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Bank activity: Report on sub-Saharan Africa; Bank film on slums in Recife, Brazil; Bank loans and IDA credits; Bank and IDA lending during fiscal years 1977-81; assistance to countries with less than $371 per capita

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
December 1981
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Report cites problems of sub-Saharan Africa; urges broad domestic, international actions

For the past two decades, sub-Saharan African countries have made remarkable progress in many ways. Human resources have been developed, infrastructure has been built, and new institutions have been created. Educational enrollment has increased faster than anywhere else in the developing world. Life expectancy has risen from 39 to 47 years, while child death rates have fallen from 38 to 29 per thousand. The number of miles covered by all-weather roads has tripled, opening up vast areas for economic exploitation for the first time.

Yet, according to a report released by the World Bank in September 1981, sub-Saharan Africa is in economic crisis. Between 1960 and 1979, per capita income in 19 countries grew by less than 1 per cent a year—in the past decade, it actually fell in 15 countries. Even countries that had previously grown rapidly are now having difficulties, and the outlook for the future is equally gloomy, with per capita gross national product expected to rise very little, if at all, in the 1980s.

Realization of these developments led the African Governors of the World Bank to request, at the Bank’s Annual Meeting two years ago, that a study of the region be undertaken by the Bank. The product of that study, a report entitled, Accelerated Development in Sub-Saharan Africa: An Agenda for Action, was discussed for the first time on September 26, 1981 at a meeting between African finance ministers and the President of the Bank; it was considered a day later by the Joint Development Committee of the World Bank and the International Monetary Fund.

The report complements the “Lagos Plan of Action” adopted by the African Heads of State at the meeting of the Organization of African Unity in April 1980, that outlines a framework designed to achieve a more self-reliant and economically integrated Africa by the year 2000. The Bank’s report identifies a complementary program for the next decade.

The report points out that the causes of sub-Saharan Africa’s slow growth are both many and complex: “Politically, all countries (in the region) have had to devote considerable effort to building national institutions and loyalties out of diverse regions and cultures; many countries have suffered from military conflicts; some countries have to contend with uncertain climatic conditions and fragile soils for producing crops; some started their independent life with inadequate infrastructure and few trained administrators; and rapid population growth has deprived Africa’s people of the fruits of economic growth.”

World Bank and IDA: lending to countries with annual per capita income below $371,1 fiscal years 1972-81

(In millions of U.S. dollars)

Source: World Bank

Annual Report 1981.

1 1979 dollars.

Table 1World Bank and IDA lending: fiscal years 1977-81(Ending June 30)
Fiscal year
19771978197919801981
World BankIn millions of U.S. dollars
Loan amounts15,7596,0986,9897,6448,809
Disbursements22,6362,7873,6024,3635,063
Number
Operations approved161137142144140
Borrowing countries5446444850
Member countries129132134135139
International Development
Association (IDA)In millions of U.S. dollars
Credit amounts1,3082,3133,0223,8383,482
Disbursements1,2981,0621,2221,4111,878
Number
Operations approved36799105103106
Borrowing countries3642434040
Member countries117120121121125
Source: World Bank Annual Report 1981.

Excludes loans to International Finance Corporation of $20 million in fiscal year 1977 and $100 million in fiscal year 1981. Includes amounts in fiscal year 1977 lent on Third Window terms.

Excludes disbursements on loans to International Finance Corporation.

Joint World Bank/IDA operations are counted only once as Bank operations.

Source: World Bank Annual Report 1981.

Excludes loans to International Finance Corporation of $20 million in fiscal year 1977 and $100 million in fiscal year 1981. Includes amounts in fiscal year 1977 lent on Third Window terms.

Excludes disbursements on loans to International Finance Corporation.

Joint World Bank/IDA operations are counted only once as Bank operations.

Although the report recognizes the significant progress made in sub-Saharan Africa since independence, it concludes that “a reordering of post-independence priorities is essential if economic growth is to accelerate.” A strategy for the 1980s is proposed to strengthen agriculture, both to meet domestic food needs and to increase exports, as an “essential beginning” to a process of long-term transformation toward industrialization. A doubling, in real terms, of official development assistance (from US$4.8 billion to $9.1 billion) to the region, is also advocated.

According to the report, there are three critical areas:

  • trade and exchange rate policies that have “overprotected industry, held back agriculture, and absorbed much administrative capacity”

  • planning and management of resources so that efficiency in the public sector might be increased; and

  • the “consistent bias” against agriculture through price, tax, and exchange rate policies that have discouraged local production.

The World Bank plans to give priority to sub-Saharan Africa in the allocation of funds from the International Development Association (IDA); about 30 per cent of IDA funds in 1982-86 are to be directed to the region. Lending to the region by the Bank itself will also continue to receive priority, although the volume will be limited by considerations of creditworthiness in the case of individual countries. The Bank will also expand its economic work in the region and will help form additional consultative groups for effective participation by donor countries and agencies. In addition, the International Finance Corporation is expected to provide more support to the development of enterprises in the private sector.

The tragedy of slow growth in sub-Saharan Africa is that its people are so poor and their access to basic services so limited. In contrast, the continent has vast potential that stems from its natural resources of timber and minerals, its fast-coursing rivers that can generate hydroelectric power, its ocean waters teeming with fish, and its agricultural land, ready to be exploited by smallholder families.

Yet, if present trends continue, poverty will inevitably increase, Africa will probably stagnate, and the condition of its people worsen. Without decisive changes in their policies, African governments are unlikely to invigorate their economies. And without more assistance from the rest of the world, their best efforts will be frustrated and the region’s poverty will be institutionalized for a decade and more. If that were to happen, a new generation of leaders, both in Africa and around the world, would see Africa’s development as an even more urgent task than it is now, and their starting point even less promising.

Table 2World Bank loans approved during first quarter of fiscal year 1982(Ended September 30, 1981)
Country1PurposeAmount

(In millions

of U. S. dollars)
Argentina (2)Oil and gas credit, refinery conversion300.0
Ecuador (2)Rural development, electric power117.0
EgyptTelecommunications64.0
IndiaPulp and paper industry100.0
IndonesiaHighways85.0
Ivory CoastUrban development51.0
Mexico (2)Agriculture, vocational training265.0
Morocco (2)Development banking, small-scale enterprises140.0
NigeriaWater supply67.0
PhilippinesAgriculture45.0
RomaniaTransportation125.0
ThailandProvincial roads35.0
UruguayTelecommunications40.0
YugoslaviaAgriculture80.0
Total1,514.0
Source: World Bank.

Figures in parentheses are the number of loans approved for the respective country.

Source: World Bank.

Figures in parentheses are the number of loans approved for the respective country.

Table 3IDA credits approved during first quarter of fiscal year 1982(Ended September 30, 1981)
Country1PurposeAmount

(In millions

of U. S. dollars)
India (2)Thermal power, irrigation620.0
MaliTechnical assistance6.5
MauritaniaPetroleum exploration3.0
SenegalAgricultural research19.5
TanzaniaTelecommunications27.0
Total676.0
Source: World Bank

Figures in parentheses are the number of loans approved for the respective country.

Source: World Bank

Figures in parentheses are the number of loans approved for the respective country.

New World Bank film on urban development focuses on Recife

A new Bank film, The Neighborhood of Coelhos, about the rehabilitation of urban slums and efforts to eradicate urban poverty, is now available. The film reflects the implications of the ever-increasing concentration of people in large cities of the developing world by looking at the effects of a Bank-assisted project in Recife, Brazil.

The urban development project in Recife is part of a larger effort by the Brazilian Government, supported by the World Bank, to improve the quality of “favela” (shantytown) life for approximately half a million people in the northeastern states of Bahia and Pernambuco. Basic services such as drainage, water, sanitation, roads, and electricity are being provided. The film depicts the successful efforts of the urban poor at improving their own conditions and in finding employment when such services and infrastructural assistance were provided to them.

For rental information on this 28-minute, 16mm color documentary with sound, please contact The World Bank, Audio-Visual Division, Washington, DC 20433, U.S.A.

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