Document of

The World Bank

Report No: 21901 AFR

PROJECT APPRAISAL DOCUMENT

ON

PROPOSED CREDITS

IN THE AMOUNT OF SDR 85.2 MILLION(US$110 MILLION EQUIVALENT)

TO

REPUBLIC OF BURUNDI, REPUBLIC OF KENYA, REPUBLIC OF MALAWI,REPUBLIC OF RWANDA, UNITED REPUBLIC OF TANZANIA,

REPUBLIC OF UGANDA, REPUBLIC OF ZAMBIAAND AFRICAN TRADE INSURANCE AGENCY

FORA

REGIONAL TRADE FACILITATION PROJECT

March 12, 2001

Private Sector UnitAfrica Region

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CURRENCY EQUIVALENTS(Exchange Rate Effective January 31, 2001)

Country Currency Unit US$1 is equal to Fiscal Year

Burundi Burundi Franc (BIF) BIF 777.00 January 1 - December 31Kenya Kenya Shillings (KES) KES 78.78 July 1 - June 30Malawi Malawi Kwacha (MWK) MWK 80.25 January 1 - December 31Rwanda Rwanda Francs (RWF) RWF 431.49 January 1 - December 31Tanzania Tanzanian Shillings (TZS) TZS 810.50 July I - June 30Uganda Uganda Shillings (UGX) UGX 1842.50 July 1 - June 30Zambia Zambian Kwacha (ZMK) ZMK 3550.00 January I - December 31

ABBREVIATIONS AND ACRONYMS

ATI African Trade Insurance AgencyCBI Cross Border InitiativeCOMESA Conmnon Market for Southern and Eastern AfricaDCA Development Credit AgreementECA Europe and Central Asia RegionEMP EnvironmentalERR Economnic Rate ReturnFl Financial IntermediaryFMS Financial Management SystemGDP Gross Domestic ProductLAPSO Inter-Agency Procurement ServiceICB International Competitive BiddingIDA International Development AssociationIFC International Finance CorporationLCS Least Cost SelectionMIGA Multilateral Investment Guarantee AgencyNBF Not Bank FinancedNCB National Competitive BiddingNPV Net Present ValueOAU Organization of African UnityPGF Political Risk Guarantee/Insurance FacilitiesPMR Project Management ReportsPPF Project Preparation FacilityPSR Project Status ReportPTA Preferential Trade AreaQCBS Quality and Cost-Based SelectionRIFF Regional Integration Facilitation ForumRTFP Regional Trade Facilitation ProjectSADC Southern Africa Development CommunitySME Small and Medium-Scale EnterpriseSOE Statement of ExpendituresTAC Technical Advisory CommitteeTAG Technical Advisory GroupUNCITRAL United Nations Commnission on International LawVAT Value Added Tax

Vice President: Callisto MadavoCountry Director: Yaw AnsuSector Manager: Demba Ba

Task Team Leader: Onno Ruhl

AFRICAREGIONAL TRADE FACILITATION PROJECT

CONTENTS

A. Project Development Objective Page

1. Project development objective 22. Key performance indicators 3

B. Strategic Context

1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 42. Main sector issues and Government strategy 53. Sector issues to be addressed by the project and strategic choices 6

C. Project Description Summary

1. Project components 82. Key policy and institutional reforms supported by the project 83. Benefits and target population 94. Institutional and implementation arrangements 9

D. Project Rationale

1. Project alternatives considered and reasons for rejection 122. Major related projects financed by the Bank and other development agencies 143. Lessons learned and reflected in proposed project design 144. Indications of borrower commitment and ownership 155. Value added of Bank support in this project 15

E. Summary Project Analysis

1. Economic 162. Financial 163. Technical 174. Institutional 185. Environmental 196. Social 207. Safeguard Policies 22

F. Sustainability and Risks

1. Sustainability 232. Critical risks 243. Possible controversial aspects 25

G. Main Conditions

1. Effectiveness Condition 252. Other 25

H. Readiness for Implementation 25

I. Compliance with Bank Policies 25

Annexes

Annex 1: Project Design Summary 26Annex 2: Detailed Project Description 28Annex 3: Estimated Project Costs 36Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 37Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 40Annex 6: Procurement and Disbursement Arrangements 41Annex 7: Project Processing Schedule 46Annex 8: Documents in the Project File 47Annex 9: Statement of Loans and Credits 48Annex 10: Country at a Glance 63

AFRICA

Regional Trade Facilitation Project

Project Appraisal Document

Africa Regional OfficePrivate Sector Unit

Date: March 12, 2001 Team Leader: Onno RuhlCountry Director: Yaw Ansu Sector Manager: Demba BaProject ID: P063683 Sector(s): FS - Financial Sector DevelopmentLending Instrument: Specific Investrnent Loan (SIL) Theme(s):

Poverty Targeted Intervention: N

Project Financing Data[ I Loan [X1 Credit [ Grant [ Guarantee [ ] Other:

For LoanslCreditslOthers:Amount (US$m): $110.00

Proposed Terms: Standard CreditGrace period (years): 10 Years to maturity: 40Commitment fee: 0.5 Service charge: 0.75%FinanciK Plan: Source . Locjl Foreln TotaBORROWER 0.70 0.00 0.70IDA 0.00 110.00 110.00OTHER PRIVATE COMMERCIAL SOURCES 195.00 0.00 195.00(UNIDENTIFIED)

Total: 195.70 110.00 305.70Borrower: MINISTRY OF FINANCE IN EACH COUNTRYResponsible agency: AFRICAN TRADE INSURANCE AGENCY

Address: Times Towers, Haile Selassie Avenue, Nairobi, KenyaContact Person: Mr. Erastus J.O. Mwencha, Interim Managing DirectorTel: 254 2 343 310 Fax: 254 2 343 310 Email: MD@ATI-ACA.com

Estimated disbursements ( Bank FYIUSS

Annual 30.00 45.00 35.00Cumulative 30.00 75.00 110.00

Project Implementation period: 2001-2011Expected effectiveness date: 06/30/2001 Expected closing date: 06/30/2011

A. Project Development Objective

1. Project development objective: (see Annex 1)

The Regional Trade Facilitation Project's (RTFP) principal objective is to contribute to poverty alleviationthrough private sector led growth in participating countries by improving access to financing for productivetransactions and cross-border trade.

The Common Market for Southern and Eastern Africa (COMESA) initiated the RTFP as an importantcomplement to its regional integration activities, in particular the introduction of a free trade area onOctober 31, 2000. The project will initially cover seven countries (Burundi, Kenya, Malawi, Rwanda,Tanzania, Uganda, and Zambia), and can be extended to cover all African countries, in order to broadenthe development impact of the project as much as possible.

Financing for productive activities in Africa is presently severely constrained by a perception of high risk inthe region as a whole, and in individual countries in the region. Interviews with market players indicatethat a significant element of this perception is associated with risks caused by government behavior andpolitical events, such as war and civil commotion. In many countries, however, this perception is notjustified by current circumstances. The same is true for the perception that Africa as a region would beinherently more risky than other regions or continents.

There are significant gaps in the private political risk insurance market when it comes to the assumption ofpolitical risk in cross-border transactions involving African countries, which hinders growth of productiveactivity in Africa. Political risk cover from commercial sources or export credit agencies is not available atall for some African countries, and where cover is available it is usually very costly and on unfavorableterns. In particular, available cover is either very thin or non-existent for transactions over the mediumterm thereby restricting the import of essential capital goods into African countries.

The project aims to address this problem by bringing together a group of countries that are willing toaddress the market's perception by setting up a credible insurance mechanism against losses caused bypolitical risks. The governments of these countries would agree to be the ultimate risk takers in theinsurance mechanism, thus creating a strong disincentive to cause claims. This type of insurance iscurrently not available from the private market, particularly for medium-term transactions (over one year).

As a result of the public sector addressing political risk through the RTFP, the private insurance sector willhave the ability to extend its activities in the region. International export credit insurers, in cooperationwith local financial institutions, will use the political risk insurance facility to offer commercial riskinsurance, which will result in comprehensive export credit coverage being available to the private sector inAfrica.

The project will thus widen the scope for private sector activity, in particular by extending the maturities atwhich credit is available, creating a more stable business environment by ensuring the availability ofcoverage on a consistent and predictable basis, and, by improving the risk, lowering the risk premium.Participating countries will reap earlier and more substantive benefits from improved policies, as theprivate sector will increase its activity without having to wait for a long track record of policy and politicalstability.

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2. Key performance indicators: (see Annex 1)

The key performance indicators to measure project development objectives would be:* the volume of policies issued per country (see targets below);* that the implementing agency, the African Trade Insurance Agency (ATI), becomes self-financing after

two years of operation;* the level of claims - on average one claim or less resulting from a government performance risk per

country per year;* the establishment of a leveraging partnership with private risk insurers for political risk insurance

cover.

Project output would be measured by the value of insurance policies issued.

Measuring performance would require tracking the value and number of policies issued measuring (i) theincrease of imports into the region, excluding donor-financed imports, (ii) exports from the region, and (iii)the volume of intra-regional trade. The project would have achieved its objective if there was an average 7percent growth per year in the value of trade flows involving countries outside the region, measured inUnited States dollars. The growth rate for intra-regional trade should start at around 7 percent andincrease to around 15 percent per annum by project end. Increasing regional integration will foster highervolumes of intra-regional trade which is vital for the region's sustainable economic development.

Performance benchmarks for project output/value of insurance policies issued in participating countriesafter three years and ten years of implementation are as follows:

Year 3 Year 10Burundi: US$7 million US$70 millionKenya: US$35 million US$350 millionMalawi: US$14 million US$140 millionRwanda: US$7 million US$70 millionTanzania: US$20 million US$200 millionUganda: US$25 million US$250 millionZambia: US$20 million US$200 million

These figures are based on detailed projections in the project files, which are based on (i) the size of thehiternational Development Association (IDA) credit for each country; (ii) the expected leverage ratio andresulting total capacity per country; and (iii) expected demand. It is expected that the volume of coverageper year would increase gradually over the life of the project. Indeed, the figures for year three appear modestin comparison with the year ten benchmarks, as a slow uptake in demand is expected in the project's early yearswhile the market becomes familiar with ATI and its insurance policies, and ATI builds its reputation. Quickergrowth in the later years of the project also reflects expected diversification of the economies of participatingcountries and thus higher and more diverse demand.

Other important indicators of performance would include: (i) catalyzing the introduction in the market ofprivate comprehensive trade credit insurance; (ii) the increase in the volume of bank lending for tradetransactions (including local and foreign banks); an average 10 percent per annum increase over theproject's life would be a significant achievement; (iii) a decreasing trend in cost and increasing trend inmaturity of trade finance; (iv) increasing the number of participating countries over the life of the project;

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(v) the broadening of ATI's client base in individual participating countries over the life of the project; (vi)the diversification of participating countries' economies and export markets to be demonstrated by adecreasing trend in the share of commodities and cash crops as a percentage of GDP and exports; and (vii)an improvement in the perception of political risks in participating countries as indicated, inter alia, byhigher leverage ratios from the private risk insurers involved in the facility, more favorable political riskcountry ratings, and new private market entrants providing risk coverage in the region.

It will take a number of years for the project, in conjunction with other initiatives and reforms in the region,to have a measurable impact on the areas listed above. The indicators will be monitored throughout the lifeof the project, but it should be noted that the results in the first couple of years may not be representative ofthe impact the project will have over its ten year life.

The following indicators will trigger corrective action at the mid-term review (after three years ofoperation):

* ATI is not self-financing;* the second tranche of IDA credits for individual countries is not yet fully utilized (i.e. is not backing up

insurance policies).

Although the project will play an important role in facilitating trade, success in attaining the project'sobjectives will hinge upon continued market-oriented reforms in participating countries, the success ofregional integration initiatives, such as the COMESA free trade area, and the degree of political stability inindividual countries and the region as a whole. The evaluation of the project will therefore need to take intoaccount progress or lack of progress in policy and institutional reforms supporting private and financialsector development, as well as policies supporting regional integration and political developments in theregion.

B. Strategic Context1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex 1)Document number: N/A Date of latest CAS discussion: N/A

CAS document number: Date of latest CAS discussion:

Republic of Burundi, 14442-BU May 2, 1995 (Interim Strategy No 19592-BU,October 5, 1999)

Republic of Kenya, 18391-KE September 2, 1998

Republic of Malawi, 21419-MAI December 21, 2000

Republic of Rwanda, 17478-RW March 17, 1998 (CAS Progress ReportIDA/R99-135, June 29, 1999)

United Republic of Tanzania, June 15, 200020426-TA

Republic of Uganda, 20886-UG November 16, 2000

Republic of Zambia, 19889-ZA November 17, 1999

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This project would address an objective which is underlined in all of the above CASs as a primary goal ofthe relevant Government and the Bank -- private sector led growth, with a focus on diversification ofeconomic activity, and exports in particular. The project would facilitate access to financing forcompanies, both small and medium scale enterprises (SMEs) and large enterprises, whose development hasbeen hindered by limited access to capital, especially beyond maturities of one year. The provision ofinsurance policies against political risks would allow foreign financiers to fund viable short- andmedium-term commercial transactions in participating countries, thereby lifting an important impediment toprivate sector development. Business transactions generating foreign exchange through exports would alsobenefit from the insurance, regardless of the source of financing. In addition, in post-crisis countries, theproject could contribute significantly to the reconstruction of infrastructure, a vital prerequisite for privatesector development.

2. Main sector issues and Government strategy:

Private Sector DevelopmentTo achieve significant and sustainable poverty alleviation in Africa, economic growth of seven percent perannum on average is necessary over the next ten to fifteen years [Note: This figure comes from a jointreport by the United Nations Economic Commission for AFrica and the World Bank - (World Bank, 2000."Can Africa Claim the 21st Century?" Washington, D.C.). This level of growth can only be attained if itis led by the private sector in increasingly diversified economies. Private sector development is therefore akey component in the strategies of the governments in the region targeted by the RTFP. There are severalareas related to private sector development which need to be addressed in order to foster high andsustainable levels of economic growth in Africa. The issues raised below apply to all or most of thecountries which would participate in the project. For the sake of clarity and simplicity, the discussion willnot differentiate among countries, but rather will flag factors affecting private sector development in theregion as a whole.

Enabling EnvironmentEfforts to improve the legal and regulatory framework have already been made in the vast majority ofcountries in the region, and are being pursued further in most countries with World Bank support.Investment codes, labor codes, product markets and prices, trade and tax regimes, and foreign exchangehave been liberalized. Privatization programs have been launched. Regional organizations, like COMESAand Southern Africa Development Community (SADC), play an important role in this context, harmonizingreforms and promoting regional cooperation though trade, privatization and regulatory networks. Regionaltrade and investment promotion actions continue under the aegis of the Regional Integration FacilitationForum (RIFF), the successor to the "Cross Border Initiative" (CBI), including the removal of tariff andnon-tariff barriers to trade and investment. In addition, COMESA is at the forefront of promotion ofintra-regional trade, with the impending introduction of a free trade area among its member states onOctober 31, 2000 as a precursor to the creation of a customs union with low external tariffs.

Security and Political RisksThe liberalization policies mentioned above are steps in the right direction to encourage both foreign anddomestic private sector investment. However, participating countries have not yet established a trackrecord in terms of implementing and maintaining these policies. Understandably, the private sector is waryto invest in countries that have reversed such policies in the past, or have only recently shown theircommitment to opening up their economy to the private sector.

Security concerns are present in certain parts of the region. Many countries have recently emerged from

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war. Other countries have been indirectly affected by conflicts in the region. Peace and stability continueto be at risk, as evidenced by the on-going conflicts in the region. The real and perceived risk of renewedconflict and/or civil disturbance is a major impediment to foreign private investment in these areas.

Availability of Credit

A functioning financial sector is critical to private sector development. Emphasis is being put onprivatization of state-owned banks, competition in the banking sector, banking supervision, capitalmobilization, access to credit for small-scale agricultural and industrial activities, and rural areas. It isrealistic to say, however, that the domestic banks in the region do not yet have the capacity to provide thesupport needed for private sector led growth.

A survey of and follow-up discussions with foreign banks that are active in the region have confirmed thatthey also are limited in their provision of capital for private commercial transactions in Africa. In this case,the capacity to finance viable commercial transactions is restricted by internally imposed country risk limitsas well as constraints imposed by their regulatory authorities. However, bankers agree that there are manyviable transactions which they could finance if it were not for these exposure limits, which relate to the riskprofile of the financial institution's portfolio. Banks and other lending institutions must diversify theirportfolio to spread risk, and country limits are one tool they use to achieve risk diversification. If countryrisk is covered by insurance, these country limits are no longer a constraint, and lenders can focus on thecommercial transaction seeking financing rather than on exogenous political risks.

Diversification of Economic Activity

The economy, and particularly exports, in countries that would participate in the RTFP rely heavily on afew key commodities (copper, gold, minerals) and cash crops (coffee, tea, maize, tobacco, cashew nuts,etc.). This reliance is detrimental to economic development for well known reasons, including fluctuationsin world market demand and prices, as well as sensitivity to drought and other natural causes foragricultural goods. A primary objective of the region's development strategy is to diversify economicactivity towards sectors such as manufacturing, agro-processing, and tourism that have a higher valueadded and are less sensitive to exogenous factors.

3. Sector issues to be addressed by the project and strategic choices:

Increasing the volume of financing for trade within the region and with third countries is crucial to achieveprivate sector-led growth. Private sector development has been constrained by the small size of thefinancial sector in Africa, the limited number of foreign financial institutions active in Africa and the smallvolumes of foreign financing from the private sector flowing to Africa. The project would enable increasedregional and international financing flows for enterprises involved in cross-border trade by addressing theissues listed above under "Security and Political Risks" and "Availability of Credit". The project wouldalso indirectly underpin efforts to diversify the region's economy.

The proposed project would directly address the concerns of risk takers regarding a lack of policycontinuity and consistency by providing insurance against the risk of a reversal in the government's policieswhich negatively affects business (for example restricting the conversion of local currency into foreignexchange, retro-actively increasing import tariffs, arbitrarily removing a license, or customs unlawfullyintervening in the import or export of goods).

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The insurance facility would also provide cover against losses resulting from the occurrence of war andcivil disturbance, thus addressing the second component of country risk that impedes increased privatesector capital flows to the region.

Furthermore, the project was specifically designed to allow international export credit insurers to buildupon the political risk insurance facility and offer comprehensive coverage, i.e. political and commercialrisk cover. This is starting to pay off, as ATI is about the sign a Memorandum of Understanding on astrategic partnership to offer comprehensive coverage with one of the largest credit insurance companies inthe world. This partnership, which might include International Finance Corporation (IFC) will not use IDAor governnent funds to cover commercial risk.

This project is specifically designed to increase the availability of credit for viable comnercial transactionsthat increase productive activity and hard currency flows to the region. It recognizes that domestic sourcesof finance are not sufficient to achieve strong private sector growth, and that foreign sources of finance arenot yet willing or able to channel the capital which is needed to spur growth. As the facility would mitigatepolitical risks, it would allow foreign banks to increase their lending to the region. They would be able toobtain insurance against political risk, and thus extend their exposure beyond their internal, and in somecases, regulatory country limits. Discussions on this issue with regulatory authorities in key countries arebeing inititiated by ATI.

The project could also play an indirect role in diversifying the economy by enabling small and mediumsized enterprises and joint ventures to attract financing to develop new areas of business, giving themaccess to working capital, capital goods and input goods for processing.

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C. Project Description Summary

1. Project components (see Annex 2 for a detailed description and Annex 3 for a detailed costbreakdown):

The project will consist of Political Risk Insurance Facilities for each of the seven participating countries,as well as financing for the start-up operational costs through year two of project operations.

indicative Bank-: ;; ofComwsponnt¢ sec t;: ;to Cots- %4off :afinancing Banf

Burundi, PRIF Financial Sector 15.00 4.9 7.50 6.8Development

Kenya, PRIF Financial Sector 75.00 24.5 25.00 22.7Development

Malawi, PRIF Financial Sector 45.00 14.7 15.00 13.6Development

Rwanda, PRIF Financial Sector 15.00 4.9 7.50 6.8Development

Tanzania, PRIF Financial Sector 45.00 14.7 15.00 13.6Development

Uganda, PRIF Financial Sector 60.00 19.6 20.00 18.2Development

Zambia, PRIF Financial Sector 45.00 14.7 15.00 13.6Development

Start-up Operational Costs through Institutional 5.00 1.6 5.00 4.5year two DevelopmentInitial Contribution to ATI Institutional 0.70 0.2 0.00 0.0

Development

Total Project Costs 305.70 100.0 110.00 100.0

Total Financing Required 305.70 100.0 110.00 100.0

2. Key policy and institutional reforms supported by the project:

As mentioned above, the countries and the Bank are focusing on creating an enabling environment forprivate sector development. This project would not specifically address outstanding policy or institutionalissues. Rather, it would build upon the results that have already been achieved on the policy side and speedup the benefits that ongoing liberalization can bring to the region by protecting the private sector againstpolicy reversals while countries build a track record of policy continuity. In addition, the project wouldstimulate good governance because of the fact that government interference in insured commercialtransactions would come at a cost for the country, i.e. if a government causes a claim, it has to pay theclaim, and it risks suspension from the facility.

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3. Benefits and target population:

The principal medium-term benefit of the project will be poverty alleviation through sustainable, privatesector-led growth. Private sector-led growth will foster increased employment and production which willresult in poverty reduction. The project will also foster increased exports and the generation of foreignexchange.

The project will address a major impediment to economic growth in participating countries, i.e. the lack offinancing for viable productive activity and cross-border trade. It will facilitate the creation of sustainablecross-border business links, which, over time, will reduce dependence on aid and lead to an improved imageof the region as a place to do business.

The project will facilitate intra-African trade and enhance ongoing regional integration efforts. It will bringtogether a significant block of countries and eliminate political barriers to trade among participatingcountries as enterprises will have access to political risk insurance when trading with partners in anotherparticipating country. This feature will encourage other African countries to join the project as insuranceagainst political risks in African countries will only be available if the country is participating in theproject. Covered risks will include transit risk for goods being transported through participating countries,thereby facilitating trade to and from land-locked countries. The inclusion of transit risk will make regionaltransport corridors for trade more reliable.

The project will have major spin-offs through its partnership with private risk insurers and by facilitatingthe availability of comprehensive cover (political and conmmercial risk insurance). First, the capacity tocover political risks will be increased through a leveraging arrangement between the implementing agencyand a syndicate of private risk insurers. This will not only allow the project to cover larger volumes oftrade, but will also allow syndicate members to become more familiar and comfortable with taking risk inparticipating countries. Second, having a reliable mechanism to cover political risk, which is harder toevaluate and mitigate than commercial risk for the private market, will allow the private market to takecommercial risk in these countries. The insurance broker that is assisting the project team design theinsurance facility has put forward a proposal to attract a large international credit insurer to the region, thatwould enter into a joint venture agreement with a local partner(s). Based on this proposal, ATI is about tosign a Memorandum of Understanding on a strategic partnership with one of the largest credit insurancecompanies in the world. The credit insurer would provide comprehensive cover and could reinsure itspolitical risk under the project. Making comprehensive cover available for trade in the region will amplifyand solidify the project benefits listed above.

The main target population of the project would be commercial firms in participating countries involved intrade, and the population benefiting from increased employment and production.

4. Institutional and implementation arrangements:

The institutional set-up of the project is critical to its success as the insurance mechanism must be crediblein the eyes of potential policy holders. The implementing agency must be credible in the eyes of the market,and must protect the interests of all participating countries.

After exploring different alternatives for the implementing agency's legal set-up, participating countries,COMESA and the Bank decided that creating a multilateral institution was the best way to ensure that theagency implementing the RTFP would be: (i) highly credible, both from a perspective of legal structure and

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in the sense of being free from historical or political baggage; (ii) an agency of the highest professionalstandards, which would be dedicated solely to the important task of implementing the RTFP, a novelfacility for the region; and (iii) open to participation by all African countries, without creating sensitivitiesbetween the various regional and sub-regional organizations in the region. Therefore, to implement theproject, participating countries have created a multilateral agency, the African Trade Insurance Agency(ATI). At the COMESA Summit of Heads of State and Government on May 18, 2000, the AgreementEstablishing the African Trade Insurance Agency was adopted by the Heads of State and recommended forsignature. Burundi, Kenya, and Uganda signed the agreement at the Summit, and Malawi, Rwanda andZambia have signed since then. In addition, these six countries have ratified the agreement and paid theirinitial capital contribution to ATI, thus becoming ATI's founding members. Consequently, the AgreementEstablishing ATI came into effect on January 20, 2001 and ATI's General Assembly held its first meetingin Nairobi, Kenya on February 19 and 20, 2001. The Secretary General of the Organization of AfricanUnity (OAU) is the depositary of the Agreement Establishing ATI, and has delegated his responsibility asdepositary to the Secretary General of COMESA. ATI's Board of Directors, which will hold its firstmeeting on March 26 and 27, 2001, will always have 50 percent private sector representation. ATI isautonomous and enjoys administrative and financial independence (See Annex 2 for more details on ATI'sstructure and operations).

ATI would manage the facility according to a detailed Operations Manual which spells out the criteria fordetermining the eligibility of applications, the form of insurance contracts, and the procedures for issuinginsurance policies. The Operations Manual was agreed at negotiations between the respectivegovemments, IDA, and the private insurers, and cannot be altered without the approval of ATI's Board ofDirectors, IDA, and the insurers. It will play an important role in building the credibility of ATI. It will beavailable to the public, and particularly potential policy holders, to demonstrate that the rules governing thefacility are fair and transparent.

There are a number of insurance structures that ATI will be able to use in order to provide political riskinsurance to risk takers whether they be a supplier, financial institution or other party financing, insuring orguaranteeing an eligible transaction. Under all structures, eligible transactions would include exports fromone participating country to another; exports from a participating country to a third country; and imports ofgoods or capital from anywhere to a participating country as long as the import is related to a productiveactivity. The insurance would cover a range of political risks, including traditional political risks: war andcivil disturbance, currency inconvertibility, inability to transfer currency, expropriation, and governmentinterference in covered transactions such as arbitrary removal of import/export licenses, seizure of goods(please go to Annex 2 for a detailed description of these risks).

The preferable and most likely structure will involve a syndicate of private risk insurers with whom ATIhas agreed in principle on a partnership agreement to leverage the IDA funds allocated to the project. It ispossible that the private insurers may not be willing to take risk in some of the countries that willparticipate in the project. This could be the case in countries where there is still a high risk of civildisturbance, In such cases, ATI would use a non-leveraged structure that would nevertheless involve theinsurers participation to issue policies on a fully cash-backed basis. A third structure has been envisagedthat would allow for risk sharing among participating countries, but this structure would not be used untilthe facility had been functioning smoothly for some time, and unless participating countries agreed thatrisk-sharing was necessary and desirable in order to expand the facility's capacity and enhance regionalcooperation.

IDA would extend a credit to each country participating in the RTFP. The size of the IDA credit woulddepend on the expected demand for insurance in and the size of the economy of each country. The IDA

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credit would serve as financial back-up to each insurance policy. It is important to note that the IDA fundscontributed by a participating country remain in the ownership of that country and the Agency's role isconfined to administering these funds according to agreed criteria. Thus, unless a participating countryagrees to join the Callable Funds Facility (see below), the IDA funds contributed by one country are at riskonly for political risk in with that country.

A. Leveraged Structure

Under a leveraged structure ATI works in cooperation with a syndicate of private risk insurers to issueinsurance policies. The insurance policies are issued either directly by the syndicate of insurers, or by ATIin the name of the private risk insurers. Each country participating in the project would place the IDA [anddonor] funds allocated to it for the project in a separate trust account and the funds could be withdrawnfrom this account only to pay valid claims, and only by the private insurers. A country's funds, as well asthe leverage ratio for that country, as agreed with the syndicate, would determine the maximum amount ofinsurance available to cover transactions involving that country (both import and export transactions). Forexample, if a country received a US$10 million IDA credit and an equivalent amount in donor funds, andthe leverage ratio agreed with the syndicate was 3 to 1, a maximum of US$60 million in insurance policiescould be issued (US$20 million times 3). Leverage ratios may vary among participating countriesdepending on the outcome of negotiations with the syndicate. Having a comparatively lower leverage ratiomay be a way of including a higher risk country (e.g. a country with a high risk of civil disturbance) in theleveraged structure.

The funds in trust would earn interest, which would be used to defray the cost of operating the facility andto build up reserves.

The risk sharing mechanism between ATI, the countries and the syndicate would be as follows: Claimswould be paid out of the trust account until the funds in the account were exhausted at which point thesyndicate would be liable for additional claims. It should be stressed that it is not expected that claimswould reach a level where a country's funds would be completely used to pay claims unless a disasterscenario (such as a full-fledged civil war) occurred. In addition, for claims occurring as a result ofgovernment actions, i.e. all covered risks other than war and civil disturbance, the Bank's CreditAgreement with the country would require the government to replenish the trust account. This requirementstrengthens the disincentive for the government to cause claims.

An insurance brokerage firm was selected by COMESA and the founding members of ATI during projectpreparation, which assisted the project team design the insurance facility, negotiate a risk-sharingagreement with private risk insurers and develop the detailed implementation arrangements. At this stage inthe negotiations with private insurers, it is expected that leveraging will be possible in all participatingcountries. Tentative leverage ratios by country are: Burundi - 2; Kenya - 3; Malawi - 4; Rwanda - 2;Tanzania - 4; Uganda - 4; Zambia - 3. See Annex 2 for a more detailed description of the leveragedstructure, including premium sharing arrangements between the countries, ATI and the private insurers,allocation of responsibilities among ATI, its broker, and the private insurers, claims resolutionmechanisms, etc.

B. Non-leveraged Structure

The non-leveraged structure would be used for political risk cover in countries where the private insurancemarket is no longer willing to take risk and leverage the IDA funds.

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The same structure as under a leveraged structure would be used except that the policies issued, either bythe syndicate, or by ATI in the name of the private insurers, would always be fully cash-backed by thefunds in the trust account.

Similarly to a leveraged structure, the government would have to replenish the trust account in case of aclaim payment resulting from a risk other than war or civil disturbance.

D. Project Rationale

1. Project alternatives considered and reasons for rejection:

A) Regional Facility vs. Independent Country FacilitiesThe project team considered creating independent insurance facilities in individual countries such as thosecurrently operating in Bosnia and Herzegovina and Albania, rather than a regional facility with a commonagency. This alternative was rejected for a number of reasons explained below.

Improving Africa 's reputationIndividual country facilities would not be effective in sending a clear message to the private sector thatmost African countries are now liberalizing their policies and regulatory environment to promote privatesector development and foster trade and investment both within the region and with the rest of the world.The fact that a number of countries are willing to join forces to improve access to financing for productiveactivity makes a strong statement regarding the governments' commitment to reforrn. A piecemealapproach with facilities opening up in different countries at different times could not create the same levelof awareness among private sector players. As a result, a regional agency could significantly reduce thelegacy of the past regarding the perception of Africa as too risky a place to do business. It would lower thelevel of risk in a meaningful group of countries in Africa in one go, making it worthwhile for foreignenterprises and banks to explore business opportunities in the region. This element should be stronglyreinforced by an aggressive marketing campaign aimed at improving Africa's reputation as a place to dobusiness. Such a campaign would not have credibility other than at the regional level.

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Economies of ScaleA country-by-country approach would not enable economies of scale in terms of operating costs as eachcountry would have to set up its own agency. Combining resources to create a regional agency will moveATI one step further from the governments which control most of the risks which are covered, and will thusenhance the credibility of ATI with the private sector. In addition, feasibility studies for severalcountry-based export credit agencies have shown that, with few exceptions, the necessary underwritingskills required for covering export to third countries could not be maintained in a single country scheme inSub Saharan Africa without heavy subsidies necessary because of insufficient economies of scale.

Peer Pressure to maintain good policiesA regional facility would create incentives for participating countries to take measures before claims weremade if they deemed that one country's policies were going off-track. Governments would use theirinfluence in the "stray" country to convince that country to maintain its commitment of non-intervention inprivate sector transactions. A regional facility thus has the ability to mitigate risks, a characteristic whichis lost in a country-by-country approach.

B) IDA's roleThe project team also considered whether there would be agencies other than IDA which would be betterplaced to support this project.

First, within the World Bank Group, the project is designed to be fully complementary to MultilateralInvestment Guarantee Agency (MIGA) coverage by providing cover only for those short- and medium-termtrade transactions that MIGA cannot support according to its convention. The project was prepared inclose cooperation with MIGA as demonstrated by the secondment of a MIGA staff member to theCOMESA project team during project preparation.

The fact that IDA's clients are the governments of participating countries enables the project to crediblymitigate the risks being covered, as governments causing risks would suffer a financial loss if claims werepaid using IDA credit funds placed on trust. IDA has an ongoing policy dialogue with these governmentsand can discuss potential government performance risks through this dialogue. IFC does not have thisdirect relationship with the governments which is vital for the risk-mitigating feature of project.

Outside the World Bank Group, consultations with both the private sector and official agencies revealedthat there is no other agency which has both the capacity and the mandate to move into this area as leaderand trigger others to follow. These consultations also allowed the project design to allow for as muchcooperation as possible with private sector providers of similar insurance products (see "Institutional andimplementation arrangements" above, "Sustainability" below, and Annex 2). Regional institutions, exportcredit agencies and the private insurance market are convinced that the proposed mechanism for the RTFP--an IDA-enhanced Government commitment-- is the strongest possible mechanism to address the riskperception associated with Africa as a region (see also the discussion of the value added of Bank support inD5), so much so that they have indicated a strong interest to work with the facility with the objective ofexpanding its capacity.

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2. Major related projects financed by the Bank and/or other development agencies (completed,ongoing and planned).Not applicable

Implementation Development

Bank-financed Progress (P) Objectie (DO)

Other development agencies

IPIDO Ratings: HS (Highly Satisfactory), S (Satisfactory), U (Unsatisfactory), HU (Highly Unsatisfactory)

3. Lessons learned and reflected in the project design:

The proposed project design incorporates lessons learned from projects which established political riskguarantee/insurance facilities (PGFs) in the Europe and Central Asia Region (ECA). Three PGFs havebeen implemented so far, in Moldova, Bosnia and Herzegovina, and Albania. The main lesson leamedfrom preparing and supervising these projects is to root project preparation firmly in a demand survey ofthe target market, obtain clear indications of demand, and build on the survey's results and subsequentcontacts with the private sector to develop a strong database of prospective clients for the facility. Inaddition, experience with the Bosnia facility shows that the PGF concept has tremendous scope forattracting other risk takers, especially private political risk and credit insurers.

The proposed leveraging mechanism with private insurers has been used in a single country scheme inBosnia and Herzegovina under the World Bank-financed Emergency Industrial Re-Start Project. A keyfeature of this mechanism is that it achieves an efficient risk distribution by allocating most of the risk tothe party that has the strongest ability to mitigate the risk, in this case the governments of participatingcountries. In Bosnia and Herzegovina, this mechanism has demonstrated its effectiveness in attracting theprivate market in a country where it was either off-cover or offering patchy cover.

Lessons have been learned in Africa from previous efforts aimed at increasing capital flows by offeringpolitical risk cover. Entities which have the authority to provide political risk insurance in the regionalready exist, such as PTA Bank and Afreximbank. However, their mainstream business is not theassumption of pure political risk, but rather acting as a lending institution, and they have in fact indicatedthat, in some situations, they would like to reinsure their political risk with ATI.

Previous experience thus indicates that, for a political risk insurance scheme to be successful, it needs notonly to protect risk-takers, but also to involve players which have the ability to mitigate the risks which itcovers.

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4. Indications of borrower commitment and ownership:

The RTFP results from an initiative taken by COMESA in the context of the reconsideration of the role ofthe COMESA Clearing House. As a result, a group of countries --Burundi, Kenya, Malawi, Rwanda,Tanzania, Uganda, and Zambia-- approached the Bank to request support for the creation of the proposedfacility. These countries understand that their participation would make them the ultimate risk takers in thescheme and accept this concept. The commitment of these countries is strongly corroborated by the factthat they have formed Technical Advisory Committees (TAC) - which include both public and privatesector participants - for the preparation of the project. These TACs have participated in five TechnicalAdvisory Group (TAG) meetings to discuss key aspects of project design, including the agreement toestablish a regional multilateral agency, the facility's Operations Manual, the results of the demand survey,proposed arbitration and claims resolution mechanisms, etc. In addition, Project Preparation Facilities(PPFs) have been approved for all participating countries. Prior to adding the proposed credits to thelending program for each of the countries, this decision was reviewed with the respective borrowers and therelevant country teams. The commitment described directly above, as well as the relevance of the project'sdevelopment objectives in view of the CAS goals for these countries were the main criteria used in decidingto proceed.

The COMESA Heads of State and Government adopted the Agreement Establishing the African TradeInsurance Agency at the COMESA Summit of Heads of State and Government on May 18, 2000, therebytaking a key step in creating ATI. In addition, three countries (Burundi, Kenya and Uganda) signed theAgreement at the Summit, and by January 2001, three more countries had signed (Malawi, Rwanda andZambia). These six countries subsequently ratified the Agreement and paid their initial capitalcontribution to ATI, thus becoming ATI's founding members at the first meeting of ATI's GeneralAssembly on February 19 and 20 in Nairobi, Kenya. The seventh participating country (Tanzania) hasconfirmed its commitment to join ATI and is in the process of completing the procedures required to do so.Technical assistance and institutional support for the creation of ATI was financed by the European Union,the Government of Japan, as well as the World Bank's Institutional Development Fund.

It is anticipated that other African countries will join at a later stage. New participants would be welcomedby the initial group, since their participation would reinforce the effectiveness of the project. In thiscontext, it should be stressed that countries could decide to become members of ATI without requestingIDA support, since ATI is an agency set up by African States. If any countries were to join ATI andrequest IDA support similar to the proposed credits to the first seven countries, such requests would bereviewed within the context of the applicable Country Assistance Strategy and submitted to the Board forseparate consideration.

5. Value added of Bank support in this project:

From discussions with key stakeholders, it appears that effective political risk cover requires a partner suchas the World Bank, that has the ability not only to cover the political risks but also to mitigate these risksby its participation in the scheme. If a government takes action that could result in a claim, the Bank canuse its ongoing policy dialogue with the government to convince the government to fix the problem beforean actual claim is filed. The Bank's participation in the scheme also adds credibility to the ATI: the Bankwould play a key role in establishing procedures and rules for issuing insurance, and it would superviseATI's operations, thus ensuring transparency and consistency.

IDA's participation will be particularly valuable as IDA funds will be leveraged thanks to: (i) theparticipation of the private political risk insurance market which will increase its business in the regionthanks to this project; and (ii) the revolving nature of the facility which allows funds to support several

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rounds of transactions. Discussions with the private insurance market and export credit agencies haveconfirmed that they would not perceive this project as competing with their business, but rather as a facilitythat could increase their involvement in Southern and Eastern Africa because of the Bank's risk mitigatingability explained above.

E. Summary Project Analysis (Detailed assessments are in the project file, see Annex 8)

1. Economic (see Annex 4):O Cost benefit NPV=US$ million; ERR = % (see Annex 4)o Cost effectiveness* Other (specify)Since the insurance facility would not cover commercial risks, the sale of insurance covering alltransactions, other than those involving exports to a non-participating country, would be demand-driven,i.e. they would be granted on a first-come first-serve basis so long as applicants complied with the generaleligibility criteria on matters such as the environment, and the market would select the transactions to beinsured. No further economic analysis would be required for these transactions.

Where the political risk being assumed is not in a participating country, i.e. for transactions involvingexports to a non-participating country, a more traditional approach to the assumption of political risk byATI would be required in order to protect the capital and reserves of participating countries. This wouldentail setting country limits and an element of "underwriting" or risk assessment which requires specializedskills and training. ATI would receive technical assistance in the early stages of its development to helpstaff acquire and develop these skills as quickly as possible and the facility's Operations Manual woulddescribe the risk assessment methodology to be applied by ATI when covering export transactions.

2. Financial (see Annex 4 and Annex 5):NPV=US$ million; FRR = % (see Annex 4)(1) Operating Expenses of ATI

Fixed costs of ATI will consist of salary payments to the managing director and the staff, includingunderwriting, finance and administration, legal, marketing, economics and accounting personnel, andsupport staff. There will also be rental expenses for office space and office maintenance costs. Capitalexpenses are limited to motor vehicles, computers, and other office equipment. Variable costs will consistprincipally of brokers' fees and other fees related to the risk sharing arrangements with private insurers thatATI may enter into.

(2) Income of ATU

It is proposed that ATI's start-up operating expenses during its two first years of operation be financed byIDA as part of this project. A technical assistance component is included and involves an IDA credit toATI. This arrangement will allow ATI a comfortable period to get organized and establish itself as anindependent, self-financing agency. ATI's income would come from premium income charged to policyholders, which after the initial period should be enough to cover operating expenses. A matrix of rates forinsurance will be developed and included in the Operations Manual, which will take account of the tenor ofthe insurance policy, the type of transaction, and the presence of a local bank guarantee of the obligationcovered by the political risk insurance. Any income in excess of operating expenses would be available tobuild up reserves and for additional insurance capacity. Interest on funds lodged in the trust account andinterest thereon will be available for ATI's expenses, if needed, and to build up reserves and additionalcapacity.

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(3) Financial controls

The participating countries authorize the syndicate of insurers to draw IDA credit funds to pay validclaims. Interest income on funds lodged in trust can be withdrawn for ATI's operational expenses, but onlywith IDA's approval. Fees from issuing insurance policies are available at any time for operationalexpenses.

(4) Stop-loss provision

hn order to limit the potential for large losses due to claims, IDA will have the right to suspend issuance ofnew insurance policies in a country where a claim occurs, where there would be a serious reversal ofpolicies affecting the covered risks, or where war or civil disturbance breaks out. This will not preventclaims under policies already issued, but it would stop ATI from "insuring a burning house." Because asuspension could result in the Government not having access to the funds remaining in trust uponexpiration of the facility, this suspension right will create a strong disincentive for the Government to causeclaims. (Please see Annex 2 for a more detailed discussion on this issue.)

Fiscal Impact:

In the initial stages of the project, apart from the obligation to service the IDA credit, and the payment ofthe initial capital contribution to ATI, there are no implications for the participating countries' budgets.Except for the start-up period, ATI's operating expenses will be covered by income from issuing insurancepolicies and interest on IDA and donor funds. However, as a consequence of their obligation to reimbursethe trust account in case of a claim caused by a government performance risk, countries would take acontingent liability equal to their participation in the facility. It is important to note that this contingentliability is an essential element in the incentive structure created by the project, as it constitutes a deterrentto government actions which might cause claims.

3. Technical:The function of ATI is to provide insurance against what are generically known as "political risks." Theserisks would be specified in a insurance policy contract, using definitions that are well-established in themarket. These risks would include the following:

- inability to convert local currency;- inablity to transfer local currency;- expropriation or imposition of a moratorium by the Government of the debtor country on the right of a

policy holder to receive payment from a debtor;- interference by the Government of a debtor country in the operations of a debtor causing the debtor to

default in performance of its financial obligation to a policy holder;- seizure by the government of a debtor country of goods;- imposition by the government of a debtor country of import or export bans on goods;- retro-active or discriminatory imposition by the government of a debtor country of new or increased

import or export taxes on goods;- war;- civil commotion;- embargo;

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Diversion of voyage as a consequence of any of these risks, as well as the same risks occurringNvhile goods are in transit in a participating country, will also be covered. A more detaileddescription of the covered risks can be found in Annex 2.

4. Institutional:The quality and transparency of the management of the project by ATI will be crucial for thecredibilitv of the facility. This is addressed by a detailed Operations Manual, which leaves verylittle discretioniary decision-making power vithi ATI's staff. Exceptions to the rules set forth inthe Operations Manual will require the consent of both ATI's Board and IDA. These measures,together with the financial credibility provided by the involvement of a syndicate of insurers,have proven to add up to an instrument with strong credibility in the market place other countries,such as Bosnia and Herzegovina where there is a Bank-finaniced project.

4.1 Executing agencies:

ATI's staff will be selected only on professional experience and merit. The selection of ATI'sManaging Director is being carried out by a Selection Committee, which is comprised of theCOMESA Secretary General in his capacity of Interim Managing Director of ATI, the Chairmanof ATI's Board of Directors, a World Bank representative, and a private sector member of ATI'sBoard of Directors. Once selected, the Managing Director will submit his/her choice ofcandidates for ATI's two managers, responsible for Finance and Administration andUnderwriting/Operations respectively, as well as ATI's Chief Counsel. to the Board of Directorsfor approval.

4.2 Project management:

To ensure quality project management from the start, insuranice policies issued by ATI will besubject to prior reviewv bv IDA until sufficient experience in applying the Operations Manual hasbecen built up. Finally, to give policy holders comfort even in a worst case scenario, the insurancecontracts will be subject to arbitration outside the region and subject to English law.

4.3 Procurement issues:

The project will involve a limited amount of procurement of goods and services from IDA funds,under the technical assistance component. ATI wvill purchase office and information technologyequipmenit, vehicles, and consulting services with this credit. See aunex 6 for more details.

4.4 Finaincial management issues:

ATI has hired an Administrationi and Finance Manager to whiom ATI's accountant will report.The accountanut's main responsibilities will include:

* Maintaining a reliable, transparent and effective accounting system;* Producing quarterly and year-end accounts, in conformity with International Accounting

Standards;* Preparing an ainual report for public distribution;. Preparing Project Management Reports (PMRs) on a quarterly basis and submitting them to

IDA;* Managing cash and investments for the Agency (treasury function);* Helping to produce agency-wide budgets;* Helping the member countries manage the financial accotnting side of the IDA credits, and

maintaining records of the IDA loans'situation in each of the borrowing countries.

18

ATI is establishing a sound Financial Management System (FMS) which will facilitate theproduction of accurate financial reports for the Borrowers, the World Bank and ATI on a regularbasis. A detailed financial managemenit manual has been prepared and is part of the Operationsmanual whicih was agreed upon at negotiations. An action plan for implementing the FMS wasalso agreed uponi (see Annex 6). The financial management manual was formally adopted byATI's General Assembly at its first meeting.

The FMS inclutdes the planniing, internal controls, accounting, financial reporting and auditarrangements relatinig to the project and will be maintained by ATI. Periodic ProjectManagement Reports (PMR) will be used as the basis for financial reporting to IDA and willcover the use of IDA funds for the sevcn country credits as well as the credit to ATI.

5. Environmental: Environmental Category: F (Financial IntermediaryAssessment)5.1 Summarize the steps undertaken for environmental assessment and EMP preparation(including consultation and disclosure) and the significant issues and their treatment emergingfrom this analysis.

The sub-projects being supported by the project are demand driven and therefore are not yetknowvn. Therefore the environmental category of the project is "Financial Intermediary" (FI).The facility's Operations Manuial takes this into accounit and allows for different standards toapply for projects of different enviroinmental risk categories (low, intermediate and high risk).As an Fl project. the Operational Manual clearly articulates that, before approving a sub-project. ATI mutst verify tlhroughl its oWvn staff, outside experts, or existing environmentalinstitutions, that the sub-project meets the environmental requirements of appropriate nationalguidelines and procedures, and is consistent with OP/BP/GP/4. 10 and other applicableenvironmental safe guard policies of the Bank.

The project's environmental guidclines reflect the fact that the political risk insurance that willbe made available under the project will cover mostly short-term trade transactions, and thatquick responses to applicants will be key to thle success of the project. Therefore theenvironmental screening procedures are as streamlined as possible, particularly when theprojects are expected to have minimal environmental impact.

The Operations Mantual includes stanudard guidelinies and procedures for all participatingcountries and provides detailed guidance for ATI's staff. The manual includes standardenvironmental screening categories, descriptions of the types of projects that would fall undereach category, and environmental screening forms to be filled out by applicants and ATI. Thispart of the Operations Manual is available to the public, including in the World Bank InfoShop.

The manual clearly establislhes the steps that are to be taken by applicants when applying forpolitical risk insuranice regarding the provision of environmental information on the project,and explains the applicants' responsibility to provide truthful and accurate information in theirapplication(s) (at the risk of being denied coverage if untruthful information is found to havebeen provided). It also describes how ATI will assess the potential environmental impact of,anid environmenitally screen projects applying for insurance using the information provided bythe applicant.

In addition, the manual containis up-to-date information on national environmental laws,regulations and policies. specifies national requirements and circumstances, and includes aninterim policy framework based oni World Bank standards for countries where nationalrequirements are not acceptable. It also lists the ministries/agencies with which ATI will need

19

to communicate to obtain inforimiation on the projects/companies applying for political riskinsurance (status of their licenses to operate, etc.), and contains a list of banned import goods.

5.2 What are the main features of the EMP and are they adequatc? N/A

53 For Category A and B projects. timeline and status of EA:Date of receipt of final draft:

N/A

5.4 How have stakeholders been consulted at the stage of (a) environmental screening and (b)draft EA report on the environmental impacts and proposed environment management plan?Describe mechanisms of consultation that were used and whiich groups were consulted?

N/A

5.5 What mechanisms have been established to monitor and evaluate the impact of the project onthe environmenti? Do the indicators reflect the objectives and results of the EMP?

N/A

6. Social:6.1 Summarize key social issues relevant to the project objectives, and specify the project's socialdevelopment outcomiies.

6.2 Participatory Approach: How are kcy stakeholders participating in the project?

The primavry beneficiaries of the project are (i) enterprises in the region that will receive inputs,capital goods and working capital to engage in productive activity and produce goods forexport. and local banks, who will be in a position to expand their business with foreign banks;and (ii) the population of participating countries that will benefit from the economic growth,job creation. and as a consequence, poverty reduction, resulting from project implementation.

To ensure that the interests of these groups were thoroughily taken into account during projectdesigin and preparation, each prospective participating couitry formed a TAC whichcomprises both public sector, private sector, and financial sector membership. The TACs havebeen constilted in a serics of workshiops in each country, and during five Technical AdvisoryGroup meetings. The input from the TACs ranged from couitry specific comments (e.g. theBumrndi embargo) to various detailed technicat suggestions to improve the project design. TheTACs provided important input on the creation ATI, its legal status, the selection andqualifications of its managing director, and its organizational set-up.

In addition, the TACs conducted demand surveys of local enterprises to obtain feedback froma wider group of beneficiaries than those represented in the TACs. The analysis of responsesfrom enterprises from Kenya, Malawi, Tanzania and Zambia shows that (i) covering importsinlto the region will initially be the main focus of the facility as enterprises in the regiongenieralIy import significantly more than they export, this finding confonrs with establishedpattems of economic growth and development where companies must first import capitalgoods and inputs for production before being able to develop their export markets; (ii)companies often import capital goods and raw materials from outside the region and export tobuyers in the region, (iii) political risk is a barrier to increased intra-regional trade which theproject will address: and (iv) combiniing political risk insurance with commercial riskinsurance will significantl ernhance the project's impact on intra-regional trade as credit/non-pavlilent risk is a major concern for exporters in the region selling to neighboring countries.

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A regional survey of commercial banks finanicing trade transactions in participating countrieswas also conducted by the project team in cooperation with the COMESA Bankers'Association, The restults of this survey corroborate the results of the foreign bank survey, andslhow that political risk is a key impediment to increased trade witlhin Sub-Saharan Africa, andbetween the participating countries anid non-African countries. The results further confirn theadditional benefits of introdtucing comprehensive credit insurance to the region, so as to makeavailable commercial risk insurance as well as political risk insuranice. All but one respondentout of fifteen stated that foreign banks would offer better financing terms for imports if theyhad access to the proposed political risk facility. All but two respondents believe that they willoffer better temis to their exporting clients if they have access to political risk insurance.

The TACs feedback received during these discussiois, and the results of the surveys have beenr eflected in the design of the project.

6.3 How does the projcct involve consultations or collaboration with NGOs or otlher civil societyorganizations?

The other key stakeholders are the suppliers of goods and/or credit outside Africa, which couldbc exporting enterpriscs or financial institutions, and the private political risk insurers andofficial export credit agencies active in Africa. Tlhese stakeholders were consulted throughoutproject preparation by way of individual meetinigs (in case of the export credit agencies withthe Berne Union and directly wvith Afrexim Bank), and by sending theml a discussion paper forcommllents. Many helpful comments wvere received, providing important technical input andgcnerally giving strong support for the proposed project design.

Consultations with the Bernie Union have led to a proposal from the Bemne Union that ATIobtain observer status in meetings for nascent export credit agencies organized by the BerneUlnion as soon as ATI is legally in existence and hias senior staff, pending furtlher considerationof its status.

Fuirthermore a survev of interniationial banks was conducted, to (i) establish whether therewoould be demand for insurance against political risk from such banks, and (ii) get feedback onthe facilitv's design to better adapt it to the need of the international financial sector. Theresults of the survev confirmed that foreign banks Nvill use the facility. The survey's mainfindinigs include: (i) there is ample demanid for the proposed facility, particularly from currenttraditional lenders to the target market. Of the 72 institutions surveyed, 32 responded, which isan exceptionally hlighi response rate of 44 percent; (ii) the current market of the respondentsclosely matches the proposed market for the facility; (iii) political risk was cited as the risktype most likely to result in banks reducing business in or withdrawing from the target market;and (iv) the marketing of the facility Nvill be key to its success, as will be the operationalstructure of the insurance policy. Furtlher consultationis with respondents after the completionof the survev have demonstrated the strong interest international banks have in the project, andthe project's relevajice in attracting trade finanicing to the region.

Feedback from surveyed banks will assist ATI market the facility to foreigii banks alnd address theirspecific conicerns. Thie firsi imarkelinig event geared towards thlese baniks will be a road-show to visitintcniational banks that have expressed iitcrest in the facility sooin after the appointmenit of ATI'smanaging director.

6.4 Wlhat institutional arrangements have beeii provided to ensure the project achieves its socialdevelopment outcomes'?

N/A

6..5 How wvill the project monitor performance in terms of social developmiienit outcomes?N/A

21

7. Safeguard Policies:7 1 Do anv of the following safeguard policies apply to the project'?

Policy ApplicabilityEnvironmental Assessment (OP 4.01, BP 4.01, GP 4.01) NoNatural habitats (OP 4.04, BP 4.04, GP 4.04) NoForestry (OP 4.36, GP 4.36) NoPest Management (OP 4.09) NoCultural Property (OPN 11.03) NoIndigenous Peoples (OD 4.20) NoInvoluntary Resettlement (OD 4.30) NoSafety of Dams (OP 4.37, BP 4.37) NoProjects in International Waters (OP 7.50, BP 7.50, GP 7.50) NoProjects in Disputed Areas (OP 7.60, BP 7.60, GP 7.60) No

7.2 Describe provisions made by the project to ensure compliance with applicable safeguardpolicies.

Not applicable

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F. Sustainability and Risks

1. Sustainability:

The project aims directly at allowing the private sector to build business links on a fully commercial basis.If the underlying transactions are successful, this will help build a viable private sector which is notdependent on official assistance or special programs. The fact that the project will be based on marketselection will ensure that the result is fully sustainable.

The participation of the private political risk insurance market under the leveraged structure will greatlyenhance the sustainability of the project. In the better performing countries, it is expected that, after thefacility is closed, the private market will take over ATI's role. In these countries, there will have been atrack record built up over the life of the project of acceptable levels of political risk to allow business toproceed without the support of the project.

Discussions with private insurers indicate that the RTFP and the private market's involvement in thepolitical risk insurance facility will lead to their involvement in covering commercial risk in the region. Thebroker hired by COMESA and the founding member states has put forward a proposal to make availablecommercial risk insurance for trade transaction in parallel with the project's political risk insurance. Itwould involve a commercial arrangement with a major international insurer specializing in trade creditinsurance. To enter the Southem and Eastern Africa market, the insurer would most likely create a jointventure with a local partner(s), such as a local insurance company or commercial bank. ATI and the jointventure could then enter into a reinsurance agreement whereby the joint venture/trade credit insurancecompany would issue comprehensive (political and commercial risk) policies and ATI would reinsure thejoint venture against political risks. ATI is about to sign a Memorandum of Understanding on thedevelopment of such a joint venture with one of the largest credit insurance companies in the world. Theexperience with private insurers in Bosnia and Herzegovina has demonstrated that (i) the market is used to,and more likely to purchase, comprehensive cover rather than political risk-only cover and (ii) when privateinsurers are involved in and aware of the Bank-financed political risk insurance facility, they are willing toexplore opportunities to cover commercial risks as well. The creation of a commercially based trade creditinsurer in the region would strongly contribute to the sustainability as well as the development impact ofthe RTFP.

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2. Critical Risks (reflecting the failure of critical assumptions found in the fourth column of Annex 1):

Risk Risk Rating Risk Mitigation MeasureFrom Outputs to ObjectiveLow credibility of ATI as a new S New multilateral agency, endorsed by allinstitution participating countries;

Partnership with a syndicate of private riskinsurers;Expert technical assistance;Operations Manual with as little discretionaryauthority as possible;Complete transparency of all procedures;Election of key personnel on merit.

From Components to OutputsSecurity Risks (renewed war/civil S IDA will have the nght to suspend the issuancedisturbance in some participating of new insurance policies in countries that arecountries) experiencing (or are expected to experience)

political turmoil.Low demand M Demand surveys conducted both inside and

outside the region which confirmed demand andprovided input for project design;Ongoing marketing campaign before and duringimplementation;Feedback loops from the market duringimplementation to modify project design whenwarranted by changing needs and circumstances.Availability of comprehensive risk cover from aprivate credit insurer.

Slowing down or backtracking in policy M IDA's ongoing policy dialogue with theand institutional reforms governments.Slow-down or breakdown in regional M IDA's ongoing policy dialogue with thecooperation governments.High level of claims M Financial incentives to stimulate responsible

behavior of participating countries;Bank's ongoing policy dialogue with thegovernments;"Notice of potential loss" process which allowsto avoid potential claims by involving high leve.igovernment officials.

Overall Risk Rating 5Risk Rating - H (High Risk), S (Substantial Risk), M (Modest Risk), N(Negligible or Low Risk)

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3. Possible Controversial Aspects:

N.A.

G. Main Loan Conditions

1. Effectiveness Condition

For a participating country's IDA credit to become effective, the country must (i) sign and ratify the AgreementEstablishing ATI, (ii) pay its initial capital contribution of US$100,000 to ATI, and (iii) sign the ParticipationAgreement with ATI, and ATI must establish a Security Trust Account and Income Account for that country.

In addition for Kenya, the capital city of which has been selected by the General Assembly of ATI as ATI'spermanent headquarter seat, the signature and ratification of a Headquarters Agreement with ATI will be aneffectiveness condition.

2. Other [classifyt according to covenant types used in the Legal Agreements.]

N.A.

H. Readiness for Implementation

0 1. a) The engineering design documents for the first year's activities are complete and ready for the startof project implementation.

1 1. b) Not applicable.

0 2. The procurement documents for the first year's activities are complete and ready for the start ofproject implementation.

ER 3. The Project Implementation Plan has been appraised and found to be realistic and of satisfactoryquality.

0 4. The following items are lacking and are discussed under loan conditions (Section G):

1. Compliance with Bank Policies

E 1. This project complies with all applicable Bank policies.O 2. The following exceptions to Bank policies are recommended for approval. The project complies with

all other applicable Bank policies.

Onno Ruhl Demba Ba Yaw AnsuTeam Leader Sector Manager Country Director

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Annex 1: Project Design SummaryAFRICA: Regional Trade Facilitation Project

KyPerformanceI ~ ofOjctvsIndicators Moniitonring & Evaluation Critical Assumptions

Sector-related CAS Goal: Sector Indicators: Sector/ country reports: (from Goal to Bank Mission)

Achieve sustainable and GDP growth: 7 percent Economic data Continued market-orientedbroad-based private (2001-2011) reforms in participatingsector-led growth to reduce countries;poverty Regional integration

initiatives are successful;A reasonable level ofpolitical stability ismaintained in individualcountries and in the regionas a whole.

Project Development Outcome / Impact Project reports: (from Objective to Goal)Objective: Indicators:Improve access to financing 1. Volume of policies issued 1. ATI reports on insurance 1. The lack of access tofor productive transactions per country; activity; political risk insuranceand cross-border trade 2. ATI becomes 2. ATI's financial contrains financing for

self-financing after two statements; productive transactions andcross-border trade in

years of operation; participating countries3. On average, one claim or 3. ATI reports on claims; 2. Demand for political riskless resulting from a insurance is high enough thatgovernment performance ATI's income from sellingrisk per country, per year; insurance will cover its4. ATI enters into a 4. Signing of agreement operating costs and allow ATIleveraging partnership with with private risk insurers. to build reserves;private risk insurers for 3. Governments will notpolitical risk cover. interfere in private sector

transactions arbitrarily, andcause claims;4. Private insurers are willingto cover political risk inparticipating countries, inpartnership with ATI.

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11411ra-' ~yt *4". A2 &t 4 Ev$uation CrItJca AssumptionsOutput from each Output Indicators: Project reports: (from Outputs to Objective)Component:See above

Project Components I Inputs: (budget for each Project reports: (from Components toSub-components: component) Outputs)

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Annex 2: Detailed Project DescriptionAFRICA: Regional Trade Facilitation Project

By Component:

Project Component 1 - US$105.00 million

Political risk insurance facilities:

The Regional Trade Facilitation Project (RTFP) will establish a regional political risk insurance facility(the facility) that will be implemented and managed by a multilateral agency (the African Trade InsuranceAgency, ATI) created for this purpose.

The IDA credits to each participating country would provide capital for the facility. (See section onDevelopment Credit Agreements below.) An additional IDA credit would be extended to finance theoperating costs of ATI for the first two years of operation.

The facility will cover productive activity involving cross-border trade. The project is designed to be fullycomplementary to MIGA coverage by providing cover only for those short- and medium-term tradetransactions that MIGA cannot support according to its convention. Both imports into and exports fromparticipating countries will have access to cover. In other to encourage other African countries to join thefacility, exports within Africa will only be covered if the importing country is also participating in theproject.

The project has been designed so that a wide variety of trade transactions and financing structures can becovered under the facility. If applicants need cover for a type of transaction that was not foreseen duringproject preparation, the design is flexible enough to accommodate new types of transactions. Transactionsfor which standard documentation already exists include:

* Sale of goods, usually on credit terns* Letter of credit confirmation* Financial lease* Operational lease* Import/export of capital equipment for use by an insured in carrying on its business* Loans by foreign lenders* Loans by local lenders* Contract/performance bonds* Import/export of goods to stock for sale* Import/export of goods for processing* Services

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Covered Risks

The political/non-commercial risks that the facility will cover include:

Inability to convert and/or transfer currency: This coverage would include protection against the inabilityof a person owing an insured obligation to obtain in the marketplace of the country, and/or transfer out ofthe country, the foreign currency required to discharge that obligation due to the lack of hard currencyavailable in the debtor country. However, this coverage would not grant the policyholder the right toconvert local currency into foreign exchange at a guaranteed future exchange rate.

Imposition of Exchange Controls: This would include coverage for losses arising from the introductionby the government of any restrictions on the conversion of local currency into foreign exchange or thetransfer of foreign exchange out of the country.

Cancellation of Licenses and Restrictions on Import and Export: This would include coverage for lossesarising from the cancellation or non-renewal by the government of an import or export license or theimposition by the government of restrictions on the import into the country of working capital inputs or theexport from the country of outputs which were not previously subject to restriction.

Imposition or Increase of Import or Export Taxes: This would include losses arising from the impositionby the government of new or increased taxes, levies or duties relating to the import or the export of goodsidentified as part of the covered transaction. It would not cover losses as a consequence of the impositionof or increases in general taxes such as VAT and corporate or personal income tax.

Expropriation: This would cover losses caused by expropriation by the government of sums due under aninsured transaction, or of funds held on deposit in the country for payment of such sums, or property orassets of the local enterprise involved in the transaction or interference in the operations or management ofan entity owing an insured obligation, such as to prevent payment of the insured obligation.

Seizure of Goods, Prevention of Sale, or Prevention of Export: This would include losses arising from thetaking and holding of inputs or outputs by the government for reasons other than ensuring public health,safety, welfare and protection of the environment.

Interference with the Carriage of Goods: This would include coverage against interference by thegovernment with carriage or storage of the goods involved in the covered transaction.

War or Civil Disturbance: This would include coverage against losses arising from war or civildisturbance in the country. Other types offorce majeure -- e.g., flood, drought, other natural disasters,war in neighboring transit countries, etc. -- would not be covered.

Embargo: This would include an embargo or any other sanction imposed by a group of countries or by theSecurity Council of the United Nations pursuant to Chapter VII of the Charter of the United Nations.

Diversion of voyage as a consequence of any of these risks, as well as the same risks occurring while goods

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are in transit in a participating country, will also be covered.

The facility does not cover losses arising from the failure of the commercial venture or the default or badfaith by either party.

The operating rules of the facility are set out in a detailed Operations Manual that has been agreed atnegotiations between IDA, all participating countries and ATI. The key features of how the facility will berun follow.

The IDA credit, and donor funds if available, serve as financial back-up to each insurance policy. At leastinitially, each country will have its own IDA credit and donor funds, which would be disbursed intoseparate accounts belonging to that country.

ATI will implement the facility in cooperation with a syndicate of private risk insurers (the insurer), and beassisted by a facility broker. The agreements between ATI, the insurer and the facility broker define howthe facility works.

A. Leveraged and non-leveragedfacilityThe insurance policies are issued either directly by the syndicate of insurers, or by ATI in the name of theprivate risk insurers. Each country participating in the project will place the IDA and donor fundsallocated to it for the project in a separate trust account. The funds can be withdrawn from this accountonly to pay valid claims, and only by the private insurers. A country's funds, as well as the leverage ratiofor that country, as agreed with the syndicate determines the maximum amount of insurance available tocover transactions involving that country (both import and export transactions). For example, if a countryreceives a US$10 million IDA credit and the equivalent amount in donor funds, and the leverage ratioagreed with the syndicate is 3 to 1, a maximum of US$60 million in insurance policies can be issued(US$20 million times 3). In a non-leveraged facility, the leverage ratio is 1, meaning that a US$ 10 millioncredit will allow a maximum of US$ 10 million of policies to be issued.

B. PremiumThe involvement of the insurer and facility broker, and in some cases, a producing broker (a broker whointroduces a client to ATI), has implications for the allocation of premium income from policies. Thefacility broker plays an administrative role whereas the insurer takes risk along with ATI. Once theaggregate value of policies issued covering risk in a given country exceeds the funds placed on trust by thatcountry to back up policies, the insurer becomes potentially liable to pay claims, and the formula to sharethe premium between ATI and the insurer changes to reflect the change in risk allocation.

C. Policy Issuance ProceduresWhen an application is sent to ATI the following steps take place:

(1) ATI reviews the application for completeness using a Checklist and Underwriting Issues that formpart of the Operations Manual;

(2) ATI completes a Non Binding Indication using Issues for Completion of Insurance Offer Letterforming part of the Operations Manual as a guide;

(3) ATI discusses the Non Binding Indication with the applicant and where agreement is reached withthe applicant, amends the Non Binding Application to conform with the agreement;

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(4) ATI's Managing Director, or where necessary, ATI's Board, approve or deny the application;

(5) If approved, ATI prepares and submits a request to IDA for no-objection;

(6) ATI submits the amended Non Binding Application to the facility broker with a request addressedto the insurer to approve the issue of a formal and binding Insurance Offer Letter;

(7) The facility broker submits the Non Binding Indication and request to the insurer who is bound toapprove providing the transaction complies with the terrns of the Operations Manual;

(8) ATI issues the Insurance Offer Letter to the applicant after the facility broker provides advice ofapproval by insurer, and copies the facility broker;

(9) The facility broker enters the details of the policy in the facility spreadsheet. The facilityspreadsheet is a document recording the amounts and dates of liabilities assumed under the facility and theapportionment of premium between ATI, the insurer, the facility broker, and if relevant, the producingbroker;

(10) The applicant accepts the Insurance Offer and pays the premium to facility broker;

(11) The facility broker instructs the insurer to issue the policy (or ATI issues the policy in the name ofthe insurer) and advises ATI of the acceptance of the Insurance Offer Letter and payment of premium.

(12) The facility broker administers the premium distribution to the insurer, ATI, and producing brokerwhere applicable.

An insurance policy comprises a number of documents. Firstly, there is the application form or "proposal"submitted by the applicant. This, together with the Insurance Offer Letter, which attaches GeneralConditions of Insurance comprising the detailed terms and conditions of the arrangement, when accepted bythe applicant, comprise the Insurance Policy. It is an important legal principle that when an insurancepolicy is issued, the insurer relies upon the statements made by the applicant in its application. If theseapplicant's statements are later determined to be untrue and are material to the risks assumed by ATI andthe insurer, there is no liability to pay a claim.

D. Transparency and CredibilityA number of the operating rules defined in the Operations Manual are designed to enhance credibility of thefacility and ensure transparent decision-making and policy issuance. These rules are reinforced in theDevelopment Credit Agreements between the participating countries and IDA and the Project Agreementbetween ATI and IDA. The Operations Manual will be available to the public allowing all applicants toknow the rules to which ATI is bound.

One important rule is the "first come, first served" rule, which states that applications for policies must behandled in the order they are received. This avoids preferential treatment of certain applicants over others.

Another key requirement, at least in the first stages of ATI's life, is the "no objection" rule. A policycannot be issued unless IDA provides its no objection after reviewing the application and supportingdocumentation. This rule ensures that ATI adopts a consistent and objective standard in underwritingapplications for insurance, that only eligible transactions are covered and that all the procedures set out in

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the Operations Manual, including, for example, the environmental screening of projects, have beenfollowed.

ATI's partnership with the insurer and facility broker will increase the credibility of the facility in the eyesof the market, and will provide an additional safeguard for transparency, as the insurer and facility brokerare involved in the underwriting and approval process.

The General Conditions of Insurance provide for claims procedures. An insured must provide the insurerand ATI with notice of the occurrence of an event which causes or is likely to cause loss covered by theguarantee. This is called a Notice of Potential Loss. The insured must then wait 45 days after providingthe Notice of Potential Loss before being able to lodge a formal claim. This cure period gives ATI time toresearch the background and make attempts to rectify the situation. Obviously this would be impossible inthe case of say war or major civil unrest, but where the cause of the loss is a "government performance"risk, being any risk other than war or civil disturbance, ATI should be able to exert some influence toattempt to rectify the government failure which caused the loss, bearing in mind that failure to rectify thesituation would result in a claim becoming payable and loss of the IDA credit or donor funds. A validclaim could result in suspension of the facility and a loss of confidence by investors in doing business in thecountry of the government causing the claim.

In each country, a government official at most senior level will be appointed as "ombudsman" for thefacility. That person will be ATI's contact point in case of a Notice of Potential Loss and will haveinfluence within the government to assist ATI to rectify the situation.

Once the 45 days has expired after delivery of the Notice of Potential Loss, the insured has another 45 dayswithin which to lodge a claim. A strict time limit is imposed to allow ATI to investigate the claim whileevents are still recent or seek any additional information before making a decision as to whether a claim ispayable.

Once a claim is lodged, ATI makes any further investigations it wishes to make to allow it to form anopinion as to whether a claim is payable or not. Within 15 days of receipt of the claim, ATI furnishes areport to the insurer setting out the background, and if applicable details on the efforts undertaken toremedy the situation so as to avoid a claim. The report is delivered to the insurer with a recommendationas to whether a claim is payable.

ATI must act responsibly and advise a claim where, on a balance of probabilities, the circumstances are infavor of an insured event having occurred. Failure to admit a claim promptly in circumstances that indicatean insured risk has occurred, or imposing conditions upon the insured requiring proof of occurrence of acovered event which are too strict or demanding, can quickly lead to a loss of confidence in the integrity ofATI and the countries' intention of providing a favorable environment for investment. The OperationsManual provides assistance as to what evidence is required to make a decision.

The insurer reviews the information contained in the report furnished to it by ATI. If there is agreement topay a claim, the insurer takes loan or donor funds held on deposit and makes payment of the claim. If adispute arises between ATI and the private insurers as to whether a claim is payable, there will be amechanism to allow for an informal expedited arbitration to resolve this dispute.

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The insured has the right to arbitrate in the event that ATI and the insurer agree to deny a claim and theInsured is dissatisfied with that finding. In the event of an arbitration award in favor of the insured, theinsurer uses the funds placed on trust to make payment. In the event that the credit and donor funds areexhausted as a result of prior claims, the insurer uses its own funds to pay the claim.

The arbitration rules that will apply are UNCITRAL rules, which are recognized worldwide. Policyholders will be given the choice of applicable law from several legal systems that have well developedinsurance law. When covering import transactions, English law would be used as the default law. TheHarare Arbitration Centre would be the arbitration venue for disputes arising under policies coveringexports from the region. Policy holders from non-participating countries could select alternative arbitrationvenues, such as the London Court of Intemational Arbitration.

An arbitrator usually awards the costs of the arbitration hearing against the party losing the decision whichcan sometimes amount to a considerable sum of money. This should serve as an important incentive forATI, the insurer, and the insured to agree when a claim is payable.

The African Trade Insurance Agency

ATI and IDA will enter into a Project Agreement which requires ATI to carry out its function with duediligence and efficiency using appropriate administrative and financial practices. ATI is required tomaintain accounts of its financial dealings, have these accounts audited in accordance with appropriateauditing principles, furnish regular reports to IDA of its operations, and participate in reviews andevaluations with IDA of the operations of the project.

ATI's StructureATI is an intemational institution governed by the Agreement Establishing the African Trade InsuranceAgency. ATI has full juridical personality and will be deemed to be a legally constituted body corporate.It is endowed with the legal capacity of a corporation. Even though the ATI's constituent instrument is anAgreement between sovereign states, its character is modeled as a private corporation incorporated ororganized under the municipal laws of a state. Persons can take out judicial or administrative proceedingsagainst ATI.

The Secretary General of the OAU is the depositary of the agreement creating ATI, and has delegated hisresponsibility as depositary to the Secretary General of COMESA.

African States or any public entity nominated or designated by any such State, international developmentfinancial institutions, regional economic organizations (such as Common Market for Eastern and SouthernAfrica, Southern Africa Development Community, Economic Community of West African States and theEuropean Union), and private corporations (such as privately owned insurance companies) may becomemembers of ATI upon signature and ratification, accession or acceptance of the Agreement EstablishingATI.

The diverse background and competence of members will provide a fusion of different perspectives,encourage partnerships and co-operation and foster common approaches in dealing with the negativeperception of Africa as a place to do business. Opening ATI to private sector participation will increase itsacceptability to the market.

In addition, ATI may cooperate with other organizations and institutions, whether public or private,

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national or intemational in the discharge of its functions and may establish specific insurance, coinsurance,reinsurance and guarantee schemes dedicated to a group of countries or to individual countries. TheAgreement Establishing ATI thereby reinforces the concept of cooperation with the private sector.

ATI has a General Assembly (of Members), a Board of Directors and a Managing Director. All will haveofficers and staff as the Board of Directors may determine. All the powers of ATI are vested in theGeneral Assembly, which is composed of one representative and one alternate of each member. It has thepower to appoint the Board of Director and exercise oversight over it.

ATI's Board of Directors comprises six directors elected by member States, three of whom shall be fromthe private sector, and one director elected by other members of ATI (intemational development financialinstitution, regional economic organization, or body corporate). Members of the Board of Directors arerequired to have internationally recognized qualifications and extensive practical experience in at least oneof the following fields: insurance, trade finance and banking, commercial law, and economics.

ATI is autonomous and enjoys admninistrative and financial independence. The Agreement EstablishingATl provides that All will be independent from political control from its members. All's operations mustbe insulated from political considerations, and be based on commercial considerations.

ATI is managed by a Managing Director, who will be assisted by a Finance and Administration Manager,an Underwriting/Operations Manager, and a Chief Counsel. The Managing Director must haveinternationally recognized qualifications and extensive practical experience in at least one of the followingfields: insurance, banking, and trade finance. The Managing Director will be responsible to the Board ofDirectors for the day-to-day management of the affairs of ATI.

The Administrative Department's role will include marketing, environmental screening, economic research,and finance and accounting. The Underwriting Departrnent will be responsible for processing insuranceapplications, issuing insurance policies, and administering outstanding policies. The Chief Counsel will beresponsible for all legal aspects of the business and operations of the Agency, especially these relevant inthe issuance and administration of insurance policy. All staff appointments will be merit-based.

Development Credit Agreements between participating countries and IDA

The Credit Agreements between IDA and the participating countries are specifically designed to createstrong disincentives for governments to cause claims, as well as to stop further losses in case of claims.ATI will enter into a Project Agreement which will require it to implement the project in strict accordancewith an Operations Manual, which has been prepared with technical assistance from IDA, and whichcannot be amended without IDA approval. The same applies to the insurance policies used by All. Thekey features of the Credit Agreements are as follows:

* Under the terms of the Development Credit Agreements, credit funds are disbursed in tranches andplaced on deposit in a first class bank in London as insurance policies are issued. The funds remain ondeposit until the end of the project (after a ten year life) when they become available to be used by therespective governments for another purpose agreed with IDA. If certain conditions -mainly related to theclaims record of the RTFP for the relevant country- are not met, the government concerned will be requiredto reimburse IDA immediately, rather than be allowed to use the funds.

* IDA has the right to suspend disbursements for new liabilities under issued insurance policies and

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for the issuance of new policies in a given country if: (i) the government is in arrears on its debt servicepayment to IDA; (ii) war or civil disturbance occurs in that country; (iii) payment for a claim resultingfrom a risk occurring in that country is made using credit funds; and (iv) failure by the country toreimburse ATI for the amount of any claim caused by a risk other than war and civil disturbance.Suspension of disbursement for reasons (i), (iii) and (iv) above automatically leads to loss of the right touse these funds after the project life.

* IDA has the right to suspend disbursements for new liabilities under issued insurance policies andfor the issuance of new policies in all participating countries if: (i) there is a failure by ATI to perform anyof its obligations under the Project Agreement; (ii) ATI fails to perform any of its obligations under theinsurance arrangements with the cooperating insurers; (iii) the governments or any other authority havingjurisdiction shall have taken action for the dissolution of the ATI, or the suspension of its operations so faras it relates to the insurance facility; (iv) the provisions of the multilateral agreement establishing ATI areamended without the consent of IDA; or (v) any material or substantial provision of the Operations Manualshall have been changed or there has been a change in the form of policies of insurance without theapproval of IDA.

Project Component 2 - US$5.00 millionATI's Operating and Capital Costs (see Annex 5)

An IDA credit to ATI will cover the costs for the start-up period of ATI's operations. Participatingcountries will share ATI's operating and capital costs. A country's share of ATI's operating costs will beproportional to the level of ATI's activity related to transactions covering imports into and exports out ofthat country. For initial capital expenses, a country's share will be based on the proportion of the country'sIDA credit in relation to the sum of IDA credits made to all participating countries. A fund will be createdfor capital expenses to be incurred during the life of the project, to which countries joining the facility at alater date will contribute.

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Annex 3: Estimated Project Costs

AFRICA: Regional Trade Facilitation Project

2 iiit;j0 ;0; Local TotalUS$minlion US$ilin S$mf o

Initial Contribution to ATI 0.70 0.00 0.70Start-up costs of ATI 0.00 5.00 5.00Insurance Facility 0.00 300.00 300.00

Total Baseline Cost 0.70 305.00 305.70Physical Contingencies 0.00 0.00 0.00Price Contingencies 0.00 0.00 0.00

Total Project Costs 0.70 305.00 305.70Total Financing Required 0.70 305.00 305.70

Identifiable taxes and duties are 0 (US$m) and the total project cost, net of taxes, is 6.15 (US$m). Therefore, the project cost sharing ratio is 81.3% of to a]project cost net of taxes.

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Annex 4

AFRICA: Regional Trade Facilitation Project

Summary of benefits and costs:

Covered transactions will be directly selected by the market, with assistance from the newagency to be created. Therefore, no further economic analysis is required. However, in orderto establish whether the project is likely to generate substantial benefits compared to the costsincurred by the Government in taking an IDA credit, a model was developed to estimate theamount of business generated by the Regional Trade Facilitation Project (RTFP). This modelis based on certain assumptions in terms of the numbers of insurance policies issued, maturityof the transactions, the types of transactions covered and amount of claims (see below).

The benefits of the project are equated to the business it generates. The amount of businessgenerated is different to the balance of outstanding insurance policies at any point in timebecause: (i) some transactions are short-term and therefore revolve more than once a year,leading to a large number of transactions over the ten year life of the facility; (ii) insurancepolicies for processing transactions cover a constant flow of business during the period ofcoverage, with an average tumover time of two to three weeks. Therefore, over a one yearperiod, this type of policy generates an amount of business which is a multiple of the amount itcovers at any point in time. The base case model used to calculate the amount of businessgenerated by the facility indicates that the facility will support about US$0.8 billion inproductive activity in the region over five years (cumulated) and US$2.1 billion over ten years(cumulated).

A sensitivity analysis shows that if the demand for the facility were to be low, the facilitywould have supported US$1.3 billion in productive activities in ten years. Finally, in acatastrophic scenario where some 50 percent of all insurance policies would be claimed in twocountries of the size of Rwanda and Uganda simultaneously, twice over the facility period inyear 2 and year 6, with a low demand scenario, the facility would have supported US$1.2billion in productive activity in ten years. Under this scenario, the costs to the Governmentswould include the loss of IDA funds lodged in the escrow account in the amount of US$27.8million, but interest accumulated during Years 1-10 of about US$71.8 million would remainwhich could cover the Agency's expenses and IDA administrative expenses.

Main Assumptions:

* Insurance Facility: US$142 million in Year I and US$284 million in Year 2* Base case - Cumulative Policies Issued

Year 1: US$49.5 millionYear 2: US$194.6 millionYear 3: US$375.7 millionYear 4: US$586.9 millionYear 5: US$800.8 millionYear 6: US$1.00 billionYear 7: US$1.27 billionYear 8: US$1.53 billionYear 9: US$1.80 billion

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Year 10: US$2.09 billion

* At any point in time, the portfolio will be composed of the following transactions:5% of facility covering transactions of average maturity of 90 days10% of facility covering transactions of average maturity of 180 days20% of facility covering transactions of average maturity of 270 days25% of facility covering transactions of average maturity of 365 days25% of facility covering transactions of average maturity of 545 days10% of facility covering transactions of average maturity of 730 days (2 years)5% of facility covering transactions of average maturity of 1095 days (3 years) and more

Insurance underwritten (as % of capacity available)

Yearl Year2 Year3 Year4 Year5 Year6 Year7 Year8 Year9 YearlOLow case 20% 30% 30% 40% 40% 50% 50% 50% 60% 70%Base case 30% 50% 70% 80% 80% 80% 80% 80% 80% 80%

High case 70% 70% 80% 80% 80% 90% 90% 90% 90% 90%

* Claims amount to 50 percent of the average premium income. This figure is realistic forcommercial insurance companies. It is conservative for this project since for the import transactions andintra-regional export transactions, the agency will be in a unique position to mitigate claims losses directlywith the countries that are its shareholders.

BASE CASE(USS) Year 1 Year 2 Year 3 Year 4 Year 5 Year * Year 7

Capital in escrow account 0 52,500.000.0 105,757,601.5 109.969,668.3 115,950,204.5 122.484,531.7 129.659.535.4 137,557.204.5Private sector rlst sharing 0 90.000,000.0 181,250.724.3 188,481,410.3 198,727.918.B 209,914.849.9 222.192,210.7 235,700,847.5Insurance Issued 0 42,750,000.0 142,194,479.8 208.342,900.5 250,829,733.2 265.077,533.3 260,478i,453.2 297,421,787.4

Productive Activities Generated by Type of Transactions90 5% 8.688.750 28.833.881 42.247.310 50.862.696 53,751,833 56,874,392 80,310,529

180 10% 8.8668,750 28.833.881 42.247.310 50,882.896 53,751.833 56,874,392 00.310,529270 20% 11.558.333 38.445,174 58,329.747 87,818,928 71,889.111 75.832.523 80.414,039365 25% 10,687,500 35,548.820 52.085,725 62,707,433 98,269.383 70.119.113 74,355.447548 25% 7,144,574 23,764,187 34,819,212 41,919,804 44.300.961 46,874,499 49.706.480730 10% 2,137,500 7,109,724 10.417,145 12,541.481 13.253.877 14.023.823 14,871.089

1095 5% 712.500 2,369,908 3,472.382 4,180,496 4,417,959 4,674.808 4.957.030

Productive Activity 49.577.908 164.905.374 241.618.832 290,891.540 307,414,957 325.273,349 344,925.143Cumulative prod. Activity 49,577,908 214,483.282 456,102,114 746,993,653 1,054.408.610 1.379,681,959 1,724,807.102New productive cctivity 49,577,908 145,074.211 181.110.252 211,193,728 213.881,954 229,180.681 242.568.693New Cumulative prod. Activity 49,577.908 194.652.119 375.762.371 586,956.099 800.838.052 1,029.998,933 1,272,565.628

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Sensitivity Analysis

Cumulative Amount of ProductiveActivity (US$ bn.)

Base Case 2.1

High case 2.5

Low case 1.3

Catastrophic scenario (50 percent of policies are claimed in 1.2two countries, twice over the facility period, low demand case)

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Annex 5: Financial Summary

AFRICA: Regional Trade Facilitation Project

IDA Credit to ATI (US$5 million)

Implementation Period

TOTAL PROJECT COSTS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Investment Costs 367,000 - 40,000

Recurrent Costs 2,891,926 2,637,874 3,055,953 3,154,040 3,469,444 3,816,388 4,198,027

Additional Reserves 745,212 2,479,711 3,019,611 3,766,302 4,064,171 4,279,950 3,887,452

Total Project Costs 4,004,138 5,117,585 6,115,563 6,920,342 7,533,615 8,096,339 8,085,479

FINANCING

IDA 3,258,926 1,648,671 - - - -

ParUcipatng countries 745,212 3,468,914 6,115,563 6,920,342 7,533,615 8,096,339 8,085,479

Total Financing Required 4,004,138 5,117,585 6,115,563 6,920,342 7,533,615 8,096,339 8,085,479

* Insurance premiums calculated based on amount of transactions and average value of insurance policies expected;* All countries will be leveraged on a 3:1 basis, except for Burundi and Rwanda (2:1 basis);* 2/3 of the premium income will be ceded to the excess of loss insurer* Claims will amount to 50 percent of the premium income. But an average of 66% of the claims will be recovered* In Year I

Salaries: US$1,026,436

Administrative Expenses: US$1,013,690

Operational Expenditures: US$851,800

- Surplus revenue would be added to the insurance facility

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Annex 6: Procurement and Disbursement Arrangements

AFRICA: Regional Trade Facilitation Project

Procurement

IDA Credits for the facility: Funds for the insurance facility will be placed in accounts on trust as secuntyfor commercial insurance companies issuing insurance policies, thus no procurement is involved.

IDA Credit to ATI:

Implementation Responsibilities: ATI will be responsible for procurement under the technical assistancecomponent (US$5.0 million). Procurement will include the purchase of office equipment and consultant servicesrelated to the setting up of the agency. ATI will undertake the limited procurement under this component inaccordance with the "Guidelines for Procurement under IBRD loans and IDA Credits" (January 1995, revisedJanuary and August 1996 and January 1999). Assistance will be provided to ATI in preparing the terms ofreference and bidding documents for the consulting services and goods to be purchased throughout the project.

Procurement of Goods: Under the technical assistance component, national shopping or IAPSO will be used toprocure goods (a small quantity of office equipment and vehicles) for contracts up to US$80,000 to an aggregateamount of about US$270,000. Most goods are expected to be available from local dealers and representatives ofintemational companies, which can supply back-up parts and warranty servicing. International shopping will beused for any items which are not available locally and for individual contracts estimated to cost more thanUS$80,000.

Consulting Services: Selection of consultants for this component will be done according to the provisions of the"Guidelines for Selection and Employment of Consultants by World Bank Borrowers" (January 1997, as revisedSeptember 1997 and January 1999). Least-cost selection will be used for contracts totaling about US$100,000 (forATI's periodic project audits). Selection based on Quality and Cost-Based selection (QCBS) will be used foradvertising and software contracts, for a total of US$1.16 million. Selection based on consultant qualifications(including legal, marketing, environment) will be used for small value contracts totaling about US$235,000.Selection of individual consultants will be on the basis of comparison of CVs of consultants who have expressedtheir interest in response to an advertisement.

ATI's Operating Costs: Up to US$4 million of ATI's operating costs for two years will be reimbursed on thebasis of annual budgets approved by IDA as follows: 100 percent of costs in year 1, 75 percent of costs for thefirst half of year 2, and 50 percent of costs for the second half of year 2. These costs will include salaries, utilitiesand other overhead costs.

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Procurement methods (Table A)

Table A: Project Costs by Procurement Arrangements(in US$ Thousands equivalent)

Expenditure Category Total CostProcurement IncludingMethod Contingencies

ICB NCB Other N.B_F1. Works

n/a2. GoodsOffice technology and equipment -- -- 147 147

(147)1 (147)Vehicles -- -- 120 120

(120)l (120)3. Consultant Services 1,395 1,395

(1,200)2 (1,200)4. MiscellaneousATI's Operating Expenses -- -- 4,003 4,003

(3,250)3 (3,250)Total -- -- 5,665 5,665

(4,700) (4,700)

Note: N.B.F. = Not Bank-financed (includes elements procured under parallel cofinancing procedures, consultanciesunder trust funds, any reserved procurement, and any other miscellaneous items).

Figures in parenthesis are the amounts to be financed by the IDA credit.

1. National Shopping or Intemational Shopping2. Procurement according to the Bank Guidelines for Use of Consultants.3. No procurement. ATI's annual operating budget will be subject to IDA's prior review.

Prior review thresholds (Table B)

Fifteen contracts are expected for the procurement of goods using shopping procedures. The first five contractswill be subject to IDA's prior review. The remaining contracts will be reviewed ex-post.

For all consultant services, ATI will need IDA's no objection for the terms of reference and short-list offirns/individuals. Contracts with firms valued at over US$100,000 each will be subject to IDA's prior review andapproval. Contracts with individuals valued at over US$50,000 each will be subject to IDA's prior review andapproval. In addition, the first consultant contract, regardless of size, will also be subject to IDA's prior review.The remaining contracts would be subject to IDA's post review during project supervision.

Procurement Scheduling

Consultant services will be procured mostly during the first two years, with project audit services engaged beforecredit effectiveness.

ATI's purchases of goods, office supplies, and supporting services (as part of operating expenses) will be on acontinuous basis over the 2-year IDA-supported start-up according to budgeted activities.

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Prior review thresholds (Table B)Table B: Thresholds for Procurement Methods and Prior Review US dollars

Expenditure Contract Value Procurement Contracts Subject toCategory (Threshold) Method Prior Review I Estimated

Total Value Subject toPrior Review

1. Goods (procured by National Shopping/lAPSOATI)

Office supplies < 30,000

Vehicles < 80,000

2. Services (procured byATI)

Firms 2 <100,000 LCS I 50,000

Firms >100,000 QCBS All3

1,160,000

Firms <100,000 Selection based on 1 50,000Consultants' Qualifications

Individuals <50,000 Selection of Individual First contractConsultants

Individuals >50,000 Selection of Individual AllConsultants

Total value of contracts 1,260,000subject to prior review:

I All goods contracts are expected to be under US$80,000.2 Least cost selection will be used only for ATI's audit.3 For advertising, marketing and software.4 Other contracts will be subject to IDA's post review.

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Disbursement

Allocation of credit proceeds (Table C)

Table C: Allocation of Credit Proceeds

Expendittre Categry Amount in US$mil11on Financing PercentageBurundi 7.50 100Kenya 25.00 100Malawi 15.00 100Rwanda 7.50 100Tanzania 15.00 100Uganda 20.00 100Zambia 15.00 100ATI's Operating Costs 5.00 100*

Total Project Costs 110.00

Total 110.00

* lo %foryear 1, 75%for thefirst half ofyear 2, and 50%for the second half ofyear 2.

Use of statements of expenditures (SOEs):

The total credit is expected to be disbursed over a four-year period and the project is expected to becompleted by June 30, 2011. The proceeds of the credit in support of the start-up operating costs of ATI(US$5 million) are expected to be disbursed in the first two years.

In addition to the credit for ATI's start-up, ATI will be managing seven IDA credits made to the sevenparticipating countries in the RTFP. The disbursement procedures will be the same for these sevencredits.

The Borrowers for the seven participating countries will establish, under terms and conditions acceptableto IDA, separate Trust Accounts, in United States Dollars, at commercial banks acceptable to IDA. ATIwill, on behalf of the Borrowers, maintain and operate, under terms and conditions acceptable to IDAthese Trust Accounts. The initial authorized allocation for a Borrower's Trust Account will be theequivalent of 25 percent of its IDA credit. Replenishment applications will be submitted by ATI.Replenishment will be allowable when the value of new insurance policies issued reaches 50 percent of theauthorized allocation. Statements of Expenditure (SOEs) will be used for disbursements. The SOEs willprovide information on new policies issued.

The proceeds of the IDA credits will back up insurance policies issued by/in the name of a syndicate ofprivate risk insurers. ATI will submit a request to IDA for its no objection of an approved insuranceapplication, and submit a Non Binding Application to the facility broker with a request addressed to theinsurer to approve the issue of a formal and binding Insurance Offer Letter. Once the IDA's no objectionand the insurer's approval are received, ATI will issue the Insurance Offer Letter to the applicant, withcopy to the facility broker. Only the insurer will have access to the funds in the Trust Accounts, and thenonly to pay a valid claim. A Security Trust Agreement between ATI, the insurers, and the commercialbank, and an Insurance Facility Agreement between ATI and the insurers will govem the insurer's rightsto access the Trust Accounts. These two agreements will be subject to the IDA's approval.

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Special account:For the credit to ATI, ATI will establish, maintain and operate, under terms and conditions acceptable to IDA, aSpecial Account, in US Dollars, at a conmmercial bank acceptable to IDA. The Special Account will have anauthorized allocation of US$1 million equivalent. Replenishment will be allowable when the amount in theSpecial Account drops to 50 percent of the authorized allocation. Replenishmnent applications will be subnittedby ATI. Statements of expenditure would be used for ATI's operating expenses (based on the annual budgetsapproved by IDA), for contracts with firns below the prior review threshold of US$100,000 and for contracts forindividuals below the prior review threshold of US$50,000.

Financial Management System

ATI is establishing a sound Financial Management System (FMS) which will facilitate the production ofaccurate financial reports for the Borrowers, IDA and ATI on a regular basis. ATI is responsible forimplementing a viable system of internal controls to ensure the transparency of transactions and flow offunds relating to project implementation. Furthermore, the system of intemal controls is meant to seek,prevent or detect errors or irregularities, which would result in an adverse impact on the financialstatements of the project or the entity. A detailed financial management manual has been prepared and ispart of the Operations Manual which was agreed upon at negotiations.

The FMS includes the planning, intemal controls, accounting, financial reporting and audit arrangementsrelating to the project and will be maintained by ATI. The FMS relates to the entire project, irrespective ofthe percentage financed by IDA (it is not limited to the funds provided by and/or administered by IDA) andwill enable ATI to provide information which adheres to international accounting standards.

The FMS provides appropriate accounting and intemal control systems that: (i) reliably record and reportATI's contingent liabilities via commitments made under the issuance of insurance policies, including thosetransactions involving the use of IDA funds; (ii) provide sufficient financial inforrnation for managing andmonitoring project activities; and (iii) record, track, and report on all project assets and liabilities.

Audits

By the Agreement establishing it, ATI is required to submit annual audited financial statements to itsmember countries. Under the proposed project, ATl is also required to submit such reports to IDA on anannual basis. An independent auditor acceptable to IDA will be appointed to carry out audits on an annualbasis.

Project Management Reports

To comply with the requirement to provide financial reporting, Project Management Reports (PMR) will beprepared and submitted to IDA on a quarterly basis, no later than 45 days after the end of a quarter. ATIwill submit separate PMRs for each country credit, as well as a set of PMRs covering IDA's credit to ATI.The fornat of PMRs was agreed upon at negotiations, with one standard formnat for the country credits,and a different format for the IDA credit to ATI. Given the nature of ATI's operations and the disbursementmechanism established for the seven country credits, disbursements will not be PMR-based (seedisbursement mechanism described above/below).

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Annex 7: Project Processing ScheduleAFRICA: Regional Trade Facilitation Project

Time taken to prepare the project (months) 18First Bank mission (identification) 10/23/99 10/25/99Appraisal mission departure 09/04/2000 09/05/2000Negotiations 11/27/2000 02/22/200 1Planned Date of Effectiveness 06/30/2001

Prepared by:

Joint COMESA/World Bank Project Team

Preparation assistance:

Technical Advisory Committees in participating countries

Bank staff who worked on the project included:

Onno Ruh] Task Team LeaderLloyd Edgecombe Export Credit SpecialistPaatii Ofosu-Amaah Chief CounselMark Walker Senior CounselSaid Al Habsy Senior CounselMarie-Sophie Tar Financial AnalystAnn Rennie Banking SpecialistSerigne Omar Fye Environmental SpecialistIraj Talai Financial Management SpecialistRichard James Consultant (PHRD)John Byamukama Financial AnalystDieneba Diarra-Kambou ConsultantAshoka Mody Peer ReviewerJorma Paukku Peer ReviewerAmy Champion Program AssistanitIrene Chacon Program AssistantMarika Behr Team AssistantJosette Percival Language Team AssistantAndrea Vasquez Language Program Assistant

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Annex 8: Documents in the Project File*AFRICA: Regional Trade Facilitation Project

A. Project Implementation Plan

Project Implementation PlanOperations Manual

B. Bank Staff Assessments

Mission ReportsATI's planned budgetProjections on volume of business generated by the insurance facility

C. Other

Demand Surveys (foreign and local banks; foreign and local enterprises)ATI's TreatyCredit AgreementsProject Agreement

*Including electronic files

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Annex 9: Statement of Loans and CreditsBURUNDI: Regional Trade Facilitation Project

Dec-2000Difference between expected

and actualOriginal Amount in USS Millions disbursements

Project ID FY Purpose IBRD IDA Cancel. Undisb. Orig Frm RevdP064556 2000 BI-EERC 0.00 35.00 0.00 4.59 -29.74 0.0D

P064510 2000 Bi-Bursap 11 0.00 12.00 0.00 10.89 1.28 0.0t)

P038801 1995 EMERG. ASSIST PR.EAP 0.00 14.6 0.00 0.00 -0.24 0.0)

P000216 1995 HEALTHIPOPULATION 11 0.00 21.30 0.00 6.78 t.41 -0.89

P000237 1993 AGRt-SUSINESS PROMOT 0.00 3.10 2.96 0.00 2.73 0.00

P000227 1993 81-Sodal Aon 0°00 10.40 00 0.70 073 0.30

P000208 1992 SAL III 0.00 30.00 21.93 0.00 18.63 0.00

P000217 1992 WATER SUP SECTOR 0.00 32.70 0.00 1.45 25.69 1.38

P000226 1992 PRIV SEC 0.00 17.00 10.03 0.00 9.57 0.67

P000219 1991 SI-EnergySectorRethab. 0.00 22.80 1.19 0.02 1.24 0.0o

P000204 1990 8ui-Transport Sector 0.00 43.20 4.73 0.00 4.67 -2.06

Total: 0.00 242.10 40.84 24.44 41.97 0.59

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BURUNDISTATEMENT OF IFC's

Held and Disbursed PortfolioDec-2000

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic2000 AEF V&F Export 0.44 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Total Portfolio: 0.44 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic

Total Pending Commitment: 0.00 0.00 0.00 0.00

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Annex 9: Statement of Loans and CreditsKENYA: Regional Trade Facilitation Project

Dec-2000Difference between expected

and actualOriginal Amount in USS MiNions disbursenerWts

Project ID FY Purpose IBRO IDA Cancel. Undi3b. Orig Frrn Rev'dP071196 2001 Emorgsncyenerycd 0.00 72.00 000 39.60 -1.333 -1.33

P069501 2001 Economic&PublicSectorRform 0.00 150.00 000 98.40 34.13 -49.20P070920 2001 HV/AMIDS Project (Umbretta) 0.00 50.00 000 000 0.00 000P056595 1999 EMERGENCY INFRAS.REHAB 0.00 40.00 0.00 21.51 22.93 - 7.20P056312 1998 STRUCTURALADJ.CRED 000 1750 000 0°00 000 0.00P001344 1997 ENERGYSECTORREFORM 0.00 125.00 0.00 100.49 98.08 -10.42P001217 1997 TANARIVERPROJECT 000 000 000 490 4.47 0.81P001354 1997 NARPII . 0.00 39.70 0.00 17.01 4.24 -18.94

P034180 1997 EARLYCHILDHOODDEV 000 27.80 0.00 17.90 10.26 7.25

P046838 1997 LAKE VICTORA ENV. 0.00 12.80 0.00 6.80 4.12 4.88

P046871 1997 LAKE VtCTORtAENV. 000 9.80 0.00 8.07 5.79 .2.31

P049332 1997 STRUC.ADJUST.CREDIT 0°00 26.60 000 0.00 0.00 0.00P001319 1996 URBANTRANSPORT 0.00 115.00 0.00 34.72 11.66 -E7,58

P001331 1996 ARIDLANDS 000 22.00 0.00 10.11 10.86 .9.42

P001334 1996 SAG I 0°00 90.00 65.78 16.26 46.97 90.42

P035691 1996 NAIROBIMOMaASAROAD 0.00 50.00 0.00 1442 1340 -3075

P045738 1996 SAC I 0.00 36.80 0.00 0.00 0.00 0.00

P001367 1995 INST. DEVELOPMENT 0.00 2540 0.00 560 7.53 -17.82

P001333 1995 SEXUALLY TRANSMITTED 0.00 40.00 0.00 1.75 3.49 -36.11

P035579 1994 EDUCATION SECTOR ADJ CREDIT 000 42.20 0.00 0.00 o.0 0.00

P001353 1994 MICRO&SSMALLENTERP 0°00 21.80 0.00 14.87 1443 12.22

P001369 1993 DROUGHTRECOVERY 000 20.00 1.30 0.00 0.26 -19.74

P001348 1993 PARASTATAL REFORM TA 000 23.32 0.00 0.78 176 -21.56

P001372 1993 EDUC SECTORADJ 0.00 52.10 0.00 0.00 000 )00

P001342 1993 AGRIC. SECT. MNGT. I 0.00 19.40 5.53 000 5.25 3.65

P001327 1992 EDUCATIONSECT.ADJ.C 000 100.00 000 000 -103.44 -203.44P001345 1992 WtLDLIFE SERVICES PR 0.00 60.50 3.78 0.00 0.36 -0.14

P001339 1992 HEALTH REHABILITATIO 0.00 31.00 2.87 0.00 3.90 -27 10

P001361 1992 MOMBASAWATERIIENG 0.00 43.20 0.18 0.00 -1.99 -2.03

P001362 1992 UNIVERSITIES 000 5500 0.00 3.22 064 ll64P001365 1992 EXPORT DEVELOPMENT 0.00 49.20 0.00 0.00 0.00 0.00

P001322 1991 FOREST DEVELOPMENT 0.00 19.90 249 0o00 2.65 -17.25

P001364 1991 FINALCIALSECTORADJUSTMENT 0.00 67.30 0.00 0.00 0.00 0.00

P001300 1991 AG.NATL.EXTII 0o00 2490 8.07 0.00 e.84 s,08P001312 1990 POPULATIONIV 000 35.00 741 0.00 6.40 606

P001325 1990 COFFEEII 0.00 46.80 4.97 0.00 095 -4.84P001340 1990 3RD NAIROBI WIS PROJ 000 64.80 1.71 0.00 -2.62 -2.70

P001359 1990 FIN SEC ADJ 0.00 MO 0°00 0e00 0.00 00

P001351 1989 INDSECADJ 0.00 53.70 0.00 0.00 0.00 000

Total: 0.00 1,824.52 120.09 416.43 175.49 -585.77

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KENYASTATEMENT OF IFC's

Held and Disbursed PortfolioDec-2000

in Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Panic Loan Equity Quasi Panic1999 AIF 0.00 74.80 0.00 0.00 0.00 8.55 0.00 0.001999 AIM 0.00 0.20 0.00 0.00 0.00 0.10 0.00 0.001993 Africa Fund 0.00 7.50 0.00 0.00 0.00 7.50 0.00 0.001999 ETI 0.00 3.75 3.75 0.00 0.00 3.75 3.75 0.002000 MSICIH 0.00 10.00 0.00 0.00 0.00 10.00 0.00 0.001999 PROPARCO AL 17.72 0.00 0.00 0.00 0.00 0.00 0.00 0.001990 JF Asia Select 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001994 SEAVI III Trust 0.00 8.85 0.00 0.00 0.00 8.85 0.00 0.001984 SEAVIC 0.00 0.00 0.01 0.00 0.00 0.00 0.01 0.001984 SEAVIM 0.00 0.00 0.05 0.00 0.00 0.00 0.05 0.001998 AAP 0.00 28.50 0.00 0.00 0.00 8.29 0.00 0.002000 NCBank 0.00 2.25 0.00 0.00 0.00 0.00 0.00 0.001999 SEF Eurotech 1.20 0.00 0.00 0.00 1.20 0.00 0.00 0.001999 SEF FEFAD Bank 0.00 0.98 0.00 0.00 0.00 0.98 0.00 0.001998 AEF Flecol 0.61 0.00 0.00 0.00 0.61 0.00 0.00 0.001998 AUTCL 5.63 0.00 0.00 0.00 5.63 0.00 0.00 0.001994 AceiteraChabas 0.00 0.00 3.10 0.00 0.00 0.00 3.10 0.001994 Aceitera General 7.50 0.00 6.90 0.00 7.50 0.00 6.90 0.001960/95/97/99 Acindar 50.00 0.00 0.00 0.00 50.00 0.00 0.00 0.001994/95/96 Aguas 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001977/84/86/88/94/96 Alpargatas 10.00 0.00 0.00 40.50 10.00 0.00 0.00 40.501999 American Plast 10.00 0.00 0.00 0.00 10.00 0.00 0.00 0.001993 Arg Equity Inv. 0.00 2.84 0.00 0.00 0.00 2.84 0.00 0.002000 Argentina SMMC 0.00 12.50 0.00 0.00 0.00 0.00 0.00 0.001994/99 BGN 0.00 0.00 33.00 0.00 0.00 0.00 33.00 0.001989/91/96 Banco Frances 4.10 0.00 0.00 0.00 4.10 0.00 0.00 0.001996/99 Banco Galicia 50.00 0.00 0.00 245.00 50.00 0.00 0.00 245.001995/97 Banco Roberts 30.00 0.00 0.00 0.00 30.00 0.00 0.00 0.001996 Bansud 3.39 0.00 0.00 0.00 3.39 0.00 0.00 0.002000 Bco Hipotecario 25.00 0.00 0.00 102.50 25.00 0.00 0.00 102.501996 Brahma - ARG 14.93 0.00 0.00 16.50 14.93 0.00 0.00 16.501988/93 BungeyBom 0.53 0.00 0.00 4.01 0.53 0.00 0.00 4.011996 CAPSA 8.73 0.00 5.00 24.00 8.73 0.00 5.00 24.001999 CCI 0.00 20.00 20.00 0.00 0.00 20.00 6.00 0.001995 CEPA 6.67 0.00 3.00 1.20 6.67 0.00 3.00 1.202000 Cefas 10.00 0.00 5.00 0.00 0.00 0.00 0.00 0.001999 Correo Argentino 63.00 6.82 5.18 0.00 63.00 6.82 5.18 0.001994/95 EDENOR 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001998 F.V. S.A. 11.25 0.00 4.00 0.00 11.25 0.00 4.00 0.001998 FAID 0.00 2.75 0.00 0.00 0.00 2.75 0.00 0.002000 FAPLAC 10.00 0.00 5.00 0.00 10.00 0.00 5.00 0.001992 FEPSA 2.75 0.00 2.00 0.00 2.75 0.00 2.00 0.001997 FRIAR 10.00 0.00 2.50 7.00 10.00 0.00 2.50 7.001996 Grunbaum 6.00 0.00 2.00 3.33 6.00 0.00 2.00 3.33

Total Portfolio: 3373.09 942.24 473.94 3036.23 2776.17 694.95 423.03 2677.88

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1999 AIF 0.00 0.00 25000.00 0.002000 MSICIH 0.00 0.00 3500.00 0.001998 Patos Marinza 30000.00 0.00 0.00 50000.002000 Hotel Armenia 0.00 3600.00 0.00 0.001998 U.Belgrano 15000.00 0.00 0.00 0.002001 USAL 10000.00 0.00 0.00 0.001999 Unisoy 5000.00 2000.00 0.00 4000.002000 ALEF 25000.00 0.00 0.00 150000.002000 APSF 20000.00 0.00 5000.00 30000.001999 American Plast 0.00 0.00 350.00 0.002000 Argentina SMMC 100000.00 0.00 0.00 450000.001999 Biopork 5200.00 2000.00 0.00 5000.002000 CAG Fund 0.00 0.00 10000.00 0.001999 Galicia BLfNC 0.00 0.00 0.00 75000.002001 Azer JV Increase 0.00 0.00 60.00 0.002001 SEFBosnalijek II 2300.00 0.00 0.00 0.002000 ULC - Bangladesh 5000.00 0.00 0.00 0.002000 USPCL 0.00 4000.00 3000.00 0.002000 Haripur 40000.00 0.00 0.00 14100.002000 Jalalabad II 30000.00 10000.00 0.00 30000.001998 Khulna 0.00 0.00 3300.00 0.002000 Lafarge B Loan 0.00 0.00 0.00 15000.001998 Lafarge Surma 35000.00 0.00 10000.00 0.002000 Podem 3100.00 2000.00 0.00 0.001999 BPBank 10000.00 0.00 12400.00 0.002001 Doverie 3000.00 1800.00 0.00 0.001999 SOBAC 0.00 0.00 79.22 0.002000 FINADEV 0.00 0.00 352.98 0.002001 Banco Ganadero 5000.00 0.00 0.00 0.002000 Samnaritano 20000.00 0.00 0.00 0.002000 Sepetiba 27000.00 0.00 6000.00 18000.002000 BBA 50000.00 0.00 0.00 50000.001997 CTBC 35000.00 0.00 0.00 150000.001999 Cibrasec 0.00 0.00 7500.00 0.001998 FSA 35000.00 10000.00 0.00 45000.001996 Globocabo II 0.00 0.00 0.00 38000.001998 Ipiranga-RI 2 0.00 0.00 92.07 0.001999 MBR LTDP 20000.00 5000.00 0.00 115000.001996 Oxiteno/Ethylo 0.00 0.00 5000.00 0.002000 BAL 10000.00 0.00 0.00 0.002000 COSMIVOIRE RI 0.00 0.00 998.66 0.002000 San Antonio 35000.00 0.00 3700.00 65000.002000 AEF Banagri 159.50 0.00 0.00 0.002000 AEF Complexe II 0.00 0.00 169.71 0.001999 AEF EPA 997.68 0.00 0.00 0.002000 AEF Hobec 338.00 0.00 0.00 0.001999 AEF LUNA 246.86 0.00 0.00 0.002000 BICEC 0.00 0.00 702.22 0.001998 PTP Hubei BLINC 0.00 0.00 0.00 1500.002000 SBCF I 0.00 0.00 15000.00 0.002000 SBLAV 0.00 0.00 15000.00 0.002000 SIGC 0.00 0.00 6000.00 0.002000 Shizuishan Carbn 0.00 0.00 1700.00 0.002000 Wan Jie Hospital 15000.00 0.00 0.00 0.002000 CIG Zhapu 6000.00 5000.00 0.00 0.002000 CIMIC Tile 15000.00 5000.00 0.00 15000.001998 Chengdu Chemical 7400.00 0.00 0.00 8600.001997 Chinefarge 12800.00 0.00 0.00 20000.002000 Jinfeng 9000.00 0.00 0.00 7300.001998 Orient Fin A Inc 3333.33 0.00 0.00 0.002001 Tolcemento 3333.33 0.00 0.00 10666.672001 Cementos Caribe 4047.62 0.00 10000.00 12952.381999 Harken 0.00 10000.00 0.00 0.002000 CODACSA 25000.00 0.00 1600.00 35000.002000 ERSA 8000.00 4000.00 0.00 0.00

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Total Pending Commitment: 1010156.8 134027.00 210034.10 1672305.78 7

- 53 -

Annex 9: Statement of Loans and CreditsMALAWI: Regional Trade Facilitation Project

Dibtenc e uand ac1a

Ortginal Amount in USS Millions disbrrnamProject ID FY Puroose IBRD IDA SF GEF Cancel. Undlsb. Orb Ffm RPAd

P001664 1997 ENV MANAGEMENT 0.00 12.40 0.00 8.39 1.24 0.00

P001648 1996 FISCAL RESTR&DERE 0.00 112.20 0.00 0.67 -2.46 3.17

P001658 1991 FISHERIES DEV. 0.00 8.80 0.00 0.64 0.83 0.13

P001657 1994 INSTIT.DEV.II 0.00 22.60 0.00 6.40 7.05 0.00

P001636 1992 LOCAL GOVT. 0.00 24.00 0.00 s.60 5.07 4.?7

P049599 1999 MASAF If 0.00 66.00 0.00 59.98 26.98 0.00P001667 1995 NAT WATER DEV 0.00 79.20 0.00 31.78 23.16 0.00

P001646 1991 PHN SECTOR CREDIT 0.00 55.50 0.00 7.55 9.91 0.00P036038 1999 POPULATIONIFP PROJEC 0.00 5.00 0.00 4.38 2.53 0.00

P001662 1992 POWER V 0.00 55.00 0.00 4.77 5.78 5.34P042305 1996 PRIMARY EDUCATION EM 0.00 22.50 0.00 0.57 2.39 0.00

P001666 1999 ROAD MAIN. & REHAB 0.00 30.00 0.00 27.79 4.21 0.00

P001670 1998 SECONDARY ED PROJECT 0.00 48.20 0.00 42.94 10.53 0.00P001668 1996 SOCIAL ACTION FUND 0.00 56.00 0.00 5.52 1.15 0.00

Total: 0.W 597.40 0.00 206.84 98.40 7.97

- 54-

MALAWISTATEMENT OF IFCs

Held and Disbursed Portfolio

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic1995 AEF Mal Stkbrkrs 0.00 0.11 0.00 0.00 0.00 0.11 0.00 0.001997 AEF Maravi 0.42 0.00 0.00 0.00 0.42 0.00 0.00 0.001996 AEF Mwaiwathu 0.00 0.81 0.00 0.00 0.00 0.81 0.00 0.001998 AEF Ufulu Garden 0.29 0.00 0.00 0.00 0.24 0.00 0.00 0.001986190 LFCM 0.00 0.11 0.00 0.00 0.00 0.11 0.00 0.002028 NICO 0.00 1.04 0.00 0.00 0.00 1.04 0.00 0.00

Total Portfolio: 0.71 2.07 0.00 0.00 0.66 2.07 0.00 0.00

Approvals Pending CommitmentFY Approval Company Loan Equity Quasi Partic1999 AEF City Lodge 640.00 0.00 0.00 0.001998 HOFICO 0.00 0.00 300.00 0.001998 IDHM 0.00 0.00 500.00 0.00

Total Pending Commitment: 640.00 0.00 800.00 0.00

-55 -

Annex 9: Statement of Loans and CreditsRWANDA: Regional Trade Facilitation Project

Feb-2001Difference between expectei

and actualOriginal Amount in USS Millions disbursements

Project ID FY Purpose IBRD IDA Cancel. Undisb. Orig Frm Rev'dP045182 2000 RW-Rural Water Suppty & Sanitation Proje 0.00 20.00 0.00 19.70 0.00 0.00

P045091 2000 Rw-Human Resource Dev. 0.00 3500 0.00 34.05 1.79 0.00

P058038 2000 AGRICULTURAL AND RURAL MARKET 0.00 5.00 0.00 4.07 -091 0.00

P057294 1999 DEVELOPMT. 0.00 75.00 0.00 31.29 20.91 000

P051931 1999 EC REC.CREDIT 0.00 5.00 000 3.93 1.61 0.00

P002241 1993 CROP 0.00 2600 701 4.22 11.86 4.85

P002237 1991 Rw-Energy Sector 0.00 19.60 000 744 0.08 0.09

P002238 1990 HEALTH & POPULATION 0-00 40.00 0.00 20.35 -26.47 12.69

TRANSPORT SECTOR

Total: 0.00 225.60 7.01 125,05 8.87 17.63

RWANDASTATEMENT OF IFC's

Held and Disbursed PortfolioFeb-200 1

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi P;

Total Portfolio: 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic2000 Rwandacell 4000.00 2000.00 0.00 0.001998 AEF Highland 526.10 0.00 0.00 0.00

Total Pending Commitment: 4526.10 2000.00 0.00 0.00

- 56-

Annex 9: Statement of Loans and Credits

TANZANIA: Regional Trade Facilitation ProjectJan-2001

Difference between expectedand actual

Original Amount in USS Millions disbursementsProjed ID FY PUIPO5_ IBRD IDA GEF Cancel. Undisb. Ong Frm Revd

POS372 2001 SOCIAL ACTION FUND PROJECT 0.00 60.00 0.00 000 5709 -0.0 000

P002822 2000 PSAC I 0.00 190.00 000 0.00 156.05 -29.32 000

P049838 2000 PRIVATIZATION 0.00 45.90 0.00 0.00 39.46 8.86 0.00

P050441 2000 RURAL& MICRO FIN SVC 0°00 2.00 0.00 0.00 1 71 0.83 000

P057187 2000 FlDP l 0.00 27.50 0.00 0.00 22.91 1t23 0.00

P058627 2000 HeaIIh Soe DevlpnW Program 0.00 22.00 0.00 0.00 19.17 0.61 0.00

P060833 2000 PUBLIC SERV REF PROG 0.00 41.20 0.00 0.00 33.21 -5.27 0.00

P047761 1999 TAX ADMINISTRATIoN 0.00 40.00 0.00 0.00 31.63 6.27 0.00

P002789 1998 HUMAN RESOURCE DEVI 0.00 20.90 0.00 0.00 9.18 3.28 0.00

P002804 1998 AGRICRESEARCH 0.00 21.80 0.00 0.00 1400 2.86 000

P046872 1997 LAKE VICTORIA ENV 0.00 9.a0 9.80 0.00 2.74 0.56 0.00

P002753 1997 NATEXTPROJPH.lt 0.00 31.10 0.00 000 11.79 9.74 o00

P038570 1997 RIVER BASIN MGM.SMAL 0.00 26.30 0 00 0.00 13.27 6.54 0.00P046837 1997 LAKE VICTORIAENV. 0.00 10.10 0.00 0.00 334 1 39 000P002758 1996 URBAN SECTOR REHAB 0.00 105.00 0.00 0.00 37o09 9.62 0.00

P002812 1995 MINERALSECTORDEV. 0.00 12.50 0.00 0.00 174 1.18 1.98P002770 1994 ROADSII 0.00 170.20 0.00 000 11898 12669 171.93

P002801 1994 ASMP 0.00 24.50 000 2.86 1.12 4.33 012

P002700 1993 TELECOMIII 0.00 7445 0.00 00o 2.93 3 53 3.53

P002756 1993 POWER VI 0.00 200.00 0.00 0.00 2008 1367 000P002788 1993 PRIV. PUB. SECT. MGT 0.00 34.90 0.00 0.00 0.73 0.11 000

P002757 1991 RAILWAYS RESTRUCTURI 0.00 76.00 0.00 1126 11.82 20.86 9s65P002786 1991 PETROL REHAB 0e00 44,00 0.00 0.00 3.01 0.85 0.54

Total: 0.00 1290.15 9.80 14.11 61306 200.31 18775

- 57 -

TANZANIASTATEMENT OF IFC's

Held and Disbursed PortfolioJan-2001

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Parti1993 TPS (Tanzania) 7.00 0.87 1.04 0.00 7.00 0.87 1.04 0.01991/97 TPS Zanzibar 0.00 0.03 0.00 0.00 0.00 0.03 0.00 0.01994 Tanzania Brewery 0.00 6.00 0.00 0.00 0.00 6.00 0.00 0.01998 Tanzania Jubilee 0.00 0.29 0.00 0.00 0.00 0.29 0.00 0.01994 ULC Leasing 1.13 0.95 0.00 0.00 1.13 0.76 0.00 0.C2000 IOH 2.50 0.00 0.00 0.00 2.50 0.00 0.00 0.C1996/99 AEF A&K Tanzania 0.28 0.00 0.00 0.00 0.28 0.00 0.00 0.C1997 AEF Aquva Ginner 0.68 0.00 0.00 0.00 0.68 0.00 0.00 0.C1998 AEF Blue Bay 1.50 0.00 0.00 0.00 1.50 0.00 0.00 0.C1996 AEF Contiflora 0.35 0.00 0.00 0.00 0.35 0.00 0.00 0.C1998 AEF Drop Zanziba 0.32 0.00 0.00 0.00 0.32 0.00 0.00 O.C1997 AEF Hort. Farms 0.50 0.00 0.00 0.00 0.50 0.00 0.00 O.C1998 AEF Maji Masafi 1.00 0.00 0.00 0.00 1.00 0.00 0.00 0.C1996 AEF Milcafe 0.18 0.00 0.00 0.00 0.18 0.00 0.00 0.C1994 AEFMoshiLthr 0.00 0.19 0.00 0.00 0.00 0.19 0.00 0.C1999 AEF Musoma Fish 1.50 0.00 0.00 0.00 1.50 0.00 0.00 O.C1994 AEF Nomad Safari 0.02 0.00 0.00 0.00 0.02 0.00 0.00 O.C1997/99 AEF Pallsons 0.41 0.00 0.00 0.00 0.41 0.00 0.00 O.C1994 AEF Raffia Bags 0.29 0.00 0.00 0.00 0.29 0.00 0.00 0.(1995 AEF Tanbreed 0.?/0 0.00 0.00 0.00 0.70 0.00 0.00 0.(1993/96 AEF Tanganyika 0.06 0.00 0.00 0.00 0.06 0.00 0.00 0.(1996 AEF Zainab Grain 0.76 0.00 0.00 0.00 0.76 0.00 0.00 0A2000 AEF Zan Safari 0.70 0.00 0.00 0.00 0.35 0.00 0.00 0.(1997 DATEL 2.25 0.51 0.00 0.00 1.35 0.48 0.00 0.(1994 Eurafrican Bank 0.00 0.73 0.00 0.00 0.00 0.73 0.00 0.(1996 IHP 1.18 0.60 0.00 0.00 1.18 0.60 0.00 0.(

Total Portfolio: 23.31 10.17 1.04 0.00 22.06 9.95 1.04 0.

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic1998 TTCL 0.00 0.00 20000.00 0.001999 AEF Arusha 1500.00 0.00 0.00 0.002001 AEF Boundary Hil 200.00 0.00 0.00 0.002000 AEF Drop 11 200.00 0.00 0.00 0.001999 AEF Moun Village 900.00 0.00 0.00 0.001998 AEF Neptune Flwr 402.76 0.00 0.00 0.002000 NBC 30000.00 0.00 10069.23 0.00

Total Pending Commitment: 33202.76 0.00 30069.23 0.00

- 58 -

Annex 9: Statement of Loans and CreditsUGANDA: Regional Trade Facilitation Project

Fet2001Difference between expected

and actualOriginal Amount in USS Millions disbursements,

Project ID FY Purpose IBRD IDA GEF Cancel. Undisb. Ong Frm Rev'dP050439 2001 PRIVATIZATION & UTILITY SECTOR REFORM 0.00 48.50 0.00 0.00 47.43 0 00 0.00

P044679 2000 Sond Econm,ic and Fin Mgnt P"e 0.00 34.04 0.00 0.00 29.64 7.18 0.00

P002992 2000 LOCAL GOV DEVE.PROGRAM 0.00 80.90 0.00 0.00 65.06 -9.17 0.00

P044213 1999 FINMKTSASSISTANCE 0.00 13.00 000 0.00 12.59 9.25 0.00

P059127 1999 AGRIC.RES&TRNG.11 0.00 26.00 0.00 0.00 22.69 4.67 0.00

P059223 1999 NAKIVUBO CHANNEL REH 0.00 22.40 0.00 0.00 19.68 11.86 0.00

P002941 1999 ICWAMSU 0.00 12.40 2.00 0.00 5 36 1.99 0 00

P002970 1999 ROADSEDEVTPROGRAM 0.00 90.98 0.00 0.00 83.39 7.68 000

P049543 1998 ROAD SECTINST.SUPP 0.00 30.00 0.00 0.00 22.88 24.55 0.00

P057007 1996 EL NINO EMERG RD REP 0.00 27.60 0.0 . 0.00 23.36 24.49 0.00

P040551 1998 NUTRIT.CHILDDEV 0.00 34.00 0.00 000 24.34 6.19 0.00

P046836 1997 LAKE VICTORIA ENV. 0.00 12.10 0.00 0.00 4.55 1.65 0.0

P046870 1997 LAKE VICTORLAENV. 0.00 9.80 9.80 0.00 571 3.26 0.00

P002987 1997 SAC III 0.00 125.00 0.00 0.00 64.81 42.66 42.13

P002978 1996 ENVIRONMENTALMGMT&CAPAC1TYBLDG 0.00 11.80 0.00 0.00 1.58 2.87 1.71

P035634 1996 PRIV. SECTOR COMPETI 000 12.30 0.00 2.18 2.58 5.77 0 00

P002971 1995 DISTRICT HEALTH 000 45.00 0.00 0.00 5.88 3.12 0.00

P002976 1995 INST. CAPACITY BLDG 0.00 36.40 0.00 0.00 313 5.45 0.00

P002957 1994 SMALL TOVS WATER 000 42.30 0.00 000 6.67 7.44 0.o0

P002977 1994 COTTONSECTORDEVELO 0.00 14.00 000 0.00 0.41 060 -051

P002963 1994 SEXUAL.TRANS.IN 0.00 50.00 0 00 0.00 5.08 5.75 0.00

P002953 1993 PRIMARY EDUC. & TEAC 0.00 52.60 0.00 0.00 3.79 3.74 1.97

P002929 1991 POWER III 0.00 125.00 0.00 0.00 17.42 -10.38 175 97

Total: 0.00 956.12 11.80 2.18 478.03 160,64 221.27

- 59 -

UGANDASTATEMENT OF IFC's

Held and Disbursed PortfolioFeb-200 1

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Parti2000 CelTel Uganda 4.00 0.70 0.00 0.00 2.40 0.70 0.00 0.0'1994 CeItel 0.43 0.64 0.80 0.00 0.43 -' 0.64 0.80 0.011984/92 DFCU 0.00 0.60 0.00 0.00 0.00 0.60 0.00 0.0O1993 Jubilee 0.00 0.10 0.00 0.00 0.00 0.10 0.00 0.01996 Kasese Cobalt 12.00 3.60 0.00 0.00 12.00 3.60 0.00 0.01998 Tilda Rice 2.28 0.00 0.00 0.00 1.78 0.00 0.00 0.01995/96 Uganda Leasing 1.16 0.00 0.00 0.00 0.56 0.00 0.00 0.01983 Uganda Sugar 5.08 0.00 0.00 0.00 5.08 0.00 0.00 0.01996 AEF Agro Mgmt 0.60 0.40 0.00 0.00 0.55 0.40 0.00 0.01992 AEF Clovergem 0.84 0.00 0.00 0.00 0.84 0.00 0.00 0.01997 AEF Conrad Plaza 1.13 0.00 0.00 0.00 1.13 0.00 0.00 0.01998 AEF Exec. Invmnt 0.97 0.00 0.00 0.00 0.97 0.00 0.00 0.01999 AEF Gomba 1.40 0.00 0.00 0.00 1.40 0.00 0.00 0.02001 AEF Kabojja 0.35 0.00 0.00 0.00 0.00 0.00 0.0() 0.01998 AEF Kampala Flwr 0.50 0.00 0.00 0.00 0.00 0.00 0.0( 0.02000 AEF Kasambya 0.99 0.00 0.00 0.00 0.00 0.00 0.00 0.0

AEF Kiwa 11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01997 AEF Ladoto 0.80 0.00 0.00 0.00 0.80 0.00 0.00 0.02000 AEF LongFreight 0.80 0.00 0.00 0.00 0.00 0.00 0.00 0.02000 AEF Mosa Court 0.64 0.00 0.00 0.00 0.64 0.00 0.00 0.01998 AEF Nile Roses 0.16 0.00 0.00 0.00 0.16 0.00 0.00 0.01993 AEF Polypack 0.10 0.00 0.00 0.00 0.10 0.00 0.00 O.C1994 AEF Rainbow 0.79 0.00 0.00 0.00 0.79 0.00 0.00 O.C1995 AEF Rwenzori 0.35 0.00 0.00 0.00 0.35 0.00 0.00 O.C1993 AEF Skay Electro 0.22 0.00 0.00 0.00 0.00 0.00 0.00 O.X1998 AEF Skyblue 0.51 0.00 0.00 0.00 0.51 0.00 0.00 O.C1994 AEF White Nile 0.28 0.00 0.00 0.00 0.28 0.00 0.00 O.C1998 AEF Wstern Hgh 0.50 0.00 0.00 0.00 0.00 0.00 0.0( O.C1999

Total Portfolio: 36.88 6.04 0.80 0.00 30.77 6.04 0.80 0..

Approvals Pending Commitment

FY Approval Company Loan Equity Quasi Partic1998 AEF Ram Oil 1000.00 0.00 0.00 0.00

Total Pending Commitment: 1000.00 0.00 0.00 0.00

- 60 -

Annex 9: Statement of Loans and CreditsZAMBIA: Regional Trade Facilitation Project

1 5-Oct-2000Difference between e,xpected

and actualOriginal Amount in USS Millions disbursements

Project ID FY Purose IBRD IDA SF GEF Cancel. Undisb. Orig FrTr ReodP003218 1995 AGRICULTURE SECTOR I 0.00 80.00 000 1342 17.85 0.17P003249 1999 8ASIC ED SEC INV PRG 0.00 40.00 0.00 29.86 16.91 3.83P044324 1997 ENTERPRISE DEVELPMNT 0.00 45.00 0.00 36.21 34.08 0.00P040642 1996 ERIPTA 0.00 23.00 0.00 3.96 4.68 0.00P003253 1997 Ernionmta Support Program 0.00 12.80 0.00 9.83 5.42 0.00P039016 2000 FISC SUST.CR. 0.00 140.00 .000 93.72 0.00 0.00P003239 1995 HEALTH SECTOR 0°00 56.00 0.00 25.55 28.97 0.00P064064 2000 MINE TOWNSHIP SERVICES PROJECT 0.00 37.70 0.00 36.93 o.0o 0.00P003236 1998 NATIONAL ROAD 0°00 70.00 0°00 39.79 -2.15 0.00P035076 1998 POWER REHAB 0o00 75.00 0.00 67.88 61.05 0.00P050400 2000 PUB SVC CAP (PSCAP) 0°00 28.00 0.00 26.48 0.00 0.00P003210 19g5 SOCIAL RECOVERY II 0.00 30.00 0.00 026 3.92 0.00P063584 2000 Social Investmenr Fund (ZAMSIF) 0.00 64.70 0.00 61.92 -1.25 0.00P003241 1995 URBANRESTRCT&WATER 0.00 33.00 0o00 4.96 2.44 1.44

Total: 0.00 715.20 0.00 450.77 171.92 5.44

- 61 -

ZAMBIASTATEMENT OF IFC's

Held and Disbursed Portfolio1 5-Oct-2000

In Millions US Dollars

Committed DisbursedIFC IFC

FY Approval Company Loan Equity Quasi Partic Loan Equity Quasi Partic1998 AEF Amaka Cotton 1.30 0.00 0.00 0.00 1.30 0.00 0.00 0.001994 AEF Big Five Car 0.52 0.00 0.00 0.00 0.52 0.00 0.00 0.001998 AEF Drilltech 0.16 0.00 0.15 0.00 0.16 0.00 0.15 0.001999 AEF Esquire 0.40 0.0 '.00 0.00 0.40 0.00 0.00 0.001997 AEF JY Estates 0.89 0.00 0.00 0.00 0.89 0.00 0.00 0.001995 AEFKailaLodge 0.10 0.00 0.00 0.00 0.10 0.00 0.00 0.001997 AEF Pentire 0.53 0.00 0.00 0.00 0.53 0.00 0.00 0.002000 APC Ltd. 2.50 0.00 0.00 0.00 1.50 0.00 0.00 0.001972/73 Bata Shoe ZA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.001997 Finance Bank 3.75 0.00 0.00 0.00 1.25 0.00 0.00 0.001997 IMDHZ 0.00 0.50 0.00 0.00 0.00 0.50 0.00 0.002000 KCM 0.00 5.20 24.80 0.00 0.00 5.20 .3.70 0.001998 Nicozan 0.00 0.30 0.00 0.00 0.00 0.30 0.00 0.001999/00 Zamncell 3.30 0.44 0.00 0.00 0.00 0.44 0.00 0.00

Total Portfolio: 13.45 6.44 24.95 0.00 6.65 6.44 3.85 0.00

Approvals Pending Commitrnent

FY Approval Company Loan Equity Quasi Partic1999 AEF Kembe Estate 1300.00 0.00 0.00 0.001999 AEF Mpelembe 700.00 300.00 0.00 0.002000 AEF QNet 340.00 0.00 80.39 0.002000 Lusaka InterCon 4600.00 0.00 0.00 0.001997 Safari Intl. 2000.00 0.00 750.00 0.00

Total Pending Commitment: 8940.00 300.00 830.39 0.00

- 62 -

Annex 10: Country at a Glance

BURUNDI: Regional Trade Facilitation Project

POVERTY and SOCIAL Saharan Low- -'

Burundi Africa income Development diamond'1999Pooulation. mid-vear (millions) 6.7 642 2.417 Life expectancyGNP oer caoita (Atlas method. US$) 130 500 410GNP (Atlas method. US$ billions) 0.8 321 988

Averaae annual orowth. 1993-99

PoDulaton /%) 2.1 2.6 1.9Labor force(%l 24 2.6 2.3 GNP Gmss

per primaryMost recent estimate ltatest vear available. 1993-99) capita PnrnuImAnt

Povertv (% of Dooulation below national oovertv line)Urban oooulation /% of total ooDulatlon) 9 34 31Life exDectancv at birth (vears) 42 50 60Infant mortalitv (Der 1.000 live births) 118 92 77Child malnutrition (% of children under 5) 32 43 Access to safe waterAccess to imDroved water source (% of oooulation) .. 43 64Illiteracv % of Dooulation sae 15+) 53 39 39Gross odmarv enrollment (% of school-aae aooulaton) 51 78 96 Burundi

Male 55 85 102 Low-income groupFemale 46 71 86

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1979 1989 1998 1999Economic r tios

GDP /USS billions) 0.8 1.1 0.9 0.7Gross domestic investmentlGDP 14.9 16.5 8.8 8.0Exworts of ooods and services/GDP 14.2 9.7 8.1 8.8 TradeGross domestic savinas/GDP 6.4 3.3 -2.9 -1.6Gross national savinos/GDP 5.3 14.3 2.6 4.2

Current account balance/GDP -2.1 -6.2 -3.6 DoesInterest Davments/GDP 02 13 14 21 mesc

0.2 1.3 1.4 21 SaingsInvestmentTotal debt/GDP 17.4 79.0 128.7 157.6 SavingsTotal debt service/exoorts 3.7 36.4 73.7 88.9Present value of debt/GDP 71.3Present value of debtWexoorts 833.6

Indebtedness1979-89 1989-99 1998 1M 1999403

(averaoe annual orowth)GDP 4.4 -2.9 -5.8 5.5 3.2 BurundiGNP Der caoita 1.3 -4.5 -7.2 5.1 1.1 Low-income groupExworts of ooods and services 3.8 8.2 -4.0 35.9 17.3

STRUCTURE of the ECONOMY1979 1989 1998 1999 Growth of Investment and GDP I%)

(% of GDP)Aariculture 60.6 53.7 53.6 49.8 100Industrv 16.6 19.7 17.3 18.5 so/

Manufactunna 10.5 13.3 6.9 7.9Services 22.8 26.7 29.1 31.7 o

Private consumotion 80.8 86.6 89.6 84.0 .50 !-General aovemment consumDtion 12.8 10.2 13.3 17.6 GDI GDPImoorts of ooods and services 22.7 22.9 19.8 18.3 G

(aversac annual oowt 1979489 1989-99 1998 1999 Growth of exports and imports l%)(averaae annual arowth)Aoriculture 3.1 -1.6 4.7 -2.8 3^Industrv 5.1 -6.2 -5.1 6.3 200

Manufacturino 5.9 -8.1 -10.8 4.9Services 5.8 -1.3 8.7 -0.3 100

Private consumoton 3.4 -5.3 21.1 -6.5 oe General oovemment consumotion 0.5 15.7 4.6 15.0 94 95 97 98 99

Grossadomesticinvestment 8.7 -2.7 45.8 10.9 -10lmortsofooods and services 2.2 8.1 81.3 13.0 Exports ) ImportsGross national oroduct 4.2 -3.0 -5.6 5.1

Note: 1999 data are preliminary estimates.

The diamonds show four kev indicators in the countrv (in bold) comoared with its income-oroUD averaoe. If data are missina. the diamond willbe incomDlete.

Burundi

- 63 -

Sub-POVERTY and SOCIAL Saharan Low-

Burundi Africa income Developmentdbamond-1999Pooulation. mid-vear tmillions) 6.7 642 2.417 Life expectancyGNP oer cadita (Atlas method. USSJ 130 500 410GNP (Atlas method. USS billions) 0.8 321 988

Averaae annual arowth. 1993-99

Pooulation 1%) 2.1 2.6 1.9Labor force(%l 2.4 26 2.3 GNP Gross

per primaryMost recent estimate (latest vear available. 1993-99) capita enmllmp.ni

Povertv (% of DoDulation below national oovettv line)Urban oooulation (% of total DoDulationl 9 34 31Life exDectancv at birth (vears) 42 50 60Infant mortalitv (oer 1.000 live births) 118 92 77Child malnutrition (% of children under 51 .. 32 43 Access to safe waterAccess to imoroved water source (% of oooulaffon) .. 43 64Illiteracv (% ofooDulation ace 15+1 53 39 39Gross orimary enrollment (% of school-awe oooulationl 51 78 96 Burundi

Male 55 85 102 Low4ncome groupFemale 46 71 86

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1979 1989 1998 1999Economic ratios'

GOP USS billions) 0.8 1.1 0.9 0.7Gross domestic investmentVGDP 14.9 16.5 8.8 8.0 TrdExoorts of ooods and services/GDP 14.2 9.7 8.1 8.8 radeGross domestic savinas/GDP 6.4 3.3 -2.9 -1.6Gross national savinos/GDP 5.3 14.3 2.6 4.2

Current account balance/GDP .. 2.1 -6.2 3.6 DomesticInterest oavmentslGDP 0.2 1.3 1.4 2.1 InvestmentTotal debt/GDP 17.4 79.0 128.7 157.6 SavingsTotal debt servicelexDorts 3.7 36.4 73.7 88.9Present value of debtGDP .. .. 71.3Present value of debt/exoorts .. .. 833.6

Indebtedness197949 1989-99 1998 1999 199943

(averaoe annual orowthlGDP 4.4 -2.9 -5.8 5.5 3.2 BturundiGNP Der caoita 1.3 -4.5 -7.2 5.1 1.1 Low-income groupExoorts of aoods and services 3.8 8.2 -4.0 35.9 17.3

STRUCTURE of the ECONOMY1979 1989 1998 1999 Growth of investrnent and GDP (%)

(% of GDP)Aariculture 60.6 53.7 53.6 49.8Industrv 16.6 19.7 17.3 18.5 s.

Manufactunno 10.5 13.3 6.9 7.9Services 22.8 26.7 29.1 31.7 0

Private consumotion 80.8 86.6 89.6 84.0 .50 _General oovemment consumotion 12.8 10.2 13.3 17.6 _GDI -GDPImoorts of coods and services 22.7 22.9 19.8 18.3

1979-89 198949 1998 1999 Growth of exports and Imports 1%)(averace annual orowthlAonculture 3.1 -1.6 4.7 -2.8 300

Industrv 5.1 -8.2 -5.1 6.3 200Manufactunno 5.9 -8.1 -10.8 4.9

Services 5.8 -1.3 8.7 -0.3 1i- .O'

Private consumotion 3.4 -5.3 21.1 -6.5 oGeneral oovemment consumotion 0.5 15.7 4.6 15.0 97 9B 99

Gross domestic investment 8.7 -2.7 45.8 10.9 100 -EImoorts of ooods and services 2.2 8.1 81.3 13.0 pstorts - ImportsGross national oroduct 4.2 -3.0 -5.6 5.1

Note: 1999 data are preliminary estimates.

The diamonds show four kev indicators in the countrv (in bold) comoared with its income-orouo averaoe. If data are missino. the diamond willbe incomolete.

Burundi

- 64 -

Kenya at a glance 919100Sub-

POVERTY and SOCIAL Saharan Low-Kenya Africa income Development dlamond'

1999Population, mid-year (millions) 29.4 642 2,417 Life expectancyGNP per capita (Atlas method, USS) 360 500 410GNP (Atlas method, US$ billions) 10.7 321 988

Average annual growth, 1993-99

Population (%) 2.2 2.6 1.9 GNPLabor force (%) 3.2 2.6 2.3 p Gross

per primaryMost recent estimate (latest year available, 1993-99) capita enrollmentPoverty (% of population below national poverty line)Urban populaton (% of total population) 32 34 31Life expectancy at birth (years) 51 50 60Infant mortality (per 1,000 live births) 76 92 77Child malnutriton ( of children under 5) 23 32 43 Access to safe waterAccess to improved water source (% of population) 53 43 64Illiteracy (% of population age 15+) 19 39 39Gross primary enrollment (% of school-age population) 85 78 96 Kenya

Male 85 85 102 Low-income groupFemale 85 71 86

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1979 1989 1998 1999Economic ratlos'

GDP (US$ billions) 6.2 8.3 11.5 10.6Grossdomesticinvestment/GDP 18.1 20.8 14.6 13.5 TradeExports of goods and services/GDP 25.8 23.1 25.0 25.0Gross domestcsavings/GDP 12.3 13.2 7.0 8.9Gross national savings/GDP 10.7 10.0 10.3 12.7

Current account balance/GDP -7.2 -8.1 4.3 -3.1 DoVInterest payments/GDP 1.7 2.4 1.5 1.4 omestic InvestmentTotal debt/GDP 43.6 70.3 58.6 64.8Total debtservice/exports 18.3 39.3 25.7 27.7Present value of debt/GDP . -. 45.1Present value of debt/exports .. .. 178.9

Indebtedness1979-89 1989-99 1998 1999 1999-03

(average annual growth)GDP 4.0 2.2 1.6 1.3 3.5 Kenya -Low-income groupGNP per capita 0.3 -0.1 0.0 -1.1 1.2Exports of goods and services 3.0 1.6 -5.8 2.5 5.0

STRUCTURE of the ECONOMY1979 1989 1998 1999 Growth of investment and GDP I%)

(% of GDP)Agriculture 34.6 30.7 26.4 23.2 20Industry 19.9 18.9 15.8 16.2 10_

Manufacturing 12.3 11.6 10.4 10.7Services 45.6 50.4 57.8 60.5 a

Private consumption 68.5 68.9 76.6 73.6 - 410 99 97 .a

General government consumpbon 19.2 17.9 16.4 17.5 GDl CGDPImports of goods and services 31.6 30.4 32.6 29.6

(average annual growth) 1979-89 1989-99 1998 1999 Growth of exports and Imports I%l

Agriculture 3.2 1.2 1.6 1.3 40

Industry 3.7 2.0 1.4 1.0Manufacturing 4.7 2.5 1.4 1.0 20

Services 4.9 3.5 2.0 1. 6

Private consumpton 3.8 2.6 -0.5 -6.5 0 4General government consumpton 2.1 9.6 4.3 7.0 0 .Gross domestic investment 0.5 2.5 1.3 -4,0 -20Imports of goods and services -0.3 7.5 -4.4 -8.6 -Exports e mportsGross national product 3.9 2.6 2.4 1.3

Note: 1999 data are preliminary estmates.The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

- 65 -

Kenya

PRICES and GOVERNMENT FINANCE1979 1989 1998 1999 Infation (%)

Domestic prices(% change) 60TConsumer prices 10.2 13.5 6.6 3 4Implicit GDP deflator 5.6 8.4 9.2 6.8

Govemnment tinance(% of GDP, includes current grants)Current revenue 0.0 25.5 26.6 24.0 94 9s 00 97 9O a 0

Current budget balance 0.0 2.5 2.5 1.2 GOP deflator CPIOverall surplus/deficit 0.0 -4.7 0.7 -1.7

TRADE

(US$ millions) 1979 1989 1998 1999 Export and Import levels (USS mill.)Total exports (fob) 1,128 913 2.012 1,755 4000

Fuel 186 42 149 138Coffee 302 153 212 172 3.000Manufactures 145 137 220 238 * lEflE

Total imports (1ci) 1,693 1,978 3,331 2,915 2.000 -

Food 90 114 312 189 * _ _ _ _Fuel and energy 402 315 532 527Capital goods 341 497 896 708

Export price index (1995=100) 72 81 99 85 93 94 ss g3 97 Ss 99Import price index (1995=100) 130 132 86 96 * Exports U imports

Terms of trade (1995=100) 56 61 115 89

BALANCE of PAYMENTS

(USS millions) 1979 1989 1998 1999 Current account balance to GDP (%)Exports of goods and services 1,571 1,905 2,849 2,600 3Imports of goods and services 1,922 2,417 3,737 3,313Resource balance -351 -511 -888 -713

Net income -224 -244 -160 -180 93 _Net current transfers 124 79 557 564

Current account balance -451 -676 -490 -329 -3

Financing items (net) 754 736 464 378Changes in net reserves -303 -60 26 -49 -r I

Memo:Reserves including gold (U'S millions) 669 327 783 697Conversion rate (DEC, local/USS) 7.5 20.6 60.4 70.4

EXTERNAL DEBT and RESOURCE FLOWS1979 1989 1998 1999

(USS millions) Composition of 1999 debt (USS mill.)Total debt outstanding and disbursed 2,718 5,862 6,724 6,894

IBRD 274 889 147 91 A 9tIDA 149 893 2,198 2,200 G:859

Total debt service 299 756 743 727IBRD 34 150 84 70 2,200IDA 2 8 30 40 F:857

Compositon of net resource flowsOfficial grants 116 379 197 185Official creditors 189 384 19 -33Private creditors 205 163 41 262 135Foreign direct investment 84 62 11 18 E: 2o0Portfolio equity 0 0 4 0 '2 752

World Bank programCommitments 137 393 0 0 A - IBRD E - Bilateral

Disbursements 61 245 84 77 B - IDA 0 - Other multilateral F - PrivatePrincipal repayments 7 79 81 82 C - IMF G - Short-term

Net flows 54 165 3 -5

Interest payments 28 79 33 28Net transfers 26 86 -30 -33

World Bank 9/9/00

- 66 -

Annex 10: Country at a GlanceMALAWI: Regional Trade Facilitation Project

Sub-POVERTY and SOCIAL Saharan Low-

Malawi Africa Income Development diamond'1998Population, mid-year (millions) 10.5 628 3,515 Life expectancyGNP per capita (Atlas method, USS) 200 480 520GNP (At/as method, US$ billions) 2.1 304 1,844

Average annual growth, 1992-98

Population (X) 2.6 2.6 1.7Labor force (%) 2.3 2.6 1.9 GNP Gross

perprmyMost recent estimate (latest year available, 1992-98), per primary

Poverty (% of population below national poverty line)Urban population (% of total population) 15 33 31Life expectancy at birth (years) 43 51 63Infant mortality (per 1,000 live births) 133 91 69Child malnutrition (% of children under 5) 30 .. .. Access to safe waterAccess to safe water (% of population) 60 47 74Illiteracy (% of population age 15+) 42 42 32Gross primary enrollment (% ofschool-age population) 89 77 108 Matawi

Male 92 84 113 Low-income groupFemale 86 69 103

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1977 1987 1997 1998Economic ratios'

GDP (USS billions) 0.8 1.2 2.5 1.7Gross domestic investmentUGDP 24.7 15.7 12.3 13.7Exports of goods and services/GDP 30.0 25.9 24.3 32.5 TradeGross domestic savings/GDP 20.1 13.3 2.1 0.7Gross national savings/GDP 20.1 13.3 -0.3 -3.4

Current account balance/GDP .. -5.2 -12.6 -17.1Interest payments/GDP 0.9 2.5 1.2 1.6 DomesIc InvestmentTotal debtGDP 55.7 117.8 88.5 144.9 SavingsTotal debt service/exports 10.2 33.2 15.1 19.3Present value of debt/GDP .. .. 53.6 83.9Present value of debt/exports .. .. 215.1 246.1

Indebtedness1977-87 1988-98 1997 1998 1999-03

(average annual growth)GOP 2.2 3.7 5.1 3.1 5.9 - aai Lwicm ruGNP per capita -0.9 0.9 2.5 0.4 3.3 Mabwi Low-income groupExports of goods and services 3.7 4.7 12.9 1.5 4.0

STRUCTURE of the ECONOMY1977 1987 1997 1998 'rowthratesofoutputandinvestmentI%)

(% of GOP)Agricuiture 41.8 49.0 36.3 38.3 2 -Industry 18.7 24.9 17.5 19.0 10 -

Manufacturing 11.7 16.8 13.6 14.8 0Services 39.6 26.1 46.1 42.7 '1 93

Private consumption 66.4 67.2 85.3 85.0 .30 _Generalgovemmentconsumption 13.5 19.5 12.7 14.3 _ GDI - GDPImports of goods and services 34.6 28.3 34.5 45.6

1977-87 1988-98 1997 1998 Growth rates of exports and Imports I%)(average annual growth)Agriculture 0.8 6.8 3.9 2.7 so -Industry 1.5 2.2 1.1 5.3

Manufacturing 2.8 1.7 0.6 5.7 25 -Services 3.3 1.0 8.7 0.5

Private consumption 0.7 7.1 4.9 6.6 978General govemment consumption 6.9 -4.0 1.6 -9.5Gross domestic investment -8.6 -7.3 7.1 -27.0 25 -Imports of goods and services -3.8 3.7 11.9 -2.1 - Exports importsGross national product 2.2 3.8 5.1 3.0

Note: 1998 data are preliminary estimates.

The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

- 67 -

Malawi

PRICES and GOVERNMENT FINANCE

Domestic prices 1977 1987 1997 199 In8tion (%)

(% change)Consumer prices .. 25.2 9.1 22.1 75 -Implicit GDP deflator 13.4 14.8 13.4 22.8 so -

Government fnnance 25

(% of GOP, includes current grants) °Currentrevenue 10.1 22.8 16.1 22.5 93 94 95 96 97 99

Current budget balance -1.8 -2.2 -5.1 -3.8 GDP deflator - CPIOverall surplus/deficit -6.4 -10.7 -12.3 -6.3

TRADE

(US$ millions) 1977 1987 1997 1998 Export and Import levels (USS millions)

Total exports (fob) .. 278 567 509 sro -Tobacco .. 173 331 270Tea .. 28 69 63Manufactures ao_

Total imports(af) * - 291 783 677Food .. 2 33 29 30-Fuel and energy .. 40 79 71Capital goods .. 82 340 285 o

Export pnce index(1995=100) ,992 113 99 -2 93 94 95 96 97 sImport price index (1995=100) .. 76 93 84 *EExports lmporusTerms of trade (t995=100) .. 120 121 118

BALANCE of PAYMENTS

(US$ millions) 1977 1987 1997 1998 Current account balance to GDP ratio (%)

Exports of goods and services 213 301 615 549Imports of goods and services 300 324 872 769Resource balance -87 -23 -258 -220 '

Netincome .. -57 -41 -49 .-1o -Net current transfers .. .. -19 -20

-is ICurrent account balance .. -60 -318 -289

Financing items (net) .. 86 265 400 . 0Changes in net reserves -51 -26 53 -111 -25..

Memo:Reserves including gold (US$ millions) 89 92 310 258Conversion rate (DEC, locaUlS$) 0.9 2.2 16.4 31.1

EXTERNAL DEBT and RESOURCE FLOWS1977 1987 1997 1998

(US$ millions) Composition of total debt, 1998 (USS mlillons)Total debt outstanding and disbursed 449 1,367 2,229 2,446

IBRD 3 104 34 26 F 20 G:27 A26IDA 84 509 1,375 1,542 E:249

Totaldebtservice 22 101 95 111IBRD 0 14 8 13IDA 1 5 18 21 D:501

Composition of net resource flowsOfficial grants .. .. 83 157Official creditors 52 83 131 122 8:1.542Prvate creditors 31 -11 *1 -1 c:Foreign direct investment 6 0 25 35Portfolio equity 0 0 0 0

World Bank programCommitments 0 0 0 0 A -18RO E - Bilat,ralDisbursements 13 55 107 130 6- IDA 0 Othier mutilateral F - PrrvatePrncipal repayments 0 8 15 21 C - IMF G - Short-teniNettlows 13 47 92 110Interest payments 1 12 11 13Net transfers 13 35 81 96

Development Economics 9/20199

- 68 -

Annex 10: Country at a GlanceRWANDA: Regional Trade Facilitation Project

Sub-POVERTY and SOCIAL Saharan Low-

Rwanda Africa income Developmentdiamond'1999Population, mid-year (millions) 8.3 642 2,417 Life expectancyGNP per capita (Atlas method, US$) 250 500 410GNP (Atlas method, USS billions) 2.1 321 988

Average annual growth, 1993-99

Population (%) 1.6 2.6 1.9Labor force (X) 1.9 2.6 2.3 GNP Gross

per primaryMost recent estimate (latestyear avallable, 19939) capita enrollment

Poverty (% of population below national poverty lne) 51Urban population (% of total population) 6 34 31Life expectancy at birth (years) 41 50 60Infant mortality (per 1,000 live births) 123 92 77Child malnutrition (% of children under 5) .. 32 43 Access to safe waterAccess to improved water source (% of population) .. 43 64Illiteracy (% of population age 15+) 34 39 39Gross primary enrollment (% of school-age population) .. 78 96 Rwanda

Male .. 85 102 Low-income groupFemale .. 71 86

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1979 1989 1998 1999Economic ratlos

GDP (USS billions) 1.0 2.4 2.0 2.0Gross domestic investment/GDP 12.0 13.4 15.7 14.3Exports of goods and services/GDP 21.0 6.1 5.4 5.6 TradeGross domestic savings/GOP 10.3 2.3 -1.7 -1.3Gross national savings/GDP 22.7 2.7 7.4 7.1

Current account balance/GDP 4.6 -10.8 -8.2 -7.1Interest payments/GDP 0.1 0.3 0.6 0.6 Domavin InvestmentTotal debt/GDP 15.1 25.8 60.0 63.2 Savings ITotal debt service/exports 2.3 18.1 32.9 41.5 /Present value of debt/GDP .. .. 34.1 38.5Present value of debtexports .. .. 570.3 640.8

Indebtedness1979-89 1989-99 1998 1999 199943

(average annual growth)GDP 2.8 -2.1 9.5 5.9 5.8 RwandaGNP per capita -0.4 -3.5 7.5 3.2 3.2 Low-income groupExports of goods and services 3.5 -6.9 1.9 14.4 6.5

STRUCTURE of the ECONOMY1979 1989 1998 1999 Growth of Investment and GDP 1%l

(% of GOP)-Agriculture 53.6 43.3 47.4 45.7Industry 20.5 18.7 21.2 20.5 i'°-

Manufacturing 14.0 11.2 13.0 11.7 soServices 25.9 38.0 31.4 33.8

Private consumption 76.6 85.0 90.4 88.7 WS Se g 7 9rGeneralgovemmentconsumption 13.1 12.7 11.3 12.7 GDI GPImports of gPods and services 22.8 17.3 22.9 21.1

(average annual growth) 1979-89 1989-99 1998 1999 Growth of exports and Imports (%)Agriculture 0.8 -4.0 10.8 5.9 so -Industry 3.8 0.5 11.4 5.9 25-

Manufacturing 4.1 4.0 10.4 8.4 0_____Services 7.3 -1.7 7.7 5.9 97 ;

Private consumption 2.1 0.9 6.6 -0.4 50 General govemment consumption 5.8 -3.5 16.9 18.1Gross domestic investment 9.1 -0.1 26.4 -12.7 -Imports of goods and services 5.4 7.1 8.0 -11.4 - Exports importsGross national product 2.7 -2.1 10.2 5.7

Note: 1999 data are preliminary estimates.

The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

- 69 -

Rwanda

PRICES and GOVERNMENT FINANCE

Domestic prices 1979 1989 1998 1999 Inflation l%)

(% change) 30 -

Consumer pices 15.7 1.1 6.8 -2.4 GOImplicit GDP deflator 6.1 5.3 2.6 -2.4 40

Govemnment finance 20

(% of GDOP includes current grants) °Current revenue .. 12.7 15.7 13.4 -20 - 94 95 93 97 go

Current budget balance .. 0.5 3.8 0,1 GDP deflator CPIOverall surplus/deficit .. .. -2.9 -6.2

TRADE

(US$ millions) 1979 1989 1998 1999 Export and import levels (USS mill )

Total exports (fob) 203 97 64 61 soo -Coffee .. 59 28 27Other agriculture .. 20 23 18 400 -Manufactures .. 4 10 15 300-

Total imports(af) .. 332 323 281 200Food '' 29 49 47Fuel and energy .. 48 35 47 100-Capital goods .. 86 61 44

Export pnce index (1995=t100) ., 83 109 106 93 94 95 93 97 9S soImport price index (1995=100) .. 83 99 102 *Exports a ImportsTermsof trade (1995=100) .. 101 110 104

BALANCE of PAYMENTS

(US$ millions) 1979 1989 1998 1999 Current account balance to GDP (%)

Exportsofgoodsandservices 227 148 111 109 0-Imports of goods and services 307 417 462 412Resource balance -80 -269 -351 -304 3

Netincome -3 -10 -7 -10Netcurrenttransfers 131 19 191 176 '- PuCurrent account balance 48 -259 -167 -138

Financing items (net) -13 155 185 161Changes in net reserves -35 105 -18 -23 -12 -

Memo:Reserves induding gold (USS millions) 152 70 164 186Conversion rate (DEC, local/USS) 92.8 80.0 312.3 333.9

EXTERNAL DEBT and RESOURCE FLOWS1979 1989 1998 1999

(USS millions) Composition of 1999 debt (USS mill.)Total debt outstanding and disbursed 156 623 1,213 1,237

IBRD 0 0 0 0 F:16IDA 48 302 552 691 E 180

Total debt service 5 29 40 49IBRD 0 0 0 0IDA 0 3 11 11

Composition of net resource flows *_Official grants 83 96 199 212 D:330 BB:6 1Official creditors 33 53 43 27Prvate creditors -1 -3 88 96Foreign direct investment 13 16 7 2Portfolio equity 0 0 0 0 C:20

World Bank programCommitments 10 52 0 80 A-IBRD E-BilateralDisbursements 11 32 55 89 a - IDA D - Other multilateral F - PrivatePrncipal repayments 0 1 6 6 C - IMF G -Short-termNetflows 11 31 49 63Interest payments 0 2 5 5Net transfers 11 29 44 58

AFTM3

- 70 -

Annex 10: Country at a Glance

TANZANIA: Regional Trade Facilitation Projectsuo.

POVERTY and SOCIAL Saharan Low.Tanzania Africa income Development diamond

1999Population, mid-year (millions) 32.9 642 2.417 Life expectancyGNP per capita (Atlas method, USS) 260 500 410GNP (Atlas method, USS billions) 8.5 321 988

Average annual growth, 1993-99

Population (X) 2.7 2.6 1.9Labor force (X) 2.7 2.6 2.3 GNP Gross

per primaryMost recent estimate (latest year available, 1993-99) capita v enrollment

Poverty (% of population below national poverty line)Urban population (X of total population) 32 34 31Life expectancy at birth (years) 47 50 60Infant mortality (per 1,000 live births) 85 92 77Child malnutrition (X of children under 5) 31 32 43 Access to safe waterAccess to improved water source (X of population) 49 43 64Illiteracy (% of population age 15+) 25 39 39Gross primary enrollment (X of school-age population) 67 78 96 Tanzania

Male 67 85 102 Low-income groupFemale 66 71 86

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1979 1989 1998 1999Economic ratios

GDP (USS billions) 5.3 8.6 8.8Gross domestic investmentVGDP 18.1 16.5 17.0Exports of goods and services/GDP 11.3 12.8 13.3 TradeGross domestic savings/GDP -3.5 2.3 2.2Gross national savings/GDP 2.0 2.2

Current account balance/GDP -4.2 -14.5 -14. omInterest payments/GDP 0.9 1.2 0.4 Domestic InvestmentTotal debt/GDP 110.3 88.5 75.2 SavingsTotal debt service/exports 32.5 20.9 11.8 /Present value of debtlGDP 66.1Present value of debt/exports 496.9

Indebtedness1979-89 1989-99 1998 1999 199943

(average annuol growth)GDP 3.0 4.0 4.7 5.7 TanzaniaGNP per capita 0.5 2.1 2.5 3.4 Low-income groupExports of goods and services 8.9 9.8 4.7 5.7

STRUCTURE of the ECONOMY1979 1989 1998 1999 Growth of investment and GDP I%)

(3 of GDP)Agriculture 50.7 44.8 44.8 20 -

Industry 14.9 15.4 15.4 101

Manufacturing 8.5 7.4 7.4 ____v _______ ^ Services 34.4 39.8 39.8 19

Private consumption B7.5 86.6 86.2 -20

General government consumption 16.0 11.1 116 GD - GDPImports of goods and services 32.9 26.9 28.0

(average annual growth) 1979-89 1989-99 1998 1999 Growth of exports and imports I%Y

Agriculture 3.4 1.9 4.7 40-

Industry 2.6 10.3 4.8 20Manufacturing 2.3 8.0 4.9

Services 2.5 4.2 4.8 o____

Private consumption 2.9 1.3 4.7 -20

General government consumption -7.4 -4.5 4.7Gross domestic investment -1.1 14.3 48 -°01

Imports of goods and services -2.1 -0.3 4.7 Expons I ImportsGross national product 3.5 4.8 5.0

Note: 1999 data are preliminary estimates.

The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

- 71 -

Tanzania

PRICES and GOVERNMENT FINANCE

Dom"estic prncs 1979 1989 1998 1999 I-nnatorn (%).

(% change) 40 _Consumer prces . 25.8 12.8 7.9 30Implicit GDP deflator .. 45.9 16.7 9.1 20

Government finance s0(% of GOP, includes current grants) D

Current revenue .. 11.3 10.8 10.6 94 95 95 97 99 BeCurrent budget balance .. -1.0 0.9 0.5 _GDP deflator COverall surplusideficit .. -3.5 -2.6 -3 33

TRADE

(US$ millions) 1979 1989 1998 1999 Export and import levels (USS mill.)

Total exports (fob) .. 415 577 541 2,000Coffee .. 103 111 98Cotton 70 91 90 1500Manufactures .. 89 68 84

Totai imports (cif . 1,211 1,519 1,631 100*

Food .. 81 84 89 __

Fuelandenergy .. 150 138 134Capital goods 443 551 629 o

Export price index (1995=100s) 79 86 84 93 94 9s 9s 97 9a 9SImport price index (1995=100) 89 83 84 *Exports * ImportsTerms of trade (1995=100) 88 103 99

BALANCE of PAYMENTS

(UJS$ millions) 1979 1989 1998 1999 Current account balance to GDP (%)

Exports of goods and services .. 1,099 1,163 0Imports of goods and services .. 2,314 2,457Resource balance .. -1,216 -1,294 -5

Net income .. -57 -35 -4oDNet current transfers .. 31 34 1 WCurrent account balance .. -1,242 -1,295

Financing items (net) .. 1,276 1,424 20 -Changes in net reserves .. .. -34 -129 -25

Memo:Reserves including gold (US$ millions) .. .. 599 776Conversion rate (DEC, locaVIUS$) 119.4 664.7 744.8

EXTERNAL DEBT and RESOURCE FLOWS1979 1989 1998 1999

(US$ millions) ComposltIon of 1999 debt (USS mill.)Total debt outstanding and disbursed 4,269 5,854 7,605 6,584

IBRD 168 252 21 16 G0.158 A 18IBA 208 1,016 2,463 2,594 G

Total debt service 100 177 239 144IBRO 16 42 14 6 B ,9IDA 2 12 33 44

Compositon of net resource flows E: 2.858SOfficial grants 349 536 648Official creditors 139 98 135 -39Private creditors 71 24 -15Foreign direct investment 0 6 172 183Portfolio equity 0 0 0 .. Di 535 27

World Bank programCommitments 143 73 43 159 A - IBRD E - BilateralDisbursements 72 115 102 199 - IDA D-Other multilateral F - PovatePrincipal repayments 4 28 29 30 C - ShortertNet flows 68 87 73 169Interest payments 15 26 18 21Net transfers 54 61 55 148

Development Economics 9/13/00

- 72 -

Uganda at a glance 9/9/00

Sub-POVERTY and SOCIAL Saharan Low-

Uganda Africa Income Development diamond'1999Population, mid-year (millions) 21.5 642 2,417 Life expectancyGNP per capita (Atlas method USS) 320 500 410GNP (Atlas method, US$ billions) 6.8 321 988

Average annual growth, 1993-99

Population (%) 2.9 2.6 1.9Labor force (%) 2.7 2.6 2.3 GNP ," Gross

per primaryMost recent estimate (latest year available, 1993-99) capita enrollment

Poverty (% of population below national poverty line) 44Urban population (% oftotal population) 13 34 31Life expectancy at birth (years) 42 50 60Infant mortality (per 1,000 live births) 97 92 77Child malnutrition (% of children under 5) 26 32 43 Access to safe waterAccess to improved water source (% Of population) 41 43 64Illiteracy (% of population age 15+) 38 39 39Gross primary enrollment (% ofschool-age population) 122 78 96 Uganda

Male 129 85 102 Low-income groupFemale 114 71 86

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1979 1989 1998 1999Economic ratios'

GDP (US$ billions) .. 5.3 6.8 6.4Gross domestic investmenVGDP .. 11.1 15.0 16.4 TrdExportsofgoodsandservices/GDP .. 8.0 10.3 11.3 radeGross domestic savingslGDP .. 1.0 5.6 4.9Gross national savings/GDP .. 1.9 13.4 10.5

Current account balance/GDP .. -6.9 -10.4 -11.6 DomesticInterest payments/GDP .. .. 0.6 0.6 Domestc InvestmentTotal debt/GDP .. 36.2 53.6 54.3 Savigs ITotal debt service/exports .. .. 25.5 23.1Present value of debt/GDP .. .. 35.0 27.3Present value of debt/exports .. .. 350.6 225.3

Indebtedness197949 1989-99 1998 1999 1999-03

(average annual growth)GDP 3.4 7.1 5.6 7.4 6.3 UgandaGNP per capita 0.9 4.1 2.8 4.3 3.3 Low-income groupExports of goods and services 1.2 14.8 -14.9 33.0 6.4

STRUCTURE of the ECONOMY1979 1989 1998 1999 Growth of investment and GDP (%)

(% of GDP)Agriculture .. 56.8 44.6 44.4 60Industry .. 10.7 17.6 17.8 40

Manufacturing .. 5.9 8.9 8.7 20Services .. 32.5 37.8 37.8 o

Private consumption . . 92.0 84.8 85.2 -201 94 95 96 97 98 99General government consumpton .. 7.0 9.6 9.9 GDI -OGDPImports of goods and services . 18.1 19.7 22.9

1979-89 1989-99 1998 1999 Growth of exports and imports I%)(average annual growth)Agriculture 2.7 3.7 1.9 6.9 60Industry 6.4 12.1 11.5 9.1 40 . t

Manufacturing 3.6 13.5 14.4 11.3Services 3.2 8.1 6.6 7.2 20

Private consumption 3.4 6.3 8.6 0.8 oGeneral government consumption 0.6 8.2 8.0 17.4 94 9 96 97Gross domestic investment 13.1 8.2 3.7 9.0 -20Imports of goods and seMces 7.3 9.0 3.1 2.8 Exports -o IportsGross national product 3.5 7.3 5.8 7.3

Note: 1999 data are preliminary estimates.

The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

- 73 -

Uganda

PRICES and GOVERNMENT FINANCE1979 1989 1998 1999 Inflation (%)

Domestic onces(% change) 30Consumer prices .. 131.0 5.8 -0.2 20ImplicitGDPdeflator .. 115.4 10.7 4.4

10

Govemment finance(% of GDP, includes current grants) o 94 ss 96 97 98 99

Current revenue .. 5.5 10.3 10.9 -10Current budget balance .. -1.3 0.9 0.9 - GDP deator -OCPIOverall surplusideficit .. 4.8 -5.6 -5.9

TRADE

(USS millions) 1979 1989 1998 1999 Export and import levels (USS mill.)Total exports (fob) 282 458 549 1.o0-

Coffee .. 276 269 307Cotton .. .. 11 11Manufactures 1,000

Total imports (cifl 562 1,411 1,376

Food 5Fuel and energy .. 76 84 65Capital goods .. . .. .

Export price index (1995=100) .. 92 74 67 93 94 3s 96 97 98 99Import price index (1995=100) .. 79 106 101 mExports bImportsTerms of trade (1995=100) .. 117 70 67

BALANCE of PAYMENTS

(US$ millions) 1979 1989 1998 1999 Current account batance to GDP (%)Exports of goods and services .. 304 634 726 °Imports of goods and services .. 712 1,871 1,834Resource balance .. -408 -1,237 -1,107 3

Net income .. -66 -9 -14Net current transfers .. 114 539 375

Current account balance .. -360 -706 -746 I IFinancing items (net) .. 342 840 780Changes in net reserves .. 18 -134 -33

Memo:Reserves including gold (US$ millions) .. 46 750 748Conversion rate (DEC, localAUS$) 170.4 1,149.7 1,362.0

EXTERNAL DEBT and RESOURCE FLOWS1979 1989 1998 1999

(US$ millions) Composition of 1999 debt (USS mill.)Total debt outstanding and disbursed .. 1,903 3,631 3,480

IBRD .. 24 0 0 F: 59IDA .. 605 1,971 2,042

E, 644Total debt service .. .. 172 179

IBRD . 5 0 0IDA .. 5 24 25

Composition of net resource flows E: 385Official grants 36 177 433 277 B 2,042Officiat creditors .. 220 188Private creditors .. ° 1 4Foreign direct investment 2 2 200 230 C: 351Portfolio equity 0 0 0

World Bank programCommitments 0 141 172 267 A - IBRD E - BilateralDisbursements 100 242 148 a - IDA D - Othermulblateral F - PrivatePrincipal repayments 4 10 10 C - IMF G - Short-termNet flows 96 231 138Interest payments .. 6 14 15Net transfers .. 90 217 123

World Bank 919/00

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Zambia at a glance 9/9/00

Sub-POVERTY and SOCIAL Saharan Low-

Zambia Africa Income Development diamond'1999Population, mid-year (mi/lions) 9.9 642 2,417 Life expectancyGNP per capita (Atlas method, US$) 330 500 410GNP (Atlas method, USS billions) 3.2 321 988

Average annual growth, 1993-99

Population (%) 2.5 2.6 1.9 GLabor force (%) 2.8 2.6 2.3 GNP pGross

Most recent estimate (latest year available, 1993-99) capita " ," enrollment

Poverty (% of population below national poverty line) 73Urban population (% of total population) 44 34 31Life expectancy at birth (years) 45 50 60Infant mortality (per 1,000 live births) 114 92 77Child malnutrition (% of children under 5) 27 32 43 Access to safe waterAccess to improved water source (% of population) 43 43 64Illiteracy (% of population age 15+) 22 39 39Gross primary enrollment (% ofschool-age population) 89 78 96 Zambia

Male 92 85 102 Low-income groupFemale 86 71 86

KEY ECONOMIC RATIOS and LONG-TERM TRENDS

1979 1989 1998 1999Economic ratlos

GDP (US$ billions) 3.3 4.0 3.2 3.1Gross domestic investment/GDP 14.2 10.8 16.3 17.5 TradeExports of goods and services/GDP 45.6 26.8 26.7 22.3Gross domestic savings/GDP 23.2 3.8 3.9 -1.1Gross national saAngs/GDP 15.0 -7.1 -3.6 -6.6

Current account balancelGDP 1.1 -5.6 -17.8 -15.8Interest payments/GDP 2.8 1.9 2.8 5.2 Domestic InvestmentTotal debt/GOP 91.3 168.0 215.5 206.9 SavingsTotal debt servire/exports 22.1 13.6 25.8 38.1Present value of debt/GDP .. .. 170.3 125.7Present value of debt/exports .. .. 575.9 454.5

Indebtedness1979-89 1989-99 1998 1999 1999-03

(average annual growth)GDP 1.1 0.2 -1.9 2.4 4.7 - ZambiaGNP per capita -3.2 -1.8 -5.1 2.2 2.6 - Low-income groupExports of goods and services -3.1 2.9 5.0 4.9 118

STRUCTURE of the ECONOMY1979 1989 1998 1999 Growth of investment and GOP (%)

(% of GDP) 0Agnculture 16.5 21.2 21.2 246 100Industry . . 29.1 24.5 s

Manufacturing .. .. 13.0 12.0 a'Services 49.7 50.9 -so 5 s s 97 98 99

Private consumption 52.9 82.5 84.9 91.5 -so0Generalgovernmentconsumpton 23.9 13.7 11.2 9.6 GD1 O GDPImports of goods and services 36.6 33.8 39.2 40.9

(average annual growth) 1979-89 1989-99 1998 1999 Growth of exports and imports (%)

Agriculture 3.6 3.4 1.8 13.7 20Industry . -3.6 -11.3 -4.9 ° i\

Manufacturing . 3.3 1.8 2.8Services .. 5.7 4.4 5.2

94 95 5~~~~7 99 99Private consumption 3.2 0.4 -1.3 2.6 -10General govemment consumpton -3.8 -5.5 -14.8 -15.8Gross domestic investment -3.6 3.3 9.3 8.7 -20Imports of goods and services -2.3 1.3 4.6 1.6 Exports -- importsGross natonal product -0.2 0.9 -2.9 4.4 _ _

Note: 1999 data are preliminary estimates.

The diamonds show four key indicators in the country (in bold) compared with its income-group average. If data are missing, the diamond willbe incomplete.

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Zambia

PRICES and GOVERNMENT FINANCE1979 1989 1998 1999 Inflation I%)

Domestic pnces(% change) 200Consumer prices 9.7 127.7 24.4 26.8 150Implicit GDP deflator 21.3 80.9 19.6 21.7 too

Govemment finance so(% of GoP, includes current grants) o00, , Currentrevenue 18.6 18.7 17.6 94 95 96 97 ga 99Current budget balance -4.4 1.4 2.6 - GDP deflator eO*CPIOverall surplus/deficit 64.6 -9.8 -10.0 10

TRADE

(USS millions) 1979 1989 1998 1999 Export and import levels (US$ mill.)Total exports (fob) 1,408 1,410 816 755 1.200

Copper 1,233 365 372Cobalt 84 155 95 90 _ - _Manufactures 36 194 188

Total imports (cif) 756 901 971 871 r00Food 14 108 0 300Fuel and energy 103 42 115Capital goods 372 539 523

Export pnce index (1995=100) 92 70 69 9 4 9 6 9 8 9Import Price index (1995=100) 55 79 87 88 OExqrts EhnportsTerms of trade (1995=100) 116 81 79

BALANCE of PAYMENTS

(US$ miltions) 1989 1998 1999 Current account balance to GDP I%)Exports of goods and services 1,523 1,493 919 842 oImports of goods and services 1.212 1,281 1,253 1,169 **Resource balance 311 212 -334 -327

Net income -169 -406 -215 -156Net current transfers -105 -28 -27 -16 1 I I ICurrent account balance 37 -222 -576 -499 '-121IFinancing items (net) -146 487 365 518Changes in net reserves 109 -265 211 -19 -a

Memo:Reserves including gold (US$ millions) 191 123 69 50Conversion rate (DEC, local/USS) 0.8 13.8 1,862.0 2,388.0

EXTERNAL DEBT and RESOURCE FLOWS

1979 1989 1998 1999(USS millions) Composition of 1999 debt (US$ mill.)Total debt outstanding and disbursed 3,047 6,709 6,982 6,518

IBRD 336 501 42 33 G 329 A 33IDA 1 253 1,562 1,704 F: 1

Total debt service 340 206 247 331 s 1,704lBRD 41 0 25 12IDA 0 0 16 16

Composition of net resource flowsOfficial grants 58 194 257 214 E: 2,895Official creditors 305 90 -54 66Private creditors 1 11 -11 -20 C: 1.171Foreign direct investment 35 164 72 163Portfolio equity - 0: 265

World Bank programCommitments 11 0 75 213 A - IBRD E -BilateralDisbursements 28 4 43 156 8 - IDA D - Other multilateral F - PivatePrincipal repayments 13 0 25 13 C - IMF G - Short-termNetflows 16 4 18 143

Interest payments 29 0 16 15Net transfers -13 4 2 128

World Bank 9/9/00

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