DOCUMENT OF INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENTINTERNATIONAL DEVELOPMENT ASSOCIATION

Not For Public Use

Recort No. 191a-DA

ECONOMIC SITUATION

rA7kls I.[13514±LJtDL.. nuJ

DAHOMEY

August 20, 1i73

Western Africa Region

I This report was nrenpared for official use only by the Bank Group. It may not be published. quoted Ior cited without Bankc Group authorization. The Bank Group does not accept responsibility for theaccuracy or completeness of the report.

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CURRENCY EQUIVALENTS

August 11, 1969 - August 14, 1971

US$1.00 - CFAF 277.71C',A1,' 1 AflA TT(Z.k- rn0

Augustcf 14L 1971 - Februa-ry 11, 1Q7'

US$ 4t1.00 r CFAF 25.79CFAF 1,000 U uS$3.91

After February 11, 1973

US$1.00 . CFAF 230.21Cr Ar 1 IAA Tuv4i. *34.

WEIGHTS AND MEASURES

i Metric Ton tt) 2,20, lb.

1 Kilogram (kg) 2.2 lbs.

1 Kilometer (kin 0.62 mile

1 Meter (m) 3.28 feet

This report is based on the findings of a mission whichvisited Dahomey in June 1972. The mission was composed of thefollowing members:

H. Sanger Chief - General EconomistF. Holin General EconomistU. Fontana Agriculturist (PMWA)A. Elsaas Fiscal EconomistP. Gyamfi Transport EconomistG. Fossi Planning Expert (OECD)J. Bolibaugh Education Expert (UNESCO)

The report takes into account comments which have beenmade by the Government in July 1973.

In addition to the present report, the mission preparedworking papers on planning organization, agriculture and transport.

DAHOMEY

TABLE OF CONTENTS

Page No.

COUNTRY DATA

MAPS

SUMMARY AND CONCLUSIONS ...................... i - xviii

GENERAL BACKGROUND - CONSTJRAINTS ONDEVELOPMENT ......... ...................... 1

A. Introduction .... ....................... 1B. Natural Resources ................ 1

Climate and Soils ..... ............ 1C. Human Resources . ....................... 3

Population and Employment ......... 3Level of Education and Skills 5Health ............................ 9

D, Government ., ........... .. ....... 10

I RECENT ECONOMIC DEVELOPMENTS .... 13

A. Recent Developments in Productionand Income .13

Agriculture .14Industry ... .. .................... 19Services .... .... .................. 20Income Distribution .... ........... 22Conclusions - Factors of Growth ... 25

B. Financial Developments ..... ............ 27Public Finance .................... 27

Background: The BudgetaryProblem ..... ............... 27

Recent Financial Developments ..... 27The Budget (Budget de

fonctionnement) .... ........ 27Current Receipts . ............ 28Current Expenditures ......... 31Public Debt .... .............. 32Capital Expenditures ......... 33Local Governments, PublicEnterprises andExtrabudgetary Funds ....... 34

Overall Government Position .. 34Monetary Developments .... ......... 36

Money Supply .................. 36External Trade and Balance of

Payments . 39Foreign Trade .39Overall Balance .41

Savings and Investment .41Foreign Aid .42

TABLE OF CONTENTS (Cont'd) Page No.

III, DEVELOPMLNT POLICY AND PROSPECTS .... ........ 45

A. Development Planning ..... .............. 45The 1971-72 Plan and Outlook ...... 46

B. Sectoral Development Policies andProspects ........ .................... 47

Agriculture . ...................... 47Introduction ..... ............ 47Caslh Crops ..... .............. 48Food Crops ..... .............. 49Research ...... ............... 51Extension Services .... ....... 51Marketing . ..... ............. 52

Transport . ......................... 53Industry, Mining and Power ........ 56Education .. ....................... 58

Future Investment and CurrentCost of Education .......... 58

Education and EmploymentProspects ..... ............. 60

A New Human Resource Develop-ment Strategy .... .......... 62

Health ........ .................... 63C. Overall Development Prospects 64

Estimates of Investment Outlays,1973-76 ....... .................. 64

D. Financial Prospects ..... ............... 68Public Finance ...... .............. 68Foreign Aid ...... ................. 71

STATISTICAL APPENDIX

TABLE OF CONTENTS (Cont'd) Page No.

LIST OF TABLES

Summary and Conclusions:

Table 1: Recent economic developments iii

Table 2: flnsolndated statement of public finance vi

Table 3: Economic growth 1971-1978: tentative mission

pro.ectis r xiv

Table 4: Consolidated statement of government finance:

tentative targets pronosed by the mission xvi

Main text:

Table 1: Enrollment in full-time education programs 5

Table 2: Distr4bution of health services by region 9Table 3: GDP by origin, 1967 and 1971 13Table 4 o-on production, 106-1072 14

Table 5: Production of palm products by SNARDA,1966-1970 15

Table 6: Food crop production, 1965-1971 16

Labue 7: Current adlu reaL incomLe of farmers 17

Table 8: Growth of industrial sector, 1967-1971 19

Table 9: Goverrnment personnel expenditures, 1966-1972 23

Table 10: Price indices of consumer goods in urban areas,

1968-19 71 24

Table 11: Terms of trade, 1966-1971 26

Table 12: GDP--Investments and exports, 1967-1971 26

Table 13: Current government budget, 1960-1971 28

Table 14: Budget revenues, l9u6-1971 29

Table 15: Major budget expenditures, 1966 and 1971 31

Table 16: Economic classifications of budget expenditures,1966 and 1971 32

Table 17: Consolidated statement of government revenuesand expenditures, 1968-1971 35

Table 18: Monetary developments, 1967-1971 37

Table 19: Balance of payments summary, 1966-1971 40Table 20: Savings, investment, resource gap, 1967-1971 42

Table 21: Disbursements of official foreign grants and

loans by source, 1968-1971 43

Table 22: Available internal and external resources,1968-1971 4

Table 23: Planned and actual investments under the

1966-1970 development plan 45

Table 24: Projected financing of the 1971-1972 interim

plan 46

Table 25: Enrollment projections, 1971/72-1976/77 60

Table 26: Demand and supply of labor, 1973-1977 61

Table 27: Estimates of modern sector investments,1973-1976 64

Table 28: Economic growth 1971-1978: tentative mission

projections . 66

Table 29: Consolidated statement of government finance:tentative targets proposed by the mission 69

TABLE OF CONTENTS (Ccnt'd)

List nf abbhrPevtions in the text

BCEAO - Banque Centrale des Etats de l'Afrique de l'OuestBDD - Banque Dahom6enne de DeveloppementCAA - Caisse Autonome d'AmortissementCARDER - Centre d'Action Regional pour le Developpement RuralCCCE - Caisse Centrale de Cooperation EconomiqueCFDT - Compagnie Francaise pour le Developpement des Fibres Textiles

CPU - University Polytechnic CollegeEEC - Euronean Economic CommunityFAC - Fonds d'Aide et de CooperationFAO - Food and Agriculture OrganizationFAS - Fonds Autonome de Stabilisation et de Soutien des Prix des

Produits d'Exportation

FED - Fonds Europeen de DeveloppementICODA - Tndittrip CGtonniere du DahomeyIDATEX - Industrie Dahomeenne de TextileOCAD - Office de G.mmerniaiiation Agricole du Dahomey

OCDN - Organisation Commune Dahomey-Niger des Chemins de Fer et desTransports

ODAMAP - Office Dahomeen des Manutentions PortuairesSATEC - Socie-te d'Aide Technique et de Cooperation

SNAHDA - Socifte Nationale des Huileries du DahomeySOCAD - Soci6tt de Commerrci21istion pt de Credit Agricole du DahomEey

SODAK - Socifte Dahomeenne du KenafCnSAT-VTE - Scit PthAlcmprn6,nnp do Tpyti1p

SONACO - Societe Nationale du CotonC(NT ATID - Q_c4lt-8 Natna-4lern1I injI v 1p le T)ep1nnopTpemnf t PiirnI

LIST OF A\F1NEX3S

1. Present Population and Densities and Projections2. Population and Density. Projections3. Enrollment Evolution (1962/63-1971/72) and Projections (1972/73-1976/77)4. Enrollment by Grades 1971-19725. Total Population, Primary School A7e Population, Primary School Enrollments

and Enrollment Rates by Department 1970 and 19716. Evolution of Examination Pass Figures and Rates, 1962-717. Central Public Expenditure For Education by Type of Education, 1962-718. Percentage of Public Expenditure for Education by Type of Education, 1962-71

19: }Central Public Expenditure on Education by Purpose, 1962-71

11. Gross Domestic Product at Current Prices by Origin,01967-7112. Use of GDP. 1967-7113. Trends in Production of Major CropsIL. Producer Prices (CFAF/Krg.)15. World Market Price Trends for Selected Agricultural Products16. Cotton Production Bv Region17. Fish Production and Imports18. Major Companies and Business Concerns19. SNAHDDA Condensed Operating Accounts20. Turnover Index of MPior Commercial Companies21. Value of Exports by Principal Products, 1967-7122. Commodiv CGomnositAion of Imports_ 1967-7123. Quantities of Products Miarketed by OCADi - OrAD O nperatingfl Arcncont..

25. OCAD Condensed Balance Sheet26. OGDnN 'rekdown of Voliimrn of Traffic on the Railway27. OCDN Financial Itesults28. Estimates of Total Salary Payments29. Minimum Hourly Wages, SMAG and SMIG, by Geographic Regions

31. Budget Expenditures32 . Ger+.ral G-overnment E,rvnp+l-m.ern33. The Amortization Fund, Revenues and Expenditures31. xtern-l Public Debt Outstanding as'4' o 'c 31, 107035. External Public Debt as of December 31, 197036. The Tnr D.I MT r,4 , "a, e, s a niA TI.mendit + Ies37. Local Governments Receipts and Expenditures, 1968-713RQ. Transf-Lers 1LJom G-overn,mert Enterprise to 4the 'Budget and E4rbdea-Fd39. Extrabudgetary TransactionsO. r).= qumr Acco-,uts oil thei- Pluostal Chec -ng' System and of the Postal1 an-' Te'lecom-L4'. LLSIL.4. lIA.J.iL U LA LJua.L L~1ILL.I Y 0 LALI v L U4± u 0J. LIiA AJLJ

munications Office, 1967-7111. - S.marl y ACCOU-4tS of' 4the Savings_ IarQ-967-71

42. Summary Accounts of the Banking System and other Financial Institutions, 1967-71L. DLtibUU.LUIt 4 xLL ShoIrt-Terr .-CreditL uo ULhe Pri.LVat UL c L-'o. UJ.1 L,7VJVJ fL44. Summary Accounts of the Commercial Banks, 1967-71I. ff co -I i-1 i1 -r| r 1 n4 f5 7 _71L4>* vumIUmaIr y Ac cou,. us o.L IU..le v enItra-. Bar=., 1L709I I46. Summary Accounts of the Development Bank, 1967-71LU i . JBalance SheetI - BLJ.U

48. BDD Condensed Balance Sheets49. Summary of Balance of Payments 1966-7150. Balance of Payments 1968-7151. Destination of Exports 1965-7152. Origin of Imports 1965-197153. French Aid: Commitments. 1959-7154. French Aid: FAC - Sectoral Breakdown - Commitments 1959-7155. French Aid! Ge-ntral Baqnk - Dis-biursements - Repnaym.ents anrd Tiabilities n

Bills of Exchange 1966-197156 Euronpan Develonmpent Fninc- Aici57. Planned Financing of Investments. 1966-7058. Actual Investments Tn Tndi+.-ry and Yinina TI-nre the 1 = IA70 Deel7e1 Plan

59. Projected Financing of the 1971-72 Interim Plan60. Investment and m.np1om.ent in Industry and Mininrg Under the 1971-72 Interim

Plan61. Estimated Reclrrrent Costs of n b-ic Rducation 1976/7762. Estimated Manpower Demand and Supply: 1973-1977

lTnrm'r IAT_n -TAROW"

2/AREA 2. rurwaual -

27T. T dlTIon (mid-1970) 25 per k112,600 lmf- uta of Growth:2.82pa (from196D tol970 ) . per km? of arable land

POPUIATION CH CTERISTICS 11 HEALTHCrude Birth Rate (per 1,000) 54 Population per physician 39,000Crude Death Rate (per 1,000) 26 Population per hospital bed 2,200in"FnMt w-ntality (f,wr 10ln liv bhirt1h1110

INCOQI DISTRISJTION DISTRIBUTION OFLAND OWNERSHIPo Di national inC1Me, AloWet gqzuiLen of owners

highest quintile .. wved by smallest 10% of owaers

ACCESS TO PiFED WATER ACESS TO LNX of population - urban .. % of population - urban

- rural .. - rural

NITRITION EDUCATIOR 197DPer capita calorie intake per day 2,200 Adult literacy rate 7. 11

Primary school enrollment % 30

GNP PER CAPITA in l9P0 US $ 90

GROSS NATIONAL PRODUCY IN 1971 ANNUAL RATE OF GROWTH (%. constant prices)

us * Min. I 1960-83 1965a7O 1971

GNP at Market Prices , 232 100.0Gross Domestic Invastiqnt 1 ' 46 19.8Grosa National Savil,.? 26 11.2

urraent Aeo.n tal ,,Exports of Goods, NFS BO 34.0Imports of Goods, MS 106 45.7

OUTflC, LABOR FORCE ANDlRODUCTIVrrY IN 1971

Value Added Labor Force V. A. Per WorkerUS -Mln % Millions % U.

kerinulturs 99 39 O=R 55 124 69Industry 30 12 0.1 9 300 166Services 124 49 0.5 36 248 137

tctaY/lAverage 253 1tW.0 1.4 .O181 100.-o

GOVERNMENT FINANCE 1971General Government Central GovernmentKID.J 0 ous $ win.) 7 of UD_

197 197 196 -7 197 1 197 1 1966-7046.1 18.2 14.8

Current Receipta 41

rnrrrnv flA'TA -n&tunv

Sept Sept

MOh'EY, CREDIT and PRICES 1968 1969 19I7 071 1970 1971(Aillions CFAFoutseanding end period)

Money and Quasi Money 1/ 7.30 8.57 10.03 12.26 9.22 1').99Domestic Credit to Public Sector 0.48 1.13 -0.14 -0.82 -0.02 -0.59Domestic Credit to Private Sector 5.14 6.56 7.40 8.54 6.12 7.IT

(Percentages or Index Numbers)

Money and Quasi Money as 7 of GDP +17 +17 '-22 +19

General Price Index Q962z100) 2/ 125 132 134 132 139Annual percentage changes in:

General Price Index 5.6 1.5 5.3

Bank credit to Public SectorBank credit to Private Sector *28 +13 +15 *16

4;

BALANCE OF PAYMENS MERCHANDISE EXPORTS (AVERAGE 1969-71)3/ 4/

1969 1970 1971 PS $ Mln

Palm product 13.0 38

Exports of Goods, NFS-, 59.3 70.5 80.3 Cotton 6.4 7•Imports of Goods, NFS' 87.8 93.9 1D6.4 Cocoa 6.9 20

Resource Gap (deficit = -) -77.5 -2r74 -2trr

Interest Payments (net) -2.3 -2.8 -3.4 All other conmodities z 7 zi23Workers' Remittances Total 34.0 I09))

Other Factor Payments (net)Net Transfers 19.4 21.8 ,. EXTERNAL DEBT, DEGEM ER 31, 197iBalance on Current Account -11.4 -4.41

US $ M1LIDirect Foreign Investment 4.5 5.7

Net ?LT Borrowing ) rublic Debt, inLl. guareateedDisbursements ) Non-Guaranteed Private DebtAmortization ) -2-_ Total outstanding & Disbursed

Subtotal ) 6/Capital Grants ) DEBT SERVICE RATIO for 1971W-Other Capital (net)Other items n.e.i .,j A -Increase in Reserves (+) -2.5 8.0 9.1 Public Debt, incl. guaranteed 5.2

Non-Guarenteed Private Debt

Gross Reserves (end year) 7.6 15.5 24.6 Total outstanding & Disbursed-NeD-.-Rese,ys end vear) 4.3 12.9 19.6

RATE OF EXCHANGE IBRD/IDA LENDING, February 1973 (Millions US $)

Aug.1l/69-Aug.14/71 At.ia14/71 - Feb.1173 TRBn TIDA

US $ 1.00 - CFAF 277.71 US $ 1.00 CFAF 255.79CPAF 2,000 = US$3.60 CFAF 1,000 = US$3.91 Outstanding & Disbursed -

Undisbursed - 3.4After Feb.11/73 Outstanding incl. Undisbursed - 3.-

Us S l Co = CFAF 230.207CPAF 1,000 -,US$4.34

1/ Domestic credit to Governrment (net).2/ Urban areas only.3' P -'^age rate of exchange US$1.00 - CFAF 258.09.

/ e:tative estimate.51 nldn neorde trae.

F1 Debt service payment as a percentage of exports of goods and non-factor services.

not available

not apolicable

TRANSPORTATION SYSTEM IRRD 2950

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ADMINISTRATIVE REGIONS C ° RAND POPULATION DENSITY BY ' | NIGERIA

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INHABITANTS PER SQUARE KILOMETER I I Boundaries

250 or more __..-Sub-District Boundaries0 - 249 "-i3 Department Capitals

50 - 99 l t hrAl; J j_*_Administrotive Centers of Sub-District

30- 49 otional Capitol

-20 - 29 . onternational undaries

Less than 10 1 4' 0 5 00 500

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ECONOMIC SITUATION AND PROSPECTSOF DAHOMEY

SUMMARY AND CONCLUSIONS

Introduction

1. With a per capita GDP of only $90, Dahomey has been classified bythe United Nations as one of the 26 least developed countries of the world.Apart from its geographical position which has favored the development of

transit trade with its neighbors, Dahomey has rather limited natural resources.

Mineral resources are few and none are exploited at present. Climaticconditions limit the cultivation of high-value tree crops such as coffee

and cocoa, and yields of natural and selected oil palms, Dahomey's majorcash crop, are generally lower than in neighboring countries. The country'smain natural resource is land. About 80 percent of the land area could be

brought under cultivation but at present, only 12 percent is being exploited,mostly by small farmers who use traditional cultivation methods. In some

areas in the densely populated south, soil fertility has been decreasingbecause of over-exploitation. Nevertheless, there is considerable scope for

agricultural expansion and the yieldB of land currently under cultivation

could be significantly increased with improvements in existing methods.

2. Dahomey's population amounted to about 2.8 million in 1971. Annual

population growth has increased during past years and is now estimated at

2.8 percent. Overall population density averaged 25 persons per kmz in 1971.Regional population distribution is very uneven, varying from 120 inhabitants

per kmI in the three coastal departments to less than 12 in the northern pro-vinces. Only 11 percent of the population live in towns. However, migration

of people from rural areas to the towns is being stimulated by the growingdiscrenancy hetween rural and urban living conditions. While income dispari-ties between the rural population of the north and south have been somewhatreduced as a result of rapidly expanding cotton production in the north, the

income gap between the rural and urban societies has grown. Farm families,who make up the bulk of the population, have incomes of only $58 per capita,

whereas average incomes of the rest of the population are estimated at six

times this amount. This imbalance between the towns and the countryside, andthe lopsided pattern of public spending which aggravates the contrast, is one

of the key nroblems of Dahomey's future economic development.

3. Political instability has plagued Dahomey since it obtained inde-

pendence in 1960. During this period, the nation has had ten governmentsand five of these, including the nresent one; have been headed by army officerswho seized power in successful coups. On October 26, 1972, the Presidential

Council, which had coe into power in early 1970, was overthrown by a militarycoup. The Presidential Council was composed of the three rival leaders of

the co-untry who were each to tRake turnrs in holding the office of Head of State

for two years. President Maga of the north served the first term from May 1970

to May 1972, and President Ahomadegbe of Dahomey's central region, was in powerwhen the Council was ousted. As a result of the coup, a military governmentwas formed, headed by Major Kerekou.

4. The political instability of the first decade of independence partlyreflected traditional antagonisms between Dahomey's three provincial regions,i.e. the north, south and center. Dahomey's problems have been aggravated bythe difficulties of integrating returning civil servants from other WestAfrican countries into the economy (mainly into the public sector), budgetarydifficulties and growing urban unemployment. Finally, trade unions have be-come increasingly successful in defending the interests of public employeesand private wage earners.

5. The frequent change of government during the past decade left theeconomy without clear leadership. Useful programs in export agriculture andinfrastructure were implemented by special development agencies such asSONADER and by French technical assistance organizations. However. largeareas of the economy, such as domestic food crops, rural health and educatior,marketing in ruFal areas, etc.- remained in dire need of government action.At the same time, the management of public finance remained quite weak.Social pressures led to an inflated number of government servants a..d to anexcessive concentration of government spending on formal education of a muchtoo academic tvye.. curative medicine and other items which reach only a smallpart of the population and which show only remote prospects of yielding accel-erntpd Peonnomic nroress Government snending for the improvement of rurallife and the promotion of non-export agriculture remained negligible. Theexcessive growth of total expenditures raused budgetarv difficulties throughmost of the 1960's, which could only be solved with foreign budget support.

6. The new government wishes to bring firm leadership to the manage-ment of publIc affairs. Its prime goal appears to be the nrnmntion of thesocial and economic development of the country, and the assertion of itspolitical and economic independence. In the fisc-a- fild, the oGovernment'saim is to end corruption and wasteful expenditures, to improve tax collec--tion and to bring the budget into balance as soon as possible. A few ener-getic measures show the serious determination of the military government inthis respect. Ho-wever, th-e Governhent stl I .needs to work out a co.sisternt

set of economic development objectives and policies.

Growth and structure of the economy

7. The following table provides a summary of the main structuralfeatures of Dahomey's econorwy and gives an indication of recent growth trernds.

- iii -

Table 1: RECENT ECONOMIC DEVELOPMENTS

(In CFAF billions at current market prices)

1967 1971 Average annualgrowth rate

Amount % Amount % 1967-1971_

Primary sector 21.6 40.6 27.2 38.7 5.9Secondary sector 5.2 9.8 8.6 12.3 13.4Tertiary sector 26.3 49.6 34.4 49.0 6.9

GDP 53.1 100.0 70.2 100.0 7.3

Gross domestic investment 9.0 17.0 13.2 18.8 10.1Gross domestic savings 2.1 3.9 7.1 10.1 36.0

Exports goods and non-fctonr sprvieip 8.8 165 19.1 27=2 21,0

Imports goods and non-fActor servires 15.7 29.6 25.2 35.9 12.6

Resource gap 6.9 13.1 6.1 8.7 -3.0

Source: Dahomey National Accounts and mission estimates

8. The mission believes that the contribution to GDP by the subsistencesector is underestimated in the official national accounts. Tentatively, wehave increased this contribution to provide a better approximation of itssigr.ificance. Obviously, this adjustm*r 4t i8-made for illustrative purposesonly and it does not take the place of a serious statistical reassessment ofthe activi4ties of the subsiste"e sector:. Ac4o:ding to our estimatIon, theprimary sector accounts for 39 percent of GDP. Most of this sector consistsof agriculture w-hIch provides a livelihood to m.ost of the 89 percent of thepopulation living in rural areas. Livestock and fisheries have remainedunfl.pJortant . TWLow calV LLs crops , cottoL anu palm oL.L. h Iave expnde iVgo r s

since the mid-sixties. Nevertheless, most of agricultural production continuesto consist of food crops which are grown for subsistence on small plots withtraditional cultivation methods. Apart from a few successful developmentprograms for specific crops, productivity ir agriculture has

9.* The sec.11 -,dary sector--industry, construct'on an' power--accounts 'oronly 12 percent of GDP. The small size of the domestic market limits thescope for industrialization. rianufacturing production has receUnly FLUWL1rapidly from a small base, due to the completion of a few processing plants(cotton ginneries, palm oil mills), and or import substiEuting plants. Theconstruction industry has also flourished in recent years due to increasedinvestment activities in the public and private sector.

10. Dahomey's tertiary sector--transport, trade and public administra-

tion--is unusuall-y large, accou"nting for 49 percent of GDP. The main explana-

tion is Dahomey's geographical location which has favored substantial transit

trade with its neighbors, particularly Niger and Nigeria, and the large size

of the public administration.

11. In the first years after independence, neither the Government northe private sector were ready to tackle the counrtry's development possibili-ties. For a number of years, the economy stagnated; GDP growth during 1963-67

was 4 percent a year in current prices and only half as much in real terms.

In the following years, however, growth accelerated. During 1967-71, with thehelp of certain fortuitous factors, GDP rose to over 7 perce,,t in currentprices and about 5 percent in real terms. Border trade with Nigeria shot upowing to temporary scarcity of imported goods in that country in the wake ofits civil war. At the same time, export prices for palm oil and cotton

reached a peak. The resulting terms of trade improvement directly exp±ainsabout one-quarter of GDP growth during 1967-71, and indirectly an even larger

proportion of growth because of the impact of the trade boom on other economic

sectors. But growth also had a more solid base in the establishment, after

the mid-sixties, of substantial cotton and oil palm plantations and a numberof industrial ventures. Transport improvements during the same years also

furthered economic growth.

12. Information on investment and savings is, at best, fragnentary.

Little is known about investment and savings in the traditional sector

(mainly traditional housing construction and land improvement, but also self-

financed investments in small shops). The size and disposition of private

modern sector savings is also poorly known. In spite of this lack of informa-

tion, there is sufficient statistical evidence, particularly in the decline

of the external resource gap, to indicate that there has been a significant

change in the savings-investments picture. According to tentative estimates

partly prepared by the mission, investment has grown by 10 percent a year

during 1967-71, rising from 17 to 19 percent of GDP. The savings rate, ex-

tremely low in 1967 at only 4 percent of GDP, rose even faster, reaching 10

percent of GDP in 1971. About half of the savings increase is explained

by the rise in public savings which, in turn, was due to soaring tax revenue

on foreign trade. In spite of this decline in the resource gap, Dahomey

remains highly dependent on foreign resources for the financing of its devel-

opment program. Even in 1971, the net inflow of foreign resources still

amounted to 44 percent of total investment. Since modern private enterprises

and banks deposit part of their liquid funds abroad, the gross foreign inflow

must have been even larger.

13, External economic relations are of great importance to the small

and open economy of Dahomey. Foreign trade fluctuations and changes in the

' ril`i y of aid largely determine the overall expansion of the economy

and the condition of public finance. Foreign trade (exports plus imports)amounts to over half of GDP. Much of foreign trade (about 20 percent) is

with neighboring countries and a large part of this goes unrecorded. Overall,

foreign trade shows a large deficit, which, together with a net deficit on

non-factor services, leads to the earlier mentioned resource gap of some 9

percent of GDP in 1971.

- v -

14. I.T aspite of the lagea vresiorce can its finar.cir.g has not precsnteA

difficult liquidity problems for Dahomey. Ever since independence, the Gov-errmen.t has been able to obtain large amounts of extern-al assist-ance, partic-ularly from France and the European Economic Community. Moreover, a fewlarger industra4l ventures have attracted pri4-va foreg4n 4--+----nt Pr-*doxically, in view of this dependence on outside financing, autonomous publicentities have been increasing their deposits with the banking system duringthe last several years. Partly as a result of these deposits, the foreignreserves or Dah _e irUte cer.;ral 'ank inceae frmCFF2 b'lJr eir. 1 -916I

I. ~ VV~L JJ"LIvLJA1Y L&1I1 LII L JLL± U IIl LncreatseU' Lro-il L..LVKr Z) v.L.L±Uon '±n1 IUto CFAF 7.3 billion ($29 million) at the end of 1972-the equivalent of fourmont S. S 0 f I7'1 .2.

.ILtl Us I 7, I LIports .

Public finance

alnce .LU aepeluoeme, Dahomey's successLve governmients have beenbeset by severe budgetary problems. During the early and mid-sixties, currentbuge deficits_s____ss ___ ev___ _a_r _. m su-u-1 _% reict we_r_ebudget deficits usual| ly exceeded 20 percent of revenue. These deficits werelargely financed with French budget support. Budgetary problems began imme-aiately after independence witn tne integration into the Dahomean civii serv-ice of 2,000 nationals who had served in French colonial administrationselsewnere in West Africa. From the start, the country had a plethoric civilservice, a feature which became more pronounced by the subsequent, almostautomatic, recruitment into the civil service of high-school and universitygraduates. The expansion of the number of government employees has been oneof the main causes of the government's budget deficits.

16. To protect the functioning ot vital public activities, the Govern-ment, meanwhile, increasingly resorted to earmarking tax revenues to inde-pendent public entities in charge of road maintenance, port management,commodity stabilization, public debt service, etc. For a full analysis ofpublic finance, the financial outcome of the ordinary budget (budget defonctionnement) therefore has to be consolidated with the results of thesespecial funds and public entities. A consolidated statement of public financeestablished by the mission shows that in recent years the overall financialoperations of the Government have had much more favorable results than thoseof the current budget alone. The acceleration in economic growth during1967-71 and, in particular, the export boom during these years, contributedto a substantial improvement in public finance, which led to the earliermentioned rise in official reserves. In 1972, however, economic growthslowed down and the public finance situatioq deteriorated again. Early in1973, the Government took a number of austerity measures to ward off afurther decline in the financial situation. Developments during 1968-72 aresummarized in the following table:

- vi -

Table 2: CONSOLIDATED STATEMENT OF PUBLIC-FINANCE

(In CFAF billions) (In Percent of GDP)1968 1969 1970 1971 1972 /a 1968 1969 1970 1971 1972 /a

Revenue 7.3 8.5 11.4 12.4 12.4 13.1 14.2 17.2 17.7 16.8(incl. ear-markea taxes)

Current expend-iture 7.1 8.2 9.2 9.9 11.4 12.7 13.7 13.9 14.1 15.5

Governmentsavings 0.2 0.3 2.2 2.6 1.0 0.4 0.5 3.3 3.7 1.4

Debt service 0.2 0.8 1.1 0.6 0.5 0.4 1.3 1.7 0.9 0.7

Investment(excluding for-eign aid) 0.6 0.7 0.6 1.4 0.8 1.1 1.2 0.9 2.0 1.1

Overallbalance -0.6 -1.2 0.5 0.6 -0.3 -1.1 -2.0 0.8 0.9 -0.4

/a Preliminary estimates

Source: Ministry of Finance and mission estimates

17. Since the mid-sixties, government revenue has proven to be quiteresponsive to economic growth. The proportion of government revenue to GDProse from 13.1 percent of GDP in 1968 to 17.7 percent in 1971, a high levelfor a country at Dahomey's level of development. 1/

18. Foreign trade taxes, particularly taxes on imports, are still themost important element in, the revenue structure. Total foreign trade taxesamounted to 54 percent of ordinary budget revenue in 1971. To keep in linewith tariff levels in neighboring countries with whom Dahomey is trading,the Government lowered, in the last four years, import duties on a numberof high-dutied articles such as liquor, tobacco and textiles. Moreover,increasing amounts of equipment and raw materials were exempt from importduties under the provisions of Dahomey's investment code. The result was adrop in import tax revenue from 30 percent of total import value in 1966 to

1/ The average proportion for francophone Western Africa is 16.4 percent0This average includes many countries with higher per capita GDP thanDahomey.

- vii -

23 percent in 1971. However, in view of the rapid increase in imports andin total receipts from import duties, it seems that the Government accom-plished the final purpose of the import duty adjustments.

19. The fastest growing element in the revenue structure are directtaxes. Revenue from this source tripled between 1966 and 1971, and nowrepresents 20 percent of ordinary budget revenue. This remarkable achieve-ment was due to the introduction of a withholding tax on wage payments andof improvements in revenue collection. Until recently, many tax payers,particularly traditional traders, were able to evade most or all of theirtax obligations. Tax enforcement was lax. Establishment of a special bureaufor tax collection and of a special police force to assist in the enforce-ment of tax laws has, however, led to improved collection. A further measurewhich should contribute to the improvement is the recent creation of atraining center for tax officers.

20. Current expenditures increased much slower than revenue until 1971.The overall level of government current expenditures in that year was 14 per-cent of GDP, which would not appear an excessively high proportion for a countrylike Dahomey. However, in 1972, a 15 percent increase in current expendituresoccurred and the 1973 budget indicates a further large increase. This upsurgein current expenditures is a major factor in the recent deterioration of publicfinance.

21. While recent expenditure growth is clearly outstripping the growthof government financial resources, the main cause for concern is not so muchthe total level but rather the composition of current expenditures. Alloca-tions for materials and supplies are far too small (only 15 percent of theordinary budget) and have remained practically unchanged from one year tothe next. Lack of supplies has made it increasingly difficult for the Govern-ment to operate its schools, hospitals, agriculture and livestock services,etc. Allocations for personnel. however, have doubled since the mid-sixtiesand now account for over two-thirds of current expenditures. Personnel ex-penditures accounted for 90 percent of the increase in total current ex-penditures during 1966-71. According to official data, the number of govern-ment employees rose at the moderate rate of 3 percent a year, which wouldimply that most of the increase has been due to an 7 percent annual increasein average navments per employee.

22. Since 1964. the Government has kept the salary scales of its person-nel unchanged, and in 1966, it even decided to indefinitely delay paying civilservants their annual salary increases. However, the rapid rise in averagepayments per employee raises serious doubts regarding the effectiveness oft-hpsp meastires Mont of the increase in Dersonnel expenditure has been dueto staff promotions to higher ranks and increases in nonsalary benefits.Apnrt frnm hnt,Qina qnd rar allnwnnces the latter include familv allowanceswhich reach a maximum amount of CFAF 6,000 per month for officials with sixor more children,

- viii -

23. Fulfilling a promise made last year by the Presidential Couuncil,

the military government increased civil service salaries in January 1973 by

half of the annual salary increase due but unpaid since 1966. This measure

added CFAF 780 million, about 6 percent, to ordinary budget expenditures

and will even further raise the proportion of personnel expenditures.

24. In the functional classification of budget expenditures, education

has become the largest item claiming, in 1971, 25 percent of ordinary budget

expenditures. It is followed by general administration (20 percent), defense

and security (18 percent), health (12 percent) and economic services (8 percent).

25. Education expenditures are not only the largest but also the fastest

growing budget item. Considering the large share of resources devoted to edu-

cation, results have been disappointing on several counts. Only 30 percent

of the school-age population attend school and these are heavily concentrated

in the more populated south and in the cities. In the rest of the country,

few children attend school. The number of repeaters is high and many students

drop out before they have finished school. Originally imported from France,

the education system does not prepare students for life in a largely rurai

developing country. Graduates therefore tend to look for jobs in government:

service or in the small private modern sector, and for this purpose, they

often move to the cities. Since job offers are scarce, many of them remain

unemployed.

26. Aware of the deficiencies of the schools and their growing financial

requirements, the Government has begun studying ways in which to adapt the

system to the country's development requirements and financial means. It has

implemented a limited program to "ruralize" a number of schools but this pro-

gram has not been entirely successful. Farther reaching reforms are however

being studied by a reform commission appointed by the Government.

27. The health system, which also claims a sizeable amount of government

finance, shows similar shortcomings. In spite of the emphasis put in official

statements on preventive medicine in rural areas, public health funds are

largely spent on curative medicine, particularly on the operation of urban

hospitals. To some extent, this is due to the relatively easy availability

of foreign aid for this type of medicine. Meanwhile, immunization and other

treatment of endemic diseases in rural areas are being neglected. Increased

attention therefore needs to be devoted to the training and equipment of

para-medical personnel who can extend preventive health care to the urban

poor and the rural people.

28. While the social sectors--education and health--are claiming a large

share of resources with a strong bias in favor of the small urban economy,

zen- expernditure allocations for agriculture and rural development remain

small In the 1972 budget, they amounted to only CFAF 0.7 billion, about 6

percent of the ordinary budget. This figure does not include foreign finan-

cial and technical acssistsance for agricultural development which have been

substantial and which have permitted rapid development of export agriculture.

- ix -

29. The most important needs in fiscal management would thus appear

to be the curtailment of growth and the re-allocation of current expenditures.At present, current expenditures emphasize personnel expenditures rather thanthe provision for materials and supplies, and urban rather than rural areas.Again, within social sector expenditures, there is a pressing need for reformsand redirection of effort.

30. Largely owing to the favorable development of the economy during1968-1971. overall financial results, as shown in Table 2, improved considerably

and the Government was able to achieve overall public savings which were suffi-rient to finance debt service and a small part of public investment. In1972, when trade fortunes fell, public savings declined and the Government

hAd an nver11 dpfirir. Although this deficit was sm,11 it gave nrnaf thatthe budgetary equilibrium achieved during 1970-71 was entirely due to favorableexnnrt condtitinn and th-at t-he Gnvernment had nnt used the temporary prosneritvto put its finances in order. Current expenditures had continued to grow atalmnot th.irc t-he rnP grnotrh rAte. As cnnn as revenue grnwith derlined. the

familiar budgetary problems returned to the scene.

Development prospects

31, Since independence, successive governments have officially adopteddevelopunn..ent plans { S/iD 1OC.J7fl 1O71-792 as nuides for -overnmnent action.

LI~VC tS~UL L*t ~ \A J- kJi , -- - S I 4_ ao -_ - - 1In practice, these plans have had little impact on actual decision making.c.)ome of thLe mos4 Lt -.- L-- 4L poJJct-. n.0 -..lL '. inL saI d not fo. pa -rtof any development plan, while other projects which were essential parts oftLI plan Jin.JL ULL.tILLFCUII|.-. More g erally , -c-l-LLL - -ClJ .makln ,

including the formulation of the government budget, was less determined bytLILe developrment l p.Lani'Lan 4)7 Jolitcal -intluences and LtLhe w4l lingness offoreign donors to finance certain types of investment and technical assistance.

32. Due to the numerous changes in Government, the planning officelacked the necessary authority to beco,m,e a-- cective center oL Lecisionmaking and to coordinate the economic activities of other ministries. How-ever, largely independent from the planning office, successful developmenthas taken place in cotton and oil palm production. This was mainly the resultofL th'e successf'u'l activities of gover.-ment agenc-ies suchi- as 0n?JAN^VE an of

technical assistance agencies. There has also been rapid development inindustry wnicn was mainly thLe resuLt of the inLtiatXLves of the private sector.The Government contributed to this development by maintaining a liberal invest-ment climate and providing tax incentives, ratner than by directly initiatilngindustrial projects.

33. The new Government has attached the planning office to the Office ofthe President. This decision is expected to enhance the status and authorityof the planning office and to provide the basis for more effective coordinationwith the rest of the Government and with foreign aid donors. The Government is

trying to improve the links between the officials in charge of budget prepara-tion and the planning office through the establishment of an interministerialcommittee in which the planning office is represented.

34. At present, the Government is still drafting its development planLor thLe years 1973-76. Ins yet, litle is ko L, bout theL actuaL prOJeCt coL-1

tent of this plan or the major policy options which will be chosen by theoenm_e __L___Tnt. _LI,I.-V _Wr th_,L _i Jfignal. d wil U= W_6 La_ 1. _6CLL%A LILL ___JA

and the composition of the plan, the mission believes it should reflect atleast Lour .L pUoLLa-LL straLLtegic e-l1L WLmentLs whlich derive from tLhL Le actual level OLdevelopment and the major constraints the economy is facing. These elementsare: acnievement of a hbetter rural-urban bUa'lance, reUuctiLon ofI thLie count:ry'sdependence on aid, diversification of exports and domestic production andincreased trade with neighboring cOunttiesQ In addition, there is the vitalneed for improvement in the management and allocation of public funds whichhas already been mentioned.

(i) Better distribution of development efforts between rural and urbanareas. With few mineral resources and a small domestic market, Dahomey's;main development opportunity is agriculture. The scope ror industrial develop-ment will remain limited for a long time and mainly a corollary of agriculturalproduction. in spite of this obvious need to accord priority to agriculture(and to livestock and fisheries for that matter), public spending has in thepast neglected the rural areas. The result has been that agriculture, apartfrom a few export crops, has languished and that young people have been movingto the cicies. With 11 percent of tne total population, the cities are stillsmall and migration to urban areas has not yet reached the level attained inmany other coastal countries. Yet, all incentives are present for an acceler-ated rural exodus in the near future, and available evidence suggests in factthat such an acceleration has already begun.

(ii) Reduction of the economy's dependence on foreign tinancing. Oringto Dahomey's poverty, prospects for increasing the overall savings rate arelimited and foreign finance will remain an important element in Dahomey'sinvestment financing. Yet it should be possible to prevent the savings ratefrom sliding back to the low level of 4 percent of GDP prevailing in the mid-sixties. As will be discussed, the Government should be able to maintain amodest level of government savings and proper management should also allowpublic enterprises to realize savings. In the private sector, a large propor-tion of savings is customarily transferred abroad by the management of foreign-owned enterprises and by expatriate personnel. To some extent, this courseof events is unavoidable in an open economy such as Dahomey which has a largeforeign element in its modern private sector. The Government could encouragethe private sector however to reinvest its savings in Dahomey, chiefly byimproving deposit conditions in local banks and perhaps by the creation ofattractive investment paper for subscription by private companies and individuals

(iii) Diversification of exports and domestic production. Dependenceon foreign markets and particularly on world market conditions for palm oiland cotton will also prove an abiding feature of the Dahomean economy. Never-theless, whatever prospects exist for diversification of export markets shouldbe diligently investigated and exploited. This includes the possible develop-ment of industrial exports (e.g. textiles) and perhaps of tourism. More im-

- xi -

portant, however, the Government should strongly increase its emphasis onthe development of the nonexport sector of the economy: the production ofdomestic food crops, the development of livestock and fisheries, the processingof agricultural products, and the further identification of import substitutionprojects.

(iv) Dahomey can also reduce its dependence on uncontrollable externalcircumstances by increasing its trade with neighboring countries. Transittrade and transport have been two imnortant factors in the growth of theDahomean economy. Maintaining the importance of these sectors will requirecontinued efforts to improve and rationalize transport links, particularly withNiger. Moreover, special efforts are necessary to promote the regular ex-change of goods and services with Nigeria. The Nigerian economy, which isbound to expand greatly, will, in the long run, not only provide a source ofall tvnes of imnnrts at competitive prices, but could also offer Dahomeyinteresting opportunities for export of food crops and processed agriculturalnrnducts,

35. In the light of these observations on development strategy, progressin three key sectors: agriculture, industry and transport, will now be brieflyreviewed.

36. In agriculture, development effects h.ave been concentrated on thLepromotion of cash crops. Only in recent years did cash crop projects includefood crop components. This recent change was partly prompted by the factthat domestic food supplies have periodically fallen short of demand in cer-tain parts of t1he courtry. 'I'here 'Ls aLreadly sorue evUeidLce that neglect ofLfood crops is jeopardizing cash crop production as well, since farmers tendto work for cashL onLy whe. their fLoo supplies are assureU.

37. The dominrant cash crops are palm oil and cotton, and both haveexpanded quite rapidly since the mid-sixties. Production of palm oil pro-ducts has groLw by an average rate of 26 percent and now accounts for 40 percentof export earnings. In 1972-73, however, production dropped due to the droughtand the next harvest is likely to be srmall for the same reason. Tne economicsignificance of this drop is much greater than indicated by the export figuresince at least t-wo-thi'rds of production is not brougnt to market but usedfor subsistence. Natural palm groves still account for the greatest parto' production, but with the ageing of trees, yields will tend to decline andthe feasibility of rehabilitation remains to be demonstrated. During thesixties, about 30,000 ha were planted with high-yielding trees. Productionfrom this area has thus far been disappointing (about 40 percent below tar-get). This is due to the drought in recent years, but also to poorer thanexpected soil quality in project areas and difficulties with the cooperativemanagement of the plantations. Further planting will be at a smaller scalethan in the past. Better planting areas can perhaps be found in bottom landsnear the Mono river.

- xii -

38. Cotton has proven to be the most dynamic element in Dahomey's agri-culture. Production increased from 6,000 tons in 1965/66 to 47,000 tons in1971/72 and a further increase is forecast to 84,000 tons for 1976/77. Cottongrowing areas have been established throughout the country and 40,000-50,000farmers, roughly half of the total in these areas, are growing cotton andderiving from it substantially increased cash incomes. The success of thiscrop is due to efficient extension services which supplied farmers with improvedseeds, rertilizer and insecticides, and established a satisfactory marketingmechanism. The ongoing Zou-Borgou project includes the cultivation of rice,maize and sorghum to be grown in rotation with cotton, thus benefitting fromthe fertilizer applied to cotton. The project will also promote the use ofox-drawn equipment in predominantly agricultural areas.

39. As yet, no other major cash crop possibility has been clearly iden-tified, but in view of the need for export diversification, efforts to identifysecondary cash crop projects have been given high priority. Projects understudy include cashew nuts, kenaf and coconuts. The scope for coffee rehabili-tation and expansion, although probably limited, also deserves consideration.None of these proiects are likely to enter production before the late 1970's.

40. Among food crops, rice has good prospects. Good varieties areavailable and since cultivation is on bottom or irrigated lands, it is lessdependent on rainfall than are traditional cereals. About 3,000 ha of landwill be irrigated by the mid-seventies. Rice production is expected to in-crease rapidly, reducing Dahomey's dependence on imports. Further rice devel-opment should proceed along an overall rice development plan which shouldtake stock of the Dossibilities of cultivating bottom lands. Many of thesecould probably be exploited at a lower investment cost than the expensiveirrigation schemes- Maize is another cereal nroduct with favorable nntpntlalIts cultivation is included in the Zou-Borgou Cotton Project.

41. Dahomey's industrial sector consists of about 25 plants engaged inagricultural processing (cotton ginning, palm oil milling), in the productionof light consumer goods (beer, soft drinks, shoes, paint, textile printing)arnd small assembly plants (bicycles, cars). Although recent growth has beenrapid, the impact of manufacturing on the economy remains limited. In 1971,manufacturing co.tributed only 5.5 percent to GDP (2.6 per.ent in 1967) andlemployed only 2,000 people. The fact that some expatriates' salaries as wellaa j.A UtE * .). V- ).A *s > DL=A. . L V1 .)) A. ; .G L A W LLfl. -LA.CS GUL'A LJU A. LL *lCL A. rUULet 61importance of industry in the Dahomean economy.

42. Prospects for further industrialization remain circumscribed bythe s.-ualil size of thLe Aomest ic muark-e-,A LI"tLLJL LL A L . let, there are possibilties 'orfurther industrialization which should be pursued. Currently, capacity isbeing expanded irn a few existing lines (palm oil umilling, cotton ginning,beer brewing, shoe manufacturing). A $23 million cotton textile plant isunder construction; almost all of its production (grey clotn, Ded sheets,garments) is to be marketed in Europe. A sugar project to cover the needsof tne aomestic market 'about 30,000 tons' is under study. The Government

- xiii -

furthermore hopes to find sponsors and assured export markets in Nigeriaor other neighboring countries for a cement plant of about 300,000 tonsbased on limestone deposits near Onigbio, close to the Nigerian border.In its review of the industrialization prospects, the Government shouldevidently continue to explore the remaining scope for import substitutionand agriculture processing. However, emphasis should increasingly be givento the study of export-oriented projects such as the textile project, andto the scope for closer economic cooperation with neighbors, particularlyNigeria with its vast economic potential. Meanwhile, most industrialenterprises benefit from almost complete tax exemption under Dahomey'sinvestment code and, in some instances, from concessionary credit terms. TheGovernment is currently reviewing the provisions of the investment code.The mission believes that the revision of the code should be such that noenterprise will be granted tax exemption unless it shows definite promiseof eventually being able to withstand foreign competition.

43. In transportation, the main needs are improved management andcoordination. The present network, including ongoing projects, serves themain needs of the country reasonably well. The most important part of thenetwork is the rail-highway link between Cotonou and Niger, the "DahomeyRoute", which carries 45 percent of Niger's foreign trade. Of lesser butgrowing importance is the Nigeria-Dahomey-Togo-Ghana road link. The Govern-ment has given high priority to transport improvements and for this purposehas received aid from various sources, including IDA. Decisions have thusbeen taken to ensure the improvement of most of the important transportconnections and improvements have been made in highway and railway mainte-nance. One of the remaining major transport projects is the expansion ofthe Cotonou harbor facilities. In recent years, the railway has beenoperating at a profit. To withstand competition between the Dahomey Routeand other routes to Niger (possibly the Niger river once its navigabilityhas been improved), Dahomey should try to reduce transport costs, mainlyby further rationalizing the railway. This can be achieved by reducingpersonnel costs through attrition, closing secondary railway stations andlimiting railway investment to essential track strengthening and equipmentrenewal. There is also room for improving the coordination of operationsof the Cotonou harbor and the railway in order to avoid storage costs atboth ends of the railway. Finally, in the evaluation of highway projectsparallel to the railway, the authorities should take into account possiblelosses caused to the railway be traffic diversion.

44. Modernization of Dahomey's principal transport network will havebeen achieved with the completion of ongoing projects and a few proiects stillunder consideration, including the Cotonou harbor project. The next stage intransnort develonpment will be the improvement of secondary and feeder roads.Remote rural areas still need improved access to markets. This type of invest-ment should be closely linked with agricultural planning.

- xiv -

Projections of overall economic growth

1 5. The mission has prepared tentative projections of economic growthduring 1971-1978 based on an analysis of the main sectors of the economy andof market prospects for the principal export products. The projections arein constant and current prices. The latter assume a 2 percent annual pricerise of non-export products and of imports. Projections of this nature are,of course, subject to wide margins of error. In this particular case, evenmore guesswork was needed than usual since there are no official nationalaccounts for recent years nor a development plan covering the next severalyears. The mission, nevertheless, believes that the projections provide anillustration of major growth trends and of the nature of the financing prob-lems arising until 1978. The following table provides a summary of the pro-jections:

Table 3: ECONOMIC GROWTH 1971-1978: TENTATIVE MISSION PROJECTIONS

(In CFAF billions) (In % of GDP)Annual average

1971 1978 growth rate 1971 1978

(AT CONSTANT PRICES)

Primary sector 27.2 34.7 3.5% 38.7 37.0Secondary sector 8.6 13.1 6.2% 12.3 14.0Tertiary sector 34.4 45.9 4.2% 49.0 49.0

GDP 70.2 93.7 4.2% 100.0 100.0

(AT CURRENT PRICES)

GDP 70.2 102.5 5.5% 100.0 100.0

Exports 16.4 23.3 5.2% 23.4 22.7Imports 23.1 32.1 4.8% 32.9 31.3N.f. services 0.6 - 0.9 -

Resource gap 6.1 8.8 5.4% 8.7 8.6Grnsq domestir investment 13.2 18-6 5.0% 18.8 18i1Gross domestic savings 7.1 9.8 4.7% 10.1 9.6

Terms of trade 100 90Foreign exchange loss

due to decline interms of trade 3.6 3.5

- xv -

46. As the table shows, the mission believes that GDP growth in realterms will slow down from about 5 percent a year during 1967-71, to 4.2 per-cent during 1971-78. The slowdown in the growth of real income 1/ will howeverbe more severe. This is due to the expected deterioration of Dahomey's termsof trade by about 10 percent during this period. According to our estimations,GDP in real terms adjusted for losses caused by terms of trade deteriorationwould increase by only 3.6 percent a year. Factors leading to slower growth are:

(i) An expected slowdown in palm oil output. The production volumeof this product is likely to increase by less than 2 percenta year until 1976, owing to the recent drought, the ageing ofnatural palm trees and the fact that much of recently plantedhigh-yielding trees will only mature in the second half of thedecade. Cotton production will continue to grow rapidly, butits contribution to GDP is still comparatively modest.

(ii) The likelihood of slow progress in traditional agriculture.Action to increase domestic food production (rice and maize)will probably not be felt in terms of increased productionuntil the second half of the decade.

(iii) The lack of new manufacturing plants. Although several in-dustrial projects are under consideration, most of them willnot be completed before the second half of the decade.

(iv) The levelling off of the border trade with Nigeria.

47. It would thus appear that, during the first half of the decade,the economy is passing through a phase of slower growth. However, in severalkey projects (palm oil, food products, industry) a higher growth rate shouldbe feasible in the second half of the decade, provided suitable projects andprograms are being prepared now. The uniform 4.2 percent growth rate in theprojections for the entire period is therefore made up of slower growth (3.8percent) during 1971-76 and faster growth (5.3 percent) during 1977-78.

48. A fairly high sustained investment level (tentatively estimated bythe mission at 18 percent of GDP) will be needed to realize the indicatedgrowth potential. According to our information, the minimum estimate forinvestments during the 1973-76 plan period would be CFAF 32 billion and themaximum estimate CFAF 45 billion. Although several projects included in thehigher estimate of the planners are not ready for implementation, recentprice increases make it likely that total planned investment will be aroundthe higher level. Total investment in the economy includes, in addition toinvestments shown in the development plan, investments in traditional agricul-ture (land improvement, traditional housing) and in small transport and trad-ing. These investments largely fall outside the scope of any development

1/ That is, GDP in constant prices adjusted for terms of trade changes.

- xvi =

plan and are, as yet, largely independent of direct government action. Based

on previous experience, it would seem that a`UUL of t e "_total investment volume should come within the purview of the developmentplan. Planned investment would include all investments in the public sectorand major private industrial ventures.

The financial outlook

49. Domestic financing will continue to be constrained by the country'sgeneral poverty and the expected slower growth of incomes. The recernt savingsperformance benefited from a rapid increase in private incomes and publicrevenue. In view of the likelihood of slower income growth during 1971-78,

the savings rate is forecast to remain slightly below the 1971 level. As faras private sector financing is concerned, the freedom of exchange transactions

and confidence in the future of the economy helped in the past to finance all

profitable ventures. Capital inflows for modern private sector ventures moreor less matched outflows by other firms and individuals. Assuming that thie

present open character of the economy will be maintained, a continuation in

the future of this pattern of investment financing appears likely.

50. As far as the public sector is concerned, financial problemis will

be more severe. Government savings will remain small, even if substantialimprovements are made in fiscal performance. The mission's tentative targets

for government finance are summarized in the following table:

Table 4: CONSOLIDATED STATEMENT OF GOVERNMENT FINANCE:TENTATIVE TARGETS PROPOSED BY THE MISSION

(in current prices)

(In CFAF billions) (In % of GDP)1972 1978 Growth rate 1972 1978

Revenue (includingearmarked taxes) 12.4 19.0 7.4% 16.8 18.5

Current expenditure 11.4 16.6 6.5% 15.5 16.2

Government savings 1.0 2.4 1.4 2.3

Debt service 0.5 1.3 0.7 1.3

51. With slower growth of foreign trade in prospect, revenue is like:Ly toincrease at a much slower, pace than in 1968-71, when it increased by 14 percenta year. The above targets nevertheless imply that revenue could continue t:o

grow faster than GDP. Although the fiscal burden is relatively high, there is

c L.C 'or streamlining the tax system and tax administration, and for

more effective taxation of many private firms particularly in the traditionaltrading sector which, until now, have escaped most or all of their tax obl:Lga-

tions= As pointed out, the Government is aware of the possibilities for in-

creasing tax revenues and has begun acting on them. In spite of these possi-

- xvii -

bilities of increasing revenue, the most important way to improve the fiscalsituation is through curtailment of the growth of current expenditures. On theexpenditure side, the mission's projections imply that the Government will makea sharp break with the past, since expenditure growth would have to declinefrom 12.6 percent during 1967-70 to only half that rate during the next severalyears.

There should be no doubt that such a slowdown in expenditure growth will requirethe strongest political determination. Claims for public services--particularlyeducation--will continue to mount. At the same time, and partly as a result ofits education efforts, the Government will remain under the most intense pressureto hire additional government servants. Recent austerity measures prove thatthe Government is aware of the seriousness of the situation. These measuresare a step in the right direction. Further large cuts, however, particularlyin personnel spending, are needed. At the same time, there is the urgent needfor the restructurin2 of current exnenditures to make them much more resDonsiveto the development needs of the economy: more weight should be given to theprovision of material and supnlies and less to nperonnel: more weight to snend-ing in rural areas and less to spending in urban areas. The achievement of abetter composition of -urrent exnpnditttres along these lines without at thesame time adding to total expenditures will be a major accomplishment and anessentin1 rontribuition to laying the groundwork for rcrlepratpd eronomir growth.

52 The achiep-ument of a hbtter ficral situa4tinon ic comnlicn2tPd hv the

lack of information available to the central government about financial devel-opments in large narts of the nichl4r sect-nor. The earmnrking nro-ediure whirhhas helped preserve resources for certain vital government activities hasat the same time led toafragmentationof revenues hich has made it extroialvdifficult to obtain an overview of the entire fiscal situation. As a resultit is difficult for government officials to be fully aware of the genera1situation of public finance. The deposit of government resources in numerousdifferent bank accounts has not been conducive to proper financial management.Although it is perhaps advisable not to do away with the earmarking procedureper se as long as deficits are threatening, an improvement of centrl1 ir ..f-ma-tion on the financial situation is highly desirable.

53. If the Government succeeds in improving fiscal performance alongthese clins ,a moAUesU; L amoLun VJ.& V g L LUUL L Dne V L nLL Ue X c . TE sesavings will be sufficient to cover public debt service but will allow the'.vvernUent to r,Lakl-.e or.Ly a sma'LUl cont;ri u .L-LUUL1 LU LthL LfLInanc±LIng, of pUUbL.Lc iL.ves-Lment. Prospects for foreign aid, however, appear favorable. In fact, absorp-L.Lt Lcp4.LLy--LII abiJ.LiLy LU pLrepaLre and UL- UeVece .LUlop"L prLJec.Ls--LaLrIL

than the lack of finance will remain the limiting factor on public investment.Foreign aid inflows during the 1973-76 Deve'opment Plan are estiLLUted at CFAF25 billion (about $27 million a year) as compared to CFAF 20 billion during1967-70. France and FED will probaDly continue to provide the bulk of foreignassistance (about 70 percent during 1967-70). The remainder is expected to beprovided by other bilaterai donors, UN agencies and the World Bank Group.

- xviii -

54. Debt service payments in 1971 amounted to 5 percent of goods and

services exported. Provided a favorable result is reached in current nego-

tiations about the debt service related to the kenaf project, and providedmost of future financing is on soft terms, the ratio will remain at about this

level throughout the seventies. In view of the country's serious poverty

and only modest development prospects, development financing should be mostly

on concessionary terms. Harder terms could quickly lead to an excessive debt

burden because of the present and prospective level of the resource gap and

the outlook of relatively slow export growth. The Government would be well

advised to review very carefully the debt servicing implications of accepting

suppliers credits for the financing of a few major projects. In Dahomey's

difficult financial circumstances, every effort should be made to obtain offi-

cial development assistance for all of its projects. In view of the difficul-

ties the Government will continue to have in mustering even a small amount of

public savings, foreign financing should moreover cover a high proportion of

total project financing, including most of local investment expenditures and

of development-related current expenditures.

ECONOMIC SITUATION AND PROSPECTS

OF DAHOMEY

I. GENERAL BACKGROUND - CONSTRaINTS ON DEVELOPMENT

A. Introduction

1. Dahomey covers an area of 112,600 km and, like a long corridor,

stretches from the Gulf of Guinea to Niger for almost 670 km (see map). Besides

the mountainous Atakora region in the north, the country is generally flat,

presenting no major topographical obstacles to transport development. Dahomey's

location and its relatively well-developed transport system have made it the

most important transit route for Niger's external trade and a principal link

for coastal trade between Togo and Ghana, on the one hand, and Nigeria, on the

other. Apart from its good geographical position, Dahomey is less favorably

endowed than its neighbors. Climatic conditions hinder cultivating high-

value tree-crops; mineral resources are few and none are exploited at present.

The lack of training, education and health care adapted to the overwhelmingly

rural needs of the country is increasingly becoming a constraint on develop-

ment. Finally, Dahomey's political instability and the increasing pressure

put on the Government by the urban society have resulted in chronic budgetary

difficulties and have made orderly decision-making and implementation of

far-reaching reforms very difficult. It is likely that, in the future,

political and social problems, more than natural constraints, will handicap

Dahomey's economic and social development.

B. Natural Resources

Climate and soils

2. Two distinct climatic zones exist: the northern, classified as

Sudanian, with one rainy season lasting from May to October and a dry sea-

son for the rest of the year; the southern, classified as equatorial with

two rainy seasons from May to July and September to November. The annual

rainfall ranges from 1,300 mm in the south to 800 mm in the northern part

of the country, with wide annual fluctuations causing great variations in

crop yields. It is a peculiar feature of this part of the Gulf of Guinea

that rainfall in the southern part of Dahomey is much lower than at similar

latitudes in West Africa (e.g. Abidjan 1,800 mm). Hence, possibilities for

cultivating perennial high value tree crops such as coffee and cocoa are

very limited, and yields of natural and selected oil palm, Dahomey's major

cash crop, are generally lower than in other neighboring countries. Yields

of natural oil palm groves are also affected by old age. The southern re-

gion, however, offers favorable conditions for food crops, such as corn,

cassava and rice. Internal and external market prospects for these crops

appear promising. Climatic conditions and rainfall of 800 to 1,200 mm in

the central and .iorthern regions allow the cultivation of cash crops, such

as groundnut and cotton, as well as annual food crops, such as yams, corn,

sorghum, millet and rice (see map).

3. Land and, to a lesser extent, water are the country's principal

resources. The country has a total cultivable area of 9 million hectares.

Only 12 nercent of this area is presently exploited by small farmers using

mostly traditional cultivation methods. The quality of soils is generally

good. In some areas in the densely populated south, however, there are signs

that soil fertility has been decreasing because of overexploitation. Never-

theless; there is considerable scope for agricultural expansion and yields of

land currently under cultivation could be significantly increased with improve-

ments in existing methods. Studies and attempts have been made to use the

water of Dahomey's major rivers, Mono and Oueme, for irrigation purposes.

The Mono irrization scheme was abandoned because of its high capital cost.

A small irrigation project on the Oueme River is presently being implemented

with the help of FAO. There are also large areas of uncultivated bottom lands

where rice and vegetables could be grown after minor improvements. Thus, al-

though Dahomev is less favorably endowed than its coastal neighbors, there

exists a wide range of ecological and climatic conditions which allow diver-.

sification of agri-iltural production in all parts of the country.

4. Livestock in the northern part and fishing in the coastal regl..n

are of some importance. Expansion and improvement of these activities are,

however, handicapped by disease and overexploitation. In the south, live-

stock development has been held back by tsetse infestation. In the north,

cattle is affected by endemic diseases such as peripneumonia and cattle

pest. The reappearance of cattle pest, a disease which was almost completely

eradicated by a FED-financed campaign in West Africa during the middle six-

ties, is due to a lack of adequate maintenance in Dahomey and in neighboring

countries. Fishing alon- the coastal lagoons iS endangered by overexploita-

tion because of the rapid increase in the population engaged in fishing and

the inflow of seaater into the lagoon, following the construction of the

modern harbor at Cotonou. Coastal fishing is also declining since fish re-

sources on Dahomey's continental shelf are not abundant and suffer from over-

exploitation. Prospects for traditional fishing are therefore dim, but deep

sea fishing may offer new possib4ties.

5.Kn^own mineral resources- are fewo and none at nresen-t are exploited

commercially. With the help of the UNDP, other governments and private comn-

panries, the Government has undertaken a program of mineral research throughwhich dolomite and limestone deposits have been discovered. The dolomite

deposit is expected to be exploited by an Italian firm -and the Gover.nmentis trying to secure foreign financing for the exploitation of limestone at

Onigbio. Indications ha-ve also been found of deposits of iron ore, phos-

phate, gypswn, diamond, uranium and oil. Offshore petroleum deposits have

been discovered by Americant cormpanies. Further investigations are being

made to determine whether exploiting these resources will be commerciallyirstiffed. Wnatever the outcome of these investigations, actual exploilta-

. _ mineral resources in Dahomey will probably not start before the

second half of this decade. However, the eventual contribution of themining sector to Dahomey's economy, in particular its impact on the labor

market, will be very limited. During the foreseeable future, agriculture

will remain the principal economic sector, and raising productivity in agri-

culture, the principal way to achieve economic progress.

-3-

C Y u'an Resources

Populatioon and Employment

Althou-g ther xs nw'4 af rnvmaovus smaller ethnic arouns and tribes in

Dahomey, three major ethnic groups form the bulk of the population: theBariba in the n.orth, the M 4 the t cetral re-ion, and the Gou in. thesouth. They constitute the leading groups of three ancient kingdoms whoseantagonism and power struggles have until now dominated Dahomey's politicallife. Because of tribal strife, mobility between these regions is very±L.LmiteU. TLIh±is fLactor could seriously handicap future settlment programswhich may become necessary to reduce population pressure in the denselypopu'LatedU southe.L regLor oL the country. At present, tere is only liited

migration from overexploited rural areas to regions with abundant cultivable.Lanu .

7. Dahomey's populatiLon a-ountedU to abuout 2.0 mi.LLlon iLn tI WI I nnexe1 & 2). Annual population growth has increased during past years and is nowestimated at 2.8 percent. At this rate, Dahomey's popu'latiLor cou7d doublebefore the end of the century. The majority of the population is young.Over 45 percent is less than 15 years old, anad only about 5 percent 's over60. Average life expectancy is estimated at 37 years. However, it is 50percent longer in cities than in rural areas. Although a growing and youngpopulation may be a promise for the distant future, for the time being itmeans that half of the people are consumers with little earning power. italso means increasing demands on available resources, particularly on food,housing, public health and education. Since prospects for immediate andrapid economic growth are limited, rapid population growth should be con-sidered an important issue in Dahomey's development policy.

8. This issue is linked to the highly uneven distribution of the po-pulation in Dahomey. Because of frequent wars by invading tribes, inhabit-ants of the savanna regions of Dahomey have been moving south. This tend-ency was reinforced during and after the colonial period by the establish-ment of the main commercial and cultural centers on the coast. These his-torical factors and the existence of important natural palm groves, favorablesoil and more rainfall explain the high population density in the south --ranging from 102 to 133 inhabitants/sq.km in the three coastal departments.More than 50 percent of the total population thus lives in 10 percent of thetotal area. By 1980, population density in this region will probably exceed160 inhabitants/sq.km. The two northern departments, which cover three-quarters of the total surface of Dahomey, account for only a quarter of itstotal population, presenting an overall density of 9 inhabitants/sq.bm (seemap). As already mentioned (see paragraph 6), an optimal distribution ofpopulation according to land availability is difficult to conceive becauseof tribal problems. Thus, growing population pressure in the south willprobably result in accelerating rural migration to Dahomey's coastal towns.

9. Dahomey's urbanization rate is still low. About 11 percent of thepopulation, or about 320 - 330,000 persons, live in the six main towns:

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Cotonou, Porto-Novo, Ouidah, Abomey-Bohicon, Parakou and Djougou. About75 percent of the urban population is concentrated in Cotonou, the presentcapital, and Porto-Novo, the former one. Both towns are in the south whereLhe urbanization rate is high. It reaches 17 percent in the Oueme depart-ment, and nearly 40 percent in the Atlantique department (see map). Therate drops to about 5 percent in the center and the north. Although Dahomeyhas not yet known the social tensions generally associated with rapid urban-ization, the increasing population pressure in the southern rural areas, theinadequacy of Dahomey's education system to meet rural needs, and the growingdiscrepancies between rural and urban living conditions will probably accel-erate migration of rural people to the cities. On past trends (3.5 to 4 per-cent per year) the urban population would double about every 20 years. Con-sidering, however, the above factors, a doubling of the urban population willprobably take place within the next 10 to 15 years. It is likely, therefore,that urban problems 'will increasingly dominate the social and political lifein Dahomey.

10. About 55 percent of Dahomey's labor force of 1.4 million in 1971is mainly engaged in rural activities. Nine percent work in the traditionaland modern industrial sector, and 36 percent, a quite high percentage, isoccupied in services. This sector includes about 350,000 women, who domi-nate Dahomey's trade activities. Information on salaried manpower in themodern sector is very scarce. Wage earners number about 35,000, represent-ing only 2.5 percent of Dahomey's total labor force. The private modernsector employs about 8,000 - 9,000 persons including some 4,000 unskilledworkers and apprentices. The public sector occupies about 25,000 persons:15,000 in the central government, about 2,500 in local authorities and 8,000in public or semipublic agencies. Wage earners in the public sector includeunskilled auxiliary and temporary personnel for an approximate number of14,200 or 60 percent. While these figures are rough estimates, they do showthat public administration is the major source of salaried employment inDahomey's economy.

11. Dahomey's rural areas are characterized by widespread underemploy-rnent, while urban areas show growing unemployment. Underemployment amongfarmers in Dahomey is caused by their low standard of production techniquesas well as the lack of adequate training and lack of rural development schemes,including road and well construction, housing and sanitary improvements. Dur-ing recent years, urban unemplovment has been on the increase. It is esti-mated that the number of unemployed is near 15,000 in the urban centers.Among these unemnlovedi. the number of school graduates is increasing rapidlv.Nevertheless, skilled jobs in industry and trade have remained difficult tofill and there is still a wide range of emnlovrment nossihilities in the

agricultural sector. There is, in fact, a shortage of skilled manpower inll ct-ors orif Daahomey's economy. Thls distnrtion nf the lnbor market is partly

1 --ito the inadequacy of Dahomey's education system for the needs ofw.rr,,nom4 A e'u'1 f~l,anmtt

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Level of Education and Skills

12. Although human resources are the most important asset of Danomey seconomy, the level and quality of education and skills among the populationstill need improvement. Wnile the iiteracy rate has more than doubied overthe past ten years, it is still only about 11 percent of the population.The distribution of literacy is uneven. Following a usual pattern in WestAfrica, literacy in Dahomey is more common among the male than among thefemale population and higher in the southern coastal part than in the nortn-ern region of the country. Furthermore, literacy is much higher among theyoung than in the age group above 35 years old. The literacy rate of thisgroup is estimated to be less than 4 percent, reflecting low enrollment ratiosin the past and the lack of adult education. The economic and social changesof the last ten years have hardly changed the fundamental features of Dahomey'sformal education system. In recent years, school graduates have found fewopportunities for productive employment. Given the recent rise in enroll-ment and the limitations of the modern sector labor market, the pool ofeducated unemployed is likely to reach substantial proportions within a fewyears.

13. Since independence, enrollment has more than doubled at the primarylevel and increased over eightfold at the secondary level. The rate of in-crease at both levels was high in the early sixties, declined in the middlesixties when a stabilization policy was adopted throughout most of francophoneWest Africa, and rose substantially during recent years. Since the end of1969, an education explosion has taken place in Dahomey reflecting the in-creasing social demand for education and the Government's difficulty inkeeping enrollment within reasonable limits. The table below shows that thegrowth rate of annual enrollment at the primary level doubled after 1969(from 6.2 to 13 percent) (Annexes 3 & 4).

Table 1: ENROLLMENT IN FULL-TIME EDUCATION PROGRAMS

(Number of pupils in public and private schoolsand average annual percent increase)

1961/62 1969/70 1971/72

Primary Schools 96,000 (6.2%) 155,255 (13%) 197,851

7.5%

Secondary Schools /1 3,527 (23.0%) 18,563 (24%) 28,497

23.5%

/1 Including public and private vocational education.

Source: Ministrv of Education.

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While the 1966-1970 Development Plan called for a primary enrollment of151,000 in 1971, the actuai rigure was aimost 198,000. Furtnermore, thenumber of Baccalaureats to be granted in 1970 was projected as 200, whilethe actual number was over 600.

14. Significant for the whole period is the fact that secondary schcoolenrollment increased three times faster than enrollment in primary schools..The faster growth of the number of pupils attending secondary schools is dueto the pressure which students and parents in the urban society exert on theGovernment to give priority to higher types of education. The pressure ofthe urban society also explains the uneven distribution of education inDahomey. While about 70 percent of the school age population attend schoolsin the southern towns, school attendance drops to about 20 percent in therural northern regions (Annex 5).

15. About 30 percent of the primary school-age group is enrolled. Al-though this figure is not very high, it still gives a too favorable impres.-sion of the real level of school attendance because school classes containmany repeaters. Of those entering the first grade of primary school in 1961/62, less than 47 percent successfully completed the six-year course and ittook an average of 11.4 pupil years to produce a graduate. The situationis similar at the secondary level where only 63.5 percent of those enteringschool in 1964/65 completed the four-year first cycle averaging 6.1 pupilyears per graduate. In the three-year second cycle, 54.6 percent of the1964/65 group graduated with an average of 5.1 pupil years. While the edu-cation system is therefore lacking in efficiency, the quality of educationalso needs improvement. Children who drop out of primary or secondary school,as well as many who graduate, have not attained much functional literacy.They may lose whatever literacy they have acquired because of the generallyilliterate environment and the lack of follow-up programs and reading mate-rials. These figures and considerations point out the waste inherent inthe present education system.

16. Education expenditures have been the fastest growing item in thebudget, accounting for 28 percent in 1971 as compared to 22 percent in 1962(Annexes 7 & 8). Considering the modest enrollment ratio and the deficienciesin quality of the present education system, this is a very high proportion ofpublic spending. About two-thirds of education expenditures are devoted tosalary payments (Annex 9). Teachers' salaries are US$2,500 and US$3,800yearly for qualified primary and secondary teachers respectively. Budgetaryappropriations for school maintenance, only 3-5 percent of education expend-itures, are insufficient for normal requirements (Annex 9) and have tendedto decline in relation to salary payments. At the primary and middle (lowersecondary) levels, local (departmental) governments and, to some extent,Darents assume resDonsibility for the funding of materials and maintenance.

this contribution, the expansion of the education system and thefinancial requirements of the teacher Davroll have led to a reduction in theavailability of materials per pupil.

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17. The cost of a pupil year at the primary level is about two-thirdsof the GDP per capita and the cost of a primary school graduate about seventimes per capita GDP. The average cost per year per secondary school pupilis approximately 2.1 times per capita GDP. Despite the low output of thissystem, increasing numbers of primary and secondary school graduates cannotfind employment. Unemployment among school leavers will probably worsen inthe foreseeable future and include increasing numbers of students who receivedvocational training.

18. Although the majority of the school population is enrolled ingeneral education, a few vocational programs exist. Non-agricultural voca-tional programs are offered in the public "College d'Enseignement Technique"(CET) and the "lycee technique", as well as in one private institution. TheCET has a three-year industrial program for primary school graduates in elec-tricity, mechanics and construction, and a two-year clerical, bookkeeping andsecretarial course for students completing the lower general secondary pro-grams. In 1970/71, enrollment in the CET and private course amounted to 217.The lycee technique at Co