident that through proper education any adverse impact oftourism on political and social values could be avoided. Accordingly, theTANU Party and the hotel industry initiated a campaign to educate workers tothe value of tourism. With the subsequent improvement in the general economicconditions in 1976 and 1977, the Government also increased foreign exchangeallocations to the sector. Hotels could again order essential equipment andsupplies from abroad, maintenance expenditures at state hotels were increasedand more funds were made available for promoting Tanzania's tourist attractions.

24. In a clear change from the uncertain policy of the early 1970s, theGovernment is now urging the private sector to invest in tourism. At the endof 1977, the Minister of Natural Resources and Tourism, on behalf of the Gov-ernment, invited all private investors, national and foreign, to invest inthe sector. In addition, the Association of Hoteliers was revived in early1978, and discussions on the needs of the private sector were initiatedbetween Government and private hotel operators. In a number of recent dis-cussions, the Government has emphasized that the foreign exchange needed toproperly operate the sector will be made available. Finally, the Governmentrequested Bank Group assistance in rehabilitating the tourism industry.

-8-

The Hotel Industry

25. Present hotel capacity in Tanzania is about 3,600 rooms (6,900beds). Of these, about 2,500 rooms (4,900 beds) are considered of interna-tional standard; they are located mainly in the northern wildlife area, alongthe coast and in Dar es Salaam. Hotels in Tanzania are owned by both Govern-ment agencies and private entrepreneurs. At the end of 1977, the publiclyowned Tanzania Tourist Corporation (TTC) controlled about 2,300 beds or over45% of international standard hotel capacity in Tanzania. In addition,TTC has large minority shareholdings in two other international hotels whichaccount for 10% of accommodation capacity. It is estimated that two-thirds ofthe private hotels are owned by Tanzanians.

Visitor Trends and Market Forecasts

26. For the safari-oriented tourists, Tanzania offers one of the finestconcentrations of wildlife in the world; few countries can effectively competewith Tanzania for this segment of the market. While competition for beach-oriented winter tourists is fierce, Tanzania enjoys three advantages in thismarket: (i) its beaches are not over-developed, (ii) hotel prices are some-what below those of neighboring countries and substantially below those ofCaribbean destinations, and (iii) tourists can combine beach vacations withexcursions to the wildlife areas.

27. Tourist flows rose rapidly in the 1960s and early 1970s as Tanzaniachanged from a discovery area to an important tourist destination. Increasedpopularity of safari tours in Africa as well as construction in Tanzania ofadditional hotels of international standard helped sustain this increase.Visitor bednights in registered hotels increased from about 295,000 in 1969to 560,000 in 1976, or about 10% annually. However, underlying this generaltrend was a marked slowdown in the period 1972-76, reflecting in part theambivalence of the Government toward tourism. Tourist flows to the northernwildlife area, which grew by 25% annually between 1969 and 1972, actuallydeclined by 2% annually between 1972 and 1976. Then in 1977, the border withKenya was closed as an outgrowth of the East African Community difficulties(para. 15) and there was a sharp reduction (about 70%) in visitors to thenorthern national parks. At Dar es Salaam beach hotels, the number of visitorbednights, which rose to over 80,000 in 1972 fell to half that level by 1976.

28. Tour operators in Europe and North America (the major tourist gen-erating markets) have been reluctant since 1972 to offer tours to Tanzania.They could not be certain of the quality and reliability of services providedas hotel accommodations deteriorated rapidly; in some cases tour operatorswere liable for compensating disenchanted visitors. This development isreflected in the visitor statistics: between 1972 and 1976 overall Europeanvisitor bednights decreased by 2% per annum and American visitor bednights by5% per annum. As of 1976 Europeans accounted for 40% and Americans for 20% ofvisitor bednights, down from 50% and 28% respectively in 1972.

29. In the future, the overall safari market is projected to grow at

8% annually, and with an appropriate marketing effort and the improvement

- 9 -

of tourism facilities and services it is projected thaL fanzania could

gradually increase its share of the East African safari market from the

depressed 1977 level (about 15%) to its 1976 market share (about 40%).Furthermore, with improved performance in the industry, it is expected thaLthe average tourist stay could be increased from the present 2.3 days to 3days in the northern national parks and from 1 to 2 days in Arusha, whichserves as an access to the northern wildlife areas. Moreover, it has beenestimated that about 20% of the tourists to the wildlife areas could beattracted to Tanzania on a safari/beach package including 5 days of safari and4 days of beach stay. The island of Zanzibar, which is only a twenty-minuteflight from Dar es Salaam, could also provide an increasingly attractivecomponent in a tour package with visits lasting 1 to 2 days. The table belowsummarizes the forecasts of demand and supply of hotel accommodation inTanzania.

Excess 1985 Additional1976 1985 Current Demand over Rooms re-

Actual Projected Available Available quired byLocation Bednights Bednights Capacity Capaci2L_ 1985

('000) ('000) ( '000) ('000)

Dar es Salaam 532 1,017 571 446 760Beach Hotels 94 200 204 - -Northern Wildlife 171 224 257 - -

Arusha/Moshi 142 237 281 - -Zanzibar 27 53 69 - -

The table demonstrates the underutilization of presently available hotelcapacity and therefore the high sectoral priority of increasing the visitorflow to Tanzania.

Tourism Related Infrastructure

30. Dar es Salaam Airport is the main international port cf entry andthe hub of the domestic air transport system. It is served by 18 scheduledand 20 nonscheduled carriers. The airport currently handles abcut 1,200passengers per day, but its facilities are inadequate: processing of arriv-ing passengers is extremely slow, the luggage handling system is inefficientand the departure lounge is too small to handle demand at peak hours. Theproposed project contains a component. specifically addressed at resolvingthese problems (para. 46). The northern wildlife area is adequately served bythe Kilimanjaro Airport at Arusha which was completed in 1971: in addition tooccasional charter flights, four international airlines include that airportin their scheduled operations.

31. The main access to Tanzania's national parks is by road. Althoughthe roads within the national parks are adequately maintained and passablethroughout the year, some of the roads leading to the parks, especially to thepopular northern wildlife area, are poorly maintained. Because of lack ofproper drainage they are frequently flooded during the rainy season andcan be used only by four-wheel drive vehicles. The Government has agreed thatthe major access road to the northern national parks will be upgraded to an

- 10 -

all weather standard and subsequently maintained to that standard (Section3.07 of the draft Development Credit Agreement). Bank Group financing forthis investment is under consideration as a component of the recently appraisedFifth Highway Project.

Tourism Sector Management

32. The Ministry of Natural Resources and Tourism (MNR&T) overseeswildlife management and the development of national parks through its WildlifeDivision. The formulation of tourism policies, hotel classifications andsupervision of the hotel training school is overseen by MNR&T's TourismDivision. The Tanzania National Parks Authority (TANAPA) and the NgorongoroConservation Authority (NCA), Government-owned parastatals under MNR&T, areresponsible for the operation of the National Parks and the Ngorongoro con-servation area, respectively. The TTC (para 25), another Government-ownedparastatal organization under MNR&T, is charged with managing and controllingstate investments in tourism and promoting the tourist industry. By the endof 1977, TTC owned 13 hotels and controlled and operated the State TravelService (a travel agency and tour operator), and Tanzania Duty Free ShopsLtd. TTC also runs overseas offices in Frankfurt, London, Milan, and New Yorkand is responsible for conducting the overall promotion campaign for Tanzania'stourism industry. Total TTC staff is about 2,400.

Tourism Training

33. The major training institute for the tourism sector is presentlythe hotel training school located in central Dar es Salaam on the premisesof an old hotel; the physical facilities of the school are inadequate andthe curriculum does not reflect the training needs of the sector. In addi-tion, since the departure of the technical assistance team which had beenrunning the school, only a few qualified instructors remain. Because theexisting school building is a historic landmark (which precludes its alter-ation) the proposed project includes financing for a new school; funds arealso provided for the technical assistance needed to operate the schoolproperly (para 43 and 44).

Wildlife Policies

34. The Government of Tanzania has recognized the importance of conserv-ing its vast wildlife resources and of utilizing these resources rationally;its policies are summarized in the Wildlife Conservation Act of 1974. Thenational parks, game reserves and game controlled areas (25% of the country)are among the best managed in East Africa. Animal inventories, research andmonitoring programs are carried out continuously and form the basis for gamecropping. Due to recent increases in animal population, hunting safaris havebeen allowed since mid-1978 under special licenses and strict control. Sus-tained yield management allows the country, through the commercial operationsof the Tanzania Wildlife Corporation, to earn foreign exchange from salesof hides, skins and trophies. The Government attitude towards safeguardingthe wildlife resources is firm and it intends to continue to pursue policies

- 11 -

consistent with the preservation of wildlife resources (Section 3.08 of thedraft Development Credit Agreement). The Government has agreed that anymajor changes in policies affecting wildlife preservation relating toorganization and staffing of anti-poaching units, licensing of hunting, anddealing in and exporting of trophies will be submitted to the Association insufficient time to enable it to comment on them (Section 3.08 of the draftDevelopment Credit Agreement). The Government has built up and maintainssubstantial antipoaching forces which will be strengthened under the proposedproject (para 45); it also imposes stiff penalties on convicted poachers.

Contributions of Tourism to the Economy

35. According to figures published by the Bank of Tanzania, foreignexchange earnings from tourism rose from TSh 80 million (US$11 million 1/)in 1969 to TSh 119 (US$15 million 1/) in 1972. By 1976, foreign exchangeearnings from tourism had fallen to TSh 88 million (US$11 million). Foreignexchange earnings in 1976 represented 2% of total exports and 0.4% of GNPcompared to 4% and 1.1%, respectively, in 1972. By comparison, Kenya, withsimilar tourist attractions, earned over US$100 million from tourism in 1976,representing 9% of exports and 3% of GNP. Employment in hotels in Tanzaniawas estimated at approximately 4,500 in 1977. Direct employment in touristactivities other than hotels (airlines, national parks, travel agencies, touroperators, handicrafts) is estimated at an additional 4,500, bringing thetotal direct employment generated by tourism to 9,000.

PART IV - THE PROJECT

Background

36. In October 1976, at the request of the Government, a project identi-fication mission from the Bank Group prepared terms of reference for a studyof the measures required for rehabilitating and increasing the utilizationof existing tourist facilities in Tanzania. Funds for this study were madeavailable through the IDA Technical Assistance Credit (Credit 601-TA) andproposals from four consulting firms were received in March 1977. Later inthe year, Coopers and Lybrand, in cooperation with Norman and Dawbarn, waschosen to conduct the study. The consultants completed the study in early1978 and the project was appraised in March 1978. Negotiations were held inWashington in October 1978 where the Government delegation was led by Mr. J.Sepeku, Principal Secretary in MNR&T. The Staff Appraisal Repcrt for thisproject is being circulated separately. A Credit and Project Summary isincluded at the beginning of this Report and the Supplemental Data Sheet isgiven in Annex III.

Project Objectives and Description

37. The proposed project is designed to assist the GoverrLment in itsefforts to reverse the deterioration in tourist facilities and services

1/ At the then prevailing exchange rate.

- 12 -

since the early 1970s, thereby reestablishing LouLism as ULI imporLaliL ioreignexchange earning industry in Tanzania. Specifically, hotels would be re-habilitated, adequate hotel training provided, the promotion of Tanzania'stourist attractions intensified, anti-poaching activities strengthened,and transportation infrastructure improved. The improvements to be broughtabout by the project will provide a basis for the full utilization ofTanzania's present tourist facilities.

38. The project would consist of the following components:

(a) urgent and essential works and equipment required tobring seven hotels and five lodges owned and operatedby TTC to appropriate operating standards;

(b) technical assistance to TTC in the fields of hotel main-tenance, marketing, hotel supplies, hotel communicationsand project administration;

(c) preparation of promotional material and marketingcampaigns aimed at the tourist travel trade;

(d) construction, furnishing and equipping, and technicalassistance for a new Hotel and Tourism Training Institute(HTTI) in Dar es Salaam;

(e) equipment for the anti-poaching units within thenational parks; and

(f) improvements to the terminal building of the Dar esSalaam Airport to provide better facilities forinternational arrivals and departures.

39. Hotel Rehabilitation: Because of poor maintenance, failure to carryout essential repairs, and lack of spare parts or technical ability to keepmajor equipment in working condition, TTC's hotels and lodges are no longeroffering the quality of accommodation and service they were designed for.With many of TTC's hotels on the verge of a breakdown in operations, thehotels' buildings and technical plants require immediate major rehabilitation.This component would provide for (i) external works, comprising site develop-ment and urgently needed roof improvements; (ii) improvement of plumbinginstallations, repair or replacement of electrical installations, overhaul ofair conditioning and heating systems, improvement of boiler plants, overhaulof water and sewage treatment plants, and repair or replacement of equipmentin kitchens, laundry and service areas; (iii) improvement or replacement offinishes, furniture and fittings in public areas and guestrooms; (iv) staffhousing; and (v) vehicles essential for the operation of hotels and lodges.

40. An essential link in the implementation of this component is thatthe rehabilitated hotels be properly maintained after project completion.In order to ensure that deficiencies in maintenance and deterioration offacilities are not allowed to recur, TTC's expenditure for the repair and

- 13 -

maintenance would, by December 31, 1981, reach at least 6% of hotel sales or2% of the current value of TTC's principal fixed assets, whichever is higher(Section 3.04 of the draft Project Agreement).

41. Technical Assistance to TTC: While overall TTC's management isadequate, several of the operating departments within TTC need strengthening.Therefore, fifteen man-years of specialists' services (in the fields ofengineering, marketing, supply and distribution and reservation and communica-tions) would be provided to TTC under the project at a cost estimated at aboutUS$45,000 per man-year.

42. Marketing: Because of lack of marketing expenditures since theearly 1970s, substantial amounts are needed over the project period to pro-vide the Marketing Department of TTC with adequate supplies of promotionalmaterials as well as funds for campaigns aimed at the tourist travel trade.Financing for these purposes was included in the project because intensivemarketing efforts are viewed as essential to the success of the project.

43. Hotel and Tourism Training Institute: The facilities of the pro-posed new HTTI would accommodate over 130 trainees and include general purposeclassrooms, a language laboratory, workshops and demonstration rooms, alibrary, administrative offices and a practice hotel with 30 bedrooms (theminimum suitable size for training purposes). The practice hotel would beopen to the public and would function commercially with all the departmentsand services generally found in international three-star hotels. Varioussites for the HTTI within Dar es Salaam are under consideration, and the finallocation would be determined in consultation with the Association (Section3.02(a) of the draft Development Credit Agreement). To ensure that HTTI willhave adequate funds for its operation, the Government has agreedl to undertakea study on how the operation of HTTI could be financed and inform the Asso-ciation on its results by December 31, 1980, (Section 3.02(b) of the draftDevelopment Credit Agreement).

44. Technical assistance will be essential for the success of the HTTI.Therefore, the project would provide funds for teachers, a senior advisor onhotel training and scholarships for teacher training. The head teacher wouldbe nominated by December 31, 1979, and all experts funded under the projectfor HTTI would be suitably qualified and experienced and appointed on termsand conditions acceptable to the Association (Section 3.02(e) of the draftDevelopment Credit Agreement). In total, this component would provide for18 man-years of internationally recruited specialists at a cost estimated atabout US$45,000 per man-year as well as 20 man-years of fellowships.

45. Anti-Poaching Equipment. Until recently, poaching did not pose aserious threat to Tanzania's wildlife resources. However, in the past twoyears there has been increasing incidence of well-armed poachers; the Govern-ment has responded by strengthening its anti-poaching activities. To supportthese activities, the project will provide the necessary vehicles and equip-ment for the anti-poaching units of TANAPA and NCA. To assist in monitoringthe effectiveness of this anti-poaching component, a report dealing with

- 14 -

the wildlife situation in Tanzania and the results of anti-poaching activities

will be furnished annually to the Association (Section 3.08 of the draft

Development Credit Agreement).

46. Terminal Building at Dar es Salaam Airport: This component is

a stopgap solution to alleviate the present problems in the arrival and

departure of passengers which will multiply as tourist and general traffic

increases. The project would provide funds for the construction of a new

international passenger building adjacent to the existing terminal building:

it would be a single-story, light structure that could easily find alternative

use should a new terminal building be constructed at some time in the future.

The component would also include the installation of luggage conveyors and

equipment for moving luggage to and from the aircraft.

Cost Estimates and Financing

47. The total cost of the project net of taxes and duties is estimated

at US$18.3 million; US$14.0 million in foreign exchange expenditures and

US$4.3 million in local expenditures. Cost estimates are based on the con-

sultants' studies (para 36), updated to March 1978; they include physical

contingencies of 10% on civil works, furniture and equipment, and price

contingencies totaling 26% of base costs. The average rehabilitation cost per

hotel room is estimated at US$8,500 excluding contingencies. Consultants

services required for the designs for the hotel rehabilitations, the HTTI, and

the airport terminal building are estimated at 37 man-years at an average of

US$30,000 equivalent per man-year.

48. The financing plan provides for an IDA Credit of US$14.0 million,

77% of project cost net of taxes; this is equivalent to the foreign exchange

cost of the project. The Government would contribute US$4.3 million equiva-

lent (excluding taxes and customs duties). IDA funds would be channeled

through the Ministry of Finance to (i) TTC for the hotel rehabilitation,

marketing and technical assistance components; (ii) MNR&T for HTTI; (iii)

TANAPA and NCA for the anti-poaching equipment; and (iv) Ministry of Works for

the international passenger terminal building at the airport. The funds for

hotel rehabilitation would be passed on by the Ministry of Finance to TTC

under a subsidiary loan agreement which would be on terms and conditions

acceptable to the Association including an interest rate of 10% per annum for

16 years including 4 years of grace (Section 3.01(c) of the draft Development

Credit Agreement). 1/

Project Implementation

49. Overall project coordination will be vested in the office of the

Principal Secretary, MNR&T. The project would be implemented in about four

1/ These terms are consistent with prevailing loan term in Tanzania. The

average inflation rate for Tanzania in the 1975-77 period was 13% as

measured by the consumer price index but inflation moderated to about 10%

in early 1978 and is expected to continue to fall over the next three

years.

- 15 -

years with an expected completion date of December 31, 1982. The hotelrehabilitation component would be executed by contractors under the supervi-sion of TTC personnel. As the extent of the hotel rehabilitation worksinvolved would put an excessive strain on existing TTC manpower, a qualifiedand experienced Project Coordinator to oversee the rehabilitation work wouldbe appointed by April 30, 1979 (Section 2.02 of the draft Project Agreement).The construction of the HTTI will be performed by contractors under thesupervision of the Ministry of Works, and its operations would come under thesupervision of the MNR&T. The design and construction of the terminal buildingat Dar es Salaam Airport will be performed by contractors under the supervisionof the Ministry of Works, Roads and Aerodromes Division. Once completed,operation and maintenance of this facility will be entrusted to the AirportServices Section of the Ministry of Works. All technical assistance requiredfor the project and financed by the Credit would be carried out by qualifiedand experienced personnel on terms and conditions satisfactory to the Associa-tion (Section 3.02 (e) of the draft Development Credit Agreement and Section2.04 of the draft Project Agreement).

Procurement and Disbursement

50. Contracts for civil works, furniture, fixtures, equipment andvehicles would be awarded on the basis of international competitive biddingin accordance with the Bank's guidelines for procurement, except (i) civilworks contracts costing US$250,000 equivalent or less (up to US$2.4 millionin total); (ii) furniture, fixtures and equipment contracts costing less thanUS$100,000 equivalent each (up to US$1.5 million in total); and (iii) spareparts for equipment already installed in hotels and lodges (up to US$0.3 mil-lion in total). Contracts for items (i) and (ii) would be awarded on thebasis of local competitive bidding in accordance with local procurementprocedures satisfactory to the Association. Spare parts for exisl:ing equip-ment would be purchased directly from manufacturers or distributors. Inevaluating civil works bids, domestic contractors would be allowed a 7.5%preference. Qualified domestic manufacturers of furniture, fixtures andequipment would be granted a preferential margin in bid evaluation equal tothe prevailing tariff, or 15% of the c.i.f. cost of imports, whichever islower.

51. Disbursement would be on the basis of (i) 65% of total expendituresfor civil works; (ii) 100% of foreign expenditures for imported furniture,fixtures, equipment and vehicles; 75% of local expenditures for such importeditems when procured locally; 100% of ex-factory costs of such items when manu-factured locally; (iii) 100% of foreign expenditures and 50% of local expendi-tures for consultant services; (iv) 100% of foreign expenditures and 50% oflocal expenditures for technical assistance and fellowships; and (v) 100% offoreign expenditures and 50% of local expenditures on marketing. In order tofacilitate the delivery of urgently needed equipment for various hotels, up toUS$400,000 for expenditures incurred on these items after October 1, 1978would be eligible for retroactive financing.

- 16 -

Accounting and Insurance

52. Separate project accounts would be maintained by the variousGovernment agencies involved in the project and TTC (Section 3.06 of thedraft Development Credit Agreement and Section 4.01(b) of the draft ProjectAgreement). The financial statements for each TTC subsidiary, consolidatedfinancial statements for TTC and the separate project accounts would beaudited by independent auditors acceptable to the Association and the reportsof such audit would be submitted to the Association within six months of theend of each fiscal year (Section 4.02 of the draft Project Agreement).Presently, TTC's accounts are adequately maintained; the quality of itsaccounting procedures has improved significantly over the past three years.

53. Because the operations of HTTI will generate substantial revenues,it is important that proper accounting procedures be observed. Therefore,it has been agreed that an accounting system, acceptable to the Association,would be installed in HTTI six months before its expected opening and annualaudited financial statements for the HTTI would be submitted to the Asso-ciation within six months of the end of each fiscal year (Section 3.02(c) and(d) of the draft Development Credit Agreement).

54. Present TTC insurance coverage, which is based primarily on initialinvestment cost, exposes TTC to potentially large losses in the event of

extensive damage to one or more hotels. Therefore, TTC's Board has decidedto reappraise all major fixed assets; the initial reappraisal of assets isexpected to be completed by September 30, 1979 and thereafter TTC shalladjust coverage periodically as asset values change.

Current and Forecast Financial Position of TTC

55. Consolidated income statements show that TTC and subsidiariescombined operated close to the breakeven point during 1974-76. However, in

the wake of the border closure with Kenya, losses increased sharply to aboutTSh 13.2 million in 1977 and an estimated TSh 13.3 million in 1978. While TTChas a reasonable debt-to-equity ratio of 47/53 (largely because of sizableGovernment infusions of funds), its current position is weak with negative networking capital of about TSh 30 million, a current ratio of about 0.6 to 1,and a debt service coverage of only 2.2.

56. Reflecting the difficult liquidity situation, TTC was past due on

about TSh 15.3 million in principal payments and TSh 9.5 million in interestcharges involving six loans as of December 31, 1977. The Serengeti SafariLodges, Ltd. (SSLL), a fully-owned TTC subsidiary which was particularly

affected by the closure of the border, accounted for about TSh 19.5 million,or about 80%, of the overdue payments. The Government has decided to assumeresponsibility for SSLL's overdue principal and interest payments and hasconfirmed that the actions needed to implement this decision will be taken bythe end of calendar year 1978.

- 17 -

57. According to the financial projections made by ASSoci;LLiua staff,TTC will continue to face a very tight liquidity position until 1982. There-fore, while the financial projections suggest that no additional Governmentsubventions would be required after 1979, the Government has agreed to provideTTC the funds necessary for any capital expenditures in excess of TSh 2million per fiscal year if these expenditures are not financed through newlong-term borrowing by TTC and if TTC's consolidated current ratio after suchexpenditures falls below 1.1 to 1 (Section 3.03(a) of the draft DevelopmentCredit Agreement and Section 4.03 of the draft Project Agreement).

Project Justification

58. Without the major rehabilitation proposed, TTC's hotels would con-tinue to deteriorate and some hotels and lodges would be forced to close dueto equipment failures or as their occupancy rates reach uneconomic levels.By rehabilitating the hotels, improving tourism infrastructure and tourismtraining, and providing adequate marketing for Tanzanian tourism, the projectwould provide the framework for a significant growth in tourism revenues.

59. The main source of project benefits would be increased visitortraffic to Tanzania resulting in higher occupancy rates for hotels and lodgesand therefore greater total expenditures by holiday and business visitors(while expenditures outside the hotels were not taken into account in theeconomic analyses, foreign visitors will spend considerable additionalamounts on transportation, park fees, curios, etc.). A second source ofbenefits would arise from projected increases in room rates. These increasesare justified because after the hotels are renovated they will offer improvedservices and because prices are higher at competing destinations which offersimilar attractions. In view of this, TTC would prepare, and submit to theAssociation by December 31, 1979, a study examining the feasibility andmagnitude of real rate increases at its hotels and lodges and recommendpolicies and procedures for future TTC tariff rate decisions (Section 3.05of the draft Project Agreement). Reflecting both increased occupancy ratesand room rates, it is projected that with the project TTC should by 1983be able to generate internally sufficient funds to cover all debt serviceand operating costs, achieve an adequate liquidity and debt structure, andhave a net income of about TSh 22 million (US$2.8 million). This net incomewould represent a return of 11.6% on equity and 6% on book value of totalassets employed.

60. The economic rate of return for the hotel rehabilitation component(about 60% of project costs) has been calculated at 22%, ranging from 10 to32% for individual hotels. A broader rate of return concept which includes(a) the cost of the tourist road to the northern wildlife area lodges; (b) 45%of the costs of marketing and 45% of the cost of HTTI (in line with TTC'sshare of the total hotel capacity in Tanzania); (c) the costs of technicalassistance to the TTC; (d) the benefits to a new TTC hotel not needing reha-bilitation (Mt. Meru Hotel in Arusha); and (e) the cost and benefits asso-ciated with the new airport terminal building, results in an ecorLomic rate ofreturn of 21%.

- 18 -

61. Net annual foreign exchange receipts resulting from the project willtotal over US$3 million by 1985 and over US$4 million by 1990. An average ofabout 72% of the foreign exchange receipts earned from this project will beretained in Tanzania. Although the basic thrust of the project is to maximizethe use of existing facilities and increase foreign exchange earnings, theproject also has employment benefits. The project is expected to generate 600construction jobs in the project period. Furthermore, about 450 jobs will becreated or saved in TTC as a result of the hotel rehabilitation, and a similarnumber of jobs will be added to in related activities such as shops, travelagencies, parks and transportation services. The total rehabilitationcost per direct job created or saved is about US$12,000.

Project Risks

62. The project's greatest risk involves the question of whether theprojections of tourist flows can be attained. A second risk involves themanagerial capability of TTC to effectively implement the project.

63. On the issue of tourist flows, there is no question that Tanzaniahas the attractions to draw substantially greater numbers of tourists.However, as the projections assume that European and North American touroperators will again schedule package tours to Tanzania it will be necessaryto ensure that the problems which formerly deterred them are adequatelyaddressed. As some of the previous difficulties have already been actedupon by the Government (in particular the clarification of the Government'ssupport for the sector), and as a number of the other major constraintsare being focused on under the proposed project we believe the projectedtourist flows are realistic. With regard to the issue of implementationcapacity, adequate technical assistance is being provided to those areas ofTTC where weaknesses have been identified. In view of these steps it hasbeen concluded that this project can achieve its objective of providing abasis for rehabilitating Tanzania's tourism industry.

PART V - LEGAL INSTRUMENTS AND AUTHORITY

64. The draft Development Credit Agreement between the United Republicof Tanzania and the Association, the draft Project Agreement between theAssociation and TTC and the Recommendation of the Committee provided for inArticle V Section 1(d) of the Articles of Agreement are being distributed tothe Executive Directors separately.

65. Features of the draft Development Credit and Project Agreements ofspecial interest are given in Section III of Annex III to this report.Execution of the Subsidiary Loan Agreement between the Government and TTCwould be a condition of effectiveness (Section 5.01 of the draft DevelopmentCredit Agreement).

- 19 -

66. I am satisfied that the proposed Credit would comply with the

Articles of Agreement of the Association.

PART VI - RECOMMENDATION

67. I recommend that the Executive Directors approve the proposedCredit.

Robert S. McNamaraPresident

Attachments

Washington, D.C.November 29, 1978

ANNEX I

-~ 20 -Page 1 of 5TABLE 3A

TANZANIA - SOCIAL INDICATORS DATA SHEET

RBFERZXCZ GROUPS (ADJUSTED A5RACESLAND ARtA (THOUSAND SQ. KM) TAMI.0IA - HOST RECENT FST7LATE)

TOTAL 945.1 SAME SAME NEXT HICHERAGRICULTURAL 508.3 3DST RECzr CEOGRAPHIC INCOME INCOME

1960 /b 1970 tb ESTIMATE /b REGION /k GROUP /d GROUP /e

CNP PFR CAPITA (US$) 70.0 Lf 110.0 Lf 200.0 Lf 223.6 182.9 432.3

ENERGY CONSUMPTION PER CAPITA(KILOGRAMiS UF COAL EQUIVALENT) 41.0 62.0 69.0 86.7 88.9 251.7

POPULATION AND VITAL S'ATISTICSTOTAL POPULATION, MID-YEAR

(KILLIONS) 9.6 /f 12.9 Li 15.5 /fURBAN POPULATION (PERCENT OF TOTAL) 4.6 5.5 7.3 13.6 15.0 24.2

POPULATION DENSITYPER SQ. KM. 10.0 14.0 16.0 18.4 46.8 42.7PER SQ. XK. AGRICULTURAL LAND 20.0 26.0 30.0 53.6 254.1 95.0

POPULATION AGE STRUCTURE (PERCENT)0-14 YRS. 42.5 1Lf, 44.4 Lb 46.7 44.4 43.6 44.9

15-64 YRS. 55.5 Lfa 53.0 /h 50.9 52.7 53.3 52.865 Y2S. AND ABOVE 2.0 .LLR 2.6 /h 2.4 2.8 2.9 3.0

POPULATION GROUTH RATE (PERCENT)TOTAL 2.3 3.0 Lf 2.7 /f 2.6 2.4 2.7URBAN 5.0 5.6 7.5 li 5.8 4.0 8.8

CRUDE BIRTH RATE (PER THOUSAND) 51.5 50.5 47.0 46.9 44.3 42.2CRUDE DEATH RATE (PERETHOUSAND) 27.1 23.0 20.1 20.6 19.7 12.4GROSS RZPROIJUCTION RATE .. 3.2 3.3 3.1 2.9 3.2FAMILY PLANNING

ACCEPtORS. ANNLiL (THOUSANDS) .. .. ..USERS (PERCEIJT OF KARRIED MKHEN) .. .. .. 2.5 14.6 14.2

FOOD AND NUTRITIONINDEX OF FOOD PRODUCTION

PER CAPITA (1970-100) 91.6 100.0 107.5 94.2 96.4 104.3

PER CAPITA SUPPLY OFCALORIES (PERCENT OF

REQURL-FNTS) 69.0 88.0 86.0 90.1 92.3 99,5PROTFINS (GRAMS PER DAY) 42.0 43.0 47.1 55.2 50.0 56.8

OF W1ICH ANIMAL AND PULSE 22.0 Li 23.0 20.0 17.1 13.9 17.5

CHILD (ACES 1-4) MORTAI.ITV RATE .. .. .. .. .. 7.5

HEALTHLIFE EXPECTANCY AT BIRTH (YEARS) 35.7 41.8 44.5 43.7 45.8 53.3INFANT MORTALITY RATE (PERTHOUSAND) 190.0 160.0 /h .. 138.4 102.7 82.5

ACCESS TO SAiE WATER (PERCENT OFPOPULATICN)

TOTAL .. 13.0 39.0 22.4 26.4 31.1URBAN .. 61.0 88.0 66.3 63.5 68.5R'JRAL .. 9.0 36.0 10.4 14.1 18.2

ACCESS TO EXCRYrA DISPCSAL (PERCENTOF POPULATION)

TOTAL .. .. 17.0 23.9 16.1 37.5URBAN .. .. 88.0 70.3 65.9 69.5RURAL .. .. 14.0 14.2 3.4 25.4

POPULATIOI PER PIIYSICIAN 21750.0]f.k 21570.0 ff20760.0 1! 21757.5 13432.7 9359.2VOPUILATTON PER NHIRSDIC PERSON 9240.6?il 4890.0 If 3180.0 If 3473.8 6CS3.3 2762.5POPUI.ATION PER HOSPITAL BED

IXTAL 570.0/f,k 700.0 Lf .. 645.4 1157.6 786.5URBAN .. .. .. 172.9 183.3 278.4kURAL .. .. .. 1292.6 1348.8 1358.4

ADMISSIONS PER HOSPITAL BED .. .. .. 19.2 19.5 19.2

HOUSINGAVERAGE SIZE 0 UOUSEHOLD

TOTAL .. 4.4 /h .. 4.9 5.2URBAN *- 3.2/ . 5.0 4.8RURAL .. 4.51, 4.7 5.3

AVERAGE NUtlBE'R OF PERSONS PER ROOmlOYAL .. .. .. . ..lURBAN 1.8 . .. .. .. 1.8 2.3RURAL. .. .. ..

ACCESS TO ELECTRICITY (PERCENTOF DIT L!LLNCE)

TOTAL .. .. .. .. 25.9 28.3URhAN .. .. ..RURAL .. .. .. .. 8.7 10.3

21 -ANNEX I

TABLE 3ATANZANIA - SOCIAL INDICATORS DATA SHEET Page 2 of 5

REFERENCE GROUPS (ADJUSTED AVERAGESTANZANIA - MOST RECENT ESTIMATE)

SAME SAME NEXT HIGHERHDST RECENT GEOGRAPHIC INCOME INCOME

1960 k 1970 /b ESTIMATE Lb REGION tc GROUP Ld GROUP te

EDUCATIONADJUSTED ENROLLMENT RATIOS

PRIMARY: TOTAL 24.0 35.0 57.0 52.1 62.9 75.8FEMALE 16.0 28.0 46.0 37.6 45.9 67.9

SECONDARY: TOTAL 2.0 3.0 3.0 8.0 14.4 17.7FEMALE 1.0 2.0 2.0 5.0 B.8 12.9

VOCATIONAL (PERCENT OF SECONDARY) 23.0 .. .. 7.2 6.6 7.4

PUPIL-TUACHER RATIOPRIMARY 45.0 47.0 53.0 43.2 38.5 34.3SECONDARY 20.0 19.0 20.0 22.8 19.8 23.5

ADULT LITERACY RATE (PERCENT) 9.5 28.1 th 49.0 1n 20.3 36.7 63.7

CONSUMPTIONPASSENGER CARS PER THOUSAND

POPIULTION 3.0 2.5 2.6 3.9 3.1 7.2

RADIO RECEIVERS PER THOUSANDPOPULATION 2.0 11.0 16.0 40.1 31.1 71.1

TV RECEIVERS PER THOUSANDPOPULATION .. 0.3 .. 2.2 2.8 14.1

NEWSPAPER ("DAILY GENERALINTEREST") CIRCULATION PERTHOUSAND POPULATION - ~ 3.0 5.0 3.0 3.9 6.0 16.3CINE?A ANNUAL ATTENDANCE PER.CAPITA 0.5 .. .. 1.2 1.4 1.6

EMPLOYMENTTOTAL LABOR FORCE (THOUSANDS) 4900.0 Jo 5600.01f.h6300.0 tn

FDKALE (PERCENT) 37.1 36.6 36.3 32.6 24.2 28.0AGRICULTURE (PERCENT) 96.0 /o 91.Otf.h 83.1 73.3 60.7 54.1IWIXISTRY (PERCENT) 3.8 5.0 ..

PARTICIPATION RATE (PERCENT)TOTAL 44.7 43.5 42.2 42.0 39.8 37.8MALE 56.9 55.7 54.3 54.8 53.3 50.3DEKALE 32.8 31.5 30.3 27.3 19.6 20.9

ECONOMIC DEPENDENCY RATIO 1.1 to 1. 2jL h 1.2 1.2 1.3 1.3

INCOME DISTRIBUTIONPERCENT OF PRIVATE INCOMERECEIVED BY -

HIGHEST 5 PERCENT OF HOUSEHOLDS .. 33.5 .. 25.7 20.3 19.5HIGHEST 20 PERCENT OF HOUSEHOLDS .. 63.3 .. 55.1 45.1 48.9LOWEST 20 PERCENT OF HOUSEHOLDS .. 2.3 .. 5.8 5.7 5.9LOWEST 40 PERCENT OP HOUSEHOLDS .. 7.8 .. 14.5 16.8 15.7

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

URBAN .. .. 117.0 108.8 88.5 155.9RURAL .. .. 89.0 74.1 71.9 97.9

ESTIMATED RELATIVE POVERTY INCOMELEVEL (US$ PER CAPITA)

UlBmN .. .. 146.0 124.4 100.8 143.7

RMRAL .. .. 45.0 59.6 42.0 87.3

ESTIMATED POPULATION BELOW POVERTYINCOME LEVEL (PERCENT)

URBAN .. .. 25.0 26.8 46.0 22.9RURAL .. .. 85.0 47.6 48.0 36.7

Not svailableNot applicable.

NOTES

Le The adjusted group averages for each indicator are population-veighted geooetric means. excluding the extremevalues of the indicator and the most populated country in each group. Coverage of countries among theindicators depends on availability of data and is not uniform.

1b Unless othervise noted, data for 1960 refer to any year between 1959 and 1961; for 1970, betveen 1969and 1971; and for Most Recent Estinate, between 1973 and 1977.

/c Africa South of Sahara; /d Low Incom ($280 or less per capita, 1976); /e Lower Middle Income($2B1-550 per capita, 1976); /f Mainland Tanzania; JI 1957; /h 1967; Li 1967-73; LI 1961-63;k 1962; /1 Registered, not all practice In the country; La 1958, Zanzibar only; a 1972; Jo 1963.

September 1978

-22- ANNEX IDE F NMMS OF 1!y',:cATORS Page 3 of 5

a!:5: Altb,-ch the itt. are dr.- f,ri soo~res generally Judged the most authoritative and ntal.it shcnl sin- be noted they then sta not be internat.ionally c ......e ecus of th, lack At standardi-d defielitona And acncpts used bv diff-ren -ounries it: cill1ecttne the dots. Th. d.t. are. nonetheLss..-ef,al to de-criha cr-r ofAt ontie indicate treeds, .nd characterize tertain naf.r differences e.e. ctcis

T'he uliu-td ue,,p -...... a for each indicator are popolatlon-veightod gec-eAecric . .tl. ee .cludicg the eu'rren -aue of the indicator and the moatpopulat-d " r in -0t grc. (r-rcae of -- ;tri.a -amng the indicators depe-ds on .av .iailftv oF inta an,d In not utIfom. Doe to lack nf data.groupevrus for Capital unveOil Eopo"rter and indicators of accese to eater end .corst. disposal1, hoosinA. Inton distribution and paosrty sr.alepls uontu-e atdg.uetric -ens itcheot the slea of entrees Values.

LA).lf AitEA (t- .u.and .-.. kn) POoclati.n par hoptLbcd - totl.1 urban. and rural - Population (total,Totc, - Tots: surfce urns ...eprlsing land aera and inland ..ters. reban. And rcurl) divIded by th.ir respective cuohb' of hospital beds

Aelutr:- Most recent estimate of agricultural ares used temporarily a-ailable in publIc and private gener al ardepoalnd hospital and re-ot pere-anrtly for crops. psacorea, market and kitchen gardens or to habilitation Centern. Hfospitals are ent.blishn... L permanently stoffed byIIe follow, at least one physlica. lEtablishoent. providing prrincipally custodial

tare,are not.aintuIled. Rurslhoptes howevr, Incolde health and .edi-GilP FER CAPIC.A (US-$) - lIP per capita estimates at corrent market pricea. Ca Ienters no per.....tly at.ffed by a phyail.ln (but by a me*dical se-

calculatel hy same conversion method as World Bank Atlas (1975-77 heals); isiecat. nurse. 1dvlfe, setc.) whIch offer le-pocinot accommodation and1960, 1910, arid 1917 data. prooida a limited conga of radical facilitIes.

Admissions Per hospital hod - lotal number of sosiesio.s to or discharge.ENERGY COSuforp10TlO PER CAPITA - Annual.. c touptio. of t aonertial energy from hospitals dinid.d by the number of beds.

(coal aid i.igmt.. petroleum nacurol gs. and hydro-, nucloar And Sao-thermal olactricity) in kilograms of coal equivalent per capita. mousiNGc

Anrlg ala,x of house.hold (persons per householdi - total, urban, and rural-POPCI;ATIGii 1'.71 VITAL STATISITCS A household ronaists of a group of individuals oh. share lining qoarters'rotal pop,la:liri. eli-year 1ilIllons) - Ad of July 1; if sot Available, and their -in mas A hoarder or lodger may or map ot he Included In

an.Srag uu tw onen-year estimate.; 1960. 1970. and 1977 data, the household for statistical purposes. Statistical deftitltoa of house-Urban populu:Ion (percent of total) - Ratio of urban to total popule- hold nary.tlan; different definitions of urban areas may affsect comparability Average number of persons Per room - total, urban, end roral - Average nun-of dare -ong countries. bar of per""n per rom. ic all, urban, and roral occuapied conventional.

Popu,l&tIoc density dwellings. respectinaly. Duelling. antlude noo-parmanmnr structuoree andPe, sq. ho M id-y.ar population par equater kiloeater (110 bactaras) unoccuepied parts.

of total area. Stress to electrIcIty~~~~~Ae prcen of duelllntsg) -vtotal, urba, and rural -Par so.ho agrIcult le lnd - Compurad as shove for agricultural leand Co oinldelnswt ltrct nlvn u rtesa erecgonly. of total. urban. and rural dealinig. respectively.Pop:latIon aes structure (percent) - Children, (0-li years), wrtoking-age(13-64 Y-sar) and ratired (65 years end over) as percentages of aid- EDUCATioN,aa pouton AdJust.d enolmnratios

PopultIon rovehnate(portent) - t.tal. and urban - Compoud snnual Priary scol-toa,ed female - Total end fenala serollmant of all agesgrowth rates of total end urban aId-year pnp.lscions for 195D-60. r ths prImr lee aan Pe tOi 5 of respectiVely.prma&ry scbolag1960-70~..ad 19yQ70 pouaizns; c0arnally iclde chlre ge -I eashlt adjutedfo

Crude birt r.at (Per thousand) - Annul lIve birtha par thousand of differant lengths of primary educ.tion; for coutries Izth universa eda-aid-yearppualm tee-pear snithnonc -neragas ending In 1960 end cation. anrolleent may emceed 100 percen.t sLots some pupils are below or1970 and fits-year average endieg in 1975 for mast cacent estimate. -abv the official school age.

Crdedet rotea(per thousandi - Annual deaths par thousand of mid- Sacendary school - total, ard female - Computed as ahoves; secondary educa-?ear popul.tio.; tee-year aritheetic. averages ending In 1960 And 1970 tIon requires at least fear yearsr of approved primay lnstru,ctdol to.-end fiv--oar ve...age ending in 1975 for most rc.ast estimate. Vldes gesaral v'caIonal, or teacher training iostruotions for puplsa

Genes raprofutticnrt, veaenme o agtr a vomn -ill bear usually of 12 to 17 yeara of &g.; correspondence courses are generallyin her nuoa-l tepr dutlne perio If, absp*riencas present age- secluded.specifIc fertilIty rates; usually fle-ya aerages ending in 1960, Vocational enrollesnt (percent of secondary) - fiocational Lostltutiona in-1970. d 973. dude tehlcal, industrial, or other progrsme which operate independently

Famiy olcyitg -acceptors. anniual. (thasaands) - Annul number of ora dpartmanta of secondary lotiiuciOriO.acceptors of hicth-csntrol. devices under iuspicea of national. family Puooh-teacher ratio - prim."y. and secondary - Total wtudeato enrolled inpiniug;og .Primary and secondary levels divided by usbers of teachers in the corres-

Famly, aanulne. .. usrs (e.arcat of marri.d comae) - Per-ent.ge of epoidinglelsmaried -oem of child-hearing age (15-41 pears) vho use birth-control Adult literacy rcac (Percent) - Literate adults (able to read and wnts) asdevices to all married somma in asame age group. a Percentage of total adult population, egd 19 years amA ovr.

FM0 ANDO lfl.TVION c0wsCOaTiONIndex of f pd roduction por capita (1970..100) -Index camber af par Passenger ears (par thousand population) - Passen.ger toar comprise water cars

capia anual redctio of ll,food comeoditla.S. stIng less them eight personsl "exludes ambulances, hearses and militaryPrcactssupl oclres(renof renulrssments) - Computed from, eicle.;aargy equivalent of met food supplies -vil.ebl. in country per capita Rladio receivers (per tho...sand tplopltIon) - All types of receivers for radioper day. vA-lblaba supplies Comprise domestic production. imports lass broadcasts to general public per thousand of porulatic,nI axcludes unlicensedmperts. and cheages in stock. Net supplies exclude animal feed. seeds. re...iveks In countri.a and In years ,'hen registration of radio sets woe Icquatitles used in fond processing, sod losses is distribution. Re- effect; data fer recent pears nay cat be comparable since mast countriee

wulemets .era estimated by tAO based on physiological needs for nor- abolished licensing.ol actitity an health considsring .evircr.encatl. temperature, body TV receivers (per thoue...d populatIon) - TV receivers for broadcast to generA"Seihts . age and see distributions of populatIon. and allo-Ieg 10 per-- public per thousand Population; excludes unlicensed TV receivers i. coon-cant for wuste at houSehold level, tries and In years shoe registration of TV set. was in effect.

Par capita -upplyo proteIn lorrd:s. Pet day) - Protein content of per Nestenacer cirolation (per choosa..d population) - Sh-v the anerage circula-capita ne:sppyo food par day. et eu pply of fond ts defined as tlan of "daily general icteceet n.top.per", defined as a periodical publi-

abv.Requiremnts far all countries setebllshed by USDA provida for cationt dsvoted primarily to recording general nests. It is considared toa inlau= alose aeo 60 gta.a of total protein per day end 20 gremsa be "daily" If it appeacs at least four close a .. eak.

of auleau and pulse protein, of which 10 gras. should be nia protein. Cinema annual attendac net&oa capita car ceac - Baaad os the cumber of tiuketaTh'a se-ut9drd. are la.er than these of 75 grame of total protein and so ld during the pear. incloding doissiona to drive-ic cinemas. and mabils23grams of .nina Protein as An avecage for the world, proposed by anita.

peFAO in theThid 'ord d Survey.Pe tap . Ir=tl suply from animal and pulse - Proteins supply of fond DlIfV)tomn

dar 1ed i-c aelna.u and pulses in grama Par day. Total labor farce (thousands) - Economically active persons. i.oluding armedCIld:lo.. _-k) mrat rt prhosn)- Annrual deaths par th.us- fortes sad unemployed but eotludieg housaives..suet,at eli

and in sge group 1-4 years. to children 10 this age group. tins in various cauntries ace not Comparable.Pemle perept -Femal labor force se p.rosotase of total labor force.

HLALli eiulue(Hret Labor for.. In farming, forestry, bunting san fishingLife epeectunc at birth (years) - A-nanag nunber of yeaars of life a. p-rceatage of total labor force.renicn atbirth; usually five-year averagee ending In 1960. 1970. Indouste (percent) - Labor force in minIng. co...tr-ctin. mwanufaccurieg andand 1975. eleracrtcly. v-ter and gan as perneu.ctge sf total labor farce.

Infant nortalttt rata (p.r thous..And) - AnnualI deaths of infests under Particiato-rt leooS -ttal. "ae adfml oa,mlo. a.done year 01 age per thousand lice hirhts. feaelbo oc as.percentages of their respecie Ppula tensd.

Accessto sul canerfoercnt of orolaton) -total. urbc. end rural - hese are (LO's ad)tod pa rticiPation ra tes reflcIngn-eNu.bec of ;eopl. (total, ran and. roca) wIth resonable acess tstroctarn of the pooaio.ad long tiee treed.safewter PPuppip (Incue tr seae sorfaca waters or .Ctreated hot cnotcder,ndsnn ratio - Ratio of populatioe under IS and 63 And o.. r to

0acotantvted water such ao that iron prot.cted bocaholan, nyrings. the labor force in age group of 15-h4 pears.and sanitary wells

tas per-etagen of their r.oeepcti" populationa..

.0 -s urba ae a,, poblifo f ulor scadpasc loca.ted Aca.r.mn INCOME DISTRT3,TI0NtheAo Ci cate~rs ftcn a h-use may bs oonaid-te as hbet

8within tea- Percentage of prln-tel. e(loth in cash end bind) r.eceivd by rIchest 5

Arnheass f Oc,t IIose.In rucl area raoAhis aoccen woul..d percent. richeuc 2i percent. poorest 20 percent. and poteat 40 perccanticblp cia:th ho tf or ember of the houohld'do ct huts tO of households.

spend a t-uyroprottloata part of th. day in fetching the family's__'n, - ' ~~~~~~~~~~~~~~~POycoTyY TARi'PT CROVPS

AC---. to z octa douoo~,al 'rrceic o ptutip- to-al, urban, and Isloe couepcryboeiclls ret -caital - cbhor and n-t.lIfue a P~y -l,I.t-tal, urban. otA roca I) ... led by ... tauslueromt invrtt 1is cha ioone linte h.lco whi.h a aciuui.

Ouyools;rscaoutuorrsycospplttn. Rcenatricfcci.y adequate J-b- plus e.sentisl non-load reqalteeanta is not

dIPoa ca oS- h oieto diaynai 1 lth owithou .fford.bl..11t.eonon of h--s. -nocst end osewtrby aa-on systems Esimte CoA$,opvor ee (USS .rec -ois) - urban arid rural-or the ~u f pit pliolas Aod s.lollr losal.t... lcive yan-rty Iv 1oI,u-ol 1JI that ic...e 1-n1 les. than one-third

_n.: kcC t~!j cbsoa- ,P,p';itio di-J.id b, ouaoar of p ...tiulca p...a.t yero1s tons. of the -onrn-'-non, n, 4 ualItod tr ..asdicl1 -ohol At unl-ratry level. -sfao#.uaas 'Iyo~t nun ee trat) - urban and rurl

Pouboioc (Ir'urT.PeE-' - Popu"l.ato dividud by number of P-ttest of popuI.l.tIa (urban and ruralf ch. rO either `absoLute poor" orp-taO-cn..B or. l-nabo graduate nurses. prootiosi cre,And 'rel.ti-e poor" whi,hever is greater.

tonmlo ' a d ioir Jtat IonIs

23 -

ANNEX I7581004 'Page 4 of 5

X1:vwGc 2IVfrl2fT 0414Sa

-,.d L9"- L9~~~~~Ira47aea 19 874-

ft...) ~ ~ ~~~~~g 4 L95 iLt 1977 1974 1908390 94 1990 1944 1? L986. i; a

L. GM 2384.2 246.4. 2412.3 2737.6 2376.1 3024.3 3183.1 4137.2 531. 9 5.1 3.1x 5.1 108.8

2. G4J.. tre 7m at ted. 12.33 74.9 -467 29.8a tg 10. 23.0 -8.2 -421. -802.1. -14.1 . .,

4 3 -30*** f I.- Mg591 2378.I1 2384 24. 299. 32. 3140. 403. 163. 483.3 3.0 94.9

4. ~aa 811.1 756. 68.0o 7"43 .71 76.7I 8081.7 537.21 84.4 1288.1 3.6 4.0 33 22.33. b.rt - "Lj 4.70.0 307.6 337.7 353.8 3 74.4 594. 7 620.3 798. 3 1041.1 3. 7 2.83 4.9 1.

6 tp. - T if .148. 344.9 43.2 547.3 tI3 3.3 3W. s 3713 66 4.4 830 . -4. 3.3 6.

7 eooe C. - TT odJaccd 306.3 317.0 114.3 4L1 133 222 29. 1. 1. 8. 2.6.1 C...lae 2~~~~~~~~~~~~ 318.2 27. 201 2~383. 241.24 2346.4 3723.0 343.1.6 41294. L . 4.3 4., so.

9.2.e. 307.3 316.0 M5.4 34.4 4431.3 684.3 477.8 893.3 1113.0 6.3' 5.6 3.7 22.2to. M.fLsmI uense 195.3 240.6 3us. 538.5 492,8 314.9 303.9 484.4 94.8 S 0.0 -1.4 3.7 17.8

* 1. ,a14 osrisa I411 202. 2332.3 463.2 417.4 133.3 418. 1 - 53.3 84927T -.0.7 -3.3 6. 9 16.312. C o ra7 243 2333. 3764.8I 3387.8 39473.9 4,323.3 400.1 0814.1 1 6043.0

(Oe.. 2 c197676 7l.c.a.

L. t.-r 17.2 15.3. 13. 163I43 67 17.1 19.3 22.8a 6.0 7.7 Y 3.02..cuLm 38.0 40.2 402 3.3 3. 367.0 37.3 34 .3 31.4 24 3.35.

3. 1a.44.a 44.3 44.3 44.7 45.1 43.3 41.4 46.2 4.3 51.6 a. .

mii (2874.76 - 201.3)

1. 7ao- 101:: :4... 99.1 90.7 122.6 127.2 129.3 132.4 133.3 177.8 243. 1 . .4.36.2 . Ier Pric 744a 83.3 104.9 104. 7 L124.6 124.3 234.1 144.3 204.3 288.3o 8. 7.

3. fir atr,. 144 112.2 84.35 103.3 119.7 124.3 96.6 93.2 87.1 84.3

a. U2 3.41 .t..rf334 94.1 103.3 125.6 123.0 137.1 143.2 133.3 214.4 201.3 . . 7.33 . 4-5015 le.. ..l (M0 7. 41501.303 7.14 LO .414 8.373

16. 1974-76 1977-40 IMUtE

1. o238 3.9 4.3 4.1 4.12. m-n fL-C.a.LCr 1. 3.4 1.1 3.7

2. *n 0--.± * Ir / 7.:3. 9.7 414.8' 14.94 . nWp 384101 S.".34 uc Z/ 13.2 10.3 17.4 16.6

3. *g431 388c40. 3*-U.4. R6 3.1 33 -. .6. rn.nat38w ~~~~ ~ ~~~ ~~~~~23. 31.7 26. 24.1'

7 2.re.fl38P 18.7 ~~~~ ~ ~~~~~ ~~2,1.3 20.9 u.I0.I.int m/y 3.2 1O. 9 6.2 7.41

1. 13RT 71

1. 7.abt into ~~~~~~~~~~~~~5.02. -7a1y Or.ne) 108.22.1 A lSOtc 91.2

2.3 001. .

M(ftlhlae Orlllna.) 1363/84 1970/7l 1971/72 L972/73 1971/74 1974/73 19375/7 136/77

L im Nsa 718 1643 1008 2357 3023 3946 3919 4762,: . agre 402 1344 1431 .1937. 2808 2161 3302 4143

1. .3rn moa41t . 707 .631 1781 2223 2785 3941 2718 4400I an n4c.ca 267 333 S4" 748 944 1361 1237

2 naa S.flse 9 52 79 134 234 Its 203 3 6'2- 'trot. set.... 34 62 214 377 643 1660

bYtIOflC le9~~~~~~~.1ftt .. 22~~~~5 117 194 __ 32 383A4 20226 3-reljeea C.Sla 238 - 89 604 36 6- 2 .222.L 123.. 2709

7 3reIJfic L.2 .8 .8 . 1130 1063 143 -7

2.t.n. to 33 270 347 436 467 661

2arC-on ,. 32 164 33 337 720

0--i. 3-ltqp p ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~.a 3. 1974L

- 24 -

TANZAMU ANNEX I

3L6CE or AnSLm FD E-rs .2 L .oSSIM7.4CZ Page 5 of 5UOilo S 33

1974 1975 L976 1977 1978 1979 .98O 1983 1990

A s1L9.y or 3A"4Cz O r.ATfP125

1. ErPovca (tmci. IFS) 465.9 460.7 605.5 759.7 742.7 787.8 837.3 1402.9 2320.9

2. t.Ptcs (tool. IllS) 779.0 793 . 727.9 352.8 970.5 1086.3 1213.3 7036.1 3429.2

3 R2m c gallce -313.1 -332.8 -122.4 93.0 227.8 298.3 -376.2 533.7 -90d.3

4. lit Factor Servic Inco_ -3.8 a -10.3 -24.6 -21.1 -18.7 -21.0 -27.3 -75.3 -143.81. Net inLacrc .7uats of Ahtch -U.6 -16.1 -18.8 -16.1 -13, 7 -16.0 -22.3 -65.3 -L33. 8

Lptresc o- .°nb7X 6 & LT .nu (-.34s (-11.1) (-L2.5) (-1.1) (-17.6) (-20.2) (-27.7) (-79.1) (-161.91

2. Direct Icota Mm ou. 23. 8eare. *- Ltsccn ('be) (4.8 (5.8 (-5.8 (-5.0 (-5.0 (-5.0 (-5.0 (-10.0 (-10.0

4. OtherFcco3S tc.1nei-(7. 1 ) ( ( ( ( ( ( ( ( (

5. Current Mratmsrs (Ofec) 30.1 71.0 77.9 94.9 110.4 129.4 147.9 235.6 362.5

S. Balnce on Cucrnt accom -291.8 -272.1 -69.1 -19.2 -L36.1 -190.1 -2.55.7 -473.4 -689.6

7. rivate Direct tav-. .c 24.3 27.5 12.3 20.0 20.0 24.0 28.0 35.0 35.0

Publi. M & L7 Loans

S. DOibu-.-c 11 143.1 229.9 116.8 215.8 187.2 271.6 315.3 528.2 818.S

9. jorrciatzoi 1/ -14.9 -15.3 -15.3 -26.5 -27.3 -28.2 -41.S *51 0 013 j

10. Soc 0isburoncs 1/ 128.2 214.6 101.3 L89.3 159.9 243.4 274.1 77 12 i

3)thr 04 1, Lo-n.

11. u1.bursm-nt. 2/ 18.2 19.9 11.6 7.2 4.7 1.2 0.6 0.3 0.0

U2. .lmrtiLacimo 2/ -3.0 -3.2 -6.2 -7.1 -5.1 -S.2 -5.5 -5.3 3.0

L3. lec 2Otsburs ncs ./ 13.2 87 4 0.1 -0.4 -4.0 -4.9 -5.3 0.0

L4. U.. of IMF Reo-r... 3/ 46.3 28.6 24.3 -24.4 -9.0 -39.0 -20.3 0.0 0.0

L5. Ooort-terS Capital Tr-aaction* Z4.1 0.0 -18.9 o.a 0.0 0.0 0.0 3.0 o.3

16. ZapLtal Mreosactios o.e.i. -31.4 -54.0 -31.2 0.0 0.0 3.0 0.0 0.0 0.3

L7. nSge L. Pc-r. (- - Lncra*a.) 84.8 38.7 -24.2 -L65.8 -34.4 -34.3 -01.2 -33.3 -56.8

3. GAMNTS A240 LOAN$S C:tQ1IMI12

1. Official Crabt 100.0 187.9 123.7 100.0 109.0 118.8 129.5 199.3 306.6

2. Total Vublic 8 & L. Loans 260.4 132.3 183.0 186.5 259.5 249.0 274.3 S46.3 703.4

2.1 DtR0 65.0 30.0 37.0 38.0 62.5 44.0 49.0 9.9 128.62.2 L71A 61.2 10.0 52.0 49.2 82.5 71.5 71.3 33. 24.4

Z.3 othar c .itlateral 7.1 18.D 5.0 L0.0 :0.0 10.0 10.0 :0.0 10.32.4 Cnsrmssncs 127.1 94.3 77.3 99.6 99.2 !89.7 234.9 37$.3 574

of tcb centrally pLanned ecomise 4/ 76.5 3.4 - 2.0 5.0 10.0 U3.0 15.0 i53

2.5 Supplier. - - - 10.0 11.4 13.0 L4.3 23.9 38.4

2.6 Fina-ci l rnotCimLom - - 11.7

2.7 8oude2.a Public Loan., ... - - - - - - . .

3. ather 8 5 LT Loan. (Nhere ailab.)j/ 5.6 2.9 6.0 - - - - _ _

Z. OFWDUM 1TT1

1. 2ramc _Innt of total CSSaicors 63.5 69.6 71.3 5.1 74.7 2.6 71.3 73.12. Average nctrtac (Perc-nt) 2.2 3.5 3.3 3.3 0.0 3.0 3.3 3.0 2.7

;. A-ara%. mcturity (Y.rS) 32 42 36 35 36 36 36 36 ;6

1. Lclld inancing of pro3ece4 balanc. of ?vancs dOaicit (1977-1990) on 301 3Onk/507. :5A Cer:z.3/ Oi.b,rSssn and rtayw.o of Bank loan. for lAC projects of which anzania s har a maclonal .O p.r.enc.3/ lec of Orawing" and "Upaymenc by Purchas ../ Locl4des COSA councries. Feople's .Rupblc of China, 4or8i .ore, Socialisc Rapublic of Viatn.

5/ aprahenc. a mocionaL 40 p.ccant of tank loins for tAC prj cs.

ZAN j

,40Ory 5, 1978

ANNEX II

-25 Page 1 of 16

THE STATUS OF BANK GROUP OPERATIONS IN TANZANIA

A. STATEMENT OF BANK LOANS AND IDA CREDITS TO TANZANIA

AS OF OCTOBER 31, 1978

(US$ million)Amount less cancellation

Undis-No. Year Borrower Purpose Bank 1/ TW IDA 1/ bursed

Four loans and thirteen credits fully disbursed 70.2 90.8

586-TA 1969 Tanzania Roads 7.0 1.4287-TA 1972 Tanzania Smallholder Tea 10.8 1.9371-TA 1973 Tanzania Education 10.3 3.7382-TA 2/ 1973 Tanzania Livestock 18.5 5.4454-TA 1974 Tanzania Cotton 17.5 11.9460-TA 1974 Tanzania Tanzania Investment Bank 6.0 1.01014-TA 1974 Tanzania Cashewnut 21.0 5.6495-TA 1974 Tanzania Sites and Services 8.5 3.1507-TA 1974 Tanzania Highway Maintenance 10.2 5.3508-TA 1974 Tanzania Rural Development 10.0 6.91041-TA 1974 Tanzania Sugar 9.0 2.4580-TA 1975 Tanzania Dairy 10.0 6.91128-TA 1975 Tanzania Textile 15.0 3.81172-TA 1975 TIB Tanzania Investment Bank 15.0 2.5601-TA 1976 Tanzania Technical Assistance 6.0 4.9606-TA 1976 Tanzania National Maize Program 18.0 12.9607-TA 1976 Tanzania Education 11.0 9.4

1306T-TA 1976 Tanzania Power 30.0 22.21307-TA 1976 Tanzania Forestry 7.0 5.6652-TA 1976 Tanzania Fisheries 9.0 8.8658-TA 1976 Tanzania Tobacco Processing 8.0 2.3

1354-TA 1977 Tanzania Urban Water Supply 15.0 14.71385T-TA 1977 Tanzania Morogoro Industrial Complex 11.5 8.51386-TA 1977 Tanzania Morogoro Industrial Complex 11.5 8.5703-TA 3/ 1977 Tanzania Rural Development (Tabora) 7.2 6.6732-TA 1977 Tanzania Second Sites and Services 12.0 12.0743-TA 1977 Tanzania Trucking 15.0 14.8

1498-TA 1977 TIB Tanzania Investment Bank 15.0 24.8801-TA 1978 Tanzania Second Cashewnut 27.5 27.5802-TA 4/ 1978 Tanzania Tobacco Handling 14.0 14.0803-TA 4/ 1978 Tanzania Rural Dev. (Mwanza/Shinyanga) 12.0 12.0

1607-TA 4/ 1978 Tanzania Morogoro Textile 25.0 25.0833-TA 4/ 1978 Tanzania Morogoro Textile _20.0 20.0

Total 210.7 41.5 352.3 303.4of which has been repaid 4.6 - 6.9Total now outstanding 206.1 41.5 345.4Amount sold 0.1

of which has been repaid 0.1Total now held by Bank and IDA 1/ 206.1 41.5 345.4

Total undisbursed 136.2 30.7 136.6 303.4

1/ Net of exchange adjustments.2/ Includes Norwegian participation of $6.2 million of which $5.6 million

has been disbursed.3/ Amount excludes Canadian participation of $4.8 million.4/ Not yet effective.

- 26 -

ANNEX IIPage 2 of 16

B. SUMMARY STATEMENT OF BANK LOANS FOR COMMON SERVICES GUARANTEEDBY KENYA, TANZANIA AND UGANDA AS OF OCTOBER 31, 1978

(US$ million)Loan Amount (less cancellations)No. Year Borrower Purpose Bank 1/ Undisbursed

Five loans fully disbursed 93.4

638-EA 1969 EAHC Harbours 35.0 1.2

674-EA 1970 EARC Railways 42.4 3.1

865-EA 1972 EAHC Harbours 26.5 1.1

914-EA 1973 EAPTC Telecommunications 32.5 5.6

1204-EA 1976 EADB Development Finance 15.0 8.3

Total 244.8 19.3

of which has been repaid 46.2

Total now outstanding 198.6

Amount sold 24.4

of which has been repaid 24.4 0.0

Total now held by Bank 1/ 198.6

Total undisbursed 19.3 19.3

1/ Net of exchange adjustments.

- 27 -

ANNEX IIPage 3 of 16

C. PROJECTS IN EXECUTION 1/(As of October 31, 1978)

There are currently 30 projects under execution in Tanzania.

AGRICULTURAL SECTOR

Credit No. 287-TA - Smallholder Tea Project: US$10.8 mil:LionCredit of March 3, 1972; Date of Effectiveness - July 26,,1972; Closing Date - December 31, 1978

After initial serious management problems, the Tanzania TeaAuthority (TTA) has finally reached a satisfactory level of senior staffing

and this has had a clear impact on the working of TTA and an improvement inthe control over field activities. However, the position with regard tofield staff will continue to be closely watched. Because of weak extension

and farm practices in the past, about 1,600 ha of the 9,671 ha planted since1971 must be infilled or rehabilitated, and yields have been lower than anti-cipated. In line with the 1976 survey, additional planting has been carried

out and effective rehabilitation and infilling has been achieved except inthe Bukoba area. Bank recommendations regarding crop yields, husbandrytechniques, field organization, TTA structure and extension activities are

now being implemented. Furthermore, market trends in tea have taken a favor-able turn. Progress on the project is expected to continue to improve.The closing date may require a further postponement to allow sufficient time

for completion of the Mwakaleli factory.

Credit No. 382-TA - Second Livestock Development Project::US$18.5 million Credit of May 23, 1973; Date of Effectiveness -September 28, 1973; Closing Date - December 31, 1979

This project was the subject of an in-depth review in November

1976. Since the review, significant progress has been made in alleviating

the financial problems of the meat processing parastatal (TPL), in correcting

some of the deficiencies in the livestock marketing parastatal (TLMC), and inadopting some of the decentralized management recommendations in the ranching

parastatal (NARCO). However, TPL needs to improve its overall efficiency,

and NARCO's financial situation is unsatisfactory. A financing proposal forNARCO is currently being prepared for presentation to Treasury and the two

financing institutions (TRDB and NBC) in order to return NARCO to financial

viability. The village livestock development component continues to have

1/ These notes are designed to inform the Executive Directors regarding

the progress on projects in execution and in particular to report

any problems which are being encountered and the action being taken

to remedy them. They should be read in this sense, and with the under-

standing that they do not purport to present a balanced evaluation of

strengths and weaknesses in project execution.

28ANNEX IIPn-;- 'I I fi

the same organizational problems evident during the review and the seriousnessof the situation has been recognized by the Prime Minister's Office. Insummary, significant progress has been made since the review but major pro-blems remain and require continued attention. The closing date of the Creditmay have to be postponed by 12 months in order to complete the ranch develop-ment program.

Credit No. 454-TA - Geita Cotton Project: US$17.5 millionCredit of January 17, 1974; Date of Effectiveness -April 5, 1974; Closing Date - December 31, 1982

The project is much improved since the appointment in October1977 of a new Project Manager. However, in view of the failure of the croptechnical packages to give economic responses, the project must now be con-sidered to be an infrastructure and adaptive research project rather thanan agricultural production project. A major objective is now to developa more soundly based and productive agricultural strategy. The most signifi-cant progress has been in the trial program with about 50 well distributedand supervised trial sites. Recruitment of staff has been more vigorouslypursued since the Project Implementation Reviews began. The major projectproblems remaining are: the lack of senior staff, the shortage of extensionstaff, the inefficient use of tractors, and the delay in producing accounts.The project will continue to be kept under close review.

Loan No. 1014-TA - Cashewnut Development Project: US$21.0million Loan of June 24, 1974; Date of Effectiveness -September 26, 1974; Closing Date - December 31, 1981

Construction of the five factories and ancillary facilities isproceeding in accordance with the revised completion schedule which is aboutnine months behind the appraisal estimate. Processing plant and machineryhas been delivered to two factories, and is under shipment for the remainingthree factories. The Cashewnut Authority (CATA) take over of the industryand the consolidation of its activities are proceeding slowly. Its man-agement capabilities are limited. Therefore, while the Government's con-sultants have effectively supervised construction and the project includesprovision of technical assistance for factory operation, the developmentof CATA is important to future progress and is receiving close attention.

Credit No. 508-TA - Kigoma Rural Development Project: US$10.0million Credit of August 21, 1974; Date of Effectiveness -November 20, 1974; Closing Date - December 31, 1980

Project implementation and disbursements remain well behindappraisal estimates. During the past six months, progress has been slowdue to continued weak management at both the regional and district levels,the loss of significant numbers of trained agricultural and cooperativesstaff as a result of their appointment as Village Managers, and the out-break of cholera in two of the region's three districts. To allow fora period of consolidation of project management, only four additional

- 29 - ANNEX II

Page 5 of 16

villages are to be included in the investment program for the next fiscal

year, bringing the total number of project villages to 61. A Joint-Mid-

term Evaluation of the project was conducted in late October 1978.

Credit No. 513-TA and Loan No. 1041-TA - Kilombero Sugar

Development Project: US$9.0 million Credit and US$9.0 million

Loan of September 27, 1974; Date of Effectiveness -

February 14, 1975; Closing Date - December 31, 1979

The development of estate cane plantations has been completed.

Kilombero Sugar Company's (KSC) land development on behalf of outgrowers

continues and is expected to exceed appraisal estimates due to lower than

expected cane yields. The inability of the transport system to supply cane

to both factories is a serious constraint to sugar production and the opera-

tions of the new management advisory agreement show some weaknesses (mainly

becaused Tanzanian seior staff could not be found to fill the line positions

vacated by expatriates). After heavy losses in 1977, mostly due Ito difficul-

ties in starting operations of the new factory, KSC is expected to break-

even. Phase III of the Sugar Study has been started and should be completed

by March 1979 The Sugar Development Corporation has requested Finance to

consider KSC's proposals as to the debt-equity ratio under the project and the

terms of the Government loans; a decision on this matter is expected soon.

Credit No. 652-TA - Fisheries Development Project: US$9.0

million Credit of July 12, 1976; Date of Effectiveness

October 12, 1976; Closing Date - December 31, 1981

With the change in TAFICO's management in August 1977, the project

appears to be progressing satisfactorily after the initial delay in imple-

mention. All formalities with regard to the establishment of the commercial

centers both for the coastal fisheries and Lake Tanganyika have been completed,

and steps have been initiated for the construction of boats and procurement

of engines and fishing gear. Of the four Ujamaa villages identified for

investment under the Ujamaa Pilot Fisheries Program two have been selected and

their investment plans have been prepared. It is expected that active fishing

operations in all cases should begin before the end of 1978.

Credit No. 606-TA - National Maize Project: US$18.0 million

Credit of January 29, 1976; Date of Effectiveness - May 28,

1976; Closing Date - June 30, 1980

Although the project has made some satisfactory progress with regard

to village participation, delivery of inputs, and concentration on high poten-

tial maize regions, it is beset by a number of problems which must be overcome

if the project is to achieve its primary objective. The project's exten-

sion services are seriously understaffed, and the deficiencies of extension

services and the Government's continued indecision on its reorganization are

- 30 -ANNEX IIPage 6 of 16

constraints effecting project implementation. Farmers' contributions to thefinancing of project inputs vary from Region to Region; in areas of high maizepotential about 80% of the inputs have been distributed in the agreed manner,but in the remaining Regions contributions have ranged from 13% to 42%. Arecent decrease in the subsidy element from 75% to 50% for all inputs hasdoubled the cost to the farmers of fertilizer. Many of the difficultiesexperienced result from limited cooperation between the central ministryresponsible for the overall project and the regional authorities in charge oflocal implementation. Proposals to improve project implementation by modifyingauthority for input financing and by increasing regional responsibility forassessing, ordering and distributing input requirements are under preparation.Another problem is the tendency for villages to place undue emphasis onmonoculture of maize. A joint RMEA/ Headquarters mission recently reviewedthe above difficulties and its recommendations have been largely endorsed bythe Government.

Credit No. 580-TA - Dairy Development Project: US$10.0million Credit of August 15, 1975; Date of Effectiveness -November 13, 1975; Closing Date - April 30, 1981

Development of the parastatal dairy farms continues to be success-fully implemented and the milk processing expansion is almost completed. Theloan security/occupancy rights problems have been resolved for most farms. Ashortage of suitable cattle and lack of milk pasteurizing facilities at Mbeyaare imminent problems. The Ujamaa component proceeds slowly and the TanzaniaRural Development Bank is actively investigation alternative means of assist-ing village milk production and consumption. The foot and mouth diseasecontrol investigation has commenced.

Loan No. 1307-TA - Sao Hill Forestry Project: US$7.0million Loan of July 12, 1976; Date of Effectiveness -October 12, 1976; Closing Date - June 30, 1982

Although the project got off to a slow start, project implementa-tion has improved considerably and is now more or less on schedule. Thenurseries are well stocked and maintained, and the current planting programshould be on schedule. Progress on fire protection, road construction andbuildings is satisfactory. All posts are now filled and management hasbeen reinforced. There are no serious procurement nor disbursement prob-lems, although both are still slightly behind schedule.

Credit No. 658-TA - Tobacco Processing Project: US$8.0 millionCredit of September 16, 1976; Date of Effectiveness - February 15,1977; Closing Date - December 31, 1981

Improvements to the existing line were completed in April 1978, ayear behind schedule. The delay did not interfere with processing, as the

- 31 -ANNEX II

Page 7 of 16

crop was only 14.5 m kg against an estimated 20 m kg. Equipment for the newline is arriving and the line will be operative by April 1979 when factorycapacity will be about 40 m kg against probable production of 20-26 m kg.Efforts will therefore be made to step up production during the 1978/79season to ensure a good factory throughput in 1979. Building work at Morogorois proceeding satisfactorily. TAT/TTPC are preparing a properly coordinatedbuilding program to cover the balance of the project, and proposals areawaited from the Treasury rationalizing the financial and functional respon-sibilities of these entities. The study of TAT's financial system willcommence as soon as the cholera quarantine is relaxed and TAT have beenrequested to employ a Systems Accountant without further delay. TTPC'saccounts for 1976/77 have been audited and the report is expected shortly.

Credit No. 703-TA and Credit No. 703-TA-5 - Tabora RuralDevelopment Project: US$12.0 million Credits 1/ of May 11,1977; Date of Effectiveness - November 11, 1977;Closing Date - June 30, 1983

Good progress has been made in project implementation, althoughoverall implementation is somewhat behind schedule, largely as a ressult ofdelays in the delivery of vehicles and equipment. Key staff of the ProjectSecretariat has been in post since early 1978, and the Secretariat is func-tioning well. The agricultural component is, however, facing serious prob-lems. The 1977/78 program of village trials (which are indended to validatethe Project's technical packages prior to dissemination to farmers) wasa failure as a result of lack of transport and poor coordination betweenregional and district-level staff. The 1978/79 trials programs faces problemsas a result of a shortage of staff to assist in the conduct of these trialsfollowing the appointment of over 50 percent of the region's trained agricul-tural extension staff as Village Managers.

Credit No. 801-TA - Second Cashewnut DevelopmentProject; US$27.5 million Credit of June 14, 1978; Dateof Effectiveness - October 2, 1978; Closing Date -December 31, 1984

This credit became effective on October 2, 1978.

Credit No. 802-TA - Tobacco Handling Project: US$14.0 millionCredit of June 14, 1978; Closing Date - April 30, 1983

This credit is not yet effective.

1/ Credit No. 703-TA-5 (US$4.8 million) is financed under the specialCIDA arrangement; Credit No. 703-TA is an IDA Credit of US$7.2. million.

- 32 -ANNEX II

Page 8 of 16

Credit No. 803-TA - Rural Development Project (Mwanza/Shinyanga): US$12.0 million Credit of June 14, 1978;Closing Date - December 31, 1984

This credit is not yet effective.

EDUCATION SECTOR

Credit No. 371-TA - Fourth Education Project: US$10.3million Credit of April 13, 1973; Date of Effectiveness -

July 2, 1973; Closing Date - December 31, 1979

Physical implementation, particularly the execution of civil works,has improved considerably and overall completion of the project has reached91%. However, to allow sufficient time for completion, the Closing Date hasbeen postponed by 18 months to December 31, 1979. Total project cost is nowestimated at about TSh 109 million, an increase of approximately 5% over theappraisal estimate of TSh 104 million. The Government do not foresee anyfinancial problem in the required additional funds. Three Community Educa-tion Centers out of eight have started operating programs for village devel-opment, education and training for youth and adults. The two VocationalTraining Centers are in operation at almost full capacity. The technicalassistance and fellowship programs are approaching completion and matchingfunds disbursed. Savings under the technical assistance and fellowship com-ponent of the project are estimated at approximately US$1.3 million.

Credit No. 607-TA - Fifth Education Project: US$11.0 millionCredit of January 29, 1976; Date of Effectiveness - March 23,1976; Closing Date - June 30, 1982

Progress in physical implementation is satisfactory. Constructionof extensions to fifteen secondary schools is progressing well and construc-tion of 1,500 houses for village Management Technicians, although delayed,shows some improvements. Housing construction is in line with VMT trainingwhich will be extended until mid-1980 as a result of the reassignment of over500 VMTs as Village Managers in January 1978. There are also dealys inrecruitment of experts by UNESCO to assist a secondary school facilitiessurvey and in recruitment of accountancy expects for the National Board ofAccountants and Auditors. Implementation of a separate review of accountancytraining and a survey of primary schools are progressing slowly. Despitethese delays, project completion can be expected by the initial Closing Dateof June 30, 1982 and no financial problems are envisaged at present.

- 33 -

Page 9 of 16

TRANSPORTATION SECTOR

Credit No. 265-TA - Third Highway Project: 1/ US$6.5million Credit of August 6, 1971; Date of Effectiveness -October 12, 1971; Closing Date - December 31, 1978

The contract for the road construction component of this projectwas signed in March 1974, two years later than scheduled and at a cost muchhigher than estimated. The Bank reduced the primary road constructioncomponent from 200 km to 82 km and transferred US$1.9 million balance fromthe completed Second Highway Project (Loan 586-TA) to meet the higher costs.The AfDB made a loan of 4 million units of account (US$4.8 million equi-valent) for the other 118 km. The 66 km of new construction on the primaryroad is complete except for about 1/4 km of bridge approaches. Additionalinvestigatory work by the MOW on the remaining 16 km of existing sealed roadhas confirmed the feasibility of undertaking minimum improvements and resealingthis section. The Mara betterment work has been completed and the Geita workis scheduled for completion in mid-1978. Government has received the finalreports of the two preinvestment studies. Funds available under Credit 265-TAhave been fully disbursed, and only US$1.4 million of the funds reallocatedfrom Loan 586-TA remain undisbursed.

Credit No. 507-TA - Highway Maintenance Project: US$10.2million Credit of August 21, 1974; Date of Effectiveness -November 20, 1974; Closing Date - June 30, 1979

Orders have been placed and deliveries are well advanced forabout US$6 million worth of equipment and bids for a further US$0.5 millionworth will be called shortly. A contract for 634 man-months of technicalassistance has been signed and 17 of the 31 experts have commenced theirduties in the country. Construction of road camps, deployment of equipmentand training of maintenance personnel are in hand. Maintenance work hascommenced on several trunk roads.

Credit No. 743-TA - Trucking Industry Rehabilitationand Improvement Project: US$15 million Credit ofNovember 3, 1977; Date of Effectiveness - April 3, 1978:;Closing Date - June 30, 1983

An initial supervision mission has just completed its discussionswith the Government on project start-up. The Project Coordinator has beenappointed and this should assist in initiating project execution.

1/ The Second Highway Project included Loan 586-TA which was for US$7.0million. In 1975, surplus funds of US$1.9 million were allocated tothe Third Highway Project, and the Closing Date was extended toDecember 31, 1978.

- 34 -

ANNEX II

PagelO of 16

URBAN SECTOR

Credit No. 495-TA - National Sites and Services Project;US$8.5 million Credit of July 12, 1974; Date of Effectiveness -October 3, 1974; Closing Date - December 31, 1978

Infrastructure construction has been completed satisfactorily on allproject sites. Construction of health facilities in Dar es Salaam is nearingcompletion. Education facilities for the Dar es Salaam sites have been ten-dered; the rest of the community facilities in the project are to be tenderedsoon. Progress on the lending program administered by the Tanzania HousingBank is slow but likely to pick up. Total project cost is estimated (atcurrent exchange rates) at US$15 million, compared to the appraisal estimateof US$16.7 million.

Credit No. 732-TA - Second National Sites and ServicesProject: US$12.0 million Credit of November 3, 1977; Date ofEffectiveness - April 3, 1978; Closing-Date - June 30, 1982

This credit became effective on April 3, 1978. Progress on imple-mentation is satisfactory for the residential components. Preparation of thesmall scale industry component is also making satisfactory progress. TheConsultants' report on the Land Rent and Service Charge Study was approvedby the Government in January 1978 and a pilot test of the new system for costrecovery proposed in the study is to be carried out in Morogoro.

WATER SUPPLY SECTOR

Loan No. 1354-TA - Urban Water Supply Project: US$15.0 millionLoan of January 5, 1977; Date of Effectiveness - March 2,1977; Closing Date - June 30, 1981

The implementation of the institutional arrangements in connectionwith the project, which includes mainly the establishment and operation ofan Urban Water Supply Fund within the Ministry of Water, Energy and Mineralsand an Urban Water Supply Unit in Morogoro, has been delayed by as much as ayear. Out of three senior advisors to be provided under the project, onlyone is on duty. Out of five main contracts needed to construct the works inMorogoro, one is practically completed, two are being awarded and the biddingdocuments for the last two contracts are being finalized. Nine-month delayin the physical construction of the work in Morogoro resulted mainly fromMWEM's poor administrative capability and difficulties due to the Tanzania/Kenya border closure. Project implementation is expected to improve signifi-cantly when the technical and financial advisors funded under the project re-port for duty.


POWER SECTOR

Loan No. 1306-T-TA - Kidatu Hydroelectric Project Phase II;US$30 million Loan on Third Window Terms of August 12, 1976;Date of Effectiveness - March 1, 1977; Closing Date -December 31, 1981

The project is financed by IBRD, SIDA and KfW. All contracts havebeen awarded. The main civil contractor has not yet completed its transport-ation; therefore, principal civil construction works at Mtera is five monthsbehind schedule. Current estimated project cost is US$117 million comparedto appraisal estimate of US$89 million, a cost overrun of 31%. The foreignexchange gap in IBRD/SIDA-financed portion is about US$14.1 million. SIDAhas indicated that it would be prepared to increase its allocation to coverits proportion of the cost overruns (about US$6 million). At present, Bankhas no plans to make any additional contruction to bridge the gap. By early1979, the issue should be reviewed and arrangements made for the necessaryfunds.

INDUSTRIAL SECTOR

Credit No. 460-TA - Tanzania Investment Bank Project:US$6.0 million Credit of February 13, 1974; Date of Effective-ness - April 18, 1974; Closing Date - December 31, 1979

This Credit has been fully committed. Because of a reallocation offunds from a subproject previously approved to a new one still under implemen-tation, the credit is still not fully disbursed and the closing date hasbeen postponed to December 31, 1979.

Loan No. 1171-TA - Tanzania Investment Bank: US$15.0 millionLoan of November 12, 1975; Date of Effectiveness - February 20,1976; Closing Date - December 31, 1980

This Loan is fully committed and disbursements are proceedingsatisfactorily.

Loan No. 1128-TA - Mwanza Textile Project: US$15.0 millionLoan of June 19, 1975; Date of Effectiveness - October 6,1975; Closing Date - July 1, 1979

The project provides for expansion of an existing textile mill andis designed to increase annual fabric production capacity by 20 million linearmeters. Project implementation performance has been acceptable. lhere hasbeen a deterioration in the operating performance of the existing MIwanzaplant as well as some other textile mills. The National Textile Corporation


(TEXCO), the holding company for state-owned textile mills, has agreed toinstitute an immediate action program to improve the operating performance ofexisting mills.

Credit No. 601-TA - Technical Assistance Project: US$6.0million Credit of January 9, 1976; Date of Effectiveness -September 14, 1976; Closing Date - June 30, 1980

With the arrival of a new project team leader from TATA in February1978, the project is now expected to be implemented smoothly. Total commit-ments as of May 31, 1978 was US$2.1 million of which US$1.7 million, US$0.3million and US$0.1 million were for consultancy services, training and projectunit services, respectively. The procedures for processing proposals arebeing streamlined and it is expected that the pace of commitments and dis-bursements will be increased as a result.

Loan No. 1385-T-TA/Loan No. 1386-TA - Morogoro IndustrialComplex: US$11.5 million Loan on Third Window Terms andUS$11.5 million Bank loan, both of April 6, 1977; Date ofEffectiveness - July 6, 1977; Closing Date - December 31, 1982

Project implementation is proceeding satisfactorily in spite of someinitial delays in the appointment of consultants and start-up of procurement.Although there will be some delays in the start-up of individual componentsof the Industrial Complex, completion of the project is still scheduled forJuly 1982. Revised capital cost estimates are only slightly higher than thosecontained in the Appraisal Report.

Loan No. 1498-TA - Tanzania Investment Bank: US$15.0 millionLoan of December 28, 1977; Date of Effectiveness - April 3,1978: Closing Date - June 30, 1981

This Loan became effective on April 3, 1978.

EAST AFRICAN COMMUNITY

There are currently five projects in execution in the East AfricanCommunity. 1/

1/ Since October 1, 1977, the East African Community loans (excluding theEast African Development Bank) have been disbursed on the basis ofseparate national guarantees. The agreed allocation of undisbursedbalances for each loan, as proposed in a report to the Executive Direc-tors dated December 29, 1977 (R77-312) and approved on January 12,1978, is given in this Annex.

- 37 -ANTEX I IPn,ei-i of 16

Loan No. 638-EA - Second Harbours Project: US$35.0 millionLoan of August 25, 1969; Date of Effectiveness - December 2,1969; Closing Date - December 31, 1977

Loan No. 865-EA - Third Harbours Project: US$26.5 millionLoan of December 18, 1972; Date of Effectiveness - April. 16,1973; Closing Date - June 30, 1978

The Second Harbours project included financing for five generalcargo berths and a single bay tanker terminal for the Port of Dar es Salaam;two general cargo berths and a bulk cement wharf for Mombasa; tugs, lighters,cargo handling equipment, offices, housing and general improvements for bothports. The Third Harbours project included three new deep water berths,modernization of two berths and a lighterage quay, a training school build-ing and central repair area for Dar es Salaam; modernization of several berthsand a lighterage quay, construction of a tug berth, cold storage facilitiesand a training building in Mombasa and improvement of a lighterage quay inTanga. Construction of all major project elements has been completed. Ofthe minor project elements, only two are still under construction, namelythe improvement of lighterage facilities in Tanga and reconstruction of shedsin Mombasa. Both are expected to be completed before mid-1978. Because ofshortage of funds under both loans, the following minor project elements havenot been submitted for Bank financing: the second phase of modernization ofthe lighterage quay and a training school for Dar es Salaam; modernizationof the lighterage quay and a training school for Mombasa. Locally financedcontracts have been awarded for these project elements with the exception ofthe modernization of the lighterage quay in Mombasa. General cargo throughputhas increased above appraisal forecasts for Dar es Salaam, and cargo handlingproductivity has improved with increasing throughput; however, port laborproductivity has stagnated in Mombasa where general cargo throughput hasdeclined considerabley. The ports of Kenya and Tanzania are now functioningcompletely independently of each other. Legislation to establish a TanzaniaHarbours Authority has been enacted, and a Kenya Port Authority is expectedto be established soon. Management of Ports in both countries is compe-tent. Some US$33.8 million of Loan 638-EA and US$25.4 million of Loan 865-EA has already been disbursed. The agreed allocation of undisbursed fundsat October 1, 1977 between the countries concerned is given below:

For Loan No. 638-EA (US$ million)

Kenya 0.7Tanzania 0.6

Total 1.3

For Loan No. 865-EA

Kenya 1.7Tanzania 0.3

Total 2.0

- 38 -

ANNEX II

Page 14 of 16

The closing date for Loan No. 638-EA has passed. However, since the

amount allocated to and guaranteed by each Partner State is clearly identified

under the terms of the agreement signed on January 25, 1978 (referred to in a

report to the Executive Directors dated December 29, 1977-R77-312), were are

continuing disbursements.

Loan No. 674-EA - Third Railways Project: US$42.4 million

Loan of May 25, 1970; Date of Effectiveness - October 30,

1970; Closing Date - June 30, 1978

The original purpose of the project was to complete the Railways'

1969-1972 Development Program, including track improvement, procurement of

rolling stock and other equipment, and to finance studies of the economic

feasibility of certain railway lines and services. The physical execution of

the original project has been seriously delayed due to administrative and

political problems within the Community. In November 1974, the Executive

Directors approved a reallocation of the uncommitted balance of the Loan to be

used for consultant services and emergency investments in track material. All

three countries have now enacted legislation to establish their own Railways

Corporations. The agreed allocation of undisbursed funds at October 1, 1977

among the various countries concerned is given below:

$ Million

Kenya 2.0

Tanzania 3.8

Uganda 1.9

Total 7.7

Loan No. 914 EA - Third Telecommunications Project: US$32.5

million Loan of June 22, 1973; Date of Effectiveness -September 19, 1973; Closing Date - December 31, 1979

The project included provision for procurement of local telephone

exchange equipment, cables and subscriber apparatus, microwave and UHF/VHF

systems and multiplex equipment, interurban cables and wires, automatic

switching and signalling equipment, telegraph, telex and data equipment,

and training. All major works other than microwave and UHF/VHF system con-

struction have now been completed, despite initial delays caused by staffing

and other problems associated with the reallocation of the headquarters.

Funds disbursed to date total US$26.9 million and the balance has been com-

mitted for cables and subscriber apparatus, microwave and associated multi-

plex equipment. Because of the long lead time required for the microwave

equipment, the project is expected to be fully completed by mid-1979. The

Closing Date has accordingly been postponed to December 31, 1979. The agreed

allocation of undisbursed funds at October 1, 1977 among the countries con-

cerned is given below:

- 39 -

ANNEX II

Page 15 of 16

$ Million

Kenya 2.4

Tanzania 3.5

Uganda 0.1

Total 6.0

Loan No. 1204-EA - East African Development Bank: US$15.0million Loan of March 1, 1976; Date of Effectiveness - June 7,

1976; Closing Date - March 31, 1980

Over the last year, the environment within the Community has had anegative impact on EADB operations. Level of operations both for appraisal

and supervision has been depressed, and there has been some deterioration in

the state of the portfolio with the arrears affected portfolio rising to 50%

as of June 30, 1977. However, EADB has been able to retain nearly all itsstaff who are both adequate in number and technically competent to continuethe operation of the institution and effect some recovery in the portfolio.

Some US$6.7 million has been disbursed to date, and the uncommitted balanceamounts to US$3.0 million.

- 40 - ANNEX II

Page 16 of 16

D. STATEMENT OF IFC INVESTMENT IN TANZANIAAs of October 31, 1978

Fiscal Year Obligor Type of Business Amount in US$ MillionLoan Equity Total

1960 and 1964 Kilombero Sugar Company Food Processing 3.96 0.70 4.66

1978 Highland Soap Soap Manufacture 1.37 0.38 1.75

Total gross commitments 5.33 1.08 6.41

Less cancellations, terminations,repayments and sales 3.96 0.70 4.66

Total commitments now held by IFC 1.37 0.38 1.75

Total Undisbursed 1.37 0.38 1.75

- 41 -ANNEX III

Page 1 of 2

TANZANIA


Supplementary Project Data Sheet

I. Timetable of Key Events

(1) Time taken to prepare project: 7 months

(2) Preparation by: Government of Tanzania/TTC

(3) Initial Discussion with IDA October 1976

(4) Appraisal Mission departure: March 1978

(5) Negotiations October 1978

(6) Planned date of effectiveness: March 1979

II. Special Bank Implementation Action

none

III. Special Conditions:

(1) The major access road to the national parks, the Makuyuni-SerengetiRoad, will be upgraded to an all weather standard and subsequentlymaintained to that standard (para. 31).

(2) The Government shall continue to pursue policies consistent withthe preservation of wildlife resources. Any major proposed changesin policies affecting wildlife preservation relating to organiza-tion and staffing of anti-poaching units, licensing of hunting,dealing in and exporting of trophies shall be submitted to theAssociation in sufficient time to enable it to comment on them.A report dealing with the wildlife situation in Tanzania and theresults of anti-poaching activities shall also be furnished annuallyto the Association (paras. 34 and 45).

(3) The level of repair and maintenance expenditure on hotels would,by December 31, 1981 reach at least 6 percent of hotel sales or2% of the current value of TTC's principal fixed assets, whicheveris higher (para. 40).

- 42 -

ANNEX IIIPage ZFot 2

(4) A suitable site for the HTTI within Dar es Salaam would bedetermined in consultation with the Association, a study on thefinancing of HTTI would be undertaken by the Government and theAssociation would be informed of its result by December 31, 1980(para. 43).

(5). The head teacher for HTTI would be nominated by December 31,1979 (para. 44).

(6) An adequately qualified and experienced Project Coordinatorto supervise and manage the hotel rehabilitation work wouldbe appointed by April 30, 1979 and all technical assistanceexperts funded under the project would be suitably qualified andexperienced and appointed on terms and conditions acceptable tothe Association (para. 49).

(7) The Government will fund any capital expenditures by TTC inexcess of TSh 2 million per fiscal year if these funds arenot raised through new long-term borrowing by TTC and if TTC'sconsolidated current ratio after such expenditures falls below1.1 to 1 (para. 57).

(8) TTC would prepare and submit to the Association by December 31,1979 a study examining the feasibility and magnitude of realrate increase at its hotel and lodges and recommend policies andprocedures for TTC tariff rate decissions (para. 59).

(9) Completion of a subsidiary loan agreement satisfactory to theAssociation between the Government and TTC would be a conditionof effectiveness (para. 65).

Documents

Public Disclosure Authorized FILE Copy · 2016. 8. 9. · Conversions in this report were made at US$1.00 to TSh 8.00 which is close to the 1978 average exchange rate.) ABBREVIATIONS