Document of The World Bank FOR OFFICIAL USE ONLY -A/ 3 o 6 3 '07 Report No. 7446-ZIM STAFF APPRAISAL REPORT ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT APRIL 18, 1989 Southern Africa Department Agriculture Operations Division This document has a restricted distribution and may be used by recipients only In the performance of their official duties. Its contents may not otherwise be disdosed without World Bank authorization. Currency and Equivalent Units Currency Unit - Zimbabwe Dollars (Z$) US$1.00 Z$2.00 Z$1.00 = US$0.50 Abbreviations AFC - Agricultural Finance Corporation AfDB - African Development Bank AIPC - Agricultural Inputs Priority Committee AMA - Agricultural Marketing Authority BADEA - Arab Bank for Economic Development in Africa CAFs - Communal Area Farmers CMB - Cotton Marketing Board EEC - European Economic Community GMB - Grain Marketing Board HPC - Horticultural Promotion Council GOZ - Government of Zimbabwe IFAD - International Fund for Agricultural Development KfW - Kreditanstalt fur Wiederaufbau MCCDWA - Ministry of Community and Cooperative Deve.opment and Womens Affairs MLARR - Ministrv of Lands, Agriculture and Rural Resettlement MLGRUD - Ministry of Local Government and Rural and Urban Development NFAZ - National Farmers Association of Zimbabwe NGOs - Non-Governmental Organizations ODA - Overseas Development Administration RBZ - Reserve Bank of Zimbabwe R & SS - Research and Specialized Services USAID - United States Agency for International Development AFC & CMB Fiscal Year April 1 - March 31 Government Fiscal Year July 1 - June 30 FOR OMCIAL USE ONLY ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Table of Contents Page Loan and Project Summary i-iii I. Background ...................................................... 1 A. Salient Economic Features ................................... 1 B. The Agricultural Sector .... 1 - Main Characteristics . . . . 1 - Objectives, Strategy and Achievements . ................... 2 - Agricultural Support Services and Price Policy ........... 3 C. Bank Strategy and Lending Operations for Zimbabwe Agriculture 7 II. Project-Related Institutions .. 9 A. Agricultural Finance Corporation (AFC) . . . 9 - Organization and Management .............................. 9 - Staffing and Staff Training . . 9 - Lending Policies, Terms and Procedures ................... 10 - Financial Performance and Capital Structure .............. 13 B. Cotton Marketing Board (CMB) .. 15 - Organization, Management and Staffing .................... 15 - Cotton Ginning and other Post-harvest Facilities .15 - Financial Performance and Conditions ..................... 16 III. The Project .... ................................................. 18 A. Project Objectives and RatiLnale for Bank Involvement ... 18 B. Project Description . . . 19 C. Cost Estimates . . ............................................ 21 D. Financing Arrangements . . . 24 E. Procurement ................................................. 25 F. Disbursement ................... 26 G. Role of Women ...................... 27 H. Environmental Impact . ................ 28 I. Role of NGOs .................... 28 J. Accounts and Audit ..... . . ...................... 28 IV. Project Implementation and Management ....................... 30 A. Credit and Group Lending Pilot Scheme . . ..................... 30 - General Lending Operations ................... 30 - Arrangements to Make Foreign Exchange Available to Farmers 31 - Group Lending Pilot Scheme . .............................. 32 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. B. Strengthening AFC Capability ................................ 33 C. Cotton Ginnery and Storage Facilities ....................... 33 D. Horticultural Research .................... 33 E. Reporting, Monitoring and Evaluation .......* .......................... 34 V. Benefits, Justification and Risks .... ................. 35 A. General .............................................. . . . 35 B. Costs and Benefit Analysis .................................. 36 C. Project Risks ......... ...................................... 39 VI. Agreements Reached and Recommendations .. 41 ANNEXES: ANNEX 1 Table 1 Interest Rate Structure Table 2 AFC Lending Program; 1980-88 Table 3 AFC Actual and Projected Lending Program; 1985/86-1993/94 Table 4 Status of Arrears; 1983-88 Table 5 AFC Income and Expenditure Statements; 1980-88 Table 6 AFC Projected Income and Expenditure Statements; 1989-94 Table 7 AFC Balance Sheet Positions; 1980-88 Table 8 AFC Projected Balance Sheet Positions; 1989-94 Table 9 AFC Source and Application of Funds: 1988-94 Table 10 CMB Income and Expenditure Statements; 1980-88 Table 11 CMB Projected Income and Expenditure Statements; 1989-94 Table 12 CMB Forecast Income and Expenditures Statements: 1989-94 Tabie 13 CMB Balance Sheet Positions; 1980-88 Tab]e 14 CMB Projected Balance Sheet Positions; 1989-94 Table 15 CMB rorecast Balance Sheet; 1988-94 Table 16 CMB Source and Application of Funds; 1988-94 Table 17 Latest Dates for Submitting to the Bank Reports of EEC Technical Assistance and Consultancies to AFC ANNEX 2 Terms of Reference for Horticultural Export Marketing and Cotton Subsector Studies ANNEX 3 Table 1 Project Cost Breakdown of Summary Accounts Table 2 Detailed Costs: Credit Fund Table 3 n n Group Lending Pilot Scheme Table 4 n n AFC Institutional Development Table 5 n n Ginnery Civil Works Table 6 n n Gin Plant Table 7 n Ginning Vehicles & Equipment Table 8 n Lint Storage, Workshop, and Cotton Sector Study Table 9 n n Horticultural Research Table 10 Summary of Accounts by Year Table 11 Financing Plan Table 12 Estimated Disbur3ement Schedule ANNEX 4 Group Lending Pilot Scheme; Implementation Guidelines ANNEX 5 Table 1 Crop Budget; Maize Table 2 Cotton Table 3 Soyabeans Table 4 Groundnuts Table 5 Sunflower Table 6 Smallholder Tobacco Table 7 Financial Analysis: Smallholder Poultry Table 8 Economic Analysis : Table 9 Financial Analysis: Wheat Table 10 Economic Analysis : Wheat Table 11 Financial Analysis: Roses Tabls 12 Economic Analysis : Roses Table 13 Financial Analysist Annual Flowers Table 14 Economic Analysis s n Table 15 Economic Analysis : Passion Fruit Table 16 Financial Analysis: n Table 17 Financial Analysis: Ginnery Component Table 18 Economic Analysis : Ginnery Component ANNEX 6 Terms of Reference for Indepth Hid-term Review ANNEX 7 Project File Papers CHART 1 APC Organization Structure: Head Office 2 AFC Organization Stricture: Field Offices 3 CMB Organization Structure 4 Implementation Schedule for Cotton Ginning Facilities MAPS IBRD No. 15907R IBRD No. 17028 - i - ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT LOAN AND PROJECT SUMMARY Borrower : Zimbab-se Beneficiaries : Agricultural Finance Corporation (AFC); Cotton Marketing Board (CMB), and Ministry of Lands, Agriculture and Rural Resettlement (MLARR). Amount s US$36.3 million Terms : Bank standard variable interest rate, 20-year maturity, including 5-year grace period. Proiect Obiectives : The project would seek to enable smallholders to increase production of food, cash, and export crops suited to peasant farming; and commercial farmers to diversify into export and import- substitution commodities for which they have comparative advantage. It would also aim at strengthening AFC's institutional capacity and encouraging the adoption of appropriate price policy for cotton. Proiect Description s The project would finance incremental agricultural credit for smallholders and commercial farmers; strengthening of AFC's institutional capacity and field facilities; a pilot scheme to promote thp use of farmer groups, many of which would consist of women, as channels for credit, storage and input supply; cotton processing and storage facilities; horticultural research; and horticultural marketing and cotton subsector studies. Benefits s Although it is not possible to quantify increased production, the project is expected to significantly increase production of food, cash, expert and import-substitution commodities. It woule thus enhance the country's food security and export earnings, and improve rural incomes. It would also strengthen agricultural credit delivery and recovery syste¶ under AFC, and help to improve the marketing and input supply system by promoting the use of farmer organizations in these regards. Furthermore, the project would help to ease fiscal burden by reducing budgetary subvention to AFC and eliminating CMB losses. - ii - Proiect Risks s Apart from the impact of recurrent droughts, AFC's abilily to provide credit services may be adversely affected by failure to rigorously implement measures to reduce arrears, and slackening of loan evaluation standards in the attempt to quickly reach a larger number of smallholders. The project would seek to minimize these risks by ensuring adoption of sound loan appraisal procedures, strengthening AFC capability to improve services to all farmers. and by providing for an indepth mid-term review to assess the need for and recommend corrective actions as may be necessary. For the cotton component, the main risk is that the political will may not be strong enough to adopt appropriate domestic cotton prices. The project would address this risk by conditioning the disbursement of funds for this component on the adoption of measures to eliminate CMB losses. - iii - Proiect Cost Summary: Local Foreign Total -US$'M---------- Agricultural Credit Commercial Farmers 9.5 16.8 26.3 Smallholders 1/ 15.2 22.7 37.9 24.7 39.5 64.2 AFC Institutional Development 10.0 4.4 14.4 Group Lending Pilot Scheme 2/ 0.5 0.4 0.9 Cotton Ginning and Storage 10.4 14.8 25.2 Horticultural Research 0.3 0.6 0.9 Base Costs 45.9 59.7 105.6 Contingencies 8.6 2.7 11.3 Total Costs 54.5 62.4 116.9 Taxes and Duties (2.4) - (2.2) Project cost (exc. taxes and duties) 52.3 62.4 114.7 FinancinR Plan: IBRD - 36.3 36.3 IFAD 15.0 15.0 BADEA - 9.7 9.7 Japan 0.6 1.2 1.8 New Zealand - 0.2 0.2 GOZ 3/ 23.5 - 23.5 CMB 7.0 - 7.0 AFC 14.7 - 14.7 Farmers 8.7 - 8.7 4.5 62.4 116.9 / Including funds for group lending. 2/ Comprises costs of organizing and training group members. 3/ Including taxes and duties estimated at US$2.2 million. Estimated Disbursements (USS million) FY90 FY91 FY92 FY93 FY94 FY95 Annual 1.5 8.0 6.5 11.0 7.5 1.8 Cumulative 1.5 9.5 16.0 27.0 34.5 36.3 Economic Rate of Return: - Total Project s Not applicable - Credit sub-loans s Ranges from 25Z to 481 - Cotton ginning Component s 27X Maps: IBRD 15907R IBRD 17028 7IMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT STAFF APPRAISAL REPORT I. BACKGROUND A. Salient Economic Features 1.01 Zimbabwe is a land-locked country of some 390,000 sq.km, with a population of about 8.7 million, growing at 3.42 per annum and nearly two- thirds of which is rural. Although the average per capita GDP at US$680 is high compared to that of many developing countries, its distribution is extremely uneven. One of the major challenges facing the country is how to redress this imbalance while sustaining overall economic growth. The economy is fairly diversified, with the service sector accounting for about 542 of GDP, agriculture for about 14?, manufacturing for about 23.52, mining for about 72, and construction 1.5Z. The country has a wide range of exports comprising agricultural, manufactured and mineral commodities; a well-established economic infrastructure; and is basically self-sufficient in staple foodstuffs while it obtains most of its energy requirements from domestic sources. However, the economy has been marked by sharp cyclical fluctuations since the turn of the decade, reflecting the impact of recurrent droughts on agriculture. B. The Agricultural Sector Main Characteristics 1.02 Although it accounts for only 14? of GDP, agriculture is the backbone of the Zimbabwean economy, directly supporting more than two- thirds of the population and contributing about 41? to exports. About 85? of the country's land is suitable for agriculture and ecological conditions allow production of a wide range of agricultural commodities. The country falls into five agro-ecological zones (Natural Regions", delineated by the amount and regularity of rainfall and thus marked by highly varying agricultural potential and risks. Maize is the most important commodity in terms of food security and domestically marketed produce, while tobacco, followed by cotton, dominates agricultural export. The other major commodities are sugar, wheat, coffee, tea, groundnuts, soyabeans, sunflower seeds, and sorghum. Once wholly dependent on imports, Zimbabwe now produces about two-thirds of its wheat consumption, but production is viable only under irrigation. The country also has appreciable potential for expanding horticultural products both for domestic and export markets. During the past two decades, these products have expanded steadily and now account for about 9? of the total agricultural production. In addition, livestock, especially cattle, are an important source of farm income and draft power for many farmers. - 2 - 1.03 Largely because of past socio-political policies, Zimbabwe's agriculture is acutely dualistic. At one extreme is the smallholder farming system, involving 800,000 families, or 94Z of the total farm households, known as the Communal Area Farmers (CAFs). Akin to CAFs and, therefore, falling under the same system, are some 40,000 farmers recently resettled into formerly commercial farming areas. The system occupies about 49? of the arable land, located mostly in the ecologically low-yield and high-risk areas, with poorly developed infrastructure and subject to high population pressure and serious lana degradation. Production is primarily for subsistence purposes, using mostly hand tools and few of modern inputs. Land tenure is based on customary individual-user rights for cropped land, and on communal-user rights for grazing land. Before independence eight years ago, agricultural support services paid little attention to the needs of CAFs. Partly due to that fact, the system is characterized by low productivity and incomes, estimated at Z$ 900 per household, and accounts for only 35Z of agricultural gross domestic production. In additicn to land shortage and poor ecological conditions, the main constraints immediately facing the smallholder system include limited technological packages, inadequate financial means to take full advantage of the available technologies, inherently high costs of obtaining agricultural support services, and operational conditions that engender a high degree of risk aversion. 1.04 At the other extreme is the large-scale commercial farming system, comprising 4,000 farmers, or 0.5? of the total farm households, occupying nearly 39? of arable land, under freehold tenure rights, and situated mostly in the ecologically high potential zones. The system operates at a fairly high level of technology, using a full range of farm machinery and modern inputs and, until independence, enjoyed the bulk of the agricultural support services. It has thus achieved levels of productivitv and incomes comparable to those found in the developed countries. In between the smallholder and large-scale commercial farming systems is the small-scale commercial system, involving some 8,500 farmers. The commercial farming system as a whole accounts for about 65? of agricultural gross domestic production. The main constraints now facing this system stem from inadequate foreign exchange to finance imported capital and recurrent inputs upon which the system critically depends; and credit for new ventures, such as horticulture. Objectives, Strategy and Achievements 1.05 The national agricultural development objectives aim at ensuring food security, increasing export earnings, and raising living standards in the rural areas in general and among the smallholders in particular. The strategy to these ends is, therefore, predicated on the attainment of a sustainable balance between growth and distributional goals. While recognizing that, for years to come, commercial farmers would continue to play a crucial role in the production of all the main commodities, including staple foodstuffs, the strategy seeks to promote increased production by smallholders of the crops well suited to peasant farming, while encouraging commercial farmers to diversify into new export and import-substitution crops that require relatively high levels of capital investments and marnagement skills. For smallholders, such crops include staple food grains, cotton, legumes, and oilseeds; for commercial farmers, they include particularly wheat and horticultural products. 1.06 Zimbabwe's agriculture has made remarkable progress towards achieving the above objectives. During 1980-86, the sector grew at an average of 42 p.a. in real terms, and agricultural exports at 4.3Z p.a. The production of staple food grairn has generally exceeded domestic needs, with maize stocks reaching 1.8 mili:jn tons in 1986 which is equivalent to two-year domestic consumption needs. Equally impressive has been the performance of the smallholders as they increased their contribution to the total agricultural production from 152 to 352, to marketed maize from 10X to 402, and to cotton production from 72 to 532 during the period. The sector's achievements attest to the effectiveness of the measures taken by the Government to alleviate the major constraints on production. For the sector as a whole, these measures have included maintaining generally attractive producer prices and generous allocation of foreign exchange resources relative to other sectors. Specific to smallholders, the measures have focussed on: raising productivity by developing and disseminating technological packages relevant to the communal areas farming system, coupled with better access to credit; reducing marketing costs by improving feeder roads and bringing marketing centres closer to the producing areas; and minimizing financial risks by providing assured market outlets and stable producer prices. While the above measures have considerably alleviated some of the major constraints on agriculture, more efforts are needed to improve the quality and coverage of agricultural support services and to ensure a sound price policy. Agricultural Support Services and Price Policy 1.07 Research and Extension Services: With assistance from the on- going IFAD-Bank supported Research and Extension Projects, the Ministry of Lands, Agriculture and Rural Resettlement (MLARR) through its department of Research and Specialized Services (R & SS) and department of Agricultural, Technical and Extension Services (Agritex), is continuing to develop and disseminate technological packages specific to smallholder farming system and consistent with the resources at the disposal of farm households. However, a major gap remains unattended regarding post-harvest research to support expanded cultivation of horticultural products for export markets. The proposed project would aim at filling this gap. 1.08 Marketing and Input SUpply: While the input supply system is virtually wholly under private hands, the marketing system remains heavily dependent on parastatals for all the major crops except tobacco. The important agricultural marketing agencies are the Grain Marketing Board (GMB) mainly for all grains and legumes; the Cotton Marketing Board (CMB) for seed cotton and lint; the Dairy Marketing Board (DMB) for dairy products; and the Cold Storage Commission (CSC) notably for beef. These agencies were originally created to serve the commercial farmers but, since independence, they have had to expand their facilities and services into Communal Areas. Although these agencies have hitherto handled the available marketable surpluses fairly efficiently, including bumper harvests, it is unlikely that they will continue to perform equally well in years to come when higher levels of agricultural development in the Communal l.reas may call for a much more dynamic and innovative marketing system than is possible under the present monopolistic structure. On the other hand, proposals to open the marketing system to private traders have proven difficult to implement, mainly because the sharp duality of Zimbabwe's - 4 - agriculture has given grounds to the apprehensions that private traders would, for an indeterminate period, focus on commercial farming areas where marketing costs are generally lower, or substantially reduce prices offered to most of the communal area farmers, thus once again marginalizing communal areas and frustrating the national objective to raise living standards Among smallht'lders. The issue of the structure of the marketing system is inter-twined with the price policy as well as with othe sectoral and macro-economic issues, all of which call for properly sequenced adjustments. 1.09 At prex.ent, measures to improve the agricultural marketing system have focussed on strengthening the role of cooperatives. The number of cooperatives has risen steadily and they now cover about 100,000 CAFs. The count;.y also has thousands of informal farmer groups, estimated to cover about 40Z of smallholders, which have emerged spontaneously and provide a wide range of services, including marketing and input supply to their members. While these farmer organizations offer great potential, they have generally remained weak largely due to poor management and limited resources. Implementation of the recommendations of a subsector study recently carried out by the Bank ir expected to help improve efficiency among cooperatives. (The work was jointly undertaken by a task force set up by the Government with support from the Bank drawn from cooperative specialists. The report was issued in February 1989). Partly to support the implementation of the study's recommendations, the proposed project would include a pilot scheme to develop practical ways of enhancing the performance of both the cooperative and informal farmer groups as alternative channels not only for marketing and input supply but also for agricultural credit. 1.10 As noted above, the country has good scope for expanding the production of horticultural commodities. To encourage increased production, a non-governmental agency, the Horticultural Promotion Council (HPC), was created in 1986 to encourage the maintenance of high quality standards, coordinate market research, collect and disseminate market intelligence, and organize export promotion activities. In addition, firm trading links have been forged with major horticultural importers in the Netherlands, and appropriate actions have been taken to ensure availability of air-cargo space. While fruits exports have stagnated mainly due ..o transport difficulties through the southern route to the sea, flower exports have risen sharply from 300 tons in 1985 to 2700 tons in 1987. The prospects of expanding exports to Europe through the Dutch connection are bright. However, there is an urgent need to explore the possibilities of increasing exports not only in Europe but also in North America, the Middle East and Japan; and to formulate a systematic strategy to exploit the available potential. To these ends, the proposed project would finance a study along the terms of reference broadly set out in Annex 2. At negotiations, assurance was obtained that the study would be carried out, completed and the report submitted to the Bank for comments not later than December 31, 1990 (para 6.03 lc]). 1.11 Price Policy: Producer prices for some of the major crops (Table 1.1) are set by the Government and, as a matter of general policy, are reviewed and adjusted periodically with a view to ensuring adequate incentives. The maintenance of the prices of these crops at attractive - 5 - levels is one of the main factors that havo contributed to the substantial rise in production especially among smallholders, thereby ensuring food security, increasing exports, and improving living standards in rural areas. Producer prices have also been progressively brought closer to international prices and, as illustrated in the following table, they are now virtually equal to border-price equivalents, at the official exchange rate, except for groundnuts and cotton where implicit subsidies are appreciable. Table 1.1: Producer Prices for Controlled Crops (1988) Border-Price Domestic Nominal Parity Equivalents Prices Protection Base (Z$/Ton) (ZI/Ton) Coefficients Maize Export 197 195 0.99 Sorghum Export 187 195 1.04 Wheat Import 368 365 0.99 Soyabeans Export 448 420 0.94 Groundnuts Export 774 1000 1.29 Cotton Export 715 850 1.19 1.12 On the other hand, these prices are set uniformly throughout the country and marketing season. Consequently, the present price policy is liable to entail efficiency losses since it does not take into account the geographically varying comparative advantages, and seasonally changing supply and demand conditions in domestic market. Moreover, even though output prices are consistent with international prices, they may lead to misallocation of public resources because such prices may not reflect the relative costs of generating foreign exchange from various import- substitution and export commodities, differer-t farming systems (smallholders vs large-scale farmers) and different production techniques (irrigated vs rainfed agriculture). The Government also administers consumer prices for the basic food commodities, notably maize, wheat, and milk. However, Zimbabwe has avoided high consumer subsidies and although the marketing parastatals have been incurring substa.ntial deficits, this is largely due to high overhead costs and/or producer subsidies except in the case of milk where consumer subsidies appear to account for a considerable proportion of the deficits relating to the Dairy Marketing Board. Following a recent review of the parastatals' efficiency, the Government is considering measures to reduce their overhead costs. The MLARR plans to undertake, with assistance from the Bank as may be necessary, a detailed and comprehensive review of the agricultural sector, including an analysis of the price policy issues. The sector review is expected to provide a basis for the Bank and the Government to engage in a more meaningful dialogue, on all major sectoral issues, than at present. The recent performance of Zimbabwe agriculture is significantly due to the fact that the Government has maintained producer prices at attractive levels. Assurances were obtained at negotiations that the Government will continue to ensure adequate producer incentives in general (para 6.03 [a]), and take - 6 - appropriate me&sures to ensure that the structure of the cotton prices is such as will enable CMB to eliminate losses from self-generated revenues (para 2.19 and 5.08). 1.13 Agricultural Credit: Despite the fact that Zimbabwe has a well developed and diversified financial sector, only 12X of smallholders have access to credit. In addition to the Reserve Bank of Zimbambwe (RBZ) and five commercial banks, the country has a full range of financial institutions comprising finance houses, building societies, insurance companies, post office saving bank, and development finance corporations. However, the financial sector caters mainly to large businesses, and farmers. For agricultural credit, the important institutions are the commercial banks, finance houses and companies, and the Agricultural Finance Corporation (AFC); other significant institutions include Cold Storage Commission (CSC) for livestock credit to all farmers. AFC is the single largest source of credit to farmers, accounting in recent years for about 402 of the total agricultural credit, while commercial banks account for about 45?, and finance houses and other institutions for the balance of 152. Lending to agriculture by commercial banks consists of overdraft facilities to commercial farmers and advances to the Agricultural Marketing Authority (AMA) to finance working capital requirements of the agricultural parastatals; finance houses confine their lending to machinery and equipment, under hire-purchase arrangements, thus excluding on-farm investments. Although these institutions are expected to play an increasing role in agricultural credit, discussions with them during the appraisal of the proposed project indicated that they generally consider it too risky to lend for horticultural investments involving relatively new ventures that are heavily dependent on export of fresh products. AFC, therefore, remains the sole source of credit to smallholders and venture capital to commercial farmers. Mainly for these reasons and the need to achieve project objectives while reaching as many farmers as possible, the credit component under the proposed project would be channeled through AFC. 1.14 Interest Rates: Annex 1, Table 1, shows the levels and structure of interest rates. Interest rates in Zimbabwe are basically market- determined and there is no credit rationing. Thus, their level basically reflects the underlying supply and demand conditions for loanable funds. During the recent past, the supply of such funds has generally exceeded effective demand, thereby contributing to low interest rates. In addition, monetary management has sought to stabilize interest rates with the result that the nominal rates have varied little over time; the prime rate charged by commercial banks has remained unchanged at 13? p.a., and short-term deposit rate at 8.25Z p.a. since 1981. However, the lending rates have varied significantly according to maturity, risks and type of borrowers, while all rates fluctuated in real terms according to inflation cycles. Relative to the GDP implicit price deflator, the prime commercial bank lending rate was negative by 1.9? on the average during the 1980-84 period and positive by 0.5? on the average during the 1985-87 period. - 7 - C. Bank Strategy and Lending Operations for Zimbabwe Agriculture 1.15 Strategys The Bank's strategy for Zimbabwe agriculture aims at helping smallholders increase a production ani productivity of commodities suited to smallholder farming, and commercial farmers diversify into export and import-substitution commodities for which they have comparative advantages. To these ends, the strategy places emphasis on reorienting agricultural support services towards smallholders while ensuring availability of imported inputs for commercial farmers, strengthening institutional capability of the major agricultural agencies, adjusting sectoral policies as politically and socially feasible, and conserving land resources especially in the densely populated Communal Areas. The strategy is supported all the major donors, notably the EEC, IFAD, AfDB, KfW, ODA, USAID, and the Dutch Government. The EEC is providing funds to AFC for smallholder credit, technical assistance, and some equipment. IFAD is co- financing the ongoing National Research and Extension Project while AfDB has, in the past, provided credit funds to AFC and is supporting the resettlement program. ODA has been the major supporter of the resettlement program and is also providing technical assistance and training accross the sector as is USAID. The Government of the Netherlands has been actively involved in promoting horticultural exports including providing funds (about US$2.5 million) for recurrent imported inputs. To help implementation of this strategy, the Bank seeks to not only complement the activities of other donors but also to help mobilize additional external resources with the view to minimizing the cost of funds. The proposed project is the first to include support to commercial farmers. 1.16 Lending Operations: The Bank lending operations consist of three projects aimed at assisting to reorient support services to smallholders and to improve conservation of the land resources: the National Extension and Research (LN 2335-ZIM); the Rural Afforestation (CR. 1368-ZIM); and the Small Farm Credit Project (CR 1291-ZIM), designed to provide credit to smallholders and to strengthen AFC institutional capacity. Allowing for the adverse effect of recurrent droughts, the overall implementation progress for the three projects has been satisfactory. However, all the projects suffered, in varying degrees, from institutional problems. Mainly due to limited capability of the ministry concernc-d with construction works, the building program under the National Extension and Research Project has remained significantly behind targets, and the necessary inter-ministerial coordination has been generally weak. Until recently, the forestry project was considerably handicapped by management-related problems. The Small Farm Credit project made notable achievements as the number of borrowers taking seasonal credit and the total amount of loans significantly exceeded appraisal targets. However, the number and amounts of term loans have been much less than envisaged. Moreover, largely due to problems encountered in introducing a new computer system, and delays in tendering and awarding contracts for civil works, the closing date had to be extended for two years to June 30, 1988. 1.17 Project Completion Report (PCR) has been done only for the Credit Project since the other projects have not come to a close. The main lessons learned from this PCR and from the supervision of the other projects are that: it is necessary to keep project designs simple until institutional - 8 - and management capabilities are strengthened; adopt a realistic project implementation period; ensure well scheduled and effective staff training programs; devise practical arrangements for inter-agency coordination where such coordination is necessary; and provide sufficient guidance to the Borrower particularly with regard to procurement procedures. The proposed project has taken the above lessons into account. - 9 - II. PROJECT-RELATED INSTITUTIONS A. Agricultural Finance Corporation (AFC) Organization and Management 2.01 AFC was established in 1971 and is a wholly Government-owned institution, under MLARR. Its objectives are to provide credit for the production, processing, storage, and marketing of agricultural produce, and to help implement national agricultural development strategy. Before independence, it lent nearly exclusively to large-scale commercial farmers. Since then, it has had to assume the additional function of meeting credit needs of smallholders while continuing to support commercial farmers as necessary. Chart 1 shows AFC's organizational structure at the headquarters. A Board of Directors, appointed by Government, is responsible for setting AFC's overall policies and ensuring that they are sound and consistent with the Government objectives and priorities. The General Manager, appointed by Board subject to approval by the minister of MLARR, is in charge of day-to-day operations. He is assisted by two Deputy General Managers (DGMs), one serving as the chief accountant and financial officer, and the other as the chief loans officer responsible for formulation and implementation of loan programs. At the field level, the organization consists of seven provincial branches and 19 district offices, with each province headed by a provincial manager, assisted by two branch managers, one covering smallholders and the other commercial farmers. The branch managers operate through district offices headed by an assistant branch manager or a senior district inspector. The day-to-day contact with farmers is maintained by assistant loan inspectors. A typical organization of provincial branches is given in Chart 2. The present organizational structure is sufficiently sound to enable AFC to implement the lending program envisaged under the proposed project. Staffing and Staff Training 2.02 The number of AFC staff has increased rapidly from 170 in 1979 to about 780 at present. However, to ensure satisfactory implementation of the proposed project, it will be necessary to increase the cadre of the field staff (para 3.05), and improve staff training and manpower development planning. It is also desirable to adjust terms of service to make them sufficiently competitive with those of comparable financial institutions in the country. While AFC's higher level staff are reasonably qualified, lack of professional training in agricultural credit and banking adversely affects staff performance at all levels. To address the problem, AFC has started establishing a staff training center and has recently created the post of AGM-Personnel whose main responsibility would be to develop and implement a staff training program based on a systematic manpower requirement and development plan. To reinforce this initiative, AFC has obtained two-man years of technical assistance from the EEC for a specialist in staff training. The first phase of his work would involve preparation of a manpower requirement and development plan, identification of training needs, and design of a training program accordingly; the second phase would involve helping to implement the training program. His - 10 - terms of reference have been reviewed and agreed with the EEC, AFC and the Bank. At negotiations, assurance was obtained that preliminary and final reports of specialist would be submitted to the Bank for review and comment, as in Annex 1, Table 17; and that Bank comments would be taken into account in the implementation of the training program ( para 6.02 [a]). 2.03 Although AFC has been unable to attract and retain staff of the appropriate caliber partly due to the uncompetitive nature of its terms of employment, it has no authori*y to adjust these terms without Government approval. The result is a high rate of staff turnover, at 201 p.a., and insufficiently experienced staff, many of whom joined AFC from schools and colleges and stay for only a relatively short period of service. The urgency of the matter is highlighted by the recent resignation of the DGM- Finance and the difficulties in attracting suitable candidates for both this and the newly established post of Assistant General Manager, Personnel. On the other hand, AFC's problem cannot be addressed in isolation from the other parastatals, all of which are suffezing from the same constraints. The Government has, therefore, recently established a commission to review the terms of service for all parastatals, and AFC has submitted to the commission proposals on job grading and compensation for its staff. If approved, these proposals would appreciably lessen the prablem facing AFC in the short-run. For the medium- to the long-term, AFC plans to be reconstituted into a more autonomous corporation, with sufficient authority to set its terms of employment at levels that are competitive with the other financial institutions. To this end, the EEC has agreed to provide a Financial Advisor whose responsibilities would include assisting AFC to formulate proposals for reconstituting AFC accordingly (para 2.15). The EEC has also agreed to finance consultancy services to help AFC design, starting with the recommendations of the ongoing commission, an appropriate staff grading, evaluation, and compensation system. The terms cf reference for the consultants have been reviewed and agreed with the EEC, AFC and the Bank. At negotiations, assurance was obtained that preliminary and final reports of the financial adviser and consultants on staff compensation would be submitted to the Bank for comments as scheduled in Annex 1, Table 17, and that the Bank comments would be taken into account in the implementation of the recommendations of the concerned reports (para 6.02 [a]). Assurance was also obtained that, as a condition of effectiveness, the post of the DGM- Finance would have been filled with a candidate having qualifications and experience acceptable to the Bank (para 6.05 [a]). Lending Policies, Terms and Procedures 2.04 AFC enabling legislation requires it to operate according to full- cost recovery principles, except in cases where the Government specifically directs AFC to undertake activities, such as lending to smallholders, on terms which do not ful'y cover costs; in such cases the Government is by law enjoined to compensate AFC fully for the losses arising therefrom. AFC lending interest rate is determined by the Government and, as a matter of general policy, it is set at least equal to the prime rates charged by commercial banks. As noted earlier, the minimum commercial bank rate has been 13Z p.a. for most of the 1980's and AFC lending rate has, therefore, remained unchanged since 1983 at 13? p.a., plus a front-end fee of 0.52 on - 11 - the amount of loan approved. While in the past this rate has, on the average, been positive in real terms, it may not continue to be so in the future unless deliberate measures are taken to maintain it positive. On the other hand, it would be inappropriate to deal with this issue in isolation from the general case relating to the economy as a whole, since doing so would place AFC's situation out of line with the overall in,erest rate structure. The issue is better addressed within the context of the dialogue that the Bank and the Fund are conducting with the Government on the broad question of monetary management. It is, however, important that the AFC lending rate is maintained at least equal to the going prime rate charged by commercial banks. At negotiations, assurance was obtained to this effect (para 6.03 [b]). 2.05 The present AFC lending rate has consistently resulted in net revenues from loans to commercial farmers. On the other hand, it has always been inadequate to recoup the inherently high costs of lending to the widely-scattered smallholders all of whom require relatively small amounts of credit. The Government has had to reimburse AFC for the losses attributable smallholders, with reimbursements amounting to about 2.7Z of the total loan portfolio in 1988. While these arrangements have the advantages of safeguarding AFC financial conditions and giving transparency to the involved subsidies, they also commit the Government to open-ended reimbursements which may increasingly become unsustainable as the number of smallholder borrowers rises. To eliminate subsidies over the medium-to long-term, it is estimated that AFC would need an interest rate spread of about 4.5Z. The proposed project would seek to ensure that, in addition to the requirement indicated in para 2.04 above, AFC lending rate would be periodically reviewed and adjusted so as provide AFC with a spread sufficient to cover its fixed and recurrent costs. At negotiations, assurance was obtained to this effect (para 6.03(b]). 2.06 AFC's other lending policies and terms are basically sound. However, as detailed in paras 4.02 and 4.03, there is a need to improve lending procedures, notably to promote the use of the group-lending approach, adopt loan evaluation procedures that better reflect borrowers' ability to repay, and establish a more effective system for monitoring lending operations. 2.07 Loan Portfolio: As Annex 1, Tables 2 and 4 show, between 1980/81 and 1987/88 AFC's loan portfolio was characterized by: a steady and rapid increase in the amount of loans approved annually; a major shift towards smallholders both in terms of the number of borrowers and total amount of loans; and a decline in the number of commercial farmer borrowers. In nominal terms, the total amount of loans disbursed annually rose from Z$95 million in 1980/81 to Z$173 million in 1986/87. The number of smallholder borrowers increased from 18,000 in 1980/81 to about 91,400 in 1985/86, the amount of loans granted to them from Z$4.2 million to Z$48.6 million, and their share of AFC credit from 4.0Z to 32Z. On the other hand, the number of commercial farmer borrowers has been on a continuously declining trend, falling from 5900 to 2400 during the period. It is important that AFC maintain a reasonable balance between the two types of farmers as envisaged under the future lending program set out in Annex 1, Table 3. To this end, AFC needs to expand its capacity to ensure quality services to both smallholder and commercial farmers, as envisaged under the project. - 12 - 2.08 Until 1986, AFC had loan arrears averaging 19X of the total outstanding loans. However, as Annex 1, Table 4 shows, arrears rose from about Z$56 million or 20Z of the total outstanding portfolio in 1986 to Z$185 million or 48Z in 1988. The sharp rise in arrears has been due to: (a) the recurrent droughts which plagued the country from 1982 to 1984 and again during 1986187, thereby reducing farmers' incomes and ability to repay loans; (b) an 18-month breakdown of AFC's computer system, thus making AFC unable to provide borrowers with up-to-date information about the status of their loan accounts, field officers unable to identify .aulters, and many farmers reluctant to repay for fear that their repayments may not be recorded correctly; (c) erosion of the "stop order" system as some borrowers resorted to side marketing, partly to avoid multiple loan deductions; (d) concentration of AFC provincial officers and loan recovery staff at the headquarters in Harare, instead of being stationed in the field; (e) AFC's lack of effective physical presence in many districts where it has no office facilities; (f) lack of a system to monitor changes in financial circumstance bearing on farm incomes and, therefore, loan repayments and calling for adjustment of the lending program; and to provide data for determining the age composition of the arrears and for formulating sound criteria for writing off bad debts; and (g) lack of a system to generate appropriate and timely information to guide management decisions. 2.09 The incidence of bad debts among these arrears is expected to be about 7Z. AFC is committed to reducing arrears to not more than 35? of the total portfolio during 1989/90, 25X in 1990/91 and 15Z in 1991/92 and thereafter. To this end, AFC has since last May initiated several measures. Apart from restoring the computer system to working order, the data processing capability has been strengthened by the recruitment of a System Manager and a Senior Analyst, and all provincial branches have been provided with computer terminals to enable them to have ready access to the status of individual loan accounts. To strengthen the field loan supervision and collection, the provincial -qnagers and loan collection staff have been deployed from the headquarters in Harare to the field. It has also launched a country-wide campaign on credit repayment, coupled with not granting new loans to and taking legal action against defaulters. These measures have already begun to show promise, as arrears have been brough down to 42.7X by end of March 1989. With the assistance of the proposed project, AFC would strengthen its field presence by increasing the number of district offices, update and expand the computer system, minimize the problem concerning the stop-order system by implementing the measures set out in para 4.04, and improve loan repayments by bringing social - 13 - pressure to bear on defaulters through group lending. At negotiations, assurance was obtained that AFC would reduce arrears according to above targets (para 6.02 [b). 2.10 To reinforce the above measures, the EEC has agreed to finance three consultancies, one of which would, among other things, assist AFC identifying ways of improving the management of its loan portfolio in general and, in particular, to evaluate the factors contributing to arrears and, as necessary, formulate specific measures to reduce arrears in accordance with the above targets. The second consultancy would help to strengthen the recently created Monitoring and Evaluation Unit whose functions include assessing the status of loan commitments and actual disbursements as well as the operational performance of the field offices; identifying and analyzing implementation problems bearing on lending operations; and identifying and evaluating factors impacting on financial viability of the main types of investments financed by AFC. The third consultancy would assist AFC in establishing and initiating implementation of a sound management information system. The terms of reference for these consultancies have been reviewed and agreed with AFC, EEC and the Bank. At negotiations, assurances were obtained that preliminary and final reports of these consultants would be submitted to the Bank for comments as scheduled in Annex 1, Table 17; and that Bank comments woull be taken into account in the implementation of the consultants' recommendations (para 6.02 [a]). Financial Performance and Capital Structure 2.11 Financial Performance: Annex 1, Table 5 shows AFC's income and expenditure statements for the period 1980-87. Since net losses from AFC's lending to smallholder are fully reimbursed by the Government, net income as shown in Annex 1, Table 5 reflects mainly net revenues generated from lending to commercial farmers. Net revenues thus generated have remained fairly stable at about 82 of loans granted, and rose from Z$0.8 million in 1980 to Z$8.4 million in 1988; on the other hand, losses attributable to smallholders rose from Z$0.2 million to Z$5.7 million in 1988. This reflects the fact that, the cost of lending to smallholder is about three- times the cost of lending to commercial farmers. Reimbursements from the Government to AFC for losses relating to smallholders have averaged 3.32 of the total outstanding loans during the past six years. Annex 1, Table S shows the projected income and expenditure statements up to 1993/94. The main assumptions are that the lending program to smallholders and commercial farmers would be as shown in Annex 1, Table 3; lending interest rates, the weighted cost of funds and, therefore, the interest spread would remain as at present; and thet operating costs would rise by 15? during 1989, 12Z during 1990, 102, in 1992, and 82 thereafter. Under these asoumptions, AFC's profit position would continue to be satisfactory, even without budgetary subventions, since AFC would continue to realize net revenues rising from Z$1.7 million in 1989 to Z$4.6 million in 1994; with reimbursements from the Government, profits would rise respectively from Z$8.1 million to Z$15.4 million. Unless interest spread is adjusted, reimbursements from the Government to cover losses due to smallholder credit would rise from Z$6.4 million in 1989 to Z$10.8 million in 1994. The Government, therefore, intends to gradually reduce the budgetary burden by periodically reviewing and adjusting AFC interest rate to allow a spread - 14 - sufficient to cover AFC costs. At negotiations, assurance was obtained to this effect (para 6.03 [b]). 2.12 Capital Structure. Annex 1, Table 7 shows AFC's balance sheets for the period 1980-88. Total assets, about 95Z of which are loans to farmers, increased from Z$132.3 million in 1980 to Z$403.7 million in 1988. Equity funds, generated mostly from lending to commercial farmers, have shown a marked improvement, rising from Z$16.4 million or 122 of total resources in 1980 to Z$70.9 million or 18Z of total resources at the end of 1988. Thus, the debt/equity ratio declined steadily from about 7.7 in 1980 to 4.6 at the end of 1988. The equity position is considerably enhanced by the fact that more than 40X of the long-term funds from the Government are irredeemable and, therefore, constitute semi-equity resources. Annex 1, Tables 8 and 9 respectively show the projected source and application of funds, and balance sheet positions during 1989-94. The main assumptions are that AFC would implement the lending program and realize credit collection rates shown in annex 1, Table 3; expand its field facilities as envisaged under the proposed project; and continue to obtain long-term and short-term loans from the Government and other sources, in addition to the project related loans, as necessary to fund the projected lending program. Under these assumptions AFC's financial conditions would continue to be satisfactory. The net working capital positions would remain sufficiently strong throughout the period, with equity capital rising steadily to Z$143.5 million (about 201 of total resources), and the debt-equity ratio declines to 4.0 in 1994. Consequently, there is no justification to convert Government loans into paid-in capital. 2.13 On the other hand, there is a need to reduce AFC's heavy dependence on borrowing from Governmental funds, given the increasing budgetary constraints facing the country and the fact that AFC would have to borrow short- and long-term loans amounting to about Z$582.5 million by 1994. To ease the burden on budgetary resources, AFC plans to be reconst4.tuted into a corporation capable of raising local non-governmental funds through taking deposits from the general public and/or borrowing from the local capital market. AFC has already started borrowing from the local capital market and is considering the possibility of mobilizing saving deposits from the general public. However, there are real risks that by hastily or prematurely embarking on deposit taking functions, AFC may impair its capability to carry out its primary responsibility of ensuring a sound agricultural credit delivery and recovery system. It is, therefore, necessary that a move to create a deposit-taking institution is preceded by a systematic assessment of pros and cons, a clear identification of the required institutional and manpower changes, and a sound determination of the proper timing. To this end, the EEC has agreed to provide AFC with technical assistance for a financial specialist to work with AFC for at least two years. In addition to advising the General Manager and, through him, the Board on all financial aspects of AFC, the specialist would be responsible for helping AFC to formulate proposals to reconstitute it into a corporation with sufficient power not only to raise funds locally but also to set its terms of service at levels competitive with the other financial institutions in the country. His terms of reference have been reviewed and agreed with the AFC, EEC and the Bank. At negotiations, assurances were obtained that his preliminary and final reports would be submitted to the Bank for comments as scheduled in Annex 1, Table 17, and - 15 - that the Bank comments would be taken into full account in the implementation of the recommendations of the report (para 6.02 (a]). B. The Cotton Marketing Board (CMB) Organization, Management and Staffing 2.14 The Cotton Marketing Board was established in 1969 to promote cotton production by providing, among other things, marketing and processing facilities and services. To carry out these functions, the Board is organized into five main departments: operations, engineering, marketing, finance, and administration and personnel. The departments are headed by an Assistant General Manager, reporting to the General Manager through two Deputy General Managers; in turn, the General Manager reports to the AMA through a series of committees (Chart 3). The present organizational structure is basically sound and adequate to ensure satisfactory implementation of the program envisaged under the proposed project. The total numbers of CMB employees has risen sharply from about 2600 in 1983 to 3700 in 1987, partly reflecting the increase in cotton production and CMB's assumption of marketing activities previously provided by the Zimbabwe Cotton Company (ZCC) and administrative services previously provided by Grain Marketing Board (GMB). CMB terms of employment are uncompetitive even in comparison with other parastatals such as GMB; this has made it difficult for CMB to attract and retain staff of the required caliber. As noted above in the case of AFC, the Government has established a commission to look at the terms of employment for all parastatals, including CMB, and it is expected that the recommendations of the commission will address the problem facing CMB relative to the other parastatals. Although CMB provides in-house as well as some external training to its staff, the training program could be improved by increasing the training budget; expanding the program to reach most of the staff at the operational level; enhancing the technical content of the courses offered; and developing a more systematic manpower planning. However, the most pressing need is to train the technicians concerned with ginning operation, particularly in electrical and hydraulic subjects; the proposed project would help to train such technicians. Cotton Ginning and other Post-harvest Facilities 2.15 Cotton production increased from 173,000 tons in 1980 to over 300,000 tons in 1988. About 70Z of lint produced in Zimbabwe is typically exported, and 33Z sold to the local textile industry; an increasing proportion is expected to be sold locally to meet the rising domestic needs. CMB's capital investment program envisages the production of seed cotton to increase from about 339,000 tons in 1988 to about 471,000 tons in 1993. However, the extent to which this would materialize depends on several factors most of which are beyond the control of CMB. Such factors include producer prices of cottor. relative to prices of the other crops; availability of land in communal areas and of labor in commercial areas; progress in the resettlement scheme as planned in the Zambezi Valley and under which scheme substantial increase in cotton production is expected; and availability of resources to develop the envisaged irrigation schemes in the same areas. Cotton has now become a major export crop, with the possibility of surpassing tobacco in due course, and significant cash crop - 16 - among many smallholders. It is, therefore, necessary for the country to have well formulated medium- and long-term programs to ensure proper and efficient development of the cotton subsector, and to address the financial problems now facing CMB (para 2.18). To this end, the proposed project would finance a study to, among other things: (a) determine the available potential for increasing production; (b) identify technical, policy, and institutional constraints on the realization of the potential, and propose possible ways to address such constraints; (c) assess costs and benefits of the feasible development options; (d) identify ways to improve the efficiency of CMB with a view to reducing ginning, operation, and overhead costs; and (e) help to prepare a medium- and long-term program to develop the subsector. The study would be carried out along the terms of reference broadly set out in Annex 2. At negotiations, assurance was obtained that the study would be completed, and the report submitted to the Bank for review and comments not later than June 30, 1990 (para 6.03 Cc]). 2.16 CMB owns and operates eight ginneries and also uses, on a commission basis, the only privately owned ginnery to process cotton produced in the south-eastern parts of the country. The capacity of these ginneries is insufficient to cope with the projected increase in cotton production by 1993. In addition, the average age of the existing ginneries is about 20 years and, mainly because of the shortage of foreign exchange, the ginneries are inadequately maintained; they are, therefore, subject to frequent stoppages for lack of spare parts. Moreover, while cotton production has shifted to communal areas, only one of the existing ginneries and a few of the transit depots are located in communal areas. Consequently, most of the cotton produced in these areas has to be transported over long distance, particularly in areas around Mt. Darwin where production is expected to rise rapidly. The proposed project would help to address these constraints by financing construction of a ginnery and related post-harvest facilities at Mt. Darwin, and spare parts for the existing ginneries. Financial Performance and Conditions 2.17 Financial Performance: Annex 1, Table 10 presents CMB's income and expenditure statements for the period 1980-1988. After operating at profits for the most part of the 1980-85 period, CMB suffered serious and persistent losses during subsequent years, annually averaging Z$34.4 million during 1986-88 period. Although operating costs, particularly ginning and overhead expenses, have been rising significantly, the poor financial performance is primarily attributable to the domestic prices for seed cotton and lint (para 5.08). Until recently, local l'nt prices were set at a level equivalent to the world prices but, for the last three years, they have been kept below the border-price equi elents as a matter of policy in order to ensure competitiveness of the local textile industry. Although the impact of this policy on CMB's income has not been critical, it is likely to assume increasing importance in the future as local lint sales are expected to account for a growing proportion of total lint production. The most important factor behind the poor financial performance is the price paid to farmers for seed cotton. As a proportion of sales revenues, the cost of seed cotton rose from about 62Z on average during 1983-85 to about 822 during 1986-88, reflecting not only the rising costs associated with the shifting of production towards communal areas but also - 17 - the fact that producer prices have tended to increase faster than the prices realized by CMB. 2.18 Unless effective measure are taken to rectify the situation, CMB financial performance will continue to deteriorate, with cumulative losses rising to the unaustainable amount of Z$505.7 million by the end of 1993/94 (Annex 1, Table 11). Such measures will need to aim not only at improving CMB's efficiency in order to reduce costs but, more important, at ensuring that domestic prices are in line with the world prices. As Annex 1, Table 12 shows, adoption of measures similar to those indicated in Table 5.4(f) (reducing CMB's operation costs by 5Z; adjusting producer price for seed cotton and local spinner prices for lint to border price equivalents; and increasing cotton seed prices by 102) would enable CMB to earn significantly positive net revenues rising to Z$81.7 million in 1994. The proposed cotton subsector study is expected to identify ways to reduce CMB's operation costs and to determine the appropriate prices for cotton seed. At negotiations, assurance was obtained that, as a condition of disbursing any of the project funds for the cotton component other than the said study, the Government would adopt appropriate measure that would enable CHB to generate increased revenues from its operations so as to eliminate the deficit on its trading accounts effective from its fir:ancial year 1990/91 and thereafter (para 6.04 (a]). 2.19 Capital Structure: Annex 1, Table 13 shows CMB's balance sheet positions during the 1980-88 period. As a mirror image of the poor financial performance, CMB's equity resources have deteriorated severely during the last three years, falling into a negative amount of Z$30.8 million at the end of 1987/88. In the absence of effective measures to address the problem facing CHB, the situation is likely to continue to deteriorate, and to place an increasingly heavy burden on budgetary resources, as the networth declines further to minus Z$116.4 million at the end of 1990/91 (Annex 1, Table 14). Annex 1 Table 15 shows the balance sheet forecast on the basis of the price policy and cost reduction assumptions indicated in para 2.18 above, while Table 16 similarly shows the forecast source and use of funds. Realization of these assumptions would improve the balance sheet significantly, with retained surpluses becoming positive by Z$37.9 million in 1993. - 18 - III. THE PROJECT A. Proiect Obiectives and Rationale for Bank Involvement 3.01 Project Origin. The project idea was conceived in mid-1987, in the course of the rupervision of the IDA-supported Small Farmer Credit Project. In November 1987, a Task Force was established to prepare project proposals. AFC served as the coordinating agency and the Task Force included representatives of the MLARR, Ministry of Finance, Commercial Farmer's Union, National Farmers Association of Zimbabwe, and Zimbabwe National Farmers Union; C*., was brought in later when it became obvious that promotion of agricultural exports called for improvement of the cotton ginning and storage capacity especially in Communal Areas. Thus, all the major end-users of the resources to be provided under the proposed project were involved in the preparation exercise. In preparing the project proposal, the Task force was supported by FAO/CP mission which visited Zimbabwe in October 1987 and January-February 1988. The Bank Residence office also played a key role in the preparation exercise. The preparation report was completed in March and appraisal took place in June-July 1988. A representative of IFAD participated in the appraisal mission and was primarily responsible for formulating the group lending program under the proposed pilot scheme. 3.02 Proiect Obiectives and Design: The project would seek to enable smallholders increase production of food, cash and export commodities suited to peasant farming, and commercial farmers diversify into export and import-substitution products for which they have comparative advantage. Thus, it would aim at alleviating some of the major constraints on widor adoption of the available technological packages by small;aolders; on farm investments, imported inputs, and technical backing needed by commercial farmers; and on processing facilities for the main export crops. It would also seek to strengthen the institutional capability and financial conditions of AFC, and to encourage the adoption of a better pr3ce policy for cotton. The Project design has taken into account experience gained from implementation of the Small Farm Credit Project. It also takes into account the on-going Bank operations, especially the IFAD-Bank supported National Extension and Research Project, as well as other activities being or likely to be funded other donors. In particular, the project is designed to complement the support being provided by the EEC to AFC, and which involves about US$ 17.8 million for credit to sLaallholders and about US$ 5.5 million for technical assistance personnel, desk computers, and some vehicles. The project is predicated on close coordination especially with the EEC technical assistance (Annex 1, Table 17). 3.03 Rationale for Bank Involvement. With the IDA Small Farm Credit Project (CR 1291-ZIM) coming to an end, Bank's involvement is necessary to build on the work started under the IDA protect, continue to take the lead in promoting institutional and policy changes to strengthen the agricultural credit system, and help mobilize and supplement funds for lending to farmers. It is also needed to augment funds to improve and expand the cotton processing facilities and production of horticultural exports. The Bank has acquired considerable knowledge of Zimbabwe's agricultural credit services, through the Small Farm Credit Project, and is thus ideally situated to take the lead among donors with regard to policy - 19 - and institutional issues. In addition, through its sectoral dialogue and funding of cotton processing facilities and horticultural production, the Bank would be well-placed to encourage the Government to adopt more appropriate policies and strategies for the development of the cotton subsector and horticultural exports. B. Proiect Description Summary Project Description 3.04 The proposed project would provide funds to finance: (a) agricultural credit to smallholders and commercial farmers; (b) strengthening of AFC institutional capacity, and expansion of its field facilities; (c) a pilot scheme to promote the use of farmer groups as channels for credit, marketing, and input supply among smallholders; (d) expansion and improvement of the cotton processing and storage facilities; (e) strengthening of horticultural post-harvest research; and (f) studies on horticultural export marketing and cotton subsector. Detailed Project Description 3.05 Agricultural Credit. As Annex 1, Table 3 shows, AFC total loan portfolio is projected to increase from Z$381.3 million in 1988/89 to Z$670.8 million, net of annual repayments: an increase of about Z$289.5 million. About 40? of the incremental amount or Z$111.3 million would go to smallholders and about Z$35.6 million would be financed by a loan recently provided to AFC by the EEC, leaving a balance of about Z$75.7 million to be financed under the proposed project; about Z$54.9 million would be lent directly to individuals while about Z$ 20.8 million would be channelled through groups. It is estimated that about 30? of commercial farmers borrowing for term credit from AFC would be involved in the cultivation ef the crops that qualify for loans under the project and that these farmers would require incremental credit amounting to about Z$ 52.6 million. The project would, therefore, finance short- and medium-term incremental credit, for smallholders and commercial farmers, amounting to about 2$ 128.3 million (US$ 64..2 million). Short-term loans would be made available for purchased seasonal inputs and services, including hired labor; medium-term loans would be made available for on-farm capital development, farm machinery and equipment, including work-ox and related implements, and motorized or ox-drawn farm transport vehicles not exceeding 10 ton capacity. Loans to smallholders would cover all crops and other farming activities that are financially viable. For the commercial farming system, loans would be made available to farmers producing or intending to produce export and import-substitution crops. Many of the farmers produce several crops, some of which would not qualify for credit under the - 20 - project. Such farmers would, nonetheless, qualify for credit under the project provided they can prove that they are also producing eligible commodities in quantities commensurate with the amount of credit they have applied for. 3.06 Strengthening AFC Institutional Canabilitys AFC has obtained a grant of ECU 2.6 million (Z$5.5 million) from the EEC to strengthen its institutional capability. To complement the EEC assistance, the proposed project would provide funds to finance: construction of 16 district offices and related staff accommodation comprising 16 low density and 64 high density houses: thirty 4-WD pick-ups and 40 motorcycles to improve field staff mobility in 10 new districts; updating and expanding the main computer facility, and associated spares, tapes, disks, supplies, and soft- ware; 24 man-months of technical assistance for the post of Computer System Manager, and 4 man-months of consultants to assist with the installation of the new computer system; and 10 man-months of training in data processing. 3.07 To implement the envisaged lerding program, AFC will need to increase the number of field staff. Based on past experience, this would require improving the field staff-farmer ratios to: one Branch Inspector for 60 loans to large-scale commercial farmers; a team of one District Inspector and two Assistant Inspectors for 300 loans to small-scale commercial farmers; and a team of one District Inspector and two Assistant Inspectors for 1,500 loans to communal and resettlement scheme farmers. On this basis, the project would finance incremental staff as follows: 1989 1990 1991 1992 1098 1994 Totsl Branch-Inspectors 8 1 2 2 8 a 19 Dlstrict-Inspectors 16 6 B 5 9 9 50 Asslstant-Inspoctore 28 10 12 10 18 18 9# Total 52 16 20 17 80 B0 165 3.08 Group Lending Pilot Scheme. To reach a substantial proportion of the farmers in communal areas, AFC will need to progressively implement the policy, recently approved by its Board, to channel credit through farmer groups, leaving the groups to on-lend to their members. To support this approach, the proposed project would include a Group Lending Pilot Scheme would involve selected cooperatives and informal farmer groups and would be initiated in six districts, with three wards in each district. At the rate of 8-9 farmer groups per ward, it is estimated that the scheme in the initial phase would cover around 150 groups in 18 wards. In selecting districts for the initial phase, the objective would be to ensure that all agro-ecological regions and socio-economic zones are covered. Based on the findings of a mid-term evaluation of the scheme during 1992 (para 4.14), it is expected that the Scheme would be extended to cover another 30 wards in Year 4 and additional 60 wards in Year 5 of the Project. Thus, during Year 5 of the Project, the Scheme would cover 108 out of a total of 1082 wards in the country, and farmer groups covered by the scheme would be about 900. The Scheme would then cover about 10% of the wards, and a slightly lesser - 21 - proportion of farmer groups in the country, and would be thereafter replicated throughout the country. 3.09 The scheme is intended to test innovative approaches to group lending and to improve operational efficiency of the credit delivery and recovery system, in order to minimize the risks and operational costs to AFC as well as credit costs to farmers. Because of the need to integrate credit with marketing and input supply, the scheme would include these activities as well. In addition to channeling credit through them, the proposed project would support a training program, costing about US$0.8 million, to improve efficiency of the farmer groups under the scheme. The program would include training in: credit administration; loan assessment and supervision; commodity assembling, grading and marketing; input procurement and transportation, group organisation and management; savings mobilisation and cash management; and financial record keeping. The project would also finance the costs of the Pilot Group Coordinator and three support staff, one vehicle for the Coordinator, vehicle running costs, and office supplies. The criteria for selecting groups to participate in the scheme are shown in Annex 4. 3.10 Expanding and Improving Cotton Processing and Storage Facilities: This would consist of: (a) construction of a new cotton processing facility, in the North Eastern part of the country, with an annual capacity of 25,000 tons of seed cotton; this would comprise civil works for a ginnery house, seed cotton and lint as well as ancillary storage facilities, service roads, electricity and water supply, office blocks, and about 10 staff houses; (b) procurement of two tractors, three trailers, 75 trolleys, four forklift trucks and one transport truck, and 16 lint clearing machines; (c) procurement of spare parts for the existing ginneries, and tools and equipment for workshops; (c) 15 man-months of consultancies for designing and supervising the construction of the processing and storage facilities; and (d) 9 man-months of external training for CMB technicians in electrical, mechanical and hydraulic fields. 3.11 Horticulture Research. To strengthen horticultural post-harvest research at Marondera Research Station, the proposed project would finance civil works to expand research buildings, and provide cold storage facilities; and equipment and vehicles comprising laboratory apparatus, three pickups, a 4-wheel drive vehicle and a tractor. 3.12 Studies: The project would also finance 13 man-months of consultancy services, one man-month to help in the installation of the new research facilities, and 12 man-months to carry out a study of ways to improve the marketing of horticultural exports. In addition, it would finance 15.5 man-months of consultancy services for a study of the cotton sub-sector. The terms of refirence for the study are set out in Annex 2. C. Cost Estimate 3.13 Annex 3, Tables 3 to 10 show detailed project cost estimates. The total project costs, including contingencies for the non-credit components and taxes and duties, are estimated at Z$233.8 million (US$ 116.9 million) of which Z$124.7 million (US$62.4 million) or 532 is foreign exchange. As - 22 - a percentage of the base costs, the total credit component would account for 61? (252 to commercial farmers and 362 to smallholders); cotton component 24X; strengthening of AFC's institutional capability 141; and group lending pilot scheme and horticultural research about one percent. The base costs are calculated using prices obtained during appraisal and updated to levels expected to prevail in July 1989. Costs, excluding the credit component, include physical contingencies equal to 52 of base costs except on civil works which have 101. Price contingencies are calculated on base costs (excluding the credit component), plus physical contingencies and are compounded using the following annual ratess on local costs, 11.52 in PY 1 and 112 thereafter and on foreign costs, 32 in PY 1, 3.5? in PY 2, and 42 thereafter. The following table summarizes the estimated costs: - 23 - Table 8.1 Project Cost Summary Zs i USi m -------~~~~~---- ----- --------------------- X Foreign Locri Forelsn Total Local Foreian Total Exchange (A) Agricultural Credit Co mme rcial Farmers 19.1 88.6 62.6 9.6 16.8 26.8 64 Smallholder Farmrs Individual Lending 22.1 82.9 66.0 11.0 16.4 27.4 60 Group Lending 8.2 12.5 20.7 4.1 6.8 10.4 60 Subtotal Com_unal Area Farmers 8U.I W X 7F7 17[ WY W7I Total Credit 49.4 78.9 128.? 24.6 89.6 64.1 62 (8) AFC lnstitutional Developmnt Capital Costa 7.7 7.8 15.6 8.9 8.9 7.8 s0 Incremental Recurrent Costa 11.9 0.6 12.4 6.0 0.8 6.8 6 1i.6 i:i 27.9 9.9 .2 1i4.1 870 (C) Group Lending Pilot Schme 0.1 0.4 0.6 - 0.2 0.2 76 (D) Cotton linning and Storage Capital Costs 12.3 28.0 40.8 6.2 18.9 20.1 69 Incremental Recurront Costs 9.1 0.8 9.4 4.6 0.1 4.7 8 2T.7 2.71 4V7 IU7 1 iT 2Ti 61 (E) Horticultural Research 0.6 0.9 1.4 0.2 0.5 0.7 70 (F) Studies Hort. Export Marketing - 0.8 0.8 - 0.2 0.2 100 Cotton Subeector - 0.8 0.8 - 0.2 0.2 100 - 0.6 0.6 - 0.4 0.4 III (0) Consultancles 0.2 1.4 1.6 0.1 0.7 0.8 85 (H) Training 0.6 0.6 1.2 0.8 0.8 0.6 54 8ase Costa 91.8 119.4 211.2 46.9 69.7 106.6 57 Physical Contingencies 2.4 2.1 4.6 1.2 1.1 2.8 47 Price Contingencies 14.9 8.2 18.0 7.4 1.6 9.0 18 Total Project Costs 109.0 124.7 2B8.8 64.6 62.4 116.9 58 Taxes A Duties (4.8) - (4.8) (2.2) - (2.2) - Needed Financing 104.7 104.0 229.5 62.8 62.4 114.7 - 24 - D. Financing Arrangements 3.14 Annex 3, Table 11 detail the proposed financing plan. All foreign exchanges costs would be funded from external sources. The Bank loan would cover foreign exchange costs amounting to US$36.3 million, of which US$ 16.8 million would be for credit to commercial farmers, US$ 8.6 million for credit to smallholders, US$ 4.4 million for strengthening AFC institutional capacity, US$ 6.0 million for cotton processing and storage, and US$ 0.5 million for the horticultural research. IFAD is expected to provide US$ 15.0 million all of which would finance foreign exchange costs for credit to smallholders. Arab Bank for Economic Development in Africa (BADEA) would contribute US$ 9.7 million for financing foreign exchange costs relating to the cotton processing and storage component. The Government of New Zealand is expected to make a grant of about USS 0.2 million to finance the proposed horticultural export marketing study. The Government of Japan has made available a grant of US$ 3 million to be used for technical assistance and training components; since such components amount to US$1.8 million, after taking into account the grant from the Government of New Zealand, it is assumed that the project would use only US$ 1.8 million from the Japanese grant. Commercial farmers would contribute about US$ 8.7 million in local cost, equivalent to 252 of the total cost of the sub-loans made to them. AFC would contribute US$ 14.7 million, CMB USS 7.0 million, and GOZ US$ 23.5 million or US$ 21.3 million excluding taxes and duties. The Government of Spain has indicated interest to contribute towards the cotton ginning and storage component; if and when this materializes, it would be used to reduce the Bank loan. The following table summarizes the proposed financing pl"n: Table 8.2: Flnancing Plan Local Forein Total Percent ..... S$ Mill on .... IBRD ----- 86.8 86.8 81 IFAD ----- 16.0 16.0 18 BADEA 9.7 9.7 8 Japan 0.6 1.2 1.8 2 New Zealand ----- 0.2 0.2 --- AFC 14. ---- 14.7 18 CUB 7.0 ---- 7.0 6 Commercial Farmers 8.7 ---- 8.7 7 Government 28.6 ---- 28.5 20 Total 54 .254 116.9 I-0 3.15 The Bank loan would be made to the Government under IBRD standard variable interest rate, and 20-year maturity including 5 years of grace. It would on-lend, at 9.752 interest rate p.a. with 15-year maturity, including a 3-year grace period, to: (a) AFC an amount of US$ 29.8 million equivalent, and (b) to CMB an amount of US$S.O million for cotton processing and storage facilities. On-lending to AFC and CMB would be under - 25 - subsidiary loan agreements satisfactory to the Bank and execution of the subsidiary loan agreements would be a condition of effectiveness (para 6.05 [b]). The Government would assume foreign exchange risks for the IBRD funds; at negotiations, assurance was obtained to the above effect (para 6.03 [d). E. Procurement 3.16 Procurement under the proposed project would be in accordance with Bank Guidelines. Farm machinery and equipment, farm transport vehicles, seasonal inputs and other supplies required by the farmers under the credit lines would be procured by the farmers themselves from local dealers or through direct import. Given that the size of individual investments would be too small and bulking of contracts would not be possible because of their diversity and scattered nature of jobs and requirements in Zimbabwe, neither International Competitive Bidding (ICB) nor Local Competitive Bidding (LCB) would be feasible under this component. Civil works would be procured through Local Competitive Bidding, (LCB) following procedures acceptable to the Bank and subject to prior review and approval by the Bank of bid documents and awards of any contracts costing more than US$ 500,000 equivalent. Machinery, equipment and vehicles would be bulked to the maximum extent possible and orders costing more than US$100,000 would be procured through International Competitive Bidding (ICB), according to Bank Guidelines, and orders costing less than US$100,000 equivalent through LCB, following procedures acceptable to the Bank, with contracts for less than $50,000 equivalent up to an aggregate of US$ 400,000 being procured on the basis of quotations from at least three suppliers. Furthermore, bid documents and awards for orders exceeding US$500,000 equivalent would be subject to prior review and approval by the Bank. Foreign firms represented lu Zimbabwe would be eligible to bid under LCB. The following table summarizes the- procurement plan: - 26 - Table 3.3t Procurement Method (US$ Million) ICB LCB Others N.A. Total Agr. Credit - - 64.2 64.2 (25.4) (25.4) Civil Works 11.5 0.6 12.1 (3.8) (3.8) Vehicles 1.4 0.3 1.7 (0.7) (0.2) (0.9) Equipment Cotton 13.5 2.5 0.5 16.5 (3.5) (0.6) (4.1) AFC 2.4 0.3 0.2 2.9 (1.7) (0.2) (1.9) Research 0.3 0.1 0.4 (0.2) (0.2) Consultancies and Studies 1.2 1.2 (0.0) Training 0.8 0.8 (0.0) Recurrent Costs 17.1 17.1 Total 17.3 14.9 67.6 17.1 116.9 (5.9) (5.0) (25.4) (36.3) Note: Figures in brackets represents amounts financed by IBRD. F. Disbursement 3.17 As the estimated disbursement schedule (Annex 3, Table 12), shows the Bank funds would be disbursed over a period of six years, largely reflecting the disbursement profile for Zimbabwe. Disbursement would be made on the following basis: (a) Agricultural credit: 752 of credit disbursed b-y AFC to commercial farmers and 100Z of credit disbursed by AFC to smallholders; (b) Civil works: 30Z of total expenditures; (c) Machinery, equipment: 1002 of foreign expenditures if imported directly, and 75Z of local costs if procured locally; - 27 - (d) Vehicles: 1002 of foreign expenditures if imported directly, and 752 of local costs if procured locally; 3.18 For agricultural credit and training, disbursemencs would be against Statements of Expenditure (SOEs) certified by the General Manager of AFC and CMB as relevant; these SOEs would be retained by AFC and CMB and made available for inspection by the Bank staff in the course of project supervision and by independent auditors. Disbursements for civil work, machinery, equipment, vehicle and technical assistance contracts costing more than US$50,000 equivalent, would be made against full documentation; for contracts costing up to US$50,000 equivalent disbursement would be, made against Statement of Expenditures (SOEs) and each of the project implementation agencies would keep SOEs in a centralized location and make them available for inspection by representatives of the Bank in the course of project supervision and by Independent Auditors in the course of the annual audit. Since the project would be implemented by three independent agencies, it would be necessary to have three separate Special Accounts for each of the three agencies. The Special Accounts would be established and maintained in the Reserve Bank of Zimbabwe (RBZ) under its "World Bank Disbursements Pool Account" (WBDPA), subject to the same procedures as apply thereto. RBZ should be asked to render 3 separate bank statements for the three different accounts. Upon project effectiveness, the Bank would deposit into these accounts sums equivalent to the estimated 4-month disbursements, a total of US$1.7 million representing US$1.0 million for AFC, US$0.6 million for the CMB, and US$0.1 million for the MLAPR-R & SS. Thereafter, the amounts would be replenished in accordance with rules and procedures set forth in the respective schedules in the legal agreements. G. Role of Women 3.19 Eighty percent of the 4.4 million women in Zimbabwe live and work in the rural areas. As a result of out-migration of adult men to seek employment in the towns and mines, about 512 of the 800,000 farm families living in the communal areas are female-headed. Women, therefore, bear a large burden of the work within the household unit. Not only are they responsible for the household chores, including the time-consuming tasks of collecting firewood and water and child-rearing, but they also do most of the physical labor associated with crop production. This is exacerbated by the fact that, with steadily increasing enrollment in school, children are unable to contribute much to household and farm chores. Overall, Zimbabwe women farmers produce about 70% of the crops, and in the Resettlement Areas, they produce about 562 of the cotton, 55Z of the maize, and 77% of the groundnuts. 3.20 Despite the fact that women farmers on the whole invest more time and labor in farming activities than men do, they generally have less access to credit, extension, and marketing services, primarily due to traditional cultural patterns. Women's participation in credit programs remains small, despite the fact that AFC considers them to be better credit risks than men, as their repayment rates are higher. The proposed Project would seek to improve women's agricultural productivity and alleviate the above constraints through assisting AFC in the strengthening of its credit outreach program to the Communal and Resettlement areas, especially through - 28 - the adoption of a group lending approach to the existing farmer groups, the membership of which consists mostly of women. Through the strengthening and eventual expansion of these groups, a greater proportion of Communal and Resettlement Area farmers, especially women, could be reached. One of the factors constraining access to credit among women is that they have no right to land; the group approach would alleviate this constraint since the group would serve as a guarantor of loan repayment. The mid-term evaluation of the pilot scheme under the proposed project would include an assessment of its impact on women (Annex 6). H. Environmental Impact 3.21 The production and processing of some of the commodities to be financed by the project involve the use of some agro-chemicals that may be harmful to human beings if not handled properly; cotton ginning also involve processes that may pollute the environment due to smoke, dust and use of chemicai.. The Government of Zimbabwe maintains strict regulation against pollutant agents and enforcement of these regulations would ensure that the project would not have a negative impact on the environment seriously. In addition, the ongoing National Research and Extension Project is expected to train farmers how to use agro-chemicals properly to avoid harming themselves. To ensure safe working conditions to workers around the cotton processing facilities, a pollution control system is incorporated in the design of the ginning plant. The Government furnished the Bank with a list of the agro-chemicals recommended for cotton. It was noted that two chemicals, which are environmetally unsatisfactory, will be withdrawn when stocks are used up since the manufacturers no longer make them; and that a third one calls for effective training of farmers on how to use it so as to avoid harmful effects. Through its supervision work and dialogue with the Government, the Bank will closely monitor the case to ensure that the two chemical are withdrawn as planned and that farmers are trained on how to properly use agro-chemicals that may be harmful to human beings. I. Role of NGOs 3.22 The main NGOs operating in the country are envisaged to play a significant role under the proposed project especially with regard to the pilot scheme. This is so not only because all the informal farmer groups are NGOs but also because the conventionally recognized NGOs would participate, through the Association of NGOs, in the main Coordinating Committee concerned with the group-lending pilot scheme (para 4.08). While the informal farmer groups would be involved in providing credit to their members, other NGOs operating in the country would take part in the training program under the pilot scheme and in helping to strengthen farmer groups in order to enhance groups' capability to provide credit, marketing, and input supply services to their members. J. Accounts and Audit 3.23 AFC, CMB and MLARR-R & SS would maintain separate project accounts and prepare annual project financial statements in accordance with generally accepted accounting principles and practices. AFC and CMB accounts are at present audited by the same independent firm of chartered accountants which is acceptable to the Bank; MLARR-R & SS accounts are - 29 - audited by the Government's Auditor General. At negotiations, assurances were obtained that AFC and CMB accounts would continue to be audited by independent auditors acceptable to the Bank, while MLARR-R & SS accounts would continue to be audited by the Auditor General; that the audit would cover SOEs as relevant and would include specific comments on SOEs and the use of funds from the three Special Accounts; and that, within six months of the close of each financial year, the audited annual financial statements together with the full auditor's report, would be submitted to the Bank (paras 6.02 tc] and 6.03 (e]). - 30 - IV. PROJECT IMPLEMENTATION AND MANAGEMENT A. Credit and Group Lending Pilot Scheme 4.01 AFC would be responsible for implementing the credit component; it would also assume the primary responsibility of implementing the Group Lending Pilot Scheme, and coordination of the participating ministries, parastatals and NGOs as relevant. AFC would undertake the measures set out below in order to improve the effectiveness of its general lending operations, ensure sound arrangements for facilitating access to foreign exchange for interested farmers, and enhance the success of the pilot scheme: General Lending Ope ations 4.02 Loan Evaluation Procedures: At present, AFC evaluates loan applications against farm models based on the broad five Natural Regions without taking into account climatic variations within the regions and their impact on expected returns. The amount of loan may, therefore, be too high or too low in a given location within the region; also, there is no reliable way of judging the financial viability of the clients and their ability to repay loans. There is also a need for AFC to set a maximum limit on the amount of loan to one borrower in order to minimize risks and to avoid a situation where a few farmers take the bulk of the loans. To rectify these drawbacks, AFC would, using technical coefficients provided by Agritex taking into account any significant agro-climatic variations within the natural regions: base loan evaluation for seasonal credit on a typical crop or farm budget showing cost/benefit ratios, gross margins, and return on labor, and grant credit only in cases where gross margin is adequate to cover credit repayment and leave attractive returns to labor; base evaluation of term loans not exceeding US$100,000 equivalent on a typical farm model and loans exceeding that amount on appraisal of individual application, showing financial and economic rates of returr, and net cash flow projections over the economic life of the involved capital investments, with loans granted only in cases where the rates of return are at least 132. AFC would also limit the amount of the loan to a single borrower to a maximum of US$250,000 equivalent. At negotiations, assurances were obtained to the above effects (paras 6.02 [d] and [e]). 4.03 The crop budgets would be circulated to the field staff at provincial and district offices to be used for assessing loan applications. Because AFC staff has no experience in approving loans involving complex investments for new crops such as horticulture products (on-farm investments, green houses, cold storage or refrigerated transport), AFC would use local consultants until AFC staff has gained the necessary experience to appraise such loans. Furthermore, to ensure that Agritex extension service gives sufficient attention to AFC borrowers or to the villages where these borrowers are located, AFC would maintain close co- ordination with Agritex. Specifically, AFC Provincial branches would provide, on a monthly basis, lists of new borrowers to Agritex's provincial offices incorporating in these lists the address of each farmer and the purpose and amount of credit approved. In addition, AFC would arrange periodic meetings at national, provincial and local levels among Agritex and AFC officials. - 31 - 4.94 Stop-Order System: AFC heavily relies on stop orders registered with marketing agencies to ensure repayment of its loans. One of the factors that adversely affects AFC's overall loan collection is that, under the current procedure, for farmers borrowing to grow more than one crop handled by different marketing agencies, stop orders are registered with each marketing agency at the full amount of the loan, including interest. The combined amount collected by the agencies is, therefore, a multiple of the number of involved agencies and, while AFC undertakes to refund the excess amount to the farmer, it usually takes a long time before the refund is effected. ,s a result, many farmers resort to marketing their produce outside the marketing agencies, thereby avoiding repaying multiple amounts of loans. To alleviate this problem, AFC would use crop budgets and farm models, as indicated in para. 4.02, to break down loan amounts according to various crops and issue separate stop orders to each marketing agency only for the part of the loan to the crop handled by agency. At negotiations, assurances were obtained to this effect (para 6.02 [f]). Arrangements to Make Foreign Exchange Available to Farmers 4.05 One of the purposes of the Special Account under the project is to enable farmers to have direct access to foreign exchange resources, if they need to do so, to procure imported inputs consistent with project objectives. Processing of loan applications for access to foreign exchange would be made through the mechanism existing in the country. At present, a committee under the auspices of MLARR, the Export Promotion Program Committee (EPPC), is responsible for reviewing all allocations of foreign exchange pertaining to agriculture and recommending release of funds through a similar committee under the auspices of the Ministry of Finance, Economic Planning and Development. The Committee's primary objective the is to ensure that foreign exchange is used for purposes that are fully consistent with the national objectives and priorities. 4.06 In view of the foregoing, the mechanism for processing applications for foreign exchange under the project would be as follows: (a) Farmers wishing to avail them-selves of foreign exchange would submit applications to AFC, together with proforma invoices and telex confirming orders and a letter justifying the need for foreign exchange; (b) AFC would receive applications from farmers, for both local currency and foreign exchange needs, and assess the applications to determine the viability of the concerned sub-projects; if satisfied that the sub-project is viable, AFC wold forward the applications involving foreign exchange needs, together with the attachments indicated in (a) above, to the MLARR's Export Promotion Program Committee (EPPC); (c) The MLARR's EPPC would then review the concerned applications, and if satisfied that the applications are consistent with the national priorities and that there are no other sources of funds, forward them to the EPPC of the Ministry of Finance with due recommendations; - 32 - (d) Upon satisfying itself regarding the need to make foreign exchange available for the purposes set out in the applications, the EPPC of the Ministry of Finance would advise the EPPC of MLARR accordingly and return that applications to AFC through the MLARR's EPPC; (e) AFC would then grant loans to farmers applying for foreign exchange. 4.07 While the above mechanism is reported to be working well witb'ut long delay, it will need to be kept under review to ensure that it does not unnecessarily slow down the processing of credit to farmers. Assurances were obtained at negotiations to the above effect (para 6.02 (g]). Group Lending Pilot Scheme 4.08 Organization and Management: To facilitate effective coordination among the participating agencies, AFC would constitute a Coordination Committees, at the provincial and district levels as may be appropria.e, inc.-iding AFC's Group Lend.ng Coordinator; and representatives of MLARR; Ministry of Community and Co-operative Development and Women's Affairs (MCCDWA), Ministry of Local Government and Rural and Urban Development (MLGRUD); National Farmers Association of Zimbabwe (NFAZ); and Association of NGOs. The Committee would serve as an advisory body to AFC in all matters relating to the group lending pilot scheme. AFC would also establish, at its headquarters, a small Group Lending Operations Unit and appoint one of its senior officers as the Group Lending Coordinator, assisted by a three support staff from the existing A.FC staff, who would be the Member-Secretary of the Coordination Committee. In addition, AFC would assign an inspector for each district covered by the Pilot Scheme to exclusively work for the Scheme and be in charge of all group credit activities in the District. Each group would establish a management committee consisting of the group's chairman, secretary, treasurer, and at least two representatives of farmer members. Criteria for selecting districts, wards, and groups to participate in the scheme, and procedures for administering credit under the scheme would be as set out in Annex 4. At negotiations, assurances were obtained to these effects (para 6.02 [hl). 4.09 Training: The training program relating to the pilot scheme would be organized by AFC's Staff Training Unit in collaboration with the Group Lending Coordinator. The Staff Training Unit would determine priority training needs, identify candidates for training, and prepare preliminary training programs which would be submitted to the coordination Committee for review and approval. A special effort would be made to include women in the training program. 4.10 Group Lending: The group managing committee would receive loan requests from individual members and evaluate them on the basis of the crop budgets and farm models supplied by AFC, and make sure that the applicant is not a defaulter or a dependent of a defaulter. It would then consolidate all approved loan requests into a single loan application which would be submitted to AFC, separating the application into seasonal and term loans. For the first three years of group borrowing, AFC staff would assess loan applications against the crop and/or farm models and also make - 33 - sure that the group is willing and able to maintain proper loan records. After three years of good performance, AFC would leave all loan assessments to the group. If the group loan is approved, AFC would authorize the group to place orders with suppliers designated by the group in the loan application, for the amount of loan relating to purchased inputs and release cash to the group for the amount of approved loan relating to hired labor. If any member of the group who is not an applicant for loan wishes to buy inputs through the group on cash basis, he would be permitted to do so, provided he pays cash on delivery or to the group and the group deposits the cash with AFC. It would be the responsibility of the group leadership to register "stop orders" on their borrowing members' marketing cards with the marketing agencies. However, cash repayments by individual members would be permitted at any time in which case the stop orders would be revoked. B. Strengthening AFC Capability 4.11 AFC would be responsible for implementing all aspects of this component. This would include civil works for field office facilities, procurement of vehicles and equipment, and implementation of the technical assistance and consultancies financed by the EEC. It would rely on local contractors for the construction of the field offices. C. Cotton Ginnery and Storage Facilities 4.12 CMB would be responsible for the construction of the new cotton ginnery, procurement of vehicles and equipment, and arranging overseas training of key ginnery technicians in electrical, mechanical, and hydraulic fields, It would hire the services of a firm of architect- engineers to design the ginning and post-harvest facilities and the services of a contractor to undertake the construction works. It is expected that the design of the new cotton ginning and related facilities would be virtually identical to that of the facilities recently constructed at Bindura; the mission examined the design for the Bindura ginnery and found it satisfactory. Implementation Schedule would be as shown in Chart 4. Site selection for the ginnery site has been done. Detailed designs, technical specifications and preparation of tender documents and award of contracts would be completed by March 1990. Tender documents would be reviewed by the Bank before invitation of bids, and contracts would be submitted to the Bank for review before the contracts are awarded. Mobilization would take place in April 1990; all works and installation of machinery and equipment would be completed by June-July 1991. At negotiations, assurances were obtained to the effect that the architect- engineers to design and supervise, and contractor to conduct the ginning and related facilities would be selected in a manner acceptable to the Bank; and that their experience and qualification and terms of appointment would be acceptable to the Bank (para 6.03 (f]). D. Horticultural Research 4.13 R & SS through MLARR would assume the overall responsibility for the implementation of the post-harvest horticultural research component. The facilities for the research would be established at the Institute of Horticultural Research at Harondera, which is under R & SS. Sites for - 34 - civil works have already been identified and are within the compound of the Institute. Civil work would be carried out by private contractors under the supervision of the Ministry of Construction. Specifications for equipment for cold and cool storage, laboratory equipment and vehicles would be prepared and procurement undertaken by the Institute through R & SS. E. Reporting, Monitoring and Evaluation 4.14 AFC, CMB, and R & SS would prepare semi-annual progress reports for their respective project components which would include a summary of operations, use of project funds, and factors bearing on implementation progress and, in the case of AFC, achievements of the EEC technical and consultant assistance, and status of loan repayments. These reports would be submitted to the Bank not later than two months after the end of each half-year. In addition, the Borrower would carry out an indepth mid-term review during 1992, for the purpose of assessing implementation progress of various activities of the prcject. The terms of reference of the review are expected to be along the lines shown in Annex 6; and would thus include reviewing: status of AFC's loan arrears, financial conditions and performance, staff training and terms of service, arrangements to raise funds from non-governmental local sources, lending policies and procedures; and the performance of the group lending pilot scheme. At negotiations, assurances were obtained that the review would be undertaken, its repoit submitted to the Bank for comments by the end of March 1992, and that recommendations emerging from the review would be implemented in consultation with the Bank (para 6.03 tg]). 4.15 Each project implementing agency would be responsible for monitoring implementation progress regarding its respective project components. The most important monitoring activities concern the credit component. In this regard, AFC's M & E unit would focus on the impact on farm production and income of activities financed under the project. The results of these analyses would be utilized for such purposes as modification of crop budgets and investment models, adjustment of appraisal criteria, and preparation of the mid-term and Project Completion Reports. The scope and methodology of the evaluation work would be determined in consultation with the Bank. AFC, CMB and R & SS would also prepare, for the component falling under each agency, a Project Completion Report (PCR), the content and format of which would be agreed with the Bank, to be submitted to the Bank within six months following the project closing date. At negotiations. assurance would be obtained to this that the PCR would be done accordingly (paras 6.2 [i] and 6.03 th]). - 35 - V. BENEFITS, JUSTIFICATION AND RISKS A. General Beneficiaries: 5.01 Project beneficiaries would consist of both smallholders and commercial farmers. It is estimated that, by 1993/94, the number of smallholders borrowing from AFC would have increased from the present 73,600 to about 118,000 and that incrementel borrowers among smallholders under the project would amount to 44,400, involving a population of about 266,400. Although the number of borrowers from among the commercial farmers is expected to increase substantially, it is difficult to estimate how many of them would benefit from the proposed project since the project would provide funds only to those farmers growing priority commodities for export and import-substitution. The incremental number of smallholders under the project would amount to about 5.5Z of the total CAFs at present, and a substantial number would consist of women, since nearly 511 of the farm households in the communal areas are de facto headed by women. While the incremental number is modest in proportion to the total CAEs, many of these farmers are not in a position to make use of agricultural credit because infrastructure and ecological constraints render credit alone insufficient to ensure profitable farming of cash crops. The project would, therefore, aim at those farmers facing little, or are in a position to deal effectively with infrastructural and ecological constraints. 5.02 Production: Except in the case of cotton lint, it is not possible to estimate meaningfully the likely increase in agricultural production. The reasons are that project activities wo'ild be spread over widely varying ecological conditions and farming systems; and that project funds would not be earmarked for any individual crop, the only restriction being that, to qualify for credit under the project, commercial farmers must be involved in growing import-substitution and export crops. However, the project is expected to help increase the production of various commodities both for the domestic and export markets, thereby continuing to ensure food security, contribute to foreign exchange earnings, and raising rural incomes. With regard to cotton ginning component, the project would help to process 25,000 tons of seed cotton, yielding about 8,750 tons af lint and about 16,250 tons of cotton seed. About 70X of the lint would be exported, earning about Z$11.7 million (US$6.6 million) in the second year and Z$15.2 million (US$8.5 million) in the sixth year. Cotton seed would yield about 4,000 tons of cooking oil, or 122 of the consumption in the country. 5.03 Institutional Benefits. The project would strengthen CHB institutional capability by training technicians entrusted with the operation and maintenance of all its ginneries. It would particularly strengthen APC institutional capacity by promoting group-lending, encouraging the adoption of better loan procedures, supporting measures to reduce arrears, and reinforcing AFC's field presence. - 36 - B. Costs and Benefits Analysis 5.04 Overall Proiect. As noted above, the credit component would finance a wide range of crops, under widely varying ecological conditions, cropping patterns, and farming systems. In view of this and the fact that farmers would be left free to decide the crops for wY'ch they wish to borrow, it is not possible to carry out a meaningful analysis of financial and economic rate of return for the project as a whole. Therefore, the justification of the project is based on the assessment of costs and benefits for individual components, using crop budgets in cases involving only seasonal credit, and rates of return in cases involving medium-and long-term loans, and cotton ginning. 5.05 Crop Budgets for Seasonal Credit. This applies to smallholders producing mainly maize, cotton, soyabeans, groundnuts, sunflowers, and tobacco. Annex 5, Tables 1 to 6 show the detailed crop budgets for these crops, with gross margins summarized in Table 5.1 below. While returns are attractive in all cases, they vary widely according to both the crops and ecological regions. Thus, return to labor is significantly below minimum wage (US$3.80 per man-day) for cotton and soyabeans in Regions III, and for groundnuts in Region II. In incremental terms, return to labor is most attractive for groundnuts in Region III, followed by maize in both regions II and III: they are least attractive for sunflowers in Region II, followed by tobacco under medium-level technology, soyabeans and cotton in Region II. The wide variation of returns underscores the need for AFP to adopt loan appraisal procedures that relate credit to expected returns as set out in para 4.02. - 37 - Table 6.1 One Hectare Crop Budget (ZS) Gross Margins ReturniMan-day Without With Without With Project Prolect Increm. ProTect Project Increm. Maize Natural Region II 98.1 226.8 80.2 2.8 5.0 2.2 Natural Region III 41.8 181.8 90.2 1.8 4.8 2.6 Cotton Natural Region II 178.6 298.6 126.0 2.8 8.7 0.9 Natural Region III 92.0 220.8 128.8 1.7 8.8 1.6 Soyabeana Natural Region II 188.8 248.0 104.4 2.7 8.9 1.2 Natural Region III 101.7 184.8 78.1 2.1 2.9 0.8 Groundnuts Natural Region II 117.2 229.9 112.7 2.2 8.4 1.2 Natural Region III 88.4 319.8 70.9 1.4 5.6 4.1 Sunflowers Natural Region II 168.5 265.4 86.9 B.9 4.6 0.6 Natural Region III 94.1 174.8 80.7 2.6 8.* 1.8 Virginia Tobacco Medium Tech. 718.7 1016.7 298.0 8.6 4.9 0.7 High Tech. 718.7 1278.6 560.8 8.6 65. 1.7 5.06 Medium- and Lon_-Term Credit. The main commodities involving medium- and long-term loans under the project are poultry for smallholders and wheat and horticultural products for commercial farmers. Annex 1, Tables 7 to 11 show the cost and benefit analysis for these commodities, with rates of return summarized in Table 5.2. The economic rates of return are satisfactory in all cases, ranging from 25Z for smallholder poultry to 41Z for annual flowers. On the other hand, the financial rate of return is marginal for annual flowers at 13?, and ranges from 182 for smallholder poultry to 28Z for roses. The wide discrepancy between financial and economic rates of return largely reflects the over-valuation of the local currency combined with uneconomic minimum wages. - 38 - Table 5.2 Financial and Economic Rates of Return Financial Economic Rate of Return Rate of Return (Percent) (Percent) Smallholder Poultry 18 25 Wheat 16 36 Roses 28 47 Annual Flowers 13 48 Passion Fruit 27 44 5.07 Cotton Ginning. The cotton component as a whole comprises three transit depots outside the area served by the proposed new ginnery, spare parts for the existing ginneries, and a workshop to service light repairs and maintenance of all CMB ginneries; the total cost of these sub- components is about US$6.8 million. The main benefits from the depots would consist of lo,Ter transport costs to producers. For the spare parts and workshop, the main benefits would be reduced operation and maintenance costs in the eight existing ginmeries, and preservation of quality of lint. Because of the difficulties in qualifying these benefits without spurious results, these sub-components have not beea included in the cost and benefit analysis. 5.D8 As Annex 5, Tables 12 and 13 show, the base financial rate of return is most unsatisfactory at minus 202.72 and differs considerably from the ecoromic rate of return of plus 24%, thereby indicating seriou.s distortions in the pricing policy. Aprart from over-valuation of the local currency, producer prices have averaged about 202 above the border-price equivalent during 1986-88 while prices of lint sold to domestic textile manufacturers have been kept below the bord^r-price equivalents. Also, cotton seed prices are set at levels considevably below the prices of other oilseeds. Although CMB's costs, especially ginning and overhead expenses, have tended to rise faster than revenues and there is, therefore, an urgent need to improve CMB's efficiency, this alone would be inadequate to improve the financial rate of return satisfactorily in the immediate future, given that a reduction of CMB's costs by 20% would leave the financial rate of return negative by 22 (table 5.4, b [ii]). On the other hand, adjusting seed cotton prices to border-price equivalent would yield a financial rate of return of 19.9X. Measures to ensure a satisfactory financial rate of return are, therefore, esseatial. A better approach is to combine a number of measures which would improving CMB's efficiency and adjusting the prices of seed cotton, cotton seed and local lint; for example, a rate of return of about 20.3% can be attained through reducing CMB's costs by 5%, increasing the price of local lint by 8%, increasing the price of cotton seed by 10X, and by adjusting seed cotton prices by 15% (Table 5.4 [f]). Measures to ensure a satisfactory financial rate of return must, therefore, include realigning domestic prices appropriately with world prices. At negotiations, assurance was obtained the Borrower will take appropriate measures to rectify the situation (para 6.04 (a]). - 39 - Table 5.4: Financial and Economic Rates of Return (2) Financial Economic (a) Base (202.7) 26.8 Switching Values (b) Operating Cost 56.0 (i) Down 52 (18.9) (ii) Down 102 (10.2) (iii) Down 202 (2.0) (c) Local Lint Prices 1/ 59.4 (i) Equal Export Prices (12.2) (d) Cotton Seed Prices 73.0 (i) Up 262 2/ (1.3) Cii) Up lOX (12.1) 'e) Seed Cotton Prices 14.6 (i) Down 102 7.4 Cii) Down 15Z 14.0 Ciii) Down 202 19.9 'f) b (i)+c(i)+d(ii)+e(ii) 20.3 1, Up 8z 2/ Equal 60Z of soyabean prices C. Project Risks 5.09 Credit ComRonent. Apart from droughts, the main risks bearing on this component are primarily institutional in nature. Measures to reduce arrears may not be rigorous enough, while the desire to reach more smallholders quickly may lead to relaxation of credit evaluation standards. Also, unless AFC succeeds in improving the quality of its services, it may lose clients from commercial farmers, the only dependable source of net revenues. This could weaken AFC's financial condition and its capacity to provide credit services. The project would seek to minimize these risks by ensuring that AFC to adhere to the lending policies and procedures set out in para 4.02 above; by strengthening AFC field capability through expanding field offices and staff, and easing, through group lending approach, the demands on its institutional capacity in order to enable it to improve the quality of its services to both smallholders and commercial farmers; and by providing for an indepth mid-term review of project implementation progress in order to ensure that necessary corrective measures are taken in good time. - 40 - 5.10 Cotton Component. The main risks bearing on this component stem from the possibility that the political will may not be sufficiently strong to undertake the necessary policy changes to eliminate CMB losses. To minimize the risk assurances were obtained at negotiations that, as a condition of disbursing project funds for the cotton component other than the subsector study, the Government would take approriate measures to eliminate CMB losses effective from 1990/91 (para 6.04 [a]). - 41 - VI. Agreements Reached and Recommendations 6.01 The following actions were taken by AFC as conditions of negotiations: recruitment and selection of the candidates financed by the EEC for the posts of Financial Advisor and Training Specialist, and consultants to help improve management of the loan portfolio (paras 2.03, 2.10 and 2.14). 6.02 At negotiations, agreements were reached that AFC would: (a) ensure that preliminary and final reports of the specialists and consultants funded by the EEC technical assistance to AFC would be submitted to the Bank for review and comments as scheduled in Annex 1, Table 17; and Bank comments would be taken into account in the implementation of the recommendations of the concernec reports (paras 2.02, 2.03, 2.10, 2.13); (b) take action to reduce arrears relative to total outstanding portfolio to not more than 35Z during 1989/90, 25Z during 1990/91, and 15? during 1991/92 and thereafter (para 2.09) (c) maintain separate accounts for the project funds, prepare and submit to the Bank audited accounts not later than six months after the end of the financial year, with specific audit comments on SOEs and the use of funds from the Special Accoint, and with accountd audited by an independent firm of auditors acceptable to the Bank (para 3.23); (d) adopt a procedure whereby (i) evaluation of seasonal credit is based on a typical crop or farm budget prepared every year, showing cost/benefit ratios, gross margins, and return on labor, and grant credit only in cases where gross margins are adequate to cover credit repayment and leave attractive returns to labor; (ii) evaluation for term loans not exceeding US$100,000 equivalent is based on a typical farm model and loans exceeding that amount on appraisal of individual application, showing financial and economic rates of return and net cash flow projections, with loans granted only in cases where the rates of return are at least 132 (para 4.02); (e) limit the amount of loan to a single borrower to a maximum of US$250,000 equivalent (para 4.02); (f) modify the stop-order system so that the amount to be deducted by each marketing agency is proportionate to the amount of loan the farmer borrowed for the concerned crop (para 4.04); (g) make foreign exchange available to farmers through the mechanism as set out in para 4.06-4.07; and - 42 - (h) assume the primary responsibility for coordinating the agencies involved in promoting the Group Lending Pilot Scheme; ensure that the selection of areas and groups to participate in the Group Lending Pilot Scheme, as well as the administration of credit under the scheme, are in accordance with Criteria and procedures set out in Annex 4; appoint a Group Lending Coordinator from among its senior staff and provide him with the necessary logistic support; constitute a Coordination Committees, at the provincial and district levels as may be appropriate, including representatives of MLARR, MCCDWA, MLGRUD, Association of NGOs and AFC's Group Lending Coordinator;; and assign a loan supervisor in each district exclusively for the Pilot Scheme activities (para 4.08). (i) prepare a Project Completion Report for their respective components, as may be agreed with the Bank, and submit the report to the Bank not later than six months after the closing date of IBRD loan (para 4.15). 6.03 Agreements were also reached at negotiations that the Borrower would: (a) continue to ensure that producer prices are maintained at levels that provide adequate incentives (para 1.12); (b) review AFC's lending interest rates and adjust them periodically in order to maintain them at least equal to the prevailing prime rate charged by commercial banks and to provide AFC with a spread sufficient to cover its fixed and recurrent costs (paras 2.04, 2.05 and 2.11); (c) carry out the horticultural export marketing and the cotton subsector studies and submit the studies' reports to the Bank for comments respectively not later than December 31, 1990 and June 30, 1990; and take Bank comments into account in the implementation of the recommendations thereof (paras 1.10 and 2.15); (d) assume the foreign exchange risks on IBRD loan under the project (para 3.15); (e) ensure that CHB, MLARR-R & SS would maintain separate accounts for the project funds, prepare and submit to the Bank audited accounts not later than six months after the end of the financial year, with specific audit comments on SOEs and the use of funds from the three Special Accounts, and with CMB accounts audited by an independent firm of auditors acceptable to the Bank while MLALR-R & SS accounts would be audited by the Auditor-General (para 3.23); (f) ensure that, for the construction of the cotton ginnery, CMB would appoint design architect-engineers and contractors - 43 - according to Bank guidelines and with qualifications and experience, and under terms acceptable to the Bank (para 4.12); (g) carry out an indepth mid-term review of implementation progress of the various project activities, submit to the Bank for comments the review's report by not later than March 31, 1992, and implement the recommendations of the review in consultation with the Bank (para 4.14); and (h) ensure that CMB, and MLARR-R & SS would prepare a Project Completion Report for their respective components, as may be agreed with the Bank, and submit the report to the Bank not later than six months after the closing date of IBRD loan (para 4.15). 6.04 Special Conditions: (a) before any project funds are disbursed for the cotton component other than the cotton subsector study, the Borrower would have adopted appropriate measures that will enable CMB to generate increased revenues from its operations so as to eliminate the deficit in its trading accounts effective from CMB's financial year 1990/91 and thereafter (paras 2.18 and 5.08); 6.05 Conditions of Effectiveness: (a) filling the post of AFC's Deputy General Manager (Finance) with a candidate having qualifications and experience acceptable to the Bank (para 2.03); and (b) execution of a subsidiary loan agreement satisfactory to the Bank under which the Government would on-lend IBRD funds to AFC and CMB at 9.752 interest rate and 15-year maturity including 3-year grace period (para 3.15); and (c) effectiveness of IFAD and BADEA loans. Recommendations 6.06 Subject to the above, the project is suitable for an IBRD loan of US$36.3 million. - 44 - ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT ANNEXES - 45 - Annex 1 Table 1 Interest Rate Structure (Percent per Annum) A. Lending Rates (September 1988) Overdraft (minimum rate) 13.0 Acceptance crdits (minimum rate) 11.00 Hire-purchase 20.00-22.00 Mortgage Residental Property 13.25 Commercial Poultry 14.25 B. DePosit Rates (September 1988) 3 Months 12 Months 24 Months Commercial Banks 8.25-9.50 8.75-10.15 9.25-10.25 Acceptance Houses 8.50-9.50 9.75 9.75-10.50 Finance Houses 8.25 9.00-9.12 11.50-12.50 Building SocieS.ies 7.75 9.75 10.00 Post Office Saving Bank 8.50 10.00 - ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT AFC Lending Program; 1980-88 Sectoral Distribution of AFC Annual Loan Disbursements Fiscal CAs and Smaill-Scale Larse-Scale Resettlement Commuercial 'Commercial Total Year No Z$mio No Z$mio No Z$mio No Z$mio 1980181. 1-8,000 4.2 3,'333 3.7 2,526 86.9 23,859 94.8 1981182 31,061 10.6 3,649 4.6 2,103 88.8 36,813 104.0 1982183 43.066 14.7 2,953 4.5 1,645 88.7 47,664 107.9 1983/84 69,910 34.0 3.052 8.1 1.400 110.2 74,362 152.3 1984/85 85,719 40.7 2,744 8.7 1,484 110.3 89,94? 159.7 1985186 91,392 47.3 2,569 11.5 1,308 113.0 95,269 171.8 1986187 89,184 68!6 1,910 9.6 1,007 94.9 92,101 173.1 1987/88 80,994 48.6 1,521 5.5 866 99.1 83,381 154.2 - 47 - ZIMBABWE ANNEX 1 AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Table 3 AFC Actual and Projected Lending Program (1985/86-1993/94) 1/ ,. ""R urWm V M as ----I'm'fw l-----1-1- -rubjenc2ed-l---- _-_"' Short-teem 662 6 610 6N m" 750 625 910 1000 - edium- and lon-tm 446 346 372 890 410 460 495 1108 (b) =I-Scal Com. re - Sh-e rmM 16" 1299 1 1488 1i56 1740 1920 2120 ftdlua- and Lane-term 285 212 248 255 270 300 350 36 400 (e) Communal & Rettlemet Scheme Paruwa - Shm-b d L1102026 6 73549 7600 62500 91500 100500 10900 116100 *-liu_ end Long-term 11126 5925 7481 SW0 600 9500 10500 11500 12500 I. AVEAOE LOAN SUE (Z)S. (a) LorScn Cow_rei 2 Fnr_r- - Shca-e C era 10rme 1172r 1403 16369 174052 1920 21321 2 262525 - Medium- ad Longterm 47960 5075 515s "716 69767 77347 a848 9794 10506 C) Seall-Scele Coml. F1rer. Short-term *940 4S s3937 4440 4724 577 6417 71126 Medium- mnd Lonterm 6772 6 66 772 a52 9124 10064 111ZI 12417 (e) C_*m1n A Remettlemwnt Schem Farer - Short-ter 34 7 734 629 l 976 1079 119 1329 - MIw- and Low-tere 40 60 7 a 64 76 650 -O940 _ 104 M. W4L LOAN OISUW54 (Z6 M) 0 (a) Large-Scale Comorerel Farmr - Short-term 91.6 77.3 69.6 106.5 119.2 144.7 178.9 213.1 202.5 - Mdium_- and Long-ter 21.4 17.6 21. 205.6 46.6 364. 42.8 51.7 63.2 Ct) Smil-ScaleCaaml. Farer - Short-term 9.0 7.7 5.1 6.1 6.6 8.8 10.1 1U.3 16.1 Meiu- VWd Long-term 2.5 1.9 1.7 2.0 2.2 2.7 3.8 4.1 5.0 Ce) om_I &l Rdettlemerk SCheme Fnrmr. - Short-term 42.9 63.6 54.1 64.7 72.7 69.8 106.4 1S1.0 157.5 - Medium- end Lane-tjrm 4.5 5.0 4.3 5.2 5.9 7.3 6.9 10.6 15.1 IV. 9UWAY OF AMWAL LON One. (Z 11) Ca) Comereiml Farmer - short-term 100.6 U5.0 9. 112.6 16.0 180.0 166.0 227.4 m26 - Medium mad Lang-term 23.9 19.5 23.8 27.6 S0.6 37.5 45.6 55.6 6.2 _ Total 204.5 104.6 115.1 140.2 156.6 190.5 921.6 m.2 84.6 tb) OIUMMal Are & Othr Sel l4cale Frmege - Shor-ter 42.9 65.6 54.1 44.? 72.7 66.5 100.4 151.0 17.5 Medium- md Long-ter 4.6 5.0 4.8 5.S 5.9 - Total 47.4 .6 66.4 19.0 76.6 6.6 17.3 141.6 170.6 CO) Total Ln DiObursoments Short-term 148.5 146. a 6 14.6 1778 19.7 242.8 24.4 315.4 435.1 - Medium- VW L*n-trm 26.4 24.5 27.6 3S20 56.7 44.a 4.5 66.6 61.8 - Total 7n1.9 178.1 176.4 210.1 253.4 2067.1 84.9 425.0 51.4 V. i YLOW WAW 1551.4 166.2 90.8 175.6 206.9 246.3 31.7 315.3 440.6 VI. Pr AU 40 OF WAR 2M6. 295.2 36.3 415.6 447.8 4J6.1 .S 595.0 670.6 Viz. MWNOLOM - 6.9 66.1 34.5 81.5 40.6 35.2 71.9 73.S Th .rm gDIebure"ents refer. to menut If loans given durin a year and ne frtol l at the ed.of the year. Proepcte Inremnm In the number of loan. diebured each year fro 19A/69 through 193/94 * estimated by AF. Pr6J emted Inrese in the *vermge loen siz, from 19116/69 trough 1993/94 1- due to Inflation forecasted In accordance with World en setiote.m, below$ 1967/66 1963/69 1Wl960 1990/91 1991/90 199/93 199/94 Inflation Rate (S) - 13.5 11.5 11 11 i1 11 Ftor 1.00. 1.15 1.20 .1.80 1.47 1.68 1.61 Represents mount rrtved m#by .ltiglicstion of number ef loan, with the amont of iverge loen "ie. - 48 - ANNEX 1 ZIMBABWE Table 4 AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Status of Arrears (1983-88) 1/ Amount in Z$Million 1068 1Q64 196592 1967 LIE Short-togM Loan. CA 2.6 16.6 9.6 40.7 13.3 39.8 9.6 13.6 26.1 48.6 60.0 66.6 RS .3 5C. 1.9 26.6 L.I 44.7 3.8 31.1 7.6 60.9 14.1 74.9 ssc 1.? 26.4 8.a 45.7 4.9 36.7 3.a 28.1 7.3 59.4 12. 73.1 LSC 9 . flUJ 23.6 Wl22 .2 2 4.5 19. 3 16.6 87 56.6 46. Subtotal 14.6 14.5 J8.8 2 L _2 ,29.,7 35. 21 1f. 43.2 ". -'- Vedlum/Lons-Ter Loon, CA 0.2 19.9 6.2 6.1 6.6 14.4 2.4 29.6 4.1 36.6 7.9 t.7 RS as no no no 0.6 19.9 1.9 47.6 2.7 U4.8 4.8 67.1 SSC 0.7 30.1 6.6 23.9 1.0 24.6 1.6 27.1 2.6 0.6 4.5 47.8 LSC LA 0.6 6 I L A L. 12.6 13.9 16.1 176 10.6 17.3 24. 24 . Sub-total 6.9 11.5 9.7 1tj. 14.9 14.6 22.0 20.1 29 21. 412 . Total Loans 22.9 z 43.6 26.5 65.1 23.9 E7.9 ILl IL E*.d 3y iL 4S g. 23.9 S7.g, 29.1 192.7 .4. If * S of loon arrears to outetanding loans Because AFC accounting Proeon door ro provide tie neceseary Informtlon, it I noet possible to detrmine the magnitud of the rrers relativ* to the a*ounts due rather than th, total loan portfoliol, or to ase.on the *g9 -p"otion of thise arrears. CA * Comunal area famers RS Reett lment scheme famer SOC * Seal -ecal, co_.ercill famer. LOC * Lerge-cle coercial farmere 1/ Loan arrears as of March 31, 1983-88 ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Financial Analysis AFC Income and Expenditure Statements; 1980-88 (Year Ending March 31) U6 23 ^ l2. 26 5 2. 1 26. S 26 1 26. 7 1m 2Wa s ZB k Zo 8 no s z oo l I es 5 U iamo o eet 6.1 o6.4 o.8 o:.0 18.3 94.6 17.7 4.1 23.0 97.5 2.4 06.9 31.4 7S.? 6. 0 9 7 416 9 3 3 camii 0.0 00 . 0.0 0.00 .0 0.0 0 0.1 0.4 0.1 0.3 0.2 0.6 0.2 0.5 1.6 8. other 1/ 0.3 3.6 0.4 4.0 0.0 5.4 1.1 S.9 -0.1 -0.4 0.1 0.3 0.2 0.6 0.4 1.1 0.4 0. total 6.4 100.0 9.9 100.0 14.7 100.0 S1.0 100.0 2a.6 100.0 29.a 100.0 12.6 100.0 87.4 100.0 44.S 100.0 ..pemditure p otne opfS t1. 22.6 3.0 a0.3 4.1 2. .3 so.9 6.6 27.7 0.a 2S.3 10.3 81.4 12.1 82.4 18.9 31.0 tereet 5.1 60.7 '.6 I6 .6 .0 14.4 10.6 36.4 14.8 60.1 17.0 Se.0 18.5 56.4 19.9 53.2 24.7 58.1 bad debt 2/ 0.7 6.3 1.0 10.1 0.4 2.7 4.4 23.4 4. 19.3 4.9 16.7 6.1 16.6 7.8 19. 6.6 14.7 depreciatio 0.1 1.2 0.1 1.1 0.1 0.? 0.4 2.1 0.8 1.8 0.4 1.4 0. 2.4 1.1 2. 1.5 3. eotel 7.6 62.9 9.9 100.0 12.6 68.7 21.2 112.8 29.6 100.4 80.6 104.4 35.7 106.6 40.4 106.0 44.7 104.2 peratireg Income (ieee) 0.S 7.1 0.0 0.0 2.1 14.3 -2.4 -12. -2.0 -0.4 -1.8 -4.4 -2.9 6.6 -.0 -0.0 -1.9 -4.2 refun af deficits 0.0 0.0 on fer oeratio ns/ 0.2 o :.4 0.6 I1 1:7 11.6 . 81:4 7:. 6:6. .o 290: 10:. . 11.2 29.9 10.3 23.0 o: *Streadinaerp Items 4/ 0. 0. 2. 92 0. 00 .0 .00 0 0.0 0.00 0 0.0 0. 0.0 0. 0.0 0.0 % met Income 0.6 9.5 2.6 28.3 5.6 29.9 6.8 16.6 5.9 24.0 7.2 24.6 7.6 23.2 6.2 21.9 0.4 16.7 fet mete. I Fore gearm 1O6-6. this figure Include. fes NW comaSwiam revemues 2 Inclde bad det. on Seal I Fare Credit and Ramttle met Schem. 3 Wfre to cermtmg deficitse and be debt. imcerred en operatlim 1hdit ad Retb n Scem 4/ Profit. from male of officm premime. Sowrc f info auie finacilI etmmnt be 667 andpreieli acout far 166 - 50 - ANNEX 1. Table 6 ZIMBABWE ACRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT AFC Prolected Income and Expenditure Statements (1989-94) (Year Ending March 81) 1968 1989 1998 1991 1992 1998 1994 Actual -----Pro ctl onu-------- ----------- Millon Income interest 40.6 45.1 60.6 55.2 62.1 69.0 76.6 Others 8.8 3.7 4.1 4.6 5.6 5.6 6.2 Total Incom 48.9 48.8 54.7 59.7 67.1 74.6 82.8 Exegnitures interest 2C.5 27.8 81.1 84.6 88.2 42.5 47.1 Operating co.t. 18.9 15.9 17.9 19.7 21.8 28.6 24.6 Bad debts 1.5 1.7 1.9 2.6 2.8 2 .6 2.8 Depreciation 1.0 1.6 2.6 .3 8 8.8 8.5 8.6 Total Expenditures 41.0 47.0 58.5 58.9 65.8 71.6 78.2 Net Income 2.0 1.7 1.2 0.9 1.8 8.O 4.6 OOZ Rlombur_amnts 6.7 6.4 7.1 7.7 8.7 9.7 10.8 Net Surpluses (Deficit) 7.7 8.1 .8 8.6 106.5 12.7 16.4 Ratlo () Net Incoe/Total Income 4.6 8.6 2.2 1.8 2.7 4.0 6.6 Net Income/Net Surpluses 26.8 21.5 14.4, 9.0 16.2 23.6 29.0 Return on Equity J 11.7 10.2 9. 8.4 965 10.4 11.8 3/ et Surpluses/Average Equity IflLIAL OMIT NO 60037 SUONTIN U isoc awl am~~~~~~~~~111 %to iw4 am z low 1am Zen 3 20. U zoo I 26. 1 23 6 ag s am 5 zo a Za. I 3 3 0.8t1st "an .vm,eante I. 1. . . . . . . .2 17 66 14 50 16 1. .0 0.7 1.7 SmotO lesslemma 60se .3 4.5 01.0 518 71 4.S66 4. 144. W63 160A. 706 0. 7. . U7.? 16.4 Nadim mmd lem,t.ra lamim 6s. 02.0 7. 44.7 72.2 40.1 71.8 43.4 60.5 71 136 166 194 8. 1. M.A I5146 U.0 Total lams pesifello up. 1. 5.5 4. 100.4 .0 143 4. a . i. w. us 46 162 6.4 6.8 4. Pleaod emale 0.0 0.5 0. .4 0 0.6 30 . 2.3 09 .0 17 .7 .3 .0 .5 8. 8. other to.g 0.4 0.5 82 .0 84 21 .8 .0 .7 1.1 8. 2 11.1 8. 1.1 -5.1 1.0 2.8 0.0 tatal 132.3 1030.0 157. 100.0 100.0 100.0 103.5 100.0 248.4 100.0 ml.7 0.0.o 80.61 2000 814.0 100.0 408.7 100.0 Liabi I 111. t0 lorter loons 497 870 5.0 4.0 3. 2'4.6 . 00. 100.0 43.8 1050 ':. 0. 301.0 367 12.0G 61.0 13o 2.7 GU longterm Seam. 55.0 41.6 57.0 36.1 08. 4104 70.0 36.0 02.5 46.6 121.1 42.2 187. 48. 1115.6 89.0A 200.1 4.6. Total PraI.a l n'e 104.7 70.1 109.0 66.1 100.4 00.5 127.2 66.6 10.5 76.3 126.? 70.1 228.0 76.7 22.0 72.8 291.7 723. Short toer 8. . 1. . 60 55 10 0 116.1 7.8 15.8 8.8 1 7.0 5. 10. 5.8I 12.5 2.1: Long toer 0. . 37 .71 20. 22. 10.2 6. .0 31 .-06 11-.-56 1.-. 2. Total oIlier fun"d 10.0 0.0 20.0 17.? 20.4 10.4 37.8 15.2 24.1 6.6 10.0 6.8 1.5. 0.1 16.4 5.2 21.5 0.8 Upecufic purpose tu.es 0.0 0.0 0.0 0.0 0.0 -----0.1 0.0 0.2 0.1 0.4 0.1 0.0 0.1 tate~ 115.9 07.0 1418.6 6.0 187.8 05.6 156.1 650 211.8 U66. 240.4 85.9 253.4 03.4 254.7 0.0. =8.0 62.4 Caneral ,eeeryee 13.9 10.5 16.5 10.5 20.2 12.6 257 18.0 Me. 10.9 46.8 11.0 40.9 13.5 49.1 13.8 5W. 14.8 Sddebt r erwaa 2.5 1.6 20 5 16 23.5 1.0 23.5 1.4 5.5 2.8 4.6 1.7 5. 1.0 4.91 1.0 4.6 1.3 creante 0.0 0.0 a :. .0 .0 .0 00 00 0.0 2.1 0.7 4. 1. 7. 2. 04- 2.1 total 16.4 12.4 19.0 12.0 22.7 14.2 26.2 14.4 832.1 13.2 40.3 14.1 00.6 10.5 01.8 16.4 70.6 17.1 Lisb;litios and networths 122.3 100.0 157.6 100.0 100.0 100.0 183.3 100.0 234.4 100.0 206.7 100.0 809.9 100. 310.0 100.0 403.7 100.0 Source AFC auited fiamejal atateaanto to 1907 and provisionaS mecount. for 1966 -52- ANNEX 1 Table 8 ZIMBABWE ACRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT AFC Proieted Balance Sheet Positions; 1989-94 (Year Ending March 31) m9ta 1989 1990 1991 lO 1993 14 Actual ----Proj ction--------------------- …~~-------Z$Million…------- Short-Term Aeset Cash and Equivalents 6.6 20.2 1.9 38.a 17.2 86.0 27.6 Short-tern loans 218.4 284.2 274.7 267.5 316.9 882.7 394.1 Sub-total 271.9 254.4 275.3 279.8 386.1 879.7 421.9 Lona-Tern Ansets Term loans 1099. 165.1 175.4 194.2 191.3 228.6 265.4 Fixed assets 14.6 28.2 87.3 47.6 48.8 59.7 59.7 Sub-total 128.9 133.4 212.7 241.7 240.1 279.8 304.1 Total Assts 394.9 442.3 468.4 689.5 676.2 6as.9 726.0 Current Liabilities Current 2.1 2.7 2.8 8.9 8.3 3.4 3.6 Short-tero loans Governmnt 196.8 84.8 79.3 72.8 68.8 76.3 67.2 Others 15.4 12.7 17.6 29.J 24.8 28.8 18.5 Sub-total (loans) 116.7 97.6 89.4 0a.1 93.1 99.3 106.? Total current liab. 117.6 199.2 91.2 90.1 96.4 193.2 109.3 Long-tarn Liabilities Long-tar loons Governmnt Project related 6.0 14.2 24.6 25.4 21.6 29.1 Others 199.9 238.0 277.8 ae3.6 833.9 831.4 429.7 Non-government 7.4 9.3 8.8 6.3 6.0 9.e 14.0 Total long-tarm loans 266.4 258.8 297.8 334.5 69.3 411.9 463.6 SPecial Funds 0.6 1.2 3.6 4.0 4.1 6.8 9.4 Total long-tarn llob. 207.0 254.6 869.6 388.6 863.4 418.7 473.2 Total liabilities 824.8 854.7 892.0 484.6 460.8 521.9 682.5 Equity Funds Retained surpluess 61.7 69.3 78.1 86.6 97.1 169.8 126.2 Orants 8.4 18.3 13.3 18.8 13.3 18.3 13.3 Total equity 70.1 83.1 96.4 104.9 116.4 128.1 148.6 Total Liabilitios a Equity 894.9 442.8 489.4 539.5 576.2 659.9 726.0 Ratios Current 2.8 2.5 3.o 3.1 3.6 3.6 3.9 Leverage 17.8 19.9 19.7 19.4 28.0 19.7 19.8 Debt/Equity 4.6 4.6 4.1 4.1 4.0 4;1 4.6 - 53 - ANNEX 1 Table 9 ZIEADWE ACRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT AFC Source and Appllcatlon of Fundgi iQAB-QA 988 1969 199 1991 19 1983 1994 Actubi - ----Projections Source of Funds _ ----M--------__ --_ Internal Surpluse 7.7 6.1 8.8 6.5 16.5 12.7 16.4 Depreciation 1.0 1.6 2.8 8.8 8.3 8.6 8.6 Subtotal 8.7 9.7 16.9 11.8 13.6 16.2 16.9 External Govern ment term loans Project related 6.6 6.2 10.4 0.6 -8.9 -1.4 Othore 12.6 40.6 41.1 26.6 24.7 57.7. 65.4 Non-government term loans 1.4 1.9 -8.6 0.6 -4.8 8.6 6.0 Grants 6.4 0.9 _.6 L6 6.6 6._ 6.6 Sub-toetal 22.4 56.4 46.8 87.6 25.2 60.8 59.6 Total Sources 81.1 68.3 67.2 48.6 89.0 78.0 77.9 Ap.licatlon of Funds Purchase of fixed assets 6.8 6.7 14.0 10.2 1.8 1.9 0.0 Repayment of Trom Dobts 2.6 2.6 2.6 2.6 2.6 6.0 8.6 Inore In agri. term credt 6.0 55.8 16.8 18.8 -2.9 87.8 24.6 Total appiletlon 16.9 67.1 26.9 81.6 1.0 .46.2 82.6 Changes In Working Capital 20.2 1.0 86.8 17.2 86.0 27.8 46.1 Chances In Workina Capital Current Assets 82.9 -16.6 21.8 22.1 38.S 84.6 61.2 Current Liabilitins 62.7 (-17.6) (-9.0) 4.9 o.3 6.8 6.1 Noet 20.2 1.0 86.8 17.0 38.0 27.8 46.1 ZDMABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Financial Analysis CMB Income & ExpentIttura aLaLements; 1980-88 ------ - -------------- - - - - --------------- - -- - -- .._.(Pev--fr%A RnA __ 2,i) -_ 19M 19111 im 19013 - 19" 1"S 1'1 . ES at 4111 at . at at ad CoLton Cina*4 365.3 104 I" 7 M in -t 250 293 248.3 240.5 Sales ENPOrt 66.5 44:: 51:2 521 49:7 W: 'a 72:3, 68.1 $7.1 Local 10 19.3 12 7 12 1 so 22 4 24 1 26 28 7 'LLO. So" Sales 97: 107.1 126:2 104:0 1001 L29:4 158:2 177:1 145:4 lating 5004 Sales 3.3 3.0 4.2 4.3 4.6 7.0 5.9 7.3 7.5 IAL PWOPPANCE Zs s s Is s n a s Zs o 9 Zs s Zs a 2 Zs s 5 Ze th I Zs 2 0ME ra" Lint 64.1 77.4 70.3 70.0 73.1 72.0 74.2 .74.4 WA 74.0 144.1 69.4 165.4 641.4 129.3 $0.0 154.2 IS. 3 L;:% Local 10. 9 23.2 15.0 18.2 15.2 26.0 14.2 14.3 14.4 11.7 33.0 17.2 40.3 16.4 43.4 20.3 40.0 19. 5 ci nod Seed 7.4 8.9 10.3 10.4 12.4 12.4 10.6 10. a 14.3 11.9 24.7 12.9 33.0 13 8 40.9 19.0 SCS 14.6 De I iftt-ed Seed 0.4 0.5 0.5 0.5 0.6 0.4 0.6 0.6 0.9 0.7 1.0 0.5 1.2 0.6 1.5 0.7 1.6 0.7 -------------------------------- - ----------------- - ------ - --------------- - ---------------------- - ------------ - - ----------- S.b-Totof 82.S 100.0 99.1 100.0 101.5 100.0 ".5 too.0 IM.5 100.0 207.4 100.0 239.9 100.0 215.5 100.0 2.U.3 100.0 ..;n/Lows m For 0 0.0 0.0 0.0 0.0 0.0 9.9 3.3 -0.4 -0.2 0.5 0.2 0.6 0.3 fonoport Broker .6 .0 11.6 ': 3' -31.01 -10.3 -10.4 -12.5 -10.1 -17.6 -8.5 -22.6 -9.4 -21.1 -9.4 -19.3 -4.2 etc. -100 -102 8 - -11.7 -12 ----------------------------------- ------- - ---- - --------------------- I--------------------------- - ---------- - ------- t. Ravi i ztsticn 72.2 W.2 G?. 6 66.3 44.2 87.1 ".2 69. I 211.0 99. 9 194.9 0416 MA 90.4 194.'l . 90.4 217.6 92.1 ,301TURES ---------------------- ,ct CCOLS -te of Seed Cotton Si 0 68.8 70.8 71.4 71.3 70.2 $5. I 65.3 79.2 94.1 103.7 $0.0 184.0 77.0 192.6 89.3 141.1 80.9 6 3 7.6 8.0 6.1 10. a 10.4 11.3 11.4 14.0 32.0 23.6 11.4 30.7 12.8 34.2 15.9 i 30.1 15.3 PlodUCLIOn E.0"004 0.6 a 7 0.6 O.$ 0.0 0.8 1.2 1.2 1.8 1.2 1.0 0.9 2.4 1.0 2.5 1.2 4.5 1.9 :-hoti.o E-PoAaa 0 0.0 0.0 0.0 0 .0.2 a I .1 0. I 0.I O.t U 0:0 O:' - 00: S2 30: 02 0:P 01 0:0 00:30 0: , 1.1 0:3 T 3' 0 a ----- ---------------- ------------- --------- - - TOTAL 64.0 77.3 79.3 80.2 82.6 $I.$ 90.4) ".5 93.7 T7.5 3,29.3 62.3' 216.2 91.0 230.5 107.0 233.6 ".4 3!5 KAMM 8.2 9.9 0.0 a. I 4.4 6.3 -6. 9 -5.8 13.3 12.4 47.6 32.6 -1.3 -0. 5 -35.6 -16.6 -15.9 47 Ln .0,084 Costs Salories A V gas 0 2 0.2 0.2 10:1 1-3 0.3 0.4 0.4 0.3 0.4 1.0 0.5 1.3 0.3, 2.0 0.9 2.3 1.0 ANA a CM C?.:rooa 0 6 0.7 0.7 , t 0.6 0.6 0.7 0.7 1.2 1.0 0.5 0.2 0.5 0.2 0.4 0.2 0.4 0.2 0 1 0.1 0.1 0 1 0.1 0.1 2.0 2.0 0.1 0.1 0.2 0.1 0.3 0.1 0.2 0.2 0.3 0.1 0.0 O o.j - 0: 0, 0:1 I- 21 1:30 1:20 1 1 1:0 1:1 0.0 1. SI 0 1-1 0:3 O 0 a 0 2 0 a 0 0:3 a 0:2 c rocoss.he 0.0 .0 0 0 0 a 0 3 0.2 2 0.7 a 3 0.1 a I 0.1 1:1 I 1:1 ::I 0:3 0:1 3 0:01 1-61 1:2 '1:11 0 1.2. 0:1 B.O. charges 7 3.3 2 8 4 1 6 4 4 4 I 7 a ::4 4 7. 3 2 9. 4:1 2.0 5 I 1t r 2. ------- ----- . ..... -------------------- ------ ....... ------ to$ G.erboads 3.7 4.6 3.9 3.0 5.5 5.4 9.8 0.8 11.0 0.9 1018 5.2 11.41 4.1 14.4 4.7 27. 6 7.4 ------------------- i------ ; -------- W. ;----- - ----- - --- - --------------------------------- -- - ---- eraCalp Surplue (Deficit) .5 5.4 4. .1 0.9 -10.8 -19.7 4.8 3.5 4 -11.1 -4.8 -50.0 -23.2 -33.5 -14.2 t,sora."ry ILeas 0,0 0.0-'---D.O 0.0 . 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -3.9 -1.6 -3.2 -I.S -1.3 -0. a r Suw%ui W icrT) _;. ; ;-; - -4-1 ci O. -9 -18.7 --------- ------ 2-4-7- ------- n --- O_,"__14 --- a' funds and appropriations 0.0 0.0 .4 .! 0.0 0.0 0.8 0.0 O. 8.1 3.9 -6.6 -2.6 -7.0 -3.2 0.7 4.1 ------------------------- I------ - - -- - -------------------- - ---- - --- - ------------------------------- fAIW13D %M%M (DEFICM 4.5 S.4 0.0 0.0 0.9 0.9 -17'.0 -IT.0 4.3 3.5 ".9 41.3 -21.8 -9.1 -60.2 -27.9 -25.3 -10.7 wrao. CMD audited financial atstewenLs to 19117 and provisional accounts for lglo cr 1-44 C - 55 - ZIMBAWE ANNU I AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT table Il CMB Prolected Income and Expenditure Statements; 1989-94 (For the periods to Z8 Feb.) 1989 !9;! 1991 1992 199! :Z .. . . _.. ,............ "... ..._. . .. ....... .. ..... .... ..................................................... fimancial performance Zte I ISe lle 2 lIe 2 lle 2 ISe 2 intern Mross Sleslint *xports 7/ 192.0 63.8 234,3 65.5 265.0 66,2 244.5 67.8 272.8 69.8 339.6 70.6 lint local 8t 67.2 22.3 72,1 20.2 77.0 19.2 67.2 18.6 65.6 16.8 90.3 16.7 einne'd sod e9l 39.3 13.1 48.5 13.6 55.3 13.8 46.4 12.9 49.6 12.7 57.8 12.0 dinted Seed to10/ 2.3 0.8 2.7 0.7 3.0 0.8 2.5 0.7 2.7 0.7 3.2 0.7 sub total 300.9 100.0 357.6 100.0 400.3 100.0 360.7 100.0 390.7 100.0 480.9 100.0 0.0 0.0 gainIlossi aR exchange 0.4 0.1 0.5 0.1 0.6 0.1 0.6 0.2 0.7 0.2 0.9 0.2 transport,brokerage ettc Ill 27.6 9.2 24.6 6.9 26.6 6.6 22.9 6.4 23.9 6.1 27.8 5.8 let realisations 273.7 91.0 333.5 9 .2 374.4 93.5 338.4 93.8 367.5 94.1 454.0 94.4 spenditere diret costs purchue of seed cotton 121 269.5 89.6 314.0 87.8 357.8 89.4 300.5 83.3 321.2 82.2 374.4 77.9 ginning expenses 13/ 51.9 17.2 60.4 16.9 68.9 17.2 57.8 16.0 61.8 15.8 72.1 15.0 croe eroduction expenus 14/ 6.4 21 7.5 2.1 8.6 2.1 7.2 2.0 7.7 2.0 8.9 1.9 earkatang 15/ 1.7 0,6 2.0 0.6 2.3 0.6 1.9 0.5 2.0 0.5 2.4 0.5 engineering costs 16/ 1 0.5 1.6 0.4 1.8 0.4 1.5 0.4 1.6 0.4 1.9 0.4 ._ ...... .. . __ ....... _. ..............._.. sub total 330.9 110.0 385.5 107.8 439.2 !00.1 368.9 102.3 394.3 100.9 459.7 95.6 grOss targin -57.2 -19.0 -52.1 -14.6 -64.8 -16.2 -30.5 -9.5 -26.8 -6.9 -5.7 -1.2 overhead costs salaries and sages 2.5 0.8 2.7 0.8 2.9 0.7 3.1 0.9 '3. 0.8 3.5 0,7 AN /611 chagns 0.4 0.1 0.4 0.1 0.4 0.1 0.4 0.1 0.4 0.1 0.4 0.1 insurances 0.4 0.1 0.5 0.1 0.5 0.1 0.5 0.1 0.5 0.1 0.5 0.1 travelling 0.7 0.2 0.5 0.1 0.6 0.1 0.7 0.2 0.8 0.2 0.9 0.2 dita procmsing 0.7 0.2 0.5 0.1 0.6 0.1 0.7 0.2 0.8 0.2 0.9 0.2 other 0.5 0.2 0.7 0.2 0.7 0.2 0.9 0.2 0.9 0.2 1.1 0.2 ioterest I bank charges 17/ 27.0 9.0 31.9 8.9 36.1 9.0 30.5 8.5 31.0 7.9 31.4 6.5 .... .... .. _.. _.............. ..... ._ ._..___ . _...._.._ sub total 32.2 10.7 37.2 10.4 41.8 10.5 36.8 10.2 37.7 9.7 38.7 9.1 9.0 Pt surplus Ideficitl 18/ -89.4 -29.7 -89.2 -25.0 -106.7 -26.6 -67.3 -18.7 -64.5 -16.5 -44.4 -9.2 11 assums out-turn ratios as follow: 351 lint; 641 cotton seed and 12 process losses 21 equivalnt to 702 of total lint marketed 3/ equivalent to 30S of total lint marketed 4/ equivalent to 95? of total seed ginned St equivalent to 52 of total seed ginned 6/ thne are largely ginning loss" 7/ at an average ci price oZ 122320 per ton t/ at an average fob price ot 11639 eer ton 91 at an average price ot 1t91 per on 10/ at in average price ot 210 per ton Ill these are largely areight nd brokerage cosmisions paid 4or lint exports. These cosrt ill Iterease by about 15 fro 1,90 onwards when the current bro0erage contract expires 12/ estiasted at the aerge 1989/89 recomsended producer price of 11795 per ton 13/ these are stimted at their J987/88 season levels. any increases are due to the voluue of thruput 14/ these relate to the processing of delinted seed. 13t these costs will vary according to toe volume of Crop sold 11/ these costs largely rtefr th the maintainance of ginning 4actlIti;s. They will there4ore vary atcordirg to the volute of seed cotton processed 171 calculated at the rate :4 9.;52 for 60Z loans ind :2.32 ;or APO advances - 56 - ANNEX 1 Table 12 ZIMBABWE AGRiCULTURAL CREDIT AND EXPORT PROMOTION PROJECT C.M.B.: Forecast Income and Expenditure Statesents (1909-94) 1989 1990 1991 1992 1993 1994 lint exports 222.7 245.6 283.6 261.7 291.9 363.3 lint local 72.6 77.9 88.2 76.6 74.3 89.1 cotton seeds 43.3 52.0 60.3 51.0 55.1 64,2 planting seeds 2.5 2.9 3.3 2.8 3.0 4.6 …-…---------- … sub total 341. i 378.3 435.¶ 392.0 424.3 521.8 ginning losses 0.4 0.5 0.6 0.6b 0.7 0.9 rokerage export costs 26.24 27.5 29.7 25.b 26.7 31.1 gross income 315.3 351.3 406.3 367.0 398.3 491.6 ENPENDI1URES purchase of seed cotton 215.6 251.2 286.2 240.4 256.9 299.6 ginning expenses 51.9 59.4 68.9 57.8 61.8 72.1 crop production expenses 6.4 7,5 8.6 7.2 7.7 8.9 marketing 1.7 2.u 2.3 1.9 2.0 2.4 i. 16 .8 15 16 1.9 engineering costs 14 1 . I 1.6 sub total 273.9 317.2 363.6 305.4 326.4 380.5 --- -- --- -- -- --- -- -- --- -- --- -- --... . . nit operating income 41.4 34.1 42.7 61.6 71.9 111.1 …--- -- - -- -- - -- -- - -- -- -- - -- -- - -- -- - salaries and wages 2.5 2.7 ,2.9 S.1 3.3 3.5 ANA /611D charges 0.4 0.4 0.4 0.4 0 4 0.4 insurances 0.4 u.5 0.5 0.5 0.5 0.5 travelling 0.7 0.5 0.6 0.7 0.8 0.9 data processing 0.7 0.5 0.6 v,7 0.8 0.9 other (I. 5 0.7 0.7 0.9 0.9 1.1 interest I bank charges 18.9 21.6 27.8 23.3 23.3 22.5 …------------ --- ----------------- ----------------- sub total 23.8 26.6 33. 2 29.2 29.7 29.4 net income: annual 17.6 7.5 9.5 32.3 42.2 81.7 ZIMBABWE AGRICULTURAL CREDIT AID- XMI PROMOTION PROJECT Financial Analysis CMB Dgac ietg 3L ,,908 , ~ ~ ~ ~ ~~2. .. 26 _ _6 1L Z. _ 26 5. _1 __. U. _ __. _ igm 1091 1"2 10 196 I9U II 1"r lo n- * n8 - * Zs - Zs n Z -s 2 - * n - n - 29 ns - -'ETS Tsd A..ta- L"d a& uId; S. 6. 2.0 6.* .0 5. .1 7.0 J.0 S.4 5.1 4.0 5.3 4.3 5.7 8.2 5.7 4.6 Goa Plntle &* o 1.2 2 1. a.3 1.1 22 10 2. 21 30 8.5 3.7 8.5 2 02 4 4 ' V.lcl.-0.0 0.0 0.0 0.0 0.1 0.2 O. 0.5 0.4 0. 04 04 04 0. 04 04 o03 0.3 tico & De Eip. 02 0.4 0. 0. . 1.2 00 14 07 1.3 0.7 0.7 1.7 1.4 1.S 1.4 1.8 1.5 iCxo;tI .P. S0.3 0.7 0.2 0. 04 0. 1. 4.s 40 7 0.4 0.4 10.2 5. 5 3.S 12.3 10.4 &A -Ttot I 't.7 10.S 4.t 11.1 5.2 10.3 6.0 18.4 10.2 ao.J 10.4 10.0 21.8 17.7 22.9 ;0.9 2t.5 24.0 SrrtCJ AOOatD S S.tor.o 28 2 02.0 20.5 80 0 32.0 63. 25.1 5 J. 80 5 S4.5 35.1 81.0 70.2 1 7.1 52 7 57.2 59.0 58.0 °oso reco (OS1oeor) 12 4 27.7 12.3 2a.0 12.8 685 12.0 S 7.e 15. 27.4 &0.0 29.0 30.0 25.1 23.4. 21 4 20.3 17. 1 sC=S Oalancoa 0 c 0.0 0.0 0.o0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0 a 0.5 0.0 0.0 SVb-Jol.I 40.8 00.7 S7.0 5G.0 415 5 0 .7 57.4 04.0 45.8 5 31.7 t3.1 90.0 101.1 E2.3 56.7 70.1 90.2 76.0 vnj "SC.j3% 45 5 SO C 42 5 ZC0t> 50.7 109 0 44.2 100.0 55 3 100.0 2. S 1100.0 122.9 ;00 0 109.6 100 0 118.7 100.0 lOlL IT 132 ,.C loro .'j, Lfonk 5 0 11.0 5 C t 10 0.0 0.0 6 .0 11.3 5 0 0.0 0 6 0.3 Z3 9 11 3 17 2 15.7 21r2 V. 9 .4oo.o-t.t on 0.4 ". 0 05 1.2 0.0 0.0 0.C 0.0 02 . 0.5 0.3 0.3 a ? 2 0 3 0.3 0.2 0.2 Oa.l>o,S toO D0 a 7 0 2 0.5 0.2 0.4 0.2 0.5 0.2 0.4 0 0 0.0 0.0 0 0 0 0 0.0 0.0 0 0 5.b-VTo/o 5S 7 12.8 0.7 IS.4 L.3 11.0 8.0 12.7 5.5 0.0 0.t 0.6 14.2 11.6 I7.5 13.0 21.4 16.0 ottC Toro A,t. Porobieo (Creditorr) 2.3 8 I . 2.D 5.4 S.0 a.e D.4 7.7 2 3 s.2 4 7 4.5 10 7 E 7 13 3 Ii 1 14 2 12.0 Ad.-c (A 14 A.) 31.7 00.7 20.2 50.4 25.1 eO.2 44.0 101.6 G3.2 5.3 :20.7 28.7 49.G 40.4 . 84.3 75 9 112.0 94.4 Daor.? 3wor slnt 0.0 1.0 1l. a .1 0.0 3.0 2.0 4.8 1.c 2.7 0. 0.O.t 0 0 0 C 0 0 0.0 1 9 216 3.b-T"I 34 a 70.5 31.0 74.8 3s.0 70.I W.a 11.0 57.e 103.2 S3.3 34.1 60.3 49.1 97.5 . 59.1 12b.1 107.9 fAL L1IA31ULTIES 40 5 Ge.0 37.5 O.:2 44.0 e0.0 65 0 120.X 83.2 118.3 C4.2 42.7 74.5 80.8 1IS I IOS 0 149 5 125.0 I ~~~~~~~~~~~~~~~~~O4Th .JI~~~~~~~~~~~~~~~~~~~~~~~~~~~~. ....-- Co8..oil Q.ont ,, 0.6 1.1\ 0.6 1.2 0.5 1.0 0.0 1.1 0.8 0.9 0.6 0.6 4.0 6.5 1.0 7.3 0.0 6.7 Cronto A OcnaMo2as 0.0 0.0 . 0.0 0.0 0.2 0.4 0.2 0.8 0.2 0.4 '1.0 1.6 5.4 4.4 5.4 4.9 8.4 4.3 A.... 5s.rols4/(0ficiet) 4.6 0.e 4.8 10.6 5.4 10.7 -12.4 -20.1 -8.1 -14.5 80.5 84.0 35.0 20.5 -18.9 -17.2 -44.2 -37.2 TOTAL a..0 110 50 11.5 $.1 12.0 -11.7 -0.5 -7.4 -5.3 W.S 87.3 48.4 3.4 -5.5 -5.0 -30.U -25.0 rT. IAM25 & OET WOMt 43.5 10.0 < 42 -100.0, 80.7 100.0 "4.2 100.0 86.7 ".0 103. 100.0 22.9 1. 09.6 100.0 116.7 100.0 .rce: CuO ruit4 r..ac;al *22...u,t. to 1207 and erois;ro:el mccaueo frS 1OU _ _ _ _ _ > _ * * - t - k - _ w r _ _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2 ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT CMB ProjectedBalance Sheet Positions; 1989-94 (Year Ending February 28) 1u 9 zes no no 0 1 1 1 96 .~~~~~~~3 .. _6 6 3 8 3 net fimed eases I/ ST.9 27.4 _1. 86.0 U.4 61.5 41.4 41.4 11.3 8., 63.3 134 7 current saset. *l-ck. cdele 2 6.0 9.1 30. 42.? 0.4 42.3 33.4 40.3 0.3 41i. 1: .3 44.9 cevebe debtor. 8 a. 28.0 is. 1.7 40.8 13. 6. 180 8.4 13. 41.1 20.1 ether m.eete 0.o 0.e 1.1 e.e e.e 0.4 0.7 0.3 0.o 0 0.8 0.2 eb total 100.7 72.5 117.4 $2.0 131.6 61. e 11. 3. 120.4 0.15 1U.1. 65.i tOt to 116.9 100.0 133.2 10.0 214.0 100.0 211.a i40.0 212.2 100.0 241.4 100.0 gof loanaZ 4/ 20.0 20.9 1.17 35.8 77.4 8.2 30.0 40.0 0.9 9 65.0 33.2 I d i as eocieiw lcom 0.3 0.2 0.3 0.2 o.a 0.1 s.e 0. . 0.1 08 0.1 0 .a other 1ane O.0 0.0 0.0 0.0 . 00 0.0 0.0 0.0 0.0 0.0 0. 0 ------------ ---- - - --- --- -- --- ------- o.k totl 20.3 231.1 7.0 05.4 77.7 W6.8 o1.2 40.1 0.2 3.2 63.3 35 3 occ. pyoablco (creditors) 3/ 27.0 15.e 2A.4 17.1 W.3 17.2 81.0 13.8 33.0 is.6 83.1 15.6 odVon.coo , 4AZ) S/ 13.3 12:3.3 146.C 103. 0 215.4 100.? 16.8 98.2 169.2 7.7 165.9 fa.1 booh over refI 7/ 0.6 0.4 0.1 0.a 0./3 0. 0.0 0.2 0.a 0.2 0.5 0.: …---------- --------------------------------- ab ttol 104.9 140.8 2219.4 121.3 2.7 113.a 100.6 96.- M2.1 8.5 204.15 4.7 total linmbiitioc 224. 16I1.7 201.4 a39.7 MO3.4 154.4 231.0 100.0 2rz.v 184.7 iB.6 120.0 co8;.ol rosoaroc 5.0 5.3 9.0 4.2 : .0 a .7 0.0 4.0 1.0 S.8 3 0 3.3 oroano cad do. aions S 3.4 t.5 S 4 2.0 5.4 3.8 1.4 2.7 5.4 2.5 3.4 2 2 occSo. 011n I o40f(4. k C) 5/ -00.0 -71.6 -175i% -92.0 -201. 1 -122.0 -00. -13.0 -031. 0 -115.6 -300.5 -1.S3.0 ov9b. c rib.teoc W0J O .G .0 8. 3 0 20.0 ll.3 01.4 210.6 107.2 264.0 124.8 07.7 12 3 …------------- … ~ ~ ~ ~~~~~~~- … - - - - - -- - - -… -- - - - - totol natwort% -.3 -81 0 -107.21 -M; 7 -110.4 -54.4 -73.7 -S3.; -78.7 -34.7 -4a.a -233: …------------ --------- - --- --- .--- …-- totcH Iiob s and Pot ortb 120.3 8C0. 0 1B0.2 100.0 216.0 C0O.0 212.t Z10.0 212.2 100.0 241.6 100.0 a/ qe% of drocictico. The Incresontal flourao includ *edditlongI fixed sroots teit Mor dlroody ptormed for by CO out of PSZP tru 091 aus soli so the ginai n ftac;llie oa chick Oall a fsir bV thi- prOject 2/ 'Sthe ore l ser elv slods of unsold i inC et S.cer and. T1*, repreeent 10lS of totael cutouit cad hsve bee 1o1 eir t ,sll value. Other torez estla to soars pert cig atrile etc r an . 8/ those have bee estimated as the ewl.sleu. of five seatseaes pr oe 4/ W* rlLereas au- funding through MfP am the o la flacet to be ectoded by this treject G/ eatiate" et the eq*iveleat of four we" eaPolea S/ theseare shotrt tre sorhino capital adv-ece from At largely wtisead to fliase the eurclme of aced cottas 7P thseo *re, the current _euimia vordraft focilities .v llerle to Os grets and donationse re|mi at 196 level. 91 isld accumulted deficit of 2144.2 clitii_ fre l16t. 20/ _c_.te pe to cover eperetl. deticit. from 1969 (cumlatlve) - es Veet slw tlo. COS eapreased the possibility of recupereti s the hulk or these osees, free, au snece ccedIa 40 hesy ers a =r I* t of ih rodur prie. mad leo lot prie , legl ecls, clA -59- ANNEX 1 Table 15 Z1MBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT CMB Forecast Balance Sheet; '988-94 1988 1989 1990 1991 1992 1993 1994 assets net fixed assets 1/ 08.5 37.9 71.9 82.4 93.8 83.8 83.8 current assets stocks and stores 2/ 69.9 68.0 80.8 90.4 81.4 88.2 108.5 receivables and debtors 3/ 20.3 31.9 35.5 40.3 36.3 39.4 48.5 bank& cash balances -27.0 16.1 bb.1 66.0 120.0 92.1 123.0 sub total 63.2 116.0 182.4 216.7 237.8 219.7 280.0 total assets 91.7 153.9 254.3 299.1 321.6 303.5 363.8 liabilities 10ngtere o2 loan 4/ 21.2 29.0 121.5 208.7 280.7 218.4 191.9 luilding society loan 0.2 0.3 0.3 0.3 0.3 0.3 0.3 other loans 0.0 0.0 0.0 0.0 0.0 0.0 0.0 sub total 21.4 29.3 121.8 209.0 281.0 218.7 192.2 short term acc.payable (creditors) 5/ 14.2 27.6 32.4 36.8 31.0 33.0 38.1 advances (IAIA 6/ 112.0 136.7 132.3 76.0 0.0 0.0 0.0 bank overdraft 7/ 1.9 0.5 0.5 0.5 0.5 0.5 0.5 sub total 128.1 164.8 165.2 113.3 31.5 33.5 38.6 total liabirlties 149.5 194.1 207.0 322.3 312.5 252.2 230.8 networth capital reserves 8.0 8.0 8.0 8.0 3.0 8.0 8.0 grants and donations 8/ 5.4 5.4 5.4 5.4 5.4 5.4 5.4 accum. surpluses/(deficits) 9/ -71.2 -53.6 -46.1 -36.6 -4.3 37.9 119.6 gov't. contributions 10/ 0.0 0.0 0.0 0.0 Q.. Q.0 0.0 total netuorth -57.8 -40.2 -32.7 -23.2 9.1 51.3 133.0 total liabs and net worth 91.7 153.9 254.3 299.1 321.6 303.5 363.8 2:::::::::- :::::::sz::sS _:::::::=-=-=:::: :.- :: ::::==:: u:::a::s23 notes 11 net of depreciation. The incresental ficures include additional fixed assets that are already planned for by CnH out of PSIP thru 1991 as well as the ginning facilities etc which will be financed by this projet 21 these are largely stocks of unsold lint at year end. They represent IOZ of total output and have been values on their net re alisable value. Other stores relate to spare parts,packing materials etc . 3/ these have been estimated at the equivalent of five weeks sales proceeds 4/ this represents 60t fundinq through PSIP and the laon finance to be extended by this project 5/ estimated at the equivalent of four weeks supplies 6/ these are short ters working capital advances from ANA largely utilised to finance the purchase of seed cotton 7/ these are the current maximum overdraft facilities available to CH8 8/ grants and donations remain at 1988 level. 9/ includes accumulated deficit of Z$44.2 million from 1988. 10/ subvention payment to cover operating deficits from 1989 Icumulative) - one year time lag. COB expressed the possibility of recuperating the bulk of these losses from 601 since according to C11 they are a result of high producer prices and low lint prices on local sales -60 - ANNEX I Table 16 AGRICULTURAL CRED PORT PROlOTION PROJECT Source and ippcaton of Funds;1988-94 1969 1989 1990 1991 1992 1993 1994 ____ ---...___ _ $ . - --- --- --- _- SOURCES OF FUNDS Net Incoue/(Deficits) -25.3 17.6 7.5 9.5 32.3 42.2 81.7 Depreciation 3.1 4.2 7.9 9.0 9.2 9.2 9.2 Dorrowings: Govwnunt 4.0 7.8 37.7 10.7 3.5 2.0 2.4 Grants 0.0 0.9 0.0 0.0 0.0 0.0 0.0 Govt. Contributions 0.0 0.0 54.8 76.5 85.6 47.9 42.9 Othbrs 0.0 0.0 0.3 -0.2 -0.2 -0.1 0.2 TOTAL SURCES OF FUNDS -18.2 29.6 108.2 105.5 130.4 101.2 136.4 USES OF FUNDS Purchas of Assets 5.4 9.4 34.0 10.5 1.4 0.0 0.0 Repy. of Lon 3.2 4.1 9.1 9.0 9.0 9.1 13.4 let Balances -27.0 16.1 66.1 96.0 120.0 92.1 123.0 Total Uses Funds -18.2 29.6 109.2 105.5 130.4 101.2 134.4 - 61 - ANNEX 1 Table 17 ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Latest Dates for Submitting to the Bank Reports of EEC Technical Assistance and Consultancies to AFC Technical Assistance Preliminary Final Reports Reports AFC Staff Training Program by Training Specialist June 30, 1990 December 31, 1990 Restructuring of AFC by Financial Adviser July 31, 1990 April 30, 1991 Consultancies Loan Portfolio Management September 30, 1989 January 31, 1990 Management Information System March 31, 1990 July 31, 1990 Monitoring & Evaluation Ssytem June 30, 1990 Sept. 30, 1990 Staff Compensation April 30, 1991 August 31, 1991 (62 ANNEX 2 Page i ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Terms of Reference for Horticultural Export Marketing and Cotton Sub-Sector Study I. Horticultural Export Marketin u A. Background 1. Zimbabwe produces a fairly wide range of horticultural products, comprising tropical and semi-temperate fruits, vegetables and flowers, for the domestic and export markets. The bulk of these commodities is. produced by commercial farmers but there is scope to increase production among smallholders. The domestic market accounts for most of the production and consumes mainly fresh products; however, the country has a thriving fruit and vegetable processing industry, and consumption of processed products has been increasing steadily during the past eight years. Some vegetables and significant proportion of fruits and flowers are regularly exported. Fruit exports have stagnated in recent years mainly because of transport difficulties through the southern route to the sea. On the other hand, flower exports has recently shown the potential for rapid growth, with exports rising from about 300 tons in 1985 to over 2500 tons in 1987. Hence, an increasing number of farmers now plan to diversify into flowers .production. 2. To encourage the growth of the horticultural sub-sector, the Horticultural Export Promotion Council (HPC), was credited in 1986 as a non-governmental agency with the responsibilities to, among other things, help ensure high quality products, undertake market research, collect and disseminate market intelligence, and organize export promotion activities. The country has also succeeded in. establishing close trading links with major importers of horticultural products, notably flowers, in the Netherlands. Proposals are under discussion to strengthen these links further by creating two new entities, one in Zimbabwe and the other in the Netherlands, to help ir. he marketing oi- Zimbabwe horticultural products. B. Objectives of the Study 3. While the country has the potential to increase horticultural exports significantly, little is clearly known about the extent of the available potential for exports, or about the appropriate strategy to exploit this potential. It is also important that, in addition to the market offered by the trading links with the Netherlands particularly with regard to flowers, the country explores the possibilities of broadening market outlets for all its horticultural products. Furthermore, there is a ANNEX 2 Page 2 need to evaluate costs and benefits from the country's point of view in order to justify public support to S h( sub-sector. C. Terin: o-t Reference 4. In view of the above, the sruudy would aim at: (a) assessing and docurieniting the i,otential for expanding Zimbabwe's hoLi-iculitural exports (fruits, vegetables and flowers), particularly in Europe, North America, the Middle East anti Japarn; (b) identlfying physie,C!, po.J_iey and institutional constraints on the exploitation oJ t.ho possible potential; (c) evaluating cost and benefits to the country, and proposing measures needed to maxininze benefits; (d) given, (b) and (c) above, formulating a medium- to long-term strategy to exploit the available potential. D. Timing and output 5. The study would be carried out under the auspices of MLARR, and would be completed not later than the end of June 1990. The output would consist of a report covering all the areas broadly set out in para 4 above. XI. Cotton Subsector Study A. Background 1. The cotton subsector has been marked by a rapid growth during the past eight years, with the pr.0oduction of seed cotton rising from about 17,300 tons in 1980 to over 300,000 tons in 1988; and by a major shift from production by large-scale corm-mercial farmers to smaliholders, with the share of the latter increasing from 7Z in 1980 to 53X in 1987. However, yields among smallholders remain very low, thereby necessitating producer prices out of line with world prices. The Cotton Marketing Board (CMB) is responsible for promoting the groVth of the sectox mlinly.by providing marketing and processing services and facilities, and by helping to plan the development of the sector. To these ends, CMB-has established eight ginning plants and seventeen transit depots. It has also prepared a 5-year capital investment program to support the projected increase in seed cotton production, estimated to teach ovre: ;400,000 tons by 1992/93. Largely reflecting the expansion of its services to cover smallholders, CMB's operating costs lhave EsCO sharp.ly, in part contributing to the heavy financial losses that GMB has exps-r.enc.ed during the last three years. However, the major contributing factor thereto is the domestic pricing policy which has tended to deviate substantially from the world-price equivalents. Moreover, because of a shortage of the necessary expertise, coupled with a pressing work load among the CMB staff, it has not been possible to carry out a systematic evaluation of the available potential for increasing prodrlcvion, (r r Ri oursasessment of the factors bearing on the realizatiorn ',;bi i 1' I ) a rcsult, the country lacks a 64 ~~~~~~ANNEX 2 Page 3 clear vision of the possible development of the subsector over the medium- to long-term, and the financial resources as well as institutional and policy measures needed to ensure the desired development. B. Objectives of the Study 2. The objectives of the proposed study, to be carried out under the auspicies of MLARR, is to provide the analytical basis necessary for an informed decision on hcw to ensure a sound growth of the cotton subsector. More specifically, the study would aim at providing the country with a clearer picture of the potential for growth; measures needed to realize the potential; and ways to improve CMB's efficiency. C. Terms of Reference 3. In view of the above, the study would seek to: (a) determine the potential for increasing cotton production, taking into account the relevant ecological and agronomical conditions; (b) identify the factors contributing low yields among CAFs, and measures to rectify the situation; Cc) identify institutional and policy measures needed to ensure maximum realization of the available production potential; Cd) propose ways to improve CMB's efficiency and operational capability with a view to minimizing especially transport, ginning marketing, and overhead costs; (e) review the implications that equating local lint prices would have on the local textile industry, and propose ways to minimize any adverse effects arising therefrom; (f) review the price of cotton seed for the purpose of determining the appropriate level relative to the price of other oilseeds; and (g) in view of the identified potential for increased cotton production, estimate the financial resources needed to ensure adequate marketing and processing capacity; and help CMB to prepare medium- and long-term investment programs accordingly. D. Timing of the Study 4. The study would be carried out with a view to completing it by the end of March 1990. The output would be in the form of a report covering the areas set out in para 3 above. - 65 - ANJNEX 3 Table I AGRICULTURAL CREDIT A-oI EP RT PIoIIOion PROJecT ZgjctC st Stss-kdq of*mrAcunts CZ$ '000) ftsuc,1 CasIuuig,i haa Caub-- - PvIc, £ntuna.s Total klc. gost. lcal (ta. Mins I ItEkl. Miss I Local (Exci. Mim A Local (Excl. Mins I s.(t, Ton.) Toan Total Fer. (ixOh. lass) Iass TotI a t.s, EgO,. Taxss) Tmma laWl for. tab. lou,) TA.a foual a. clit MI 1. AC 1.46.1 5,J20.0 - 9."8.7 173.0 206.0 459.0 2219.1 8452.3 1#412.3 3,0113.6 7,43I.5 82. 2. OSI 31161,5 6.91,2 .low,? M9.9 631.5 914.4 827. 18327.1 W 1,759.9 1.414 8,4910,4 82,821.9 3. 211M 315.4 314.0 - 619.4 15. 1 5,7 38.0 81.1 04.7 08.1 W17. 394.1 - 3. 5.hlsal amVI w8 6,197.0 121.902 -89,741.9 408.2 93.2 8*4904.4 374.9 2#049. 3,023.9 7,42.9 8W,SW2 24,176.0 8. NC 1100.8 8.4 442.0 1,479.4 58.9 0.1 12.1 72.9 79.4 0.2 33.0 112.1 8*845.2 1.0 497.6 1,6664.5 2. W9 1103.3 IV7. 819212.1 58.1 9. - 60.6 641. 40,0 - *87.2 8,845.2 .245.5 - 39. 3. 51M 2431 15,9 07.1 349.3 82.2 0.9 4.4 87.4 7.8 2.0 3.3 83.8 245.3 19.7.7 7 379.7 Whilotl 218L(15 2tu146. 204.9 529.0 2390.5 185.1 80.2 26.5 852.0 154.9 50.9 36.9 242.4 2,575.7 265.9 M9.] MUM3. C. 1629101 8. twat1la S EWEd09110 A3427 b2.64. 2,074 19d.747 1,911.1 142.7 104.01.429.9 18,12.0 045,7 23.8 2,702.1 2i.850.0 LO03. 2,449.5 31,90.5 2. MFC 0927(18 2,121.7 444.0 8.887*2 4,37.0 165.6 22.1 55.9 243.9 38.# 8991.3 862.4 7133, 3stm.2 657.0 1.3315 5.953. 1.6656624 Eau~0 3Di.? 70.0 470.7 89.7 3.09 23.5 30.6 21.1 52.4 444.2 802.5 - 546.? 4. Ono3182E918 10,2 W. 1 4.1 0.5 0.2 - 0.7 0.3 0.5 - 0. 81.8 4.6 - 85.7 540ta8 1081180 27MS4.5 2,31,1. 3s.167 34,821.5 8,377.2 809.1 859.9 1.7*6.1 2,244.8 057,3 287.5 3,49. 31,86-5. 4,40-7 3,744.0 31.307,2 9. 183011W 73,0 897. - 250.81 16 9.4 8 2.9 4.7 48.0 53.4 7913 245.0 32125.1 *E. COSLT88E115 81005.2 210.0 8,046.2 6.1, 12.5 . 100,1 827.2 311.7 - 59.0 8,558.2 94-2804. (EC ~ ~ ~ ~ ~ ~ ~ * - 336.9 865W 16.5 52.0 -2.0 9. 9. 01 390.0 - 109.9~~~~- 85,03. * 8.0 14,8 0.9 14.9 339.9 329.9 bTORRaEJInS 11*M WA. 309 1. 3845 66,9 0.0 . 66.9 72.1 119.8 AFC - 49.0 - 549.0 V 2.4 27.4 185.0 215.0 MA0. 1 90.4 5.hTota LOCLA 16MW - 590 549.0 - 27.4 - 27.4 215.0 * 15.0 - 10. - 9.4 I0.0.14. TPAIN 630.0 540.0 8,8719. 38.5 27.4 So58S9 66.9 215.0 2191.01 72.M904I8,8 9. SloSE 550.5 10.6 - 69.1 27. 0.5 28.5 37.2 2.7 - 30.0 683.7 13.9 4,27.6 V. DIsT rues 8. 1(916680 14921 33,554.9 89.094,4 -52.6583 . - - -- -33569 8,904 -5,5. 2. (00138 flM 1463( 861981036. 8.0916 ~~32,045.3 22.065.9 -50,938.2 -. - 2061 226.9 50p931.2 GM9 1(8380 M2U23A 8.23.2 -20,186 - - - - . -12534 92. 0761.6 M-0ToaW C9(00 WA6 16A21 45,189.7 10,304. 5629 - . 153. 3341 -7,9. 8'h-T.toll81 1F88 78,945.5 49,399.5 - 20,444,0 - - - - 79,945.5 49395 - 2,144,0 Tsuotal 9.3198 tllT 11.080 6691. 117 18,86-5,7 2 l44.58.623 1 806.3 3-.443.l -2,99.5 1,954.8 424,3 7,279.9 123,102.8 71,949.0 41110.2 199,549.7 A. S9.ARISIALS8L08(I - 85.813,0 - 85,933.0 - 91.1 - 91.7 . 7,967.9 -17,67.9 - 4,511.5 42. 9. ui08£L AD1 (02191S 088 41.7 85.9 - 57.6 2.8 0.0 2.9 5.2 7.4 - 2.0 49.0 20.0 77.8 C. 9911(205 O88 58.2 8,355.7 - 9.415,0 4.0 67.8 78.9 to, 040O.9 - 71.0 94.9 2,0644. - 2.11I.z P. 0FFICE DIlLIES 64351018T8* 6,21 1d.5 .. 22.1 0.3 0.8 8.8: 0.7 0.4 7.1 7.1 22.7 . 34,9 C. 018H. 111145 8,00.8 3913.0 - 4.908.? 54.4 892.1 24. 84. .,957.2 -2,100.9 1.292.2 0,024.5 . .310.' Total RIW.F151 C8S85 8*l8, 21,094.7 -22*380.9 60.1 8,054.7 Ilo 1 66.2 80.39.9 8010.76.0 1,43.1 3W,745.2 34.I':.3 1,4.1 819.475,0 ~~~~~~~~~88.s14.9 I.7m.? 288,874,5 2,855.3 2,287.0 106,3 4,551.0 2,805.0 84,455.9 424.3 188,045.9 824,745.9 104,658.0 4,336.3 :1331.8. 4p01, pat19 6:20 ZIDMANVI AGRICULTURAL CREDIT AND EXPORT PRMOTION PROJECT Detailed Coats: Credit Fund llunti Same Costs Z$ o000 kmucsts in 6 US$ ° Uthit Ikit 1 2 3 4 5 Totl Cost 1 2 3 4 5 tal 1 2 3 4 5 Tol :. I.UESTKMT COSTS A. C fVCiAL FAFES - - - - - - 10,530.3 10,530.3 10.530.3 10,530.3 10.530.3 52.651.3 5.265.1 5.265.1 5,265.1 5t265.1 5.265.1 26,325.6 9. *Dt0DAL AREV frV?TS Sa - - - - - - 10,986.21.980,6.2 I099.2 10986.2 10.986.2 540931.2 5493.1 5.493.1 5,493.1 5,493.1 5493.1 279465.6 C. CAF PILOC SM%E lb 1. BHj RT T I E_ _ - -_ - 2082.6 4U0.6 4,749.2 89214,9 154526.7 - 1,041.3 240.3 2.374.1 4J107.4 79763,1 . IU MM c - - - - - - 702.2 162.1 1,601.1 2,770.0 5W235.3 - 351.1 81.0 OO.5 1.3B5.0 2t617.7 Sjb-To,tal CF PILC7 49X /b - 2.784.0 642.6 6,349.3 10.904.9 20.761.6 - 1,392.4 321.3 3.174.6 5.492.4 10390.6 otW1 :,X,S1.' £--TS 21.516.5 24,321.3 22.159.1 27.65.8 32501.4 128.344.0 10.7SB.2 12.150.6 11,079.6 13.93.9 162.50.7 6t,172.0 Tctal 21.5!6.5 24J301.3 22.159.1 27,S65.8 32,501.4 12N344.0 10,75.2 12,150.6 11,079.6 13.932.9 16,250.7 64,172.0 0% ------------------~~~~~~~~~~~~~-e-: --------- -: -:, -e:. e_ - s=e- e -------- 3% Is WITHIN CREIT CCFFl' t ,NT F;M MSIN O7F UP TO U507 M. EM13M0 F11TR 5REP4ER INTERESTED IN PRVDIBIS TRAMT.RI /b CDIT KMS tW CAF FILOT SDIIE! AS ESTIHATE IN I7A3 FPAi' AT ZI11l LUI DIWRtN THE FIRST TEMR OF TERO ECT WiM K lET FR0 DT OF FilDS AVAILAELE WB THE EEC CDIT LIO. /c ASM AT 251 OF TOTAL EtTDIATD CKIT 11SI E . Ranh 30. IM 1620 If ZDMAIM 6AUCULT¶IRL CamiT AnD W-n plmSOT 1303K Detailed COtSI GVmm Lim.n 1,1tltchm highs lam~~~~~~b cuba Z$ ' 000 kWs Cast LBas US$' OOOiels Iztl CwAiuwasU bIll1 2 34 5 TetaIlMlCagt 1 2 a I * ITuta 1 223 4 5 TeW 2 3 4 5 Toaul 1.-g-MMCu A. umNCz.cS cm /a a - - SIX1.231.2 - - - - 31.2 15.6 - 15.6 34.0 - - - - 34.0 Sub-Total WHO.U 31.2 - - 31.2 15.& 15.6 34.0 . . . - 34.0 1.FmISI me minio FILII CABINET No 2 - - - - 2 0.543 1.1 - - - 1.1 0.5 - 05 1.2- - 1.2 [laIU No 2 - - - - 2 6.519 13.0 - - - 13.0 6.5 6- - 65 14.4 - 14.4 DESKCMDALaTI IC 2 - - - - 2 0.543 1.1 - - -- 1.1 0.5 - 05 1,2 - - -1.2 Suab-Total F1M8T1l MM EgJ19I1I 15.2 - - - 15.2 7.6 - - 7.6 16.9 - - - - 16.0 C. COW2110Tk lb M.1 L2 12 12 - - 31. 20 240.0 240.0 240.0 - - 720.0 12.0 120.0 120.0 - - 360.0 259.6 268.1 278.1 - - KM0. D. TR010166 012924S131?S ft 80 IS~~~~1 1 1 5 1 23 2 30.0 2.0 2.0 10.0 2.0 46.0 15.0 1.0 1.0 5.0 1,0 23.0 35.3 2.6 2.9 16.1 3,6 eM. 5T., UF T0012118 l6- - - 60.0 - 20.0 MU. - 120.0 31.0 - 10.6 20.0 - 60.0 70.6 - 29.1 64.5 - 164.2 MF1R.'S T3I114120 f 30,0 -W.00 1000 0.0 216.0 18.9 - 29.0 50. 0 10.0 100.0 42.4 -867.2 261.3 21.0 326.? COZLSE VIE101.0---...- - 430.0 - 00.0 10.0 too0. 0 20.0 - 25~.0 5.0 - 50.0 47.1 -72.7 1,6.1 LI 17I0.I mm O ittrLNxM ~,Iozm - - - -1.9 3,0 20.0 30.0 10,0 MA.2 015 2.1 !100 15.0 5.0 33.0 1.2 4.5 20.1 40.4 17.0 102.1 000 SA05F Ca0. 70213380 a7 2 6 - - - - 6 3.215 49.2 - - - (. 24.9 - 2 4.0 54.0 - - - - 04.2 SB-Tol.a T011910 216,9 7.0 152.4 10.0 :220 597,0 :033.4 7,17 . .0 05.0 16.0 20.9 211.5 2.2 220.9 2301.0 07.! E0(4.c 0cl.z1 WZST30003 CZSTS 503.3 247.2 302. 100.0 -2.0 lv:414.3 25', 7 1423.0. 1IClO 95.0 i6.0 L.02.2 361.0, 277.2 0"PID 30.003 C 11. RE0~-0IT CCSTS A. SAUSIES PILCT F,,0.;ZT L.IT8 0 5 1 1 1. I 5 M0 3043.2 1 30.0 M0.C 32.0 ISM4.15C10.0 f 10 200 15.0 15.C 75.0 30.3~ 79.-3 03.6 42.4 03.7 PIE1 090I:Er0 NO 1 I I I 1 5 20 20.0 24.0 20.0 23.0 2.0 100.0 10.1 14.2 I2. 10.0 10.0 50. 20 23- 2.1.2 9,1 22~ 20.C SECRETMY 1. 2 2 2 2 2 10 0 100e 10.0 18.0 10.0 18.0 020 9.0 9.0 ?.0 9.0 9.0 42.0 21.2 22.0 z-.¾2 :9.2 7:.: 091q 09 13D 1 2 2 2 21 9 5 5.0 10.0 10.0 10.0 14.0 45.0 24 50 5.0 S.0 .2 5.2 22.0 0.5 13.:' :4.0 16.1 17,. 60. Su'~-lTatz $00801E0 73.0 70.C 780. 70.0 70.0 M80.0 36.5 39.0 Z9.C 39.0 39.0 192.5 MT. 102.12 112,4 120.0 13S.' 56 D. VEooI LM ai 0041 8.7 M.010.9 13.0 05.2 57.0 4,3 4, 0.4 6. 7.6 23.0 9. 1 11.'.~ 23.0 17.2 71.3 -3.:' C. STATID1PT . 6.2 2.1 6.2 6.2, 2.1 22.7 3.1 1.0 3.1 3.1 1.0 11.2 7.1 2.6 0.0 9.3 3.4 ; Total RECM&OflT COSTS 87,9 89.8 95.1 97.2 95.3 465.3 43.9 44.9 47.0 41.6 47.6 232.6 10.2.7 l2.t.2 130.3 102.3 164.4 627'.0 coo.. ~8.0C0 son. .0000 floss an.... a.... *000 oOoco cocos to.. Oct00 .==CZ scooz o=:.::_ Total ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~591.2 336.8 487.1 287.2 127.3 1#829.6. 2M.6 168,4 243.5 143.6 63.6 9..... ..o...6 393.4 634.3 458.8 221.7 2t,371.0 /a CAR FOR PILOT 980CT0 WOIMITIR. /b 681? WiOINGI TEDICk81U *Dt13El TO BMWLO F 1 WS8E PROCEDURS. MSl 11*13I1 PIOGBIMIAD 1011T TOE INWWW*TIIU 8 THE SOIE. /C 2 DYMMl F1O RSP SL.STNF OF WCMuGITEWCa1b ADl RMUN.ISTRICt IMETNS WM IN SEEC1IO P8OVEE TO #MM0I T1R VITO PUYO $OCHIE. /8 2 WME T1A0NI10 C0*51S FOR FC INSPECTORSP *55T. INSPCTONS *10U19513O UWBSOMM.MMT MS 1108331T9031190 OWMR OF PILOT MD. /a UIDITATIEN TRAIlIlIB TO F W 61OEN M30 K1JNE UI0 UITWIISI rI 119 11001 AS COORDINATOR. f/6 101 LENDIIIB C00*20391 All 20OM0S. 101111 U NFC MnUM lUITT £3113 TO TOIGINIIIIm v 3131w6n OF w r RCWi aml WhIW 9RMmS. to 20? 9 VEHICL.E IWESnOT C1115 WINITD U LOU IWA80. 68 - AGROICIL(LU9OAL C,07032 7900'1T PROLOUTIO93 PROJECT DctalYi~d_ 970takIC. I,Itito09i.n.k Devco opone S '000 *,e, a,US$ '000 Uikt 1 2 314 3 30ta10Lkut09 3" 2 3 4 5 total 1 2 3 4 5 Total 1. IIKSII237 COSTS A. £38L VW ii DISTRICT OFFICES /a 01 2 4 4 - 0 3 12.978f 626.0 1.251 931,231.9 -3259 313.0 626.0 626.0 - 35614.9 EOISOOIIS DISTRICT OFFICES No3 3 3 - - - 6 332.938 937.9 933.03-I9L 469.5 469.5 - 931.9 Lou MEITy S3WMI 30530/b Ila 5 7 4 1 6 93.693 469,5 657.3 335.0 - ,50,.3 234.7 328.6 187.9 753.8 HIGH4ow" STAF 5066 1050/C ha 20 29 36 - 6. 1',13 034.6 1,193,4 667.7 2 ,670.7 417.3 584.2 33.9 3,3354 S,h-Totul CIVIL MM 2.eSV.0 4,026.5 32.2-9.133,7 1,434.5 2,0038.3 1,147.6 - 4,590.3 325 COOFTEO /4 00 1 2.4o.223 2.47-. 2,470.2 - - 3.235.1 1.2,35.1 IEMOII4LS,F1IN109S,PA61S . . . . . 79.0 77.0 155.9 39,0 39.0 - -78.0 SFAU1 FOR 3Du 0081810 520,7 523.7 - 261.8 263.9 SFAAE1 FOR 3230 (400031 - 4.4 J43.4 - - 71.7 71.1 C9UT.3Tt 09906T380 S09660E 11C.4 116,4 - - 58.2 - -5.2 36W110 DE60.09(00 29. 231.6 3. 135.9 639. CONDIT0IN1ING .o 19092 003.2 - 96.6 - 96.6 399.IN1TER.F030 SLIOL tO . I. . - 57.3 37.9 29.5 28.5 TAFES MD34 DISKS... . . 96,6 46,6 39.3 - 49.3 - 4.3 96.6 CsI9060biiE 78 -93 - -0.4 01.4 91.4 IT.. 01,4 427,1 40.7 40.7 40.7 48.7 40.7 243,6 S76330600 - 6.0 70.09 7 0 7A3. 76.0 32,4.2 33,4 38.4 38,4 38.4 38.4 192.1 S,h-Totdl E09339a06 27s.2 209,2 3 1, ~. 0 359.5 455.3 4.070,0 339.3 338.9 1.709,4 175,7 227.7 2,438.0 9390-49 /I N0 6 12 32 35 35.955 215.7 431.5 431.5 1-3070.7 107,9 215.7 285.7 - - 539.3 ITOORIKOS 14 aD 8 16 16 690 4,474 39.0 71.9 71,7' 1 79,9 39.7 3A.0 36.8 - 9.9 1WA84C015I I,3. 33,4 14.7 094,7 - 161,8 16.2 32.4 02.4 - 9.9 3910-3481881300 . 5.4 30.09 90.0 - 7.0 2.? 5.4 5.4 3.35 Sub-Total 030C08.0 h9 20.4 57,0. 523.' 1 9447.2 144.7 299.4 209.4 - - 73.6 9. 3EW91CAL ASSI000EO 0-0U1S3.69(' 243.0 2930 - 49,.0 - 1 20.0 3210.0 - 246.0 9-190CD098TA6C,o r9 4 2 2 4 30 - 4.0 47 0 Colo.0 20.0 20.0 - 40.0 40140 0EY1E8 .09.2 39.?' 91,3 IL.2 11.2 3.6.2 3. 6 5.6 5.6 5.6 5.6 28.1 kil-lotal lTEDIt..0L i.SS3ISTAKE 99.21 31.9. 77M 52' 0.2 694.2 5So 25.6 345.6 325.6 5.6 368.3 C. 004F711634I39 FEL.L885H95 ,p 90 5 13l 20,090 137.4 940.4 ?0-93. 70.2 70.2 140.4 S,b'Total STAFF 309919N0m 31.4 140.4 203. - - 70.2 70.2 140.4 Total 310501031 COS r 3.1':.9 4.,02.9 6,7,2.1 7,3.2 60,0 6,40,?. 1,702.9 2.441.4 3,381.0 371.6 303.5 8.268,5 II. gleS9am COSTS A. "LI.S10 INM8061. FIELD3 STAFF I. 69.0 77.9, 0.0 9237.0 3,3330 5,9000 304.5 V393.3 434.0 603.5 73 2.5 2.541vo, MLV DISTRICT 07FIC0 STAFF /, 2 '2 ,2,C .9:3.73,2.39 2.,20.0 .6.0 300.0 TO 400,0 3096.031,00.09 9.09.0 3,340.0 lb-Total SALARIES9' .22 . .2'31... 9,29 424.! 20T3.5 1,206,0 3.099.33I72.5 5.040.( 9. INTILDINO 004 'S . .3 977, 97 .9 90.9 990.3 '71.3 :.6 60.4 93.6 5l,6 08.6 345,7 Total 000407409053 Costs.. 23 322:~.9 ].,'I 9 ]2.'9. 42' 3 093.0 1,377.6 I,93e.04. .0,7 is 16008S. M. 60 23M193.51). M. lb 320 00. M. 60T32370~/0. M. /C 70 1. 9. AT M971.53. R. Id 390.00ES SO TEAF71A,4S. 16 F01407E09, 09.7 9K0340 909MI930 769IL9F'. it CURAMTE C94I00L F90 2 CCr;oIER 09230S5,2 10MMMISID0103,' r,3 90U49. It 3400100099000E MOI; 99LF9L0 - 0D09E,09, STAJIL31[0, IS 00341E0 0130909 09,2 rE39L3C 909435. lb~ 91 3998 01570390 :7I2Ls 30L0 It I P30993 99 Fi WC O 073 3353390C (IF73C0S, 1.6 4010D0931S9F0 242. 0F790 035109093 OF19(09, it69 O 3503 k130023h60 T0. is 23160 COVOFACT P9 .,9000,0.,009,745 3161fi49,o393 to 40 (Al' /a 4039462 CX~L1I. 30:ET Kt kA';L'7k FE79040 3263 F0 92F'' 49or' 942A23 ~ '~ , 'p 09.9090S C9Y.J' i0 ( 0942, 97749 £12I.91.1 0 39(203 F:E.:' S'jF STAIMED A 9307 r95'0029 2792,9. Prtrh 3o. 3007 It-. ZIMBABWIE AUICULTUL CEDIT AN EXOtRT PFaOTION PROJECT Detiled Cost.t Giunery Civil Works kwthm costs Z$'000 ha cats I US$' 000 Totals Ieiub Cmtumeius Matl 1 2 3 4 STetuhi 2 2 3 4 * 5Tal 1 2 3 4 5 Total 1 2 3 * 5 Total Mass Mass- -ES Massno -RM -UMM as*MMMMms - a -a a f n .. lSaa s a. s I. trf U LAN FWUh /a no - - 54.1 18.3 - - 73.0 27.4 9.1 - - - 36.5 65.5 23.7 - - - S7.1 BEDITY FEIU h 10 - - - - - - 40.7 13.6- - - 54.2 20.3 6.1 - - - 27.1 4B.6 17.6 - - - U.2 ENT I EU IIOn … . . . . . 472.2 157.4 - - - 62Y.7 23 61 7 W - - - 314.3 562.1 20,.3 - - 764.4 A COStM I I . . . . . 5..-7 1-.9 - - - 755.6 213.3 4.4 - - - 7. 674.5 242.0 - - - Y17.3 STOW MU swIm /e 1 . . . . . . I…… 59.- 316- - - - 254.-3 57-9 193.3 - - - m.2 .398.S 509.0 - - - 1l90.5 am1 3I01 1 II No - - - - … … … 123.6 41.3 - - - 165.0 61.9 20.6 - - - 82.5 152.6 56.6 - - - :0°.2 OFICE CKS d 1 - - - - - - -247.4 32.5 - - - 32.9 123.7 41.2 - - 164.9 293.3 106.6 - - 406.9 PF STIE No 0.S 0.3 .- - 1 23.47 212.6 70.9 - - - 213.5 106.3 35.4 - - - 141.7 256.4 93.3 - - - 340.7 UTILITY STORE ND -0. 0.3 - - - 23.7n 211.3 70.4 - - - 231.8 105.7 35.2 - - - 140.9 256.0 93.5 - - - !49.5 OFFLOIIIG PIAWfM 1 0. e0. - - I 1".175 67.6 22.5 - - - 90.2 333R 11.3 - - - 45.1 31.9 29.9 - - - 111.B VATER DE10IR NO 0.8 03 - - - I 77.37 58.4 29.5 - - - 77.9 29.2 9.7 - - - 31.9 70.7 25.8 - - - .6 FtW MS NO 0.3 0.3 - - - 1 35.69 26.7 8.9 - - - 35.6 13.4 4.5 - 17.3 32.5 11.9 - - 44.5 iuARs SHELTER NO 0.3 0.3 - - - I 10 7.5 2.5 - - - 10.0 3.6 2.3 - - - 5.0 9.2 3.4 - - - 12.7 SILE SM No 0.0 0.3 - - - 1 39.202 6.9 22.3 - - - 89.2 33.5 12.2 - - 44.6 79. 2.7 - - - 118.3 6U3*13 kW NO 0.3 0.3 - - - I 277.352 207.3 69.3 - - - 277.1 103.9 34.6 - - - 133.5 247.3 3.o - . 336.4 ILuTINU KOS NO 1.5 0.! - - - 2 139.351 203.6 69.5 - - - 271.1 104.3 34.3 - - - 139.1 24.3 .A - - - 337.6 9r3RD URmTBS 6 2 - - - 5 2.472 3124. 104.9 - - - 429.3 157.4 52.5 - - - .9 374.7 134.9 - - - 50.6 SElIR STFF HOM U 1.5 2 0.5 - 4 103.703 155.6 27.4519 - - 414.3 77. 1037 25. - 207.4 136.3 270.9 73.7 - - 531.4 CMIEEN FOR STFF UO 0.3 .3 -3 - I 103.7 77". 25.9 - 0- 23.7 3.9 23.0 - - - 51.9 93,4 33.9 - - - 2. FIRUFISITING 3ES fO UO 0.3 0.3 - - - I 101.34 76.4 25.5 - - - 101.9 33.2 12.7 - - - 50.9 92.9 34.1 - - - I:z'0 P£ 617*I SNELTER o 0.3 0.3 - - - 2 0.25 0.2 0.1 - - - 0.3 0.1 0.0 - - - 0.2 0.2 0.1 - - - 0.3 MIXING1 FLOOR UO 0.o 0.3 - - I 204.944 153.7 51.2 - - - 204.9 76.9 25.6 - - - 102.5 136.2 68.0 - - - 254.2 SACHZIY UIMI UO 0.8 0.3 - - - I 670.034 502.6 167.5 - - - 670.1 251.3 03.3 - - - 335.0 606.0 220.6 - - - 6:6.6 INUT OFFICE UO 0.8 0.3 - - - I 43.557 32.7 o0.9 - - - 43.6 16.3 5.4 - - - 21.8 39.2 24.2 - - - .3.4 SM1 lAGGING-El RU UO 0.9 0.3 - - - I 70.27 52.7 07.6 - - - 70.3 26.4 3.3 - - - 35.2 64.1 23.5 - - - 6.6 FOIdLIFT TtJJ 6M1W1 UO 0.6 0.3 - - - I 153.32 119.1 39.7 - - - 158.9 59.6 19.9 - - - 79.4 144.3 52.7 - -- li.o C01103 SEED HRMNTSIS U 2.5 0.5 - - - 2 264.32 397.2 1324- - - 529.6 19.6 66.2 - - - 264.3 433.2 17J.2 - - o. MUE STORES 7e UO 1.5 0.5 - - - 2 s7.59- 131.4 43.8 - - - 175.2 65.7 21.9 - - - 87.6 15S.1 55.4 - - 21:.5 LIuT LOADING FtATFI/Ur UO 0.s 0.3 - - I f2.96 62.2 20.7 - - - 33.0 31.1 10.4 - - - 41.5 74.7 2. - * - 10158 LU.l CL4SSIFYIN6 lUOO U 0.8 0.3 - - - I 61.U4 46.4 15.5 - - - 61.9 23.2 7.7 - - - 30.9 5s.9 25.4 - -6L3 ArTR RETICuL.1RE UO 0.8 0.3 - - - I 325.326 244.0 31.3 - - - 325.3 122.0 40.7 - - - il:.' 29C.4 104. - * ;- c 18-Total CIVIL Is 6099.6 2,130.3 51.9 - - 3,340.2 3.04 9, 1094.4 7.9 - 4170.1 7.3s5s 2363. 73.7 - 0p - Ttsl IllSTtENiT COSt5 6.09.6 24.213 51.9 - - 3,340*2 3,049.3 Lt094.4 25.9 - - 4170.1 ?v329.5 s,63.0 . - - 109266.2 --- nUns - - ma am --ss-- a n a ma .m as . a nn .- .... gag s Sa TOWl 609". 2130.3 51.9 - .340.2 3,049.3 1094.4 25.9 - - 42170.1 7.329-5 2.sU3. 73.7 1 -*0.266.2 :Zm san an 5 5 ma at ausans ta ma ma _gg nl aa gas . agng /a Lr IN U 26 KCTANES.p 7b FfII16 TO r 20 NECTAES FOR 1MM SITE. fD /c ND 01l C_ ST lE OKA SAFiACING. /d Ia IIUII . crr NM amE OFFICEIU OM1 MMr1. is RIINEASIONSE x 3112. March 30, 1989 ... ... - - -- - - - ZIMBABWE AGRICULTURAL CREDIT AIID EXPORT PROMOTION PROJECT Detailed Cost: Ginnery Plant Ruatitv DM Costs z$ '000 im Costs in $ US$ '000 Totals Inc1udira Continncies __ unit- - Unit 1 2 3 4 5 Total Cost 1 2 3 4 5 Total 1 2 3 4 5 Total 1 2 3 4 5 Total = _ - _ =e_ _ =- = - =~ == S== ==_ I* INJEStEH COMT A. 8111 PNT F /a No 2,303.4 6,910.1 - - - 9,213.5 1,151.7 3,455.1 - - - 4r606.7 2,491.6 7,718.1 - - - 1O20F.8 Total DJETNT COSTS 2,303.4 6,910.1 - - - 9,213.5 1,151W 7 3,455.1 - - - 4,6067 2,491.6 70719.! - - - 10 9209.8 -=== - - _J =a =====-- --=== =J == -- -- 5- --= == Total 2,303.4 6,910.1 - - - 9,213.5 1,151.7 3,455.1 - - - 4,606*7 2,491.6 7,718.1 - - - 10,209.5 /a COIFLETE SIN KLN IIITH IIDI FU101 I CONVEYXE SYSTEN, SEED CUIUEYNI; I HANDLIIG SbII ETC. I Narch 30, 199? 16:20 IM AUICULTURAL c2DIT TlWUT PQIDtmIo PoDJuT DetaLled Costs: GlCmin Vebhcles Ia14 Btt smuts babel Z$ '000 kw. cats l Us$'000 Bid 1 2 34 STota11lIbct 1 2 3 4 5 Totwl 1 2 32 4 5 TOa 1. m emm 6. E3IITD23O ERCnTO6FUT 3 - - - - - - 7W4 236.0 - - 3U4 39.3 I.0 - - - ID.3 TOLS FM 5ECTU1 ° - 100 2U.7 - - 359. 44U 1343 - - 37m.6 alCUCWS OM 1.7 5.1 - - - 67 0. 2.5 - - - 3.4 Od HIRE ND U.- 54.4 -- - 2.6 9.1 27.2 - - - 36.3 FU-F4IUT S SOIEII II 393.5 530.6 - -74.1 96.3 20.3 - - - 30.1 CDS /a 88 * - -.7 497 1 . - 62.9 12.9 246.6 - - - 331.4 STOIS O 1 3 3-- - 4 2U231 26U2 7h.7 - - - U 11.9 .1 37.4 - - - 52.5 1 1M. E lTI IE o - - - 961.0 - - - 138.0 "LS 490.5 - -54.0 301U5 o) _-_ _ _ _ _ U.4 34.2 - - - 45.6 5.7 17. - - - 22.8 SU65 111 - - - - - - 2U0. 612.2 - - - 14.9 101.9 305.6 - - - 407.4 spt a - - - 252. 1411.2 I.2 14 11.2ll2 1311.2 4,2. 26.4 55.6 5I5O 505.6 SO.4 214i. WLaE la - - - - - -a. 75.9 - - 101.2 12.7 3s.0 - - 50.6 SetITl EIWFIEIT 1,14.1 4, l 1411.2 1.013.2 Ill.2 hI2.t 67.0 20217. 565.6 505.6 55.6 49431.5 I 3. ILT2. _____ T1CTR 0.5 35 - - - 2 42.135 21.3 63.2 - - - 14.3 10.5 31. - - - 42.1 T1IU13 o.: 2.3--- 3 2n.4 i. s.9 - - - 7. 9.0 26.9 - - 35.9 SltTltal IIC1TI rI1 30.0 17 - - - 15.Ml 19.5 S.$ - - 71.0 C. fofCLES FIFTT11S 96 - 4 - - - 4 91.315 - mJ - - -M39 .3 - 196.4 - - 196.6 2 X 7t1a4xE T9U O - 10 - - - 10 U.ff - 31.5 - - - U1.5 - 409. - - - 469.6 SoT- I 3- -1.212.8 - - - 22.8 60.4 - 606.4 o. 3s 1FFICE 973(630 - - - - - 2s.0 - - - - 2x0 e 1. - - - - us o E. CE F - - - - - U7.7 2. - 12.9 - - - 2 F. LAMR . . . . . . 41.8 U.3 - - - 6.0 24.4 M. - 32.5 TeoU 1 18ESIT S 1731.9 6431.9 141O.2 343u.2 3431.2 30,80.5 5 9 301.5 s55 SOS.6 535.6 5402.2 II. Cl IM a. - -ALA- - 9.0 .0 942,0 942. 37P,3 - 471.6 471. 471.0 471.6 b884.0 . DM 1A - - . 1 376 176.1 3761 71 4.3 - u .0 U.S 8.0 1.e M2.2 C. -CKU - - - - - 54.3 93.1 7M.1 79.1 2.973.7 - 297.2 396.6 3.6 3.6 1416.9 3. 32511 234 297.2 297.2 297.2 1,314.9 - 111.7 140.6 148.6 140.6 357.4 6. MISC. W9m 2029 234 223.4 223.4 97. - 303.4 113.7 111.7 113.7 43.5 row Kr 60c _ 2.13.7 2,431.0 2,431.3 2432. 9,434.0 - W9 1,215.9 .215. 1,215.9 4717.0 CD Tol 1731.9 6177.6 3.443. 2443.0 3,43.0 20233. 6.9 408.6 172. 5 M,721 .5 12.5 M011.3 I X m_ m_ _m ma - _ _ _aa-_ M x Is DM3. BET OBSMMLIE WXT I CM %Rh 3, 390 36:20 ANNEX 3 - 72 - Table 8 AGRICULTURAL CRZDIT AR I D! T PROHOTION PRWOECT Detailed Cosa4: Lint Storae. WC. iIkehoe ind Cocton Sector Study owUtv kwt zS '000 b "tslaIUS$tOOC tit 1 2 3 4 5 TetSl itCost 1 2 a 4 5 Tota 1 2 3 4 5 TdS elmt m 1. LUn S_W FACIUw /a LINT STM AT 11- - 61-.5 -11.5 301.3 - - - - 9.3 LMX t SlAl / 1tN&IM611. .3 - - - -237.1 - - - - I.2373 113.5 hTtl CIL M 1.Wl - - - - IW237. 613.5 - . .- 618.5 a. TM" - . ..0 19.0 - . . 30x.0 75.0 n5.0 - - - 550.0 C. Now= S1 /C Eawr I -1.5-- -1.5 21 - 0.0 - - - 3.0 -15.0- - 55.0 6CCOM3TMT U - 2 - -- 2 21 - 40.0 - - 40-0 -20.0 - - - 20.0 nIST U - 5.5 -- -. ..5 21 - 3e.0 - - -3x. -15.0- - I5.0 COTT1 S3E.1 U -5 1.5 - - - - o 30- 30.0 -1.0 - -15.0 TETILEP .PO,SPUM U I.S - - - 1.5 20 - 30.0 - - - 30.0 - 15.0 0- - 5.0 COTI a1t Fo.1 l.. 114 1.5 - - - *.5 20 30.0 30.0 I-.0 15.0 LKra.LWMLTAU U - 2 - - - 2 5.3 10.6 10,6 5.3 - - -5.3 mm IRTITIS - 4 - - - 4 20 - t0.0 - - - 10.0 -40.0 - - - 40.0 3*Total 3133 9Om /C - 230.6 - - 320-6 -40.3 - - - 140.3 I. O0ER msWmr S0ow g MN . . / -. . 1259.6 5,129.6 1u259.6 1259.6 I.25.6 6M27.3 2.l 62.1 62.3 6 29 .3 3.15.9 NYBACS tA UT / No-4 - 2.0 42.0 4.0 42.0 42.0 210.1 21.0 21.0 21.0 21.0 21.0 105.1 1hTotal OIER fIS 1,301.6 1.301.6 110.6 5,3101.6 513016 6507.9 6e.0 6-53 6ue 650.3 A 0.o 3623.9 E. /aW it 5 D1 KulaI I - - - - 1 27.46 207.4 - - - - 207.4 103.7 - - - - 103.7 CmIu E-.4 - - - - 35.4 17.7 - - - - 57.7 DImIIs (SIPMENT 65,3 - - - 615.3 32,6 - - - - . iumiWns IENUIFII--T 12.5 - - - - 2.5 6.2 - - - - 6.2 sit EQar E-pjf - 7.5 - - - - 327.5 13.7 - - - - 13.7 651Y 115LEUInI- - - 4.2 - - - - 4.2 2.1 - - - - 2.1 l6iSTS AND SETTINOS MOM 62u. 62.1 311.1 Jl- - - MI WLUICAIIEl 'UIPIIT- 13.3 - - - - 13.3 6.6 - - - - 6.6 FUEL IMNACTT EOUSPI- T 7. - - - - 7.a . - - - - 3.9 TYRE LMTDWUNC EunFlr-- 12.7 - - - - U. 6.4 - - - 6.4 s&b4ot.1 IWIOP 753.1 - - - - 753.5 37. - - - - 37O Tro DIME T COStS 3,446.7 12732.2 1.35.6 1I305.6 1.O1 9s033.6 373.4 316.1 650.3 65-0 &0 4541.8 tal 3J446.7 5.72.2 1#301.6 I.301.6 5.0156 9,003.6 1723.43 66.15. sL 650.3 50.3 541.8 __- --.---------- - - - - - - /a 2 U ll1 ROM FACLIUTIS To IK UT (NE IN SIMSNDA MI IN CN01M. lb 3 MME f EX . TM" FM3 6 81S. F?LH. /c CUMFAE U SEKC T513 M SIM F IIINIST7Y OF ULSI 60t10T131 IMESETnW To 2 CaUISSIOK Y e103. /d WMSES FOR G5 ff 12 GINUI SULLI FOR 5 YEAS. to N3SICS KFSAEENT FO 12 0OMES A15 AMLLY FOR5 rYWS. 7t 58Pw IS 3o SENE AL CtD 09111 .4 /g Io IUIES 11T1.ULS An C*IINt AS kEL AS PUSE COST OF ONE- ) HOARE OF Li. utIH 30. 59 1020 ZINBSA3IE ACRICULTURAL CREDIT AND EXPORT PRKOSTIOU PROJECT Detailed Costs: Horticultural Remaercb hantita los sts z$ '1000 E a Cts In Stu$ '600;Ss LsdAlnS Cantifmfias Uitt 1 2 3 4 * Total Unit ost 1 2 3 4 Total 1 2 3 4 5 Totul 1 2 3 4 5 Total I. t- mSmS I. PM 5W WIUUII;/a NO I - - -- I 55.83 55.0 - - - - 5.3 27V. - - - - 27.9 63.4 63.4 mluIIIS /b No I - - - - 1 165.182 165.2 - - - - 165.2 324 - - - - 82.6 197- - - ir.7 cau STEaE FCIjT1Ul /l D - I - - - I 228.207 - 220.3 - - - 227.3 - 114.1 - - - 114.1 - 275.7 - - - CUJ STI; FMC M / -d N- - - I 75.4 - 75.6 - - - 75.6 - 37. - - -37. 91 . - 1.3 CUN IED UT6NWIE F5 T, h NO - 1 - - - I 4 -.5 -94.5 - 9.5 -47.3 - - - 47. -114.1 - - - 1;:.1 StTebl PUT "NSt RnSE 221.0 3.4 - - - 619.4 110.5 1".2 - - - 309.7 251.1 411.0 - - ;3:.2 Sd-Tut CMVOWL 22122.0 m4 - - - I9M4 110*5 19.2 - - - 30J.7 251.1 41.0 - - - 732.2 *. E01Tui P-IES.WL FIIP - - - - - - 63.6 245.0 - - - 3t.6 31.3 U25. - - - 154.3 69.1 230.? - - - M50.7 STNE* TUI/t - 5.0 - - - - SJ. 2.5 - - - - 2.5 5.9 - - - - 5.9 IutUPLT / . . . . . . 31.4 31.4 32.4 31.4 31.4 t17.1 15.7 25.7 15.7 15.7 15.7 73.6 34.5 36.0 37. 39. 42.0 19m.2 Sub-l1tu l T 10.0 276.4 31.4 31.4 31.4 473.7 50.0 31.2 15.7 15.7 15.7 235.4 1.1 316.9 P7.3 3. 42.0 546.7 C. Van=E NUQ ZplaS No 3 - - - - 3 59.5 173.7 - - - 1737 6.3 . - - - 3N.3 194.3 - - - - 194.3 LAW Mm N - - - - 1 1U345 1-1.3 - - - - 61.3 3.7 --- 30.7 .7 - - - - 7 TREI NlD I - - - - 1 s0. m 50.2 - - -- 3231 --- -25.1 54.6 - - - - 54- SP /h - -53. - - - - 5 I 29.0 - - - - 29-0 43-2 - - - - 63.2 Sd-Totaw IS 343a - - - - 3.3 174.1 - - - - 174.2 373.7 - - - - 37..7 0. IU i1 i 1 * * * * 1 20 20*0 - - - - 20.0 10. - - - - 10. 21.6 - - - - 21.6 E. ET SM1STi /J M 12 - - - * 12 24.06 233.5 - - - - 20.5 144.3 - - - . 144.3 312.1 - - - - 312.1 Total JES4NBT CSTS 977.9 4 31.4 31.4 32.4 127469 40S. 337.4 157 15.7 15.7 e3s 1.073.7 73.0 37.3 39. 42.0 1991.4 - --- -----man --- m- Ttab1 977.9 674.0 31.4 31.4 32.41,746.9 413.9 337.4 5.7 15.7 15.7 735 1.073.7 m.s 37.3 39.3 42.0 l.m.4 /a FM LSITIFlMlE CPS. MUMI1; COSTS tVJAE SEIOM Me SECMS. /b FOR NI1UENnE CMS. UIUIN COSTS IIDLUDE tI391 AN9D SICE5. C ME-MO ANS CM STEAK CtNMiETS E* 2.4 X 2.4 X 3N. /d FME- FOR CDIIR Al E STIlE- 31M X 4 X 31. PRIUSIUW. Ft1S. taM X 411 X 31. tt ST1AKE CTIS AND M0OM FM FUIIT *0 1LA .fl 9 102 IOF CIVIL NOES AN EDlIENT INEIE COSTS. REFED AIIWIlIT lh 202 OF OMCLE lFSTT CtStS FOR VARE MU.TSC I't PS-V 11Bum I U;sIO00/l3. 7J 3PElt FOR 4 E . Bow ANNEX 3 Table I0 ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Summdry Accounts By Year 2193w AWICOIP. cMo2t Ao ES1111 9 6118 FROACT S,aut kcc,ts by eta lotels Inclu(unl Continincls Totals WNWluR Coinmea *Z I '000) (US'0000 1 2 3 4 Total A 2 3 4 5 Total fleas. ann.. ~ ~. ..... ... ..... a,--* .f ........ ........ ...flaaa a. u 1. DNtr Com1 A. CIVIL NM I.we 37.m7 4,967.5 3,80.8 - - 11.322.0 1,636.7 .493.7 1t,40.4 - 5,6.6 2. c 9,13.9 2,86.3 73.7 12.021.9 ,581.9 1.442.1 36.9 - 6- 08.9 3. 1SEI 251.1 01.0 - 732.2 125.6 240.5 - - 366.1 ST40.1 CIVIL MM 22.686.7 .332,8 3.154.5 - - 24176.0 6344.4 4166.4 1577.3 - - 12F08610 I. wiiiajs I. Mt 3471 4.6 670.8 - - 10664.S 173.5 323.3 335.4 - - 632.2 2. Cs - 1390.7 -3 19390.7 - 695.3 65- 6.3 3. 86A3CN 376.7 - - 378.? 119.4 - - - - 19.4 ShTtaI 1UC0s m.2 2.037.2 70.S - - 34332.9* 623a 1O13. 3.4 - 1.716.9 t. 191u1r 1. Mm N181 E0Mi t 964M.3 14#6H.1 2.10.2 2.737,4 269.9 32,901.5 4,933.4 7.334,0 1340.1 1M3.7 t449.5 16.*450.0 2. MFC E1IW T 259.3 271.5 4.274.9 44.3 603.3 5,853.3 129.7 135-7 2o137.4 222.2 301.7 2e92U.6 3. ESEW E6OUIPIIt 110.1 316.9 37.8 39. 42.0 546.7 55.0 158.5 16.9 19.9 21.0 273,4 4. CT012 £101 1S.7 - - - - 15.7 7.8 - - - 7.6 Sub-Total E£190 10,1.6 15.256.5 6*993.0 3e271.6 3544.2 39,317.2 5,225.9 7.626.3 3,496.5 l.U5.8 27M.1 19656.6 8. rlmTIE 1.2 323.9 - - - 25.1 0.6 162.0 - - - i62.6 E. C8IS2L1TMl(S 507.7 325.3 615.6 302.8 14.1 IF845.5 293.8 162.6 307.8 151.4 7.0 922.7 F. tWN61116 1. TG RUII FC 54.0 - 109.3 176.0 39.3 27.0 - - 84.6 a.0 1099.6 ct 162.3 167.5 - - - 329.8 81.0 3.8 - - - 164.9 'i--.t1 OVen"l5 TRN 216.2 167 5 - 10.3 176.0 729.1 1O.s1 63.8 - a4.6 8S.0 364.5 2. L . tlU1111118 YC 196.6 9.2 220.9 306.5 57.3 790.4 9.3 4.6 110.4 153.2 26.6 395.2 601-Te LJC. tlm A 19 . .2 2206. 306.5 57.3 790.4 98.3 4.6 18.04 31.2 28.6 395.2 Su-ftoul 1121 412.2 6 76.7 220.9 475.1 233.3 1.1P.5 206.4 88.4 110.4 237.9 116.7 759. 6. 11861(1 312.1 315,4 - 067 156.1 157.7 - - - 313. V. IT FUS 1. 1c6C1L r 96 120536.3 lOtW.3 *0.530.3 I030.3 10030.3 52.651.3 5265.1 2 265.1 5,265.1 54245.1 5265.1 26932.6 2. CORt r_ A l1ISI6IIL LIISe 10,96.2 lO293.2 1o096.2 10.93.2 l09o6.2 54.931.2 5.93.1 5.493.1 5,493.1 5,693.1 5,493.1 270465.6 amU LEMIS - 276.6 642.6 6p349.3 0093.9 2O.61.6 - 192.4 321.3 3074.6 s492.4 10.380.1 Sult-otal tD l * Fr s 10,936.2 31f7.0 10.2 7.335S 21971.1 7692.8 5.493.l 685.5 5.6*4.4 0667.8 0.935.6 37o646.4 SiO-tol 1BIT FUS 21,526.5 24,301.3 22F159.1 27.365. 32501.4 1213.44.0 10756.2 122.506 12o079.6 13,932. 16,250.7 64.272.0 totl IStI CMT 46t496.6 51.0691. 33.114.0 325.9 493.0 2^9586.7 23.243,3 25434.6 16,907.0 25tM.O 18.146.5 9794.4 ,aainaa am..------- ------ -------- --- . . .n.n..n....a....aae . an. - .. it. U.ICU t ConT .SNIALLm.1CE8 1,038.1 3,423.2 5,220.1 6.l28.? 8,002.3 2492.5 529.0 1,706.6 2,610.0 3,409.3 4.051.2 02.296.2 6. 86ICl MS A JP*101T Om 9.6 11.4 23.5 07.2 21.3 73.1 4.6 5.7 6.7 8.6 10.7 36.5 C. 1U1*1318 Om 53.0 406.3 516.1 571.3 632.4 2,179.2 26.5 203.2 253.2 265.6 326.2 1l,b8.6 e. OFFICE S9 ItS AR 5T1*1106t 7.1 2.6 8.5 9.3 3.4 30.9 3.6 2.3 4.2 4.6 1.7 05.4 C. OIlER WIE - .2M3.2 2624.3 2.001.6 2,097.5 73*6.7 46.6 91222 10000.6 1.099.6 -45.3 total Kammi CosTS ,07.9 5.226. 7.582.5 9,428.0 00,97.0 34.192.3 554.0 2.363.4 3.913 4.709.0 5.478.5 17.096.1 .es.na en.... as.8.. ...... .......... a . s ... .8*t ..aaa .aa. total "Mt COSTIS 47.44.5 56P195,9 41,395.5 40324.0 47,250.8 23381.0 23.8023 .8092.0 m O0698.3 20,667.0 23625.0 112690.5 ...s 4....... afl eea s a.....a4. . .. .. __N-_--e-P-*Fwo' 30. 193- 26-;-20-- ---------- Noh Sot Im 16;20 ZIABE AGRICULTURAL CREDIT AnD EXPORT PROMOTION PROJECT Financing PIon CM Million) Credit Civil Recurrent C_For_eru SealIholders Work Vehicle Equtnmit Studies Consultancy Training Costs Total A. AFC ID 16.6 8.6 1.9 3.e 1.9 29.e IFAD 15.8 - - - 15.0 Japan/ - - - - 0.6 06 - 1.1 AFC - - 3 . 0 .2 10 - - - 9.7 14.7 Formers 8.7 - - - - - - - - 8.? COZ 0.6 14.8 11.1 Sub-Total 26.8 7. 77 1i 2.9 - 371 11 -T7 34.4 S. cu TMo ^ - 1.7 0.2 4.1 - - - - 6.o BADEA - - - 0.4 9.2 - - - - 9.7 Japan - - - - - 6.2 .2 3.0 - .7 CIIB - - - - - - - 7.0 7?. coz ~~~~~~~4.8 6.1 8.1 - -- 7. Sub-Total - - ?.. Ti Ti ri ri Hi C. Hort. Research IBRD - - 0.2 3.1 3.2 - - - - 3.5 Japan V/ - - - - - - Nr Ze Iaand - - - - 0.2 - - - .2 coz - 0 .2 6.1 0.2 ---0.69 Sub-Total - - El9 3§ Ui .174 Total 26.8 37.9 12.1 1.7 19.8 0.4 -.* 17.1 116.9 D. S_r of Finunct-ru IB~RD .LFin ier3 3. 809.6 - - - - s.a IFAD - 1650 - - - - - - - 15.0 BADEA - - - 6.4 9.8 - - - - 9.7 Japan - - - - - 0.2 e.3 G.8 - 1.1 MM Zea l nd - - - - - 0.2 - - - 6.2 AFC - - 8.8 0.2 1.3 - - - 9.7 14.7 CbB - - 4.3 3.1 8.1 - - - 7.0 14.5 Fur_ra B.7 - - - - - - - - 8.7 Coz 6.6 14.3 4.S 0.2 8.3 - - - 0.4 23.5 Total 37 J U.9 fMi 177 19.6 i4 0i. e.s 17.1 116.9 ^J Consultancits Include about Z$8.6 million for computer personnel and Z3.?7 million for group lending; training includes about Z88.3 million for overses stff training in computers, and Z30.6 million for group lending training. V A s1ma l amount of Z120, wil I be needed for concultancy to the Horticultural Reserch Station. I! - 76 - Annc.c 3 Table 12 ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Extended Disbursement of IBRD Loan (US$ Million) Semester Cumulative FY 89/90 First Semester - - Second Semester 1.5 1.5 Sub-Total 1.5 FY 90/91 First Semester 3.5 5.0 Second Semester 4.5 9.5 8.0 FY 91/92 First Semester 2.5 12.0 Second Semester 4.0 16.0 6.5 FY 92/93 First Semester 4.5 20.5 Second Semester 6.5 27.0 11.0 FY 93/94 First Semester 3.0 30.0 Second Semester 4.5 34.5 7.5 FY 94/95 First Semester 1.0 35.5 Second Semester 0.8 36.3 1.8 - 77 - ANNEX 4 Page 1 Group Lending Pilot Scheme Implementation Guidelines 1. The selection of districts, and wards within a district, would conform to the following criteria: (a) The district would have a large concentration of small farmers, and an established AFC district office. (b) Each selected ward within every district identified as above would have at least 8-9 groups that conform to the criteria detailed in para. 2 below, and willing to participate in the Scheme. (c) At least one ward in each selected district would have a high proportion of female farmers, and population strata that reflect different income levels of small farmer households. 2. As conditions for participating in the Pilot Scheme, the group would: (a) have, as its members not more than 50 small farmers engaged primarily in farming activities in or within the vicinity of the groups kraal in order to ensure maximum cohesion among the members; (b) show that the majority of its members are willing to participate in the Pilot Scheme and to borrow credit from AFC on terms and conditions applying thereto; (c) organize itself on the principles of equal treatment to all members irrespective of gender, joint and several liability; (d) have, as its objective, the intention to operate on a long-term basis, and to undertake input supply and produce marketing functions for its members, in addition to credit services; (e) establish itself in accordance with provisions of the applicable legislations of Zimbabwe at least at the level of the Village and Ward Development Committees; I (f) elect a chairperson, a secretary, and a treasurer, from among its members who are capable of guiding financial and business operations of the group in a sound manner, and maintaining Il I/ The development councils which enjoy legal authority over land allocation and which are part of the rural development structure. ANNEX 4 - 78 - Page 2 discipline among the members; and willing to participate in the training program under the scheme; (g) establish and maintain simple accounting records; (h) depute its office bearers and/or training; (i) undertake to encourage its members to generate own resources through membership fee and savings. (j) establish and maintain a savings account with lawful financial institutions in order to deposit its income on loan operations and other revenues, as well as savings generated from its members. 3. To qualify for loans from AFC, the group would be required to: (a) have paid lOOZ oif the loans granted to the group except for defaults due to force mejeure as may be determined by the AFC Board: (b) provide evidence that appropriate actions are being taken against willful defaulters; [c) ensure, through the group leaders, that credit is used for the intended purposes; (d) maintain sound accounts for each individual member; .e) lend to members at the same interest rate as AFC charges to individuals directly borrowing from AFC; (f) use the spread allowed to it only for administrative costs and create a reserve fund, in a deposit account with reputable financial institutions, for any surpluses from the interest spread for the purpose of covering credit risks, and authorize AFC to register a stop-order against the reserve to repay, outstanding debt; (g) authorize AFC to register a stop-order for the purpose of loan repayments; (h) not approve new loans for any member. or his/her dependent, in default beyond four weeks after tne due repayment date for loans borrowed from the group or directly from AFC; (i) establish and implement a system of written agreement to be signed by member-borrowers specifying terms and conditions of loans, including a joint and several liability clause. 4. AFC, on its part, would: (a) charge, for loans channelled through groups, a rate of interest that is less than the one charged to individual borrowers; the group an interest rate spread of at least l.52 below the AFC's lendiug rate to individuals; ANNEX 4 - 79 - Page 3 (b) charge the group the same rate as applicable to individuals borrowing directly from AFC, for any loans intended for use by the group as such; (c) ensure that all group loans are legally subject to joint and several liabilities. AMICILTWU CRh1T #A ERFUT P1111W(11 PUEC Crop Budget: Maize castl EaCm 2 CzoI as 2 ommercial Farme Price Fares ValIe! Form Vaine/ Fare Value! fares Vial'e for" lusts (1) (25 hiatity EastlIll 1161 heatit CostuIS) (21) hautsty WaSl(4 (265 haRtaty Coitus) (211 Iastity CoatUll] (III Pruduation (t0,s5 5130.00 - .60 29.00 - .40 612.00 t.00 1310.00 -2.30 414.00 -5.50 M90O0D E0TS seeds if 0.75 0.30 25.00 13.75 5.63 ~ 5 13.7 5.63 25.00 131.75 5.63 .25 d 13.15 5.63 25.00 18.75 5.63 Fertilizers Coup I too 355.00 0.45 0.10 '35.50 15.9 0.U 106.50 47.93 0.05 17.75 7.99 0.23 71.00 S1.9" 0.33 124.25 55.91 AUN too 406.00 0. 45 0.10 40.60 13.27 0.25 10.50 45.611 0.05 20.30 9.1 0.55 60.90 27.41 0.30 121.30 54.11 Aawe ton 45.00 0.30 - - - 0.25 11.25 3.338 - - 0.215 11.25 3.33 0.25 11.25 3.33 herbic~ids pack 6.00 0.50 - - - - - - - - L2.00 72.00 36.30 InSecticad&, k4 1.20 0.50 2.00 2.40 1.20 4.00 4.30 2.40 2.00 2.40 1.20 4.00 4.30 2.40 2.00 2.40 1.20 Oier. (haredi ha 55.00 0.05 1.00 ~55.00 2.75 1.00 55.00 2.75 1.00 55.00 .2.15 1.00 55.00 3.75 - - Tractor litre 5.50 0.65 - - - - - - - 75.00 112.5 73.13S Labour0 hired ed 2j 3.30 0.00 - - - - - - - - 48.00 132.40 0.00 0 feaalv ad 1j 3.30 0.00 35.00 ILISdO 0.00 46.00 174.30 0.00 31.00 117.30 0.00 39.00 148.20 0.00 - - Iranport-an too 20.00 0.65 0.23 4.60 2.9 0.33 16.60 50.79 0.13 2.60 5.69 0.63 12.60 3.19 0.93 153.0 12.03 Transport-out tca 15.00 0.65 1.60 24.30 15.60 3.40 51.00 33.15 1.00 15.00 9.75 2.30 34.5 22.43 5.50 32.50 53.63 Prod. Levy value 23 - - - - - - - - - - 6.93 0.00 fliscallaftecas 33 - - 9.04 1.45 - PJ.27 4.57 - 6.59 0.99 13.44 3.36 3.66 15.07 Total Eost . 22.69 63.36 - 558.47 156.26 256.19 39.13 430.1.4 1 01.41 7WC.14 310.76 930M AR61SIS 134.39u 53.53 576.19) 5.4 - 199.06 Fasaly Labour ad 13 3.30 - 35.00 133.00 - 46.00 174.30 - 31.00 117.30 - 39.00 543.20 - 6005 $W30k (Eacd. Faa. Labour I - - 98.11 -- 223.33 - - 41.61 .131.76 Retornltan-day af Fasily Labour - - 2.80 - - 4.96 - - 1.34 - 3.381- btaraMna-day of Famsyl Labour 4j 3.49 6.07 1.35 4.26 211.3 Aivrp FCIEI (ZN- - 0. "t - - 0.28 - 0.15 0.25 - 0.39 VNIL: Cast 1, average current, withou credit, satuatbon; Case 2, good managmet and appropiate isput Ilevels 1-! Prevailing *arj tar hired labor,j amputed sage rate far family labor I._t it 0.7n c total value of production; commrcial productrs omly 33 Estaeated at 52 of total costs; faaily labor excluded 431 Ultalaiog Prices for the 1938169 marketing season (ZS 195.0 m.ton) MItULTlL UE3l 1[TP N TISl UNECT Crop Budget: Cotton -------tural Rii l 1- ---Ntural hpm 1 -1- --aral Ibi I1- tasel Case2 CumeI Cam 2 Ca_rtial Farm unit Forus Val" Fores Vain Frm Valu Faong Vai Foru Vain Fwrs tWits Price lU hIbtity Cost(il fi15 hatity Cost(lS) (ll) haotity CostlUIs (ISI hatity CoItSZ6II (26) htity WMitqSl 1101 REVEMBS Productiom (tonsl 740.00 O .0 6.00 - 1.30 942.00 - 0.75 555.00 1.10 814.00 - I.95 1,4qus e COSTS Snds kg 0.21 0.30 30.00 6.30 1.39 30.00 6.30 1.89 30.00 6.30 1.69 30.00 4.30 1.39 30.00 6.30 1.39 ed treatmt kg 0.57 0.50 - - - - - 1.00 0.5? 0.29 imttilazet com L too 405.00 0.45 0.10 40.50 11.23 0.25 101.25 45.56 0.08 32.40 14.53 0.19 72.90 32.81 0.30 121.50 54.6 Alh too 406.00 0.45 0.06 24.36 10.96 0.12 41.72 21.92 0.05 20.30 9.14 0.10 40.60 18.27 0.10 40.60 13.27 IIIm too 45.00 0.30 - - - 0.25 1l.25 3.31 0.25 11.25 3.38 0.25 11.25 3.39 0.25 11.25 3.33 ierbicimJs litre 30.00 l-/ 0.5 - - - - - - - - - - 5.00 150.00 75.-0 Pesticides pack 200.00 2_ 0.50 1.00 200.00 140Ae 1.00 200.00 100.00 1.00 200.00 100.00 1.00 200.00 100.00 1.00 200.00 l00.00 Sprayin cost I ha :0.00 0.65 - - - - - - . - - - 1.00 20.00 13.00 Ouent iredi I ha 55.00 0.05 1.00 55.00 2.7 l.00 55.00 2.75 1.00 55.00 2.75 1.00 55.00 2.75 - - - Tractor litre 1.50 0.65 e - - - - - -- 75.00 112.50 73.13 Labour hired ad 4.00 31 0.00 25.00 500.00 0.00 35.00 10.00 0.00 20.00 30.00 0.00 30.00 120.00 0.00 52.00 208.00 0.40 0 faisly ad 4.00 31 0.00 62.00 248.00 0.00 30.00 320.00 0.00 54.00 216.00 0.00 67.00 268.00 0.00 - - - Fachsm got tcntoutput 3.33 0.50 0 90 3.00 1.50 1.30 4.33 2.16 0.75 2.50 1.25 1.10 3.66 1.13 1.95 6.49 3.25 1 Transprt-i too 20.00 0.65 0.19 3.30 2.47 0.65 13.00 3.45 0.16 3.20 2.08 0.56 11.20 7.28 0.68 13.60 3.34 Tra.sport-out too 40 (III 0.65 o9o 36.00 23.40 1.30 52.00 33.30 0.75 30.00 19.50 1.10 44.00 21.60 1.95 21.45 13.9 P'ol. Levy value - 4 I 0.00 - - - - - - - - - - - 20.20 0.00 NIscellanaous - - 5 t - - 23.45 5.16 - 31.59 7.27 - 22.05 5.29 - 23.25 6.7- 46.62 17.25 Total Cost - - - - 740.40 166.35 - 93.44 227.13 - 673.99 159.35 - 61.1 203.53 - 979.09 3W2.90 -..-.-…- ------------- - - ----- ------------ - - -- ---- - --- .----- lSs "ASIN - - (74.403 - - (21.441 - - (123.991 - - (47.161 - 463.91 - Fully Labowr 4_m 4.00 3 - . 62.00 245.00 - 90.00 320.00 - 54.00 216.00 - 67.00 268.00 - - US NS5 hRM(Excl. Family Labourl - - 173.60 ;- 291.56 - - 92.01 - - 220.84 - _ At'urn/whny of Family Labour - - - 2.80 - - 3.73 - - 1.70 - - 3.30 - - Return/anoda of Family baor 6_I - - 3.13 3.13 - 1.96 - - 3.74 - - 551.26 6-j Iveroge FOREE - - - - 0.22 - - 0.23 - - 0.24 - - 0.24 - - 0.39 lote; Case 1, uverargt turrent without credit sitution; Case 2, good uanaeoet and appropiaet it levels Ij Catoris 3 4 and diuron 2 kg 2J Inclading carbaryl-8K 2.5 kg, endosupnan-35 2.5 It, pyreteoid 1.0 It, dsuthoate-40 0.5 It, triazopoos-40 0.7 It, and molass 30 It 3_$ Prevailin baie for sesi-skilled labor imputed sage rate for faesl laor 4] At 1.4: of total value of production, comercial prodvcers aonl 5. Estimated at St of total costs, faeily labor excluded 6j Rettrns to fasily labor I ad gross margius for cosurcial farursl atliting prices for the 1988189 arketieg seascm IS 786.3Ja.ton IIE AiICILTUKL CeDIT MU EIPIRT PRIION PROJECT Crop Budget: Soyabeans -Itual beim 11- ----atural Regis 111- Can I Cme 2 Can I Case 2 unit Faes Valul fores Valsl Faens Vall Fares Value Fame Umits Price(S) it) klatity CustMl1 tI) hatity Cmst(ll (tI Qratity Castl) 41) owtity Cost(l$l (Sl pruitim (tins) 35.00 - o.se 34.30 - 1.50 57.50 - 0.60 30000 1.25 481.25 - Sewds kg 0.7s 0.30 .00 o 70.20 21.04 S0.00 70.20 21.04 90.00 70.20 21.04 90.00 70.20 21.04 imctal. pck 0.75 0.50 - - - 2.00 1.50 0.75 2.00 1.50 0.75 sed trestat to 3.00 0.50 - - - 0.20 1.40 o .K 0.20 1.40 0.K Fertilizer coap O too 355.00 0.45 0.10 3J5.5o 1. 0.10 35.50 15.9 - - - SsP ton 2M.00 0.45 - - - 0.20 51.20 23.04 0.15 38.40 17.29 cap U ton 351.00 0.45 - - - 0.20 70.20 31.59 0.1 52.65 23.49 tim to 45.00 0.0 0.10 4.50 1.35 0.25 11.25 3.38 0.10 4.50 1.35 0.25 11.25 3.38 lsecticides it 13.00 0.50 1.00 13.00 4.50 1.50 I.50 9.75 1.00 13.00 .50 1.50 19.50 9.75 Cr (hired) value 55.00 0.e5 1.00 55.00 2.75 1.00 55.00 2.75 1.00 55.00 2.75 1.00 55.00 2.75 Labour hird ed i 3.90 OMO - - - - - - - - - - - family md j 3'.0 0.00 52.00 197.40 0.00 43.00 239.0 0.00 49.00 192.40 0.00 63.00 239.40 0.00 Trasgart-an ton 20.00 0.65 0.29 5.10 3.77 0.74 14.60 9.42 0.2? 5.80 3.77 0.44 12.80 1.00 TranWrt-aut ton 15.00 0.65 0.90 13.50 8.78 1.50 22.50 14.63 0.80 12.00 7.80 1.25 18.75 12.19 0.00 0.00 Prod. Levy value 2j - - - - - - - - - - - - - - llistella s 3i - - - 9.8 1.49 - 15.89 3.34 - 9.90 1.47 - 14.09 2.48 Total Cost - - - - 404.99 61.4 - 573.04 120.70 - 388.20 40.49 - 535.13 5.32 GaSS - - - - 158.48) - - 4.4 - - 110.20) - (53;.8) - Fasiy Labur * QJ 3.80 - 52.00 1MM.60 - 63.00 239.40 - 49.00 182.40 43.00 239.40 - 6RC55 lUIP1Excl. Family Labour) - - 139.12 - - 243.9 - - 102.20 - 185.52 - Retmrntaday otf Fialy Labour - 2.48 - - 3.97 - 2.13 - 2.94 - bturn/nday of Family Lar 4_1 3.29 4.70 2.71 3.44 Aw.i4g FOEK - - - - - 0.15 - - 0.21 - 0.14 - - 0.1I 1l0E: Case 1, avrage current, sithout credit, situation; Case 2, goad man ent and apprepiaht iput levels lj Prevailing age far hired labor., isputed value far family IDbor 2_J At 1.51 of total value of production; comurcial farws only 3_ Estimated at 52 Qt total costs, family labor excluded 4j Rturns ta fmily labor utilizing prices for the 1988199 uarketing season ! S 420.00/m.ton) MICLIITU. CUB1T IS [VWT P3101 INUPOW Crop Budget: Groundnuts -latura hie l- - Ntural gimll Cam I CAN 2 cm l Came2 Ihit Fwre.s Vain/ Fars ValwI Forx Vglui Fms Vila/ Femes UWits Vaiuu(iO (3) hastiLy CtUstl$) fil katitv CoitUS) 1IS) hatitk CoistS") u) iOusatity COMtl) (16) Fitoinctim Items) 5$5 - 0.40 351.00 - 1.10 443.50 - 0.50 m.50 o.s0 524.50 Seds,(purchaed) ke 1.25 0.30 120.00 150.00 45.00 120.00 150.00 45.00 . Seeds,toma kg 0.8 0.30 120.00 9.00 23.10 120.00 9S.00 28.60 Fertilit r SS? tan 254 0.45 0.10 25.40 11.52 0.35 19.40 40.32 0.10 25.60 11.52 0.20 51.20 23.04 yps ton 55.4 0.45 0.10 5.54 2.49 0.10 5.54 2.49 lie ton 45 0.45 a.20 9.00 4.05 0.20 9.00 4.05 Insecticides It 1/ 14 0.50 0.40 5.10 2.80 0.30 4.20 2.10 Oze (hired) I ha 55 0.05 1.00 55.00 2.75 1.00 55.00 2.75 1.00 55.00 2.75 1.00 55.00 2.75 Labor hired ad 2j 3.8 2_J 0.00 9.00 34.20 0.00 12.00 45.40 - 7.00 26.60 0.00 10.00 33.00 0.00 family ad 2_j 3.9 2. 0.00 54.00 205.20 0.00 69.00 258.0 0.00 48.00 182.40 0.00 58.00 220.0 0.00 Packing Nlatuis t/oe tput 1.50 0.30 0.0 .0 0.27 1.10 1.45 0.50 0.50 0.75 0.23 0.90 1.35 0.41 w Iransport-is too 20 0.45 0.10 2.00 1.30 0.11 15.40 10.01 0.10 2.00 1.30 O.U2 12.40 3.04 1 Transprt-out ton 15 0.65 0.40 9.00 5.35 1.10 16.50 10.73 0.50 7.50 4.0 O."0 13.50 3.73 Prod. Levy valu 3j - - iscelllenus (51- - - 11.14 1.34 - 1.49 3.35 10.61 1.20 17.01 2.21 Total Cost - - - 439.04 51.3 - 671.93 121.99 404.52 50.75 427.40 53.38 6UW 31111 -9.03 - - -28.4u - -114.02 ".90 Faily Labour ad 2j 3.80 54.00 205.20 - 68.00 258.00 - 49.00 192.40 58.00 220.40 6RISS MR61N(Excl. Family Labour) - - - 117.17 - - 229.92 - U.39 319.30 bturnladWay of Family labur - - - 2.17 - - 3.39 - 1.42 5.51 Rtora/Nanday of Faaily Labour 4j 2.8W * 4.43 2.19 4. 49 neraqe FREI - - - - - 0.12 - - 0.1 - 0.12 0.13 Note: Case 1, awearge current, wthout credit, situationw case 2, good mnagmnt and appropiate impts Ieels Ij uaestoo-S-Nthyl 25 2j Prevaliling uage for hired labor, ispAted apge rate for family labor 3J At 1.53 of total value of production; comercial farmers only 43 Raturrs to family labor utilizing prices for the 1989/69 earketing season I Z 6501m.ton unshellad) iI- aUMCIIUlALI CIIDI a ET cm T10i1 UEC Crop Budget: Sunflower Cas l Case 2 Cas I Can 2 liut Fores Vaui/ Forts Valuu/ Fores Value/ Form Vale forne Units FricelIS) (I) kantity CostliSI s) katity CostlZl 1U() Gwntity Cost(ISl) (11 BDuntty CostuS) (lS) REVENUES frodacttua Itons) 390.00 - 0.90 312.00 * 1.30 507.00 - 0.55 214.50 1.00 390.00 COSTS Seeds kg 1.10 0.30 10.00 11.00 3.30 10.00 11.00 3.30 10.00 11.00 3.30 10.00 11.00 3.30 Fertilaier coop L too 405.00 0.45 0.05 20.25 9.11 0.15 40.75 27.34 0.10 40.50 18.23 AIN too 404.00 0.45 0.05 20.30 9.14 0.10 40.40 13.27 0.05 20.30 9.14 0.10 40.40 18.27 Line tow 45.00 0,30 0.10 4.50 1.35 0.25 11.25 3.38 0.15 4.75 2.03 Insecticidus It 19.00 0.50 - - 0.00 1.00 19.00 9.50 1.00 19.00 9.50 Oben Ibiredl I ha 55.00 0.05 1.00 55.00 2.75 1.00 55.00 2.75 1.00 55.00 2.75 1.00 55.00 2.75 Labour hirb Id 3.80 1j 0.00 - - - - _ - - family ad 3.90 1_ a 00 52.00 117.40 0.00 48.00 251.40 0.00 45.00 171.00 0.00 55.00 209.00 0.00 lruasport-in ton 20.00 0.45 0.21 4.20 2.73 0.51 10.20 4.43 0.60 12.00 7.60 0.34 7.20 4.48 transprt-out ton 15.00 0.45 0.90 12.00 7.90 1.30 19.50 12.48 0.55 9.25 5.36 1.00 15.00 9.75 Prod. Levy value 2 J - - - - - - - - - - - - aiscellaneons (51) - - 11.24 2.92 - 24.29 4.6 - 13.86 4.02 - 20.20 4.44 lotal Cost - - - 341.09 39.10 - 509.99 38.49 - 291.43 32.37 - 424.25 72.94 6ROSS NAIGIM - - - - (29.093 - - (2.99 - - (76.93) - - (34.25) - Family Labour ad 3.90 II - 52.00 197.40 - 48.00 2718.40 - -5.00 171.00 - 55.00 209.00 - ORMSS WA61N 1ExCl. FaU. Labor - - - I.51 - - 255.42 - - 94.07 - - 174.75 - Returalflanday of FaU. Labor - - - 3.24 - - 3.76 - - 2.09 - - 3.19 - Returnif day of Fan. Labor 3_1 3.86 4.52 2.58 3.90 Average FCIE- - . - - - 0.11 - - 0.17 - 0.11 - - 0.17 NOTEs Cast 1, average current, without credit, situation; Cast 2, good anageumot and appropiate isput lews 1j Frevalilinq sage for hired labor, imputed wage rate for family laor 2! At 1.51 al total value of production; commercial farsers Only 3_/ eturns to fasily labor utilizing prices for the 198189 arketing uaso I S 430.00/a.toal AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Crop Budget; Smalliulder Tobacco CWE I lj cSE 2ij CASE 3 It Ur,Lt Forex: hl Fores Vali For6x ValueI Forex Units PricellS) (I Duantity Costul) (Ih) Quantity CostMiS) I3I5 2uantitv Costill (ll) … _.-. ……- ..... . ... .._________ ,___,_ _ __ ___ __ REVEILES Procattior. tcasl 2,190.00 - 1.00 2,190.00 1.20 2,616.00 - 1.40 3,052.00 - -- -- -- -^- -..- -,.- - -- - -- -- - -- - -- -- - -- - _-- - -- - -- -__- - - -- - -- - - ___ Seeds kg 0.92 0.30 8.30 7.54 2.29 6.30 7.64 2.29 9.30 7.64 2.29 Fertil zer seed bed pack 6.15 0.45 1.00 5.15 2.77 1.00 5.11 2.77 1.00 5.15 2.77 Loop C tOD 46.00 0.45 0.55 304.20 136.69 0.70 327.50 147.42 0.75 351.00 157.95 AIN ton 406.00 0.45 0.15 50. 0 27.41 0.15 60. 0 27.41 0.20 51.20 3.54 lim tca 35.00 0.30 0.25 8.75 2.53 0.50 17.50 5.25 0.30 17.50 5.25 Pestic ides sed bed pack 40.)0 0.50 1.00 40.00 2a.00 1.00 40.00 20.00 1.00 40.00 20.00 EBB lit 9.50 0.50 12.00 105.60 52.50 5.00 44.L0 22. 0 5.t0 44.00 22.00 other pack 28.00 0.50 1.00 221.00 114.00 1.00 22.00 114.00 1.00 221.00 114.00 Oxen (hired) I ha 55.00 0.05 1.00 51.00 2.75 1.00 55.00 2.15 1.00 55.00 2.75 Labour hured ed 4.00 22 0.00 41.00 14.00 0.00 49.00 196.00 0.00 51.00 244.00 0.00 I fai ly ad 4.00 2- 0.00 198.00 m7.o 0.00 215.00 960.00 0.00 20.0 90.00 0.00 cx Cosl ton 67.00 0.50 3.30 221.10 56.33 4.0) 255.00 0.40 5.00 335.00 100.50 U larn anmtm valJe - 0.35 - 110.00 39.50 - 130.00 45.5C - 150.00 56.00 Packing eat tonloutput 19,o0 0.30 1.00 19.00 5.70 3.20 22.80 6.94 1.50 2i8.50 9.55 raasport-in ton 2c.00 *.0.65 0.9t 19.20 12.49 1.30 26.40 16.S0 1.60 32.00 20.Bu Iransport-out ton 15.00 6.65 1.00 15.00 9.75 1.20 19.00 11.70 1.40 21.00 13.65 anodlinq Fee bale 2.00 3/1 0.10 - 29.57 2.95 - 34.29 3.43 - 40.00 4.00 2rod. Lev value 41 -- 1i1rellanmous 5s/ 6 - 6.23 15.01 n.23 15.92 * S2.55 1 16.16 Tctal Cost - - - - 2,255.33 a12.16 2,414.26 s24.58 2,733.54 5S5.21 6GMSS5611 - - - - 173.33) - - 2CI.74 - - 319.46 -! Family "atour ad 4.00 - 198.00 192.00 - 215.00 6O.00 - 240.00 960.00 6POSS NAiIN(Excl. Fail:y Labour) - - 719.67 - - 1,061.74 - - 1,273.45 - Getirn/tanday ot FasIly Labur - - - 3.63 - - 4.94 - 5.33 Return/landay of Feanly Laouor 6j 6.76 8.40 3.94 Average FORE - - - - 0.23 - - C.22 - - NOTES: 1j Case 1: average present situation; Case 2: media uraguent ad input lewls; Case 3: bigt mnagement anod inut levels 2Jl Average prevailing wage 3j At 1S 2 per 70 kg bale 4 iAt 1.3t total value of prodatioi; coemercial prooueers only. 51 Isimated at 5? ot total costa; faa;ly labor and handling costs excled 61 Returns to fanslg labor utlizing price,s for the 1998I/9 arketing season I Zs 2O.tlu .tonl IIE MMCITJW O COEIT D EV3 fUCIWIN 141ECT Financial Analysis: Smallholder Poultry (cunstat 1987 Zs I foul 1 2 3 4 5 h 7 1 9 10t0 MAL i1) b t UIYESTIIENT COSTS --- - -- - _ __ - Cage 00 X0 0.20 13.0 Chikea mire a/ 42 42 0.3s 14.7 Feederslucterials U/ 43 43 0.35 15.1 Pullets cl I97 1U7 0.20 31.4 Tools, utensils 20 20 0.35 7.0 Feeds di 30 304 0.20 41.2 laicellaceos (110 of total5 109.8 109.3 0.35 39.4 OIIIL IIESTIENITS 1207.3 1207.3 0.23 273.0 WEKRBTII EtWOITUES Feeds e * 547 1431 1431 1431 1631 1431 1431 1631 1631 £431 1522 0.20 3,045.2 Vet. and edicines 20 20 20 20 20 20 20 20 20 20 200 0.40 20.0 Pullet replaceent cl 17 197 197 187 117 lei 197 157 1i7 141 0.20 334.4 nazntenncef/ t40 0 40 40 40 40 60 60 40 *0 400 0.3s 210.0 Labor Si 113.4 173.4 173.4 173.4 173.4 173.4 173.4 173.4 173.4 173.4 1734 0.00 0.0 HIsscellaaeous (101 ot total) 90.04 207.14 207.14 207.14 207.14 207.14 207.14 207.14 207.14 207.14 £964.3 0.35 480.5 10TAL OPERAI1NI E1PENIOITlUS O0.44 2270.54 227B.S4 221M.54 2211.54 2279.54 2278.54 227.54 2278.54 2211.54 213B7.3 0.20 4,352.3 co =CZ= *#CZ= 2222a #u2299 a=m ~tZ=2 ==:s Z=Z= =:rn aZ=v rLmx TaOAL COST 2098.24 2279.54 2279.s4 2279.54 2278.54 2279.54 2279.54 2278.54 2271.5$ 2273.54 22595.1 0.20 4,424.1 REVEES Eggs hi 1050 2520 2520 2520 2520 2520 2520 2520 2520 2520 Cull birds il 315 315 315 3&5 315 315 315 315 315 TOTlL REVWEIS 1050 2e35 2135 2935 2935 2E35 2835 2835 295 29MS NET ICOIIE -1038.24 556.46 556.44 556.44 554.46 556.46 556.44 S55.46 556.46 556.46 FnR - 18X at 20 a chitken ire for rear3ng and layer house at Z12.1/a bl 3 feed troughs at ZS 10.2 each and two drinkers at I1 4.2 each cl 110, eight weks pullets at It 1.7 each dl Crowrs sash 1 9 to 19 weks) 7 kg at ZS 0.3/kg, and layers sash (119 to 22 weks) 3 kg/bird for a total of 100 birds , eI Year 1, 5 months of layer sash for a total of 19kglbird at IS 0.32/kg. Year 2 onwards, 44kg/bifd of layer cash at 21 0.32/hg for a total of 90 birds, 7kg/bird of grower mash at IS 0.301kg and, 3kglbird of layer mash at IS 0.32/kg for a total of 100 pullets ft Estimated at n of total Investoent costs g/ One hour of family labor per day at ZS 3.8/day hl 90 birds at 20 dozen eggs per year, sold at Z4 1.4/dozen i/ Sold at IS 3.5 each Z .4ABWE uRICULTIM. CUuIT so EIMT PUUII PMULFr Economic Analysis: Smallholder Poultry (constant 1987 2s 1 2 3 4 5 6 7 8 9 10 INLOV -- - -- -- _-- --- --_ - Value of Sales 2.5 2,409.8 2,409.8 2,409.8 2,409.8 2,409.8 2,409.8 2,409.8 2,409.8 Residual valu aI 191.0 Total lifIb. 0.0 892.3 2,409.8 2,409.8 2,409.8 2,409.8 2,409.8 2,409.8 2,409.8 2,590.9 DUTFLUN Investment M0.3 lncr. working capital bi 348.8 580.5 Operating expmndltures 697.6 1,858.6 1,958.6 1,858.6 1,858.6 1,858.6 1,858.6 1,858.6 1b858.6 Total Outflow M83.3 1,046.4 2,439.1 1,958.6 1,858.6 1,958.6 1,858.6 1,958.6 1,958.6 1,858.6 Not Benefits 1983.3) 1153.9) 129.4) 551.1 551.1 551.1 551.1 551.1 551.1 732.1 Economic Rate of ReturO = 0.25 a/ Estisated at 152 of tostal investmnts O bi Equivalent to 502 of thew incremntal operating expenditures 0 Z ZI1 AGRICULTURAL CREDIT AND EIPORT PONOTION PROJECT Financial Analysis: Wheat (constant 1997 16'000) … - - - - - - - - - - - - - - - - - - - - - - - - -…(Years)…---- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 19 19 20 INFLOW - - - - - - Value of sales 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 Residual value a/ 22.0 Total Inflow 75.3 75.3 75.3 75.- 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 75.3 97.3 OUTFLOL lovesteent 142.0 locr. marking capital bI 29.0 Opecating exp2nditure- 47.6 47.6 47.6 47.6 47.4 47.4 47.6 47.6 47.6 47.6 47.4 47.6 47.4 47.6 47.6 47.6 47.6 47.6 47.6 Total Outtlio 142.0 76.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 47.6 let Benefits (142.0) (1.3)-27.7 27.7 27.7 27.7 27.7 27.7 27.7 27.7 277 27.7 27.7 27.7 27.7 27.7 27.7 27.7 27.7 49.7 Finantial Rate of Return 0.15 0.154 a/ Estiaated at 152 of total investment bi Equivalent to 60% of the incremental operating expeditures X tlllE ARICULlTi3M CREDIT AND EUIT MUTION PROECT Eco-.Jmic Analysis: Wheat (castaot 1997 ZSbOeeI -(Years) ----- 1 2 3 4 5 6 7 8 9 10 it i2 13 14 15 lb 17 19 19 20 WONI - - -- - -- __ _ ___ __ _ __ _ _ __ --__ Value ot uales 82.9 05.6 80.2 91.0 5.d 9.7 91.7 998.7 1.7 96.7 99.7 99.7 9.7 91.7 98.7 9M7 K.7 9.7 91.7 Residul valu *1 11.0 Total letlou 92.9 95.6 88.2 91.0 ".9 9B.7 98.7 9B.7 ".7 ".7 98.7 98.7 ".7 98.7 ".7 91.7 91.7 9B.7 114.7 OUTFLOW lovteent 117.9 loct. working capital hI 23.8 Operating eemditures 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 Total Outflou 117.8 63.5 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 39.7 Not enotits (117.8) 19.4 45.9 48.5 51.3 56.1 59.0 59.0 59.0 59.0 59.0 59.0 59.0 39.0 59.0 59.0 59.0 59.0 59.0 77.0 Ecoaie Rate of Return 0.36 al Estasatad at ISl of total investet hi Equvalent to 601 of the iscregestal operating eapaditurn c .0 * U ZIlADIVE AGRICULTURAL CREDIT AND ENPORT PRUIMTTaM PRIUfT. Financial Analysis: Roses 1/ (constant 1987 150OOO) ---a----------------rs------…----- --- I 2 3 4 5 6 7 8 10 tEfLON……-- Value of sales 462.0 660.0 660.0 660-0 660.0 60.0 660.0 660.0 660.0 Residual value a/ 76.0 Total Inilow 462.0 660.0 660.0 60.0 660.0 66.0 660.0 660.0 736.0 OUTFLOU Investeent 404.0 'D Incr. aorking capital bl 178.0 5.0 0 Operating expenditares 359.0 463.0 463.0 463.0 463.0 4b3.0 470.0 463.0 463.0 Total Outflow 404.0 537M 0 515.0 463.0 463.0 463.0 463.0 470.0 463.0 463.0 Net Benefits (404.0) (75.0) 145.0 197.0 197.0 197.0 197.0 l.0 197.0 197.0 Financial Rate of Return 0.28 a* Estimated at 151 oa total investeent bl Equivalent to 501 of the increeentil expenditureo 1/ Details in Project File a.! _ n1 ZIINSADE ASRICULTURAL .EDIT AND FIPIIRT PRWNIT!nU PDn.cri rrconomUX lc Inaysls. Ro ses (CoFctant 1987 ZS'000) 1 2 3 4 5 6 7 a 9 to INFLOW ---- --- Value of sales 0.0 462.0 660.0 60.0 660.0 660.0 460.0 660.0 660.0 4 60.0 Residual value al 62.0 Total Intlow 462.0 660.0 660.0 660.0 660.0 660.0 660.0 660.0 722.0 OUTFLON Invesreent 326.3 17.0 50.9 16.l lncr. vorking capital bJ 154.0 46.4 F Operating expenditures 308.1 401.0 401.0 401.0 401.0 401.0 405.9 401.0 401.0 Total Outflow 3%6.3 462.1 447.4 401.0 418.0 451.9 417.8 405.9 401.0 401.0 Net Benetits (326.31 (0.1) 212.6 259.0 242.0 208.1 242.2 254.1 259.0 321.0 Economic Rate of Return 0.47 al Estimated at 15Z of total investment b/ Equivalent to SOX of the incremental expenditures ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Financial Analysis: Annual Flowers 1/ IConstant 1987 ZS4000) ---------- ----…------ Y---ears -- --------------… 1 2 3 4 5 6 7 8 9 10 IkFLO -------- -------- - ---- Value of sales 900.0 900.0 900.0 000 00.0 900.0 900.0 930.0 900.0 Residual value at 44.0 Total Inflow 900.0 900.0 900.0 900.0 900.0 900.0 900.0 900.0 944.0 OUTFL0i investment 292.0 0.0 0.0 0.0 0.0 35.0 20.0 0.0 0.0 0.0 Incr. working capital bJ 386.0 5.0 Operating expenditures 771.0 781.0 781.0 761.0 791.0 78I.0 781.0 701.0 781.0 Total Outflow '92.0 1,157.0 786.0 781.0 781.0 116.0 901.0 781.0 781.0 781.0 NE-t Benefits -.292.01 (257.03 114.0 119.0 119.0 84.0 99.0 119.0 119.0 163.0 Financial Rate at Return = 0.13 a/ Estimated at 157 of total investaent bI Equivalent to 50% of the incresental operating expenoitures 1/ Details In Project File 'H ZIMABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Economic Analysis: Annual Flowers (Constant 1987 ZS'0001 …-------------Taar--------------------- 1 2 3 4 5 6 7 8 9 10 Value of sales 0.0 0. 900.0 900.0 900.0 900.0 90.0 900.0 900.0 900.0 Residdal value a/ 42.0 Total lafloa 0.0. 900.0 900.0 900.0 900.0 900.0 900.0 900.0 900.0 942.0 OUTFLOW Insestmbnt 237.0 29.0 16.9 lncr. working capital b/ 331.0 4.0 Operating expenditures 662.7 670.5 670.5 670.5 670.5 670.5 670.5 670.5 670.5 -------------------------------------- - ----- - ---- Total ittlo 237.0 993.7 f74.5 670.5 670.5 699.5 687.3 670.5 670.5 610.5 Net Benefits 1237.01 193.7) 225.5 229.5 2m9.5 200.5 212.7 229.5 229.5 271.5 Economic Rate of Return 0.48 a/ Estimated at 152 of total investment bl Equivalent to i fof the incremental operating expenditures ZIMBABWE AGRICULrURAL CREDIT ANlD EXPORT PROMOTION PROJECT Economic Analysis: Passion Fruit (Constant 1987 S'040) ----------- Years--… 1 2 3 4 5 6 7 8 9 10 INFLON ------ ------ ---- ---- - ---- Value of sales 66.3 204.4 259.7 259.7 259.7 259.7 259.7 259.7 259.7 Residual value a/ 55.0 Total Inflow 0.0 U4.3 204.4 259.7 259.7 259.7 259.7 259.7 259.7 314.7 OUTFLOW Investment 104.4 11.2 11.2 3.5 3.5 41.2 3.5 3.5 3.5 3.5 Intr. marking capital bJ 29.0 34.0 23.0 5.0 Operating expenditures 55.0 96.6 142.7 151.8 151.9 151.8 151.8 151.8 151.8 Total Outflow 104.4 94.2 141.8 169.2 160.3 193.0 155.3 155.3 155.3 155.3 Net Benefits (104.41 p27.9) 62.6 90.5 n.4 66.7 104.4 104.4 104.4 159.4 Econooic Rate of Return 0.44 aI Estimated at 151 of total investment bI Eqaivalent to 601 of the incremental operating expenditures - v ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PRO(MOTION PROJECT Financial Analysis: Passion Fruit 1/ (constant 187 1$ '001 1 2 3 4 5 6 7 a 9 10 INFLOV - - - -- -_ _ Value of sales 78.0 241.0 305.0.0 305.0 S.0 305.0 305.0 305.0 305.0 Residual value a. Total Ir.flob 0.0 78.0 241.0 305.0 305.0 305.0 305.0 305.0 305.0 305.0 OUTFLCi Investment 19.0 33.2 33.2 0.0 0.0 45.0 16.0 16.0 16.0 0.0 Incr. dorking capital ol 33.0 26.0 28.0 9.0 Operating exp1nditures 65.5 117.0 174.0 192.0 192.0 192.0 192.0 152.0 192.0 1" Total Outflow B99.0 131.7 176.2 202.0 201.0 237.0 208.0 208.0 200.0 192.0 Net Benefits (199.0) (53.7) 64.8 103.0 104.0 68.0 97.0 n1.0 97.0 113.0 Financial Ra*e of Return : 0.27 ai Estiuated at 15Z of total intestaemt bi Eq4ivalent to 601 of the incrmental aperatinq expenditures 1/ Details in Project File ANNEX 5 96 - Table 17 ZIMBABWE AGRICJLTURAL CREDIT AND EXPORT PROMOTION PROJECT Financial Analysis: Ginnery Cowponent(Z$'000) 1989 1990 1991-1993 1994 1995-1M 199 2000-2003 2004 2005-2006 INVESTHENTS 9374 8766 - 425 - 643 - 425 - OPERATING EXPENDITURES - 4321 54 5344 6280 6280 . 7892 7 7892 SEED COTTON PURCHASES - 13404 18893 18893 24492 24492 34832 34832 34832 TOTAL COSTS 9374 26491 24237 24662 30M 31415 42724 43149 42724 LINT EXPORT SWLES - 11044 14724 14724 19087 19087 27146 27146 2146 LINT LOCAL SALES - 3462 4615 4615 5983 598 8509 8509 8509 SED SALES - 2815 3753 3753 465 465 6919 6919 6919 TOTAL REOENUE - 17321 23092 23092 29935 235 42574 42574 42574 NET REVENUE NET REVENUE -9374 -9170 -1145 -1570 -837 -1480 -150 -575 -150 October 3, 198 14:07 Internal Rate of Return ot Not Streass NTOT No Intemnal Rate o Return Exists ANNEX 5 97 Table 18 ZINDADVE AGRICULTuRAL CREDIT AND EXPORT PROMOTION PROJECT Economic Analysis: Ginnery Component (7$'nfln) 1989 190 1991 1m 1m 1994 1995-1M 199 2000-2003 2004 2005-2008 COSTS iHNESTHENTS 9698 8968 - - - SOS - 736 - 505 - OPERATING EXPENDITURES - 4448 5605 6623 8503 8571 8571 8571 8571 8571 8571 SEED COTTON PURCHEASES - 11630 16394 16394 16394 16394 21252 21252 30224 30224 30224 MOTAL COSTS 9688 25046 21999 23017 24897 25470 29823 30559 38795 39300 38795 REVEUE LINT EXPORT SALES - 12884 17178 17178 17178 17178 22268 22268 31671 31671 31671 LINT LOCAL SALES. 4501 5999 5999 5999 5999 7778 7778 11062 11062 11062 SEE SALES - 2815 3753 3753 3753 3753 4865 4865 6919 6919 6919 TOTAL RENENUE - 20200 26930 26930 26930 26930 34911 34911 49652 49652 49652 NET REVENO NET R£NENUE -9680 -4846 4931 3913 203' 1460 5098 4352 10857 10352 10857 October 3t 1988 12:50 Internal Rates ot Return ot Net Streags H7OT 26.77z - 98 - ANNEX 6 Page 1 ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Terms of Reference for In-depth Mid-tern, Review Objective and Timing 1. The objective of the mid-term review is to carry an in-depth study of AFC so as to ensure that effective measures are taken to safeguard its financial position while reducing dependence on budgetary funds, to improve the capability of its manpower resources, and to place the group lending pilot scheme at a sound footing before the scheme is expanded. To these ends, the review would seek to determine the need for remedial measures, identiff such measures, and make recommendations accordingly. The review which would take place during July-August 1992 would be coordinated by the World Bank with full participation from EEC, IFAD, AFC and MLARR. Scope of the Review 2. To ensure safeguarding AFC's financial conditions, the review would: (a) assess collection performance and the reduction of arrears relative to the target of 152 of the total loan portfolio to be achieved by the end of March 1992; (b) if the achievements are significantly below the target: (i) identify the factors accounting for the failure to achieve the target; (ii) recommend measures to rectify the situation; (c) assess the adequacy of interest rate spread and provisions made for bad and doubtful debts and, if necjssary, recommend the appropriate levels required; (d) review the trends and prospects of generating net revenues from lending to commercial farmers; and the progress made towards enabling AFC to tap private funds from local sources; 3. To ensure improvement of AFC manpower capability, the review would: (a) assess the impact of the training program as recommended by the EEC financed training specialist, paying particular attention to: the number of staff attending training courses during the project period; levels of staff served by the training program; the relevance of the courses relative to job requirements; and adequacy of the training budget and facilities relative to the total training needs; ANNEX 6 99 Page 2 (b) determine the progress made towards making AFC's terms of employment competitive relative tu those offered by other financial institutions in the country; and evaluate the impact on a staff turn-over. 4. To ensure that the pilot group lending scheme is on a sound footing before it is expanded, the review would: (a) determine the performance of the participating groups with regard to the amount of loans and other businesses handled by the group, loan repayment rates, and membership size and stability; (b) assess the adequacy and effectiveness of the group training program under the project, particularly as reflected by cost- effectiveness of the services providea by the group to its members in respect of credit, marketing and input supply; (c) identify measures as may be necessary to improve the performance of participating groups. Review Output and Follow-up Actions 5. The output of the review would consist of a brief report setting out the main recommendations to be prepared, discussed and agreed with the Government before the departure of the mid-term review mission, followed by a detailed report. The review finding and recommendation would be confirmed through a letter from the Bank to the Government together with a action plan and timetable. - 100 - ANNEX 7 ZIMBABWE AGRICULTURAL CREDIT AND EXPORT PROMOTION PROJECT Proiert File Papers Paper No. 1 Terms of Reference for EEC's Technical and Consultant Assistance to AFC 2 AFC Annual Report; 1988-89 3 CMB Annual Report; 1988-89 4 AFC Source and Application of Funds 5 CMB Source and Application of Funds 6 Zimbabwe Cotton Subsector 7 Zimbabwe Horticultural Subsector 8 Informal Farmer Groups in Zimbabwe 9 Role of Women in Zimbabwe Agriculture 10 Detailed Crop Budgets: Maize, Cotton, Tobacco, Soyabeans, Groundnuts, and Sunflowers 11 Detailed Cost and Benefit Analysis: Smallholder Poultry; Vh.eat; Roses; Annual Flowers; and Passion Fruit 12 Detail Cost and Benefit Analysis: Cotton Ginning ZIMBABWE AGRICULTURAL CRrDIT AND EXPORT PROMOTION PROJECT AFC ORGANIZATION STRUCTURE - HEAD OFFICE |Minlstry of Lands. Agriculture. I and Rural Resettlgement |AFC Board of Directors rXR eaN General Manager i Private Secretary I-0 Chief Ecno;;in ;; | Colpsrate | Genetal Manager Gr mcal Mstatta w GenerslantMaar Data Processing General Manager G eorall a ary l 5 Wostom Region tt _j Eastem R t | Ld^tstraton Manager l Fuiarnce Hum an Hesources | Senlr l| Sno N I SN l _ Mangagrment m aaeet wanagement __ taagement _ Secrelary Secretary Secretary SecrWar1y ElaW43137C| 'A". - IBRD 15907R 28' 30' 32' MARCH 1993 ANGOLA ,t~'J , 1 heaos'\ tZIMBABWE r / LAND CLASSIFICATION L > t ' 16'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1' j.. wt "y SIT. ...' t Th@NI40 eNn At. O ewIned UhnON a-. n ire cef o N. t ' Poncecneee Te tenhiee -hTn oed on liTe OoZeh sOos TOi Into moo doCZ noAStW nbj l . .1 -$ ' - t''s'> \ SCS~~~~~~k' '.. ; ;8/{ios | > X ~ ~~~~~~ C(inihoyl Biner.0o O;hO , N. w l~-. NAM S l HASI _ . . .. .'O. v 4 X < ' .,>J t T~~~~~~ M .do, Commu~Pnclnring Aend \ ; j ; i Evl Xr KILOME1ORSi 5 BOTSWA NA '1"_~ _b tbrwdg.roe o2- N.t.-I ~ ~ ~ ~ ~ ~ ~ ~ ~ , -'PrMOZk BIQ 0 so 20 2200 r SOUTH AFRICA 26' 20' 30I' \ 32 I BR D 17028 25 i s- Z I M B A B WE E5 29 - MAR09 13 is' NATURAL REGIONS f ,. - Mo1ar Roads L1 Specialized and Diversified - Secondory Roads Frming Region -c--Railways W-Pl 1ntensive Forming Region JItensive Farming Region * Major Cities S - intensive Farming Region i r S ~]Semi-intensive Farming Region --ItrainlBndie ! .;; , 1~~~~~~~~~Itentinl Boun,\dories EVi E.tensive Forming Region J, I,'~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~7 A~~~~~~~~~~~~~~~~ a'9 - 9-is . fsouTH 2 Oceon M{tE5 L / 2 22-~~~~~~~~. r 26- ArvcA cv 'cc scc,m.c.2r 2M 20' cc. ccccccn.cvc vancccvcccro -9 _~n( c7- 2,5/rt2r 5 ° U T H R I C 32- 3,3- cad As's Wc,cc Oa0 ccc - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~6022 25' 2i' 1-~~~~~~~~~~2,' ' 0( - o